The Wine Intelligence

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The Wine Intelligence Japan Wine Market Landscape Report

2008

© Wine Intelligence 2008

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Contents

§ Executive summary pg.4

§ Market overview pg.7

§ Regulatory framework § Labelling requirements § Taxation and duties

§ Global wine market pg.15

§ Volume and value trends § Per capita consumption

§ Japan wine market pg.19

§ Wine volume & value trends § Market size by ontrade vs offtrade § Still light wine by colour § Summary: category drivers

§ Competitive landscape pg.32

§ Country of origin § Leading brands market share

§ Distribution & Retail pg.35

§ Channel structure § Offtrade sales by channel § Wholesaler profiles § Retailer profiles

§ Japanese wine consumers pg.61

§ Overview: Who are they? § Demographics: Age, gender, income

§ Regular wine drinkers § Frequency of consumption pg.68

§ Repertoire by colour § Repertoire by source country § Repertoire by varietal § Typical spend § Drinks portfolio ﴾other drinks﴿

§ Choice cues pg.77

§ Purchase motivators in a nutshell § Closure types § ABV

§ Brand awareness pg.79

§ Major brands: Consumer awareness § Major brands: Penetration § Major regions: Awareness and conversion

§ Wine drinker shopping patterns pg.84

§ Usage by channel § Usage by retailer

§ Consumer profiling pg.88

§ Who are the most valuable consumers in Japan? § Who drinks sparkling wine in Japan?

§ Appendix pg.135

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Copyright

§ © Wine Intelligence 2008

§ All rights reserved. No part of this publication may be reproduced in any form ﴾including photocopying or storing it in any medium by electronic means﴿ without the permission of the copyright owners. Application for permission should be addressed to Wine Intelligence.

§ The source of all information in this publication is Wine Intelligence unless otherwise stated.

§ Information from Adams Wine Handbook is reproduced by kind permission of Adams Beverage Group; copyright Adams Wine Handbook 2007 ©. Information from Euromonitor International is reproduced by kind permission of Euromonitor International; copyright © Euromonitor International 2008.

§ Wine Intelligence shall not be liable for any damages ﴾including without limitation, damages for loss of business or loss of profits﴿ arising in contract, tort or otherwise from this publication or any information contained in it, or from any action or decision taken as a result of reading this publication.

§ Wine Intelligence International Wine & Spirit Centre, 3945 Bermondsey Street, London SE1 3XF Tel: 020 7089 3890. Email: [email protected]. Registered number: 4375306 England.

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§ Executive Summary

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Executive summary

§ Japan is a mature and stable market for wine, punctuated by occasional “crazes” or shortlived trends. Consumption is dominated by Sake, the domestically produced rice wine, and indigenous winebased beverages.

§ Among imported wines, luxury brands ﴾particularly Champagne﴿ and midquality everyday drinking wines drive most of the consumption.

§ Wine imports skyrocketed during the red wine boom of 1998 ﴾36 million wine cases﴿, This boom was the result of numerous TV shows and magazine articles at the time which touted the health benefits of red wine.

§ Once the craze had run its course – about 12 months – wine sales quickly fell back to preexisting levels and it took until 2001 to rebalance inventories.

§ Since 2002 the still light wine market has been static in volume and value terms.

§ Sparkling wine is the only wine category that has grown since 2002 with an annual increase of 17% in volume and 18% in value.

§ Sparkling wines have a price per bottle much higher than any other category due to the propensity of Japanese consumers to buy luxury Champagne brands

Japan wine market Key trends in a nutshell:

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Executive summary ﴾2﴿: Competitive landscape & consumers in the spotlight

§ Domestic wine represents 43% of the Japanese market

§ Suntory, Sapporo and Mercian Corporation the major domestic wine producers and also the main importers and distributors of nondomestic light wines

§ France and Italy lead the market for imported wine by volume and value and their price per bottle has increased over the last years

§ Australia, Italy and USA are increasing markedly their value as well as their share of market

§ The top domestic wine brand in Japan are: Manns wine, Bistro and Polaire

§ Competitive landscape in a nutshell

§ Wine consumers in Japan are likely to be the younger segments ﴾2544﴿

§ The most frequent drunk wine is red wine ﴾50%﴿ although white wine has an important share ﴾38%﴿

§ Country of origin and recommendation by a friend/family or shop staff are the most valuable choice cues they bear in mind when purchasing wine

§ Japanese wine consumers in the spotlight

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§ Market overview § Regulatory framework

§ Labelling requirements

§ Taxation & duties

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Macroeconomic market overview 2007

§ Population: 127.433,494 ﴾July 2007 est.﴿

§ GDP per capita: $33,100 ﴾2006 est.﴿

§ GDP growth: 2.2% ﴾2006 est.﴿

Source: Wine Intelligence; CIA World Fact Book

§ Comparative in geographical size to California, Japan occupies a strategic location in North East Asia

§ Third largest economy in the world after the US and Germany, mainly based on technology

§ Industry is based largely on manufacture of motor vehicles, electronic equipment, machinery and steel, ships, chemicals, textiles, processed foods

§ Due to low birth rates and almost nonexistent immigration, Japan’s population is declining

§ Cuisine based on seafood, some meat and vegetables, traditional beverages beer and sake ﴾rice wine﴿

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Japanese market overview: Nearly 60% of wines are imported

Domestic and Imported still light wines in Japan 2005

Imported 57%

Domestic 43%

Japanese major producers: Mercian Suntory Sapporo

Major importers: France Italy US

NB domestic producers are also the leading importers and distributors of wine from France, Italy, USA and Australia

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Labelling requirements

Product name Wine, Fruit wine or Sweetened fruit wine

Food additives Name of substance of antioxidants or synthetic preservatives

Alcohol content Ethyl alcohol content

Content volume Expressed in millilitres or litres

Type Whether or not sparkling

Name and Address of Importer Name and address of Importer

Distributor address Distributor or rebottling plant address

Geographic Country of origin

VOLUNTARY LABELLING

To prevent consumption by minors

“consumption of liquors by minors is prohibited” or “liquors may only be consumed by those age 20 and over”

Warning of risks of drinking during pregnancy

Drinking alcohol during pregnancy or nursing may adversely impact the growth and development of the fetus or infant

Blend of imported and domestic wine

Wines made from mixtures must list the wines in order of quantity. E.g. “Made from domestic and imported wine”

Promotion of recycling of liquor containers

Products packed in steel or aluminium cans and PET bottles must have a mark on the container identifying the packaging material type

Source: Jetro Marketing Book for Major Imported Products

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Taxation: How is wine taxed in Japan?

Products treated as alcoholic beverages under provisions of the Liquor Tax Law are subject to liquor tax on a volume basis when imported.

Liquor Tax

Tariffs

A tariff is a tax imposed on imported products. The taxable basis is either the customs value ﴾the price of the food itself + insurance + freight charges﴿ or the volume. For more complete information, consult the Customs Tariff Schedules of Japan. * The Customs Tariff Schedules of Japan is published by the Japan Tariff Association ﴾TEL: 033263 7221﴿

Consumption Tax Consumption tax ﴾5%﴿ is imposed on the sum of the customs value and any applicable tariff ﴾or liquor taxes, in some cases﴿. In principle, neither tariffs nor consumption tax are due when the customs value is under 10,000 yen, whether the item is being imported for business or personal purposes. * Alcoholic beverages are also exempt from tariffs and consumption tax if the value is under 10,000 yen, but they still are subject to liquor taxes.

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Wine taxation

§ Customs duty: § Still wine ¥125 per litre or CIF 15 per cent, whichever is less

§ Sparkling wine ¥182 per litre

§ Fortified wine ¥112 per litre

§ Liquor tax: § Fruit wine* ¥80,000 per kilolitre

§ Sweet fruit wine** ﴾alcohol strength less than 13 per cent﴿ ¥120,000 per kilolitre

§ Sweet fruit wine** ﴾alcohol strength 13 per cent or above﴿ ¥120,000 plus ¥8,644 for each per cent alcoholic content above 13 per kilolitre

§ Consumption Tax: ﴾CIF + Custom duty + Liquor tax﴿ x 5%

* Fruit wine: wines produced by fermenting fruit or fruits plus water, with sugar, brandy and other substances added up to specified limits

** Sweet fruit wine: wines produced by adding brandy or other alcoholic beverages or sugar to fruit wines above a specified quantity

Source: Jetro Marketing Book for Major Imported Products

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Packaging recycling law

§ The Japanese government began full implementation of the Packaging Recycling law in April 2000. It requires the industry to recycle all paper and plastic packaging, glass bottles, steel and aluminium cans and PET bottles

§ In the case of wines, according to industry sources, some importers have requested that exporters use colourless glass bottles if possible, and a number of wines in clear bottles have appeared on the market. However, this is only appropriate for lessexpensive or early drinking wines; for premium wines, the industry generally continues using coloured bottles despite the added recycling costs.

§ The recycling charges determined by the Japan Containers and Packaging Recycling are:

Sources: Japan Recycling Association www.jcpra.or.jp; USDA GAIN Wine Report 2006

Glass bottle PET bottle

Paper packaging

Plastic packaging No colour Brown Green/other

¥3.8/kg ¥5.2/kg ¥5.8/kg ¥1.8/kg ¥12.5/kg ¥85.8/kg

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Distribution channels for imported wine

Overseas wine makers ﴾of bulk wine﴿

Overseas wine makers ﴾of bottled wine﴿

Japanese wine makers

Primary wholesalers Import trading

company

Secondary wholesalers

Commercial liquor vendors

Liquor retailers

General liquor stores

Discount liquor stores

Supermarkets, department stores

Convenience stores

Food service establishments

CONSUMERS

Source: Jetro Marketing Book for Major Im

ported Products

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§ Global wine market § Volume & value trend

§ Per capita consumption

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Global wine market: Volume trends in leading markets

Total wine market volume in thousand 9 litre cases

297,735 (1%)

286,073 (3%)

268,132 (2%)

260,119 (7%)

241,358 (0%)

149,645 (3%)

134,399 (1%)

128,769 (6%) 112,621 (3%)

58,582 (2%) 49,169 (2%)

43,409 (4%)

40,577 (4%)

39,599 (1%)

31,727 (2%)

31,415 (1%)

19,961 (3%)

18,158 (0%)

8,563 (7%)

7,441 (5%)

6,922 (4%)

0 50,000 100,000 150,000 200,000 250,000 300,000 350,000

Finland (21)

Norway (20)

Ireland (19)

Denmark (18)

Sweden (17)

Switzerland (16)

Belgium (15)

Brazil (14)

Netherlands (13)

Canada (12)

Australia (11)

Portugal (10)

Japan (9)

Russia (8)

Spain (7)

United Kingdom (6)

Germany (5)

China (4)

France (3)

USA (2)

Italy (1)

Still light wine Other wines (fortified, sparkling, rice/fruit wine…)

Source: © Euromonitor International 2008

The number in black are the Wine market value in thousand 9l cases in 2007 The number into brakets is the Compound Annual Growth Rate (20022007) CAGR: The yearoveryear growth rate over a specified period of time

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Total wine market value in million $ RSP (Retail Sales price)

1,533 (0%)

1,674 (6%)

1,739 (7%)

2,311 (3%)

2,550 (4%)

2,775 (4%)

3,129 (10%)

3,389 (2%)

5,341 (3%)

5,638 (0%)

5,759 (3%)

6,474 (7%)

8,777 (16%)

10,524 (8%)

11,750 (1%)

16,131 (1%)

21,567 (4%)

22,033 (1%)

28,562 (1%)

31,656 (7%)

820 (4%)

0 10,000,000 20,000,000 30,000,000 40,000,000

Finland (21)

Denmark (20)

Norway (19)

Ireland (18)

Sweden (17)

Netherlands (16)

Belgium (15)

Brazil (14)

Portugal (13)

Australia (12)

Switzerland (11)

Spain (10)

Canada (9)

Russia (8)

China (7)

Germany (6)

Italy (5)

United Kingdom (4)

Japan (3)

France (2)

USA (1)

Still light wine Other wines (fortified, sparkling, rice/fruit wine…)

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Global wine market: Value trends in leading markets


The number in black are the Wine market value in million US$ in 2007 The number into brakets is the Compound Annual Growth Rate (20022007) CAGR: The yearoveryear growth rate over a specified period of time

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Market 2002 2006 % Change, 2002/2006

Croatia 72 74 3.2% France 65 59 9.6% Italy 54 57 6.1% Georgia 58 56 4.6% Slovenia 50 48 3.2%

Switzerland 50 44 12.1% Denmark 37 38 2.2% Germany 31 32 2.6% Belgium 29 32 10.5% Australia 24 26 9.2% UK 22 25 10.8% Ireland 18 23 23.0% Sweden 21 23 5.1% Netherlands 25 22 11.5% Norway 14 17 16.0% Canada 10 13 20.2% Finland 10 12 18.6% US 10 11 10.8% Japan 2 2 4%

Top5

Additional Vinitrac markets

Per Capita Consumption, Wine, 2006, Litres, Adult population

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Global wine market: International per capita consumption

Source: Adams Wine Handbook 2007 ©; International Wine and Spirits Record

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§ Japan wine market § Wine volume and value trends

§ Market size by ontrade vs. offtrade

§ Still light wine by colour

§ Summary: Category drivers

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§ Japan wine market § Wine volume and value trends

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Wine volume trends


Volume of wine in the Japan trend data 20022007 Thousand cases (On + Off trade)

26,934 26,459 25,985 27,104 27,782 27,769 2,533 2,169 1,719 1,437 1,309 1,156

83,018 85,215 86,520 91,812 103,087 105,289

133 134 136 115

123 127

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

2002 2003 2004 2005 2006 2007

Fortified wine and vermouth

Nongrape wine

Sparkling wine

Still light grape wine

Still light wine 0.6% Sparkling wine 17.0% Fortified and Vermouth 1.4% Non grape wine 4.6%

Japan: 2002 2007 Volume data

Compound Annual Growth Rate

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Wine value trends


Value of wine in Japan trend data 20022007 Million ¥ Yen (On + Off trade)

768,401 778,058 759,588 731,318 746,366 763,211

171,471 202,064 235,882 267,862 335,632 395,537

1,792,436 1,765,683 1,556,141 1,465,905 1,443,366 1,406,681

5,230 5,198 4,828

4,401 5,361 5,222

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2002 2003 2004 2005 2006 2007


Nongrape wine

Sparkling wine



Japan: 2002 2007 Value data


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Wine price per bottle


Price per bottle of wine in Japan trend data 20022007 ¥ Yen (On + Off trade)

12,357 12,865 13,679 12,987 12,896 13,011

3,419 3,265 3,189 3,240 3,275 3,282 2,306 2,334 2,335 2,345 2,351 2,361

1,419 1,427 1,412 1,412 1,411 1,412 0

2000

4000

6000

8000

10000

12000

14000

16000

2002 2003 2004 2005 2006 2007

Sparkling wine



Nongrape wine


Japan: 2002 2007 Price per bottle

Compound Annual Growth Rate NB prices shown in the chart are weighted average of on and offpremise consumption. Key offpremise price points for still light wine are ¥8001,500;

for the onpremise, the key price points are ¥2,0003,000

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§ Japan wine market § Market size by ontrade vs. offtrade

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Imported wines: On vs. Off trade

Source: © WANDS Business Report April 2007

Imported wines volume 2006 Still light wine

62% 59%

38% 41%

0%

20%

40%

60%

80%

100%

Volume Value

On trade

Off trade

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§ Japan wine market § Still light wine by color

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Still light wine volume trend: By colour


Volume of still light wine in Japan by colour 20022007 Thousand cases (On + Off trade)

17,311 16,470

8,341 8,007

17,145 17,543 17,754 16,798

8,187 8,485 8,499 8,090

1,602 1,741 1,571 1,509 1,452 1,529

0

5,000

10,000

15,000

20,000

25,000

30,000

2002 2003 2004 2005 2006 2007

Rose wine

White Wine

Red wine

Total volume 2007

Rose wine 6%

White wine 30%

Red wine 64% Red wine 0.5%

White wine 0.7% Rosé wine 1.6%

Japan: 2002 2007 Volume data


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Still light wine value trend: By colour


Value of still light wine in Japan by colour 20022007 Million ¥ Yen (On + Off trade)

480,389 501,729 490,468 513,116 503,090 498,951

213,460 222,123 216,669 220,030 225,834 226,615

40,092 43,617 39,229 37,469 35,736 38,327

0 100,000 200,000

300,000 400,000 500,000 600,000

700,000 800,000 900,000

2002 2003 2004 2005 2006 2007

Rose wine

White Wine

Red wine

Total value 2007

Red wine 66%

White wine 29%

Rose wine 5%

Red wine 0.2% White wine 0.5% Rosé wine 1.7%

Japan: 2002 2007 Value data


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Still light wine price per bottle: By colour


Price per bottle of wine in Japan trend data 20022007 ¥ Yen (On + Off trade)

2,370 2,408 2,415 2,431 2,433 2,445

2,218 2,222 2,219 2,222 2,232 2,240

2,085 2,081 2,070 2,051 2,089 2,088

1800.00

1900.00

2000.00

2100.00

2200.00

2300.00

2400.00

2500.00

2002 2003 2004 2005 2006 2007

Red wine

White wine

Rosé wine

Red wine 0.6% White wine 0.2% Rosé wine 0.0%

Japan: 2002 2007 Price per bottle


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§ Japan wine market § Summary: Category drivers

(Including: Still light wine, Sparkling wine, Fortified and non grape wine in On+Off trade)

(Including: On+Off trade)

(Including: On+Off trade)

31 31

Category drivers: On trade and especially Sparkling are driving the wine category


1%

17%

1%

5%

1% 0% 1% 2%

7%

18%

1%

5%

0%

0%

1% 2%

10%

5%

0%

5%

10%

15%

20%

Wine Sparkling wine

Fortified and Vermouth

Nongrape wine

Still light wine Red wine White wine Rosé wine

Volume and Value growth in Japan 20022007 Category drivers analysis

Volume growth (CAGR) Value growth (CAGR)

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§ Competitive landscape § Country of origin

§ Leading brands market share

33 33

France leads source of Still light wine followed by Italy and US

Source: Euromonitor International

2008

Japan: Thousand cases 2002 2006 CAGR

20022006 Market

share 2006 France 7,056 6,344 3% 39% Italy 3,322 2,722 5% 17% USA 1,733 2,289 7% 14% Chile 1,211 1,289 2% 8% Spain 856 900 1% 6% Australia 544 767 9% 5% Argentina 611 733 5% 5% Germany 967 567 12% 4% South Africa 256 144 13% 1% New Zealand 22 56 26% 0% Hungary 89 44 16% 0% Portugal 89 33 22% 0% Other countries 656 289 19% 2%

Volume: Still light wine imports in Japan by country of origin

Japan: Million ¥ Yen 2002 2006 CAGR

20022006 Market

share 2006 France 43,282 57,534 7% 61% Italy 11,788 12,877 2% 14% USA 6,224 7,587 5% 8% Chile 3,303 3,677 3% 4% Australia 1,914 3,461 16% 4% Germany 3,224 3,086 1% 3% Spain 2,245 3,009 8% 3% Argentina 638 1,019 12% 1% New Zealand 258 548 21% 1% South Africa 571 478 4% 1% Hungary 179 200 3% 0% Portugal 465 147 25% 0% Other countries 1,140 1,096 1% 1%

Value: Still light wine imports in Sweden by country of origin

Still light wines price per imported bottle by Country of Origin ¥ Yen

¥ 966

¥ 823

¥ 756

¥ 511

¥ 278

¥ 454

¥ 296 ¥ 394

¥ 168

¥ 376 ¥ 279

¥ 219 ¥276

2002 2003 2004 2005 2006

New Zealand

France

Germany

Italy

Australia

Hungary

Spain

USA

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Top10 brands: Manns Wine, a domestic product, is the leading brand


Top 10 brands Global Name 2002 2006 CAGR 20032006

Share of market 2006

Manns Wine Kikkoman Corp 1293 1222 1% 4.6% Bistro Mercian Corp 807 770 1% 2.9% Polaire Sapporo Holdings Ltd 756 8% 2.9% Bon Rouge Mercian Corp 681 580 4% 2.2% Franzia Wine Group Inc, The 20 490 122% 1.9% Oishii Sanka Boushizai Mutenka Wine Mercian Corp 410 36% 1.5% Mutenka Yuuki Wine Asahi Breweries Ltd 192 360 17% 1.4% Georges Duboeuf Les Vins Georges Duboeuf 374 359 1% 1.4% Delica Maison Suntory Ltd 797 300 22% 1.1% Sunrise Viña Concha y Toro SA 126 244 18% 0.9% KWV (Ranked 26) KWV Group 85.6 88.9 1% 0.3% Note: No data registered for 2002, % from 2003

Top 10 Still light wine brands in Japan + KWV (by volume) Total volume '000 9 Litres Cases

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§ Distribution & Retail § Channel structure

§ Offtrade sales by channel

§ Wholesaler profiles

§ Retailer profiles

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Selling wine in Japan: Overview

Importers & wholesalers

§ The market is dominated by Suntory, Mercian and Kokubu and the breweries Asahi and Sapporo

§ These firms have traditionally competed strongly for volume leadership as opposed to maximising value

Retailers

§ While Aeon, Seven Eleven, Seiyo and Rakunten Ichiba are considered to be the top retailers among Japanese consumers

§ Wine distribution in Japan has traditionally been dominated by specialist stores, with a 40% of share

§ In recent years Supermarkets, discounters and convenience stores have been gaining ground in the wine distribution mostly because of the liquor deregulation law

Source: Wine Intelligence; Wine Business International

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Distribution channels

§ Specialist stores are the leading distribution channel with a 40% share

§ Supermarkets, Discounters and Convenience stores together account for 41%

Source: Euromonitor International 2008

Distribution channels in Japan 2007

Supermarkets/ hypermarkets,

30%

Specialists, 40%

Direct sales, 4% Others, 10%

Convenience stores, 8%

Independent food stores, 6%

Discounters, 3%

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Wine Manga comic: Sommelier

§ Created by Kenichi Hori from the California Wine Institute, “Sommelier “ spreads interest in wine using the popular Japanese Manga comics. It sells up to a million copies

Source: Wine Business International

39 39

§ Distribution & Retail § Importers and wholesaler profiles

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Wholesaler profile: Suntory

Japanese brewing and distilling company established in 1899, it is one of the oldest and leading companies in the distribution of alcoholic beverages in Japan. Its business has expanded to other fields, and the company now offers everything from soft drinks to vintage wines. The group has three operating units: the beverage and food unit; the spirits, wine and beer unit; and the foodservice and business development unit. Suntory beverages are produced through its Suntory Limited division. Suntory wine business surpassed market achievements by turning 4% higher sales than in 2006. In sparkling wine, worldclass brands LaurentPerrier and Henriot contributed to a 20% increase in sales for champagne and sparkling wine combined. Suntory has tiedup businesses with distinguished wineries such as Georges Duboef, Torres, Gallo, Freixenet, PerrierJouët and Mumm

Description

Suntory Limited Division Headquarter Dojimahama 2140

Kitaku Osaka, Osaka 5308203, Japan Phone: ﴾0081﴿ 6 6346 1131

www.suntory.com

Contact information

Source: Company Website and www.hoovers.com

41

Retailer profile: Suntory

Sales 2007

£ 792 m

YY Sales Growth

+4%

Regions covered

Across Japan

Domestic wines @ Suntory

Select Key Wine Brands in Portfolio

Georges Duboef , Torres , E & J Gallo, Freixenet , PerrierJouët and Mumm


42

Wholesaler profile: Mercian

Established in 1934 as a liquor manufacturer, Mercian Corporation has become one of Japan's leading producers of wine, oriental liquors and lowalcohol beverages. The Company has also established a strong record of selling a wide range of imported alcoholic beverages. Mercian's network consists of five branch offices, eight factories and two research facilities in Japan, as well as one representative office and five production facilities overseas. Today, their partners include leading Spanish Cava producer Codorniu S.A.; Champagne Pommery from France; and Viña Concha y Toro S.A. In recent years, Mercian has also expanded their wine selection by establishing ties with other leading wineries worldwide, including the Robert Mondavi Winery, and Italy's famed Marchesi de' Frescobaldi.

Description

Mercian Corporation 158 Kyobashi

Chuoku Tokyo 1048305

Japan Phone: ﴾0081﴿3 3231 3910 Fax: ﴾0081﴿3 3231 8539

www.mercian.co.jp/e/index.html?main.html

Contact information


43

Wholesaler profile: Mercian

Sales 2006

£483m


Production of domestic wines: Château

Mercian and Imported wines such as

Codorniu S.A, Champagne Pommery,

Concha y Toro, Robert Mondavi and

Marchesi de’ Frescobaldi

Regions covered

Across Japan

Some of Château Mercian Domestic wines


44

Wholesaler profile: Kokubu

Kokubu & Co. is the shogun of the Japanese wholesale food industry. As the largest distributor in the country, it supplies customers with more than 260,000 foods, beverages, and other products, including frozen foods, processed food, and wine. Kokubu is aggressively innovating food distribution practices and recognize themselves as one of the leading distribution companies of Japan. Kokubu's own private label, K&K, offers a feast of items, including boxed lunches, canned food and beverages, and snacks. Both an importer and exporter of foods and alcoholic beverages, Kokubu serves some 30,000 retailers in more than 37 nations; it has 160 warehouses in Japan alone. The company also owns Kokubu Grocer's chain, which franchises about 700 Community Store convenience stores. Founded in 1712, the company is owned by the Kokubu family. The Kokobu group employees about 1,527 people and has an annual turnover of about £6,729.2m, it grew 3.8% compared to the last year. The wholesale part of their business is about 30%.

Description

Kokubu & Co., Ltd 111 Nihonbashi

Chuoku Tokyo 1038241

Japan Phone: ﴾0081﴿332764000

Fax: ﴾0081﴿332716523 www.kokubu.co.jp

Contact information


45

Wholesaler profile: Kokubu

Sales 2006

£6,729.2m

Staff

1,527


K&K ﴾company label﴿,

Imported wines such as

KWV wine from South

Africa

Regions covered

Across Japan

From which £1,439m ﴾aprox. 21.4%﴿ is only in wine


46

Wholesaler profile: Sapporo

Sapporo is one of Japan's oldest brewers and sits at #3 in that country's beer market ﴾behind Asahi Breweries and Kirin Brewery﴿ with brews ranging from its flagship Black Label to the pricier Yebisu. The company sells Guinness beer in Japan through its Sapporo Guinness Company and owns a beverage company that makes canned coffee, bottled water, and soft drinks. They own not only a production facility to produce domestic wine, but import also wines from different countries. Some of their prestige labels of the Company's imported wines are Beringer, La Cuvee Mythique and [yellow tail]

Description

Sapporo Holdings Limited 201 Ebisu 4chome

Shibuyaku Tokyo 1508686

Japan Phone: ﴾0081﴿354237227 Fax: ﴾0081﴿3 5423 2061 www.sapporobeer.jp

Contact information


47

Wholesaler profile: Sapporo

Sales 2006

£1,838m

Staff

4,112


Production of domestic

wines, Imported wines

such as Beringer, La

Cuvee Mythique and

[yellow tail]

Regions covered

Across Japan

Domestic wines @ Sapporo

Imported wines @ Sapporo

From which £65.4m

﴾approx. 3.6%﴿ is wine


48

Wholesaler profile: Asahi

Asahi Breweries is a leading beer company in Japan, commanding some 40% of the country's beer market. The Asahi group employees about 15,280 people and has an annual turnover of about £5,000m. In addition to its alcoholic beverage business, Asahi makes WONDA coffee drinks, a variety of soft drinks, and bottled tea and water, along with food products, baby food and nutritional supplements. In terms of wine, Asahi Breweries delivers imported wines from various European countries, such as France and Italy, in addition to California, Chile and other areas of the new world, as well as domestic wines to the dietary life of their customers. From their total turnover of about £5,000m the share of alcoholic beverages is 80%. However, due to the low penetration of wine in Japan, wine represents a 1.5% of their turnover at least £74.1m. The wholesale part of their wine business is about 60%.

Description

Asahi Breweries, Ltd 231, Azumabashi 1chome

Sumidaku Tokyo 1308602

Japan Phone: ﴾0081﴿356085111

Fax: ﴾0081﴿356085152 www.asahibeer.co.jp

Contact information


49

Wholesaler profile: Asahi

Sales 2006

£4,995.2m

Staff

15,280


Caliuterra, Zonin, Baron

Philippe de Rothschild,

Louis Latour, Saint Neige,

Nikka Cidre, SteNeige

Ume Wine

Regions covered

Across Japan

From which £74.1m

﴾approx. 1.5%﴿ is wine Source: Company Website and www.hoovers.com

50

Wholesaler profile: Shosan Shoji

Shosan Shoji, established in 1928, imports and conducts wholesale business for specialist stores, high end supermarket chains, hotels, restaurants and liqueur shops. They provide a range of deli products such as olive oil, spaghetti, fruit juice, foie gras and smoked salmon etc. In their imported wine portfolio you can choose among wines from France, Italy, Spain and other. In 2007, Shosan Shoji had 256 employees and its turnover was £281.1m.

Description

Shosan Shoji Co 193 Itabashi

1730004 ItabashiKu Tokyo Japan

www.shosan.co.jp

Contact information


51

Wholesaler profile: Shosan Shoji

Sales 2007

£281.1m

Staff

256

Regions covered

Across Japan


52 52

§ Distribution & Retail § Retailer profiles

53

The core business of Japan's AEON Group, AEON CO. owns or

franchises more than 4,400 stores worldwide. It is Japan's largest

supermarket chain, with about 750 stores under JUSCO and

MaxValu banners, as well as about 2,975 MINISTOP convenience

stores. AEON also runs a number of specialty chains, including

The Body Shop and Laura Ashley stores in Japan. It has a joint

venture in Japan with Sports Authority and owns the women's

clothing chain The Talbots. Also, the firm operates AEON Welcia, a

leading drugstore chain in Japan with 1,800plus outlets. Other

operations include shopping center development and financial and

credit card services. Aeon employees about 200,000 people and

has an annual turnover of £23,541.1m.

Retailer profile: AEON

AEON CO., LTD. Headquarters

151 Nakase Mihamaku Chiba 2618515 Japan

Phone: ﴾0081﴿432126042 Fax: ﴾0081﴿432126849

Contact information

Description


54

Retailer profile: AEON

Sales 2007

£23,541.1m

YY Sales Growth

+8.9%

Regions covered

Across Japan


55

7eleven is a subsidiary of Seven & I Holdings Co. of Japan.

There are 33,220 companyowned and franchised 7eleven

convenience stores in 18 countries, but Japan has with 11,735

more stores then anywhere else in the world. Today, it is the

worlds largest retailer chain store. They offer not only food,

drinks and magazines but also video games and consoles,

CDs, DVDs and seasonal items. Due to cheap prices they

provide also a wide range of private label products. In Japan

alone 7eleven employees about 5,000 people and has an

annual turnover of £12,340.8m. The Japanese shops often

bear the title of its holding company “Seven & I Holdings”.

Retailer profile: 7eleven – the worlds largest chain store

SevenEleven Japan Co.,Ltd. Head Office

88, Nibancho, Chiyodaku Tokyo 1028455,Japan Phone: 0362383711

www.sej.co.jp

Contact information

Description


56

Retailer profile: 7eleven

Sales 2006

£12,340.8m

YY Sales Growth

1.4%

Regions covered

High density across Japan

more stores than anywhere else in the world

57

Retailer profile: Seiyu

Description

Seiyu is Japan’s fifth largest supermarket chain operator. The company was established on April 19, 1963. On December 5, 2007, WalMart announced its tender offer to acquire all of the issued and outstanding shares Seiyu was successful, raising WalMart’s ownership of Seiyu from 50.9 percent to 95.1 percent. SEIYU runs about 400 stores, including supermarkets and department stores. Merchandise includes food, apparel, and household goods ﴾under international brands or SEIYU's own brands﴿. Company flags include SEIYU, Sunny, and SSV. ﴾supermarkets﴿ and Livin ﴾department stores﴿. The annual turnover is about £3,337.9m, which is about 70% from the total groups turnover. While the group employees about 35,426 people, at the Seiyu stores alone are 18,774 peoples employed.

The Seiyu, Ltd.

211 Akabane, Kitaku Tokyo, 1150045, Japan

Phone: ﴾0081﴿335987000 Fax: ﴾0081﴿335987745

Website: www.seiyu.com.hk

Contact information


58

Retailer profile: Seiyu

Sales 2006

£3,337.9m

YY Sales Growth

Recently loosing

Regions covered

Across Japan

Only Seiyu stores


59

Retailer profile: Rakuten Ichiba

Description

Rakuten, Inc. ﴾楽天株式会社, Rakuten Kabushikigaisha﴿ was founded in

1997 and is Japan's largest online retailer and a leading provider of

Internetbased services. Today, Rakuten is one of the biggest online

shopping mall operators and the second ranking site in Japan with an

annual turnover of about £859m and 3,430 employees. The company's

business segments and subsidiaries include Rakuten Ichiba ﴾an online

shopping mall﴿, Rakuten Auction ﴾online auctions﴿, Rakuten Books ﴾online

bookstore﴿, Infoseek ﴾Internet search, Web logs, and job boards﴿,

Rakuten Enterprise ﴾entertainment ticket sales﴿, ShowTime ﴾broadband

entertainment programming﴿, and Target ﴾online marketing and

promotions﴿. The firm's entertainment activities include television

broadcasting in Japan and ownership of a professional baseball team. Its

financial services unit offers credit cards and consumer loans. The chief

executive officer from Rakuten is Hiroshi Mikitani. Rakuten is among the

Top 10 largest Internet companies in the world ﴾along with Amazon.com,

InterActive Corporation ﴾IAC﴿, Expedia, etc.﴿

Rakuten Inc. Roppongi Hills Mori Tower 6101 Roppongi Minatoku

Tokyo 1066118 Japan

Phone: ﴾0081﴿345231111 www.rakuten.co.jp

Contact information

http://www.rakuten.co.jp/


60

Across Japan ﴾online﴿

Retailer profile: Rakuten Ichiba

Sales 2006

£859m

YY Sales Growth

Recently growing

Regions covered

Rakuten, Inc. is expanding its business to other Asian countries and also to Europe


61 61

§ Japanese wine consumers § Overview: Who are they?

§ Demographics: Age, gender, income

62 62

Notes on data and definitions

§ Regular wine drinkers in Japan = adults of legal drinking age who drink wine at least once a month

§ Vinitrac® = global proprietary survey of wine consumer behaviour and attitude owned and operated by Wine Intelligence

§ Vinitrac® methodology: § n = minimum of 1,000 interviews per wave per country

§ Online interviews

§ 15 minute survey

DEFINITIONS/EXPLANATORY NOTES FOR THIS SECTION

63 63

Japanese wine drinkers: Who are they?

§ Regular wine drinkers in the Japan are concentrated in the 2544 group § 32% of them drink wine at least twice a week § France, Chile and Italy lead their country repertoire § Country of origin and recommendation ﴾friends/family or shops﴿ are the most

important cues when buying wine § More than a third of consumers don’t recognise drinking any of the top grape

varieties § 70% of consumers agree with the statement “I don’t mind what I buy so long as

the price is right” § Carlo Rossi and [yellow tail] top international brands in awareness

Japanese wine consumers in the spotlight:

64 64

Wine consumers in Japan: Age & gender

Source: Wine Intelligence 2008, Vinitrac®

Gender profile Vinitrac® Japan, March 2007

All Japanese regular wine drinkers n=1,013

Male 45% Female

55%

Age profile Vinitrac® Japan, March 2007


45 54 14%

55 and over 6%

LDA 24 5%

25 34 40%

35 44 35%

65 65

Wine consumers in Japan: Income distribution


Estimated annual household income before taxes Vinitrac® Japan, March 2007


12%

13%

9%

9%

9%

7%

15%

2%

1%

7%

10%

6%

0% 2% 4% 6% 8% 10% 12% 14% 16%

Prefer not to answer

Under 1,000,000 yen

1,000,0001,999,999 yen

2,000,0002,999,999 yen

3,000,0003,999,999 yen

4,000,0004,999,999 yen

5,000,0005,999,999 yen

6,000,0006,999,999 yen

7,000,0007,999,999 yen

8,000,0008,999,999 yen

9,000,0009,999,999 yen

100,000,000+

66 66

§ Regular wine drinkers § Frequency of consumption

§ Repertoire by colour ﴾red, white, rosé﴿

§ Repertoire by source country

§ Repertoire by varietals

§ Typical spend

§ Drinks portfolio ﴾other drinks﴿

67

Frequency of consumption


32% of all regular wine drinkers consumes at least twice a week

Frequency of consumption Vinitrac® Japan, March 2007


41%

28% 25%

7%

0%

10%

20%

30%

40%

50%

13 times a month About once a week 25 times a week Most days/every day

68 68 68

Red wine remains the favourite choice of the regular wine drinkers in Japan


Proportion by type of wine Vinitrac® Japan, March 2007


Red wine 50%

White wine 38%

Rosé wine 12%

69 69 69

Country of origin repertoire 61% has French wine in their repertoire


Country of origin repertoire Vinitrac® Japan, March 2007


12%

14%

5%

5%

7%

15%

22%

22%

26%

31%

34%

42%

61%

0% 20% 40% 60% 80%

Other

Don't know

Portugal

New Zealand

South Africa

Argentina

USA

Spain

Australia

Germany

Chile

Italy

France

70 70

Cabernet Sauvignon, Merlot and Pinot Noir are the Japan’s favourite red varietals


Red grape repertoire Vinitrac® Japan, March 2007


7%

41%

4%

4%

4%

5%

5%

6%

6%

8%

9%

12%

22%

25%

36%

0% 10% 20% 30% 40% 50%

Other red grape

Don't know which grape I drink

Dornfelder

Zinfandel

Tempranillo

Pinotage

Carmenère

Grenache

Malbec

Gamay

Sangiovese

Shiraz/Syrah

Pinot Noir

Merlot

Cabernet Sauvignon

71 71 71

Chardonnay is the most popular choice among white varietals


Chardonnay

White grape repertoire Vinitrac® Japan, March 2007


6%

36%

3%

3%

4%

4%

6%

6%

7%

8%

15%

23%

45%

0% 20% 40% 60%

Other white grape

Don't know which grape I drink

Viognier

Gewürztraminer

Grüner Veltliner

Colombard

Chenin Blanc

MüllerThurgau

Pinot Grigio/Pinot Gris

Semillon

Riesling

Sauvignon Blanc

Chardonnay

72 72 72

Typical spend – Offtrade Over 50% claim to spend within ¥ 1,000 ¥ 1,999


Typical Off trade spend Vinitrac® Japan, March 2007


7%

9%

12%

35%

20%

13%

5%

0% 10% 20% 30% 40%

Under ¥ 600

¥ 600 ¥ 799

¥ 800 ¥ 999

¥ 1000 ¥ 1499

¥ 1500 ¥ 1999

¥ 2000 ¥ 2999

Over ¥ 3000

73 73 73

Typical spend – On trade spend

§ Over 3/4 claim to spend between ¥ 1,000 ¥ 3,999


Typical On trade spend Vinitrac® Japan, March 2007


4%

7%

28%

31%

16%

9%

4%

1%

1%

0% 5% 10% 15% 20% 25% 30% 35%

Do not buy wine in the ontrade

Under ¥ 1000

¥ 1000 ¥ 1999

¥ 2000 ¥ 2999

¥ 3000 ¥ 3999

¥ 4000 ¥ 5999

¥ 6000 ¥ 7999

¥ 8000 ¥ 9999

Over ¥ 10000

74 74

What else is in the shopping basket of regular wine drinkers in Japan?


Alcoholic drinks repertoire Vinitrac® Japan, March 2007


3%

4%

6%

6%

15%

18%

28%

28%

48%

73%

75%

83%

0% 30% 60% 90%

Prosecco

Sherry

Port

Cava

Sweet/dessert wine

Other sparkling wine

Rosé wine

French Champagne

Premixed/ready to drink

Beer

White wine

Red wine

75 75 75

§ Choice cues § Purchase motivators

§ Closure types

§ ABV

76 76 76

Purchase choice cues

® Source: Wine Intelligence 2008, Vinitrac®

Country of origin and recommendation by a friend/family or shop staff are dominant purchase cues

Purchase choice cues % that quoted the following statements as

"Important" or "Very important" when purchasing wine Vinitrac® Japan, March 2007


23%

28%

33%

35%

38%

42%

44%

50%

53%

54%

0% 15% 30% 45% 60%

Medal or award

Alcohol content

Promotional offer

Appeal of the bottle or label design

A brand I am aware of

Grape variety

Region of origin

Recommendation by shop staff

Recommendation by friend or family

Country of origin

77 77 77

Closures:


Attitudes towards closures Vinitrac® Japan, March 2007


23% 19%

50% 68%

37%

26% 12%

59%

4% 0%

20%

40%

60%

80%

100%

Screwcap Synthetic cork Natural cork

I like buying wine with this closure

Neutral

I don't like buying wine with this closure

Screwcap and Synthetic cork is accepted by more than ¾ wine regular drinkers

78 78 78

Alcohol level


1/3 of Japan regular wine drinkers would buy wine with alcohol level of 13% and above

Alcohol level perception % answering "Would buy or Defenetily would buy" wine

at the following alcohol levels Vinitrac® Japan, March 2007


12%

14%

29%

25%

0% 20% 40%

Alcohol level wine below 9%

Alcohol level wine between 9 and 10%

Alcohol level wine between 11 and 12%

Alcohol level wine of 13% and above

79 79 79

§ Brand awareness § Major brands: Prompted awareness

§ Major brands: Penetration

§ Major regions: Awareness and conversion

80 80 80

Prompted brand awareness


Brand awareness Top 10 Vinitrac® Japan, March 2007


28% 23%

18% 13%

9% 9% 7% 7% 7% 7%

0% 5% 10% 15% 20% 25% 30%

Carlo R

ossi

Yellow

Tail

Monta

na Gallo

Jacob'

s Cree

k

Woodb

ridge

Torres

KW

V

Robert

Monda

vi Har

dys

81

Brand penetration Top 10 (purchase/all sample) Vinitrac® Japan, March 2007

All Japanese regular wine drinkers n=1,013 9%

7%

5%

3% 3% 2% 2% 2% 2% 2%

0%

2%

4%

6%

8%

10%

Yellow

Tail

Carlo R

ossi

Sunrise

Monta

na

Riverc

rest

Gallo

Jacob’

s Cree

k KW

V

George

s DuBo

euf

Robert

Monda

vi

81 81

Brand penetration

81 81


82

Wine region Awareness and Purchase Vinitrac® Japan, March 2007

All Japanese regular wine drinkers n= 1,013

45% 41% 37% 36%

26% 20% 19% 21%

25% 25% 24%

14%

25%

34% 33% 32%

48%

11% 17%

24%

0%

20%

40%

60%

Champagne Provence Oregon Bordeaux Chianti Beaujolais Chablis Napa Valley Sicily Loire

Awarereness Conversion (purchase/awareness)

82 82

Wine region awareness and conversion


§ French regions lead awareness and conversion

83

Wine region Penetration (purchase/all sample) Vinitrac® Japan, March 2007


17%

11% 8% 8% 8%

7% 5% 5% 4% 4%

0%

5%

10%

15%

20%

Bordeaux Champagne Chianti Beaujolais Chablis Provence Côtes du Rhone

Napa Valley Loire Oregon

83 83

Wine region penetration

83 83


84 84

§ Regular wine drinker shopping patterns § Usage by channel

§ Usage by retailer

85 85

Wine consumption in the On trade


Wine consumption in the On trade Vinitrac® Japan, March 2007


14% 8%

86% 92%

0%

20%

40%

60%

80%

100%

Bar or pub Restaurant

Yes

No

86 86

Supermarkets dominate shopping location, but other channels enjoy significant share


Channels usage when buying wine Vinitrac® Japan, March 2007


4%

4%

5%

18%

18%

19%

20%

28%

42%

48%

58%

0% 20% 40% 60% 80%

From the winery direct

In a membership store

Through mail order

In a convenience store

On the internet

In a wine shop

In a discount store

In a department store

In a hypermarket/mass merchant

In a liquor store

In a supermarket

87

Shop usage Rakuten fills the top position


Shop usage when buying wine Vinitrac® Japan, March 2007


1%

1%

1%

2%

3%

7%

7%

10%

12%

16%

0% 10% 20%

WinePro

Posful

YorkMart

Netwine

York Benimaru

Tokyo Store

Saty

7Eleve

Seiyu

Rakuten

88 88

§ Consumer profiling § Who are the most valuable consumers in Japan?

§ Who drinks rosé wine in Japan?

89 89

§ Consumer profiling § Who are the most valuable consumers in Japan?

90

Value by frequency of consumption


Value segments profile by frequency of consumption Vinitrac® Japan, March 2007


70%

41%

11%

41%

5% 19%

50%

25%

3% 18%

7%

24%

38%

22%

28%

1%

0%

20%

40%

60%

80%

100%

Low value Mid value High value All Japanese regular wine drinkers

Most days/every day

25 times a week

About once a week

13 times a month

Significantly higher than two groups

Significantly higher than one group only

91

Value segments by gender


§ Slightly skewed to the female group

Value segments profile by Gender Vinitrac® Japan, March 2007


44% 49% 44% 45%

56% 52% 56% 55%

0%

20%

40%

60%

80%

100%


Female

Male

92

Value segments by age group

§ 2534 group stands out in high value while 3544 in low value


Value segments profile by age groups Vinitrac® Japan, March 2007


37% 40% 45% 40%

12% 15% 16% 14%

5% 6% 5% 6%

5% 5% 4% 7%

39% 35% 30% 35%

0%

20%

40%

60%

80%

100%


55 and over

45 54

35 44

25 34

LDA 24



93

Value segments by income


Value segments by Income Vinitrac® Japan, March 2007


7% 7% 7% 7%

33%

32% 29% 31%

21% 34% 38% 31%

31%

26% 27% 39%

0%

20%

40%

60%

80%

100%


Above mainstream income

Mainstream income

Below mainstream income




94

Value segments by wine attitudes


Value segments profile by wine attitudes Vinitrac® Japan, March 2007


7% 13% 25% 15%

81% 72%

57% 70%

15% 18%

15% 12%

0%

20%

40%

60%

80%

100%


I enjoy trying new and different styles of wine on a regular I know what I like and I tend to stick to what I know I don't mind what I buy so long as the price is right

Significantly higher than two groups Significantly higher than one group only

95

Value segments by Screw cap closure

§ Remarkable % of acceptance in the lowest value


Value segments profile by Screwcap closure attitudes Vinitrac® Japan, March 2007


47% 55% 50%

50%

34% 22% 22% 26%

23% 28% 23% 19% 0%

20%

40%

60%

80%

100%



Neutral



96

Value segments by Synthetic cork closure


Value segments profile by Synthetic cork closure attitudes Vinitrac® Japan, March 2007


71% 70% 64% 68%

13% 11% 14% 12%

16% 20% 22% 19% 0%

20%

40%

60%

80%

100%



Neutral



97

Value segments by Natural cork closure

§ More than 60% of the sample prefers Natural cork closure in the highest segments


Value segments profile by Natural cork closure attitudes Vinitrac® Japan, March 2007


46% 34% 32% 37%

48% 63% 65% 59%

6% 3% 4% 4% 0%

20%

40%

60%

80%

100%



Neutral



98

Value segments by wine consumption in bars


Value segments profile by consumption in bar or pub % of regular wine drinkers that buy wine in bar or pub

Vinitrac® Japan, March 2007 All Japanese regular wine drinkers n= 1,013

22% 12% 14% 7%

86% 94% 88%

78%

0%

20%

40%

60%

80%

100%


Yes

No


99

Value segments by wine consumption in restaurants


Value segments profile by consumption in restaurants % of regular wine drinkers that buy wine in restaurants


17% 5% 8%

2%

83%

96% 98% 92%

0%

20%

40%

60%

80%

100%


Yes

No


100

Value by wine involvement


Value segments by wine involvement Vinitrac® Japan, March 2007


40%

51% 40%

44%

49% 31% 27% 36%

21% 33%

18% 11%

0%

20%

40%

60%

80%

100%


High involvement

Medium involvement

Low involvement



101

Value segments by drinks repertoire



Red wine 77% 83% 89% 83% Soft drinks 78% 81% 78% 79% White wine 69% 74% 82% 75% Beer 71% 72% 77% 73% Premixed/ready to drink 43% 49% 52% 48% French Champagne 14% 25% 45% 28% Rosé wine 21% 26% 37% 28% Other sparkling wine 16% 15% 25% 18% Sweet/dessert wine 9% 12% 24% 15% Cava 2% 3% 12% 6% Port 2% 3% 12% 6% Sherry 1% 2% 11% 4% Prosecco 1% 0% 7% 3%

Red: statistically higher than two groups & Blue: statistically higher than one group only

Value segments by Alcoholic drinks repertoire Vinitrac® Japan, March 2007

All regular Japanese wine drinkers n=1,013

102


Value segments by channels usage


In a supermarket 57% 55% 62% 58% In a liquor store 42% 46% 56% 48% In a hypermarket 39% 41% 46% 42% In a department store 11% 26% 48% 28% In a discount store 20% 17% 23% 20% In a wine shop 5% 16% 37% 19% On the internet 10% 14% 31% 18% In a convenience store 14% 18% 24% 18% Through mail order 2% 3% 10% 5% In a membership store 2% 2% 9% 4% From the winery direct 2% 3% 7% 4% Other 2% 4% 2% 2%

% of regular wine drinkers that have bought in the following buying channels in the past 6 months


Vinitrac® Japan, March 2007 All regular Japanese wine drinkers n=1,013

Value segments by channels usage

103 Source: Wine Intelligence 2008, Vinitrac®

Value segments by shops usage


Rakuten 11% 14% 22% 16% Seiyu 9% 11% 15% 12% 7Eleve 7% 11% 11% 10% Saty 4% 9% 10% 7% Tokyo Store 2% 7% 12% 7% York Benimaru 3% 4% 2% 3% Netwine 1% 0% 4% 2% YorkMart 1% 1% 2% 1% Posful 1% 2% 0% 1% WinePro 0% 0% 2% 1%



% of regular wine drinkers that have bought in the following stores in the past 6 months

Vinitrac® Japan, March 2007

Value segments by shop usage


Value segments by country of origin


France 47% 65% 73% 61% Italy 28% 41% 56% 42% Chile 28% 34% 40% 34% Germany 21% 33% 38% 31% Australia 18% 28% 32% 26% Spain 14% 22% 30% 22% USA 17% 22% 26% 22% Argentina 9% 13% 22% 15% South Africa 4% 6% 12% 7% New Zealand 2% 5% 9% 5% Portugal 2% 4% 9% 5% Don't know 22% 14% 7% 14% Other 16% 13% 8% 12%



Value segments by Country of origin repertoire

% of regular wine drinkers that have drunk from following wineproducing places in the past 6 months

105

Value segments by region awareness



Champagne 41% 49% 45% 45% Provence 40% 41% 42% 41% Oregon 35% 33% 44% 37% Bordeaux 32% 37% 39% 36% Chianti 19% 24% 36% 26% Beaujolais 18% 26% 32% 25% Chablis 20% 25% 29% 25% Napa Valley 15% 23% 24% 21% Sicily 15% 20% 25% 20% Loire 10% 20% 26% 19%



% of regular wine drinkers aware of the following wineproducing regions


Value segments by Region awareness

106

Value segments by region penetration



Bordeaux 8% 17% 26% 17% Champagne 4% 11% 17% 11% Chianti 3% 6% 17% 8% Beaujolais 4% 8% 13% 8% Chablis 4% 7% 14% 8% Provence 4% 4% 13% 7% Côtes du Rhone 2% 4% 10% 5% Napa Valley 1% 4% 11% 5% Loire 1% 3% 9% 4% Oregon 1% 1% 10% 4%



% of regular wine drinkers that have bought wine from the following wine growing regions in the past 6 months


Value segments by Region penetration

107

Value segments by brand awareness



Carlo Rossi 27% 27% 29% 28% Yellow Tail 18% 23% 28% 23% Montana 11% 15% 27% 18% Gallo 9% 11% 20% 13% Jacob's Creek 6% 8% 15% 9% Woodbridge 5% 8% 14% 9% Torres 3% 6% 13% 7% KWV 5% 4% 13% 7% Robert Mondavi 4% 4% 13% 7% Hardys 2% 5% 14% 7%



% of regular wine drinkers aware of the following brands


Value segments by Brand awareness

108

Value segments by brand penetration



Yellow Tail 5% 9% 12% 9% Carlo Rossi 6% 7% 9% 7% Sunrise 3% 4% 8% 5% Montana 0% 2% 7% 3% Rivercrest 1% 2% 5% 3% Gallo 1% 0% 6% 2% Jacob’s Creek 1% 1% 5% 2% KWV 1% 1% 4% 2% Georges DuBoeuf 1% 2% 4% 2% Robert Mondavi 0% 0% 5% 2%



(purchase / all sample) Vinitrac® Japan, March 2007

Value segments by Brand penetration

109

Value segments by purchase choice cues



Country of origin 48% 56% 59% 54% Recommendation by friend or family 49% 55% 54% 53% Recommendation by shop staff 47% 52% 52% 50% Region of origin 33% 44% 56% 44% Grape variety 31% 41% 56% 42% A brand I am aware of 31% 36% 47% 38% Appeal of the bottle or label design 29% 35% 40% 35% Promotional offer 37% 32% 31% 33% Alcohol content 29% 24% 32% 28% Medal or award 13% 22% 33% 23%



Value segments by Purchase choice cues

% of respondents that quoted the following quotes as being "Important" or "Very important" when purchasing wine

110

Value segments by alcohol level



Alcohol level wine below 9% 8% 11% 18% 12% Alcohol level wine between 9 and 10% 7% 13% 22% 14% Alcohol level wine between 11 and 12% 16% 25% 34% 25% Alcohol level wine of 13% and above 21% 30% 36% 29%



% of respondents that "Would buy or Defenetily would buy" wine at the following alcohol levels

Value segments by Alcohol level perception

111

Profile of the most valuable consumers: Summary

§ The most valuable consumers are:

§ Above mainstream income level

§ Younger ﴾2544﴿

§ Drinking wine at least twice a week

§ Adventurous and enjoy trying new styles of wine

§ Prefer buying wines with natural cork

§ More likely to consider important when purchasing wine “region of origin”, “grape varietal”, “brand I am aware of” and “medals or awards”

112 112

§ Consumer profiling § Who drinks Sparkling wine in Japan?

113

21% of all regular drinkers have drunk sparkling wine in the past 6 months


Sparkling wine consumers Vinitrac® Japan, March 2007


Non sparkling

wine drinker 79%

Sparkling wine drinker

21%

114

Sparkling wine drinkers profile by frequency


Sparkling wine drinkers profile by frequency of consumption Vinitrac® Japan, March 2007


45% 32% 41%

20% 32%

25%

10% 7%

28% 26%

29%

6%

0%

20%

40%

60%

80%

100%

Non sparkling wine drinker


All Japanese regular wine drinkers

Most days/every day

25 times a week

About once a week

13 times a month


115

Sparkling wine drinkers profile by gender


§ Sparkling wine drinkers profile skewed towards female

Sparkling wine drinkers profile by Gender Vinitrac® Japan, March 2007


47% 42% 45%

53% 58% 55%

0%

20%

40%

60%

80%

100%




Female

Male

116

Sparkling wine drinkers profile by age


Sparkling wine drinkers profile by age groups Vinitrac® Japan, March 2007


35% 50% 40%

17% 10%

14% 7% 6%

5% 5% 5%

36%

33% 35%

3%

0%

20%

40%

60%

80%

100%




55 and over

45 54

35 44

25 34

LDA 24


117

Sparkling wine drinkers profile by income


Sparkling wine drinkers profile by Income Vinitrac® Japan, March 2007


7% 7% 7%

32% 31% 31%

30% 33% 31%

32% 29% 31%

0%

20%

40%

60%

80%

100%




Above mainstream income

Mainstream income

Below mainstream income


118

Sparkling wine attitudes


Sparkling wine drinkers profile by wine attitudes Vinitrac® Japan, March 2007


11% 21% 15%

73% 65% 70%

15% 14%

16%

0%

20%

40%

60%

80%

100%




I enjoy trying new and different styles of wine on a regular I know what I like and I tend to stick to what I know I don't mind what I buy so long as the price is right


119

Sparkling wine drinkers profile by Natural cork closure attitudes


Sparkling wine drinkers profile by Natural cork closure attitudes Vinitrac® Japan, March 2007


40% 33% 37%

56% 64% 59%

4% 4% 5% 0%

20%

40%

60%

80%

100%





Neutral



120

Sparkling wine drinkers profile by consumption in bars or pubs

§ Sparkling wine drinkers are more likely to drink wine in bar or pubs


Sparkling wine drinkers profile by consumption in bar or pub % of regular wine drinkers that buy wine in bar or pub


85% 90%

16% 11% 14%

86%

0%

20%

40%

60%

80%

100%




Yes

No


121

Sparkling wine drinkers profile by consumption in restaurants

§ Sparkling wine drinkers are more likely to drink wine in restaurants


Sparkling wine drinkers profile by consumption in restaurants % of regular wine drinkers that buy wine in restaurants


90% 96%

8% 4%

10%

92%

0%

20%

40%

60%

80%

100%




Yes

No


122

Sparkling wine drinkers profile by buying frequency consumption in the Off trade ﴾Index﴿

Index: 100 is the average frequency of consumption of all sample


Sparkling wine drinkers profile by Frequency Off trade Index Vinitrac® Japan, March 2007


123

122

136

133 82

87

88

80

60 80 100 120 140

Non sparkling wine drinker Sparkling wine drinker

With a more formal dinner party at home

A relaxing drink at the end of the day at home

With an informal meal at home

At a party/celebration at home

The frequency of Sparkling wine drinkers in all occasion is significantly higher than non sparkling

wine drinkers

123

Sparkling wine drinkers profile by average spend per bottle Off trade


Sparkling wine drinkers profile by spend in the Off trade (Average spend in YEN ¥ per bottle)

Vinitrac® Japan, March 2007 All Japanese regular wine drinkers n=1,013

1,392 1,423

2,086

2,254

1,819

1,300 1,257

1,910

1,000

1,250

1,500

1,750

2,000

2,250

2,500

With an informal meal at home

A relaxing drink at the end of the day at home

At a party/celebration at home

With a more formal dinner party at home



The spend of sparkling wine drinkers is significantly higher than non sparkling wine drinkers

Prices in ¥

124

Sparkling wine drinkers profile by buying frequency consumption in the On trade ﴾Index﴿

Index: 100 is the average frequency of consumption of all sample


Sparkling wine drinkers profile by Frequency On trade Index Vinitrac® Japan, March 2007


155

145

141

144

78

74

69

77

40 70 100 130 160

Non sparkling wine drinker Sparkling wine drinker

With a more formal dinner in a restaurant

A relaxing drink out at the end of the day

With an informal meal in a bar/restaurant

At a party/celebration big night out

The frequency of Sparkling wine drinkers in all occasion is significantly higher than non sparkling

wine drinkers

125

Sparkling wine drinkers profile by average spend per bottle On trade


Sparkling wine drinkers profile by spend in the On trade (Average spend in YEN ¥ per bottle)

Vinitrac® Japan, March 2007 All Japanese regular wine drinkers n=1,013

2,270 2,392

4,003

4,479

3,036

1,914 1,791

3,394

1,500

2,000

2,500

3,000

3,500

4,000

4,500

A relaxing drink out at the end of the day

With an informal meal in a bar/restaurant

With a more formal dinner in a restaurant

At a party/celebration/big

night out



The spend of sparkling wine drinkers is significantly higher than non sparkling wine drinkers

Prices in ¥

126

Sparkling wine drinkers profile by involvement

§ Higher involvement within sparkling wine drinkers


Sparkling wine drinkers profile by wine involvement Vinitrac® Japan, March 2007


44%

43% 44%

36% 27%

41%

15% 30% 21%

0%

20%

40%

60%

80%

100%




High involvement

Medium involvement

Low involvement


127

Sparkling wine drinkers by drinks repertoire





Red wine 81% 86% 83% Soft drinks (sodas, water, juice) 73% 88% 79% White wine 67% 90% 75% Beer 70% 79% 73% Premixed/ready to drink 39% 64% 48% French Champagne 0% 79% 28% Rosé wine 18% 46% 28% Other sparkling wine 0% 51% 18% Sweet/dessert wine 6% 30% 15% Cava 0% 16% 6% Port 2% 12% 6% Sherry 1% 11% 4% Prosecco 0% 8% 3%

Blue: statistically higher than one group only

Sparkling wine drinkers profile by Alcoholic drinks repertoire


128


Sparkling wine drinkers by channels usage




In a supermarket 56% 62% 58% In a liquor store 44% 56% 48% In a hypermarket 38% 49% 42% In a department store 20% 42% 28% In a discount store 18% 24% 20% In a wine shop 13% 30% 19% On the internet 12% 29% 18% In a convenience store 16% 23% 18% Through mail order 4% 7% 5% In a membership store 3% 7% 4% From the winery direct 2% 8% 4% Other 3% 2% 2%


% of sparkling wine drinkers that have bought in the following buying channels in the past 6 months


Sparkling wine drinkers profile by channels usage


Sparkling wine drinkers by shops usage




Rakuten 12% 22% 16% Seiyu 11% 12% 12% 7Eleve 9% 12% 10% Saty 7% 9% 7% Tokyo Store 6% 10% 7% York Benimaru 3% 3% 3% Netwine 1% 2% 2% YorkMart 1% 1% 1% Posful 1% 1% 1% WinePro 1% 1% 1%



% of sparkling wine drinkers that have bought in the following stores in the past 6 months


Sparkling wine drinkers profile by shop usage


Sparkling wine drinkers by country of origin




France 56% 71% 61% Italy 36% 51% 42% Chile 30% 42% 34% Germany 28% 35% 31% Australia 23% 32% 26% Spain 17% 31% 22% USA 19% 26% 22% Argentina 12% 19% 15% South Africa 5% 11% 7% New Zealand 3% 9% 5% Portugal 3% 9% 5% Don't know 17% 10% 14% Other 13% 11% 12%



Sparkling wine drinkers profile by Country of origin repertoire

% of sparkling wine drinkers that have bought in the following stores in the past 6 months

131

Sparkling wine drinkers by brand awareness





Carlo Rossi 24% 35% 28% Yellow Tail 19% 30% 23% Montana 14% 24% 18% Gallo 9% 21% 13% Jacob's Creek 7% 14% 9% Woodbridge 6% 14% 9% Torres 5% 13% 7% KWV 5% 12% 7% Robert Mondavi 4% 14% 7% Hardys 4% 12% 7%



% of sparkling wine drinkers aware of the following brands


Sparkling wine drinkers profile by Brand awareness

132

Sparkling wine drinkers by brand penetration





Yellow Tail 7% 12% 9% Carlo Rossi 7% 9% 7% Sunrise 4% 7% 5% Montana 2% 6% 3% Rivercrest 2% 4% 3% Gallo 1% 5% 2% Jacob’s Creek 1% 4% 2% KWV 1% 4% 2% Georges DuBoeuf 1% 4% 2% Robert Mondavi 0% 5% 2%



(purchase / all sample) Vinitrac® Japan, March 2007

Sparkling wine drinkers profile by Brand penetration

133

Sparkling wine drinkers by purchase choice cues





Country of origin 52% 58% 54% Recommendation by friend or family 52% 54% 53% Recommendation by shop staff 50% 51% 50% Region of origin 40% 53% 44% Grape variety 37% 53% 42% A brand I am aware of 35% 45% 38% Appeal of the bottle or label design 30% 43% 35% Promotional offer 33% 33% 33% Alcohol content 28% 29% 28% Medal or award 20% 27% 23%



Sparkling wine drinkers profile by Purchase choice cues

% of respondents that quoted the following quotes as being "Important" or "Very important" when purchasing wine

134

Profile of Sparkling wine drinkers: Summary

§ Sparkling wine drinkers:

§ Around 21% of Japanese regular wine drinkers

§ Young consumers ﴾2534﴿

§ Drink at least twice a week

§ More likely to buy wine in restaurants and bars or pubs

§ More adventurous consumers that like trying new styles of wine

§ Wine/sparkling wine is the preferred drink at any occasion

§ When purchasing wine they consider “region of origin”, “grape varietal”, “brand I am aware of”, “appeal of the bottle or label design” and “medals or awards” to be more important than non sparkling wine drinkers

135 135

§ Appendices § Wine Intelligence Vinitrac® methodology

136

Value segments methodology Questions we have asked – Step 1

§ Using Vinitrac we have asked to respondents § Frequency of consumption in off trade = 4 different occasions

— A relaxing drink at the end of the day at home = “INFORMAL NON FOOD” — An informal meal at home = “INFORMAL FOOD” — With a more formal dinner party at home “FORMAL FOOD” — At a party/celebration at home “FORMAL NON FOOD”

§ Frequency of consumption in on trade = 4 different occasions — A relaxing drink out at the end of the day = “INFORMAL NON FOOD” — With an informal meal in a pub/bar or restaurant = “INFORMAL FOOD” — With a more formal dinner in a restaurant = “FORMAL FOOD” — A party/celebration/big night out = “FORMAL NON FOOD”

§ We have estimated the average number of times respondents drink wine per month for each occasion:

— If “Less than once a month”, then value = 0.5 — If “13 times per month”, then value = 2 — If “About once a week”, then value = 4 — If “25 times per week”, then value = 14 — If “Everyday / most days”, then value = 25

137

Value segments methodology Step 2

§ We have calculated a mean spend per bottle for each occasion in the off trade: § If “Less than 600¥”, then value = 550 § If “Between 600 ¥ and 799 ¥”, then value = 700 § If “Between 800 ¥ and 999 ¥”, then value = 850 § If “Between 1000 ¥ and 1499 ¥”, then value = 1,250 § If “Between 1500 ¥ and 1999 ¥”, then value = 1,750 § If “Between 2000 ¥ and 2999 ¥”, then value = 2,500 § If “More than 3000 ¥”, then value = 3,250 § If “I don’t drink wine on this type of occasion”, then value = 0

§ …and a mean spend per bottle for each occasion in the on trade: § If “Less than 1,000 ¥ ”, then value = 850 § If “Between 1,000 ¥ and 1,999 ¥ ”, then value = 1,500 § If “Between 2,000 ¥ and 2,999 ¥ ”, then value = 2,500 § If “Between 3,000 ¥ and 3,999 ¥ ”, then value = 3,500 § If “Between 4,000 ¥ and 5,999 ¥ ”, then value = 5,000 § If “Between 6,000 ¥ and 7,999 ¥ ”, then value = 7,000 § If “Between 8,000 ¥ and 9,999 ¥ ”, then value = 9,000 § If “More than 10,000 ¥ ”, then value = 10,500 § If “I don’t drink wine on this type of occasion”, then value = 0

138

Value segments methodology Step 3

§ Multiplying the number of times each consumer drink wine and their average spend we have their individual spend per month ﴾including all occasions on and off trade﴿

§ We have then allocated each consumer to one of the value segments:

— Low value: respondents with the lowest spend 1/3

—Mid value: respondents with middle spend 1/3

—High value: consumers with the highest spend 1/3

139 139

Vinitrac ® – How can it help you understand the wine consumers and their needs?

…It even monitors what varietals they favour and what they think of

different closures…

Vinitrac ® is the only global survey that monitors and tracks wine consumers’ attitudes, behaviour & relationship with wine…

Vinitrac ® monitors every aspect of wine drinkers wine lives – from what they drink, where they purchase to their attitude to wine brands & countries of origin.

140 140

Vinitrac ® methodology: Japan

•Adult drinking age •Permanent resident of the country •Drinks wine at least once per month • Drink at least red or white wine • Buy wine in the offtrade and/or in the ontrade

Each sample is weighted to be reflective of the ‘regular’ wine drinking population

Vinitrac ® sample size & methodology:

141 141

Vinitrac methodology: Online surveys

Sample sizes: At least 500 per survey; 1000 in most countries, 2000 in US Regular adult wine drinkers (where ‘regular’ = Drink wine at least once/month)

w

Each Vinitrac survey starts with questions to screen respondents….. • Adult drinking age within each country • Permanent resident of the country being surveyed • Drinks wine at least once per month • Drink at least red or white wine • Buy wine in the offtrade and/or in the ontrade ..... and rejects all respondents who do not fulfil these Vinitrac criteria

Each sample is weighted to be reflective of the ‘regular’ wine drinking population in that market and is therefore both valid and reliable…it’s like a ‘smaller’ version of the wine drinking population at large

142 142

Frequently asked question: Is Vinitrac a panel?

No

w

• Invitations to participate in Vinitrac are distributed to tens of thousands of adult consumers in each market • Consumers interested in a wine survey are directed to a URL address, which welcomes them to the online survey Wine Intelligence monitors incoming completed responses to build a sample representative the wine drinking population of the target market • When a representative sample of at least 1000 (US: 2000) is logged, the survey is closed

Why not a panel? • Panels are good for monitoring detailed purchase activity but require regular input from the exactly the same complete group of respondents • This requires more time from respondents for which they are paid and are therefore more heavily skewed towards homebased consumers e.g. students and homemakers • This group of a country’s wine drinking population does not fully represent the accurate weighted sample of adult regular wine drinkers on which Vinitrac insights are based

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