Confidential & Proprietary Copyright © 2007 The Nielsen Company
November, 2007
Spreading the Love via CGM – Nielsen Insights on Wine and the Web
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 2
Media Measurement and Information
Business Information
MarketingInformation
Homescan®
ACNielsen
Spectra®BASES
Beverage Data Network
ClaritasDecisions Made Easy
TDLinx
Nielsen//NetRatings
Nielsen Media Research
Nielsen BuzzMetrics
Nielsen EDI
Nielsen Bookscan
Nielsen Videoscan
Nielsen Soundscan
Nielsen Business Media Trade Shows
Progressive Grocer
The Gourmet Retailer
Convenience Store News
BRANDWEEK
ADWEEK
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 3
Wine OverviewA Mid-Year 2007 Review of …“What’s Hot, and Not”
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 4
New Wine Brands Since the year 2000, there have been close to 2,500 new brands flooding Grocery store shelves, representing over 60% of the active brands today.
Number of Active Brands
0500
1,0001,5002,0002,5003,0003,5004,000
1999 2000 2001 2002 2003 2004 2005 2006
EXISTING Brands 2000 Intros 2001 Intros2002 Intros 2003 Intros 2004 Intros2005 Intros 2006 Intros
Source: Nielsen Total US FoodBy calendar year – Active Brands = sales during the year
Launch year based on zero sales in previous year
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 5
Tl U.S. Sales Dollar % Chg - 24 w/e 06/30/07 vs YAG
52 wk $ Share
< -10%
-5 to -10%
0 to -5%
0 to +5%
+5 to +10%
+10 to +15%
+15 to +25%
> +25%
Ann 06 % Chg
Nielsen Trend Ind.
TTL Table 100% +6.4 +6.9
Red 49.9 +9.3 +7.4
White 42.1 +4.9 +7.9
Blush 7.9 -2.1 +/-0
Rose Table 0.8 +2.1 +0.5
Rose Table (>$8.00)
0.1 +66.4 +66.9
Source: Nielsen Food, Drug, Liquor
Rank
Table Wine – by Color
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 6
Red Wines leading the growthRed Wines trailed White’s growth through October 2006, but since then the tide has turned
8.1%8.4% 9.3%
1.4%
6.3%
8.8%
5.1%
-2.5%
52 w/e 10-21-06 36 w/e 6-30-07
Table Wine Dollar Growth Rates by Color
Tl Table Red Wine White Wine Blush
Source: Nielsen Food, Drug, Liquor
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 7
Red Wines have benefited from positive media coverage
200620052004200320022001
Most recently (Nov. 2006), studies by the Harvard Medical School and the National Institute of Aging suggesting that daily doses of resveratrol - a substance found in Red Wine - may help people live longer, was widely covered
Source: Nielsen Food, Drug, Liquor
45.6%46.7%
49.7% 49.8%
51.2%
2003 2004 2005 2006 2007
Red Wine Share - Dollars36 weeks through end of June
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 8
Tl U.S. Sales Dollar % Chg - 24 w/e 06/30/07 vs YAG52 wk
$ Share
< -
10%
-5 to -10%
0 to -5%
0 to +5%
+5 to +10%
+10 to +15%
+15 to +25%
> +25%
Ann 06 % Chg
Nielsen Trend Ind.
TTL Table 100% +6.4 +6.9
Chardonnay 22.5 +2.1 +5.2
Cab Sauvignon 13.8 +12.9 +11.1
Merlot 12.0 +4.0 +1.8
Pinot Grigio/ Gris
7.3 +13.7 +17.9
White Zin 5.1 -2.9 -0.7
Pinot Noir 4.6 +26.3 +20.3
Syrah/Shiraz 4.0 +1.4 +1.9
Fume/ Sauv Blanc
3.8 +8.0 +9.5
Zinfandel 2.2 +10.7 +11.6
Riesling 2.0 +23.5 +25.2
Chianti 1.8 +10.2 +8.7
Chablis 1.3 -9.7 -4.4
Blends 3.2 +2.7 +0.5Source: Nielsen Food, Drug, Liquor
RankTable Wine – by Major Varietal
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 9
Tl U.S. Sales Dollar % Chg - 24 w/e 06/30/07 vs YAG
Low to High
Avg Price/ 750 ml
52 wk $
Share
< -
10%
-5 to -10%
0 to -5%
0 to +5%
+5 to +10%
+10 to +15%
+15 to +25%
> +25%
Ann 06 % Chg
Nielsen Trend Ind.
TTL Table $5.64 100% +6.4 +6.9
0-$2.99 $2.09 11.9 -0.7 -0.2
$3-$5.99 $4.49 22.3 +4.8 +3.6
$6-$8.99 $6.89 27.0 +3.5 +6.0
$9-$11.99 $10.30 21.2 +9.3 +11.9
$12-$14.99 $13.04 6.8 +15.5 +16.3
>$15 $19.30 10.2 +15.7 +10.5
Rank
Table Wine – by Price Tier
Source: Nielsen Food, Drug, Liquor
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 10
Zin price growth mirrors category
$15+12%
$10-14.9925%
$8-9.9934%
$6-7.996%
<$623%
Nielsen Homescan Panel 52 weeks ending May 12, 2007
Zinfandel by Price Tier
% Chg vs YA
$15+ +14.1
$10-14.99 +18.3
$8-9.99 +13.8
$6-7.99 +1.7
Under $6 +9.2
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 11
Zin is among top 3 Millennials most-often wines62
5948
4746
3632
2626
2019
1614
87
65
43
17
0 10 20 30 40 50 60 Merlot Chardonnay Zinfandel White Zinfandel Pinot Grigio Cabernet Sauvignon Pinot Noir Riesling Rose Sauvignon Blanc Chianti Syrah/Shiraz Red Bordeaux White Bordeaux Gewurztraminer Malbec Sangiovese Petite Sirah Meritage Gruner VeltlinerNone of the above
Base: Millennial wine drinkers (n=346)Q39: In the past year, which varieties or blends of wine have you personally drank? (MA)
Per
cent
age
of P
eopl
e
Zinfandel
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 12
Top three Millennials most consumed wine types are also their favorite wine types.
3937
3225
2418
1514
137
666
43
21
0 10 20 30 40 50 60
Chardonnay Merlot White Zinfandel Pinot Grigio Zinfandel Cabernet Sauvignon Pinot Noir Riesling Rose Chianti Sauvignon Blanc Syrah/Shiraz Red Bordeaux Gewurztraminer White Bordeaux Malbec Sangiovese
Base: Millennial wine drinkers (n=346)Q40: Please choose up to three of your favorite types of wine from the following. (MA)
Per
cent
age
of P
eopl
e Zinfandel
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 13
Key Questions In The “Consumer Era”
How many consumers are online?Is my target consumer online?
To what extent are they engaged?How do I engage them on my brand/specialty?
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 14
The Internet Reaches Critical Mass…
Internet Penetration July 07'
67%74%
% of Total HH's % of Total Population
The Current Web Universe is 215.3 million people
Source: Nielsen//NetRatings NetFacts Q1 2007/ NetView Audience Measurement August 07/ U.S. population data based on World-gazetter.com
Internet Penetration August 07’
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 15
U.S. Internet Population Shows Modest YOY Growth With Users Consuming More Content
And Spending More Time
Source: Nielsen//NetRatings NetView, Aug ’06 & Aug ‘07
Aug-06 Aug-07 YOY Change (%)
Sessions/Visits per Person 58 60 3%
Domains Visited per Person 102 107 5%
Web Pages per Person 2,244 2,436 9%
Duration of a Web Page viewed 0:00:50 0:00:51 2%
PC Time per Person 61:29:47 66:37:29 8%
Active Digital Media Universe 155,671,206 158,415,002 2%
Current Digital Media Universe Estimate 209,775,535 215,349,003 3%
Overall Internet Audience Comparison – August 2006 - 2007
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 16
Adult (Age 21+) Internet User Spends Much More Time Online Than
Counterparts
Source: Nielsen//NetRatings NetView, Aug ‘07
Average Internet
User
21+ Internet User
YOY Change (%)
Sessions/Visits per Person 60 73 22%
Web Pages per Person 2,436 2,777 14%
PC Time per Person 66:37:29 80:41:49 21%
Active Digital Media Universe 158,415,002 119,598,000
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 17
Consumers Drink of Choice
28% of the adult online population consumes Wine, totaling over 40.1 million individuals
Source: Nielsen//NetRatings @plan, Fall 2007
26% of the adult online population consumes Spirits, totaling over 37.4 million individuals
33% of the adult online population consumes Beer, totaling over 47.5 million individuals
33%
28%
26%
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 18
Key Online Questions In The “Consumer Era”
How can I “listen” to consumers’ to understand their
needs and preferences?Where is the conversation coming from?
Who are my brand advocates?
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 19
What Is Consumer-Generated Media?
Consumer-Generated Media (CGM): A variety of new sources of online content that is created, initiated, circulated, shared and used by consumers who are intent on educating others about products, brands and services.
44% of U.S. Online adults 53 million people are “content creators” (Pew Research 2003)
• How Big is CGM
10,000+ Message boards40+ million Blogs
45,000 Usenet newsgroupsProduct review sites
Social networksCompany feedback portals
Core Drivers: - Basic consumer needs of expression - Media fragmentation + device proliferation - Erosion of trust in traditional information sources - Rise of interactive media and social networks
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 20
Why Is CGM So Important?
Because, research companies find that consumers trust CGM and word of mouth far more than any other information source…
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 21
This isCGM
Where Does It Originate?
What if half the store shelf said, “Don’t Touch This?”
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 22
Who will be first here?
ZAP #4 on “zinfandel” search, but
no brands on first page (3
on first 3 pages, non-
paid)
Where Does It Originate?
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 23
Everyone Is Creating Content These Days
13%
33%27%
18%
30%
58%
Rev/commented on brand/company blogProvided email feedback to company/brandParticipated in online product ratingParticipated in online community/message board/forumReviewed online comments/ratings while researching productsForwarded something found on internet
Speakers
Data supplied by:
SeekersFact: About 73% of people who shop online leave comments to
share their thoughts and experiences with other consumers
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 24
Key Online Questions In The “Consumer Era”
How are consumers’ talking about my category?
How much buzz is there for my brand?What sentiment is being expressed?
What are topics of discussion?
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 25
Consumers Are Passionate & Enjoy Sharing
Wine PlaylistWine Network
Wine MediaWine Tools
Placement & Reviews
“Apparently all it took was a glass of Château Malescot St-Exupéry (a Bordeaux Third Growth
estate), a nibble of camembert cheese, and a
group hug to prevent a recent robbery in a
private home.”
Advertising
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 26
What’s The Buzz On The Beverage Category?
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 27
What’s The Buzz On Wine?
Varietals “Italian wine is the first, best and only. Doubt it, try making it, transporting it to the four corners of the known world, store it for a thousand years, then open it and drink it like it's fermented grape juice.”Forums.winespectator.com, 2007-09-30
“Why anyone would drink anything but Italian wine is beyond me...”Forums.travel.com, 2007-09-29
“I don't care for most French reds as I prefer up front fruit thats more > common with California wines. However, there are California reds that > aren't fruit forward and there are some French reds that are.”Alt.food.wine Posting Date: 2007-06-29
“And for those people who like/hate white zin, red zin is totally different. It's more like a chianti or syrah/pinot/merlot blend.”Forums.corvetterforum.com, 2007-09-28
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 28
How Do Consumers’ Feel About My Brand And What’s Driving Sentiment?
Sentiment toward XYZ Brand, as a % of sample
Positive 59%
Mixed13%
Negative 11%
No Opinion11%
Unsure6%
n = 100 relevant messages about Maker’s Mark
0%
5%
10%
15%
20%
25%
30%
35%
40%
Men
tioned
w/C
ompet
itor
Taste
/Tex
ture
/Pro
of/Sm
ell
Prefe
rence
Compet
itor C
ompar
ison
Recom
men
ds
JB B
rand M
entio
n
Perce
ived
Cla
ss
Recip
e
Mix
Drin
k Id
eas
Drink
Educatio
nCost
Drinki
ng Occ
asio
ns
Overa
ll
Drinki
ng Cultu
re
Distil
lery
/Touris
m/W
iner
y
Bottle
Desig
n
Availa
bility
Alcohol C
ollect
ion
Side
Effect
s
Joke
sGift
s
Inte
rnat
ional
Mar
ketin
g
Positive Negative Mixed Unsure No Opinion
XYZ Brand discussion topics, as a % of sample
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 29
Key Online Innovation Questions In The “Consumer Era”
How are beverages being talked about from the consumers’ vantage point?
What are complementary product offering opportunities?
Which brands are most closely associated with beverages?
What are innovative applications?
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 30
Cigarettes, Pizza and Wings
highly associated with beer.
Vodka, Bourbon, Rum,
Whiskey and
Champagne most
frequently associated
alternatives – not Wine.
How Do Consumers Talk & What Do TheyAssociate w/ Beer
Lager, Ale and Stout are the most popular types of beer
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 31
Majority of discussion related to food and cooking.
Spirits equally associated
with Wine varietals
Cabernet is wine variety
most closely associated.
Social events and
places highly associated
with wine.
How Do Consumers Talk & What Do They Associate w/ Wine
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 32
Key Online Innovation Questions In The “Consumer Era”
Are consumers’ talking about my brand?Do they understand the benefits?
Are there product misperceptions?
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 33
Screw Caps vs Corks – Confusing Innovation? “Its obvious that people who don't really follow or drink wines, believe the old stigma that screw caps represent cheap wine.”Winespectator.com, 2007-07-23
“You know that the buzz is that screw cap wine is actually better preserved than corked bottle wine.”Fodors.com, 2007-05-23
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 34
Key Online Questions In The “Consumer Era”
What are health and wellness trends?What are key trend opportunities?How is Wine being associated with
health/wellness benefits?
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 35
Red Wine Links To Health And Wellness
“Since drinking alcohol in excessive amounts can have harmful health effects, doctors generally recommend moderate red wine consumption, which is an average of two drinks a day for men and one drink a day for women”Siliconinvestor.com, 2007-08-31
“Health benefits of red wine include reducing your risk of prostate cancer. Other benefits include lower risk of heart attack, stroke, diabetes, and cardiac death.”Religion on the Rocks, 2007-09-16
“A glass of red wine could improve "good" HDL cholesterol. ... Flavonoid polyphenols include catechins, flavonones, flavonols, isoflavones, reservatrol, and anthocyanins....Red wine Catechins and reservatrol (flavonoids). Toast your good health!...”[email protected], 2007-07-17
“Consuming wine conservatively (pace yourselves, people) will help you reap all the heart-healthy benefits”Afterdawn.com, 2007-06-10
-
50
100
150
200
250
300
Jan-0
6
Feb-0
6
Mar
-06
Apr-06
May
-06
Jun-0
6
Jul-0
6
Aug-06
Sep-0
6
Oct-0
6
Nov-06
Dec-0
6
Jan-0
7
Feb-0
7
Mar
-07
Antioxidants Bioflavonoid Selenium
Dark Chocolate Red Wine Green Tea
Average Buzz for Nutrients
Individuals discuss the antioxidant power in red wine to help prevent / fight cancer
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 36
Organic Trends Translating To Wines…“Organic wine is something I won't/can't buy. It is really hard to find, and when you do, it's usually really expensive.”Mommysavers.com, 2007-09-12
“I can't say that I think the organic grapes TASTED much different from non-organically grown wine, but organic grapes tend to leave a better taste in your mind at least. ;-)”Food Follies - Daily Specials, 2007-08-31
“And my experience is that organic wine is clearly better, since it isn't bringing with it the traces of chemicals which are used in the commercialization of the wine-making process.”Liamvino's Journal, 2007-08-26
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 37
Organic is a key tenet of sustainable living with organic products driving 53% of sustainability discussion. .
Plastic packaging and the growing utilization of CSAs (community supported agriculture) elicit steady buzz over the timeframe.
Key Trends Driving Sustainability Buzz
Buzz share for key trends, as a % of sustainability discussion
n = 241,227 messages about sustainability, between 7/01/2006 and 6/30/2007.
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
Jul-0
6
Aug-06
Sep-0
6
Oct-0
6
Nov-06
Dec-0
6
Jan-0
7
Feb-0
7
Mar
-07
Apr-07
May
-07
Jun-0
7
% o
f S
ust
ain
abil
ity
Men
tio
ns
for
All
Tre
nd
s E
xcep
t O
rgan
ic
0%
10%
20%
30%
40%
50%
60%
Org
anic
as
a %
of
Su
stai
nab
ilit
y M
enti
on
s
Fair Trade Plastic Packaging CSA Organic
Confidential & Proprietary Copyright © 2007 The Nielsen Company
Page 38
Thank you!
Brian Lechner [email protected]
510.745.4133
www.nielsen.com