November, 2007

1. Spreading the Love via CGM – Nielsen Insights on Wine and the Web November, 2007

2. Business Information Media Measurement and Information Marketing Information

3. Wine Overview A Mid-Year 2007 Review of …“What’s Hot, and Not”

4. New Wine Brands Since the year 2000, there have been close to 2,500 new brands flooding Grocery store shelves, representing over 60% of the active brands today. Source: Nielsen Total US Food By calendar year – Active Brands = sales during the year Launch year based on zero sales in previous year

5. Rank Table Wine – by Color Source: Nielsen Food, Drug, Liquor

6. Red Wines leading the growthRed Wines trailed White’s growth through October 2006, but since then the tide has turned Source: Nielsen Food, Drug, Liquor

7. Red Wines have benefited from positive media coverage Most recently (Nov. 2006), studies by the Harvard Medical School and the National Institute of Aging suggesting that daily doses of resveratrol - a substance found in Red Wine - may help people live longer, was widely covered 2001 2002 2003 2004 2005 2006 Source: Nielsen Food, Drug, Liquor

8. Rank Table Wine – by Major Varietal Source: Nielsen Food, Drug, Liquor

9. Rank Table Wine – by Price Tier Source: Nielsen Food, Drug, Liquor

10. Zin price growth mirrors category Zinfandel by Price Tier Nielsen Homescan Panel 52 weeks ending May 12, 2007

11. Zin is among top 3 Millennials most-often wines Zinfandel Percentage of People Base: Millennial wine drinkers (n=346) Q39: In the past year, which varieties or blends of wine have you personally drank? (MA)

12. Top three Millennials most consumed wine types are also their favorite wine types. Zinfandel Percentage of People Base: Millennial wine drinkers (n=346) Q40: Please choose up to three of your favorite types of wine from the following. (MA)

13. Key Questions In The “Consumer Era” How many consumers are online? Is my target consumer online? To what extent are they engaged? How do I engage them on my brand/specialty?

14. The Internet Reaches Critical Mass… The Current Web Universe is 215.3 million people Internet Penetration August 07’ Source: Nielsen//NetRatings NetFacts Q1 2007/ NetView Audience Measurement August 07/ U.S. population data based on World-gazetter.com

15. U.S. Internet Population Shows Modest YOY Growth With Users Consuming More Content And Spending More Time Overall Internet Audience Comparison – August 2006 - 2007 Source: Nielsen//NetRatings NetView, Aug ’06 & Aug ‘07

16. Adult (Age 21+) Internet User Spends Much More Time Online Than Counterparts Source: Nielsen//NetRatings NetView, Aug ‘07

17. Consumers Drink of Choice 33% of the adult online population consumes Beer, totaling over 47.5 million individuals 33% 28% of the adult online population consumes Wine, totaling over 40.1 million individuals 28% 26% of the adult online population consumes Spirits, totaling over 37.4 million individuals 26% Source: Nielsen//NetRatings @plan, Fall 2007

18. Key Online Questions In The “Consumer Era” How can I “listen” to consumers’ to understand their needs and preferences? Where is the conversation coming from? Who are my brand advocates?

19. How Big is CGM 44% of U.S. Online adults 53 million people are “content creators” (Pew Research 2003) What Is Consumer-Generated Media? • Consumer-Generated Media (CGM):A variety of new sources of online content that is created, initiated, circulated, shared and used by consumers who are intent on educating others about products, brands and services. 10,000+ Message boards 40+ million Blogs 45,000 Usenet newsgroups Product review sites Social networks Company feedback portals • Core Drivers: - Basic consumer needs of expression • - Media fragmentation + device proliferation • - Erosion of trust in traditional information sources • - Rise of interactive media and social networks

20. Why Is CGM So Important? • Because, research companies find that consumers trust CGM and word of mouth far more than any other information source…

21. This is CGM What if half the store shelf said, “Don’t Touch This?” Where Does It Originate?

22. Where Does It Originate? Who will be first here? ZAP #4 on “zinfandel” search, but no brands on first page (3 on first 3 pages, non-paid)

23. Seekers Speakers Everyone Is Creating Content These Days Fact: About 73% of people who shop online leave comments to share their thoughts and experiences with other consumers Data supplied by:

24. Key Online Questions In The “Consumer Era” How are consumers’ talking about my category? How much buzz is there for my brand? What sentiment is being expressed? What are topics of discussion?

25. Consumers Are Passionate & Enjoy Sharing Wine Playlist Placement & Reviews “Apparently all it took was a glass of Château Malescot St-Exupéry (a Bordeaux Third Growth estate), a nibble of camembert cheese, and a group hug to prevent a recent robbery in a private home.” Wine Network Advertising Wine Media Wine Tools

26. What’s The Buzz On The Beverage Category?

27. Varietals What’s The Buzz On Wine? “Italian wine is the first, best and only. Doubt it, try making it, transporting it to the four corners of the known world, store it for a thousand years, then open it and drink it like it's fermented grape juice.” Forums.winespectator.com, 2007-09-30 “Why anyone would drink anything but Italian wine is beyond me...” Forums.travel.com, 2007-09-29 “I don't care for most French reds as I prefer up front fruit thats more > common with California wines. However, there are California reds that > aren't fruit forward and there are some French reds that are.” Alt.food.winePosting Date: 2007-06-29 “And for those people who like/hate white zin, red zin is totally different. It's more like a chianti or syrah/pinot/merlot blend.” Forums.corvetterforum.com, 2007-09-28

28. How Do Consumers’ Feel About My Brand And What’s Driving Sentiment? Sentiment toward XYZ Brand, as a % of sample XYZ Brand discussion topics, as a % of sample n = 100 relevant messages about Maker’s Mark

29. Key Online Innovation Questions In The “Consumer Era” How are beverages being talked about from the consumers’ vantage point? What are complementary product offering opportunities? Which brands are most closely associated with beverages? What are innovative applications?

30. How Do Consumers Talk & What Do TheyAssociate w/ Beer • Lager, Ale and Stout are the most popular types of beer • Vodka, Bourbon, Rum, Whiskey and Champagne most frequently associated alternatives – not Wine. • Cigarettes, Pizza and Wings highly associated with beer.

31. How Do Consumers Talk & What Do They Associate w/ Wine • Majority of discussion related to food and cooking. • Social events and places highly associated with wine. • Cabernet is wine variety most closely associated. • Spirits equally associated with Wine varietals

32. Key Online Innovation Questions In The “Consumer Era” Are consumers’ talking about my brand? Do they understand the benefits? Are there product misperceptions?

33. Screw Caps vs Corks – Confusing Innovation? “Its obvious that people who don't really follow or drink wines, believe the old stigma that screw caps represent cheap wine.” Winespectator.com, 2007-07-23 “You know that the buzz is that screw cap wine is actually better preserved than corked bottle wine.” Fodors.com, 2007-05-23

34. Key Online Questions In The “Consumer Era” What are health and wellness trends? What are key trend opportunities? How is Wine being associated with health/wellness benefits?

35. 300 250 200 150 100 50 - Jul-06 Oct-06 Jan-06 Apr-06 Jan-07 Feb-06 Mar-06 Sep-06 May-06 Jun-06 Nov-06 Dec-06 Mar-07 Feb-07 Aug-06 Antioxidants Bioflavonoid Selenium Dark Chocolate Red Wine Green Tea Average Buzz for Nutrients Red Wine Links To Health And Wellness Individuals discuss the antioxidant power in red wine to help prevent / fight cancer “A glass of red wine could improve "good" HDL cholesterol. ... Flavonoid polyphenols include catechins, flavonones, flavonols, isoflavones, reservatrol, and anthocyanins....Red wine Catechins and reservatrol (flavonoids). Toast your good health!...” Type-2-Diabetes@yahoogroups.com, 2007-07-17 “Consuming wine conservatively (pace yourselves, people) will help you reap all the heart-healthy benefits” Afterdawn.com, 2007-06-10 “Since drinking alcohol in excessive amounts can have harmful health effects, doctors generally recommend moderate red wine consumption, which is an average of two drinks a day for men and one drink a day for women” Siliconinvestor.com, 2007-08-31 “Health benefits of red wine include reducing your risk of prostate cancer. Other benefits include lower risk of heart attack, stroke, diabetes, and cardiac death.” Religion on the Rocks, 2007-09-16

36. Organic Trends Translating To Wines… “Organic wine is something I won't/can't buy. It is really hard to find, and when you do, it's usually really expensive.” Mommysavers.com, 2007-09-12 “I can't say that I think the organic grapes TASTED much different from non-organically grown wine, but organic grapes tend to leave a better taste in your mind at least. ;-)” Food Follies - Daily Specials, 2007-08-31 “And my experience is that organic wine is clearly better, since it isn't bringing with it the traces of chemicals which are used in the commercialization of the wine-making process.” Liamvino's Journal, 2007-08-26

37. Key Trends Driving Sustainability Buzz Buzz share for key trends, as a % of sustainability discussion • Organic is a key tenet of sustainable living with organic products driving 53% of sustainability discussion. . • Plastic packaging and the growing utilization of CSAs (community supported agriculture) elicit steady buzz over the timeframe. n = 241,227messages about sustainability, between 7/01/2006 and 6/30/2007.

38. Thank you! Brian Lechner brian.lechner@nielsen.com 510.745.4133 www.nielsen.com