1. Brief Overview of Wine and Olive Industries Including some important connections BVL and OGAL 2008 Paul Miller

2. Southern Australian Recent Climate Two unexpected problems from 2006 Odd weather Politics & Water (efficiency) La Nina

3. Wine Industry Overview AWBC November 2007 Analysis View from my vineyard

4. World wine consumption 08 Source - AWBC Nov 2007

5. This estimate represents the third successive year that world wine production has declined. Source - AWBC Nov 2007

6. Past and projected winegrape harvests Australia Source - AWBC Nov 2007

7. Past and projected wine production Australia Source - AWBC Nov 2007

8. Past and projected export, import and domestic – Australian wine Source - AWBC Nov 2007

9. AWBC Nov 07 – selected comments Extended period of lower Australian harvests to come Bottled sales growth is about red Red not planted recently so behind white in ability to recover New plantings deterred by MDB water issues Still some stock on hand – 465M l at June 07 (650M l year before) Value building is the key – region, quality, price point

11. Australian Wine Industry 2008 – view from my vineyard 06/07 was a shock 08 looking better Grape prices on the way up - wine company responses and actual supply hard to reconcile so far Water trends – La Nina and politics Still need scale more than ever in 5.5Billion industry Need to promote regions Adapt canopies and monitor temperatures – climate warming? Technology and use of observations critical Scale in Barossa a significant advantage

13. BVL 07/08

14. Olive Industry Overview Big Picture Strong global market growth Wealth, population, health Limited agricultural land Australian responses, industry status and industry developments

15. Mistry, D., Sep/Oct 2007 – Bull market fats and oils next 7 to 10 years. The mother of all bull markets?

16. Factors affecting world olive oil prices Supply and demand – current EU crop ave. Interaction/substitution between EVO and ROO Pressure from non olive EU countries Competitors being used for fuel Wide range of qualities within categories that are not well defined or improperly defined New markets expanding rapidly – USA, China, Asia and India Increasing wealth of population driving demand for luxury and healthy products

17. The expert’s comment on Extra Virgin Olive Oil Good balance of fatty acids incl. monos, pufas Antioxidants and minor components Poly-phenols and phyto-sterols Oleacanthin Natural Mechanical extraction Extra Virgin Olive Oil – ‘the perfect oil’

19. Forecast to double by 2014

20. Lesson for Australia with its high quality, healthy products – Product Differentiation Industry Conditions - The Global Scene

21. Product Differentiation and Branding Olive Oil is a brand (Mack, AOF 2007) Extra Virgin is a brand (Mack, AOF 2007) Others are looking at both terms with regard to their products (potentially good and bad for us)

22. Preliminary Brand Designs

23. Example 4 page DL flyer

24. Example Neck tags Point of sale Regional display Targeted and Measured Media Campaign

26. Product Differentiation How will our product be different/better? Good brand Code of Practice (ACCC standing behind it) Promotion and good images Simple but effective and advanced chemistry and organoleptics e.g. oil life Random testing Continuous improvement – measure results Initial focus on domestic market Emulate wine industry

27. The Australian Olive Industry – 2007 & Future Oil Production Context - World annual - 3 million tonnes of oil increasing by about 3% p.a.

28. Australia – annual olive oil production metric tonnes In 2014 expect 25,000 metric tonnes+ (current domestic consumption 35,000 tonnes++)

29. Australian Olive Industry – Other physical data 2007 table olive production – about 1,000-2000 tonnes (mech harvest?) About 2,500 olive growers & about 87,000 acres of trees – 40 of these growers produce 90% of the olives and oil 40% of olive oil exported (USA, China, EU, Asia, Argentina)

30. Australian Olive Industry Grove Locations San Francisco Laredo El Paso S Oregon Equivalent latitudes

31. Summary Features of Australian Olive Oil Production Climate Soils and water

32. New plantations - Chile

33. Traditional Production Spain

35. Colossus 2005 2006 2007 - VOOP Large scale olives Australia – well-drained soils + technology = some success – world’s best like the past wine industry

36. Australian wine and olive oil in the world Actually a lot to develop