How Food Retailers Promote Wine & Spirits

Tom Pirovano May 3rd, 2011

1 What You Need to Know

• Retailers promote wine as much as beer and spirits combined. • banners run more wine ads than any other retailer – up vs. year ago. • ad support for spirits is down 16% while beer ads are up 10%. • Wine ad counts vs. year ago have been down since Christmas.

2 Share of Beverage Alcohol Retail Promotions

Beer 29.0% Share of Retail Ads Although beer generates much higher Liquor/ dollar sales, wine Spirits receives more retailer 20.0% ad support than beer and spirits combined. Malt Liquor MarketGate Ad Comparisons Wine 1.4% 52-Weeks Ending 4/16/2011 U.S. & Canadian Retailers 49.6% Excludes Liquor Stores 3 Top Retailers Promoting Wine Number of Wine Ad Blocks Over 12 Months Tom Thumb 871 Randall's Food Markets 865 Quality Food Centers Safeway banners 774 Safeway Stores run the most wine 725 Dominick's Finer Foods promotions. 716 Carrs 712 -OSCO 710 684 677

ShopRite 580 MarketGate Ad Comparisons 52-Weeks Ending 4/16/2011 U.S. & Canadian Retailers 570 Excludes Liquor Stores 4 Top Retailers Promoting Spirits Number of Liquor/Spirits Ad Blocks Over 12 Months

Jewel-Osco 699

ShopRite 586

Carrs 362 Jewel-Osco runs Safeway Stores 359 102 circulars per Vons 358 year. Pavilions 356 The average Supervalu () 352 ShopRite circular contains 582 ad Dominick's Finer Foods 329 blocks. Sweetbay Supermarket 317 MarketGate Ad Comparisons 52-Weeks Ending 4/16/2011 U.S. & Canadian Retailers Save Mart 273 Excludes Liquor Stores 5 Alcohol Promo Mix Across Retailers Retailers Promoting More Wine Tom Thumb 74.7% 25.3% Randall's Food Markets 74.3% 25.7% Giant Eagle 71.5% 25.0% Super Markets 71.3% 28.7% Quality Food Centers 70.0% 30.0% Wine Beer & Malt Liquor Spirits Across Retailers 46.1% 35.1% 18.8%

Retailers Promoting More Spirits ShopRite 48.7% 2.2% 49.2% Sweetbay Supermarket 30.4% 28.2% 41.4% Bashas' Markets 33.1% 31.9% 34.9% Jewel-OSCO 33.4% 33.7% 32.9% 30.3% 37.3% 32.4%

MarketGate Ad Comparisons, 52-Weeks Ending 4/16/2011, U.S. & Canadian Retailers, excludes liquor stores 6 Top Promoted Wine Companies Share of Retailer Wine Ads Constellation Brands, Inc. 16.5% E&J Gallo Winery 13.3% Treasury Wine Estates 7.9% Majestic Fine Wines 5.3% Diageo North America, Inc. 4.9% The top 3 wine- The Wine Group 4.8% makers represent Ste. Michelle Wine Estates 3.6% 38% of wine ads. Trinchero Family Estates 3.4% Brown-Forman Corporation 3.3%

W.J. Deutsch & Sons, Ltd. 3.2% MarketGate Ad Comparisons 52-Weeks Ending 4/16/2011 LVMH Group 2.5% U.S. & Canadian Retailers Excludes Liquor Stores 7 Top Promoted Spirits Companies Share of Retailer Spirits Ads Diageo North America, Inc. 27.30% Beam Global Spirits & Wine 11.48% Bacardi, Ltd. 11.38% Pernod Ricard 8.41% William Grant & Sons Ltd 5.02% The top 6 spirits Jack Daniel Beverage Co. 3.80% companies Private Brand Manufacturer 3.53% represent over two thirds of ads. Skyy Spirits, LLC 3.30% Constellation Brands, Inc. 2.57%

Allied Domecq PLC 2.42% MarketGate Ad Comparisons 52-Weeks Ending 4/16/2011 Nolet Spirits USA 2.41% U.S. & Canadian Retailers Excludes Liquor Stores 8 Top Promoted Wine Brands Share of Retailer Wine Ads Beringer 4.03% Kendall Jackson 3.59% Barefoot 3.55% Yellow Tail 2.92% Clos du Bois 2.60% Woodbridge 2.37% No single wine Robert Mondavi 2.24% brand represent Chateau Ste. Michelle 2.23% more than 4% of retail wine ads. Sterling 1.98%

Korbel 1.75% MarketGate Ad Comparisons 52-Weeks Ending 4/16/2011 Sutter Home 1.69% U.S. & Canadian Retailers Excludes Liquor Stores 9 Top Promoted Spirits Brands Share of Retailer Spirits Ads Bacardi 7.66% Jose Cuervo 5.90% Smirnoff 5.12% Sauza 4.38% Captain Morgan 4.22% Absolut 3.97% Jack Daniel's 3.80% The top promoted spirits brands represent Private Brand 3.53% a wide variety of Jim Beam 3.25% product segments.

Seagram's 3.02% MarketGate Ad Comparisons 52-Weeks Ending 4/16/2011 Skyy 2.76% U.S. & Canadian Retailers Excludes Liquor Stores 10 Retail Ad Support Vs. Year Ago

+10.3% Change Vs. Year Ago +8.8%

-1.2% -0.6% Retail ads for spirits Total alcohol ad counts declined sharply, while change changed very beer ads increased. little vs. year ago. -15.9%

Total Alcohol Wine Spirits Beer Malt Liquor MarketGate Ad Comparisons 52-Weeks Ending 4/16/2011 U.S. & Canadian Retailers Excludes Liquor Stores 11 Weekly Retail Ad Support - Wine

Retailer ad support Thanksgiving Pre-Christmas for wine has declined New Year’s since December. Current Year Ago Valentine’s 1/15/11 1/22/11 1/29/11 2/12/11 2/19/11 2/26/11 3/12/11 3/19/11 3/26/11 4/16/11 9/11/10 9/18/10 9/25/10 10/2/10 10/9/10 11/6/10 4/24/10 5/15/10 5/22/10 5/29/10 6/12/10 6/19/10 6/26/10 7/10/10 7/17/10 7/24/10 7/31/10 8/14/10 8/21/10 8/28/10 12/4/10 10/16/10 10/23/10 10/30/10 11/13/10 11/20/10 11/27/10 12/11/10 12/18/10 12/25/10 1/1/11 1/8/11 2/5/11 3/5/11 4/2/11 4/9/11 9/4/10 5/1/10 5/8/10 6/5/10 7/3/10 8/7/10

12 Weekly Retail Ad Support - Spirits

Pre-Christmas Retailer ad support New Year’s for spirits have declined throughout Pre-Thanksgiving the past 52 weeks. Labor Day

Current Year Ago 1/16/10 1/23/10 1/30/10 2/13/10 2/20/10 2/27/10 3/13/10 3/20/10 3/27/10 4/10/10 4/17/10 9/12/09 9/19/09 9/26/09 10/3/09 11/7/09 4/25/09 5/16/09 5/23/09 5/30/09 6/13/09 6/20/09 6/27/09 7/11/09 7/18/09 7/25/09 8/15/09 8/22/09 8/29/09 12/5/09 10/10/09 10/17/09 10/24/09 10/31/09 11/14/09 11/21/09 11/28/09 12/12/09 12/19/09 12/26/09 1/2/10 1/9/10 2/6/10 3/6/10 4/3/10 9/5/09 5/2/09 5/9/09 6/6/09 7/4/09 8/1/09 8/8/09

13 Retailers with Significant Changes in Wine Ad Support Current Year Ago Ad Count Percent 52-Week 52-Week Chg Vs. Chg Vs. Retailer # of Ads # of Ads Year Ago Year Ago Dominick's Finer Foods 716 512 +205 ads +40% Giant Eagle 570 375 +196 ads +52% Safeway Stores 725 555 +170 ads +31% Randall's Food Markets 865 742 +124 ads +17% Vons 684 566 +118 ads +21% Carrs Most are 712 595 +118 ads +20% Tom Thumb Safeway 871 768 +103 ads +13% Banners Farm Fresh 374 474 -100 ads -21% Grocery Co. 191 300 -109 ads -36% 312 423 -111 ads -26% Albertsons LLC 21 188 -167 ads -89% Save Mart 392 649 -257 ads -40% ShopRite 580 1,446 -866 ads -60% 14 Retailers with Significant Changes in Spirits Ad Support

Current Year Ago Ad Count Percent 52-Week 52-Week Chg Vs. Chg Vs. Retailer # of Ads # of Ads Year Ago Year Ago Copps 227 132 +95 ads +72% Hy-Vee Food Stores 105 26 +79 ads +302% 57 0 +57 ads n/a 126 80 +45 ads +56%

Pavilions 356 387 -30 ads -8% Save Mart 273 318 -45 ads -14% Dominick's Finer Foods 329 377 -48 ads -13% Ralphs Grocery Co. 125 180 -55 ads -30% Winn Dixie 26 91 -66 ads -72% Albertsons LLC 16 158 -142 ads -90% ShopRite 586 1,084 -498 ads -46%

Down 498 Ads at ShopRite 15 Change in Ad Support Among Top Promoted Wine Companies Retail Ad Support Change Vs. Year Ago Constellation Brands, Inc. -0.9% E&J Gallo Winery -0.7% Treasury Wine Estates +1.4% Majestic Fine Wines +9.2% Diageo North America, Inc. -6.1% MarketGate Ad Comparisons 52-Weeks Ending 4/16/2011 The Wine Group -11.6% U.S. & Canadian Retailers Excludes Liquor Stores Ste. Michelle Wine Estates -14.9% Trinchero Family Estates +1.0% Brown-Forman Corporation +5.4% W.J. Deutsch & Sons, Ltd. -9.8% LVMH Group +16.1% 16 Change in Ad Support Among Top Promoted Spirits Companies Retail Ad Support Change Vs. Year Ago Diageo North America, Inc. -12.3% Beam Global Spirits & Wine -5.2% Declining Ad Bacardi, Ltd. -20.8% Support Across Pernod Ricard -18.1% Top Spirits William Grant & Sons Ltd -9.4% Companies. Jack Daniel Beverage Co. -11.4% Private Brand Manufacturer +44.8% Skyy Spirits, LLC -7.4% Constellation Brands, Inc. +4.6% MarketGate Ad Comparisons Allied Domecq PLC -37.9% 52-Weeks Ending 4/16/2011 U.S. & Canadian Retailers Nolet Spirits USA -2.4% Excludes Liquor Stores 17 Retailers Promoting Private Label Wine & Spirits

# of PL PL % # of PL PL % Retailers Wine Ads of Ads Retailers Spirits Ads of Ads Fresh & Easy 104 71.8% Jewel-Osco 95 13.6% ShopRite 15 2.6% Supervalu (Albertsons) 42 11.9% Jay C Stores 13 52.0% Carrs 9 2.6% Carrs 12 1.7% Ralphs Grocery Co. 5 4.3% 11 4.7% Pavilions 4 1.1% Pavilions 9 1.3% Vons 4 1.1% Vons 9 1.3% Cub Foods 4 3.6% Dominick's Finer Foods 6 0.9% Safeway Stores 3 0.7% Safeway Stores 6 0.8% Dominick's Finer Foods 2 0.7% Randall's Food Markets 5 0.6% Baker's 2 3.8%

MarketGate Ad Comparisons, 52-Weeks Ending 4/16/2011 U.S. & Canadian Retailers, Excludes Liquor Stores 18 Front Page of Raley’s Weekly Circular – May 1st, 2011

19 CVS Circular Back Page – May 1, 2011

Milwaukee Las Vegas Omaha Springfield, Mo

Boston – No Alcohol Houston – Some Alcohol NYC – Unique Format

20 What percent of your ads are shared with your competitors?

21 Recent Digital Promotions

Save Mart 4/28/2011

Raley’s 5/1/2011

22 News: February 24th, 2011

“Shoprite is First Grocery Retailer On All Three Leading Mobile Spaces”

First with… 1. iPhone (IOS) App 2. Android App 3. Mobile Web Site

23 Mobile strategies appear unbalanced across the top U.S retailers

# Who “Like” iPhone Android Mobile Web Company Facebook Page App? App? Site? 3,500,000 Yes Sam's Only Yes 54,000 Yes Yes No Target 3,900,000 Yes Yes Yes Walgreens 823,000 Yes Yes Yes The Home Depot 228,000 Yes No No 217,000 No No Yes CVS 263,000 Yes No Yes Lowe's 508,000 No No Yes Sears/Kmart N/A Yes Yes Yes Best Buy 2,500,000 Yes Yes Yes

Safeway 145,000 No No Store Locator Only Observed as of 2/19/2011 24 Kroger’s Mobile Strategy

Facebook Page  iPhone App  Android App  2D Barcodes  Digital Coupons  All these tech tools and no mobile web site?

25 How many shopping apps does a consumer need?

26 Authenticity is a new challenge in mobile marketing

Each of these Android apps uses the Walmart name, and some look very authentic. But none of these is from Walmart.

27 Walmart (U.S.) Wine & Spirits Ads Over the Past 12 Months

Walmart Ad 12/5/2010 Page 12

28 Target and Walmart Both Promoting E-Readers for Mother’s Day in Their May 1st Circulars

Source: ECRM’s MarketGate Ad Comparisons www.adcompare.marketgate.co 29 A Creative Approach To Mother’s Day Retailer: Vivanda Page 1 Lima, Peru 4/28/2011 Page 2

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30 International Retail Promotions

Comercial Mexicana Bi-Lo Supermarkets Mexico City Hawthorn East, Australia 4/29/2011, Pg 17 4/28/2011, Pg 26 Metro Carrefour Heibronn, Germany Shanghai, China 4/28/2011, Pg 22 4/29/2011, Pg 2

31 This Week’s Supermarket News May 2, 2011

Detailed Overview of Wine & Spirits Promotions on Page 9

Our friends at Supermarket News sent free copies for ECRM attendees.

32 You already have access to this data.

More on Ad Comparisons: www.adcompare.marketgate.com Tom Pirovano, 440-528-0418 [email protected] 33 Key Take Aways

• Strong Retail Ad Support for Wine • More Safeway Wine Ads Vs. Year Ago • Retailers Shifting Ads from Spirits to Beer • Wine Ads Down Since Christmas • Raley’s Front Page Wine Ads This Week • Ad Exclusivity Remains an Issue • Tracking Ad Versions Is a Challenge • Wine is for Mothers Day!

34 What’s Next?

• Integration of Social & Mobile Media – Shifting Trade Promos from Print to Digital – Digital Coupons, Groupon, Living Social • More Focus on Ad Performance – Beyond Just Compliance – Paying for Ad Exclusivity – Version Accountability • Creative Tie-Ins (Example from Peru) • Small Store Formats – Real Estate Conversion

35 Thank you.

Questions?

36