1. Brought to you by: US Drinks Conference 2010 Translating Industry Trends Into Actionable Insights

2. Click to edit Master title style U.S. Drinks Conference 2010 Using Beer, Wine and Spirits category trends to make informed decisions on building your brands 2 Session Overview

3. Click to edit Master title style xxxxxxx U.S. Drinks Conference 2010 3 Agenda Macro Consumer Trends Impacting The Industry Total Beverage Alcohol Consumption Trends Spirits Category Consumption Trends Wine Category Consumption Trends Beer Category Consumption Trends Summary Of Key Takeaways

4. Click to edit Master title style U.S. Drinks Conference 2010 Macro Trends Impacting The U.S. Beverage Alcohol Industry 4

5. Click to edit Master title style U.S. Drinks Conference 2010 Macro Economic Trends The U.S. Economy Shifting Consumer Behavior U.S. Population Size And Growth Growing Ethnic Diversity Seeking Out New Drink Experiences Premiumization And Affordable Luxury 5 CREATE 1-5 NEW SLIDES

6. Click to edit Master title style U.S. Drinks Conference 2010xxxxxxx 6 The U.S. Economy Unemployment is beginning to go down but remains high at 9.6% and is expected to remain elevated for 2-5 years Mortgage foreclosures will continue to impact the housing market Tight credit is dampening consumer spending Consumers focus more on debt reduction and savings rather than over-indulgence Consumer confidence is improving marginally and spending is starting to improve Sources: U.S. Bureau Of Labor Statistics and Market Harmonics

7. Click to edit Master title style U.S. Drinks Conference 2010xxxxxxx 7 Shifting Consumer Behavior Frugality is fashionable and deals and value for the money are key Consumers drinking more at home to save money Consumers drinking more but trading down across all categories

8. Click to edit Master title style U.S. population over 300 million with legal drinking age consumers growing by 20 million every 10 years 8 U.S. Population Size And Growth 8 Sources: U.S. Census Bureau – Demographic Trends in the 20 th Century, Nov. 2002.

9. Click to edit Master title style U.S. Drinks Conference 2010 9 Growing Ethnic Diversity The fast growing multi-ethnic population is fueling interest in new drink experiences from around the world such as Cachaça from Brazil and Pisco from Peru Sources: U.S. Census Bureau

10. Click to edit Master title style Consumers are actively seeking out new taste experiences across beer, wine and spirits through a wider selection of new and undiscovered brands, varietals and categories Seeking New Drink Experiences 10 U.S. Drinks Conference 2010 U.S. Drinks Conference 2010 10

11. Click to edit Master title style Premiumization And Affordable Luxury 11 Consumers aspire to luxury across all segments with Premium Beverage Alcohol offering “Affordable Luxury” High-end Beverage Alcohol has grown to about 20% of category Everyday Luxury ItemsHigh-End Beverage Alcohol Beverage Alcohol High-end Market Share Source: DISCUS and Next Level Marketing Consumer Research

12. Click to edit Master title style Total Beverage Alcohol Trends U.S. Drinks Conference 2010 12

13. Click to edit Master title style U.S. Drinks Conference 2010xxxxxxx 13 Data Sources The data in this presentation comes from the Beverage Information Group’s 2010 Liquor, Wine and Beer Handbooks. These Handbooks contain the most current and complete statistics on the Spirits, Wine and Beer categories.

14. Click to edit Master title style 2009 Total U.S. Beverage Consumption Source: B.I.G. 2010 Handbook Advance 14 Beverage Alcohol ranks as the 4 th largest beverage type in the U.S. Market and sales have been flat during the recession

15. Click to edit Master title style Retail Sales Of $189 Billion 29 Volume Of 3.3 Billion 9L Cases 29 Spirits 5%Spirits 34% The U.S. market size is 3.3B 9L cases and $188B in retail sales Beer dominates consumption with an 85% volume share Spirits are much more important on a dollar share basis Total U.S. Beverage Alcohol Industry 15 3.3 Billion 9L Cases $188 B Retail Sales 15 The B.I.G. 2010 Liquor, Wine And Beer Handbooks

16. Click to edit Master title style U.S. Drinks Conference 2010 16 2009 Volume Trends The B.I.G. 2010 Liquor, Wine And Beer Handbooks Total Beverage Alcohol consumption fell by 1.8% driven by a 2.1% decline in Beer but led by growth in Wine and Spirits -2.1% -1.8% +0.8% +1.6%

17. Click to edit Master title style U.S. Drinks Conference 2010 17 The B.I.G. 2010 Liquor, Wine And Beer Handbooks Total Beverage Alcohol sales dollar fell by 0.4% driven by Beer volume declines, Wine trade-down and Spirit trade-up -1.1% -0.4% -3.2% +1.9% 2009 Dollar Sales Trends

18. Click to edit Master title style U.S. Drinks Conference 2010 18 The B.I.G. 2010 Liquor, Wine And Beer Handbooks Five Year Category Growth Rates Over the last five years, Spirits and Wine consumption have grown much faster than Beer consumption U.S. Drinks Conference 2010

19. Click to edit Master title style U.S. Drinks Conference 2010 19 The B.I.G. 2010 Liquor, Wine And Beer Handbooks On Vs. Off-Premise Case / Dollar Sales Across all categories on-premise does about 25% of cases and off-premise does 75% but dollar sales are split equally 23% 20% 25% 53% 44% 48% 80% 77% 75% 47% 56% 52%

20. Click to edit Master title style U.S. Drinks Conference 2010 20 The B.I.G. 2010 Liquor, Wine And Beer Handbooks The Off-premise channel is now the key growth driver for Beer, Wine and Spirits as today’s cash conscious consumers have shifted towards more at home consumption On And Off-Premise Growth Trends -3.3% -5.9% -0.1% +3.2% +2.6% -3.9%

21. Click to edit Master title style U.S. Drinks Conference 2010 Spirit Category Trends 21

22. Click to edit Master title style Distilled Spirits Sales Trend Spirit consumption has grown steadily to a record level of 188,630 million 9-liter cases with 1.6% growth in 2009 Source: Adam’s 2008 Advance The B.I.G. 2010 Liquor Handbook (Thousands 9-Liter Cases) 22

23. Click to edit Master title style U.S. Drinks Conference 2010 23 Top 10 Markets For Spirits CA TX FL IL NY NJ MA The top 10 states account for 60% of U.S. Spirits volume OH VA The B.I.G. 2010 Liquor Handbook MI PA

24. Click to edit Master title style Imported Vs. Domestic Volume Share Domestics Spirits account for 60% of volume with Imports making up 40% and both showing growth in 2009 U.S. Drinks Conference 2010 24 The B.I.G. 2010 Liquor Handbook (Thousands 9-Liter Cases)

25. Click to edit Master title style Imported Vs. Domestic Spirits Trend Prior to the Recession, Imports were driving Spirits category growth with both continuing to grow U.S. Drinks Conference 2010 25 The B.I.G. 2010 Liquor Handbook +5.4% +1.1% +5.0% +2.1% +2.3% -1.4% +2.0% +1.8%

26. Click to edit Master title style U.S. Drinks Conference 2010 Spirit Volume And Share By Category 26 Vodka dominates the Spirits category with a 31% volume 31.0% 13.3% 10.7% 10.6% 8.3% 6.0%5.9% 5.5% 4.7% 3.4% 0.6% The B.I.G. 2010 Liquor Handbook

27. Click to edit Master title style Spirits Growth By Category U.S. Drinks Conference 2010 27 Irish Whiskey, Vodka, Rum and Tequila continue to be the key growth driving spirits categories The B.I.G. 2010 Liquor Handbook +5.9% +1.6% +0.2% -3.6% +1.1% +0.1% +0.9% -0.6% -1.0% -2.4% +13.0%

28. Click to edit Master title style 28 Top 25 Spirit Brand Trends 28 The B.I.G. 2010 Liquor Handbook (Thousands 9-Liter Cases)

29. Click to edit Master title style Wine Category Trends U.S. Drinks Conference 2010 29

30. Click to edit Master title style U.S. Drinks Conference 2010 Wine Consumption Trend Wine consumption has grown steadily posting 0.8% growth in 2009 to reach a record level of 296,960 million 9-liter cases. The B.I.G. 2010 Wine Handbook (Thousands 9-Liter Cases) 30

31. Click to edit Master title style U.S. Drinks Conference 2010 31 Top 10 Markets For Wine CA TX FL IL NY NJ MA WA The top 10 states account for 60% of U.S. Wine volume OH VA The B.I.G. 2010 Wine Handbook

32. Click to edit Master title style Imported Vs. Domestic Volume Share Domestics Wine accounts for 75% of volume with Imports making up 25% and declining slightly in 2009 U.S. Drinks Conference 2010 32 The B.I.G. 2010 Wine Handbook (Thousands 9-Liter Cases )

33. Click to edit Master title style Imported Vs. Domestic Wine Trend Prior to the Recession, Imports were driving Wine category growth but they have declined for the past two years U.S. Drinks Conference 2010 33 The B.I.G. 2010 Wine Handbook (Thousands 9-Liter Cases) +5.6% +2.7% +7.3% +2.9% -1.7% -2.2% +2.9% +1.8%

34. Click to edit Master title style Source: Adam’s 2008 Advance. Volume Stated On A Thousands Of 2.25-gallon Cases Basis. Wine Consumption By Type U.S. Drinks Conference 2010 U.S. Drinks Conference 2010 34 The B.I.G. 2010 Wine Handbook (Thousands 9-Liter Cases ) Table Wines represent over 91% of U.S. Wine consumption and they continued to show growth of almost 1% in 2009

35. Click to edit Master title style Source: Adam’s 2008 Advance. Volume Stated On A Thousands Of 2.25-gallon Cases Basis. Table Wine Consumption By Varietal U.S. Drinks Conference 2010 U.S. Drinks Conference 2010 35 Chardonnay, Cabernet and Merlot combine for 54% of U.S. Wine consumption by All Other Varietals represent opportunity at 24% 35 The B.I.G. 2010 Wine Handbook

36. Click to edit Master title style Top 25 Domestic Table Wine Brands U.S. Drinks Conference 2010 U.S. Drinks Conference 2010 36 The B.I.G. 2010 Wine Handbook (Thousands 9-Liter Cases)

37. Click to edit Master title style U.S. Drinks Conference 2010 37 The top 10 countries account for 96% of U.S. Imported Wine sales Wine Import Trends By Country The B.I.G. 2010 Wine Handbook: Source U.S. Department Of Commerce

38. Click to edit Master title style Top 25 Import Wine Brand Trends U.S. Drinks Conference 2010 U.S. Drinks Conference 2010 38 The B.I.G. 2010 Wine Handbook (Thousands 9-Liter Cases )

39. Click to edit Master title style Beer Category Trends U.S. Drinks Conference 2010 39

40. Click to edit Master title style U.S. Drinks Conference 2010 40 Beer Consumption Trend After three years of growth, Beer declined by 2.1% in 2009 to 2.9 Billion 2.25 Gallon Cases The B.I.G. 2010 Beer Handbook (Millions of 2.25-Gallon Cases)

41. Click to edit Master title style U.S. Drinks Conference 2010 41 Top 10 Markets For Beer The top 10 states account for 53% of total U.S. Beer volume The B.I.G. 2010 Beer Handbook

42. Click to edit Master title style Imported Vs. Domestic Volume Share Domestics Beer dominates at 87.5% of volume with Imports declining by 6.9% in 2009 U.S. Drinks Conference 2010 42 The B.I.G. 2010 Beer Handbook (000 2.25-Gallon Cases)

43. Click to edit Master title style Imported Vs. Domestic Beer Trend Prior to the Recession, Imports were driving Beer category growth but they have declined for the past two years U.S. Drinks Conference 2010 43 The B.I.G. 2010 Beer Handbook +12.1% -0.2% +3.6% +0.9% -1.2% -6.9% +0.9% -1.4%

44. Click to edit Master title style Domestic Beer Consumption By Type U.S. Drinks Conference 2010 U.S. Drinks Conference 2010 44 Source: Adam’s 2008 Advance. Volume Stated On A Thousands Of 2.25-gallon Cases Basis. Domestic Light is the largest segment with a 52.8% share but Super Premium/Craft is the fastest growing segment The B.I.G. 2010 Beer Handbook (000 2.25-Gallon Cases) 44

45. Click to edit Master title style Top 25 Domestic Beer Brand Trends U.S. Drinks Conference 2010 U.S. Drinks Conference 2010 45 The B.I.G. 2010 Beer Handbook (000 2.25-Gallon Cases) 45

46. Click to edit Master title style U.S. Drinks Conference 2010 46 The top 10 countries account for 96% of U.S. Imported Beer sales The B.I.G. 2010 Beer Handbook (000 2.25-Gallon Cases) Beer Import Trends By Country

47. Click to edit Master title style Top 25 Import Beer Brand Trends U.S. Drinks Conference 2010 U.S. Drinks Conference 2010 47 The B.I.G. 2010 Beer Handbook (000 2.25-Gallon Cases) 47

48. Click to edit Master title style Summary Of Key Takeaways U.S. Drinks Conference 2010 48

49. Click to edit Master title style Summary Of Key Takeaways The U.S. Beverage Alcohol market is very large and highly profitable at 3.3B 9L cases and $189B in retail sales Despite the slow economy, there is still growth in the U.S. Beverage Alcohol industry and the future outlook is strong Macro trends in the U.S. market are very favorable to the continued growth of the Beverage Alcohol industry Consumers are trading down consistent with past recessions but the premium end always recovers and is already doing so On-premise recovery is key to future growth and trade-up as the economy recovers U.S. Drinks Conference 2010 49

50. Click to edit Master title style Key Implications U.S. Drinks Conference 2010 50 The number of new product launches has decreased during the recession increasing interest in new brands. Consumers and retailers are interested in discovering and experiencing new products across all categories Consumers are seeking value more than ever opening brand building opportunities in all price segments Over half of Beer, Wine and Spirit volume is concentrated in the top 10 states so focus brand launches in key markets Building beverage brands in the U.S. requires a disciplined, hands on, long-term approach but it can be done

51. Click to edit Master title style 51 Mike Ginley, Partner Next Level Marketing 1330 Post Road East Westport, CT 06880 USA 203-913-7723 mginley@nextlevel-co.com Thank You 51 U.S. Drinks Conference 2010