1. The Oregon Grape and Wine Industry AAWE Conference 15 August, 2008

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3. About Us 3 Unique Place Artisanal Wine Sustainability Leadership Promotes Health Cool nights Ideal soils Long growing season Small vineyards, tended by hand “Discovery” destination for adventurous travelers Predominantly family owned vineyards & wineries Known for hand sorted grapes, hand- crafted wines Distinctive acid profile enables food friendliness Strict labeling laws: you know what’s in the bottle 26% of acreage certified sustainable Leadership LIVE certification “Oregon Certified Sustainable” helps consumers make informed choices Part of a healthy lifestyle High resveratrol levels Antioxidant; cancer prevention and cardiovascular benefits May reverse negative effects of obesity People: Honest, collaborative, friendly, accessible, authentic

4. Sources: NASS, Dr. Greg Jones, Southern Oregon University, 2008

5. Source: Dr. Greg Jones, Southern Oregon University, 2008 Sources: NASS, Dr. Greg Jones, Southern Oregon University, 2008

9. Economic Impact Over $1.4B 8,479 jobs $203M in wine-related wages $92M tourism revenue 1.48M annual winery visits Wine grapes rank in dollar value within Oregon agriculture: 4th 9 Sources: Full Glass Research, OWB, OWA (2005)

10. Ultra-Premium Focus Successfully focused on the higher priced, higher quality segments Highest average returns per ton Highest average revenues per case Despite producing a much smaller volume of wine, OR winery revenues per capita compare to NY and WA 10

11. Outlook generally positive Demand for PN & PG remains high Production costs are reasonable for the quality obtained Market outside NW underexploited, offering solid growth potential Wine tourism underdeveloped compared to CA wine regions –~5% percent of overnight leisure trips involved winery visits Far lower than Mendocino, San Luis Obispo and Amador counties (10–25%) Tourism infrastructure not keeping up with industry growth However, competition fierce, especially in a softening economy Market will need to absorb significant increases in the supply of PN and some other varietals 11

12. Unique Business Challenges No significant economies of scale – no large vineyards possible Not about cost minimization, but margin optimization No extraordinarily large player, unlike CA and WA Limited marketing budgets Many second career owners not in it for the money –Not always a rational economic system Securing effective distribution in 3 tier system Emphasis on direct distribution – margins vs. efficiency 12