What’s Going on With Gin

1. What’s Going on With Gin Joey McHugh & Brendon Doran

2. Category Snapshot

4. Category Role • We both are fans of Liquor, and heard about Gin so much in class it was an easy decision. Also Joey Worked in a Liquor store in St. Louis so he had some experience • Size in U.S. Sales: • 2007: $340 mill • Trend has been growth but no updated numbers • Total Alcoholic Beverages in same year over $15 Billion • As of 2012 5.3% of total spirits category • Low penetration (2.71% regional) (3.2% total U.S.)

6. Assigning the role Avg Gm of almost 40%

7. Why Gin • In 2012 gin accounted for 5.3% share of the liquor industry up from 4.4% in 2007. • Slow but steady growth • Potential with aging baby-boomers • It is a pull marketing industry – will always be a high demand (gives power to suppliers) • No private brands (only differentiating brands) • Legal complications with P/L’s • Only a few distilleries willing to brew them (Mile High Spirits, Private Label Distillery) • Not a normal category • Depending on location there is potential to increase depth

8. Retailers Audited • Grapevine Wines & Cheese (Kirkwood, MO) • Z &Z Liquor (Kirkwood, MO) • Fossil Creek (Anna, TX) • Goody Goody (Anna, TX) • Liquor World (Fay) • Wedington Liquor (Fay) • Cheers (Fay) • Liquor to Go (fay) • Crossover Liquor (Fay) • Dickson Street Liquor (fay) • Liquor Mart and Wine Shoppe (Fay) • The Spirits Shop (Fay) • Midway Liquor (Fay) • Town & Country (Fay) • Premier Wines & Spirits (Fay) • City Liquor (Fay) • 69 different SKU’s

9. Fayetteville

10. Kirkwood MO

11. Anna Texas

13. Changes • 2006 there were 63 different SKUs • 2010 there were over 100 different SKUs • 2013 there were 66 different SKUs • We found 69 Different SKUs • It all depends on the region and demographics • Prices of the Big names have gone up slightly in some places but are mostly the same • Prices varied based on location • Facings and display share have remained constant for the most part • Share for boutique brands varies the most • Some changes in differentiation brands in stores

14. The Big Names • Beefeater Distilleries (5.8% SKUs) • Bombay Spirits Company (8.7%) • Heaven Hill Distilleries (8.7%) • Schenley Diageo Global (4.3%) • Seagram Company Limited (17.4%) • Tanqueray Gordon and Company (11.6%) • We lumped all the differentiating bands together as “Others” (30) accounting for 43.5% of the total SKUs • Beefeater • Beefeater 24 • Bombay London Dry • Bombay Sapphire • Gilbey’s Extra Dry • Seagram’s apple twisted (Grape, Lime, orange, raspberry) • Seagram’s Distillers Reserve • Seagram’s Extra Dry • Tanqueray London Dry • Tanqueray No. 10 • Tanqueray Rangpur • Burnett’s London Dry • Heaven Hill London Dry

15. Supplier Share of Facings

16. Gross Margin ($) by Store and Manufacturer

17. Gross Margin (%) by Store and Manufacturer

18. Thank You! Questions?