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Beverage Alcohol Consumption Among Adult Millennials Brand Names and Packaging Premiums Prepared for: Abacus Data Inc. Prepared by: Johnathan Nadeau and Jaime Morrison

March 1, 2012

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CONTENTS 3 The Importance of Brand Names

4 Bottle Packaging

4 Red or White?

5 What Spirits Do Millennials Drink?

7 Methodology

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THE IMPORTANCE OF BRAND NAMES Millennials between the age 18 – 30 are more willing to try out new brands of

alcohol. They are less likely to get the same thing every time. This leaves room in the

beverage alcohol market for new brands and products to emerge as this generation

comes of age and takes on more purchasing power.

Millennials who are used to buying the same brands have already established what

brands identify with their personal image. In the upcoming years we expect that

many of the 43% undecided Millennials may determine their favourite brands.

In a November, 2011 survey of 1,005 Millennials and 1,040 non-Millennial

Canadians we found that while most Canadians usually prefer buying the same

brand of beverage alcohol, Millennials are more likely to try new brand (43%) over

non-Millennials (36%). Nearly, three in five (57%) Millennials usually buy the same

brand of alcohol.

There is still a lot of room for this market to change in the next six to ten years as the

incoming Millennial cohort reaches the drinking age. With Millennials who are more

likely to

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Many Millennials are willing to try new things,

but still a majority likes to stick to the brands they

know and trust. BOTTLE PACKAGING

Packaging is more important to Millennials and most millennials prefer beer bottles. Canadians who drink beer prefer to purchase beer in a bottle over a can most of the time, where older Canadians are more willing to drink beer packaged in cans.

Interestingly, two-thirds (65%) of Millennials prefer beer in bottles, this is eight percent higher than the non-millennial market. Each demographic was equal, at 22%, for having no preference how their beer was packaged.

What does this say about us? We have found that specific Millennial taste cultures are more interested in bottle packaging when this is more aligned with their personal image and priorities. For Millennials, packaging helps us define our interests and who we are. For most of us, even though beer cans are the better choice for packaging, because of the look and feel of the bottle and how it helps us define ourselves better it is what we want.

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RED OR WHITE?

Millennials are more interested than Non-Millennials in drinking white wine and even more (almost three in ten) who have not yet determined a favourite are interested in both red and white.

Wine drinking Millennials do not enjoy reds (46%) as much as non-Millennials (52%). However, more Millennials prefer white wine (25%) than do non-Millennials (21%).

We see room in the Millennial market for white wine to become more prevalent however, as it stands today red is preferred. As the market of beverage alcohol consumers expands to incorporate the younger half of the Millennial generation we may see this interest in white wine expand.

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WHAT SPIRITS DO MILLENNIALS DRINK?

When it comes to Millennials and what they like to drink, vodka was a clear winner. Millennials are looking for excitement, we are much more interested in drinking vodka, rum and whiskey. Some might choose to drink other spirits like gin, scotch or tequila but our results show that among the Millennial market, this is not a level playing field.

Nearly, two-thirds (63%) of Millennials, who drank spirits, drank vodka on a regular basis, compared to only 46% of non-Millennials. Rum came in a close second, with just over half (51%) of Millennials and 41% of non-Millennials consuming it. Non-millennial Canadians preferred sipping beverages, that also carry higher costs, more than Millennials; this includes scotch (25% non-Millennials vs. 14% Millennials) and brandy (13% vs. 6%).

As we see the Millennial drinking age cohort double over the next decade we expect the beverage alcohol market to become even more polarized. Our results show that most Millennials are willing to leave expensive sipping beverages like scotch and brandy for our parents. However we may see a rise in some less popular spirits like gin and tequila, which Millennials are even more likely to drink than their parents.

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Millennials are more likely to experiment with new brands. This Gen will pay a premium for appealing packaging, but we are still less likely to buy some of the higher priced spirits that non-Millennials enjoy. We buy based on what we think fits with our personal image and we believe this is what will drive the market in the upcoming decade as the rest of the Millennial cohort reaches the legal drinking age.

We can expect to see major changes in product branding and packaging as the beverage alcohol market evolves to its newest consumer base. With these changes there may be room for new brands and products to emerge or make way for major industry shifts.

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Methodology

In November 2011, Abacus Data Inc. conducted an online survey among 2,068 randomly selected Canadian adults from an online panel of over 400,000 Canadians.

The margin of error—which measures sampling variability—is comparable to +/-2.1%, 19 times out of 20.

Results of the survey were statistically weighted by gender, age, region, language, and immigration status using census data from Statistics Canada and by past vote using Elections Canada results from the 2008 General Election. Totals may not add up to 100 due to rounding.

For more information about the poll’s methodology, visit the Abacus website at www.abacusdata.ca

The table below reports the unweighted and weighted distribution by region or province.

Region/Province Unweighted Count (All Respondents)

Weighted Count (All respondents)

Atlantic Canada 154 142

Quebec 551 481

Ontario 745 677

Prairies (MB and SK) 153 266

Alberta 208 226

BC 233 276

Total 2,045 2,068