Codorniu; the Sparkling wine from Barcelona

Spanish Specialties 1

Lara Garcia Date: 25/07/2015

It’s time to seed the Australian market with a compelling sexy proposal from Barcelona!

Spanish Specialties

Agenda

Executive Summary Market Context, Target Shopper, Occasion of Consumption Outlook & Drivers of Sparkling wine in the Off trade Codorniu strengths for the Australian Market Codorniu Marketing strategy What can this plan deliver

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Spanish Specialties

1. The Australian Market is within the top 10 largest markets when it comes to consumption of sparkling wine. Prossecco has hit hard, there is an opportunity for other imported Sparklings.

2. Codorniu has the right to have a stronger presence in the market.

3. There are a few barriers to consider; •  Strong Competition, •  Low Distribution levels •  Low Awareness

4. Before investing on marketing, we need to gain critical mass distribution.

Executive Summary

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5. Through a compelling off trade shopper marketing campaign, Codorniu can deliver incremental 147k bottles at a cost of AUD 104k.

6. We do not recommend to invest in the on trade; it represents 20%, it is a fragmented channel and expensive to make an impact


Market Context Sparkling Wine

ü  1 in 3 Australians travel to Europe and more than 200k go

to Spain every year. Barcelona is the most visited destination.

ü  Most of Australia enjoys a Mediterranean/tropical weather in the country with more than 1 in 2 sunny days* per year

ü  Australia is a social country where celebration is a key component of its busy social life.

ü  The Australian household is global in its composition: Anglo primacy, eclectic fusion of Mediterranean and Asian influences.

ü  Australia is the 7th Sparkling Wine-consuming

country. ** . In the last years, there has been a democratisation of Sparkling wine in the market

ü  In the recent years, on the one hand, Sparkling wine consumption has decreased. This is driven by consumers moving to cider and Sauvignon Blanc alternatives. On the other hand, Prossecco segment has grown. Also, more brands within this segment have entered the market

ü  In terms of Champagne, Australians are the 9th biggest consumers globally.

Australia is a social outgoing country where more than 1 in 2 days along the year

are sunny days.

Australia is the 7th Sparkling wine consuming country in the world**

•  Source: http://www.australia.com/en/facts/weather.html •  ** Source: Data based on the questionnaire on sparkling wines submitted to OIV Member States. Trade data

provided by the “Observatorio Española del Mercado del vino (OEMV)


Target Shopper & Occasion of consumption

ü  The shopper of Premium and Super Premium sparkling wine (Premium segment: from AUD10 and above) is females from 25 to 45 yo. (Champagne is not considered in this study)

ü  While females are the most frequent shoppers of

sparkling wine, males and females equally consume it at gatherings with friends and family. *

ü  In Australia - Sparkling wine has moved from its celebratory role towards a more every day occasion type of drink consumed all the way along the year.

ü  In the on trade, Sparkling wine has benefited by

the growing popularity of cocktails in the on trade, as bartenders have looked to give their cocktails an effervescent quality through the addition of sparkling wine.

24 to 45 yo. young professional females are the main target shopper of sparkling wine

Sparkling wine has move from a drink of special occasions to an every day drink to

enjoy with friends.

•  Source:* Survey to 5 off trade store owners & 2 bars in Sydney, NSW. Pls. consider further analysis is required.


Off trade context

1.  The off trade represents 80% of the volume of consumption of Sparkling wine.

2.  Major players in the liquor industry are Woolworths Ltd (39%), Westfarmers (19%), IBA (15%), other Independent liquor stores representing 37%*.

3.  The level of sophistication across the

top 2 groups is much larger than the rest. Woolworths Ltd planning, marketing and commercial capabilities are stronger than any other player in the industry.

Codorniu within competitive set Major Players (Market Share)**

•  Source:* IBIS Liquor Retailing Research– March 2015 •  **Source: IBIS report – Spirits and Wine data •  ***Source: pls. consider this result comes from 5 Dan Murphy store sample.

1.  Codorniu sits at imported Sparkling Wine in store section at Dan Murphy’s

2.  Ok In store location & on shelf

visibility

3.  Share of space: Codorniu (6 facings) vs. 10 facings (Freixenet)***

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Overall consumption in line with population growth (+1.4%)* Consolidations of big boxes growing share & driving private labels

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High level Market assumptions/trends for sparkling wine in the off trade

Assumptions/trends Implication

Taste trends continue to shift towards light & fresh and sweeter styles of beverages

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Prossecco has been growing in the last years, bringing new consumers to the sparkling wine category**

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Underlying growth to remain for sparkling wine Suppliers that build strong relationships/partnerships with these retailers’ formats will be in a stronger position.

Shift towards easy, uncomplicated sparkling wines that marry with food on an everyday occasion of consumption

This innovation has brought new consumers to the Sparkling Wine category and new occasions of consumption

•  Source: *ABS http://www.abs.gov.au/ausstats/[email protected]/mf/3101.0 •  ** Sydney Morning Herlad

http://www.smh.com.au/entertainment/restaurants-and-bars/why-prosecco-is-charming-the-world-20121001-26uzd.html

Consumers are drinking better – they are moving out of cask wine into bottle and we are see greater value growth in premium brackets

Trend towards Premium Sparkling Wine and Fine Sparkling Wine will continue with increased education and accessibility


Sparkling Wine Competitor Set

Fine Wine $30+

Super Premium $15 - $30

Premium $10 - $15

Upper Mass $6 - $10

Price Segmentation reflective of Australian marketplace**

Lower Mass <$6

Mumm Cordon Rouge (7 facings) Veuve Clicquot Brut Yellow Label (4 facings) Moët & Chandon Brut Impérial (3)

Arras (XX facings) Chadon (8 facings) Petaluma Croser NV (3 facings)

Henkell Trocken (7 facings) Minchinbury Prosecco (6 facings) Jacob’s Creek (XX facings) Freixenet (10 facings), (Codorniu (6)

Yellow Tail (3 facings) Yellowgleen (4 facings)

*Source::Survey to 5 off trade store owners & 2 bars in Sydney, NSW. Pls. consider these results are not definitive **Source: Price Segmentation according to a major liquor distributor in Australia ***Source: interview with members of senior leadership team of a leading wine beverage company

1.  Dan Murphys, 174 big box stores. It is the most sophisticated retailer across the board in the liquor industry in Australia

2.  Key segments in the sparkling wine category are: ü  Champagne ü  Prossecco ü  Other imported sparkling wine; NZ, German sparkling

wine, other regions in France, Spain, other areas in Italy. ü  Domestic wine

3.  Key segments/brands that perform well in the premium and

super premium segments are*: Chandon, Jacob’s Creek, Petaluma Croser NV.

4.  Codorniu is a brand that people might explore to choose with the objective of exploring the product or because they have tasted it in their travels to Barcelona*.

5.  Most of the volume of sparkling wine comes from Upper Mass segments. Premium does not represent a large segment***.

Spanish Specialties

1.  Codorniu is the world's oldest and second-largest producer of bottle-fermented sparkling wine; known as cava.

2.  Mediterranean Sparkling wine, founded close to Barcelona, Spain in 1551.

3.  Strong connection with the vibrant, quirky, creative Barcelona and its Mediterranean, lifestyle

4.  It has a large range of wines - to be consumed

on an every day basis as well as special occasions.

5.  Best in class quality-price equation.

6.  Codorniu has recently launched the 1st Sparkling Albarino: FRIZZ 5.5

Codorniu has the potential to become the New Mediterranean uncomplicated Sparkling from Barcelona; uncomplicated sparkling, it marries food, same method of production to

Champagne, great price quality equation.

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Codorniu strengths for the Australian Market


Best of Codorniu assets to be leveraged for this market

Codorniu’s Territory; uncomplicated, fresh and fruity sparkling from Barcelona for an every day meal with friends

Heritage; oldest cava maker, Methode traditionel

Post-modern, casual, quirky, one of a kind Barcelona

Uncomplicated Mediterranean sparkling to marry with tapas


However, 3 key barriers for Codorniu in this market

FIERCE COMPETITION ON PREMIUM & UPPER-MASS

SEGMENTS

Category Issue

LOW AWARENESS OF CAVA & CODORNIU BRAND

Shopper Issue

ü  Strong and aggressive competition across these segments

ü  Low knowledge of Cava category of sparkling wine.

ü  For experts, cava might have some connotations of stale, dull, sometimes, overworked.

ü  Low awareness of Codorniu brand.

•  Source: interview to 5 store managers. Please consider these results are not definitive. The method used is a basic one and they can not be considered final results. They are orientative for the purpose of the presentation

ACTION: N/A we have limited influence

ACTION: How can we inspire shoppers to try Codorniu at

scale?

CURRENTLY ONLY PRESENCE AT DAN MURPHY

Distribution issue

ü  While Codorniu has presence across the main big boxes in Australia – Dan Murphy it’s distribution levels are not high enough to start activating the brand in this market

ü  Opportunity to engage Woolworths’ group and negotiate ranging across BWS

ACTION: How can we inspire BWS to gain ranging of

Codorniu?

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How can we effectively inspire 25 to 45 yo. ladies to taste Codorniu during summer?!

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Shopper Issue

How can we effectively inspire BWS to range Codorniu?!

Retailer Issue


2 potential options to explore

Option 1 Option 2

Approach: revitalise and drive the current mother brand with shopper marketing activation at key retailers. Target Consumers: 30 and above. Occasion of consumption: apperitif, tapas, The different varieties make them very versatile. Seco & Semi Seco are perfect with desserts, even be drunk with Asian food. Brut and Brut Nature is ideal with a variety f dishes: aperitifs, tapas smoked meats or fish, pastries, cured meats, white meat and fish.

Drive Codorniu Clasico to fight against Freixenet and other imported sparkling wines

Drive Innovation - NEW FRIZZ 5.5 CodorNEW to fight against Prosecco’s new segment through a compelling differentiated proposal

Approach: bring innovation to the market, Albarino and Verdejo Frizz 5.5., to fight against prossecco and tap into new consumers and new occasions of consumption Target Consumers: 25 to 40 yo. Females Occasion of consumption: every day casual get together occasion with friends. Ideal served with characteristic dishes and aperitifs from the Mediterranean diet: seafood, tapas, rice dishes, pasta.


Compelling Shopper Marketing Campaign driving current variant to fight against Freixenet

CODORNIU, THE SPARKLING FROM BARCELONA SINCE 1551. *Codorniu, the cava that has celebrated the small things in life since 1551. It is the world's oldest & 2nd largest producer of bottle-fermented sparkling wine, Known as cava, made by the Traditional champagne method.

Option 1: Drive current Codorniu variant


Drive new variant in the market & shopper Marketing Campaign associated to fight against Prossecco

FRIZZ5.5,AlbariñofromBarcelona

Option 2: Drive Innovation – Frizz 5.5


What could a shopper marketing campaign look like across any of these options.

See Shopper Marketing Campaign Option 2 …

Spanish Specialties

Activities

Media Amplifi

Timing

NEW FRIZZ 5.5 Sparkling Albariño from Barcelona.

Oct 2016 Wc. 1st of Nov, Dec Wc. 1st of Feb

Campaign

FY16 Shopper Marketing Campaign aims to drive a compelling distinctive proposal like no other in the market to tap into the growth of new occasions of consumption

28th Feb

ü  X2 FB posts llinked to video with Media Investment associated to reach max no. of shoppers

In store Activation

ü  At Shelf Decal ü  Tastings with other sparkling wines ü  Gondola end location during 2 weeks – (DM = 174 stores).

7th July

ü  iNTRODUCTION TO BRAND, GENERATE INTEREST

ü  IMPROVE IN STORE VISIBILITY ü  INCREASE AWARENESS & TRIAL LEVELS

ü  KEEP BRAND ALIVE IN THE SHOPPER REPERTOIRE

Benefits

Objective

SHOPPER MARKETING CAMPAIGN TO INSPIRE LADIES TO TASTE CODORINU AT SCALE

FOLLOW UP CAMPAIGN

TEASER -

INTRODUCTION TO CODORNIU

PROMOTION TRIP TO BARCELONA

PROMOTION PICNIC KIT

LAST SUMMER

DAYS

MEDIT. SUMMER

1 2 3

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ü  262k fans

ü  X2 FB posts with Media Investment associated to reach max no. of shoppers

ü  ¼ page of BWS catalogue

ü  X2 FB posts with Media Investment associated to reach max no. of shoppers

Spanish Specialties

Date: October 2016 - beginning of Australian Summer Objective: Introduce Frizz 5.5 to key target shopper & iinspire ladies to consider it during summer Execution: x2 Posts on BWS/Dan Murphy’s Facebook Page that links with Video. Ensure there is media investment to reach max level of target shoppers.

Copy: We are introducing a special guest in house; NEWFrizz5.5,quirkyAlbarinofromBarcelona,only5.5%alc. SparklingbubblesandlowalcoholcontentmakeFRIZZ5.5Verdejoaperfectbalanceofsweetnessandsharpness.TryitandtransportyourselftoBarcelona.HasanyonetryAlbarinoontheirlastTmeinBarcelonaoranyotherpartofSpain?

FRIZZ5.5,SparklingAlbariñofromBarcelona.

Introduction to FRIZZ 5.5 - Teaser 1

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Video

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WINATRIPTOBARCELONAFORU&AFRIENDWITHFRIZZ5.5CODORNEW

Date: Mid November 2016 – Summer Season Objective: inspire shoppers to consider Codorniu cava during summer season Execution: 360 degrees shopper marketing campaign Trip to Barcelona includes: flights, accomodation, Codorniu winery visit.

Copy: FRIZZ 5.5, the hipster variant of Codorniu invites you and a friend to visit Barcelona. Picasso, Dali, Gaudi, Paseo de El Born… blend you and a friend in the post modern Barcelona. Go to any BWS, buy any bottle of Codorniu and enter the challenge online at www.BWSCodorniu.com Best answer wins.

Promotion Trip to the Mediterraneo 2

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1.Facebook

2.BWSCatalogue

3.InstoreGondolaEnd

4.Atshelfdecal

Facebook post & Reminder !

¼ of Catalogue ad during month of December!Presence at Gondola End during 2 weeks of activation!

Shelf Decal at shelf !

Example; What could in store execution look like?

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360 degrees Execution with touch points across the path to purchase

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WINAFRIZZ5.5PICNICKITBUYABOTTLETOWIN

Date: 1st of February 2016 – Summer Season Objective: Drive Awareness and Trial levels Execution: 360 degrees Shopper Mk Campaign Alternative: Cross Promo with snacks, party items

Promotion Picnic Kit

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Thekitincludes:PicnicBag+recipecards(Albarino&tapas)

Two options of promotions to encourage trial of Cava Codorniu

FRIZZ5.5OFFER–BUY6BOTTLES&GET25%OFF

Date: 1st of February 2016 – Summer Season Objective: Drive Awareness and Trial levels Execution: 360 degrees shopper marketing campaign

Copy: Buy a bottle of FRIZZ 5.5% CodorNEW and WIN a Picnic Kit. 1 Kit per store to win

Copy: Buy 6 bottles of CodorNEW FRIZZ 5.5, get 25% off.

+

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EnjoythelastbeachdayoftheseasonwithFRIZZ5.5,theAlbarinofrom

Barcelona

Date: 28th of Feb Execution: Facebook coupon activation on BWS’s website with media investment associated

7thofJuly28thofFeb

Tapas,CavaCodorniu,Barcelona.

Date: 7th of July Execution: Facebook coupon activation on BWS’s website with media investment associated

Copy: Normal. Frizz. Special. After work, at a cocktail, after dinner… FRIZZ 5.5 CodorNEW is the perfect sparkling wine to make any occasion special. Find it across BWS stores

Copy: Tapas is no small plate. FRIZZ 5.5 CodorNEW, the sparkling from Barcelona marries beautifully with tapas. And you, what tapa would you choose? Buy a bottle of CodorNEW and go in the draw to win a Tapas & Sparkling wine book.

2 additional follow up events to keep the brand alive in the shopper mindset

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What can this plan deliver?

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ü  This plan is a combination of: Ø  Distribution job: can deliver 140k bottles at the end of a year time Ø  Off trade Shopper Marketing Plan: 7k incremental bottles

ü  Please consider this data as tentative and not conclusive data.

ü  Assumptions: Ø  Get ranging across BWS stores – 1300 points along 1 year time. Ø  Average weekly sales: 2 per week Ø  Uplifts* generated by the following activities: Facebook page with media investment – 4%, visibility on Catalogue –

12%, visibility on catalogue and off location in store display – 22%.

24* Source: assumptions used in finance modelling across similar activations in a leading beverages FMCG company in Australia

This plan can generate 147k bottles by end of FY16

•  Source: uplifts based on similar activities at an leading beverage company in a similar customers in Australia

Spanish Specialties

The investment needed is AUD 107k behind the plan

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ü  Spanish Specialties’ fees represent around 20% of the cost and it is associated to the work of: Ø  Engaging Dan Murphy’s marketing team/ Codorniu team, Ø  Development, management and execution of the marketing activations Ø  Support from a commercial perspective.

ü  There should be no need to recreate new photographic material, there might a need to work on adaptations. Usage of existing graphic design resources from Codorniu global brand.

Spanish Specialties

Australia is the 7th largest market of sparkling wine. In the last 5 years there has a massive democratisation of Sparkling Wine

In recent years sparkling wine has been decreasing

Currently there are few barriers that should be taken into account: Strong Competition, Low distribution and low

Awareness of the brand

Before investing on marketing, we need to gain critical mass.

Summary – CodorNEW can deliver incremental 147k bottles in Australia at the end this FY16

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Through a compelling shopper marketing campaign, Codorniu can delivers incremental 147k bottles at a cost of 74k €

Prosecco has been an innovative segment that has brought new consumers and new occasions of consumption to the

category

While some cavas have good reputation against Prossecco, sometimes it can be considered stale and boring.

Two options to tap into the Australian market: (1) Drive current variant to fight against Freixenet or (2) tap into new occasions

of consumption with Sparkling Albarino

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Appendix

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DanMurphy’s

Leader retail chain from a Big Box format perspective Dan Murphy’s is an Australian liquor supermarket chain owned by Woolworths Limited. Dan Murphy's competes principally with 1st Choice Liquor Superstore. Mission: Be the most admirable big box format in the world Slogan: Biggest range of products & lowest prices States in Australia: Nationwide, all states Type of Store, Number of stores: Big Box, 174 stores. Main Shopper Proposition: Customers’ drinks merchant Key channels: 1.  Online Store: 2.  National Catalogue: national reach 3.  National Press: national reach 4.  In store Persuasion through staff members 5.  In store Tastings: 6.  Website, Facebook page: 250k fans

BWS

BWS is an Australian retail chain of liquor stores owned by Woolworths Limited. BWS began operations as a local neighborhood bottle shop. BWS is a brand of the Woolworths Liquor Group which also includes Cellarmasters and Pinnacle Liquor. Mission: Be the convenient outlet that facilitate “better drinking” through food and drinks proposals. Slogan: Today’s specials States in Australia: Nationwide, all states Type of Store, Number of stores: Convenience store, 1200 stores. Main Shopper Proposition: Today’s specials Key channels:

1.  National Catalogue: national reach 2.  In store Tastings: 3.  Website, Facebook page: 150k fans

Woolworths Retail Liquor Group


Thanks

Lara Garcia 2/27A Eaton Street, Neutral Bay, Sydney, NSW,

Australia [email protected]

Ph: 0434918061 www.spanishspecialties.net

Codorniu; the Sparkling wine from Barcelona

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