THE AUSTRALIA WINE MARKET LANDSCAPE REPORT

Transcription

1 THE AUSTRALIA WINE MARKET LANDSCAPE REPORT AUGUST 2016 Wine Intelligence

2 Copyright Wine Intelligence 2016 All rights reserved. No part of this publication may be reproduced in any form (including photocopying or storing it in any medium by electronic means) without the permission of the copyright owners. Application for permission should be addressed to Wine Intelligence. The source of all information in this publication is Wine Intelligence unless otherwise stated. Wine Intelligence shall not be liable for any damages (including without limitation, damages for loss of business or loss of profits) arising in contract, tort or otherwise from this publication or any information contained in it, or from any action or decision taken as a result of reading this publication. Please refer to the Wine Intelligence Terms and Conditions for Syndicated Research Reports for details about the licensing of this report, and the use to which it can be put by licensees. Wine Intelligence Ltd: 109 Maltings Place, 169 Tower Bridge Road, London SE1 3LJ Tel: info@wineintelligence.com. Registered in England as a limited company number:

3 Intro to the 2016 Report Deliverables Insights to help your business flourish The n 2016 report includes: Report with the latest information regarding the n wine market, supported by: Wine Intelligence Vinitrac Wine Intelligence market experience Secondary sources User-friendly data table with all the measures from Vinitrac showing significances, cross tabbed with: All n regular wine drinkers in 2016 Gender groups Age groups n regions Tracking data vs and

4 Contents Click on links to navigate to relevant sections Click on logo in corner on any slide to return to contents page Introduction p. 6 Management summary p. 9 n wine market overview p. 18 Imported vs. domestic wine market share Per capita consumption of still light wine n wine consumers p. 23 Overview of the n wine market Demographics of n regular wine drinkers Wine consumption frequency Beverage repertoire p. 27 Alcoholic beverage repertoire Varietal consumption Country of origin awareness and consumption Region of origin awareness and purchase Region of origin awareness tracking Region of origin purchase tracking Wine buying behaviour p. 38 Channel usage Retailer usage Choice cues Wine consumption in the off-premise and in the on-premise p. 48 Off-premise consumption frequency by occasion Off-premise spend by occasion On-premise consumption frequency by occasion On-premise spend by occasion Threats to wine consumption Wine involvement and attitude p. 56 Wine attitude Wine involvement Attitudes towards closures Brand health p. 61 Brand power Brand awareness Brand purchase Brand affinity Brand recommendation Future Consumers p. 70 Generations overview Future consumption Methodology p. 81 4

5 Contents Introduction p. 6 Management summary p. 9 n wine market overview p. 18 Imported vs. domestic wine market share Per capita consumption of still light wine n wine consumers p. 23 Overview of the n wine market Demographics of n regular wine drinkers Wine consumption frequency Beverage repertoire p. 27 Alcoholic beverage repertoire Varietal consumption Country of origin consumption Region of origin awareness Region of origin purchase Region of origin conversion Wine buying behaviour p. 38 Channel usage Retailer usage Choice cues Wine consumption in the off-premise and in the on-premise p. 48 Off-premise consumption frequency by occasion Off-premise spend by occasion On-premise consumption frequency by occasion On-premise spend by occasion Threats to wine consumption Wine involvement and attitude p. 56 Wine attitude Wine involvement Attitudes towards closures Brand health p. 61 Brand power Brand awareness Brand purchase Brand affinity Brand recommendation Future consumers p. 70 Generations overview Future consumption Wine drinker profiling p. 81 Profiling summary Methodology p. 87 5

6 Introduction The 10th largest wine country in the world, and ranked as the 12th most attractive in our recently released Compass report, continues to display all the hallmarks of an established wine nation. Wine may be embedded in the culture of the country, however per capita consumption continues to fall (26.08 litres/per head/per annum in 2015 compared to in 2014 according to IWSR data). Yet, when they do choose to enjoy a glass, ns are opting for a wider selection of wines than ever before. This diversification can be tracked across the spectrum of the most important choice cues. n wine drinkers are still indicating that brand awareness and grape varietal are the most important choice cues, however since 2012 we can see that region and country of origin are becoming more of an influence when consumers are buying wine. Continuing on from this, varietals like Sangiovese and Malbec have shown growth, another indicator that more ns are starting to look further afield than our own backyard. ns are buying more wine from New Zealand, France and Italy then ever before, but at the expense of n wine, which has seen a long-term decline in purchase penetration. Understandably, region of origin awareness is also expanding. Although the Barossa Valley remains the premier region in terms of both awareness and purchase, Champagne and Rioja have increased. It s no surprise, then, that IWSR data demonstrates that the volume of imported wine (still light and sparkling) into has increased since 2011, whilst their domestic equivalents have fallen. If we needed one category to encapsulate all of the above, we need only look towards sparkling wine. We have witnessed long-term growth across the category, to include Prosecco, rose/pink Champagne and Cava. Champagne remains steady as the fourth favourite alcoholic drink in the n beverage repertoire. Our Sparkling Wine in the n Market report, due out later this year, is sure to hold some interesting category-specific insights. 6

7 Introduction It s not all doom and gloom for domestic wines however. They still make up a very dominant 83% of the n wine market volumes and the increase in importance and awareness of regionality can be applied in a domestic context. offers an incredibly diverse wine producing landscape, so there is ample opportunity to continue to emphasise the USP of each region. ns also bring their adventurous spirit to wine; the majority enjoy trying new and different styles on a regular basis, a longterm trend which is showing no sign of fading to a more unadventurous alternative. Without forgetting that consumer spend per bottle, especially for a relaxing drink at the end of the day at home (the most frequent off-premise occasion), is on the increase. To accompany our in-depth look at the n wine landscape in 2016, we ve fast-forwarded through the years in this report and included a series of projections on the future n consumer. For a small nation, ns are some of the most involved in the world in the wine category, with the younger generations looking to spend more per capita than their older counterparts in the next 10 years. Liz Lee Country Manager and New Zealand August

8 Contents Introduction p. 6 Management summary p. 9 n wine market overview p. 18 Imported vs. domestic wine market share Per capita consumption of still light wine n wine consumers p. 23 Overview of the n wine market Demographics of n regular wine drinkers Wine consumption frequency Beverage repertoire p. 27 Alcoholic beverage repertoire Varietal consumption Country of origin consumption Region of origin awareness Region of origin purchase Region of origin conversion Wine buying behaviour p. 38 Channel usage Retailer usage Choice cues Wine consumption in the off-premise and in the on-premise p. 48 Off-premise consumption frequency by occasion Off-premise spend by occasion On-premise consumption frequency by occasion On-premise spend by occasion Threats to wine consumption Wine involvement and attitude p. 56 Wine attitude Wine involvement Attitudes towards closures Brand health p. 61 Brand power Brand awareness Brand purchase Brand affinity Brand recommendation Future consumers p. 70 Generations overview Future consumption Methodology p. 81 8

9 Management Summary Overview of the n wine market Whilst is still a market dominated by domestically produced wine, imported wine (from further afield than New Zealand) is starting to gain momentum. More n wine drinkers are trading up and paying a little bit more for their wine, however levels of consumption have plateaued. Market classification: Established WINE MARKET SUMMARY: 10th largest wine market Total wine consumption: 51,720 '000 9l cases of still light wine long-term trend : 0.17% CAGR Per capita consumption: 24.5 litres per year (still light wine) Imported wine consumption: 8,720 '000 9l cases of still light wine Share of imported wine: 17% 83% Sources: World Bank, CIA library, Eurostat, Trading and Economics, Transparency International, Starbucks, The Guardian Wine volume growth rates: 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% Share of imported wine: 17% ECONOMIC SUMMARY: Adult population: 19.0 Million GDP/capita: $ 56,328 Dollars GDP long-term trend: 3.38% CAGR GNI/capita: $ 60,070 Dollars Unemployment rate: 6.00% Corruption index: 79 0 to 100 (100 = no corruption) Comparative globalization index: 10 1 to 10 (10 = very globalized) Sources: IWSR 2015, ComTrade, Wine Intelligence Calibration studies ( ), Wine Intelligence Vinitrac, Wine Intelligence market experience GDP growth rates: 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% We used GDP at current local currency unit, which is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products Source: Wine Intelligence Compass Excel tool 1 Adult population size measured by the world bank (adult = 15 years old +) 9

10 Management summary is classified as an established market, the 12 th most attractive in the world MATURE ESTABLISHED GROWTH EMERGING NEW EMERGING Markets where wine has reached its potential with stable or declining volumes Markets with strong historical growth which is tailing off Markets where wine is becoming a mainstream product and experiencing growth Markets where wine is experiencing growth and shows potential from a relatively low base Markets where wine is still a relatively new and unknown beverage, but showing potential Markets Markets Markets Markets Markets Germany (2) United Kingdom (3) United States (1) China (4) India (16) France (6) Italy (9) Argentina (21) Austria (22) Portugal (27) Slovenia (34) Hungary (35) Chile (40) Romania (42) Spain (43) Greece (45) Switzerland (5) Norway (8) (12) Ireland (13) Denmark (14) The Netherlands (18) Sweden (20) New Zealand (23) Finland (26) Belgium & Luxembourg (28) Singapore (7) Canada (10) Japan (11) South Korea (15) Hong Kong (17) South Africa (41) United Arab Emirates (19) Taiwan (25) Mexico (29) Poland (30) Czech Republic (31) Colombia (32) Slovakia (33) Peru (44) Brazil (46) Russia (48) Angola (50) Indonesia (24) Turkey (36) Malaysia (37) Philippines (38) Vietnam (39) Thailand (47) Nigeria (49) () = Ranking in attractiveness in Wine Intelligence Compass report Source: Wine Intelligence Compass report 10

11 Management summary Macro trends in the n wine market Established wine market is the 10 th largest market in terms of still light wine volumes and has experienced a small growth of 0.2% CAGR since 2011 but a decline of 0.3% CAGR when compared to Growing imported wine market The volume of imported still light wine in has increased by 5% CAGR since 2011, whilst imported sparkling wine volumes have increased by 6% CAGR. Imported wine accounts for 17% of the market share 1 Falling per capita consumption There are 12 million 2 regular wine drinkers in, however, the per capita consumption has fallen from litres per person per annum in 2011 to litres in New Zealand wine is the most imported Wine from neighbouring New Zealand is the most imported wine in with 13% of the market share. 1 Sources: 1 IWSR 2015 Copyright 2016 The IWSR 2 Wine Intelligence online calibration study with YouGov, June 16, n=1,004 n adults. Wine=still light wine (red, white, rosé) 11

12 Management summary Trends amongst n wine drinkers 1 2 A greater scope of beverages The beverage repertoire of the n regular wine drinker has widened, with beer and cider having strong associations with relaxing at the end of the day Importance of regionality There is increased importance of country of origin and region of origin when it comes to selecting a wine 3 Growth of the sparkling category Along with Champagne, ns are drinking more Prosecco, Cava and rosé/pink Champagne than in previous years 4 Decline in daily drinking The number of ns who drink most days or every day has fallen from 15% in 2012 to 13% in 2016 Source: Wine Intelligence, Vinitrac 2012 & April 2016, n>1,000 n regular wine drinkers 12

13 Management summary Consumption trends 2012 vs. 2016: Imported wines and niche varietals starting to penetrate the top tier of s wine consumption repertoire Top alcoholic beverages % who have drunk the following beverages in the past 6 months White wine Red wine Beer Sparkling Champagne wine from Top countries of origin % who have drunk wine from the following countries in the past 6 months 85% (91%) Top regions of origin % who have drunk wine from the following regions in the past 6 months Barossa Valley 29% (31%) New Zealand 41% (35%) Margaret River 26% (32%) France 25% (20%) South 23% (26%) 80% (77%) 79% (76%) 61% (61%) 47% (46%) 43% (n/a) (n/a) Italy Spain 19% (14%) 9% (7%) Hunter Valley Yarra Valley 22% (29%) 17% (18%) Top red varietals % who have drunk the following varietals in the past 6 months 1 Cabernet Sauvignon 49% (60%) Top white varietals % who have drunk the following varietals in the past 6 months 1 Sauvignon Blanc 57% (57%) 2 Merlot 49% (58%) 2 Chardonnay 50% (58%) 3 Shiraz / Syrah 49% (51%) 3 Riesling 34% (37%) 4 Pinot Noir 38% (34%) 4 Pinot Grigio/Pinot Gris 33% (25%) 5 Sangiovese 11% (7%) 5 Moscato 29% (n/a) (n/a) : statistically no significant change compared to previous wave(s) : statistically significantly higher than 2012 at a 95% confidence level : statistically significantly lower than 2012 at a 95% confidence level () represents data in 2012 Source: Wine Intelligence, Vinitrac 2012 & April 2016, n>1,000 n regular wine drinkers 13

14 Management summary Purchase behaviour 2012 vs. 2016: Country and region of origin are growing in importance as choice cues but ns still rely on big retail chains for purchase Off-premise location % who have bought wine in the following channels in the past 6 months Key retailers % who have bought wine from the following retailers in the past 6 months 1 In the supermarket - attached liquor store 60% (63%) 1 56% (54%) 2 National wine discount store* 51% (23%) 2 42% (31%) 3 Local hotel or bottle shop 35% (40%) 3 33% (46%) 4 Direct from the winery 16% (17%) 4 13% (21%) 5 On the internet 16% (16%) 5 11% (7%) Top brands (2015 vs. 2016) % who have bought the following brands in the past 3 months Please note: short-term tracking only due to changed methodology in 2014 Choice cues % who quoted the following as important or very important when selecting wine 1 31% (28%) 1 Grape variety 72% (73%) 2 22% (19%) 2 A brand I am aware of 69% (70%) 3 20% (18%) 3 The country of origin 62% (56%) 4 18% (17%) 4 The region of origin 62% (54%) 5 17% (15%) 5 Recommendation by friend or family 60% (63%) * Note: Wording changed slightly between 2012 and 2015/2016. () = represents data in 2012 (2015 for top brands) : statistically no significant change compared to previous wave(s) : statistically significantly higher than 2012 (April 2015 for top brands) at a 95% confidence level : statistically significantly lower than 2012 (April 2015 for top brands) at a 95% confidence level Source: Wine Intelligence, Vinitrac, 2012, April 2015 & April 2016, n>1,000 n regular wine drinker 14

15 Management summary Brand power in the n market Brand power: Top 15 wine brands (by awareness) Base = All n regular wine drinkers (n=1,000) 45% 40% Size of bubble: Purchase (drinkers/all sample) 35% (1) Jacob's Creek 30% (11) Oyster Bay (7) Brown Brothers Conversion (are aware of the brand and have bought it in the last 3 months) 25% 20% (8) Yellow Tail (3) Wolf Blass (2) Penfolds 15% (12) De Bortoli (5) Yellowglen 10% 5% (13) McWilliams (14) Hardys (9) Yalumba (15) Wynn's (10) Wyndham Estate (4) Rosemount Estate (6) Lindemans Size of bubble: Purchase (drinkers/all sample) 0% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% Awareness (have heard of the brand) Source: Wine Intelligence, Vinitrac, April 2016, n=1,000 n regular wine drinkers 15

16 Future consumption Number of regular wine drinkers In order to project and understand future consumption in the n market in the next 10 years (until 2026) the total number of regular wine drinkers in 2021 and 2026 was calculated using the following variables: - Historical Vinitrac data on total regular wine drinkers in - Net n population growth (births vs deaths) - Net n immigration rate (emigration vs immigration) Total adult population 18.4 million 20.3 million Wine Intelligence projection 21.8 million Regular Wine Drinkers 12.0 million 12.7 million 13.1 million 65% 62% 60% Sources: Vinitrac calibration studies Future consumption modelling results 16

17 Contents Introduction p. 6 Management summary p. 9 n wine market overview p. 18 Imported vs. domestic wine market share Per capita consumption of still light wine n wine consumers p. 23 Overview of the n wine market Demographics of n regular wine drinkers Wine consumption frequency Beverage repertoire p. 27 Alcoholic beverage repertoire Varietal consumption Country of origin consumption Region of origin awareness Region of origin purchase Region of origin conversion Wine buying behaviour p. 38 Channel usage Retailer usage Choice cues Wine consumption in the off-premise and in the on-premise p. 48 Off-premise consumption frequency by occasion Off-premise spend by occasion On-premise consumption frequency by occasion On-premise spend by occasion Threats to wine consumption Wine involvement and attitude p. 56 Wine attitude Wine involvement Attitudes towards closures Brand health p. 61 Brand power Brand awareness Brand purchase Brand affinity Brand recommendation Future consumers p. 70 Generations overview Future consumption Methodology p

18 Still light wine volumes Volumes of imported still light wine have increased whilst domestic volumes have decreased still light wine volumes and price per bottle (total and by country of origin) Thousands of 9 litre cases CAGR CAGR Market share Price per 0.75L in 2015 (US$) Price per 0.75L CAGR Price per 0.75L CAGR Total 51,380 52,140 52,200 51,895 51,720 0% 0% 100% % 2% Domestic 44,250 44,300 43,850 43,285 43,000-1% -1% 83% % 3% Imported 7,130 7,840 8,350 8,610 8,720 5% 1% 17% % 0% New Zealand 5,590 6,000 6,350 6,556 6,600 4% 1% 13% % 0% French % 3% 2% % 1% Italian % 5% 1% % 0% Spanish % 3% 0% % 0% South African % -8% 0% % -5% Chilean % 9% 0% % 5% Argentinian % 14% 0% % 6% Portuguese % 0% 0% % 1% German % 0% 0% % 0% US % 18% 0% % 6% Greek % 0% 0% % 0% International % -8% 0% % -10% volume in 1000s of 9L cases Copyright The IWSR Source: IWSR

19 Sparkling and fortified wine volumes As with still light wine, imported sparkling wine volumes are growing whilst domestic volumes are falling. The fortified wine market continues to decline in terms of volume sparkling wine volumes and price per bottle (total and by country of origin) Thousands of 9 litre cases CAGR 11- CAGR 14- Price per 0.75L in 2015 Price per 0.75L Market share (US$) CAGR Total 5,043 5,200 5,170 4,965 5,010 0% 1% 100% % 3% Domestic 3,820 3,875 3,770 3,516 3,480-2% -1% 69% % 1% Imported 1,223 1,325 1,400 1,449 1,530 6% 6% 31% % 1% Price per 0.75L CAGR French % 9% 15% % 0% Italian % 7% 11% % -2% New Zealand % -3% 3% % 2% German % 9% 1% % 0% Spanish % -5% 1% % 0% volume in 1000s of 9L cases Copyright The IWSR fortified wine volumes and price per bottle (total and by country of origin) Thousands of 9 litre cases CAGR 11- CAGR 14- Price per 0.75L in 2015 Price per 0.75L Market share (US$) CAGR Total 1,609 1,490 1,377 1,290 1,265-6% -2% 100% % 4% Domestic 1,573 1,454 1,344 1,259 1,235-6% -2% 98% % 4% Imported % -6% 2% % 1% Price per 0.75L CAGR International % -4% 2% % 0% Spanish % -10% 0% % 7% Portuguese % -20% 0% % 1% volume in 1000s of 9L cases Copyright The IWSR Source: IWSR 2015 Copyright 2016 The IWSR 19

20 Imported vs. domestic consumption Imported wines make up 17% of n wine market volumes Shares of imported and domestic wine consumption by market 2% 30% 29% 25% 24% 17% 84% 72% 69% 57% Imported 100% 98% 70% 71% 75% 76% 83% 16% 28% 31% 43% Domestic UK South Korea Canada Japan Germany Russia China USA New Zealand France Source: IWSR 2015 Copyright 2016 The IWSR 20

21 Per capita consumption of still light wine Per capita consumption in has been in continuous decline since 2012 Per capita consumption of still light wine (adult population) in litres per annum (Selected markets) Top 5 Market CAGR CAGR Slovenia % 0.86% 2 France % -3.18% 3 Portugal % 3.85% 4 Italy % -3.40% 5 Montenegro % -0.86% Additional Vinitrac markets 6 Switzerland % -1.38% 9 Denmark % -1.40% 13 Argentina % -1.63% 15 Germany % 0.30% % -1.56% 18 Netherlands % -0.94% 21 Sweden % -1.52% 23 New Zealand % -0.86% 25 Belgium and Luxembourg % -5.12% 27 United Kingdom % -1.33% 30 Chile % 2.27% 33 Ireland % 0.87% 34 Spain % -1.49% 37 Norway % -3.74% 42 Canada % 1.32% 47 United States % -0.23% 49 Finland % -0.62% 51 South Africa % 6.52% 64 Hong Kong % 4.18% 68 Russia % -8.53% 74 Japan % 0.81% 75 Poland % 4.09% 87 Singapore % -1.79% 88 Brazil % -0.04% 97 China % 0.23% 109 Mexico % 6.50% 110 South Korea % 5.84% Source: IWSR 2015 Copyright 2016 The IWSR 21

22 Contents Introduction p. 6 Management summary p. 9 n wine market overview p. 18 Imported vs. domestic wine market share Per capita consumption of still light wine n wine consumers p. 23 Overview of the n wine market Demographics of n regular wine drinkers Wine consumption frequency Beverage repertoire p. 27 Alcoholic beverage repertoire Varietal consumption Country of origin consumption Region of origin awareness Region of origin purchase Region of origin conversion Wine buying behaviour p. 38 Channel usage Retailer usage Choice cues Wine consumption in the off-premise and in the on-premise p. 48 Off-premise consumption frequency by occasion Off-premise spend by occasion On-premise consumption frequency by occasion On-premise spend by occasion Threats to wine consumption Wine involvement and attitude p. 56 Wine attitude Wine involvement Attitudes towards closures Brand health p. 61 Brand power Brand awareness Brand purchase Brand affinity Brand recommendation Future consumers p. 70 Generations overview Future consumption Methodology p

23 Overview of the n wine market The top-down view Adult population 18.4 million 1 81% Wine drinkers 14.9 million 2 65% 51% 80% Regular (i.e. at least once per month) wine drinkers 12 million 2 77% Sample for this report Weekly wine drinkers 9.3 million 3 Sources: 1 Total 18+ population estimated by ABS in June Wine Intelligence online calibration study with YouGov, June 16, n=1,004 n adults. Wine=still light wine (red, white, rosé) 3 Wine Intelligence, Vinitrac, April '16, n=1,000 n regular wine drinkers 23

24 Demographics of n regular wine drinkers The highest proportion of regular wine drinkers come from the and age groups, with an equal gender split Gender 50% 50% 50% 50% Female Male Age 12% 22% 18% 15% 18% 16% 18% 19% 19% 19% 11% 12% 65 and over Regions th Wales 31% 30% Victoria New South Wales 29% 26% 31% 30% eensland Victoria 19% 20% Queensland 8% 9% 29% 26% 19% 20% Western 10% 9% ACTSouth 2% 2% 8% 9% 10% 9% asmania 2% 3% ACT 2% 2% Territory 0.3% 0.3% Tasmania 2% 3% Northern Territory 0.3% 0.3% Income (per year) Under $50,000 $50,000 - $79,999 $80,000 - $99,999 $100,000+ Prefer not to answer 27% * 31% 22% 21% 13% 12% 26% * 21% 13% 14% *: statistically significantly higher than previous wave at a 95% confidence level *: statistically significantly lower than previous wave at a 95% confidence level Source: Wine Intelligence, Vinitrac, April 2016, n=1,000 n regular wine drinkers 24

25 Wine consumption frequency ns are less likely to drink wine most days or every day than in previous years Consumption frequency % who drink wine at the following frequency Base = All n regular wine drinkers (n=1,000) Most days/every day 13% 2-5 times a week 37% About once a week 27% 1-3 times a month 23% Consumption frequency: Tracking % who drink wine at the following frequency Base = All n regular wine drinkers (n>1,000) n= ,505 1,000 1,000 Long-term trend '12-'16 Short-term trend '15-'16 Most days/every day 15% 20% 13% 2-5 times a week 33% 33% 37% About once a week 27% 26% 27% 1-3 times a month 25% 21% 23% : statistically no significant change compared to previous wave(s) : statistically significantly higher than previous wave(s) at a 95% confidence level : statistically significantly lower than previous wave(s) at a 95% confidence level Source: Wine Intelligence, Vinitrac, 2012, April 2015 & April 2016, n>1,000 n regular wine drinkers 25

26 Contents Introduction p. 6 Management summary p. 9 n wine market overview p. 18 Imported vs. domestic wine market share Per capita consumption of still light wine n wine consumers p. 23 Overview of the n wine market Demographics of n regular wine drinkers Wine consumption frequency Beverage repertoire p. 27 Alcoholic beverage repertoire Varietal consumption Country of origin consumption Region of origin awareness Region of origin purchase Region of origin conversion Wine buying behaviour p. 38 Channel usage Retailer usage Choice cues Wine consumption in the off-premise and in the on-premise p. 48 Off-premise consumption frequency by occasion Off-premise spend by occasion On-premise consumption frequency by occasion On-premise spend by occasion Threats to wine consumption Wine involvement and attitude p. 56 Wine attitude Wine involvement Attitudes towards closures Brand health p. 61 Brand power Brand awareness Brand purchase Brand affinity Brand recommendation Future consumers p. 70 Generations overview Future consumption Methodology p

27 Summary Beverage repertoire in the n market 1 Alcoholic beverage repertoire White and red wine top the alcoholic beverage repertoire of n regular wine drinkers, although cider and the sparkling wine category are growing 2 Varietal consumption Whilst traditional varietals Sauvignon Blanc and Cabernet Sauvignon take the top spots, the consumption of niche varietals such as Sangiovese and Malbec is on the increase 3 Country of origin consumption Although the volume of imported wine is growing, most wine consumed in is from 4 Region of origin The Barossa Valley has the highest rate of awareness as well as the highest purchase levels 27

28 Alcoholic beverage repertoire Along with white and red wine and beer, Champagne and sparkling wine from comprise the nation s top 5 alcoholic beverages amongst regular wine drinkers Beverage repertoire % who drink the following alcoholic beverages Base = All n regular wine drinkers (n=1,000) White wine Red wine Beer Champagne Sparkling wine from Cider Vodka Whisky / Whiskey Rosé wine Liqueurs Cocktails Port Pre-mixed/ready to drink alcoholic beverages Rum Craft beer Rosé/pink Champagne Other sparkling wine Gin Sweet/dessert wine Brandy / Cognac Sherry Prosecco Cava None of the above 0% 5% 30% 29% 28% 26% 24% 23% 23% 22% 21% 20% 16% 14% 13% 47% 43% 41% 38% 38% 36% Source: Wine Intelligence, Vinitrac, April 2016, n=1,000 n regular wine drinkers 61% 80% 79% 28

29 Alcoholic beverage repertoire Cider and rosé wine are displaying long-term growth Beverage repertoire tracking % who drink the following alcoholic beverages Base = All n regular wine drinkers (n>1,000) Rank in Beverage n= 1,505 1,000 1,000 Long-term trend '12-'16 Short-term trend '15-' White wine 77% 84% 80% 2 Red wine 76% 77% 79% 3 Beer 61% 59% 61% 4 Champagne 46% 52% 47% 5 Sparkling wine from n/a n/a 43% n/a n/a 6 Cider 28% 39% 41% 7 Vodka n/a 39% 38% n/a 8 Whisky / Whiskey n/a 37% 38% n/a 9 Rosé wine 28% 37% 36% 10 Liqueurs 32% 31% 30% 11 Cocktails n/a 30% 29% n/a 12 Port 32% 30% 28% 13 Pre-mixed/ready to drink alcoholic beverages 30% 27% 26% 14 Rum 23% 26% 24% 15 Craft beer n/a 23% 23% n/a 16 Rosé/pink Champagne 12% n/a 23% n/a 17 Other sparkling wine 27% 33% 22% 18 Gin n/a 22% 21% n/a 19 Sweet/dessert wine 23% 24% 20% 20 Brandy / Cognac n/a 17% 16% n/a 21 Sherry 11% 15% 14% 22 Prosecco 4% 14% 13% 23 Cava 2% 7% 5% : statistically no significant change compared to previous wave(s) : statistically significantly higher than previous wave(s) at a 95% confidence level : statistically significantly lower than previous wave(s) at a 95% confidence level n/a = not applicable as question was not featured in this wave Source: Wine Intelligence, Vinitrac, 2012, April 2014 & April 2015, n>1,000 n regular wine drinkers 29

30 Varietal consumption A three way tie at the top for red varietal consumption between traditional favourites Cabernet Sauvignon, Merlot and Shiraz, with Sauvignon Blanc leading for white wine White varietal consumption % who have drunk the following varietal in the past 6 months Base = All n regular wine drinkers (n=1,000) Red varietal consumption % who have drunk the following varietal in the past 6 months Base = All n regular wine drinkers (n=1,000) Sauvignon Blanc 57% Cabernet Sauvignon 49% Chardonnay Riesling Pinot Grigio/Pinot Gris Moscato Sémillon Chenin Blanc Verdejo/Verdelho Viognier Gewürztraminer Grüner Veltliner Albariño Colombard Torrontés Other 11% 9% 8% 6% 5% 5% 4% 3% 3% 34% 33% 29% 27% 50% Merlot Shiraz / Syrah Pinot Noir Sangiovese Malbec Grenache Tempranillo Zinfandel Pinotage Carmenère Gamay Other Don't know 11% 11% 11% 10% 6% 6% 5% 4% 2% 9% 38% 49% 49% Don't know 7% Source: Wine Intelligence, Vinitrac, April 2016, n=1,000 n regular wine drinkers 30

31 White varietal consumption n consumers continue to remain loyal to mainstream white varietals whilst starting to embrace more niche varietals as well White varietals consumption: Tracking % who have drunk the following varietal in the past 6 months Base = All n regular wine drinkers (n>1,000) Rank in Varietal Long-term Short-term 2016 n= 1,505 1,000 1,000 trend '12-'16 trend '15-'16 1 Sauvignon Blanc 57% 60% 57% 2 Chardonnay 58% 50% 50% 3 Riesling 37% 34% 34% 4 Pinot Grigio/Pinot Gris 25% 34% 33% 5 Moscato n/a 33% 29% n/a 6 Sémillon 30% 29% 27% 7 Chenin Blanc 12% 10% 11% 8 Verdejo/Verdelho 7% 6% 9% 9 Viognier 7% 10% 8% 10 Gewürztraminer 6% 6% 6% 11 Grüner Veltliner n/a 5% 5% n/a 12 Albariño n/a 4% 5% n/a 13 Colombard 6% 6% 4% 14 Torrontés 3% 5% 3% Other 0% 3% 3% Don't know 5% 5% 7% : statistically no significant change compared to previous wave(s) : statistically significantly higher than previous wave at a 95% confidence level : statistically significantly lower than previous wave at a 95% confidence level n/a = not applicable as question was not featured in this wave Source: Wine Intelligence, Vinitrac, 2012, April 2015 & April 2016, n>1,000 n regular wine drinkers 31

32 Red varietals consumption The long-term shift away from traditional varietals towards more niche grapes continues Red varietals consumption: Tracking % who have drunk the following varietal in the past 6 months Base = All n regular wine drinkers (n>1,000) Rank in Varietal Long-term Short-term 2016 n= 1,505 1,000 1,000 trend '12-'16 trend '15-'16 1 Cabernet Sauvignon 60% 51% 49% 2 Merlot 58% 51% 49% 3 Shiraz / Syrah 51% 48% 49% 4 Pinot Noir 34% 38% 38% 5 Sangiovese 7% 9% 11% 6 Malbec 7% 10% 11% 7 Grenache 10% 11% 11% 8 Tempranillo 6% 9% 10% 9 Zinfandel 3% 6% 6% 10 Pinotage 4% 6% 6% 11 Carmenère 3% 3% 5% 12 Gamay 3% 5% 4% Other 2% 2% 2% Don't know 6% 5% 9% : statistically no significant change compared to previous wave(s) : statistically significantly higher than previous wave(s) at a 95% confidence level : statistically significantly lower than previous wave(s) at a 95% confidence level Source: Wine Intelligence, Vinitrac, 2012, April 2015 & April 2016, n>1,000 n regular wine drinkers 32

33 Country of origin awareness and consumption After and New Zealand, ns are consuming wines from France, Italy and Spain Country of origin awareness and respective consumption level Base = All n regular wine drinkers (n=1,000) France Italy New Zealand Spain California Germany Portugal Argentina Chile South Africa Hungary Other USA Switzerland Bulgaria Other 2% 9% 6% 7% 4% 4% 6% 5% 2% 1% 2% 1% 19% 18% 16% 12% 19% 25% 41% 43% 41% 40% 39% 51% 60% 57% 85% 79% 75% 74% 89% % who are aware % who have drunk in the past 6 months Country of origin consumption tracking % who have drunk wine from the following countries in the last 6 months Base = All n regular wine drinkers (n>1,000) Rank in Country Long-term Short-term 2016 n= 1,505 1,000 1,000 trend '12- trend ' % 83% 85% 2 New Zealand 35% 44% 41% 3 France 20% 23% 25% 4 Italy 14% 16% 19% 5 Spain 7% 10% 9% 6 Germany 6% 6% 7% 7 Chile 5% 5% 6% 8 California 6% 9% 6% 9 South Africa 5% 5% 5% 10 Argentina 3% 5% 4% 11 Portugal 6% 7% 4% 12 Switzerland 1% 1% 2% n/a 13 Hungary n/a n/a 2% n/a n/a 14 Bulgaria 2% 3% 1% 15 Other USA 1% 2% 1% Other 1% 0.4% 0.3% Don't know 5% 7% 5% : statistically no significant change compared to previous wave(s) : statistically significantly higher than previous wave(s) at a 95% confidence level : statistically significantly lower than previous wave(s) at a 95% confidence level Source: Wine Intelligence, Vinitrac, 2012, April 2015 & April 2016, n>1,000 n regular wine drinkers 33

34 Region of origin awareness and purchase ns have a strong awareness of their own wine producing regions Region of origin awareness and respective purchase level Base = All n regular wine drinkers (n=1,000) Barossa Valley Hunter Valley Margaret River Yarra Valley South Champagne Bordeaux Western McLaren Vale Victoria New South Wales Tasmania Coonawarra Clare Valley Burgundy Marlborough Mornington Peninsula Rutherglen South East Provence Hawke s Bay Chablis Chianti Loire Prosecco Côtes du Rhône 8% 5% 13% 16% 14% 13% 10% 15% 9% 2% 16% 6% 6% 9% 2% 5% 1% 2% 1% 4% 2% 29% 22% 26% 17% 23% 24% 23% 22% 62% 62% 61% 59% 59% 58% 58% 56% 56% 55% 51% 44% 44% 44% 36% 35% 35% 34% Victoria New South Wales Tasmania Coonawarra Clare Valley Burgundy Marlborough Mornington Peninsula Rutherglen South East Provence 78% Hawke s Bay 77% Chablis 74% Chianti 73% Loire 70% Prosecco Côtes du Rhône Bourgogne Alsace Châteauneuf-du-Pape Médoc // Haut-Médoc Languedoc St Emilion Rioja Vin de Pays d'oc Source: Wine Intelligence, Vinitrac, April 2016, n=1,000 n regular wine drinkers 2% 6% 6% 9% 2% 5% 1% 2% 1% 4% 2% 1% 1% 2% 1% 1% 1% 2% 1% 14% 13% 10% 15% 9% 16% 24% 23% 22% 22% 20% 14% 13% 11% 11% 10% 8% % who are aware % who have purchased in the past 3 months 59% 58% 58% 56% 56% 55% 51% 44% 44% 44% 36% 35% 35% 34% * The Barossa Valley has the highest rate of awareness, as well as the highest purchase levels * Marlborough shows a healthy purchase rate regardless of relatively low awareness levels when compared with other regions 34

35 Region of origin awareness The long-term trend for more foreign wine regions entering the n regular wine drinker s vocabulary continues Region of origin awareness tracking % who know the following regions produce wine Base = All n regular wine drinkers (n>1,000) Rank in Region Long-term Short-term Rank in Region Long-term Short-term 2016 n= 1,505 1,000 1,000 trend '12-'16 trend '15-' n= 1,505 1,000 1,000 trend '12-'16 trend '15-'16 1 Barossa Valley 81% 80% 78% 19 South East 43% 51% 44% n/a 2 Hunter Valley 84% 80% 77% 20 Provence n/a n/a 36% n/a n/a 3 Margaret River 77% 77% 74% 21 Hawke s Bay 33% 42% 35% n/a 4 Yarra Valley 76% 78% 73% 22 Chablis 32% 36% 35% 5 South 71% 75% 70% 23 Chianti 31% 39% 34% 6 Champagne 56% 65% 62% 24 Loire 22% 31% 24% 7 Bordeaux 57% 65% 62% 25 Prosecco n/a 19% 23% n/a 8 Western 62% 64% 61% 26 Côtes du Rhône 16% 28% 22% 9 McLaren Vale 61% 66% 59% 27 Bourgogne 18% 28% 22% 10 Victoria 59% 65% 59% 28 Alsace n/a n/a 20% n/a n/a 11 New South Wales 57% 64% 58% 29 Châteauneuf-du-Pape 10% 15% 14% 12 Tasmania 54% 66% 58% 30 Médoc / Haut-Médoc n/a n/a 13% n/a n/a 13 Coonawarra 61% 63% 56% 31 Languedoc n/a n/a 11% n/a n/a 14 Clare Valley 56% 58% 56% 32 St Emilion n/a n/a 11% n/a n/a 15 Burgundy 47% 56% 55% 33 Rioja 7% 12% 10% 16 Marlborough 41% 59% 51% 34 Vin de Pays d'oc n/a n/a 8% n/a n/a 17 Mornington Peninsula 46% 52% 44% None of these 0% 1% 2% 18 Rutherglen n/a 50% 44% n/a : statistically no significant change compared to previous wave(s) : statistically significantly higher than previous wave(s) at a 95% confidence level : statistically significantly lower than previous wave(s) at a 95% confidence level Source: Wine Intelligence, Vinitrac, 2012, April 2015 & April 2016, n>1,000 n regular wine drinkers 35

36 Region of origin purchase Domestic regions of origin have the highest rates of conversion although long-term tracking indicates increased conversion for Champagne, Prosecco and Rioja Region of origin purchase tracking % who have bought wine from the following regions in the past 3 months Base = All n regular wine drinkers (n>1,000) Rank in Region Long-term Short-term Rank in Region Long-term Short-term 2016 n= 1,505 1,000 1,000 trend '12-'16 trend '15-' n= 1,505 1,000 1,000 trend '12-'16 trend '15-'16 1 Barossa Valley 31% 28% 29% 19 Bordeaux 4% 5% 5% 2 Margaret River 32% 30% 26% 20 Prosecco n/a 3% 4% n/a 3 South 26% 24% 23% 21 Burgundy 2% 3% 2% 4 Hunter Valley 29% 25% 22% 22 Chianti 2% 4% 2% 5 Yarra Valley 18% 18% 17% 23 Rioja 1% 2% 2% 6 Marlborough 18% 21% 16% 24 Châteauneuf-du-Pape 1% 1% 2% 7 McLaren Vale 16% 20% 16% 25 Côtes du Rhône 2% 3% 2% n/a 8 Coonawarra 17% 18% 15% 26 Provence n/a n/a 2% n/a n/a 9 Victoria 17% 15% 14% 27 Loire 1% 2% 1% 10 Western 17% 14% 13% 28 Alsace n/a n/a 1% n/a n/a 11 New South Wales 14% 15% 13% 29 Chablis 1% 2% 1% n/a 12 Tasmania 9% 11% 10% 30 Bourgogne 1% 2% 1% n/a 13 Clare Valley 11% 12% 9% 31 Médoc / Haut-Médoc n/a n/a 1% n/a n/a 14 South East 11% 12% 9% 32 St Emilion n/a n/a 1% n/a n/a 15 Champagne 5% 8% 8% 33 Vin de Pays d'oc n/a n/a 1% n/a n/a 16 Rutherglen n/a 7% 6% n/a 34 Languedoc n/a n/a 1% n/a n/a 17 Mornington Peninsula 6% 6% 6% None of these 11% 12% 11% 18 Hawke s Bay 8% 8% 5% : statistically no significant change compared to previous wave(s) : statistically significantly higher than previous wave(s) at a 95% confidence level : statistically significantly lower than previous wave(s) at a 95% confidence level Source: Wine Intelligence, Vinitrac, 2012, April 2015 & April 2016, n>1,000 n regular wine drinkers 36

37 Contents Introduction p. 6 Management summary p. 9 n wine market overview p. 18 Imported vs. domestic wine market share Per capita consumption of still light wine n wine consumers p. 23 Overview of the n wine market Demographics of n regular wine drinkers Wine consumption frequency Beverage repertoire p. 27 Alcoholic beverage repertoire Varietal consumption Country of origin consumption Region of origin awareness Region of origin purchase Region of origin conversion Wine buying behaviour p. 38 Channel usage Retailer usage Choice cues Wine consumption in the off-premise and in the on-premise p. 48 Off-premise consumption frequency by occasion Off-premise spend by occasion On-premise consumption frequency by occasion On-premise spend by occasion Threats to wine consumption Wine involvement and attitude p. 56 Wine attitude Wine involvement Attitudes towards closures Brand health p. 61 Brand power Brand awareness Brand purchase Brand affinity Brand recommendation Future consumers p. 70 Generations overview Future consumption Methodology p

38 Summary Channel and retailer usage and choice cues in the n market 1 Channel usage n regular wine drinkers are most likely to buy wine from supermarket-attached liquor stores and national wine discount stores 2 Retailer usage Dan Murphy s continues to be the most popular retailer to buy wine from, with BWS and Aldi also showing growth 3 Choice cues when buying wine Country and region of origin have increased in importance when buying wine, as has alcohol content. The appeal of the bottle and/or label has also grown in the past 12 months as an influencing factor when choosing which wine to buy 38

39 Channel usage Supermarket attached liquor store and national wine discount stores continue to lead Top 10 channel usage % who have bought wine from following channels in the past 6 months Base = All n regular wine drinkers (n=1,000) In the supermarket - attached liquor store 60% National wine discount store 51% Local hotel or bottle shop 35% Direct from the winery - Cellar door or mail order On the internet From a specialist wine shop From a drive through Through a wine club From Duty Free (e.g. airports) 16% 16% 13% 13% 11% 8% Other I don't buy wine to drink at home 1% 1% Source: Wine Intelligence, Vinitrac, April 2016, n=1,000 n regular wine drinkers 39

40 Channel usage National wine discount stores continue to experience long-term growth whilst the local hotel or bottle shop is declining in both the short and long-term Channel usage: Tracking % who have bought wine from following channels in the past 6 months Base = All n regular wine drinkers (n>1,000) Rank in Channel Long-term Short-term 2016 n= 1,505 1,000 1,000 trend '12-'16 trend '15-'16 1 In the supermarket- attached liquor store 63% 60% 60% 2 National wine discount store 23% 51% 51% 3 Local hotel or bottle shop 40% 39% 35% 4 Direct from the winery - Cellar door or mail order 17% 16% 16% 5 On the internet 16% 18% 16% 6 From a specialist wine shop 29% 15% 13% 7 From a drive through 21% 15% 13% 8 Through a wine club 10% 12% 11% 9 From Duty Free (e.g. airports) 6% 13% 8% Other 2% 1% 1% I don't buy wine to drink at home 0% 1% 1% : statistically no significant change compared to previous wave(s) : statistically significantly higher than previous wave at a 95% confidence level : statistically significantly lower than previous wave at a 95% confidence level Source: Wine Intelligence, Vinitrac, 2012, April 2015 & April 2016, n>1,000 n regular wine drinkers 40

41 Channel usage by state Those in Western are more likely to buy wine direct from the cellar door than other regions Channel usage per city / region % who have bought wine from following channels in the past 6 months Base = All n regular wine drinkers (n=1,000) New South Western South Channel All sample Queensland Victoria Rank Wales n= In the supermarket - attached liquor store 60% 65% 45% 73% 49% 47% 2 National wine discount store 51% 50% 59% 47% 49% 61% 3 Local hotel or bottle shop 35% 34% 38% 31% 40% 36% 4 Direct from the winery - Cellar door or mail order 16% 15% 9% 16% 26% 20% 5 On the internet 16% 18% 15% 11% 17% 22% 6 From a specialist wine shop 13% 13% 9% 14% 20% 16% 7 From a drive through 13% 9% 9% 12% 20% 25% 8 Through a wine club 11% 14% 9% 10% 13% 10% 9 From Duty Free (e.g. airports) 8% 9% 6% 9% 7% 9% Other 1% 2% 1% 1% 1% 0% I don't buy wine to drink at home 1% 1% 1% 0% 0% 2% Red: statistically significantly higher than all n regular wine drinkers at a 95% confidence level Blue: statistically significantly lower than all n regular wine drinkers at a 95% confidence level Source: Wine Intelligence, Vinitrac, April 2016, n=1,000 n regular wine drinkers 41

42 Retailer usage Consumers mostly buy wine from Dan Murphy's and BWS Top 10 retailer usage % who have bought wine from the following retailers in the past 6 months Base = All n regular wine drinkers who drink wine in the off-premise (n=991) Dan Murphy's 56% BWS 42% Liquorland/Liquorland Express 33% 1st Choice Aldi 13% 11% Vintage Cellars Cellarbrations IGA Liquor Thirsty Camel Cellarmasters 7% 6% 6% 5% 5% Source: Wine Intelligence, Vinitrac, April 2016, n=1,000 n regular wine drinkers 42

43 Retailer usage BWS and Aldi are the only retailers showing a significant long term increase in the number of wine drinkers purchasing at the store Retailer usage: Tracking % who have bought wine from following retailers in the past 6 months Base = All n regular wine drinkers who drink wine in the off-premise Rank in Retailer Long-term Short-term trend '12-'16 trend '15-'16 1 Dan Murphy's 54% 50% 56% 2 BWS 31% 36% 42% 3 Liquorland/Liquorland Express 46% 32% 33% 4 1st Choice 21% 16% 13% 5 Aldi 7% 10% 11% 6 Vintage Cellars 13% 5% 7% 7 Cellarbrations 15% 7% 6% 8 IGA Liquor 13% 8% 6% 10 Thirsty Camel 13% 6% 5% 11 Cellarmasters n/a n/a 5% n/a n/a 12 The Bottle O 9% 5% 4% 13 Local Liquor n/a n/a 4% n/a n/a 14 Bottlemart/Sip n Save 8% 4% 3% 15 Foodworks n/a n/a 2% n/a n/a 16 Coles online (shop.coles.com.au) n/a n/a 2% n/a n/a 17 Duncans n/a n/a 1% n/a n/a Other 7% 5% 5% None of these 1% 2% 1% : statistically no significant change compared to previous wave(s) : statistically significantly higher than previous wave at a 95% confidence level : statistically significantly lower than previous wave at a 95% confidence level n/a = not applicable as question was not featured in this wave Source: Wine Intelligence, Vinitrac, 2012, April 2015 & April 2016, n>1,000 n regular wine drinkers 43

44 Retailer usage by state Those in NSW and Queensland are more likely to shop for wine at Aldi Retailer usage per city / region % who have bought wine from following channels in the past 6 months Base = All n regular wine drinkers who drink wine in the off-premise Rank Retailer All sample New South Wales Queensland Victoria Western South 1 Dan Murphy's 56% 56% 61% 53% 54% 64% 2 BWS 42% 36% 53% 40% 40% 43% 3 Liquorland/Liquorland Express 33% 36% 30% 36% 40% 22% 4 1st Choice 13% 8% 20% 12% 14% 19% 5 Aldi 11% 19% 2% 16% 3% 0% 6 Vintage Cellars 7% 12% 1% 6% 5% 7% 7 Cellarbrations 6% 5% 7% 6% 9% 7% 8 IGA Liquor 6% 5% 0% 11% 9% 0% 10 Thirsty Camel 5% 0% 3% 5% 17% 11% 11 Cellarmasters 5% 7% 6% 2% 4% 5% 12 The Bottle O 4% 3% 7% 5% 3% 3% 13 Local Liquor 4% 6% 1% 3% 2% 4% 14 Bottlemart/Sip n Save 3% 2% 2% 2% 4% 7% 15 Foodworks 2% 3% 1% 1% 0% 1% 16 Coles online (shop.coles.com.au) 2% 3% 0% 1% 4% 0% 17 Duncans 1% 1% 1% 2% 2% 1% Other 5% 6% 4% 3% 5% 6% None of these 1% 1% 1% 1% 1% 0% Red: statistically significantly higher than all n regular wine drinkers at a 95% confidence level Blue: statistically significantly lower than all n regular wine drinkers at a 95% confidence level Source: Wine Intelligence, Vinitrac, April 2016, n=1,000 n regular wine drinkers 44

45 Choice cues Grape variety, brand awareness and country of origin are the primary choice cues for n regular wine drinkers Choice cues % who quoted the following as important or very important when selecting wine Base = All n regular wine drinkers (n=1,000) Grape variety 0 % 2 0 % 4 0 % 6 0 % 72% 8 0 % % % A brand I am aware of 69% The country of origin The region of origin Recommendation by friend or family Promotional offer Taste or wine style descriptions on the shelves or on wine labels 62% 62% 60% 60% 57% Alcohol content Appeal of the bottle and/or label design The wines recommended by shop staff or shop leaflets Whether or not the wine has won a medal or award Recommendation by wine critic or writer Recommendation by wine guide books 42% 39% 37% 33% 32% 27% Source: Wine Intelligence, Vinitrac, April 2016, n=1,000 n regular wine drinkers 45

46 Choice cues Country of origin and region of origin have grown in importance over the long-term Choice cues: Tracking % who quoted the following as important or very important when selecting wine Base = All n regular wine drinkers (n>1,000) Rank in Choice cue Long-term Short-term 2016 n= 1,505 1,000 1,000 trend '12-'16 trend '15-'16 1 Grape variety 73% 77% 72% 2 A brand I am aware of 70% 69% 69% 3 The country of origin 56% 63% 62% 4 The region of origin 54% 59% 62% 5 Recommendation by friend or family 63% 58% 60% 6 Promotional offer 57% 61% 60% 7 Taste/wine style description on shelf or label n/a n/a 57% n/a n/a 8 Alcohol content 31% 34% 42% 9 Appeal of the bottle and/or label design 29% 35% 39% 10 Recommended by shop staff or shop leaflets 35% 37% 37% 11 If the wine has won a medal or award 29% 31% 33% 12 Recommendation by wine critic or writer 29% 27% 32% 13 Recommendation by wine guide books 27% 25% 27% : statistically no significant change compared to previous wave(s) : statistically significantly higher than previous wave at a 95% confidence level : statistically significantly lower than previous wave at a 95% confidence level n/a = not applicable as question was not featured in this wave Source: Wine Intelligence, Vinitrac, 2012, April 2015 & April 2016, n>1,000 n regular wine drinkers 46

47 Contents Introduction p. 6 Management summary p. 9 n wine market overview p. 18 Imported vs. domestic wine market share Per capita consumption of still light wine n wine consumers p. 23 Overview of the n wine market Demographics of n regular wine drinkers Wine consumption frequency Beverage repertoire p. 27 Alcoholic beverage repertoire Varietal consumption Country of origin consumption Region of origin awareness Region of origin purchase Region of origin conversion Wine buying behaviour p. 38 Channel usage Retailer usage Choice cues Wine consumption in the off-premise and in the on-premise p. 48 Off-premise consumption frequency by occasion Off-premise spend by occasion On-premise consumption frequency by occasion On-premise spend by occasion Threats to wine consumption Wine involvement and attitude p. 56 Wine attitude Wine involvement Attitudes towards closures Brand health p. 61 Brand power Brand awareness Brand purchase Brand affinity Brand recommendation Future consumers p. 70 Generations overview Future consumption Methodology p

48 Summary On-premise and off-premise consumer trends in the n market 1 Off-premise consumption frequency As with last year, the preferred occasions for off-premise consumption are as a relaxing drink at the end of the day and with an informal meal both at home 2 Off-premise consumption frequency Since last year, the frequency of drinking wine in the on-premise as a relaxing drink out at the end of the day has increased 3 Beverage best occasion Red wine is seen as more appropriate for formal dining occasions, whereas white and rosé wine are associated more with informal occasions 4 Alcoholic beverage repertoire trends Compared to last year, the alcoholic beverages that n regular wine drinkers are drinking more frequently are red wine, cider and white wine 48

49 Off-premise consumption frequency by occasion As with last year, the most frequent occasions for off-premise consumption are as a relaxing drink at the end of the day and with an informal meal both at home Off-premise consumption frequency by occasion: Tracking % who drink wine in the following occasions Base = All n regular wine drinkers who drink wine in the off-premise (n>991) 14% 11%* 12% 9%* 23% 23% 19% 22% 2% 0%* 2% 0%* 2%* 3%* 5% 7% 5% 10% 6% 9% 14% 17% 26% 29% 1% 0%* 1% 0% 5% 3%* 5% 3%* 7% 10%* 9% 9% 22% 25% 18% 19% Every day/most days 2-5 times per week About once per week 1-3 times per month 21% 24% 23% 23% 47% 49% 43% 45% Less than once per month I don't drink wine on this type of occasion 19% 19% 22% 23% 51% 52% 54% 51% 13% 16% 17% 17% 26% 24% 25% 24% 9% 7%* 7% 6% 6% 7% 10% 10% A relaxing drink at the end of the day at home With an informal meal at home BYO (To take to a more formal restaurant) At a party/celebration at home With a more formal dinner party at home BYO (To take to an informal bar/restaurant) *: statistically significantly higher than April 2015 at a 95% confidence level *: statistically significantly lower than April 2015 at a 95% confidence level Source: Wine Intelligence, Vinitrac, April 2015 & April 2016, n=1,000 n regular wine drinkers 49

50 Off-premise spend by occasion As expected, ns spend the most per bottle on gifts, and the least on wine to be consumed informally at home Off-premise spend by occasion: Tracking % who stated they typically spend the following amount for the following occasions Base = All n regular wine drinkers who drink wine on the following occasions 2% 1% 1% 0% 1% 3%* 1% 3%* 5% 8%* 9% 8% 20% 19% 18% 20% 3% 5% 3% 3% 5% 5% 2% 6% 5%* 6% 7% 7% 12% 13% 16% 18% 17% 18% 2% 2% 4% 4% 11% 10% 9% 11% 11% 12% $30 or more Between $25 and $29.99 Between $20 and $24.99 Between $15 and $ % 34% 32% 34% 29% 28% 24% 24% 28% 30% 26% 26% 23% 22% Between $10 and $14.99 Between $7 and $9.99 Up to $ % 32% 33% 36% 26% 26% 25% 17% 24% 12%* 25% 15% 23% 11%* 26% 12% 28% 10% 7% 5% 17% 10% 16% 28% 9% 6%* 7% 27% 10% 4%* 17% 16% 20% 18% 7% 7% 7% 6% 4% 4% A relaxing drink at the end of the day at home With an informal meal at home BYO (To take to a more formal restaurant) At a party/celebration at home With a more formal dinner party at home BYO (To take to an As a gift for somebody informal bar/restaurant) $12.35 $12.89 $12.50 $13.05 $16.26 $17.01 $14.67 $15.24 $16.82 $17.25 $14.69 $14.80 $19.24 $19.76 Mean spend *: statistically significantly higher than April 2015 at a 95% confidence level *: statistically significantly lower than April 2015 at a 95% confidence level Source: Wine Intelligence, Vinitrac, April 2015 & April 2016, n=1,000 n regular wine drinkers 50

51 On-premise consumption frequency by occasion Since last year, a relaxing drink out at the end of the day has grown as the most frequent occasion for on-premise consumption On-premise consumption frequency by occasion: Tracking % who drink wine in the following occasions Base = All n regular wine drinkers who drink wine in the on-premise (n>862) 7% 13% 18% 10%* 17%* 23%* 1% 0% 1% 1% 0% 0% 4% 3% 5% 4% 5% 4% 7% 10%* 8% 9% 14% 15% 21% 22% 27% 31% 31% 38%* Every day/most days 2-5 times per week About once per week 1-3 times per month Less than once per month 18% I don't drink wine on this type of occasion 32% 21% 21%* 58% 53%* 44% 39%* 60% 58% Bar or pub 58% 57% % 8%* 2% 2% 5% 4% 7% 7% A relaxing drink out at the end of the day With a more formal dinner in a restaurant With an informal meal At a party/celebration/ in a pub/bar/restaurant big night out Restaurant 82% 82% *: statistically significantly higher than April 2015 at a 95% confidence level *: statistically significantly lower than April 2015 at a 95% confidence level Source: Wine Intelligence, Vinitrac, April 2015 & April 2016, n=1,000 n regular wine drinkers 51

52 On-premise spend by occasion ns spend more with a formal dinner in a restaurant than other on-premise occasions On-premise spend by occasion: Tracking % who stated they typically spend the following amount for the following occasions Base = All n regular wine drinkers who drink wine on the following occasions 2% 5% 8% 16% 28% 1% 4% 9% 14% 29% 41% 43% 8% 9% 12% 18% 24% 22% 14% 17% 24% 23% 16% 13% 3% 2% 5%* 8% 10% 13% 20% 21% 34% 34% 5% 4% 6% 9% 14% 22% 20% 27% 15% 29% 26% 25% 26% 23% A relaxing drink out at the end of the day With a more formal dinner in a restaurant With an informal meal At a party/celebration/ in a pub/bar/restaurant big night out $40 or more Between $30 and $39.99 Between $25 and $29.99 Between $20 and $24.99 Between $15 and $19.99 Less than $14.99 Bar or pub Restaurant $19.18 $18.41 $24.80 $25.51 $21.03 $20.41 $21.85 $22.12 Mean spend 58% 57% % 82% *: statistically significantly higher than April 2015 at a 95% confidence level *: statistically significantly lower than April 2015 at a 95% confidence level Source: Wine Intelligence, Vinitrac, April 2015 & April 2016, n=1,000 n regular wine drinkers 52

53 Threats to wine consumption Best occasion for beverage consumption Best occasion for beverage Those who indicated the most appropriate occasion for the following beverages Base = All n regular wine drinkers (n=1,000) A relaxing drink at the end of the day With an informal meal With a more formal dinner party At a party/celebration As a gift for somebody Red wine 27% 25% 26% 9% 13% Cocktails 11% 5% 19% 57% 8% White wine 35% 30% 16% 10% 9% Rosé wine 19% 27% 17% 17% 20% Prosecco 16% 15% 17% 26% 26% Champagne 9% 6% 20% 45% 20% Other Sparkling wine 16% 14% 16% 38% 17% Craft beer 32% 20% 8% 22% 18% Cider 38% 24% 4% 24% 11% Regular beer 51% 20% 3% 19% 7% Source: Wine Intelligence, Vinitrac, April 2016, (n=1000) n regular wine drinkers Red = 2 most relevant beverages for each occasion Blue = least relevant beverage for each occasion 53

54 Threats to wine consumption Alcoholic beverage repertoire trends Alcoholic beverage repertoire trends Those who are drinking more or less the following beverages compared to last year Base = All n regular wine drinkers (n=1,000) I am drinking I am drinking I don t drink this I am drinking less more about the same type of beverage Red wine 15% 55% 18% 12% Cider 13% 33% 18% 36% White wine 12% 60% 19% 10% Regular beer 10% 45% 19% 26% Craft beer 9% 32% 15% 43% Other Sparkling wine 7% 45% 19% 29% Champagne 6% 47% 22% 25% Cocktails 6% 32% 21% 41% Rosé wine 6% 37% 19% 38% Prosecco 5% 23% 11% 62% Source: Wine Intelligence, Vinitrac, April 2016, (n=1000) n regular wine drinkers 54

55 Contents Introduction p. 6 Management summary p. 9 n wine market overview p. 18 Imported vs. domestic wine market share Per capita consumption of still light wine n wine consumers p. 23 Overview of the n wine market Demographics of n regular wine drinkers Wine consumption frequency Beverage repertoire p. 27 Alcoholic beverage repertoire Varietal consumption Country of origin consumption Region of origin awareness Region of origin purchase Region of origin conversion Wine buying behaviour p. 38 Channel usage Retailer usage Choice cues Wine consumption in the off-premise and in the on-premise p. 48 Off-premise consumption frequency by occasion Off-premise spend by occasion On-premise consumption frequency by occasion On-premise spend by occasion Threats to wine consumption Wine involvement and attitude p. 56 Wine attitude Wine involvement Attitudes towards closures Brand health p. 61 Brand power Brand awareness Brand purchase Brand affinity Brand recommendation Future consumers p. 70 Generations overview Future consumption Methodology p

56 Summary Attitude and involvement in the n market 1 2 Attitude towards wine ns continue to be relatively adventurous when it comes to wine, with 38% of n regular wine drinkers indicating they enjoy trying new and different styles on a regular basis Wine involvement The number of n regular wine drinkers showing high involvement with wine remains stable at 30% 3 Attitude towards closures Screw cap closures continue to be the preferred closure in 56

57 Wine attitude ns continue to have a preference for trying new and different styles of wine on a regular basis Attitude towards wine: Tracking % who agree with the following statements about wine Base = All n regular wine drinkers (n=1,000) 33% 31% I know what I like and I tend to stick to what I know 28% 31% I don't mind what I buy so long as the price is right I enjoy trying new and different styles of wine on a regular basis 39% 38% There are no significant differences between the 2015 and 2016 waves Source: Wine Intelligence, Vinitrac April 2015 & April 2016, n=1,000 n regular wine drinkers 57

58 Wine involvement Drinking wine gives me pleasure and I always look for the best quality wines I can get for my budget are the primary wine involvement statements for n RWD Attitude towards wine: Tracking % who agree with the following statements about wine Base = All n regular wine drinkers (n=1,000) Drinking wine gives me pleasure 77%* 82% I always look for the best quality wines I can get for my budget 73% 77% 30% 30% 44% 42% Generally speaking, wine is reasonably priced Deciding which wine to buy is an important decision I like to take my time when I purchase a bottle of wine 66% 63% 62% 62% 56% 55% Wine is important to me in my lifestyle 45% 46% 27% 28% I have a strong interest in wine 40% 40% Compared to others, I know less about the subject of wine 40% 42% 2016 High involvement I feel competent about my knowledge of wine 38% 40% 2015 Medium involvement Low involvement I don t understand much about wine Generally speaking, wine is an expensive drink 31% 31% 30% 27% *: statistically significantly higher than previous wave at a 95% confidence level *: statistically significantly lower than previous wave at a 95% confidence level For information on calculation of involvement please see appendix Source: Wine Intelligence, Vinitrac April 2015 & April 2016, n=1,000 regular wine drinkers 58

59 Attitudes towards closures A neutral attitude towards closures is showing long term growth, although the screw-cap remains the closure of preference for n regular wine drinkers Attitude towards closures: Tracking % who agree or strongly agree with the following statements Base = All n regular wine drinkers (n=1,000) 18% 13%* 52% 45%* 42% 37%* 63% 66% I like buying wine with this closure Neutral 40% 48%* 48% 53%* I don't like buying wine with this closure 8% 7% 10% 10% 19% 21% Screw-cap Natural cork Synthetic cork *: statistically significantly higher than April 2015 at a 95% confidence level *: statistically significantly lower than April 2015 at a 95% confidence level Source: Wine Intelligence, Vinitrac, April 2015 & April 2016, n=1,000 n regular wine drinkers 59

60 Contents Introduction p. 6 Management summary p. 9 n wine market overview p. 18 Imported vs. domestic wine market share Per capita consumption of still light wine n wine consumers p. 23 Overview of the n wine market Demographics of n regular wine drinkers Wine consumption frequency Beverage repertoire p. 27 Alcoholic beverage repertoire Varietal consumption Country of origin consumption Region of origin awareness Region of origin purchase Region of origin conversion Wine buying behaviour p. 38 Channel usage Retailer usage Choice cues Wine consumption in the off-premise and in the on-premise p. 48 Off-premise consumption frequency by occasion Off-premise spend by occasion On-premise consumption frequency by occasion On-premise spend by occasion Threats to wine consumption Wine involvement and attitude p. 56 Wine attitude Wine involvement Attitudes towards closures Brand health p. 61 Brand power Brand awareness Brand purchase Brand affinity Brand recommendation Future consumers p. 70 Generations overview Future consumption Methodology p

61 Summary Brand health in the n market 1 Unprompted favourite brands When n regular wine drinkers are asked to think about their favourite wine brands, Penfolds, Jacob s Creek and Brown Brothers are the most popular choices 2 Brand awareness Jacob s Creek continues to lead in prompted brand awareness, followed by Penfolds and Wolf Blass 3 Brand purchase Despite lower levels of brand awareness, Oyster Bay and Brown Brothers move in to the top five for brands purchased in the past three months 4 Brand affinity and recommendation Brown Brothers and Oyster Bay lead for both measures 61

62 Brand power Jacob s Creek leads the market for brand power with high awareness, conversion and purchase levels Brand power: Top 15 wine brands (by awareness) Base = All n regular wine drinkers (n=1,000) 45% 40% Size of bubble: Purchase (drinkers/all sample) 35% (1) Jacob's Creek 30% (11) Oyster Bay (7) Brown Brothers Conversion (are aware of the brand and have bought it in the last 3 months) 25% 20% (8) Yellow Tail (3) Wolf Blass (2) Penfolds 15% (12) De Bortoli (5) Yellowglen 10% 5% (13) McWilliams (14) Hardys (9) Yalumba (15) Wynn's (10) Wyndham Estate (4) Rosemount Estate (6) Lindemans 0% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% Awareness (have heard of the brand) Source: Wine Intelligence, Vinitrac, April 2016, n=1,000 n regular wine drinkers 62

63 Favourite Wine Brands Penfolds, Jacob s Creek and Brown Brothers are the brands that wine drinkers are most likely to indicate as their favourite, when unprompted Unprompted favourite wine brands % who indicate the following brands are their favourite Base = All n regular wine drinkers (n=1,000) Note: This question was asked prior to being shown the prompted brand awareness question Source: Wine Intelligence, Vinitrac, April 2016, n=1,000 n regular wine drinkers 63

64 Brand awareness vs. purchase The brands most n regular wine drinkers are aware of are Jacob s Creek, Penfolds and Wolf Blass Top 25 brands by awareness and respective purchase level Base = All n regular wine drinkers (n=1,000) Jacob's Creek Penfolds Wolf Blass Rosemount Estate Yellowglen Lindemans Brown Brothers Yellow Tail Yalumba Wyndham Estate Oyster Bay De Bortoli McWilliams Hardys Wynn's Taylors Banrock Station Tyrrell's Seppelt Peter Lehmann Eaglehawk Pepperjack Kaiser Stuhl McGuigan Houghton 20% 17% 9% 10% 8% 22% 14% 6% 5% 18% 9% 6% 5% 4% 10% 10% 5% 2% 6% 6% 10% 1% 6% 6% 31% 88% 80% 75% 71% 70% 70% 70% 67% 66% 63% 62% 60% 60% 58% 55% 53% 52% 50% 49% 48% 43% 43% 42% 41% 40% % who are aware % who have purchased in the past 3 months Brands such as Rosemount Estate, Lindemans and Wyndham Estate are underperforming in converting awareness into sales Source: Wine Intelligence, Vinitrac, April 2016, n=1,000 n regular wine drinkers 64

65 Brand awareness tracking The only brand to have increased in short-term awareness is Jacob s Creek Brand awareness tracking 2016 vs % who know the following brands Base = All n regular wine drinkers (n=1,000) Rank in Brand Short-term Rank in Brand Short-term 2016 n= 1,000 1,000 trend '15-' n= 1,000 1,000 trend '15-'16 1 Jacob's Creek 84% 88% 26 Stanley Wines 40% 39% 2 Penfolds 78% 80% 27 Berri Estates 39% 38% 3 Wolf Blass 77% 75% 28 Clean-skin 40% 35% 4 Rosemount Estate 71% 71% 29 Stoneleigh 40% 35% 5 Yellowglen 74% 70% 30 Evans & Tate 35% 34% 6 Lindemans 72% 70% 31 Queen Adelaide 35% 32% 7 Brown Brothers 71% 70% 32 Annies Lane 38% 31% 8 Yellow Tail 63% 67% 33 Cloudy Bay 35% 30% 9 Yalumba 67% 66% 34 Brancott Estate 31% 30% 10 Wyndham Estate 64% 63% 35 Grant Burge 27% 27% 11 Oyster Bay 66% 62% 36 Giesen 25% 25% 12 De Bortoli 61% 60% 37 Wild Oats 22% 20% 13 McWilliams 62% 60% 38 Yering Station 21% 18% 14 Hardys 64% 58% 39 Villa Maria 17% 16% 15 Wynn's 57% 55% 40 Tempus Two 16% 16% 16 Taylors 55% 53% 41 Jim Barry 14% 16% 17 Banrock Station 55% 52% 42 JP Chenet 13% 12% 18 Tyrrell's 53% 50% 43 Nepenthe 6% 8% 19 Seppelt 52% 49% 44 Zonin 8% 8% 20 Peter Lehmann 48% 48% 45 Brand's Laira 8% 8% 21 Eaglehawk 51% 43% 46 Mouton Cadet 7% 6% 22 Pepperjack 41% 43% 47 Kim Crawford 6% 5% 23 Kaiser Stuhl 43% 42% 48 Georges Duboeuf 3% 4% 24 McGuigan 44% 41% None of these 1% 1% 25 Houghton 47% 40% : statistically no significant change compared to previous wave(s) : statistically significantly higher than previous wave(s) at a 95% confidence level : statistically significantly lower than previous wave(s) at a 95% confidence level Source: Wine Intelligence, Vinitrac, April 2015 & April 2016, n=1,000 n regular wine drinkers 65

66 Brand purchase Pepperjack and Yering Station are attracting significantly more buyers than last year Brand purchase tracking 2016 vs % who have bought the following brands in the past 3 months Base = All n regular wine drinkers (n=1,000) Rank in Brand Short-term Rank in Brand Short-term 2016 n= 1,000 1,000 trend '15-' n= 1,000 1,000 trend '15-'16 1 Jacob's Creek 28% 31% 26 Wyndham Estate 5% 5% 2 Brown Brothers 19% 22% 27 Wynn's 4% 4% 3 Penfolds 18% 20% 28 Grant Burge 5% 4% 4 Oyster Bay 17% 18% 29 Cloudy Bay 6% 4% 5 Wolf Blass 15% 17% 30 Stanley Wines 3% 4% 6 Yellow Tail 12% 14% 31 Stoneleigh 6% 4% 7 Yellowglen 11% 10% 32 Berri Estates 4% 4% 8 Taylors 8% 10% 33 Brancott Estate 3% 3% 9 Pepperjack 6% 10% 34 Villa Maria 3% 3% 10 Banrock Station 9% 10% 35 Tempus Two 2% 3% 11 De Bortoli 11% 9% 36 Wild Oats 2% 2% 12 Rosemount Estate 10% 9% 37 Yering Station 1% 2% 13 Lindemans 9% 8% 38 JP Chenet 2% 2% 14 Houghton 6% 6% 39 Queen Adelaide 1% 2% 15 McGuigan 8% 6% 40 Jim Barry 1% 2% 16 Peter Lehmann 5% 6% 41 Seppelt 2% 2% 17 McWilliams 5% 6% 42 Nepenthe 1% 2% 18 Eaglehawk 7% 6% 43 Zonin 2% 2% 19 Yalumba 4% 6% 44 Brand's Laira 2% 2% 20 Clean-skin 8% 6% 45 Kaiser Stuhl 2% 1% 21 Annies Lane 6% 6% 46 Kim Crawford 1% 1% 22 Evans & Tate 7% 6% 47 Mouton Cadet 1% 1% 23 Hardys 6% 5% 48 Georges Duboeuf 0% 1% 24 Giesen 6% 5% None of these 12% 12% 25 Tyrrell's 6% 5% : statistically no significant change compared to previous wave(s) : statistically significantly higher than previous wave(s) at a 95% confidence level : statistically significantly lower than previous wave(s) at a 95% confidence level Source: Wine Intelligence, Vinitrac, April 2015 & April 2016, n=1,000 n regular wine drinkers 66

67 Brand affinity Brown Brothers enjoys the highest brand affinity with n regular wine drinkers Top 25 brands by awareness and respective affinity level Base = All n regular wine drinkers (n=1,000) Jacob's Creek Penfolds Wolf Blass Rosemount Estate Yellowglen Lindemans Brown Brothers Yellow Tail Yalumba Wyndham Estate Oyster Bay De Bortoli McWilliams Hardys Wynn's Taylors Banrock Station Tyrrell's Seppelt Peter Lehmann Eaglehawk Pepperjack Kaiser Stuhl McGuigan Houghton 32% 33% 31% 34% 31% 28% 26% 26% 25% 53% 49% 44% 47% 37% 40% 37% 30% 22% 35% 28% 43% 45% 43% 19% 42% 33% 41% 37% 40% 88% 80% 75% 71% 70% 70% 55% 70% 67% 66% 63% 62% 60% 60% 58% 55% 53% 52% 50% 49% 48% % who are aware % who believe that the brand is right for people like them Tracking data available in data table Source: Wine Intelligence, Vinitrac, April 2016, n=1,000 n regular wine drinkers Grey: small sample size (n<50) 67

68 Brand recommendation Brown Brothers enjoys the highest brand affinity with n regular wine drinkers Top 25 brands by awareness and respective recommendation level Base = All n regular wine drinkers (n=1,000) Jacob's Creek Penfolds Wolf Blass Rosemount Estate Yellowglen Lindemans Brown Brothers Yellow Tail Yalumba Wyndham Estate Oyster Bay De Bortoli McWilliams Hardys Wynn's Taylors Banrock Station Tyrrell's Seppelt Peter Lehmann Eaglehawk Pepperjack Kaiser Stuhl McGuigan Houghton 25% 23% 23% 26% 21% 19% 18% 21% 21% 28% 34% 27% 24% 15% 28% 15% 22% 37% 43% 88% 46% 80% 37% 75% 71% 70% 70% 52% 70% 67% 66% 63% 44% 62% 60% 60% 58% 29% 41% 29% 40% 55% 53% 52% 50% 49% 48% 43% 43% 42% % who are aware % who would recommend the brand to a friend Tracking data available in data table Source: Wine Intelligence, Vinitrac, April 2016, n=1,000 n regular wine drinkers 68

69 Contents Introduction p. 6 Management summary p. 9 n wine market overview p. 18 Imported vs. domestic wine market share Per capita consumption of still light wine n wine consumers p. 23 Overview of the n wine market Demographics of n regular wine drinkers Wine consumption frequency Beverage repertoire p. 27 Alcoholic beverage repertoire Varietal consumption Country of origin consumption Region of origin awareness Region of origin purchase Region of origin conversion Wine buying behaviour p. 38 Channel usage Retailer usage Choice cues Wine consumption in the off-premise and in the on-premise p. 48 Off-premise consumption frequency by occasion Off-premise spend by occasion On-premise consumption frequency by occasion On-premise spend by occasion Threats to wine consumption Wine involvement and attitude p. 56 Wine attitude Wine involvement Attitudes towards closures Brand health p. 61 Brand power Brand awareness Brand purchase Brand affinity Brand recommendation Future consumers p. 70 Generations overview Future consumption Methodology p

70 Generations overview Overview Born between Next Gens Young Millennials Older Millennials X-Gens Baby Boomers Silents With around 15 years difference between them, each generation exhibits certain characteristic behaviours. Opinions and attitudes differ between generations, driven by many social, economic and technological factors. Collectively, these factors will exert particular influence on the early stages of each person s life, when personalities are defined Despite the importance of the adolescent stage, the period of entering the job market is of great importance to the consumption habits of each generation, as disposable income may vary depending on the economic context at this time This is especially relevant for the wine business, since this period typically matches the legal drinking age The Silent Generation, also known as the Lucky Generation, is now aged between 65 and 80 years old; they started their working life in a still post-war period, and we will see this generation spend the least on wine. Young Millennials started their career during the global financial crisis and the gap between their spending habits against Older Millennials is significant Still academically unnamed, the generation after Millennials have just started to be legally allowed to drink alcohol. We named them the Next Generation Note: The American academic approach to name generations has been used Sources: n Bureau of Statistics, McCrindle, Cassandra Report, United Nations, digitalmarketingstrategiessummit.com, mic.com, adweek.com, prnewswire.com, huffingtonpost.com, new.trinity.edu, businessinsider.com, esds1.pt, dmnews.com, careerplanner.com, hbr.org, adage.com 70

71 Generations overview Descriptors Next Gens Key descriptors Low involvement with wine and very price sensitive- more likely to indicate they don t mind what they buy, as long as the price is right. Mostly purchase wine from, France and New Zealand, and more likely than other groups to buy wine from a local hotel or bottle shop. Alcohol content is more important to them, as well as the appeal of the bottle design, and recommendations from shop staff or leaflets. Most likely to buy Jacobs Creek. Young Millennials Older Millennials X-Gens Baby Boomers Silents Most adventurous compared to other groups and also have the highest involvement with wine. Less likely to drink wine from and New Zealand than the average, adding to their adventurous mentality towards wine. Also more likely than other groups to be influenced by wine critics or wine books. Like taking recommendations from friends or family more compared to other groups. More likely to buy wine from a specialist wine shop, or from duty free. More adventurous than the average, and have medium involvement with wine. More likely than the average to drink beer, and like purchasing wine from and New Zealand. Grape variety and brands are important decision factors when it comes to buying wine, and they are less likely to be influenced by recommendations by shop staff or shop leaflets. Less adventurous than the average, and know what they like and tend to stick to what they know. More likely to drink wine from and New Zealand than the average. Group most likely to be influenced by grape variety. Most likely to buy wine in supermarkets (attached liquor store), national wine discount store and a local hotel/bottle shop. Least adventurous compared to other groups and have a medium involvement with wine. More likely than average to drink wine from. Grape variety and brand are primary choice cues. Group least likely to be influenced by the appeal of the bottle and/or label design and to buy wine from a local hotel or bottle shop. Note: The American academic approach to name generations has been used Sources: n Bureau of Statistics, McCrindle, Cassandra Report, United Nations, digitalmarketingstrategiessummit.com, mic.com, adweek.com, prnewswire.com, huffingtonpost.com, new.trinity.edu, businessinsider.com, esds1.pt, dmnews.com, careerplanner.com, hbr.org, adage.com 71

72 Future consumption Number of regular wine drinkers In order to project and understand future consumption in the n market in the next 10 years (until 2026) for each of the segments, the total number of regular wine drinkers in 2021 and 2026 was calculated using the following variables: - Historical Vinitrac data on total regular wine drinkers in - Net n population growth (births vs deaths) - Net n immigration rate (emigration vs immigration) Total adult population 18.4 million 20.3 million Wine Intelligence projection 21.8 million Regular Wine Drinkers 12.0 million 12.7 million 13.1 million 65% 62% 60% Sources: Vinitrac calibration studies Future consumption modelling results 72

73 Future consumption Relative size of generations Then, the percentage of regular wine drinkers per generation was calculated within the total regular wine drinkers on each year, using: - Historical Vinitrac data on each generation relative size within n regular wine drinkers - Net AUS new wine drinkers rate (new wine drinkers vs new absents) Regular wine drinkers Next Gens Young Millennials Older Millennials X-Gens Baby Boomers Silents 12 million 4% 17% 9% 28% 23% 12.7 million 11% 19% 9% 25% 21% Wine Intelligence projection 13.1 million 18% 15% 11% 19% 18% 9% 23% 19% Next Gens Young Millennials Older Millennials X-Gens Baby Boomers Silents Sources: Vinitrac omnibus surveys from 2010 to 2016 Future consumption modelling results 73

74 Future consumption Scenarios methodology The last step was to calculate an estimated spend on wine and frequency of wine consumption per segment in 3 distinct scenarios by The calculation took into account the following variables: - Historical Vinitrac data on average spend per generation - Historical Vinitrac data on average drinking frequency per generation - IWSR data for total n still light wine consumption in Historical average inflation rate Scenario 1: Carry Generations bring their spend and frequency habit with them while they grow older Scenario 2: Adopt Generations adopt the spend and frequency habits of the previous generation while growing older Scenario 3: Mixed Generations will partially carry their habits and adopt the habits of the previous generation while growing older 74