1. Sonoma County Winegrape Commission Survey August 21, 2007

2. Acknowledgement and Thanks The Commission market research team included growers Pamela Gunsalus and Julie Hagler Lumgair.

3. Panelists are recruited from diverse sources online using various methods, to avoid source bias. Currently 3300 members, about 2300 of whom are active. Based on benchmarking vs. Wine Market Council data, the panel is representative of the “core involved wine drinker,” roughly 18 million consumers who are responsible for about 3/4 of consumer $$ spending on wine. Panel includes smaller samples of less frequent wine drinkers and members of U.S. wine trade (producer, wholesale and retail/restaurant tier). Useful for contrast. Panel members in every state, similar to distribution of core wine drinkers in U.S. Answer 1-2 surveys per month, cash/gift certificate incentives Wine Opinions Panel

4. Annual Tracking Study California Regional Survey

5. 620 Wine Opinions consumer respondents. Provide measures of awareness, trial and image for selected California wine regions or appellations. Measurement of visitation to regions by core involved wine consumers. Evaluations of perceived wine quality, price positioning and value. To be executed annually to provide tracking of basic awareness, trial, price, quality and visitation measures. Difference from Regional in-depth studies: no AVAs or sub- regions, no testing of regional-specific image or messages or visitation activities, much less detail. CA Regional Report

6. Source: Wine Opinions Have NOT heard of Heard of NOT tried HAVE Tried Lodi 32%42%26% Livermore Valley 46%45%9% Lake County 42%44%14% Santa Barbara County 11%50%38% Amador County 51%30%19% Paso Robles 22%34%44% Sonoma County 1%23%76% Monterey County 7%50%44% Napa Valley 1%17%83% Mendocino County 12%47%41% Regional Awareness and Trial Percent by awareness and trial (in past 3 months)

7. Source: Wine Opinions Leading Varietals Many different Don’t know Lodi CH 9%, WZN 5%, PG/SB 2%9%63% Livermore Valley CH 7%, RL/SB 3%7%72% Lake County CH/SB 9%, PG 4%7%63% Santa Barbara County CH 19%, PG 7%, SB 5%17%40% Amador County CH/SB/VG/WZN 3%9%70% Paso Robles CH 9%, VG 7%, SB 6%18%45% Sonoma County CH 37%, PG 6%, SB 4%31%13% Monterey County CH 21%, PG/SB 5%, RL 4%22%36% Napa Valley CH 36%, SB 6%, PG 3%40%9% Mendocino County CH 12%, SB 5%, PG 4%21%46% Regional Associations with White/Rose Varietals Percent associate by region

8. Source: Wine Opinions Leading Varietals Many different Don’t know Lodi ZN 23%, CS/ME 4%7%53% Livermore Valley CS 7%, ME/PS/ZN 4%7%70% Lake County CS/ZN 7%, PN 5%8%62% Santa Barbara County PN 33%, ME 6%, SR 5%13%33% Amador County ZN 23%5%62% Paso Robles ZN 14%, SR 12%, CS 9%, PN 8%15%34% Sonoma County CS 24%, PN 13%, ME 10% ZN 7%32%10% Monterey County PN 13%, CS 9%, ME 7%23%34% Napa Valley CS 49%, ME 6%30%8% Mendocino County PN 10%, ZN 7%, CS/ME 6%19%46% Regional Associations with Red Varietals Percent associate by region

9. Source: Wine Opinions Under $6$6 - $10$10 - $15$15 - $20Over $20 Lodi 3%27%46%21%4% Livermore Valley 3%24%51%19%3% Lake County 3%21%51%21%5% Santa Barbara County 0%9%37%39%14% Amador County 2%17%48%26%7% Paso Robles 1%11%35%41%13% Sonoma County 0%6%29% 38% 27% Monterey County 1%9%41%37%13% Napa Valley 0%7%21%28%44% Mendocino County 1%10%41%37%11% Pricing Estimates for Typical Wine, by Region Percent stating price range (750ml)

10. Sonoma County Winegrape Commission Survey

11. Compare awareness and attitudes regarding Sonoma County and its wines to competing world and California wine regions. Identify significant traits associated with Sonoma County and its wines. Assess consumer and trade opinions of Sonoma County attributes, leading grape varieties, and wine quality and value in comparison to other regions. Elicit consumer definitions and expectations of “wine country.” Measure the relative merits of the Sonoma County appellation versus sub-appellations. Measure visitation to Sonoma County and the effects of visitation on quality perceptions. Survey Objectives

12. Online survey of 686 Wine Opinions panelists 565 high frequency and 121 occasional wine drinkers. 595 consumers and 128 trade members. All states except the District of Columbia, South Dakota, Iowa, and Wyoming Cross tabulations against age, gender, wine consumption frequency, California residents, visitors, high end wine buyers, Sonoma “fans”. Calculated at confidence level of 90%, confidence interval range of ±2% to ±4% for entire sample Survey Methodology

13. Consumer Respondent Profile Sonoma County Survey

14. Survey Respondent Age Segmentation - Consumers 21-29 30-39 40-49 50-59 60 Plus Source: Wine Opinions 6 28 16 20 31 Percentage by age

15. Age segments – percentage in each segment by gender Survey Respondent Age Segmentation - Consumers 21-29 30-39 40-49 50-59 60 Plus Source: Wine Opinions 4 7 18 19 34 25 21 33 29 10

16. Survey Respondent Gender Composition - Consumers Source: Wine Opinions Percentage by gender 39% 61%

17. Consumer Respondent Consumption Frequencies Daily Wkly+ Once Wk 2-3X Mo Once Month Source: Wine Opinions 34 52 9 4 Percentages by segment 1 High Frequency Occasional

18. Consumption frequency percentages by segment and gender Consumer Respondent Consumption Frequencies by Gender Daily Wkly+ Once Wk 2-3X Mo Once Mo Source: Wine Opinions 38 54 5 2 1 31 50 12 5 2

19. Percentage purchase by frequency and price segment (750ml) Consumer Respondent Purchase by Price Point Weekly Monthly Several x Yr Less Often Never Source: Wine Opinions 29 30 7 44 33 20 29 32 17 19 6 21 6 1 7 1 15 29 35 19 High End Wine Buyers

20. Percentage purchasing monthly or more often, by price point and gender Frequency of Purchase by Price Point and Gender Under $10 $10 - $20 $20 - $30 Over $30 Source: Wine Opinions 54 59 73 74 50 32 24 12

21. Trade Respondent Profile Sonoma County Survey

22. Roughly 300 employees or owners of businesses related to wine. Recruited in same manner as WO consumer panel, plus personal references. 40% restaurant/hospitality, 20% Grape- growing/wineries, 19% retail stores, 13% importer/distributor. Unlike the consumer panel, the data is not projectable to Total U.S. Primarily used for directional and contrast with consumer panel. WO Trade Panel (as of July 2007)

23. Segmentation of Trade Panel Respondents Source: Wine Opinions Restaurant Hospitality Growers / Producers Importers / Distributors Retailers 48% 32% 20%

24. Trade Respondent Gender Composition Source: Wine Opinions Percentage by gender 41% 59%

25. Trade Respondent Age Segmentation 21-29 30-39 40-49 50-59 60 Plus Source: Wine Opinions 20 36 7 22 15 Percentage by age group

26. Awareness & Trial Sonoma County Survey

27. Unaided Consumer Awareness of Wine Regions Source: Wine Opinions Region Percent naming Napa/Napa Valley 80% Sonoma/Sonoma County/Sonoma Coast/Sonoma Valley 61% Bordeaux 28% California 27% Burgundy 18% Russian River, Washington 11% Tuscany, Rhone 10% Paso Robles, ”Coast,” ”Coastal” 9% Santa Barbara, Central Coast, Alexander Valley 8% “Name up to five fine wine regions in the U.S. and/or around the world”

28. Unaided Awareness – Sonoma Nomenclature Source: Wine Opinions

29. Have NOT heard of Heard of NOT tried HAVE Tried Sonoma County 1%6%93% Washington 8%20%72% Bordeaux 2%20%78% Napa Valley 1%4%95% Santa Barbara 8%30%62% Paso Robles 17%21%62% Rioja 21%22%57% Barossa Valley 34%28%38% Tuscany 2%26%72% Burgundy 5%25%70% Oregon 9%19%73% Awareness and Trial of Selected Wine Regions Percent by awareness and trial (past year)

30. Source: Wine Opinions Californians Non- Residents Sonoma County 99%91% Washington 71%72% Bordeaux 76%78% Napa Valley 97%94% Santa Barbara 82%56% Paso Robles 87%55% Rioja 51%59% Barossa Valley 39%37% Tuscany 64%74% Burgundy 67%71% Oregon 78%71% Trial of Selected Wine Regions – Californians vs. Non-Residents Percent by trial

31. Quality & Value Assessment Sonoma County Survey

32. Source: Wine Opinions Very GoodExcellentTotal Sonoma County 42%44%86% Washington 44%24%68% Bordeaux 32%46%78% Napa Valley 35%57%92% Paso Robles 40%23%63% Rioja 39%17%56% Barossa Valley 38%15%53% Tuscany 43%34%77% Burgundy 36%40%76% Oregon 41%26%67% Quality Perceptions of Selected Wine Regions Percent “excellent,” “very good,” and total top two box ratings

33. Source: Wine Opinions QualityValue Sonoma County 86%64% Washington 68%69% Bordeaux 78%36% Napa Valley 92%53% Paso Robles 63%65% Rioja 56%64% Barossa Valley 53% Tuscany 77%50% Burgundy 76%34% Oregon 67%58% Quality and Value Perceptions of Selected Wine Regions - Consumers Percent total of top two box ratings

34. Source: Wine Opinions QualityValue Sonoma County 79%55% Washington 71%68% Bordeaux 77%36% Napa Valley 89%32% Paso Robles 63% Rioja 59%62% Barossa Valley 58%53% Tuscany 74%47% Burgundy 79%34% Oregon 73%46% Quality and Value Perceptions of Selected Wine Regions - Trade Percent total of top two box ratings

35. Quality & Value Grid Sonoma Washington Rioja Paso Napa Tuscany Oregon Barossa Bordeaux Burgundy

36. Source: Wine Opinions Californians quality Non-Residents quality Sonoma County 63%39% Washington 18%25% Bordeaux 55%44% Napa Valley 73%52% Paso Robles 25%22% Rioja 15%17% Barossa Valley 14%15% Tuscany 37%33% Burgundy 48%37% Oregon 16%28% “Excellent” Quality Perceptions – Californians vs. Non-Residents Percent giving “excellent” ratings

37. Source: Wine Opinions Californians value Non-Residents value Sonoma County 34%20% Washington 22%26% Bordeaux 10% Napa Valley 22% Paso Robles 27%19% Rioja 32%30% Barossa Valley 20%14% Tuscany 37%33% Burgundy 9%10% Oregon 14%20% “Excellent” Value Perceptions – Californians vs. Non-Residents Percent giving “excellent” ratings

38. Percentage “excellent” ratings by consumer segment Quality and Value Perceptions of Sonoma County Wines – by Visitation Source: Wine Opinions 57 44 31 28 24 18

39. Sonoma County: Wine Country Sonoma County Survey

40. Agreement Statements on Definition of “Wine Country” Source: Wine Opinions StatementAgree “Wine country” is anywhere that winegrapes are grown 61% I think of the wine regions of France or Italy as “wine country’ more than anyplace in California 24% I think of Sonoma County as “wine country” 92% “Wine country” mean that there are wine trails or routes established that lead from one winery to another 58% I think of Napa Valley as “wine country” 96% “Wine country” means that there are nice restaurants and places to stay, as well as wineries to visit 71% I think of Santa Barbara as “wine country” 61% Percentage completely/somewhat agree

41. Qualities or Traits Associated with Sonoma County and its Wines - Consumers Source: Wine Opinions Agree Highly regarded by wine critics 41% A wide variety of wines and styles 59% Wines are consistently excellent 40% Wines are over-priced 9% More for your money than wines from Napa Valley 39% One of the best regions for wine 45% Less pretentious or snobby than Napa Valley 42% Many small, artisan wineries 46% People are friendly and helpful to visitors 45% Wines are safe and reliable choices 50% Wines you can buy with confidence 51% Going there is a different kind of adventure compared to other wine regions 24% Percentage in agreement

42. Qualities or Traits Associated with Sonoma County and its Wines - Trade Source: Wine Opinions Agree Highly regarded by wine critics 42% A wide variety of wines and styles 65% Wines are consistently excellent 40% Wines are over-priced 9% More for your money than wines from Napa Valley 53% One of the best regions for wine 44% Less pretentious or snobby than Napa Valley 56% Many small, artisan wineries 55% People are friendly and helpful to visitors 55% Wines are safe and reliable choices 61% Wines you can buy with confidence 53% Going there is a different kind of adventure compared to other wine regions 38% Percentage in agreement

43. Quality or Trait Associations: High End Buyers vs. Others Source: Wine Opinions High endOthers Highly regarded by wine critics 48%41% A wide variety of wines and styles 72%57% Wines are consistently excellent 47%40% Wines are over-priced 11%9% More for your money than wines from Napa Valley 56%33% One of the best regions for wine 54%44% Less pretentious or snobby than Napa Valley 53%39% Many small, artisan wineries 58%43% People are friendly and helpful to visitors 60%40% Wines are safe and reliable choices 59%50% Wines you can buy with confidence 59%52% Going there is a different kind of adventure compared to other wine regions 33%21% Percentage in agreement

44. Source: Wine Opinions Visited 2+ times Visited once Would like to visit No interest in visiting Napa Valley 45%21%32%2% Sonoma County 39%21%38%2% Town of Sonoma 32%20%42%6% Town of Healdsburg 28%17%37%18% Town of Santa Rosa 24%20%44%13% Coast (Pt. Reyes to Russian River) 18% 57%7% Russian River 21%19%50%10% Town of Yountville 29%16%37%19% Town of Mendocino 14%19%53%14% Visitation and Interest by Region or Town Percent stating visitation frequency and/or level of interest

45. Sonoma County & its AVAs Sonoma County Survey

46. Source: Wine Opinions Have NOT heard of Heard of NOT tried HAVE Tried Sonoma Valley 2%9%89% Russian River Valley 17%15%68% Chalk Hill 38%25%36% Alexander Valley 26%15%58% Carneros 29%14%56% Green Valley 67%23%10% Bennett Valley 72%20%7% Rockpile 69%17%14% Sonoma Coast 19%28%53% Sonoma Mountain 36%29%35% Dry Creek Valley 25%21%53% Knights Valley 54%21%25% Awareness and Trial of Sonoma County AVAs Percent by awareness and trial

47. Source: Wine Opinions Multiple Visitors Non Visitors Sonoma Valley 97%80% Russian River Valley 92%42% Chalk Hill 60%18% Alexander Valley 88%28% Carneros 84%31% Green Valley 19%5% Bennett Valley 14%4% Rockpile 30%4% Sonoma Coast 73%38% Sonoma Mountain 49%21% Dry Creek Valley 83%26% Knights Valley 42%10% Trial of Sonoma County AVAs – Multiple Visitors vs. Non-Visitors Percent by trial and AVA

48. Respondents routed to three similar questions, with the three groups balanced for age, gender and wine- buying frequency. Each question asks respondents to choose between same variety and price of wine, distinguished only by region of origin. Cell 1 = Santa Barbara, Sonoma Cty, Napa Valley Cell 2 = Santa Barbara, Sonoma Cty Russian River Valley, Napa Valley Cell 3 = Santa Barbara, Russian River Valley, Napa Valley. Cell 4 = Santa Barbara, Sonoma County, Paso Robles 4-celled Test of Label Designation

49. Variations on Sonoma AVA – Responses of Four Cells Source: Wine Opinions Choice ranking of respondents, by cell Cell 1Cell 2Cell 3Cell 4 Sonoma County 2 nd --1 st Sonoma County Russian River -1 st -- Russian River --2 nd - Santa Barbara 3 rd 2 nd Napa Valley 1 st 2 nd 1 st - Paso Robles ---3 rd

50. Ranking of Sonoma AVAs – Cells 1, 2, 3 Source: Wine Opinions

51. Appellation$14$18$24$28 Would Purchase Sonoma County 35%38%21%6%45% Alexander Valley 16%36%28%20%34% Sonoma County Alexander Valley 12%38%34%16%21% Price Matching by AVA – Cabernet Sauvignon Percent stating price by appellation and intent to purchase at stated price – all respondents

52. Source: Wine Opinions AppellationHigh endOthers Sonoma County 31%54% Alexander Valley 44%28% Sonoma County Alexander Valley 25%18% Purchase intent by AVA – High End Buyers vs. Others Percent stating intent to purchase at price they had previously guessed

53. Source: Wine Opinions Appellation Multiple Visitors Non Visitors California Residents Non Residents Sonoma County 32%56%33%48% Alexander Valley 47%25%54%29% Sonoma County Alexander Valley 21%20%13%23% Purchase intent by AVA – Visitor and Resident Groups vs. Others Percent stating intent to purchase at price they had previously guessed

54. Sonoma County by Varietal Sonoma County Survey

55. Quality Ratings of Sonoma County Varietal Wines Source: Wine Opinions Percentage “very good/excellent” ratings by varietal 62 55 49 50 41 39 55

56. Quality Ratings of Varietals: Multiple Visitors vs. Non- Visitors Source: Wine Opinions Varietal Multiple Visitors Non Visitors Cabernet Sauvignon 73%48% Chardonnay 68%41% Merlot 53%39% Pinot Noir 65%34% Sauvignon Blanc 50%31% Syrah 50%22% Zinfandel 74%37% Percentage rating “excellent/very good”

57. Quality Ratings of Varietals: Consumers vs. Trade Source: Wine Opinions VarietalConsumersTrade Cabernet Sauvignon 62% Chardonnay 55%60% Merlot 49%42% Pinot Noir 50%57% Sauvignon Blanc 41%38% Syrah 39%40% Zinfandel 55%57% Percentage rating “excellent/very good”

58. Quality Ratings of Varietals: High End Buyers vs. Others Source: Wine Opinions VarietalHigh endOthers Cabernet Sauvignon 71%57% Chardonnay 66%49% Merlot 56%44% Pinot Noir 63%43% Sauvignon Blanc 51%35% Syrah 46%35% Zinfandel 67%48% Percentage rating “excellent/very good”

59. Please share your thoughts on experiences you have had in Sonoma County and/or with Sonoma County wines. Source: Wine Opinions Comment ThemeCount Good Wines 59 Had a good time 38 Miscellaneous positives 30 Not Napa 26 Beautiful 25 Friendly 25 Good Value 13 Discovery 12 Good Food 11

60. “ While it's been said that Napa Valley makes a better Cabernet Sauvignon, I've found excellent Cabs from Sonoma Valley just as good for less money. I do think that the Sonoma wineries make the best Zinfandel, though.” “ Very interesting place to visit -- great variety -- some lovely wines and some real losers. Excellent restaurants and places to stay. Amazing variety of topography and history. “ This is a lovely laid-back friendly region. The wines are all interesting and the tours especially nice. Not only fine wine, wonderful food, inns and very friendly people. What more could you want?” Consumer Verbatim Comments

61. “ The atmosphere is so relaxed and the wineries are so comfortable. You always feel welcome, unlike some regions where they make you feel like they're doing you a favor to let you taste their wines “ Sonoma county's Russian River Valley and Sonoma Coast are world class producers of Chardonnay and Pinot Noir. The Dry Creek area, as well as the northern Alexander Valley make great Zins, which are a CA phenomenon. The Bordeaux varietals are not the greatest from this region, Napa does a better job with these..” “ Sonoma County is THE place to go in wine country. I used to say we were going "to Napa" for vacation. Now we say "Sonoma" because that's what wine country IS to us..” Consumer Verbatim Comments

62. “ I prefer Sonoma to Napa for the more quaint, off-the-beaten path feel. Paso falls into this same category for me. I'm less in tune with Santa Barbara because it feels more like a collection of wineries, then it does a region to explore. “ I love the different, often less "commercial" tasting rooms in Sonoma. It reminds me of the Napa valley 25 years ago. “ Having had the chance to taste Sonoma Wines more in the recent past as I attend various wine tastings, I am impressed with the quality and the value! Enjoy the quality of these wines and they stack up just fine against Napa Wines in my experience! Great & beautiful area however the wine prices are rising faster than their quality. They think because they are hot stuff in the Healdsburg, they can price gouge the consumer as they do in Napa. “ Consumer Verbatim Comments

63. “ Sonoma County is a great place to visit because of the artisinal farm trail as a complement to the wine trail. Often it's too large an area to feel I've accomplished visiting all the wineries I want to visit in a weekend vs. Napa where I can hit the 6 or more that I want to visit. Healdsburg and Sonoma (towns) are getting too touristy (like St. Helena). I like the diversity, but often times Sonoma wines are a notch below Napa. “ Perfect weather, many tourists, quality wines, great cheeses, expensive accommodations.” “ I thought it was absolutely beautiful and everyone was so hospitable. I was completely sold on the wines from this region.” “A beautiful place. Wish I lived there.” Consumer Verbatim Comments

64. Sonoma is in a strong position, just behind Napa in awareness and quality, with a better value image. Sonoma is “wine country.” People expect nice restaurants and places to stay with “wine country” but the experience itself is still primarily about the wineries and their ambience. Visitation has a powerful effect on regional perceptions. Even one visit is associated with major improvements in quality ratings and positive attributes and image. Survey Conclusions

65. Diversity is a key strength for Sonoma County. Gives broader appeal and reliability to the wines. In general, a combination of Sonoma County and AVA has stronger appeal to consumers than either alone. Greater specificity probably is equated with higher quality. AVA recognition and salability increases with knowledge and high end purchases by consumers. Sonoma County retains an edge over AVAs in value perception. Friendliness and lack of pretension are significant advantages for Sonoma. Survey Conclusions

66. Strategic action plan: review of sales and market trends trade gatekeeper survey/interviews combine consumer, trade, market data Other research issues: Breakdown of research by key markets; where does Sonoma need to focus? Concept/positioning/communication testing Is specificity or combining Sonoma County + AVA always better or does it depend on varietal/AVA? How do vineyard-designates fit in? Further exploration of Trade vs. Consumer? Next Steps?