Confidential & Proprietary Copyright 2010 The Nielsen
Company Todays Consumers and Generation Next Myths and Realities
Nick Lake The Nielsen Company NABI Board Meeting July 29, 2010
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Confidential & Proprietary Copyright 2010 The Nielsen
Company Page 2 The Economy Is a Bit Like This Cant Make Up its
Mind
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Confidential & Proprietary Copyright 2010 The Nielsen
Company Page 3 The News Is Inconsistent Not All Good and Not All
Bad Foreclosures (May) New: -3% vs Apr Total: +11% vs 6 mos ago
Building Permits +10% vs YAG DOW Rollercoaster >11K (Apr); 10K
(Jun) Retail Sales (May) -1.2% vs Apr +6.9% vs YAG Jobs lost since
recession began -7.8 m 9.7% Unemployment 16.6% Underutilized
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Company Page 4 Monthly Job Gains/Losses The Labor Picture Is
Improving, But Recovery Will Take Years Source: Seasonally Adjusted
U.S. Total Non-Farm Employment, U.S. Government 411,000 temporary
workers for Census 2010
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Company Page 5 Momentous Events Unpredictable or Uncontrollable Are
Impacting the Consumer
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Company Page 6 Source: The Conference Board - Nine census regions,
5,000 US households; 1985 = 100 200120022003200420052006 Confidence
Is Better, But Still Weak by Historical Levels 20072008 2009
2010
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Company Page 7 Consumers Still Saving, But Moving Toward Some
Discretionary Spending Once you have covered your essential living
expenses, what do you do with your spare cash? I spend it on
Source: Nielsen Global Online Consumer Confidence and Opinion
Survey, 1Q10
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Company Page 8 Overall Dining Is Close to Flat Now, But Well Down
vs. Two Years Ago Source: Company Reports Nations Restaurant
News
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Company Page 9 It Could Take at Least 45+ Years Before Restaurant
Sales Return to 2007 Levels Source: Nielsen projections
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Company Page 10 Consumers Are Rephrasing Value Ill trade down even
if it means sacrificing what I really want. I want what I want, but
at the best price.
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Company Page 11 Bev Al Mid Year Report Card Whats Hot and Not
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Company Page 12 Value vs. Volume Gaps Have Shrunk From 2007 Levels
Value % Change vs Year AgoVolume % Change vs Year Ago Annual 2007
Lat 52 weeks Lat 26* weeks Lat 13* weeks Annual 2007 Lat 52 weeks
Lat 26* weeks Lat 13* weeks
Beer+3.2%+0.9%+1.1%+1.0%+0.5%-1.0%-0.8%-0.9%
Wine+6.1%+2.7%+4.4%+3.2%+2.9%+1.4%+2.8%+1.9% Spirits+4.4%+0.8%+2.5%
+2.2%+1.1%+2.4%+2.7% Source: Nielsen Tl U.S. Food/Drug/Conv/Liquor
Plus - through 06/26/2010 Lat 24 and Lat 12 for Beer/FMBs only
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Company Page 13 Now We See a Trading Up Comeback Or Do We? Source:
Nielsen Total U.S. Food/Drug/Conv/Liquor Plus/Dollars
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Company Page 14 Source: Nielsen, Total US Food, 13 weeks rolling
ending 5/29/10 Pricing Is a Factor in the Current Wine and Spirits
Trading Up $ Volume % Chg vs YA Avg Eq 750ml Price Chg vs YA Wines
>$20
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Company Page 15 Source: Nielsen Total U.S. Food, Drug, Liquor (+
Conv for Beer) Taking Price in Wine and Spirits Is Difficult; Beer
Is in a Better Place, for some Segments
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Company Page 16 Beer Price Tiers/Origin Crafts continue to lead the
way, while mainstream Premiums decline. Imports are now back to
flat, and the only segment down on price. Source: Nielsen Total
U.S. Food/Drug/Conv/Liquor Plus; thru 06-26-2010 Lat 52 $ Share
Major Sub- Category Value % ChgVolume % Chg Price Trend Lat 52Lat
12 Lat 52Lat 12 100%Ttl Beer +0.9%+1.0%-1.0%-0.9%
84.3Domestic+1.5+1.1-0.9-1.2 49.1 --Premium-0.8-0.1-2.7-1.6 20.9
--Below Premium+5.0+1.4+1.3-1.9 12.0 --Above
Premium+5.6+5.8+2.9+4.2 6.1 --Craft/Microbrew+14.0+14.5+11.4+12.7
15.7Imported-2.0+1.0-1.8+2.0 53.9Light+1.5+1.1-0.4-0.6
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Confidential & Proprietary Copyright 2010 The Nielsen
Company Page 17 Beer Country of Origin The Import comeback is led
by Mexican beer, and reduced Holland losses albeit with reduced
prices, coupled with Canada/Belgium gains. Lat 52 $ Share Country
of Origin Value % ChgVolume % Chg Price Trend Lat 52Lat 12 Lat
52Lat 12 15.7%Ttl Imported -2.0%+1.0%-1.8%+2.0%
7.6Mexican-0.2+3.1+1.1+4.6 3.5Holland-7.5-4.3-7.5-3.2
1.1Canadian+2.1+3.6+0.2+1.6 0.8Germany-5.2-3.4-6.8-3.8
0.6Belgium+10.9+14.6+8.2+14.7 0.5Ireland-1.8-5.7-3.4-6.1
0.4England+5.0+6.5+6.3+6.8 Source: Nielsen Total U.S.
Food/Drug/Conv/Liquor Plus; thru 06-26-2010
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Confidential & Proprietary Copyright 2010 The Nielsen
Company Page 18 Beer Package Size 4 packs, as well as large 30
packs lead growth, with Kegs now bouncing back. Prices are
uniformly higher than year ago. Lat 52 $ Share Package Size Value %
ChgVolume % Chg Price Trend Lat 52Lat 12 Lat 52Lat 12 100%Ttl Beer
+0.9%+1.0%-1.0%-0.9% 30.9 12 Pack -2.8-2.2-5.4-4.3 20.3 6 Pack
-0.2+1.3-1.7-0.4 13.1 18 Pack +3.6+2.9+1.6+1.3 11.5 Singles
+2.8+3.0+0.1+0.2 9.7 24 Pack +0.8-1.1-1.4-3.1 9.5 30 Pack
+7.5+5.4+4.4+2.2 2.1 20 Pack -8.5-12.3-9.8-12.1 1.4 4 Pack
+11.1+11.3+10.5+10.1 0.4 36 Pack +1.6+1.0-1.9-2.3
0.4Kegs-1.1+17.2-4.8+4.9 Source: Nielsen Total U.S.
Food/Drug/Conv/Liquor Plus; thru 06-26-2010
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Company Page 19 Table Wine Price Tiers Trading down was a 2008/09
event. Now, price points $9-$15 and >$20 are in the best growth
position, but have been accompanied by price decreases. Lat 52 $
Share Price Segment Value % ChgVolume % Chg Price Trend Lat 52Lat
13 Lat 52Lat 13 100%Ttl Table Wine +2.6%+2.8%+1.4%+1.9%
8.60-$2.99+0.8-1.6-3.6-3.7 24.4$3-$5.99+4.9+3.3+3.2+3.0
24.1$6-$8.99-2.3-2.6-0.7+0.1 19.3$9-$11.99+6.2+6.4+8.5+9.3
11.5$12-$14.99+3.9+6.0+6.2+9.6 6.8$15-$19.99+1.2+5.0+2.7+6.4
5.2>$20+4.2+12.4+3.7+12.5 Source: Nielsen Total U.S.
Food/Drug/Liquor Plus; thru 06-26-2010; Pricing based upon 750 ml
Equivalent
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Confidential & Proprietary Copyright 2010 The Nielsen
Company Page 20 Table Wine Package Growth is led by 750 ml (but
with average price attrition), alternative packaging such as 3 l
Box and Tetra, and the 187 ml size. Lat 52 $ Share Package Size/
Type Segment Value % ChgVolume % Chg Price Trend Lat 52Lat 13 Lat
52Lat 13 100%Ttl Table Wine +2.6%+2.8%+1.4%+1.9% 67.5 750 ml
+3.2+3.9 +5.0 +5.2 21.3 1.5 l +0.4+0.3 -0.1 +1.3 4.4 5 l +3.5+1.0
-1.1 -0.4 1.7 3 l Prem Box +18.9+16.1 +12.6 1.4 4 l -6.3-11.5 -12.9
-16.2 1.4 187 ml +4.5+6.7 +3.4 +7.1 1.4 3 l Glass -3.8-4.9 -8.3
-7.7 0.3 Tetra +19.9+21.4 +22.8 +23.6 Source: Nielsen Total U.S.
Food/Drug/Liquor Plus; thru 06-26-2010; Pricing based upon 750 ml
Equivalent
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Confidential & Proprietary Copyright 2010 The Nielsen
Company Page 21 Table Wine Country of Origin Domestic growth is
running well ahead of Imports, with all major wine-growing states
contributing. Lat 52 $ Share Origin Value % ChgVolume % Chg Price
Trend Lat 52Lat 13 Lat 52Lat 13 100%Ttl Table Wine
+2.6%+2.8%+1.4%+1.9% 71.8 Domestic+4.0+4.5+2.0+2.8 65.4
--California +4.0+4.3+1.9+2.6 4.1 --Washington +3.5+3.6+4.7+5.5 0.8
--Oregon +6.0+19.1+13.3+26.0 0.3 --Texas+0.9+5.2-1.1+5.5 24.6
Imported-1.3-0.6 -0.9 Source: Nielsen Total U.S. Food/Drug/Liquor
Plus; thru 06-26-2010; Pricing based upon 750 ml Equivalent
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Confidential & Proprietary Copyright 2010 The Nielsen
Company Page 22 Table Wine Imports Softness still from AU and FR,
while clear growth leaders remain AR and NZ, now ranked #5 and #6,
but with opposite pricing trends. Lat 52 $ Share Country of Origin
Value % ChgVolume % Chg Price Trend Lat 52Lat 13Lat 52Lat 13
24.6%Ttl Imported -1.0%-1.3%-0.6% -0.9% 7.7- Italy -2.4-0.4 -2.2
+0.3 7.0- Australia -7.3-8.4 -5.1 -6.3 2.3- France -6.6-8.1 -7.0
-10.2 2.0- Chile +3.1+0.3 +4.3 +3.0 1.8- Argentina +30.9+19.3 +23.8
+11.1 1.2- New Zealand +16.7+19.4 +22.9 +27.9 1.1- Spain +1.1-2.7
+2.5 -0.7 1.0- Germany +3.1+4.9 +2.5 +5.6 0.3- S. Africa -7.1-9.2
-5.3 -5.5 0.2- Portugal +2.0+3.6 +3.1 +3.2 Source: Nielsen Total
U.S. Food/Drug/Liquor Plus; thru 06-26-2010; Pricing based upon 750
ml Equivalent
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Confidential & Proprietary Copyright 2010 The Nielsen
Company Page 23 Table Wine Top 10 Varietals Pinot Noir and Riesling
lead the way, followed closely by Sauv Blanc, Zinfandel and Cab
Sauv. Syrah/Shiraz continues to struggle. Lat 52 $ Share Varietal
Value % ChgVolume % Chg Price Trend Lat 52Lat 13Lat 52Lat 13
100%Ttl Table Wine +2.6%+2.8%+1.4%+1.9% 21.5Chardonnay +1.8+1.7
+2.8 +2.7 15.0Cab Sauv+4.7+4.6 +5.6 +5.5 10.1Merlot-3.6-4.6 -1.5
-2.7 7.8P. Grigio/Gris+1.9+2.7 +3.2 +4.3 5.8P. Noir+7.6+9.3 +10.9
+12.7 4.4Sauv Blanc+7.4+7.7 +7.2 4.2White Zin-2.2-3.5 -3.0 -2.7
3.1Syrah/Shiraz-8.6-9.5 -7.3 -7.8 2.5Riesling+8.5+9.3 +10.9 +12.8
2.4Zinfandel+4.3+7.2 +5.7 +8.1 Source: Nielsen Total U.S.
Food/Drug/Liquor Plus; thru 06-26-2010; Pricing based upon 750 ml
Equivalent
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Confidential & Proprietary Copyright 2010 The Nielsen
Company Page 24 Spirits - Sub-category Vodka continues to grow,
along with improved Tequila, Cognac and Prep Cktl growth. Average
price for some rising (Cognac, Prep Cltl), and others falling
(Vodka, Tequila) Lat 52 $ Share Sub-category Value % ChgVolume %
Chg Price Trend Lat 52Lat 13Lat 52Lat 13 100%Ttl
Spirits+0.8%+2.5%+1.1%+2.7% 29.1 Vodka +3.1+4.1 +4.3 +4.9 25.8
Whiskey -0.0+1.0 -1.8 -1.1 8.5 ---Scotch -2.6-0.2 -5.7 -5.4 8.4
---Bourbon +0.9+1.5 -1.9 +0.5 5.8 ---Canadian -1.50.3 -2.8 -1.1 1.8
---Blended +4.7+0.3 +6.0 +1.6 1.1 ---Irish +12.6+9.9 +13.2 +10.5
12.4 Rum +1.0+3.2 +1.4 +3.4 11.5 Cordials/Schnapps -2.4-1.8 -2.3
-0.9 6.9 Tequila +0.5+2.9 +3.4 +5.8 6.6 Unflav Brandy/Cog. +2.3+8.6
-0.0 +4.1 4.4 Gin -2.7 -3.0 -3.2 2.7 Prep/RTD Cocktails -1.6+8.5
+1.2 +10.8 Source: Nielsen Total U.S. Food/Drug/Liquor Plus; thru
06-26-2010; Pricing based upon 750 ml Equivalent
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Confidential & Proprietary Copyright 2010 The Nielsen
Company Page 25 Spirits Import vs. Domestic While domestic trends
overall are flat, Imported trends have picked up in the last 13
weeks, with help from Imported Vodka growth Lat 52 $ Share Imp vs.
Dom by Sub-category Value % ChgVolume % Chg Price Trend Lat 52Lat
13Lat 52Lat 13 100%Ttl Selected* Spirits+0.4%+2.1%+0.8%+1.9% 62.5
Imported +0.0+2.9 +0.6 +2.6 32.0 Vodka +2.9+5.6 +7.4 +8.3 32.0
Whiskey -2.3+0.4 -4.2 -2.3 20.2 Cordials -1.6-1.1 -1.4 -0.5 5.3 Gin
-3.1-1.1 -2.1 +0.2 1.1 Brandy -8.5-9.4 -9.3 -8.8 37.5 Domestic
+1.1+0.8 +1.0 +1.3 63.4 Vodka +3.2+2.9 +3.1 +3.6 12.5 Brandy
-1.1-0.9 -2.2 -1.3 8.6 Gin -2.3-4.3 -3.5 -4.9 7.6 Cordials -5.1-3.4
-3.7 3.9 Whiskey -1.4-6.0 -4.4 -8.5 Source: Nielsen Total U.S.
Food/Drug/Liquor Plus; thru 06-26-2010; Pricing based upon 750 ml
Equivalent *NOTE: Ttl Selected Spirits = Vodka, Whiskey, Cordials,
Gin, Brandy and Schnapps segments
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Confidential & Proprietary Copyright 2010 The Nielsen
Company Page 26 Spirits - Price Tiers Trading down NOT the
descriptive word any longer; premium and especially ultra-premium
leading the way but with reduced pricing. Lat 52 $ Share Price Tier
Value % ChgVolume % Chg Price Trend Lat 52Lat 13 Lat 52Lat 13
100%Ttl Spirits+0.8%+2.5%+1.1%+2.7% 21.6Value+0.1+0.4-0.3+1.0
32.5Mid Price+0.5+1.6 +1.7 +3.0 33.8Premium+0.7+2.1 +2.0 +3.8
12.1Ultra Premium+3.1+10.4 +3.7 +11.5 Spirit Price Tiers Legend
(equiv 750 ml) Source: Nielsen Total U.S. Food/Drug/Liquor Plus;
thru 06-26-2010; Pricing based upon 750 ml Equivalent
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Confidential & Proprietary Copyright 2010 The Nielsen
Company Page 27 Ultra Premiums Generally Leading the Way, with the
Exception of Vodkas and Tequilas TTL US Sales Volume % Chg Lat 26
weeks vs Year Ago ValueMidPremiumUltra Vodka Scotch Bourbon
Canadian Whisky Rum Cordials/Schnapps Unflavored Brandy/Cognac
Tequila Gin Top box growth Bottom box growth Source: Nielsen Total
U.S. Food/Drug/Liquor Plus; thru 06-26-2010; Pricing based upon 750
ml Equivalent
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Confidential & Proprietary Copyright 2010 The Nielsen
Company Page 28 Summary Economic uncertainty still prevails;
recovery likely modest Impact depends upon your products geographic
development and consumer demographics Consumers have re-phrased
value Frantic trading down replaced by I want what I want, on my
terms Trading up activity in Wine and Spirits at least partially
tied to decrease in pricing Imports in general are mixed and those
performing well have adjusted pricing to be more competitive within
the category