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CONSUMER INTELLIGENCE AND INSIGHTS ON THE SA WINE INDUSTRY 31 MAY 2011 1

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SELECTED SA WINE/BRANDY CONSUMER FINDINGS

BOTTLED WINE AND BRANDY: CONSUMER TRENDS 2005 2006 2007 2008 2009 2010 Total SA adult population (16+ years) 30,655,696 30,903,002 31,109,074 31,305,016 32, 498, 063 33,141,487 Bottled Wine consumers 1,871,161 2,055,546 2,089,911 2,231,898 2,417,961 2,993,857 % of total adult 6.1% 6.7% 6.7% 7.1% 7.4% 9.0% The number of Wine consumers has increased from 1.87 million in 2005 to almost 3 million in 2010, an increase of just over 1 million consumers. The proportion of Bottled Wine consumers has increased significantly between 2009 and 2010. 2005 2006 2007 2008 2009 2010 Total SA adult population (16+ years) 30,655,696 30,903,002 31,109,074 31,305,016 32, 498, 063 33,141,487 Total Brandy consumers 3,676,161 3,983,019 4,315,259 4,058,813 3,960,362 3,859,396 % of total adult 12.0% 12.9% 13.9% 13.0% 12.2% 11.6% There has been a decline in the number of Brandy consumers from a high of 4.3 million (13.9% of adults) in 2007 to just over 3.8 million in 2010 (11.6% of adults). Stronger branding and marketing of the Brandy category may be necessary to appeal to a wider consumer base and encourage people to start drinking Brandy (again) rather than competitor categories like Whisky. Source: AMPS 2010B Sample Sizes : 25 160 (Total); 2768 (Bottled Wine consumed in past 7 days) Note: all figures based on weighted numbers 12

LSM GROUP PROFILE LSM profile of consumers of brandy and bottled wine 100% 80% 15% 14% 19% 19% 26% 20% LSM 9-10 60% 40% 37% 42% 36% LSM 7-8 LSM 5-6 LSM 1-4 20% 29% 25% 18% 0% Total Consumers of brandy (past 7 days) Consumers of bottled wine (past 7 days) Frequency LSM 1-4 LSM 5-6 LSM 7-8 LSM 9-10 Total 9,890,145 12,527,080 6,450,923 5,151,512 Consumers of Brandy (past 7 days) 954,467 1,620,946 739,049 544,934 Consumers of Bottled Wine (past 7 days) 530,548 1,080,548 613,080 769,681 In 2010, 26% of Bottled Wine consumers lived in LSM 9-10 households compared to 14% of Brandy consumers. Only 18% of Bottled Wine consumers lived in LSM 1-4 compared to the 30% among the total SA population. Source: AMPS 2010B Sample Sizes : 25 160 (Total); 2883 (Brandy consumed in past 7 days) 2768 (Bottled Wine consumed past 7 days) Note: all figures based on weighted numbers 13

GENDER PROFILE Gender profile of consumers of brandy and bottled wine 100% 80% 53% 30% 50% 60% Female 40% 47% 70% 50% Male 20% 0% Total Consumers of Brandy (past 7 days) Consumers of bottled wine (past 7 days) Frequency Male Female Total 16,113,054 17,906,605 Consumers of Brandy (past 7 days) 2,707,455 1,151,941 Consumers of Bottled Wine (past 7 days) 1,494,908 1,498,949 In 2010, the gender split for consumers of Bottled Wine was equal at 50%, similar to the total SA population. Among Brandy consumers, 70% were male. Source: AMPS 2010B Sample Sizes : 25 160 (Total); 2883 (Brandy consumed in past 7 days) 2768 (Bottled Wine consumed past 7 days) Note: all figures based on weighted numbers 14

AGE PROFILE Age profile of consumers of brandy and bottled wine 100% 80% 60% 40% 20% 11% 7% 10% 10% 11% 11% 15% 14% 15% 19% 22% 21% 13% 18% 18% 60+ Years 50-59 Years 40-49 Years 30-39 Years 25-29 Years 14% 17% 13% 20-24 Years 15% 12% 12% 15-19 Years 0% Total Consumers of Brandy (past 7 days) Consumers of bottled wine (past 7 days) Frequency 15-19 20-24 25-29 30-39 40-49 50-59 60+ Total 5,132,944 4,898,527 4,420,522 6,559,332 5,248,618 3,678,657 3,901,899 Consumers of Brandy (P7 days) 469,775 662,346 706,056 836,505 537,981 370,638 254,693 Consumers of Bottled Wine (P7 days) 348,104 378,478 530,285 623,860 455,210 335,806 300,989 There was a significantly higher proportion of Brandy and Bottled Wine consumers aged 25-29 years (18%) compared to the total SA population (13%). Source: AMPS 2010B Sample Sizes : 25 160 (Total); 2883 (Brandy consumed in past 7 days) 2768 (Bottled Wine consumed past 7 days) Note: all figures based on weighted numbers 15

POPULATION GROUP PROFILE Population group profile of consumers of brandy and bottled wine 100% 80% 13% 16% 3% 2% 9% 8% 28% 1% 8% White 60% Indian 40% 75% 74% 63% Coloured Black 20% 0% Total Consumers of Brandy (past 7 days) Consumers of bottled wine (past 7 days) Frequency Black Coloured Indian White Total 25,613,102 2,941,695 927,204 4,537,658 Consumers of Brandy (P7 days) 2,864,515 311,546 59,896 623,439 Consumers of Bottled Wine (P7 days) 1,891,546 242,145 35,982 824,185 74% of Brandy consumers were Black compared to 63% among Bottled Wine consumers. Source: AMPS 2010B Sample Sizes : 25 160 (Total); 2883 (Brandy consumed in past 7 days) 2768 (Bottled Wine consumed past 7 days) Note: all figures based on weighted numbers 16

HOME LANGUAGE PROFILE Language profile of consumers of brandy and bottled wine 100% 80% 60% 40% 20% 0% 3% 3% 2% 1% 4% 2% 1% 3% 2% 1% 10% 11% 10% 8% 9% 10% 9% 7% 8% 8% 15% 14% 18% 22% 20% 17% 12% 8% 15% 18% 22% Total Consumers of Brandy (past 7 days) Consumers of bottled wine (past 7 days) Ndebele Swazi Venda Tsonga Tswana South Sotho North Sotho Xhosa Zulu English Afrikaans Frequency Afrikaans English N.Sotho Ndebele S.Sotho Swazi Tsonga Tswana Venda Xhosa Zulu Total 4,982,239 4,056,543 7,544,640 5,224,971 2,958,011 2,718,172 3,330,760 1,038,150 897,996 739,187 341,312 Consumers of Brandy (past 7 days) 707,886 327,340 775,771 559,543 309,671 387,814 406,729 153,587 78,152 72,675 51,837 Consumers of Bottled Wine (past 7 days) 652,088 514,502 538,097 249,161 205,072 269,957 306,731 95,471 53,444 33,304 35,408 In 2010, 22% of consumers of Bottled Wine spoke Afrikaans as their home language compared to 15% of the SA population. 17% of consumers of Bottled Wine spoke English as their home language and 18% spoke Zulu. Source: AMPS 2010B Sample Sizes : 25 160 (Total); 2883 (Brandy consumed in past 7 days) 2768 (Bottled Wine consumed past 7 days) Note: all figures based on weighted numbers 17

PROVINCE PROFILE Provincial profile of consumers of brandy and bottled wine 100% 80% 60% 40% 20% 0% 8% 10% 9% 20% 11% 7% 10% 7% 21% 17% 23% 28% 10% 5% 18% 14% 11% 8% 6% 9% 8% 2% 2% 2% 10% 12% 12% Total Consumers of Brandy (past 7 days) Consumers of bottled wine (past 7 days) North-West Gauteng Limpopo Mpumalanga Kwazulu-Natal Eastern Cape Free State Northern Cape Western Cape Frequency Western Cape Northern Cape Free State Eastern Cape Kwazulu-Natal Mpumalanga Limpopo Gauteng North-West Total 3,523,874 717,888 2,210,093 4,733,845 7,148,459 2,339,595 3,752,138 6,882,529 2,711,238 Consumers of Brandy (past 7 days) 448,978 87,329 329,896 421,858 665,132 265,956 373,037 884,329 382,879 Consumers of Bottled Wine (past 7 days) 363,409 65,670 249,961 234,033 531,032 149,254 289,825 829,139 281,534 The highest proportion of Brandy and Bottled Wine consumers lived in Gauteng (23%). Source: AMPS 2010B Sample Sizes : 25 160 (Total); 2883 (Brandy consumed in past 7 days) 2768 (Bottled Wine consumed past 7 days) Note: all figures based on weighted numbers 18

CONSUMER TRENDS 2006-2010: 2010: POPULATION GROUP Bottled Wine Population Group Profile: 2006-2010 100% 80% 53% 55% 56% 61% 63% 60% Black Coloured 40% 8% 6% 1% 2% 9% 1% 8% 1% 8% 1% Indian White 20% 37% 37% 33% 31% 28% 0% 2006 2007 2008 2009 2010 There has been strong growth in the proportion of Black consumers Bottled Wine, from 53% in 2006 to 63% in 2010. The proportion of White consumers Bottled Wine declined from 37% in 2006 to 28% in 2010. Source: AMPS 2006-2010B RA (Adults 16+ years old) Sample Sizes : AMPS 2006 (24 813); AMPS 2007 (21 068), AMPS 2008 (21 083); AMPS 2009 (25 170); AMPS 2010 (25 170) Note: all figures based on weighted numbers 19

QUESTIONS THAT STILL NEED TO BE ANSWERED 20

IMPORTANT QUESTIONS WE STILL NEED TO ANSWER How do we responsibly increase the number of wine and brandy consumers in South Africa? Which consumer and product segments are growing? Why do consumers prefer a certain alcoholic beverage category? For which occasions do they prefer certain categories? Why? What are the emotional benefits (image) derived from drinking a certain alcoholic beverage? How do we position the Wine and Brandy categories to appeal to and target new consumer segments? 21

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