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

Category Snapshot TOTAL GIN (LIQUOR) 16 OZ. Total Consumption BehaviorScape Framework LifeStyle BehaviorStage Cosmopolitan Centers Affluent Suburban Spreads Comfortable Country Struggling Urban Cores Modest Working Towns Plain Rural LivingTotal Start-Up Families HHs with Young Children Only < Small Scale Families Small HHs with Older Children Younger Bustling Families Large HHs with Children (6+), HOH < Older Bustling Families Large HHs with Children (6+), HOH Young Transitionals Any size HHs, No Children, < Independent Singles 1 person HHs, No Children, Senior Singles 1 person HHs, No Children, Established Couples 2+ person HHs, No Children, Empty Nest Couples 2+ person HHs, No Children, Senior Couples 2+ person HHs, No Children, Total

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 % of total spirits category Low penetration (2.71% regional) (3.2% total U.S.)

ITEM $ (000)DOLLAR SHARE ITEM BUYERS (000) ITEM PENETRATION ITEM $ PER ITEM BUYER ITEM $ PER ITEM TRIP ITEM UNITS PER ITEM TRIP PURCHASE CYCLE (IN ELAPSED DAYS) LOYALTY (SHARE OF $ REQ.) % ITEM $ ON DEAL % DOLLARS WITH MANUFACTURER COUPON DEPT- ALCOHOLIC BEVERAGESTOTAL U.S. 15,075, , WEST SOUTH CENTRAL 1,534, , GINTOTAL U.S. 340, , WEST SOUTH CENTRAL 29, BEEFEATER - GINTOTAL U.S. 53, WEST SOUTH CENTRAL BOMBAY - GINTOTAL U.S. 11, WEST SOUTH CENTRAL BOMBAY SAPPHIRE - GINTOTAL U.S. 39, WEST SOUTH CENTRAL BURNETT'S - GINTOTAL U.S. 12, WEST SOUTH CENTRAL CTL BR - GINTOTAL U.S. 5, WEST SOUTH CENTRAL GILBEY'S - GINTOTAL U.S. 10, WEST SOUTH CENTRAL GORDON'S - GINTOTAL U.S. 47, WEST SOUTH CENTRAL SEAGRAM'S EXTRA DRY - GINTOTAL U.S. 45, WEST SOUTH CENTRAL TANQUERAY - GINTOTAL U.S. 52, WEST SOUTH CENTRAL TANQUERAY RANGPUR - GINTOTAL U.S. 3, WEST SOUTH CENTRAL \

Assigning the role Avg Gm of almost 40%

Why Gin In 2012 gin accounted for 5.3% share of the liquor industry up from 4.4% in 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

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

Fayetteville

Kirkwood MO

Anna Texas

StoreSKUsPercentFacings Grapvine Wine & Cheese, Kirkwood, MO, F %21 Z&Z Liquor, Kirkwood, Mo, F136.7%13 Cheers, Fayetteville, AR, F4221.8%44 liquor to go, Fayetteville, Ar, F3719.2%40 Crossover Liquor, Fayetteville, Ar, F5428.0%65 Dickson St. Liquor, Fayetteville, Ar, F3417.6%35 Liquor Mart and Wine Shoppe, Fayetteville, Ar, F %45 The Spirit Shop, Fayetteville, Ar, F2412.4%29 Liquor World, Fayetteville, Ar, F4121.2%68 Wedington Liquor, Fayetteville, Ar, F3317.1%45 Midway Liquor, Fayetteville,Ar, F168.3%22 Fossil Creek, Anna,Tx, F3116.1%45 Goody Goody Liquor, Anna,Tx, F3518.1%82 Town &Country, Fayetteville, Ar, F2412.4%26 Premier Wine & Spirits, Fayetteville, Ar, F %31 City Liquor, Fayetteville, Ar, F2110.9%22

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

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

Supplier Share of Facings

Gross Margin ($) by Store and Manufacturer

Gross Margin (%) by Store and Manufacturer

Thank You! Questions?