The Australian Wine Market Landscape Report August 2017

THE AUSTRALIAN WINE MARKET LANDSCAPE REPORT AUGUST 2017

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Australia 2 Landscapes Intro to the Australia Landscapes 2017 Report Deliverables

Insights to help your business flourish

The Australia Landscapes 2017 report includes:

• Report with the latest information regarding the • User-friendly data table with all the measures from Australian wine market, supported by: Vinitrac® showing significances, cross tabbed with: • Wine Intelligence Vinitrac® • All Australian regular wine drinkers in 2017 • Wine Intelligence market experience • Gender groups • Secondary sources • Age groups • Trade interviews • Australian regions • Tracking data vs. 2016 and 2012

Australia 3 Landscapes Contents

▪ Introduction p. 6 ▪ Wine consumption in the off-premise and in the on-premise p. 59 ▪ Management summary including key trends p. 8 ▪ IWSR Value and volume data by price point ▪ Off-premise consumption frequency by occasion ▪ Australian wine market overview p. 25 ▪ Off-premise spend by occasion ▪ Imported vs. domestic wine market share ▪ On-premise consumption frequency by occasion ▪ Per capita consumption of still light wine ▪ On-premise spend by occasion ▪ Australian wine consumers p. 30 ▪ Wine involvement and attitude p. 66 ▪ Overview of the Australian wine market ▪ Wine attitude ▪ Demographics of Australian regular wine drinkers ▪ Wine involvement ▪ Wine consumption frequency ▪ Attitudes towards closures ▪ Beverage repertoire p. 34 ▪ Brand health p. 70 ▪ Alcoholic beverage repertoire ▪ Brand power ▪ Varietal consumption ▪ Brand awareness ▪ Favourite varietal ▪ Brand conversion ▪ Country of origin consumption ▪ Brand purchase ▪ Region of origin awareness ▪ Brand affinity ▪ Region of origin purchase ▪ Brand recommendation ▪ Region of origin conversion ▪ Wine drinker profiling p. 83 ▪ Wine buying behaviour p. 45 ▪ Adventurous Explorers ▪ Channel usage ▪ Developing Drinkers ▪ Retailer usage ▪ Mainstream Value Seekers ▪ Choice cues ▪ Contented Casuals ▪ Style and Flavour descriptor preferences p. 52 ▪ Newbies ▪ Red wine ▪ Senior Sippers ▪ White wine ▪ Methodology p. 91

Australia 4 Landscapes Contents

▪ Introduction p. 6 ▪ Wine consumption in the off-premise and in the on-premise p. 60 ▪ Management summary including key trends p. 8 ▪ IWSR Value and volume data by price point ▪ Off-premise consumption frequency by occasion ▪ Australian wine market overview p. 26 ▪ Off-premise spend by occasion ▪ Imported vs. domestic wine market share ▪ On-premise consumption frequency by occasion ▪ Per capita consumption of still light wine ▪ On-premise spend by occasion ▪ Australian wine consumers p. 31 ▪ Wine involvement and attitude p. 67 ▪ Overview of the Australian wine market ▪ Wine attitude ▪ Demographics of Australian regular wine drinkers ▪ Wine involvement ▪ Wine consumption frequency ▪ Attitudes towards closures ▪ Beverage repertoire p. 35 ▪ Brand health p. 71 ▪ Alcoholic beverage repertoire ▪ Brand power ▪ Varietal consumption ▪ Brand awareness ▪ Favourite varietal ▪ Brand conversion ▪ Country of origin consumption ▪ Brand purchase ▪ Region of origin awareness ▪ Brand affinity ▪ Region of origin purchase ▪ Brand recommendation ▪ Region of origin conversion ▪ Wine drinker profiling p. 84 ▪ Wine buying behaviour p. 46 ▪ Adventurous Explorers ▪ Channel usage ▪ Developing Drinkers ▪ Retailer usage ▪ Mainstream Value Seekers ▪ Choice cues ▪ Contented Casuals ▪ Style and Flavour descriptor preferences p. 53 ▪ Newbies ▪ Red wine ▪ Senior Sippers ▪ White wine ▪ Methodology p. 92

Australia 5 Landscapes Introduction

The last year has been characterised by dramatic change on the global stage. With all the upheaval, one might think this economic uncertainty would have wide ramifications for international businesses operating in a global marketplace. Looking at the Australian wine industry, however, this doesn’t seem to be the case; the market has stayed relatively stable in the past year compared to the rest of the world. But this doesn’t necessarily mean that the industry is stagnant. For the 2017 edition of our Australian Landscapes report, we have enlisted a panel of experts from all areas of the trade to gain first-hand insight into the state of the industry. Complementing our usual quantitative research, this qualitative approach has allowed us to identify and examine the key trends and developments within the Australian market, both from a consumer and trade perspective.

One of the main themes we have identified from our series of trade interviews is that the tastes of the regular Australian wine drinker are developing, and that consumers are becoming more involved with the category. Widely seen as the consequence of increasingly well-travelled wine drinkers, trade respondents (in particular those with direct customer contact) pointed out a noticeable increase in the general knowledge of wine amongst drinkers and their willingness to experiment with new varietals, as well as wines countries beyond the traditional offering.

The rise of alternative varietals is another trend reflected in both our quantitative and qualitative research. Through our Vinitrac® survey of regular Australian wine drinkers, we have noted growth in the reach of non-French varietals with varietals such as Tempranillo and Sangiovese, both of which record significant long-term increases since 2012. Industry members confirm this growth and highlight the growing importance of domestic wines from Mediterranean varietals in providing ready access to new styles of wine; in the past, Australian drinkers would have resorted to imported examples. Whilst an established market, the Ben Luker Australian wine landscape continues to show subtle and nuanced developments that all Project Executive operating in this market should be aware of. Australia 6 Landscapes Contents

Australia 7 Landscapes Key Trends

1 The Australian wine market is mature and developed wine market, with some signs of ‘trading up’ as consumers seek quality over quantity

2 Strong current and future growth in the sparkling wine and rosé categories

Increasing diversity of both regions and varietals sought by consumers who 3 have a growing interest in wine

4 Growing move towards moderate consumption of alcohol

Australia 8 Landscapes Key Trends

5 Niche opportunity for natural, biodynamic and organic wines, although there is much consumer confusion as to what these wines actually are

Increasing dominance of ‘the big 2’ retailers, with bricks and mortar outlets 6 adapting the retail experience in order to compete with online sales

7 Potential threat to the wine category from changes in legislation and tax

8 The wine category remaining typically slow to adopt innovation and NPD

Australia 9 Landscapes Trends in the Australian market A mature, developed wine market, with some signs of ‘trading up’ as consumers seek quality over quantity

▪ An established market, there is limited opportunity for Australia is a mature market and therefore significant overall market growth, but some growth growth in wine is limited at best opportunities are available in selected sub-categories Producer

The place of wine has improved over the last ▪ Positive wine category in Australia compared with 10 years, with everyone now knowing about wine and what its about other liqour categories, partly driven by ongoing On-premise buyer consumer interest in, and increased knowledge of, wine Wine has been the fastest growing liquor category over the past 12 months Major retailer ▪ Evidence of ‘trading up’ in terms of spend per bottle, mainly evident for more involved consumers The long-term trend for wine has been strong, as Australians care more about the quality of In Australia consumers are drinking less but their food, wine and entertaining experience better Producer Producer

Retail price per 0.75L Thousands of 9 CAGR CAGR Market 2012 2013 2014 2015 2016 CAGR CAGR litre cases 12-16 15-16 share 2016 (US$) 12-16 15-16 Total 52,128 52,192 51,888 51,715 52,882 0% 2% 100% 6.98 2% 4% Domestic 44,300 43,850 43,285 43,000 44,180 0% 3% 84% 6.34 2% 5% Imported 7,828 8,342 8,603 8,715 8,702 3% 0% 16% 10.24 -1% 3%

NewAustralia Zealand 6,000 6,350 6,556 6,600 6,531 2% -1% 12% 10.60 -2% 3% 10 LandscapesFrench 765Source: IWSR 2017 850 875 900 920 5% 2% 2% 8.52 5% 2% Italian 450 475 524 550 565 6% 3% 1% 9.11 2% 2% Spanish 170 185 229 235 246 10% 5% <1% 9.10 -1% 1% South African 160 175 125 115 106 -10% -8% <1% 8.44 -2% 0% Chilean 89 100 92 100 104 4% 4% <1% 9.54 4% 5% Argentinian 52 65 70 80 91 15% 14% <1% 11.93 5% 6% Portuguese 40 40 35 35 37 -2% 6% <1% 9.06 2% 4% German 35 35 33 33 34 -1% 2% <1% 9.67 -1% -1% US 15 15 17 20 25 14% 25% <1% 9.09 -5% -2% Greek 21 20 20 20 20 -1% 0% <1% 9.66 0% 0% International 17 18 15 14 10 -12% -29% <1% 6.68 -3% 0% Austrian 9 9 8 8 8 -1% 3% <1% 30.48 1% 0% Hungarian 6 5 5 5 5 -4% 0% <1% 9.66 2% 8% Trends in the Australian market Strong current and future growth in the sparkling wine category

▪ Continued growth in sparkling wine, driven primarily In terms of sparkling, Prosecco is booming. by buoyant growth of imported sparkling wine, Even the inclusion of Prosecco in cocktails is especially Prosecco and Champagne starting to gain momentum. Major Retailer

There is a continual growth in Champagne Major Retailer Beverage repertoire % who drink the following alcoholic beverages Base = All Australian regular wine drinkers (n>1,000) There are certain pockets which are showing growth, such as Sparkling /Champagne Beverage 2012 2016 2017 Long-term Short-term Producer n= 1505 1000 1006 trend '12-'17 trend '16-'17 Champagne 46% 47% 53%   Sparkling wine from Australia n/a 43% 49% n/a  Rosé/pink Champagne 12% 23% 26%   Other sparkling wine 27% 22% 23%   Prosecco 4% 13% 19%   Australian sparkling wine volumes Retail price per 0.75L Thousands of 9 CAGR CAGR Market 2012 2013 2014 2015 2016 CAGR CAGR litre cases 12-16 15-16 share 2016 (US$) 12-16 15-16 Total 5,200 5,170 4,965 5,010 5,130 0% 2% 100% 14.32 3% 2% Domestic 3,875 3,770 3,516 3,480 3,500 -3% 1% 68% 10.17 2% 2% Imported 1,325 1,400 1,449 1,530 1,630 5% 7% 32% 23.24 1% 0% French 566 626 682 740 766 8% 4% 15% 37.10 1% 3% Italian 495 500 513 550 587 4% 7% 11% 9.84 0% 0% New Zealand 150 155 135 130 126 -4% -3% 2% 15.30 0% 0% Australia Sources: German 48¹ Wine Intelligence, 50 Vinitrac® 55 Australia, 60 2012’ - ’17, n>1,00085 Australian16% regular wine42% drinkers2% 12.63 -1% 0% 11 LandscapesSpanish 32² IWSR 2017 32 30 29 50 12% 75% 1% 10.24 1% 1% Chilean 13 15 17 10 8 -13% -25% 0% 11.14 0% 0% South African 15 13 10 7 5 -24% -29% 0% 11.14 0% 0% International 3 5 5 3 3 -2% 0% 0% 8.91 0% 0% Argentinian 3 3 3 1 1 -37% -60% 0% 11.89 -2% -6% Trends in the Australian market Strong current and future growth potential for rosé wine

▪ Long term growth in rosé, with a broad range of age Rosé is monstrous at the moment – we are in groups enjoying it the middle of winter and are still pouring two rosé wines by the glass On-premise buyer ▪ Whilst women are significantly more likely to have drunk rosé than men, although almost half of male regular wine drinkers in Australia enjoy rosé wine We are seeing growth in rosé – The Australian palate is changing Major Retailer Rosé drinkers Base= Australian regular wine drinkers who drink rosé (n=364)

The growth is rosé is coming from French 65 and over 14% (16%) rosé – a combination of it being from overseas, beautifully packaged, the light style 55-64 12% (14%) and the great colour 45-54 15% (15%) Major Retailer 35-44 19% (21%) 25-34 27%* (21%) 46%* 54%* LDA-24 12% (13%) (55%) (45%)

Australia 12 Landscapes Source: Wine Intelligence, Vinitrac® Australia, March ’17, n>1,000 Australian regular wine drinkers Trends in the Australian market Increasing focus on regionality, with growing consumer knowledge of established regions and experimentation with smaller regions

▪ Consumers are increasingly showing more signs of I find that most people like trying new things experimentation with their wine choices, and and exploring beyond the ‘same old’ wine demonstrating a better understanding of different which their parents drunk Independent Retailer styles There is evidence of growth of Canberra District wines, cool climate & high altitude wines which produce styles that work well with food Producer

Wines form McLaren Vale are showing Tasmania has really jumped ahead and is growth, led by the Mediterranean varietals starting to be known as a really high quality Producer region On-premise buyer McLaren Vale has done a great job in promoting itself as a region On-premise buyer The Barossa has been really successful in building value around the total experience that goes beyond wine to the lifestyle and food Barossa and Margaret River just sell well all the Producer time On-premise buyer

Australia 13 Landscapes Trends in the Australian market Expansion of wine-producing countries beyond Australian and New Zealand starting to enter wine drinkers’ portfolio

▪ Whilst still dominated by domestic wine, growing We are seeing growth in Malbec and some of appetite for imported wines amongst regular wine the Italian varietals like Montepulciano drinkers in Australia Producer ▪ Prices for imported wine moving towards being A lot of rosé growth is from French rosé. As more comparable to domestic wine the Pinot Noir trend continues, we are starting ▪ Increasing exposure to international varietals is to see more French and Chilean Pinot Noirs grow as well helping acceptance of Australian ‘alternate Major retailer varietals’

France and Italy are always an easy sell On-premise buyer Country of origin consumption % who have drunk wine from the following countries in the last 6 months At the moment the consumer can purchase French, South American and Italian wines at Country 2016 2017 Rank in Australian prices Trend 2017 Producer n= 1,000 1,006 1 Australia 85% 87%  2 New Zealand 41% 47%  There is growth within the on-premise 3 France 25% 31%  including in Vermentino, Fiano, Tempranillo, 4 Italy 19% 24%  Gruner Veltliner, Nebbiolo and Malbec; this 5 Spain 9% 12%  is now starting to trickle through to the off-  6 Chile 6% 9% premise, but growth is still in its infancy Producer Australia 14 Landscapes Source: Wine Intelligence, Vinitrac® Australia, 2016- ’17, n>1,000 Australian regular wine drinkers Trends in the Australian market Growth in experimentation with wine choices leading to a diversifying range of varietals being sought and offered

▪ Growth of alternate varietals, albeit from a small base Pinot Grigio and Pinot Gris continue to grow and currently still niche, with a particular focus on Major Retailer Mediterranean varietals … more discerning drinkers are certainly eyeing up Chardonnay ▪ Experimentation with new wines styles balanced by: Independent Retailer ▪ A resurgence of Chardonnay, particularly higher There have been a lot more alternative priced Chardonnay amongst higher spending and varietals available, in particular Mediterranean more knowledgeable consumers varietals which seem to generate interest with ▪ Strength in Shiraz my customers On-premise buyer ▪ Growth in demand for Pinot Noir driven by move to lighter reds Australia now has a greater choice of ▪ Continued growth in popularity of Pinot Grigio / domestically produced varieties Pinot Gris On-premise buyer

We’re still figuring out this country and while most punters still opt for Barossa Shiraz, more discerning customers are looking for Aussie Tempranillo, Fiano, Nebbiolo, Touriga Independent Retailer

Australia 15 Landscapes Trends in the Australian market Growing move towards moderate consumption of alcohol

▪ Driven by both Government and consumers Its difficult to store half bottles due to the themselves, a growing move towards moderate cost of real estate, which is disappointing consumption. This in turn leads to: because half bottles would be really good with the trend of moderation becoming more present ▪ Increased trade demand for single serves On-premise buyer ▪ Wines with lower ABV including naturally lower My clientele are curious about the weight of alcohol levels, such as cool climate wines wine, especially for lunch time drinking On-premise buyer ▪ However, potential is yet to be realised for low or no alcohol wine We are seeing more and more moderation trends coming through, so NPD will be focused on portion control such as single serves Major Retailer

Australia 16 Landscapes Trends in the Australian market Niche opportunity for natural, biodynamic and organic wines, although there is much consumer confusion as to what these wines actually are

Biodynamic, organic and natural wines are still ‘out there’ but we’re seeing more mainstream consumers asking for them On-premise buyer ▪ Potential opportunity for wines produced with more environmental and sympathetic wine growing and There is definitely ground swell for bio- making practices dynamic, organic and Fairtrade wines, however they still remain in the minority, driven by both quality and pricing Producer

There is a lot of misinformation about what organic wine is. Once people realise that ‘organic’ refers only to farming practices, rather than wine making, people will hunt a lot more for wines which follow the practice from viticulture straight through to bottling Independent Retailer

Consumers struggle with categories like organic and biodynamic in wine as there is an over-arching assumption that wine is already ‘natural’ Major Retailer Australia 17 Landscapes Trends in the Australian market Increasing dominance of ‘the big 2’ retailers, with bricks and mortar outlets adapting the retail experience in order to compete with online sales

▪ Development of a more engaging ‘wine retail experience’ The off-premise are changing their offering to ▪ Responding to increased online purchasing, retailers create ‘retail experiences’ such as the Dan Murphy's cellar in Prahran which is leading investing in more engaging retail experiences the way Producer ▪ Increasing dominance of ‘the big 2’ retailers ▪ Increasingly difficulty for producer brands to compete Once the independents are finally forced out, against own-brands with them goes the support for the small, boutique wines which so often produce some of the country’s standout wines Independent Retailer

Top 4 Retailer usage (% who have bought wine from the following retailers in the past 6 months)

Dan Murphy's 57%

BWS 45%

Liquorland/Liquorland Express 33%

1st Choice 16%

Aldi 11%

Cellarbrations 9%

Australia Vintage Cellars 8% 18 Landscapes Source: Wine Intelligence, Vinitrac® Australia, March ’17, n>1,000 Australian regular wine drinkers IGA Liquor 6%

Thirsty Camel 5%

The Bottle O 5% Trends in the Australian market Potential threat to the wine category from changes in legislation and tax

▪ Potential threat from changes to alcohol taxation The biggest threat to the industry is the anti- coupled with increasing pressure from anti-alcohol alcohol lobby lobby On-premise buyer

The main threat to the wine industry is the ▪ Potential threat to domestic wine from increases in rethinking of the taxation system; if all imported wine alcohol is taxed by a volumetric tax then this would threaten the whole of the industry and ▪ Without increased tariffs on imported wine, would limit smaller wineries from competing domestic wine could be threatened Producer

Removing WET tax and growing back to volumetric tax would be a win for me as my prices would come down On-premise buyer

If the trend continues for some International wines to play a significant part within the The biggest threat to the wine category is consumers’ ‘basket’ then without increased from legislation – both Government and tariffs this could prove tricky for wine public policy that increase tax rates on what is producers already a highly taxed industry Producer Producer

Australia 19 Landscapes Trends in the Australian market The wine category typically slow to adopt innovation and NPD

▪ However, innovations such as Coravin screw-cap We are seeing developments in the wine support move to both premium and single serve category, but compared with other liqour categories it is the most behind from an NPD perspective Major Retailer

CORAVIN™ Screw Caps, together with any Coravin™ As wine is predominantly served in heavy, Wine System, open your 750ml glass that doesn’t suit many occasions, door to savouring a glass of we are seeing work done around single serves, your favourite wine in a wine cans and pouches bottle closed with a screw Producer cap. Designed with a silicone membrane, Coravin™ Screw Cap reseals itself after being accessed using a Coravin™ With Coravin launching a screw-cap version 3 Wine System, just like a weeks ago it’s a bit of a game changer in terms natural cork would and of the wines we can serve by the glass allows the user to protect a On-premise buyer wine from oxidation for up to three months.

Source: Coravin.com.au As the RTD market continues to see declines wine has the opportunity to seize the moment and drive the millennial consumer into the wine category but it has to be relevant and exciting Producer Australia 20 Landscapes Trends in the Australian market Consumption trends in Australia (2017 vs. 2016)

Top alcoholic beverages Top countries of origin % who have drunk the following beverages in the past 6 months % who have drunk wine from the following countries in the past 6 months Sparkling wine White wine Red wine Beer Champagne from Australia Australia 87% (85%) 

New Zealand 47% (41%) 

France 31% (25%) 

84% 79% 65% 53% 49% Italy 24% (19%)  (80%) (79%) (61%) (47%) (43%)      Spain 12% (9%) 

Top red varietals Top white varietals % who have drunk the following varietals in the past 6 months % who have drunk the following varietals in the past 6 months

1 Shiraz 51% (49%)  1 Sauvignon Blanc 60% (57%) 

2 Merlot 50% (49%)  2 Chardonnay 51% (50%) 

3 Cabernet Sauvignon 49% (49%)  3 Moscato 36% (29%) 

4 Cabernet Sauvignon / Merlot Blend 41% (n/a) n/a 4 Sémillon/Sauvignon Blanc Blend 35% (n/a) n/a

5 Pinot Noir 39% (38%)  5 Pinot Grigio/Gris 35% (33%) 

: statistically no significant change compared to 2016 wave : statistically significantly higher than 2016 wave at a 95% confidence level Australia : statistically significantly lower than 2016 wave at a 95% confidence level () = represents data in 2016 21 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 16, Mar’17, n>1,000 Australian regular wine drinkers Trends in the Australian market Purchase behaviour in Australia (2017 vs. 2016)

Off-premise location Key retailers % who have bought wine using the following channels in the past 6 months % who have bought wine from the following retailers in the past 6 months

1 In a local bottle shop 54% (35%)  1 Dan Murphy’s 57% (56%) 

2 In a the supermarket-attached liquor store 49% (60%)  2 BWS 45% (42%) 

3 In a liquor store that is in a shopping centre 43% (n/a) n/a 3 Liquorland 33% (33%) 

4 In a large wine discount store 27% (n/a) n/a 4 First Choice 16% (13%) 

5 In a bottle shop attached to a pub 25% (51%)  5 Aldi 11% (11%) 

Top brands Choice cues % who have bought the following brands in the past 3 months % who quoted the following as ‘important’ or ‘very important’ when selecting wine

1 34% (31%)  1 Grape variety 78% (72%) 

2 25% (22%)  2 A brand I am aware of 72% (69%) 

3 24% (20%)  3 Country of origin 65% (62%) 

4 23% (17%)  4 Recommendation by friends or family 64% (60%) 

5 19% (18%)  5 Promotional offer 61% (60%) 

: statistically no significant change compared to the 2016 wave : statistically significantly higher than the 2016 wave at a 95% confidence level Australia : statistically significantly lower than the 2016 wave at a 95% confidence level 22 Landscapes () = represents data in 2016 Source: Wine Intelligence, Vinitrac® Australia, Mar’ 16, Mar’17, n>1,000 Australian regular wine drinkers Management summary Brand power in the Australian market

Brand power: Top 15 wine brands (by awareness) Base = All Australian regular wine drinkers (n=1,006)

50%

Size of bubble: Purchase 45% (drinkers/all sample)

40% (1) Jacob's Creek

35% (6) Brown Brothers (2) Penfolds

Conversion (are aware of the 30% (10) Oyster Bay brand and have (3) Wolf Blass bought it in the last 3 months) 25% (8) Yellow Tail

20% (15) Banrock Station (4) Yellowglen (14) De Bortoli 15% (12) McWilliams (5) Lindeman's 10% (11) Yalumba (7) Rosemount Estate (13) Hardys (9) Wyndham Estate 5% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% Awareness (have heard of the brand) Australia 23 Landscapes Source: Wine Intelligence, Vinitrac® Australia, March’17, n=1,006 Australian regular wine drinkers Contents

Australia 24 Landscapes Imported vs. domestic still wine market share Stable market, with continued dominance of domestic wines

Australian still light wine volumes and share (total and by country of origin) Retail price per 0.75L Thousands of 9 CAGR CAGR Market 2012 2013 2014 2015 2016 CAGR CAGR litre cases 12-16 15-16 share 2016 (US$) 12-16 15-16 Total 52,128 52,192 51,888 51,715 52,882 0% 2% 100% 6.98 2% 4% Domestic 44,300 43,850 43,285 43,000 44,180 0% 3% 84% 6.34 2% 5% Imported 7,828 8,342 8,603 8,715 8,702 3% 0% 16% 10.24 -1% 3% New Zealand 6,000 6,350 6,556 6,600 6,531 2% -1% 12% 10.60 -2% 3% French 765 850 875 900 920 5% 2% 2% 8.52 5% 2% Italian 450 475 524 550 565 6% 3% 1% 9.11 2% 2% Spanish 170 185 229 235 246 10% 5% <1% 9.10 -1% 1% South African 160 175 125 115 106 -10% -8% <1% 8.44 -2% 0% Chilean 89 100 92 100 104 4% 4% <1% 9.54 4% 5% Argentinian 52 65 70 80 91 15% 14% <1% 11.93 5% 6% Portuguese 40 40 35 35 37 -2% 6% <1% 9.06 2% 4% German 35 35 33 33 34 -1% 2% <1% 9.67 -1% -1% US 15 15 17 20 25 14% 25% <1% 9.09 -5% -2% Greek 21 20 20 20 20 -1% 0% <1% 9.66 0% 0% International 17 18 15 14 10 -12% -29% <1% 6.68 -3% 0% Austrian 9 9 8 8 8 -1% 3% <1% 30.48 1% 0% Hungarian 6 5 5 5 5 -4% 0% <1% 9.66 2% 8%

Australia Source: IWSR 2016 25 Landscapes ©Copyright 2017 – The IWSR Imported vs. domestic sparkling & fortified wine market share Growth in sparkling wine, driven by imports which now account for 1/3rd of the market; continued slow decline of fortified wine Australian sparkling wine volumes (total and by country of origin) Retail price per 0.75L Thousands of 9 CAGR CAGR Market 2012 2013 2014 2015 2016 CAGR CAGR litre cases 12-16 15-16 share 2016 (US$) 12-16 15-16 Total 5,200 5,170 4,965 5,010 5,130 0% 2% 100% 14.32 3% 2% Domestic 3,875 3,770 3,516 3,480 3,500 -3% 1% 68% 10.17 2% 2% Imported 1,325 1,400 1,449 1,530 1,630 5% 7% 32% 23.24 1% 0% French 566 626 682 740 766 8% 4% 15% 37.10 1% 3% Italian 495 500 513 550 587 4% 7% 11% 9.84 0% 0% New Zealand 150 155 135 130 126 -4% -3% 2% 15.30 0% 0% German 48 50 55 60 85 16% 42% 2% 12.63 -1% 0% Spanish 32 32 30 29 50 12% 75% 1% 10.24 1% 1% Chilean 13 15 17 10 8 -13% -25% 0% 11.14 0% 0% South African 15 13 10 7 5 -24% -29% 0% 11.14 0% 0% International 3 5 5 3 3 -2% 0% 0% 8.91 0% 0% Argentinian 3 3 3 1 1 -37% -60% 0% 11.89 -2% -6% Australian fortified wine volumes (total and by country of origin) Retail price per 0.75L Thousands of 9 CAGR CAGR Market 2012 2013 2014 2015 2016 CAGR CAGR litre cases 12-16 15-16 share 2016 (US$) 12-16 15-16 Total 1,490 1,377 1,290 1,265 1,258 -4% -1% 100% 6.56 3% 1% Domestic 1,395 1,289 1,209 1,195 1,199 -4% 0% 95% 6.35 3% 0% Imported 96 88 82 70 60 -11% -15% 5% 10.72 6% 16% International 89 81 75 64 52 -13% -19% 4% 8.58 3% 8% Spanish 5 5 5 5 6 1% 16% 0% 21.26 -1% -2% Portuguese 1 1 1 1 2 12% 100% 0% 37.26 3% 8% volume in 1000s of 9L cases ©Copyright 2017 - The IWSR

Australia Source: IWSR 2016 26 Landscapes ©Copyright 2017 – The IWSR Imported vs. domestic market share across markets Market strongly dominated by domestic wine, although stronger longer term growth trend for imported wine

Shares of imported and domestic wine consumption by market

16% 25% 24% 22% 33% 31%

57% 68% Imported 84% 100% 84% 75% 76% 78% 67% 69%

Domestic 43% 32% 16%

UK South Korea Japan Germany China Russia USA New Zealand France Australia

Australia Source: IWSR 2016 27 Landscapes ©Copyright 2017 – The IWSR Per capita consumption of still light wine Australia ranks 16th for wine consumption per capita, three positions higher than its neighbour New Zealand

Per capita consumption of all wine (adult population) in litres per annum

CAGR CAGR Market 2012 2013 2014 2015 2016 12-16 15-16

1 France 55.5 54.9 53.8 52.3 49.7 -2.7% -5.1% 2 Portugal 46.5 45.9 46.5 48.2 48.9 1.3% 1.4% 3 Slovenia 46.5 46.6 46.7 47.3 47.6 0.6% 0.6% 4 Italy 51.1 49.8 48.2 46.8 45.0 -3.1% -4.0% 5 Switzerland 45.0 45.4 44.2 43.7 43.1 -1.1% -1.4% 6 Montenegro 43.1 42.9 42.3 41.9 41.5 -1.0% -1.1% 7 Malta 34.0 35.4 37.3 39.0 39.7 4.0% 2.0% 8 Austria 38.4 36.8 37.7 37.1 38.8 0.2% 4.5% 9 Germany 38.1 37.8 37.3 37.3 37.5 -0.4% 0.5% 10 Denmark 37.3 36.6 36.6 36.2 36.1 -0.8% -0.3% Top 20 Countries 11 Hungary 33.1 32.9 33.1 33.5 33.5 0.3% 0.2% 12 Slovakia 33.3 33.1 32.9 32.9 32.8 -0.4% -0.5% 13 Argentina 35.4 35.3 34.0 33.6 32.7 -2.0% -2.8% 14 Greece 31.0 31.7 31.8 31.8 32.2 1.0% 1.4% 15 Belgium and Luxembourg 33.7 31.9 30.5 29.1 30.0 -2.9% 2.8% 16 Australia 30.9 30.5 29.8 29.3 29.6 -1.1% 1.0% 17 Netherlands 29.7 29.2 28.5 28.1 27.6 -1.8% -1.9% 18 Belarus 28.7 28.2 27.5 27.5 27.2 -1.3% -1.0% 19 New Zealand 28.1 27.6 26.9 26.7 27.1 -0.9% 1.6% 20 Uruguay 29.3 29.9 28.7 27.9 26.6 -2.4% -4.7%

Australia 29 Landscapes Overview of the Australian wine market 12 million regular drinkers of wine in Australian

Adult population 18.4 million 1

81%

2 Wine drinkers 14.9 million 65% 53%

80%

Regular (i.e. at least once a 12 million 2 month) wine drinkers 81%

Weekly wine 9.7 million 3 drinkers

Sources: 1 Total 18+ population estimated by ABS in June 2015 Australia 2 Wine Intelligence online calibration study with YouGov, June’16, n=1,004 Australian adults. Wine=still light wine (red, white, rosé) 30 Landscapes 3 Wine Intelligence, Vinitrac® Australia, March ’17, n=1,006 Australian regular wine drinkers Demographics of Australian regular wine drinkers The demographics of the Australian regular wine drinkers have remained relatively stable, with the exception of a significant growth in the proportion of men drinking wine Gender Age

18% 16% 65 and over 50% 45%* Female 14% 15% 55-64 15% 16% 45-54

19% 21% 35-44 25-34 55%* Male 50% 19% 21% LDA-24 12% 13%

2016 2017 2016 2017 Regions Income (per year)

New South Wales 31% 31% 22%* Under $50,000 25% 27% Victoria 29% 19% 31% Queensland 19% $50,000 - $99,999 34% 2017 South Australia 9% 10% 2017 18% $100,000 - $149,999 12%* 17% Western Australia 8% 2016 14%* Australian Capital Territory 2% 2016 $150,000 and over 2% 10% Tasmania 3% 2% 14% Prefer not to answer 0.2% 13% Northern Territory 0.2%

Australia *: statistically significantly higher than 2016 at a 95% confidence level *: statistically significantly lower than 2016 at a 95% confidence level 31 Landscapes Source: Wine Intelligence, Vinitrac® Australia, March ’17, n=1,006 Australian regular wine drinkers Wine consumption frequency Significant increase in the last 5 years of frequent wine drinking (i.e. once a week or more)

Consumption frequency % who drink wine at the following frequency Base = All Australian regular wine drinkers (n=1,006) LDA-24 year Most days/every day 14% olds are more likely to drink 2-5 times a week 41% once a week than regular About once a week 26% drinkers- 35%* vs 26% 1-3 times a month 19%

Over 65 year olds are the most likely Consumption frequency: Tracking age group to drink % who drink wine at the following frequency most days/every Base = All Australian regular wine drinkers (n>1,000) day- 27%* vs 14% 2012 2016 2017 Long-term Short-term n= 1505 1000 1006 trend '12-'17 trend '16-'17 Most days/every day 15% 13% 14%   2-5 times a week 33% 37% 41%   About once a week 27% 27% 26%   1-3 times a month 25% 23% 19%  

: statistically no significant change compared to previous wave(s) : statistically significantly higher than previous wave(s) at a 95% confidence level Australia : statistically significantly lower than previous wave(s) at a 95% confidence level XX%= All regular Australian wine drinkers 32 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 12, Mar’ 16, Mar’ 17, n>1,000 Australian regular wine drinkers Contents

Australia 33 Landscapes Alcoholic beverage repertoire White wine continues to be consumed by more regular wine drinkers in Australia than red wine

Beverage repertoire % who drink the following alcoholic beverages Base = All Australian regular wine drinkers (n=1,006) White wine 84% Red wine 79% Beer 65% Champagne 53% Sparkling wine from Australia 49% Cider 47% Whisky / Whiskey 40% Vodka 40% Rosé wine 36% Cocktails 33% Liqueurs 31% Pre-mixed/ready to drink alcoholic beverages 30% Craft beer 29% Port 28% Rum 27% Rosé/pink Champagne 26% Gin 25% Sweet/dessert wine 25% Other sparkling wine 23% Prosecco 19% Brandy / Cognac 17% Sherry 12% Cava 5% Australia 34 Landscapes Source: Wine Intelligence, Vinitrac® Australia, March ’17, n=1,006 Australian regular wine drinkers Alcoholic beverage repertoire White wine has continued to grow its reach, and is now consumed by 84% of regular wine drinkers in Australia

Beverage repertoire: Tracking % who drink the following alcoholic beverages Base = All Australian regular wine drinkers (n>1,000) Beverage 2012 2016 2017 Long-term Short-term Rank in 2017 n= 1505 1000 1006 trend '12-'17 trend '16-'17 1 White wine 77% 80% 84%   2 Red wine 76% 79% 79%   3 Beer 61% 61% 65%   4 Champagne 46% 47% 53%   5 Sparkling wine from Australia n/a 43% 49% n/a  6 Cider 28% 41% 47%   7 Whisky / Whiskey n/a 38% 40% n/a  8 Vodka n/a 38% 40% n/a  9 Rosé wine 28% 36% 36%   10 Cocktails n/a 29% 33% n/a  11 Liqueurs 32% 30% 31%   12 Pre-mixed/ready to drink alcoholic beverages 30% 26% 30%   13 Craft beer n/a 23% 29% n/a  14 Port 32% 28% 28%   15 Rum 23% 24% 27%   16 Rosé/pink Champagne 12% 23% 26%   17 Gin n/a 21% 25% n/a  18 Sweet/dessert wine 23% 20% 25%   19 Other sparkling wine 27% 22% 23%   20 Prosecco 4% 13% 19%   21 Brandy / Cognac n/a 16% 17% n/a  22 Sherry 11% 14% 12%   23 Cava 2% 5% 5%  

: statistically no significant change compared to previous wave(s) : statistically significantly higher than previous wave(s) at a 95% confidence level Australia : statistically significantly lower than previous wave(s) at a 95% confidence level n/a = not applicable as question was not featured in this wave 35 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 12, Mar’ 16, Mar’ 17, n>1,000 Australian regular wine drinkers Varietal consumption Whilst Sauvignon Blanc & Chardonnay continue to dominate white wine choices, a broader range of reds are enjoyed by regular wine drinkers in Australia

White varietal consumption Red varietal consumption % who have drunk the following varietals in the past 6 months % who have drunk the following varietals in the past 6 months Base = All Australian regular wine drinkers (n=1,006) Base = All Australian regular wine drinkers (n=1,006)

Sauvignon Blanc 60% Shiraz / Syrah 51% Chardonnay 51% Merlot 50% Moscato 36% Cabernet Sauvignon 49% Semillon/Sauvignon blend 35% Cabernet Sauvignon/Merlot blend 41% Pinot Grigio/Pinot Gris 35% Pinot Noir 39% Riesling 35% Red blend 20% Sémillon 25% Malbec 12% Verdelho 15% Chenin Blanc 12% Grenache 12% Viognier 11% Tempranillo 11% Gewürztraminer 7% Sangiovese 10% Grüner Veltliner 5% Zinfandel 7% Torrontés 5% Pinotage 6% Vermentino 4% Cienna 5% Albariño 4% Gamay 4% Verdejo 4% Carménère 3% Colombard 4% Other 4% Other 4% Don't know 12% Don't know 9%

Australia 36 Landscapes Source: Wine Intelligence, Vinitrac® Australia, March ’17, n=1,006 Australian regular wine drinkers Favourite varietal Sauvignon Blanc is a firm favourite with Australian regular wine drinkers, while Shiraz is the most popular red varietal

Unprompted favourite white varietal Unprompted favourite red varietal % who indicate the following varietals are their favourite % who indicate the following varietals are their favourite Base= Australian regular wine drinkers who drink white wine) Base= Australian regular wine drinkers who drink red wine

(21%) (2%) (2%) (4%) (18%)

(18%) (8%) (13%) (7%) (6%)

(23%)

For more information, see the Flavour and varietal preference in the Australian wine market 2017 Report, available from Wine Intelligence

Australia 37 Landscapes Source: Wine Intelligence, Vinitrac® Australia, October 2016, n=1,032 Australian regular wine drinkers White varietal consumption Moscato is the only white varietal to experience a short-term increase in its reach

White varietal consumption: Tracking % who have drunk the following varietals in the past 6 months Base = All Australian regular wine drinkers (n>1,000) Rank in Varietal 2012 2016 2017 Long-term Short-term 2017 n= 1505 1000 1006 trend '12-'17 trend '16-'17 1 Sauvignon Blanc 57% 57% 60%   2 Chardonnay 58% 50% 51%   3 Moscato n/a 29% 36% n/a  4 Sémillon/Sauvignon blend n/a n/a 35% n/a n/a 5 Pinot Grigio/Pinot Gris 25% 33% 35%   6 Riesling 37% 34% 35%   7 Sémillon 30% 27% 25%   8 Verdelho n/a n/a 15% n/a n/a 9 Chenin Blanc 12% 11% 12%   10 Viognier 7% 8% 11%   11 Gewürztraminer 6% 6% 7%   12 Grüner Veltliner n/a 5% 5% n/a  13 Torrontés 3% 3% 5%   14 Vermentino n/a n/a 4% n/a n/a 15 Albariño n/a 5% 4% n/a  16 Verdejo n/a n/a 4% n/a n/a 17 Colombard 6% 4% 4%   Other 0% 3% 4%   Don't know 5% 7% 9%  

: statistically no significant change compared to previous wave(s) : statistically significantly higher than previous wave(s) at a 95% confidence level Australia : statistically significantly lower than previous wave(s) at a 95% confidence level n/a : not applicable as question was not featured in this wave 38 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 12, Mar’ 16, Mar’ 17, n>1,000 Australian regular wine drinkers Red varietal consumption Alternative varietals have experienced significant increases in reach since 2012

Red varietal consumption: Tracking We are seeing a shift towards lighter reds, and % who have drunk the following varietals in the past 6 months generally these are at a higher price point. Base = All Australian regular wine drinkers (n>1,000) Australian Pinot Noir from cool climate regions is seeing growth Major Retailer

Rank in Varietal 2012 2016 2017 Long-term Short-term 2017 n= 1505 1000 1006 trend '12-'17 trend '16-'17 1 Shiraz / Syrah 51% 49% 51%   2 Merlot 58% 49% 50%   3 Cabernet Sauvignon 60% 49% 49%   4 Cabernet Sauvignon/Merlot blend n/a n/a 41% n/a n/a 5 Pinot Noir 34% 38% 39%   6 Red blend n/a n/a 20% n/a n/a 7 Malbec 7% 11% 12%   8 Grenache 10% 11% 12%   9 Tempranillo 6% 10% 11%   10 Sangiovese 7% 11% 10%   11 Zinfandel 3% 6% 7%   12 Pinotage 4% 6% 6%   13 Cienna n/a n/a 5% n/a n/a 14 Gamay 3% 4% 4%   15 Carménère 3% 5% 3%   Other 2% 2% 4%   Don't know 6% 9% 12%   : statistically no significant change compared to previous wave(s) : statistically significantly higher than previous wave(s) at a 95% confidence level Australia : statistically significantly lower than previous wave(s) at a 95% confidence level n/a : not applicable as question was not featured in this wave 39 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 12, Mar’ 16, Mar’ 17, n>1,000 Australian regular wine drinkers Country of origin awareness and consumption Growth in terms of the number of regular wine drinkers who are now consuming wines from beyond Australia

Country of origin awareness and respective Country of origin consumption tracking % who have drunk wine from the following countries in the last 6 months consumption level Base = All Australian regular wine drinkers (n>1,000) Base = All Australian regular wine drinkers (n=1,006)

Country 2016 2017 Australia 87% 90% Rank in Trend 2017 France 31% 78% n= 1,000 1,006 Italy 24% 73% 1 Australia 85% 87%   New Zealand 47% 70% 2 New Zealand 41% 47% 3 France 25% 31%  Spain 12% 61% 4 Italy 19% 24%  California 8% 55% 5 Spain 9% 12%  6 Chile 6% 9%  Germany 7% 45% 7 California 6% 8%  Portugal 5% 42% 8 Germany 7% 7%  9 Portugal 4% 5%  Chile 9% 41% 10 Argentina 5% 5%  Argentina 5% 40% 11 South Africa 4% 5%  South Africa 5% 37% 12 Other USA 2% 3%  13 England n/a 2% n/a Other USA 3% 36%  % who are aware 14 Switzerland 2% 2% England 2% 23% 15 Canada n/a 2% n/a % who have drunk in 16 China n/a 1% n/a Canada 2% 17% the past 6 months Other 0% 1%  Switzerland 2% 15% Don't know 5% 5%  China 1% 12%

: statistically no significant change compared to previous wave(s) Australia : statistically significantly higher than previous wave at a 95% confidence level : statistically significantly lower than previous wave at a 95% confidence level 40 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 16, Mar’ 17, n>1,000 Australian regular wine drinkers Region of origin awareness and purchase Classic French regions of Bordeaux and Burgundy rank well for awareness yet lower for purchase levels, reflecting the luxurious nature and pricing of their products

Region of origin awareness and respective purchase level Base = All Australian regular wine drinkers (n=1,006)

Hunter Valley 24% 78% South East Australia 9% 40% Barossa Valley 34% 77% Hawke’s Bay 8% 40% Margaret River 30% 73% Provence 2% 33% Yarra Valley 21% 72% Mudgee 4% 33% South Australia 22% 65% Eden Valley 3% 32% Adelaide Hills 15% 62% Chianti 3% 32% Marlborough Western Australia 17% 61% Prosecco 7% 28% *shows a healthy McLaren Vale 19% 60% Canberra 4% 28% purchase rate, despite relatively Bordeaux 6% 59% Chablis 1% 28% low awareness Tasmania 12% 57% Orange 3% 27% levels when Champagne 11% 57% Loire 2% 26% compared to other mainstream regions Coonawarra 15% 54% Côtes du Rhône 2% New South Wales 12% 53% Central Otago 5% 22%

Clare Valley 11% 53% Alsace 2% 20% % who are aware Marlborough 20% 53% Châteauneuf du Pape 2% 15% % who have purchased in the Victoria 14% 50% Languedoc 1% 14% past 3 months Burgundy 3% 50% Rioja 2% 12% Mornington Peninsula 8% 42% Rutherglen 5% 41% Australia 41 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 17, n=1,006 Australian regular wine drinkers Region of origin awareness State-based regions South Australia, New South Wales and Victoria have all experienced long- and short-term declines reflecting an industry wide focus on more specific GI labelling

Region of origin awareness tracking % who know the following regions produce wine Base = All Australian regular wine drinkers (n>1,000)

Long-term Short-term Long-term Short-term Rank in Beverage 2012 2016 2017 Rank in Beverage 2012 2016 2017 trend trend trend trend 2017 2017 '12-'17 '16-'17 '12-'17 '16-'17 n= 1505 1000 1006 n= 1505 1000 1006 1 Hunter Valley 84% 77% 78%   16 South East Australia 43% 44% 40%   2 Barossa Valley 81% 78% 77%   17 Hawke’s Bay 33% 35% 40%   3 Margaret River 77% 74% 73%   18 Provence n/a 36% 33% n/a  4 Yarra Valley 76% 73% 72%   19 Mudgee n/a n/a 33% n/a n/a 5 South Australia 71% 70% 65%   20 Eden Valley n/a n/a 32% n/a n/a 6 Adelaide Hills n/a n/a 62% n/a n/a 21 Chianti 31% 34% 32%   7 Western Australia 62% 61% 61%   22 Prosecco n/a 23% 28% n/a  8 McLaren Vale 61% 59% 60%   23 Canberra n/a n/a 28% n/a n/a 9 Bordeaux 57% 62% 59%   24 Chablis 32% 35% 28%   10 Tasmania 54% 58% 57%   25 Orange n/a n/a 27% n/a n/a 11 Champagne 56% 62% 57%   26 Loire 22% 24% 26%   12 Coonawarra 61% 56% 54%   27 Côtes du Rhône 16% 22% 26%   13 New South Wales 57% 58% 53%   28 Central Otago n/a n/a 22% n/a n/a 14 Clare Valley 56% 56% 53%   29 Alsace n/a 20% 20% n/a  15 Marlborough 41% 51% 53%   30 Châteauneuf-du-Pape 10% 14% 15%   16 Victoria 59% 59% 50%   31 Languedoc n/a 11% 14% n/a  17 Burgundy 47% 55% 50%   32 Rioja 7% 10% 12%   18 Mornington Peninsula 46% 44% 42%   None of these 0% 2% 1%   19 Rutherglen n/a 44% 41% n/a 

: statistically no significant change compared to previous wave(s) Australia : statistically significantly higher than previous wave(s) at a 95% confidence level : statistically significantly lower than previous wave(s) at a 95% confidence level 42 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 12, Mar’ 16, Mar’ 17, n>1,000 Australian regular wine drinkers Region of origin purchase The major regions have experienced an increase in the number of regular wine drinkers who have purchased wine from that region, with 6 of the top 10 regions experiencing significant growth

Region of origin purchase tracking % who have bought wine from the following regions in the past 3 months Base = All Australian regular wine drinkers (n>1,000)

Long-term Short-term Long-term Short-term Rank in Beverage 2012 2016 2017 Rank in Beverage 2012 2016 2017 trend trend trend trend 2017 2017 '12-'17 '16-'17 '12-'17 '16-'17 n= 1505 1000 1006 n= 1505 1000 1006 1 Barossa Valley 31% 29% 34%   16 Bordeaux 4% 5% 6%   2 Margaret River 32% 26% 30%   17 Rutherglen 0% 6% 5%   3 Hunter Valley 29% 22% 24%   18 Central Otago n/a n/a 5% n/a n/a 4 South Australia 26% 23% 22%   19 Mudgee n/a n/a 4% n/a n/a 5 Yarra Valley 18% 17% 21%   20 Canberra n/a n/a 4% n/a n/a 6 Marlborough 18% 16% 20%   21 Eden Valley n/a n/a 3% n/a n/a 7 McLaren Vale 16% 16% 19%   22 Chianti 2% 2% 3%   8 Western Australia 17% 13% 17%   23 Orange n/a n/a 3% n/a n/a 9 Coonawarra 17% 15% 15%   24 Burgundy 2% 2% 3%   10 Adelaide Hills n/a n/a 15% n/a n/a 25 Provence n/a 2% 2% n/a  11 Victoria 17% 14% 14%   26 Rioja 1% 2% 2%   12 New South Wales 14% 13% 12%   27 Côtes du Rhône 2% 2% 2%   13 Tasmania 9% 10% 12%   28 Loire 1% 1% 2%   14 Clare Valley 11% 9% 11%   29 Châteauneuf-du-Pape 1% 2% 2%   15 Champagne 5% 8% 11%   30 Alsace n/a 1% 2% n/a  16 South East Australia 11% 9% 9%   31 Languedoc n/a 1% 1% n/a  17 Mornington Peninsula 6% 6% 8%   32 Chablis 1% 1% 1%   18 Hawke’s Bay 8% 5% 8%   None of these 11% 11% 8%   19 Prosecco 0% 4% 7%  

Australia 44 Landscapes Channel usage Approximately one in five regular wine drinkers has bought wine online in the past 6 months

Top 10 channel usage % who have bought wine from the following channels in the past 6 months Base = All Australian regular wine drinkers

In the supermarket - attached liquor store 63%

National wine discount store 60%

Local hotel or bottle shop 46%

From a drive through 22%

Direct from the winery - Cellar door or mail order 21%

On the internet 18%

From a specialist wine shop 17%

Through a wine club 14%

From Duty Free (e.g. airports) 13%

Other; please specify 2%

Australia *: statistically significantly higher than all regular wine drinkers at a 95% confidence level *: statistically significantly lower than all regular wine drinkers at a 95% confidence level 45 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Dec ‘16 , n=2,001 Australian regular wine drinkers Retailer usage Woolworths and Coles-owned retail outlets continue to dominate, followed by Aldi

Top 10 retailer usage % who have bought wine from the following retailers in the past 6 months Base = All Australian regular wine drinkers who drink wine in the off-premise

Dan Murphy's 57%

BWS 45%

Liquorland/Liquorland Express 33% Queenslanders are more likely 1st Choice 16% to purchase wine from 1st Aldi 11% Choice than 35 to 44 year regular wine Cellarbrations 9% olds are more drinkers - 27%* likely to vs 16% Vintage Cellars 8% purchase wine from Dan IGA Liquor 6% Murphy’s than regular wine Thirsty Camel 5% drinkers - 66%* vs 57% The Bottle O 5%

Australia *: statistically significantly higher than all regular wine drinkers at a 95% confidence level *: statistically significantly lower than all regular wine drinkers at a 95% confidence level 46 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 17, n=1,006 Australian regular wine drinkers Retailer usage BWS and Aldi are the only two retailers to see long-term growth in terms of the number of regular wine drinkers who shop there for wine

Retailer usage: Tracking % who have bought wine from the following retailers in the past 6 months Base = All Australian regular wine drinkers (n>1,000) Long-term Short-term Rank in Retailer 2012 2016 2017 trend trend 2017 n= 1505 1000 1006 '12-'17 '16-'17 1 Dan Murphy's 54% 56% 57%   2 BWS 31% 42% 45%   3 Liquorland/Liquorland Express 46% 33% 33%   4 1st Choice 21% 13% 16%   5 Aldi 7% 11% 11%   6 Cellarbrations 15% 6% 9%   7 Vintage Cellars 13% 7% 8%   8 IGA Liquor 13% 6% 6%   9 Thirsty Camel 13% 5% 5%   10 The Bottle O 9% 4% 5%   11 Cellarmasters n/a 5% 4% n/a  12 Local Liquor n/a 4% 3% n/a  13 Bottlemart/Sip n Save 8% 3% 3%   14 Coles online (shop.coles.com.au) n/a 2% 3% n/a  15 Woolworths online n/a n/a 2% n/a n/a 16 Costco n/a n/a 2% n/a n/a 17 Foodworks n/a 2% 2% n/a  18 Liquor Barons n/a n/a 1% n/a n/a 19 Porter’s Liquor n/a n/a 1% n/a n/a 20 Liquor Stax n/a n/a 1% n/a n/a 21 Little Bottler n/a n/a 1% n/a n/a 22 Duncans n/a 1% 0% n/a  23 Other 7% 5% 4%   24 None of these 1% 1% 1%  

: statistically no significant change compared to previous wave(s) Australia : statistically significantly higher than previous wave(s) at a 95% confidence level : statistically significantly lower than previous wave(s) at a 95% confidence level 47 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 12, Mar’ 16, Mar’ 17, n>1,000 Australian regular wine drinkers Retailer usage by state Aldi is significantly higher in terms of the number of wine shoppers visiting the stores in New South Wales and Victoria, reflecting the retailer’s store footprint

Retailer usage per city / region % who have bought wine from following channels in the past 6 months Base = All Australian regular wine drinkers

New South Western South Rank in All sample Victoria Queensland Retailer Wales Australia Australia 2017 n= 1,006 314 248 187 121 88 1 Dan Murphy's 57% 58% 58% 62% 54% 64% 2 BWS 45% 41% 41% 52% 39% 47% 3 Liquorland/Liquorland Express 33% 31% 42% 26% 41% 27% 4 1st Choice 16% 12% 15% 27% 17% 13% 5 Aldi 11% 20% 17% 1% 3% 2% 6 Cellarbrations 9% 6% 9% 14% 11% 9% 7 Vintage Cellars 8% 12% 5% 6% 7% 6% 8 IGA Liquor 6% 5% 13% 0% 8% 1% 9 Thirsty Camel 5% 0% 6% 2% 7% 22% 10 The Bottle O 5% 5% 4% 6% 7% 1%

Australia %: statistically significantly higher than all regular wine drinkers at a 95% confidence level %: statistically significantly lower than all regular wine drinkers at a 95% confidence level 48 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 17, n=1,006 Australian regular wine drinkers Choice cues Grape variety is the most important factor when selecting a wine for Australian regular wine drinkers, with a brand awareness ranking second

Choice cues % who quoted the following as ‘important’ or ‘very important’ when selecting wine Base = All Australian regular wine drinkers (n=1,006)

Grape variety (e.g. Cabernet Sauvignon, Chardonnay, etc.) 78%

A brand I am aware of 72%

The country of origin (e.g. France, Australia, Spain, Chile, USA, etc.) 65%

Recommendation by friend or family 64%

Promotional offer (e.g. price discount or 3 for the price of 2) 61%

Taste or wine style descriptions displayed on the shelves or on wine labels 60%

The region of origin 60%

Food matching 52% Men are more Appeal of the bottle and/or label design 41% likely to find food matching The wines recommended by shop staff or shop leaflets 40% important than women - 58%* vs Alcohol content 37% 46% Recommendation by wine critic or writer 33%

Australia *: statistically significantly higher than all regular wine drinkers at a 95% confidence level *: statistically significantly lower than all regular wine drinkers at a 95% confidence level 49 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 17, n=1,006 Australian regular wine drinkers Choice cues Grape variety is the only choice cue to experience both short- and long-term growth, with the importance of alcohol content falling since 2016

Choice cues: Tracking % who quoted the following as ‘important’ or ‘very important’ when selecting wine Base = All Australian regular wine drinkers (n>1,000)

Long-term Short-term Rank in Choice Cue 2012 2016 2017 trend trend 2017 '12-'17 '16-'17 n= 1505 1000 1006 1 Grape variety (e.g. Cabernet Sauvignon, Chardonnay, etc.) 73% 72% 78%   2 A brand I am aware of 70% 69% 72%   3 The country of origin (e.g. France, Australia, Spain, Chile, USA, etc.) 56% 62% 65%   4 Recommendation by friend or family 63% 60% 64%   5 Promotional offer (e.g. price discount or 3 for the price of 2) 57% 60% 61%   6 Taste or wine style descriptions displayed on the shelves or on wine labels n/a 57% 60% n/a  7 The region of origin 54% 62% 60%   8 Food matching n/a n/a 52% n/a n/a 9 Appeal of the bottle and/or label design 29% 39% 41%   10 The wines recommended by shop staff or shop leaflets 35% 37% 40%   11 Alcohol content 31% 42% 37%   12 Recommendation by wine critic or writer 29% 32% 33%   13 Whether or not the wine has won a medal or award 29% 33% 33%   14 Recommendation by wine guide books 27% 27% 29%  

Australia 51 Landscapes Style and flavour descriptors for red wine Australian regular wine drinkers are motivated by a balance of mellow characteristics, supported by fuller flavour indicators for red wine, under-pinned by specific berry flavours

Red style descriptors (prompted) Red flavour descriptors (prompted) Base= Australian regular wine drinkers Base= Australian regular wine drinkers

Top 5 - Appealing Top 5 - Appealing % who selected the following descriptors as % who selected the following descriptors as appealing (4. appealing + 5. very appealing) appealing (4. appealing + 5. very appealing)

1. Smooth 76% 1. Berries 59% 2. Easy drinking 71% 2. Blackberry 53% 3. Full-bodied 63% 3. Plum 50% 4. Fruity 59% 4. Blackcurrant 49% 5. Rich 57% 5. Blueberry 47%

Bottom 5 - Unappealing Bottom 5 - Unappealing % who selected the following descriptors as % who selected the following descriptors as unappealing (1. very unappealing + 2. unappealing) unappealing (1. very unappealing + 2. unappealing)

1. Leather 48% 1. Smoky 33% 2. Liquorice 43% 2. Jammy 32% 3. Pepper 38% 3. Dry 30% 4. Nutty 30% 4. Spicy 28% 5. Vanilla 29% 5. Tannic 28% For more information, see the Flavour and Varietal Preference in the Australian Wine Market 2017 Report, available from Wine Intelligence Australia 52 Landscapes Source: Wine Intelligence, Vinitrac® Australia, October 2016, n=1,032 Australian regular wine drinkers Red wine style descriptors appeal Australian regular wine drinkers are motivated by a balance of mellow characteristics, supported by fuller flavour indicators for red wine

Red wine style descriptors appeal (prompted) % who selected the following descriptors as appealing (4. appealing + 5. very appealing)/ unappealing (1. very unappealing + 2. unappealing) Base= Australian regular wine drinkers Unappealing Appealing 5% Smooth 76% 7% Easy drinking 71% 9% Full-bodied 63% 14% Fruity 59% 9% Rich 57% 10% Soft 55% 11% Delicate 53% 8% Elegant 52% 19% Light 46% 13% Bold 45% 28% Sweet 43% 18% Juicy 41% 19% Oaky 41% 13% Complex 40% 21% Earthy 40% 30% Dry 36% 28% Spicy 35% 20% Savoury 34% 33% Smoky 33% 28% Tannic 22% 32% Jammy 22%

Australia 53 Landscapes Source: Wine Intelligence, Vinitrac® Australia, October 2016, n=1,032 Australian regular wine drinkers Red wine flavour descriptors appeal The most appealing flavours for red wine comes from darker fruits such as blackberry, plum and blackcurrant

Red wine flavour descriptors appeal (prompted) % who selected the following descriptors as appealing (4. appealing + 5. very appealing) / unappealing (1. very unappealing + 2. unappealing) Base= Australian regular wine drinkers Unappealing Appealing 12% Berries 59%

17% Blackberry 53%

18% Plum 50%

18% Blackcurrant 49%

19% Blueberry 47%

20% Raspberry 46%

20% Cherry 45%

23% Strawberry 44%

23% Cranberry 41%

29% Vanilla 38%

30% Nutty 30%

38% Pepper 30%

43% Liquorice 28%

48% Leather 18%

Australia 54 Landscapes Source: Wine Intelligence, Vinitrac® Australia, October 2016, n=1,032 Australian regular wine drinkers Style and flavour descriptors for white wine Descriptors for white wine are most appealing when balancing freshness (crisp, citrus & zesty) with gentle fruit sweetness (fruity, peach & tropical fruit)

White style descriptors (prompted) White flavour descriptors (prompted) Base= Australian regular wine drinkers Base= Australian regular wine drinkers

Top 5 - Appealing Top 5 - Appealing % who selected the following descriptors as appealing % who selected the following descriptors as appealing (4. appealing + 5. very appealing) (4. appealing + 5. very appealing)

1. Easy drinking 76% 1. Citrus 54% 2. Fresh 74% 2. Peach 50% 3. Smooth 73% 3. Tropical Fruit 49% 4. Crisp 67% 4. Apple 47% 5. Fruity 64% 5. Pear 43%

1. Buttery 39% 1. Toasty 36% 2. Creamy 33% 2. Nutty 35% 3. Oaky 31% 3. Grapefruit 30% 4. Herbaceous 28% 4. Gooseberry 26% 5. Dry 26% 5. Elderflower 26%

For more information, see the Flavour and Varietal Preference in the Australian Wine Market 2017 Report, available from Wine Intelligence Australia 55 Landscapes Source: Wine Intelligence, Vinitrac® Australia, October 2016, n=1,032 Australian regular wine drinkers White wine style descriptors appeal Indicators of more gentle flavours (easy drinking and smooth) garner strong appeal for white wine and are very rarely rated unappealing, whilst sweetness indicators are more polarising

White wine style descriptors appeal (prompted) % who selected the following style descriptors as appealing (4. appealing + 5. very appealing) / unappealing (1. very unappealing + 2. unappealing) Base= Australian regular wine drinkers Unappealing Appealing 5% EasyEasy drinking drinking 76% 4% Fresh Fresh 74% 4% SmoothSmooth 73% 7% Crisp Crisp 67% 12% Fruity Fruity 64% 7% DelicateDelicate 62% 8% Soft Soft 59% 7% ElegantElegant 57% 11% Light Light 57% 16% Juicy Juicy 49% 26% Sweet Sweet 49% 21% Medium-sweetMedium-sweet 48% 26% Dry Dry 44% 16% Zesty Zesty 44% 16% Bold Bold 40% 16% ComplexComplex 39% 31% Oaky Oaky 36% 33% CreamyCreamy 32% 28% HerbaceousHerbaceous 26% 39% ButteryButtery 26% Australia 56 Landscapes Source: Wine Intelligence, Vinitrac® Australia, October 2016, n=1,032 Australian regular wine drinkers White wine flavour descriptors appeal Flavour descriptions that suggest freshness, but are balanced with an indication of subtle sweetness, have the strongest appeal for white wine

White wine flavour descriptors appeal (prompted) % who selected the following descriptors as appealing (4. appealing + 5. very appealing)/unappealing (1. very unappealing + 2. unappealing) Base= Australian regular wine drinkers Unappealing Appealing

15% Citrus Citrus 54% 19% PeachPeach 50% 19% TropicalTropical fruit fruit 49% 19% Apple Apple 47% 22% Pear Pear 43% 24% MelonMelon 43% 24% HoneyHoney 43% 24% MangoMango 43% 23% ApricotApricot 40% 20% StoneStone fruit fruit 40% 29% VanillaVanilla 38% 30% GrapefruitGrapefruit 35% 26% GooseberryGooseberry 34% 25% HoneysuckleHoneysuckle 33% 26% ElderflowerElderflower 31% 35% Nutty Nutty 28% 36% ToastyToasty 24%

Australia 57 Landscapes Source: Wine Intelligence, Vinitrac® Australia, October 2016, n=1,032 Australian regular wine drinkers Contents

▪ Introduction p. 6 ▪ Wine consumption in the off-premise and in the on-premise p. 60 ▪ Management summary including key trends p. 8 ▪ IWSR Value and volume data by price point ▪ ▪ Australian wine market overview p. 26 Off-premise consumption frequency by occasion ▪ ▪ Imported vs. domestic wine market share Off-premise spend by occasion ▪ Per capita consumption of still light wine ▪ On-premise consumption frequency by occasion ▪ On-premise spend by occasion ▪ Australian wine consumers p. 31 ▪ Overview of the Australian wine market ▪ Wine involvement and attitude p. 67 ▪ Demographics of Australian regular wine drinkers ▪ Wine attitude ▪ Wine consumption frequency ▪ Wine involvement ▪ Attitudes towards closures ▪ Beverage repertoire p. 35 ▪ Alcoholic beverage repertoire ▪ Brand health p. 71 ▪ Varietal consumption ▪ Brand power ▪ Favourite varietal ▪ Brand awareness ▪ Country of origin consumption ▪ Brand conversion ▪ Region of origin awareness ▪ Brand purchase ▪ Region of origin purchase ▪ Brand affinity ▪ Region of origin conversion ▪ Brand recommendation ▪ Wine buying behaviour p. 46 ▪ Wine drinker profiling p. 84 ▪ Channel usage ▪ Adventurous Explorers ▪ Retailer usage ▪ Developing Drinkers ▪ Choice cues ▪ Mainstream Value Seekers ▪ Contented Casuals ▪ Style and Flavour descriptor preferences p. 53 ▪ Newbies ▪ Red wine ▪ Senior Sippers ▪ White wine ▪ Methodology p. 92

Australia 58 Landscapes Volume in the Australian market by price point Whilst more than half of the volume of wine sold in Australia is under US$10 (AUD$13), growth can be seen in the higher price points

Wine Volume in the Australian market by price point

Thousands of 9 litre 2012 2015 2016 CAGR 12-16 CAGR 15-16 Market Share cases Total 52,140 51,720 52,888 0% 2% 100% Under US$2.99 11,325 10,770 10,160 -3% -6% 19% US$3 to 4.99 2,828 1,360 1,380 -16% 1% 3% US$5 to 9.99 20,433 20,885 21,191 1% 1% 40% US$10 to 19.99 15,841 16,796 18,072 3% 8% 34% US $20 – 29.99 1,543 1,727 1,894 5% 10% 4% US$30 – 49.99 147 149 158 2% 6% <1% US Over $50 22 32 35 11% 7% <1%

US Dollar Definitions AUS Dollar Conversion Australia is a mature market and therefore Under $2.99 Under $4 growth is limited at best for all categories. $3 to $4.99 $4 to $7 This has pretty much been the same $5 to $9.99 $7 to $13 landscape for a number of years. That said $10 to $19.99 $13 to $26 there are certain pockets which are showing $20 to $29.99 $26 to $40 growth such as >$15 table wine $30 to $49.99 $40 to $66 Producer Over $50 Over $66

Australia Source: IWSR 2017 59 Landscapes ©Copyright 2017 – The IWSR Value in the Australian market by price point Over half of the value of wine sold in Australia comes from wine priced above US$10 (AUD$13), with substantial growth amongst the higher price points (from a low base)

Wine sales value in the Australian market by price point

Thousands of US 2012 2015 2016 CAGR 12-16 CAGR 15-16 Market Share Dollars Total $ 4,099,052 $ 4,169,496 $ 4,430,833 2% 6% 100% Under US$2.99 $ 217,358 $ 208,189 $ 198,398 -2% -5% 4% US$3 to 4.99 $ 87,067 $ 50,706 $ 52,041 -12% 3% 1% US$5 to 9.99 $ 1,487,997 $ 1,482,879 $ 1,537,855 1% 4% 35% US$10 to 19.99 $ 1,904,789 $ 2,003,896 $ 2,166,381 3% 8% 49% US $20 – 29.99 $ 338,579 $ 353,715 $ 398,687 4% 13% 9% US$30 – 49.99 $ 50,213 $ 50,462 $ 55,925 3% 11% 1% US Over $50 $ 13,047 $ 19,650 $ 21,546 13% 10% <1%

US Dollar Definitions AUS Dollar Conversion Under $2.99 Under $4 $3 to $4.99 $4 to $7 We are seeing much better growth for wines $5 to $9.99 $7 to $13 that are priced $15 and above, led by the $10 to $19.99 $13 to $26 overall trend that Australians are drinking less $20 to $29.99 $26 to $40 but more premium wines $30 to $49.99 $40 to $66 Producer Over $50 Over $66

Australia Source: IWSR 2017 60 Landscapes ©Copyright 2017 – The IWSR Off-premise consumption frequency by occasion Australian regular wine drinkers are enjoying consuming wine for informal occasions at home more frequently

Off-premise consumption frequency by occasion: Tracking % who drink wine on the following occasions Base = All Australian regular wine drinkers who drink wine in the off-premise

3% 3% 3% 3% 2% 2% 2% 9% 9% 3% 11% 12% 7% 10%* 10% 9% 10% 13%* 9% 9% 17% Every day/most days 22% 23% 19% 19% 23% 25%* 28%* 25% 28% 29% 32% 2-5 times per week

23% 24% 28%* About once per week 23% 49% 45% 47% 42% 1-3 times per month 23% 51% 49% 19% 52% 20% 22% 47% Less than once per month 16% 17% 12%* 12%* 24% 21% 24% 22% 10% 10% I don't drink wine on this 7% 6% 6% 6% 7% 5% type of occasion 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 A relaxing drink at With an informal With a more formal At a BYO (To take to an BYO (To take to a the end of the day meal at home dinner party at party/celebration informal bar / more formal at home home at home restaurant) restaurant)

Australia *: statistically significantly higher than 2016 at a 95% confidence level *: statistically significantly lower than 2016 at a 95% confidence level 61 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 16, Mar’ 17, n>1,000 Australian regular wine drinkers Off-premise spend by occasion There is a significant increase in the number of consumers spending $30 or more, although this remains a small proportion of the typical spend for each occasion

Off-premise spend by occasion: Tracking % who stated they typically spend the following amount on the following occasions Base = All Australian regular wine drinkers who drink wine on the following occasions

1%* 3% 3% 5% 3% 5%* 5% 2% 4%* 4% 4% 9%* 8%* 4% $30 or more 8% 5% 5% 11% 8% 11%* 7% 7%* 6% 17%* 10% 10% 10%* 13% 11%* 16%* 12% Between $25 and $29.99 19% 18% 15% 18% 20% 13% 23%* 23% Between $20 and $24.99 21% 19% 26% 24% 22% Between $15 and $19.99 27% 29% 24% 30% 28% 34% 34% Between $10 and $14.99 28% 31% 31% 25%* 26% 32% 36% Between $7 and $9.99 23%* 27%* 28%* 27% 28% Up to $6.99 24% 23% 22%* 22%* 20%* 21% 18% 16% 16% 16% 13% 10% 13% 10% 8% 9% 7% 12% 11% 11% 5% 9% 6% 4% 3% 5% 5% 3% 6% 4% 4% 2% 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 A relaxing drink With an informal With a more At a BYO (To take to a BYO (To take to an As a gift for at the end of the meal at home formal dinner party/celebration more formal informal bar / somebody day at home party at home at home restaurant) restaurant)

13.07 14.19 13.23 14.26 17.32 19.02 15.36 16.83 17.09 18.81 14.91 16.45 19.82 21.42 Mean Spend ($)

Australia *: statistically significantly higher than 2016 at a 95% confidence level *: statistically significantly lower than 2016 at a 95% confidence level 62 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 16, Mar’ 17, n>1,000 Australian regular wine drinkers On-premise consumption frequency by occasion Although regular wine drinkers are more likely to drink wine in a restaurant than in 2016, there were no significant differences in frequency for both informal and formal meals

On-premise consumption frequency by occasion: Tracking % who drink wine on the following occasions Base = All Australian regular wine drinkers who drink wine in the on-premise

4% 4% 3% 4% 4% 3% Every day/most days 10% 6%* 10% 9% 10% 15% 13% 11% 2-5 times per week 17% 17% About once per week 22% 31% 32%* 1-3 times per month 33% 21% 23% 38% 40% Less than once per month

22% 61% 21% 2017 58% Bar or pub 58% 2016 51%* 53% 50% 39% 39% 85%* 24% Restaurant 21% 82%

8% 9% 7% 4% 3% 2% 4%* 2016 2017 2016 2017 2016 2017 2016 2017 A relaxing drink With an informal With a more formal At a party/celebration/ out at the end meal in a pub/bar/ dinner in a restaurant big night out of the day restaurant/hotel/bistro Australia *: statistically significantly higher than 2016 at a 95% confidence level *: statistically significantly lower than 2016 at a 95% confidence level 63 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 16, Mar’ 17, n>1,000 Australian regular wine drinkers On-premise spend by occasion There has been a significant increase in the average reported spend per bottle for all occasions

On-premise spend by occasion: Tracking % who stated they typically spend the following amount on the following occasions Base = All Australian regular wine drinkers who drink wine on the following occasions 2%* 3% 3% 4% 3% 5% 3% $50 or more 6%* 5% 5% 3% 9% 9%* 8%* 9% 10% Between $40 and $49.99 13% 12% 14% Between $30 and $39.99 14% 16% 16% 15% 18% 17% Between $25 and $29.99 21% 17% Between $20 and $24.99 19% 20% 23% 29% Between $15 and $19.99 25%* Less than $14.99 30% 24% 34% 21%

29% 61% * 2017 28% Bar or pub 23%* 58% 2016 23% 43% 20% 85%* 33%* Restaurant 25% 23% 82% 20%* 19% 13% 11%

2016 2017 2016 2017 2016 2017 2016 2017 A relaxing drink out With an informal meal With a more formal At a party/celebration/ at the end of the day in a bar/restaurant, dinner in a restaurant big night out hotel or bistro 18.83 20.46 20.66 22.51 25.61 27.51 22.34 23.90 Mean Spend($)

Australia *: statistically significantly higher than 2016 at a 95% confidence level *: statistically significantly lower than 2016 at a 95% confidence level 64 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 16, Mar’ 17, n>1,000 Australian regular wine drinkers Contents

▪ Introduction p. 6 ▪ Wine consumption in the off-premise and in the on-premise p. 60 ▪ Management summary including key trends p. 8 ▪ IWSR Value and volume data by price point ▪ ▪ Australian wine market overview p. 26 Off-premise consumption frequency by occasion ▪ ▪ Imported vs. domestic wine market share Off-premise spend by occasion ▪ Per capita consumption of still light wine ▪ On-premise consumption frequency by occasion ▪ On-premise spend by occasion ▪ Australian wine consumers p. 31 ▪ Overview of the Australian wine market ▪ Wine involvement and attitude p. 67 ▪ Demographics of Australian regular wine drinkers ▪ Wine attitude ▪ Wine consumption frequency ▪ Wine involvement ▪ Attitudes towards closures ▪ Beverage repertoire p. 35 ▪ Alcoholic beverage repertoire ▪ Brand health p. 71 ▪ Varietal consumption ▪ Brand power ▪ Favourite varietal ▪ Brand awareness ▪ Country of origin consumption ▪ Brand conversion ▪ Region of origin awareness ▪ Brand purchase ▪ Region of origin purchase ▪ Brand affinity ▪ Region of origin conversion ▪ Brand recommendation ▪ Wine buying behaviour p. 46 ▪ Wine drinker profiling p. 84 ▪ Channel usage ▪ Adventurous Explorers ▪ Retailer usage ▪ Developing Drinkers ▪ Choice cues ▪ Mainstream Value Seekers ▪ ▪ Style and Flavour descriptor preferences p. 53 Contented Casuals ▪ Newbies ▪ Red wine ▪ Senior Sippers ▪ White wine ▪ Methodology p. 92

Australia 65 Landscapes Wine attitude Growing interest in experimenting and trying new and different wines amongst Australian regular wine drinkers

Attitude towards wine: Tracking % who agree with the following statements about wine Base = All Australian regular wine drinkers (n>1,000)

31% 32%

I know what I like and I tend to stick to what I know

26%* 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

42%* 38%

2016 2017

Australia *: statistically significantly higher than 2016 at a 95% confidence level *: statistically significantly lower than 2016 at a 95% confidence level 66 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 16, Mar’ 17, n>1,000 Australian regular wine drinkers Wine involvement Significantly more Australian regular wine drinkers agree that drinking wine gives them pleasure in 2017 compared with 2016

Attitude towards wine: Tracking % who agree with the following statements about wine Base = All Australian regular wine drinkers (n>1,000) 82%* Drinking wine gives me pleasure 77%

75% I always look for the best quality wines I can get for my budget 73%

65% Deciding which wine to buy is an important decision 62%

64% Generally speaking, wine is reasonably priced 66%

58% I like to take my time when I purchase a bottle of wine 56%

49% Wine is important to me in my lifestyle 2017 45%

44% I have a strong interest in wine 40% 2016 40% I feel competent about my knowledge of wine 38%

39% Compared to others, I know less about the subject of wine 40%

30% Generally speaking, wine is an expensive drink 30%

27% I don’t understand much about wine 31%

*: statistically significantly higher than previous wave at a 95% confidence level Australia *: statistically significantly lower than previous wave at a 95% confidence level For information on calculation of involvement please see appendix 67 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 16, Mar’ 17, n>1,000 Australian regular wine drinkers Attitudes towards closures Screw-caps remain the most popular choice of closure amongst regular wine drinkers in the Australian market

Attitude towards closures: Tracking % who agree or strongly agree with the following statements Base = All Australian regular wine drinkers (n>1,000)

13% 12%

37% 41% 45% 49%

I like buying wine with this closure 64% 66% Neutral

I don't like buying wine with this closure 53% 47%* 48% 42%*

21% 24% 13% 7% 9% 10% 2016 2017 2016 2017 2016 2017 Screw-cap Natural cork Synthetic cork

Australia *: statistically significantly higher than previous wave at a 95% confidence level *: statistically significantly lower than previous wave at a 95% confidence level 68 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 16, Mar’ 17, n>1,000 Australian regular wine drinkers Contents

▪ Introduction p. 6 ▪ Wine consumption in the off-premise and in the on-premise p. 60 ▪ Management summary including key trends p. 8 ▪ IWSR Value and volume data by price point ▪ ▪ Australian wine market overview p. 26 Off-premise consumption frequency by occasion ▪ ▪ Imported vs. domestic wine market share Off-premise spend by occasion ▪ Per capita consumption of still light wine ▪ On-premise consumption frequency by occasion ▪ On-premise spend by occasion ▪ Australian wine consumers p. 31 ▪ Overview of the Australian wine market ▪ Wine involvement and attitude p. 67 ▪ Demographics of Australian regular wine drinkers ▪ Wine attitude ▪ Wine consumption frequency ▪ Wine involvement ▪ Attitudes towards closures ▪ Beverage repertoire p. 35 ▪ Alcoholic beverage repertoire ▪ Brand health p. 71 ▪ Varietal consumption ▪ Brand power ▪ Favourite varietal ▪ Brand awareness ▪ Country of origin consumption ▪ Brand conversion ▪ Region of origin awareness ▪ Brand purchase ▪ Region of origin purchase ▪ Brand affinity ▪ Region of origin conversion ▪ Brand recommendation ▪ Wine buying behaviour p. 46 ▪ Wine drinker profiling p. 84 ▪ Channel usage ▪ Adventurous Explorers ▪ Retailer usage ▪ Developing Drinkers ▪ Choice cues ▪ Mainstream Value Seekers ▪ Style and Flavour descriptor preferences p. 53 ▪ Contented Casuals ▪ Red wine ▪ Newbies ▪ White wine ▪ Senior Sippers ▪ Methodology p. 92

Australia 69 Landscapes Summary Brand health in Australian market

Jacob’s Creek excels in terms of brand power 1 Jacob’s Creek has the strongest brand power from the top 15 brands with Penfolds, Wolf Blass and Brown Brothers also performing well

Brown Brothers and Oyster Bay deliver strong conversion rates 2 Brown Brothers and Oyster Bay are efficiently converting awareness levels into purchases, with the two brands exceeding their competitors on this measure

Yellow Tail grows in terms of number of people who purchase the brand 3 Yellow Tail is the only brand to experience significant growth in both the short and long term in terms of the number of regular wine drinkers who purchase the brand

Brown Brothers leads in terms of affinity and recommendation 4 Brown Brothers, Oyster Bay, Taylors and Pepperjack all record proportionally high rates of affinity and recommendations compared to their respective awareness levels, with Brown Brother’s taking the number 1 position on both measures

Australia 70 Landscapes Brand power Jacob’s Creek has the strongest brand power in the Australian wine market

Brand power: Top 15 wine brands (by awareness) Base = All Australian regular wine drinkers (n=1,006) 50%

Size of bubble: Purchase 45% (drinkers/all sample)

40% (1) Jacob's Creek

35% (6) Brown Brothers (2) Penfolds

Conversion (are aware of the 30% (10) Oyster Bay brand and have (3) Wolf Blass bought it in the last 3 months) 25% (8) Yellow Tail

20% (15) Banrock Station (4) Yellowglen (14) De Bortoli 15% (12) McWilliams (5) Lindeman's 10% (11) Yalumba (7) Rosemount Estate (13) Hardys (9) Wyndham Estate 5% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% Awareness (have heard of the brand) Australia 71 Landscapes Source: Wine Intelligence, Vinitrac® Australia,, Mar’ 17, n=1,006 Australian regular wine drinkers Unprompted Brand Awareness Penfolds, Brown Brothers, Jacob’s Creek and Wolf Blass are mentioned most frequently by Australian regular wine drinkers

Unprompted brand awareness Size of words: Font size of words proportional to the number of mentions Base: All Australian regular wine drinkers (n=1,006)

Question: Thinking about wine, which brands come to mind?

Australia 72 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 17, n=1,006 Australian regular wine drinkers Brand awareness vs. purchase Brown Brothers and Oyster Bay perform particularly well at converting those aware of the brand into purchasers

Top 25 brands by awareness and respective purchase level Base = All Australian regular wine drinkers (n=1,006) Jacob's Creek 34% 87% Penfolds 24% 78% Wolf Blass 23% 78% Yellowglen 14% 73% Lindeman's 9% 71% Brown Brothers 25% 70% Rosemount Estate 7% 69% Yellow Tail 17% 67% Wyndham Estate 5% 66% Oyster Bay 19% 63% Yalumba 6% 61% McWilliams 6% 60% Hardys 6% 59% De Bortoli 10% 57% Banrock Station 11% 54% Taylors 12% 52% Tyrrell's 6% 50% % who are aware Wynn's 5% 50% % who have Houghton 7% 48% purchased in the McGuigan 7% 47% past 3 months Seppelt 3% 47% Peter Lehmann 6% 47% Eaglehawk 5% 45% Pepperjack 9% 43% Stanley Wines 5% 38% Australia 73 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 17, n=1,006 Australian regular wine drinkers Brand awareness tracking Brand awareness for the top 10 ranked brands remains relatively stable with only Jacob’s Creek, Yellow Tail and Oyster Bay experiencing long term growth

Brand awareness: Tracking % who know the following brands Base = All Australian regular wine drinkers (n>1,000)

Long-term Short-term Long-term Short-term Rank in Brand 2012 2016 2017 Rank in Brand 2012 2016 2017 trend trend trend trend 2017 2017 '12-'17 '16-'17 '12-'17 '16-'17 n= 1505 1000 1006 n= 1505 1000 1006 1 Jacob's Creek 84% 88% 87%   26 Queen Adelaide 54% 32% 37%   2 Penfolds 77% 80% 78%   27 Berri Estates 42% 38% 36%   3 Wolf Blass 77% 75% 78%   28 Clean-skin 56% 35% 35%   4 Yellowglen 75% 70% 73%   29 Stoneleigh 28% 35% 35%   5 Lindeman's 72% 70% 71%   30 Cloudy Bay n/a 30% 33% n/a  6 Brown Brothers 72% 70% 70%   31 Evans & Tate 29% 34% 31%   7 Rosemount Estate 71% 71% 69%   32 Annie's Lane n/a 31% 30% n/a  8 Yellow Tail 52% 67% 67%   33 Grant Burge 22% 27% 28%   9 Wyndham Estate 69% 63% 66%   34 Giesen 14% 25% 27%   10 Oyster Bay 58% 62% 63%   35 Brancott Estate 11% 30% 26%   11 Yalumba 67% 66% 61%   36 Yering Station 19% 18% 22%   12 McWilliams 63% 60% 60%   37 Villa Maria 10% 16% 22%   13 Hardys 65% 58% 59%   38 Arrogant Frog n/a n/a 21% n/a n/a 14 De Bortoli 59% 60% 57%   39 Tempus Two 14% 16% 21%   15 Banrock Station 51% 52% 54%   40 Wild Oats 19% 20% 20%   16 Taylors 46% 53% 52%   41 D'Arenberg n/a n/a 20% n/a n/a 17 Tyrrell's 51% 50% 50%   42 Jim Barry n/a 16% 13% n/a  18 Wynn's 48% 55% 50%   43 JP Chenet n/a 12% 13% n/a  19 Houghton 44% 40% 48%   44 Brand's Laira n/a 8% 12% n/a  20 McGuigan 40% 41% 47%   45 Nepenthe 5% 8% 9%   21 Seppelt 54% 49% 47%   46 Mouton Cadet n/a 6% 8% n/a  22 Peter Lehmann 39% 48% 47%   47 Kim Crawford 4% 5% 6%   23 Eaglehawk 56% 43% 45%   48 Zonin n/a 8% 5% n/a  24 Pepperjack 28% 43% 43%   None of these 1% 1% 1%   25 Stanley Wines 48% 39% 38%   : statistically no significant change compared to previous wave(s) Australia : statistically significantly higher than previous wave(s) at a 95% confidence level : statistically significantly lower than previous wave(s) at a 95% confidence level 74 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 12, Mar’ 16, Mar’ 17, n>1,000 Australian regular wine drinkers Brand purchase tracking Yellow Tail is the only brand to experience significant increases in purchase rates in both the short and long term

Brand purchase: Tracking % who have bought the following brands in the past 3 months Base = All Australian regular wine drinkers (n>1,000)

Long-term Short-term Long-term Short-term Rank in Rank in Brand 2012 2016 2017 trend trend Brand 2012 2016 2017 trend trend 2017 2017 '12-'17 '16-'17 '12-'17 '16-'17 n= 1505 1000 1006 n= 1505 1000 1006 1 Jacob's Creek 30% 31% 34%   26 Stanley Wines 7% 4% 5%   2 Brown Brothers 26% 22% 25%   27 Wyndham Estate 8% 5% 5%   3 Penfolds 15% 20% 24%   28 Eaglehawk 9% 6% 5%   4 Wolf Blass 20% 17% 23%   29 Grant Burge 4% 4% 5%   5 Oyster Bay 17% 18% 19%   30 Wynn's 4% 4% 5%   6 Yellow Tail 7% 14% 17%   31 Villa Maria 2% 3% 4%   7 Yellowglen 15% 10% 14%   32 Annie's Lane n/a 6% 4% n/a  8 Taylors 8% 10% 12%   33 Tempus Two 2% 3% 4%   9 Banrock Station 10% 10% 11%   34 D'Arenberg n/a n/a 3% n/a n/a 10 De Bortoli 14% 9% 10%   35 Seppelt 3% 2% 3%   11 Pepperjack 6% 10% 9%   36 Berri Estates 5% 4% 3%   12 Lindeman's 11% 8% 9%   37 Arrogant Frog n/a n/a 3% n/a n/a 13 McGuigan 6% 6% 7%   38 Yering Station 2% 2% 3%   14 Rosemount Estate 11% 9% 7%   39 Brand's Laira n/a 2% 3% n/a  15 Houghton 7% 6% 7%   40 Brancott Estate 2% 3% 2%   16 Clean-skin 17% 6% 7%   41 Queen Adelaide 6% 2% 2%   17 Peter Lehmann 5% 6% 6%   42 Nepenthe 1% 2% 2%   18 McWilliams 7% 6% 6%   43 Wild Oats 3% 2% 2%   19 Tyrrell's 4% 5% 6%   44 JP Chenet n/a 2% 1% n/a  20 Yalumba 6% 6% 6%   45 Kim Crawford 1% 1% 1%   21 Evans & Tate 7% 6% 6%   46 Jim Barry n/a 2% 1% n/a  22 Hardys 8% 5% 6%   47 Zonin 0% 2% 1%   23 Cloudy Bay n/a 4% 6% n/a  48 Mouton Cadet n/a 1% 1% n/a  24 Giesen 4% 5% 6%   None of these 11% 12% 8%   25 Stoneleigh 5% 4% 5%   : statistically no significant change compared to previous wave(s) Australia : statistically significantly higher than previous wave(s) at a 95% confidence level : statistically significantly lower than previous wave(s) at a 95% confidence level 75 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 12, Mar’ 16, Mar’ 17, n>1,000 Australian regular wine drinkers Brand conversion Brand’s Laira and Kim Crawford are efficient in converting those who are aware of each respective brand into buyers

Top 25 brands by conversion % who have bought the following brands in the past 3 months Base = Those who have heard of the following brands Jacob's Creek 39% Brown Brothers 35% Oyster Bay 31% Penfolds 31% Wolf Blass 30% Yellow Tail 26% Brand's Laira 23% Taylors 23% Kim Crawford 23% Pepperjack 22% Zonin 21% Giesen 20% Banrock Station 20% Nepenthe 20% Clean-skin 19% Evans & Tate 19% Villa Maria 19% Yellowglen 19% De Bortoli 18% Cloudy Bay 17% Tempus Two 17% Grant Burge 17% d'Arenberg 17% McGuigan 16% Stoneleigh 16% Australia 76 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 17, n=1,006 Australian regular wine drinkers Brand conversion to purchase tracking Penfolds, Wolf Blass and Yellow Tail have experienced short-term significant increases in converting awareness to purchase

Brand conversion: Tracking % who have bought the following brands in the past 3 months Base = Those who have heard of the following brands

Long-term Short-term Long-term Short-term Rank in Rank in Brand 2012 2016 2017 trend trend Brand 2012 2016 2017 trend trend 2017 2017 '12-'17 '16-'17 '12-'17 '16-'17 1 Jacob's Creek 36% 35% 39%   26 Stanley Wines 14% 11% 14%   2 Brown Brothers 36% 31% 35%   27 Houghton 17% 16% 14%   3 Oyster Bay 29% 29% 31%   28 Arrogant Frog n/a n/a 14% n/a n/a 4 Penfolds 20% 26% 31%   29 Peter Lehmann 12% 13% 14%   5 Wolf Blass 26% 22% 30%   30 Annie's Lane n/a 19% 13% n/a  6 Yellow Tail 14% 21% 26%   31 Lindeman's 16% 12% 13%   7 Brand's Laira n/a 21% 23% n/a  32 Yering Station 11% 13% 13%   8 Taylors 18% 19% 23%   33 Tyrrell's 8% 10% 12%   9 Kim Crawford 24% 20% 23%   34 JP Chenet n/a 19% 12% n/a  10 Pepperjack 23% 23% 22%   35 Eaglehawk 16% 14% 10%   11 Zonin n/a 21% 21% n/a  36 Rosemount Estate 16% 12% 10%   12 Giesen 27% 20% 20%   37 McWilliams 12% 10% 10%   13 Banrock Station 20% 18% 20%   38 Yalumba 10% 9% 10%   14 Nepenthe 17% 21% 20%   39 Jim Barry n/a 14% 10% n/a  15 Clean-skin 30% 16% 19%   40 Hardys 12% 9% 10%   16 Evans & Tate 23% 17% 19%   41 Brancott Estate 15% 10% 10%   17 Villa Maria 25% 17% 19%   42 Wynn's 9% 8% 9%   18 Yellowglen 20% 15% 19%   43 Berri Estates 11% 10% 9%   19 De Bortoli 24% 14% 18%   44 Mouton Cadet n/a 11% 8% n/a  20 Cloudy Bay n/a 14% 17% n/a  45 Wild Oats 14% 13% 8%   21 Tempus Two 18% 16% 17%   46 Wyndham Estate 12% 7% 8%   22 Grant Burge 16% 16% 17%   47 Seppelt 5% 4% 7%   23 d'Arenberg n/a n/a 17% n/a n/a 48 Queen Adelaide 11% 7% 6%   24 McGuigan 16% 15% 16%   None of these 12% 12% 8%   25 Stoneleigh 17% 12% 16%   : statistically no significant change compared to previous wave(s) Australia : statistically significantly higher than previous wave(s) at a 95% confidence level : statistically significantly lower than previous wave(s) at a 95% confidence level 77 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 12, Mar’ 16, Mar’ 17, n>1,000 Australian regular wine drinkers Brand affinity Brown Brothers is the most likely brand for Australian regular wine drinkers to believe is right for people like them

Top 25 brands by affinity % who believe the following brands are right for people like them Base = Those who have heard of the following brands Brown Brothers 54% Penfolds 51% Jacob's Creek 51% Oyster Bay 46% Evans & Tate 45% Pepperjack 45% Wolf Blass 45% Cloudy Bay 44% Grant Burge 43% Nepenthe 43% Annie's Lane 42% Taylors 41% De Bortoli 39% Banrock Station 38% d'Arenberg 38% Brand's Laira 38% Peter Lehmann 37% Yellow Tail 37% Giesen 36% Tempus Two 34% Villa Maria 33% Houghton 33% JP Chenet 33% Yellowglen 33% Yering Station 32% Australia 78 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 17, n=1,006 Australian regular wine drinkers Brand affinity tracking While Brown Brothers and Jacob’s Creek both show declines in the number of people who think the brand is right for them, Penfolds shows a significant increase in the measure

Brand affinity: Tracking % who believe the following brands are right for people like them Base = Those who have heard of the following brands

Long-term Short-term Long-term Short-term Rank in Rank in Brand 2012 2016 2017 trend trend Brand 2012 2016 2017 trend trend 2017 2017 '12-'17 '16-'17 '12-'17 '16-'17 1 Brown Brothers 60% 55% 54%   26 McGuigan 41% 33% 32%   2 Penfolds 44% 49% 51%   27 Rosemount Estate 36% 32% 31%   3 Jacob's Creek 56% 53% 51%   28 Tyrrell's 28% 30% 31%   4 Oyster Bay 49% 47% 46%   29 Zonin n/a 26% 30% n/a  5 Evans & Tate 47% 32% 45%   30 Kim Crawford 33% 37% 30%   6 Pepperjack 44% 45% 45%   31 Arrogant Frog n/a n/a 30% n/a n/a 7 Wolf Blass 51% 44% 45%   32 Lindeman's 34% 31% 30%   8 Cloudy Bay n/a 40% 44% n/a  33 Jim Barry n/a 30% 30% n/a  9 Grant Burge 45% 41% 43%   34 Wyndham Estate 33% 28% 30%   10 Nepenthe 47% 37% 43%   35 Yalumba 28% 31% 30%   11 Annie's Lane n/a 46% 42% n/a  36 Stoneleigh 32% 29% 29%   12 Taylors 41% 40% 41%   37 Clean-skin 42% 28% 29%   13 De Bortoli 44% 37% 39%   38 Seppelt 24% 22% 29%   14 Banrock Station 42% 37% 38%   39 Wynn's 27% 25% 28%   15 d'Arenberg n/a n/a 38% n/a n/a 40 Hardys 31% 26% 26%   16 Brand's Laira n/a 34% 38% n/a  41 Queen Adelaide 34% 24% 26%   17 Peter Lehmann 36% 35% 37%   42 Eaglehawk 36% 28% 26%   18 Yellow Tail 33% 34% 37%   43 McWilliams 32% 26% 25%   19 Giesen 45% 39% 36%   44 Wild Oats 30% 31% 24%   20 Tempus Two 44% 34% 34%   45 Brancott Estate 31% 27% 23%   21 Villa Maria 37% 36% 33%   46 Stanley Wines 28% 23% 23%   22 Houghton 37% 37% 33%   47 Berri Estates 24% 21% 22%   23 JP Chenet n/a 25% 33% n/a  48 Mouton Cadet n/a 21% 20% n/a  24 Yellowglen 37% 33% 33%   None of these 4% 4% 2%   25 Yering Station 33% 33% 32%   : statistically no significant change compared to previous wave(s) Australia : statistically significantly higher than previous wave(s) at a 95% confidence level : statistically significantly lower than previous wave(s) at a 95% confidence level 79 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 12, Mar’ 16, Mar’ 17, n>1,000 Australian regular wine drinkers Brand recommendation Grant Burge and d’Arenberg both feature in the bottom half for brand awareness, however they perform well for brand recommendation amongst those who are aware of the brand

Top 25 brands by recommendation % who would recommend the following brands to a friend Base = Those who have heard of the following brands Brown Brothers 50% Penfolds 46% Jacob's Creek 43% Wolf Blass 42% Oyster Bay 41% Pepperjack 39% Cloudy Bay 37% Brand's Laira 37% Grant Burge 37% Evans & Tate 36% Annie's Lane 35% d'Arenberg 35% Tempus Two 34% Taylors 33% Nepenthe 33% Peter Lehmann 31% Villa Maria 30% Jim Barry 30% Giesen 30% Yering Station 29% Yellow Tail 29% Banrock Station 29% De Bortoli 29% Houghton 27% Kim Crawford 27% Australia 80 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 17, n=1,006 Australian regular wine drinkers Brand recommendation tracking Penfolds have experienced a long term increase in recommendation levels since 2012

Brand recommendation: Tracking % who would recommend the following brands to a friend Base = Those who have heard of the following brands

Long-term Short-term Long-term Short-term Rank in Rank in Brand 2012 2016 2017 trend trend Brand 2012 2016 2017 trend trend 2017 2017 '12-'17 '16-'17 '12-'17 '16-'17 1 Brown Brothers 58% 52% 50%   26 McGuigan 34% 29% 26%   2 Penfolds 38% 46% 46%   27 Stoneleigh 26% 25% 25%   3 Jacob's Creek 47% 43% 43%   28 Tyrrell's 23% 24% 24%   4 Wolf Blass 45% 37% 42%   29 Yalumba 21% 21% 24%   5 Oyster Bay 45% 44% 41%   30 Yellowglen 29% 23% 24%   6 Pepperjack 38% 37% 39%   31 Rosemount Estate 30% 25% 23%   7 Cloudy Bay n/a 33% 37% n/a  32 Lindeman's 26% 23% 23%   8 Brand's Laira n/a 37% 37% n/a  33 Arrogant Frog n/a n/a 22% n/a n/a 9 Grant Burge 37% 39% 37%   34 Wyndham Estate 26% 19% 22%   10 Evans & Tate 40% 26% 36%   35 Zonin n/a 21% 20% n/a  11 Annie's Lane n/a 33% 35% n/a  36 Seppelt 18% 15% 20%   12 d'Arenberg n/a n/a 35% n/a n/a 37 Hardys 22% 21% 20%   13 Tempus Two 38% 32% 34%   38 Queen Adelaide 25% 21% 19%   14 Taylors 33% 34% 33%   39 Wynn's 21% 21% 19%   15 Nepenthe 43% 36% 33%   40 Wild Oats 26% 28% 19%   16 Peter Lehmann 33% 28% 31%   41 Mouton Cadet n/a 16% 18% n/a  17 Villa Maria 30% 27% 30%   42 Clean-skin 25% 16% 18%   18 Jim Barry n/a 29% 30% n/a  43 Brancott Estate 25% 21% 17%   19 Giesen 44% 33% 30%   44 JP Chenet n/a 15% 17% n/a  20 Yering Station 27% 29% 29%   45 Stanley Wines 18% 16% 17%   21 Yellow Tail 25% 26% 29%   46 McWilliams 22% 18% 17%   22 Banrock Station 34% 27% 29%   47 Eaglehawk 27% 22% 16%   23 De Bortoli 37% 28% 29%   48 Berri Estates 15% 15% 15%   24 Houghton 31% 29% 27%   None of these 7% 7% 5%   25 Kim Crawford 35% 42% 27%   : statistically no significant change compared to previous wave(s) Australia : statistically significantly higher than previous wave(s) at a 95% confidence level : statistically significantly lower than previous wave(s) at a 95% confidence level 81 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 12, Mar’ 16, Mar’ 17, n>1,000 Australian regular wine drinkers Contents

▪ Introduction p. 6 ▪ Wine consumption in the off-premise and in the on-premise p. 60 ▪ Management summary including key trends p. 8 ▪ IWSR Value and volume data by price point ▪ ▪ Australian wine market overview p. 26 Off-premise consumption frequency by occasion ▪ ▪ Imported vs. domestic wine market share Off-premise spend by occasion ▪ Per capita consumption of still light wine ▪ On-premise consumption frequency by occasion ▪ On-premise spend by occasion ▪ Australian wine consumers p. 31 ▪ Overview of the Australian wine market ▪ Wine involvement and attitude p. 67 ▪ Demographics of Australian regular wine drinkers ▪ Wine attitude ▪ Wine consumption frequency ▪ Wine involvement ▪ Attitudes towards closures ▪ Beverage repertoire p. 35 ▪ Alcoholic beverage repertoire ▪ Brand health p. 71 ▪ Varietal consumption ▪ Brand power ▪ Favourite varietal ▪ Brand awareness ▪ Country of origin consumption ▪ Brand conversion ▪ Region of origin awareness ▪ Brand purchase ▪ Region of origin purchase ▪ Brand affinity ▪ Region of origin conversion ▪ Brand recommendation ▪ Wine buying behaviour p. 46 ▪ Wine drinker profiling p. 84 ▪ Channel usage ▪ Adventurous Explorers ▪ Retailer usage ▪ Developing Drinkers ▪ Choice cues ▪ Mainstream Value Seekers ▪ Style and Flavour descriptor preferences p. 53 ▪ Contented Casuals ▪ Red wine ▪ Newbies ▪ White wine ▪ Senior Sippers ▪ Methodology p. 92

Australia 82 Landscapes Australian Portraits Segmentation Australian regular wine drinkers can be grouped into 6 distinct segments, based on their relationship with wine

Share of population- Portraits Base=All Australian regular wine drinkers (n=1,006)

Adventurous Explorers are high spending consumers who are both confident 23% in, and adventurous with, their wine choice

Developing Drinkers are younger, high spending, wine drinking consumers, 18% with ‘conservative’ views of wine and growing in their knowledge

Mainstream Value Seekers are frequent, brand savvy wine drinkers, who view 16% wine as an everyday treat

Contented Casuals are less frequent wine drinkers, who view wine as a weekend treat 18% Newbies are younger, new to the wine category and less frequent wine drinkers with a limited interest in wine 9% Senior Sippers are older wine drinkers, who are typically unengaged with the category 16%

2017

For more information, see the Australia Portraits 2016 Report, available from Wine Intelligence

Australia 83 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 17, n=1,006 Australian regular wine drinkers SUMMARY Adventurous Explorers Highly involved and adventurous with a male skew

Motivations: ▪ Over half the Like visiting wineries and buying wine directly from them, often group are aged forming brand loyalty through these channels between 25 and ▪ 45; they are more See wine as a personal interest, and are keen to share their likely to be male knowledge with others and live in a city ▪ Broad wine drinking portfolio in terms of varietals, but also different countries and regions Most involved Higher segment and spending ▪ Confident in their knowledge of wine, but still interested to learn most more and receive recommendations from others confident and about their confident in Demographics and Buying Behaviours knowledge of their wine ▪ Higher household income with 25%* earning between $100,000 - wine choices $150,000 a year (18% for regular wine drinkers) ▪ Regular drinkers, with 60%* drinking wine 2-5 times a week (41% for regular wine drinkers) ▪ More likely to purchase wine through all different channels, with Dan Murphy’s the most popular retailer (67%* vs 57%) often due to variety available ▪ High off-premise spend with 66%* spending over $15 a bottle (45% for regular wine drinkers) 63%* 37%* ▪ Most influenced by grape variety 90%*, brand awareness 82%* and (55%) (45%) country of origin 79%*

Motivations:

Currently less ▪ Wine drinking primarily associated with sharing with others, for experienced lower key, relaxed occasions with wine, so ▪ Like building their knowledge of wine, however the are still building still building confidence within the category confidence and knowledge ▪ They often see wine knowledge as an indication of sophistication 1 of 2 younger and education segments; the Drink choice ▪ They enjoy trying new types and varietals, yet aren’t particularly majority is most brand loyal under 35 influenced by years old occasions, with wine not Demographics and Buying Behaviours always being ▪ Younger consumer group with only 12%* over 45 years old (46% for their first regular wine drinkers) choice ▪ Slight male skew with 61% (55% for regular wine drinkers) ▪ Less frequent drinkers overall, and more likely to drink wine about once a week than regular wine drinkers (35%* vs 26%) ▪ Often prefer to shop for wine based on convenience, rather than pre- planning where to buy wine ▪ Price conscious, yet avoid purchasing wine under $7 a bottle in the off- premise (0% vs 7%) 61% 39% (55%) (45%) ▪ The grape varietal is significantly less likely to be seen as a important choice cue compared to regular wine drinkers (66%* vs 78%)

XX% = represents respective all regular wine drinkers data Australia *: statistically significantly higher than all regular wine drinkers at a 95% confidence level *: statistically significantly lower than all regular wine drinkers at a 95% confidence level 85 Landscapes Source: Wine Intelligence, Vinitrac® Australia, Mar’ 17, n=1,006 Australian regular wine drinkers SUMMARY Mainstream Value Seekers Highly involved but unadventurous Motivations: Most frequent wine drinkers, ▪ Wine is an everyday routine and core part of their everyday lives and have a higher level of ▪ They view the core, well-known brands as reliable and trustworthy, wine knowledge particularly those from Australia and involvement than most other ▪ They recognise good value wines, using their knowledge and groups experience to seek out special offers and deals on the brands and Confident in styles they know and trust their ability to Aside from identify wines Senior that deliver Sippers, they both good are the oldest quality and group of Demographics and Buying Behaviours good value for drinkers money ▪ Older group of drinkers with 86%* over the age of 45 years old (46% for regular wine drinkers) ▪ Less likely to drink Vodka (27%* vs 40%), Cocktails (20%* vs 33%) and Ready to drink beverages (20%* vs 30%) ▪ The most frequent drinkers with 88%* drinking wine at least twice a week (55% for regular wine drinkers) ▪ More likely to purchase wine through discount stores and wine clubs ▪ With Senior Sippers, they are the most likely group to spend under $10 a bottle in the off trade 54% 46% (55%) (45%) ▪ More likely to be influenced by grape variety than regular wine drinkers (88%* vs 78%)

Motivations: ▪ See wine as an important part of socialising with friends and family, Less frequent focusing primarily on weekend wine drinking drinkers, with medium wine ▪ Have some knowledge of wine, but can sometimes they do not feel involvement confident and so will rarely volunteer to take the lead when ordering wine with friends

▪ Willing to try new wines provided they come with some sort of recommendation - either from friends and/or family or shop staff Most likely group to be Normally living in the see wine as suburbs of a a weekend city Demographics and Buying Behaviours treat ▪ More likely to be aged between 45 and 54 years old than regular wine drinkers (24%* vs 15%) ▪ High representation of residents of Queenslanders with 27%* (19% for regular wine drinkers) ▪ Most likely portrait group to drink wine about once a week (39%* vs 26%) ▪ More likely to be aware of the top three regions of origin (Hunter Valley, Barossa Valley and Margaret River) than regular wine drinkers

49% 51% (55%) (45%)

Motivations: Smallest segment with ▪ Infrequent wine drinkers the lowest value and ▪ The least involved segment – yet to adopt wine as part of their regular lifestyle volume, yet opportunity to ▪ Least confident group about their knowledge of wine, with grow less experience and yet to fully adopt wine Youngest group with a New to the ▪ Price driven, with almost two thirds not minding what they female skew, wine buy, so long as the price is right with almost category, a third aged currently Demographics and Buying Behaviours under 25 with low involvement ▪ Just under two thirds of Newbies are under 35 years old (63%* vs 34%) ▪ More likely to have drunk Vodka (52%* vs 50%) and Ready to Drink beverages (43%* vs 30%) than regular wine drinkers ▪ Most likely portrait group to drink monthly 55%* (19% for regular wine drinkers) ▪ Less likely to drink red wine ▪ More likely to be influenced by a recommendation by a friend or family member than all regular wine drinkers (75%* vs 64%) 43%* 57%* (55%) (45%)

The second Motivations: smallest segment in ▪ Less involved wine drinkers (2nd lowest involved segment) also terms of having less confidence in their wine knowledge proportion of ▪ Price conscious and least adventurous segment regular wine drinkers ▪ Half consume wine several times per month and half several Low times a week Older portrait spenders, group with with low wine the majority involvement of drinkers and Demographics and Buying Behaviours over 55 years knowledge ▪ More likely to be older with 72%* of drinkers over 55 years old (30% for regular wine drinkers) ▪ More likely to have an off premise spend of under $10 a bottle than all regular wine drinkers (51%* vs 24%) ▪ Less likely to drink wine in the on-premise than all regular wine drinkers (60%* vs 89%)

▪ Less likely to have an on premise spend over $20 a bottle than all regular wine drinkers (13%* vs 48%)

50% 50% ▪ More likely to prefer screw-cap closures (59%* vs 49%) (55%) (45%)

▪ Introduction p. 6 ▪ Wine consumption in the off-premise and in the on-premise p. 60 ▪ Management summary including key trends p. 8 ▪ IWSR Value and volume data by price point ▪ ▪ Australian wine market overview p. 26 Off-premise consumption frequency by occasion ▪ ▪ Imported vs. domestic wine market share Off-premise spend by occasion ▪ Per capita consumption of still light wine ▪ On-premise consumption frequency by occasion ▪ On-premise spend by occasion ▪ Australian wine consumers p. 31 ▪ Overview of the Australian wine market ▪ Wine involvement and attitude p. 67 ▪ Demographics of Australian regular wine drinkers ▪ Wine attitude ▪ Wine consumption frequency ▪ Wine involvement ▪ Attitudes towards closures ▪ Beverage repertoire p. 35 ▪ Alcoholic beverage repertoire ▪ Brand health p. 71 ▪ Varietal consumption ▪ Brand power ▪ Favourite varietal ▪ Brand awareness ▪ Country of origin consumption ▪ Brand conversion ▪ Region of origin awareness ▪ Brand purchase ▪ Region of origin purchase ▪ Brand affinity ▪ Region of origin conversion ▪ Brand recommendation ▪ Wine buying behaviour p. 46 ▪ Wine drinker profiling p. 84 ▪ Channel usage ▪ Adventurous Explorers ▪ Retailer usage ▪ Developing Drinkers ▪ Choice cues ▪ Mainstream Value Seekers ▪ Style and Flavour descriptor preferences p. 53 ▪ Contented Casuals ▪ Red wine ▪ Newbies ▪ White wine ▪ Senior Sippers ▪ Methodology p. 92

Australia 90 Landscapes ▪ The data for this survey was collected in Australia in March 2012, March 2015, March 2016 and March 2017 Australia 2012 2015 2016 2017 sample size 1505 1000 1000 1006 ▪ Data was gathered via Wine Intelligence’s Vinitrac® online Male 50% 49% 50% 55% survey: Gender Female 50% 51% 50% 45% Total 100% 100% 100% 100% ▪ 1,505 Australian regular wine drinkers (March 2012) LDA-24 11% 10% 12% 13% 25-34 19% 19% 19% 21% ▪ 1,000 Australian regular wine drinkers (March 2015) 35-44 18% 19% 19% 21% ▪ 1,000 Australian regular wine drinkers (March 2016) Age 45-54 18% 16% 16% 15% ▪ 1,006 Australian regular wine drinkers (March 2017) 55-64 22% 17% 15% 14% 65 and over 12% 18% 18% 16% Total 100% 100% 100% 100% ▪ Respondents were screened to ensure that they drink wine at Australian Capital Territory 2% 3% 2% 2% least once a month; drink red, white or rosé wine; and buy wine New South Wales 30% 29% 31% 31% in the off-premise or in the on-premise Northern Territory 0% 0% 0% 0% Queensland 20% 23% 19% 19% State South Australia 9% 9% 10% 9% ▪ Invalid respondents (those who sped through the survey or gave Tasmania 3% 3% 2% 3% inconsistent answers to selected questions) were removed Victoria 26% 25% 29% 25% before analysis Western Australia 9% 9% 8% 12% Total 100% 100% 100% 100% Source: Wine Intelligence, Vinitrac® Australia, n>1000 ▪ The data is representative of Australian regular wine drinkers in Australian regular wine drinkers terms of age, gender and region

▪ The distribution of the sample is shown in the table

Australia 91 Landscapes Research methodology Qualitative trade research

Trade interview methodology

▪ Trade Interviews were conducted with five experienced industry professionals in Australia’s wine trade in July 2017

▪ Interviews followed a pre-determined discussion guide, and covered overall market trends, opportunities for different wine styles, retail channels and pricing

▪ The five interviewees were members of the wine trade working in different roles: ▪ 2 x producers ▪ 1 x major retailer ▪ 1 x independent retailer ▪ 1 x on-premise buyer

Australia 92 Landscapes How does Vinitrac® work?

1) Defining the right samples: ▪ Wine Intelligence, with the support of global research companies (e.g. TNS, YouGov), regularly runs calibration studies in each market in order to define demographic specifications of the wine consumers and the size of the market (i.e. penetration of wine consumption)

2) Running the online survey: ▪ Invitations to participate in an online survey programmed by Wine Intelligence are then distributed to residents in each market ▪ Respondents are directed to a URL address, which provides access to the online survey ▪ Based on given criteria (e.g. age, beverage, frequency of wine consumption) respondents will either proceed or screen out of the survey ▪ Wine Intelligence monitors completed responses to build samples representative of the target markets’ wine drinking population based on the most recent calibration study

3) Cleaning the data: ▪ When a representative sample is logged, the survey is closed ▪ Wine Intelligence will then clean out all invalid data points (e.g. those who sped through the survey or gave inconsistent answers to selected questions) and weight the data in order to ensure representability

Australia 93 Landscapes For more information about Wine Intelligence please contact us:

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