Thursday, May 21, 2020 9:00 a.m. – 10:00 a.m. PDT

State of the Wine Industry –Special Edition

Speakers

2

Jeff BitterPresidentAllied Grape Growers

Amy HoopesPresidentWente Family Estates

Danny BragerSenior Vice PresidentNielsen Beverage Alcohol Practice

Paul LearyFounder & PrincipalAssemblage Consulting Group

Max HeinemannWine & Spirits Client ManagerNielsen CGA

Rob McMillanExecutive Vice President & FounderSilicon Valley Bank Wine Division

0%10%20%30%40%50%60%70%80%90%

100%

Phone Club POS eCommerce

DtC: More Channel Shifting – A Separate ViewExisting Club Members Being Leaned on Heavily. eCommerce Accelerating

3

Date Phone Club & Subscription Tasting Room eCommerceJanuary 1st - March 13th 11.4% 48.6% 34.6% 5.3%March 20th to May 8th 14.1% 60.4% 6.9% 19.2%Change 2.7% 11.8% -27.7% 13.9%

Exports3% Off-Premise

Wholesale18%

Lost Restaurant & Tasting Room

Sales44%

Mailing List & Subscriptions

10%

Wine Club23%

Phone & eCommerce

3%

View from Winery - Average Winery’s Channel Mix –Pre & Post S.I.P. Orders

4

March 20th, 2020Exports

2%Off-Premise Wholesale

20%

Restaurant

Tasting Room

5%

Mailing & Subscription

10%eCommerce

16%

Wine Club35%

Phone10%

8 Weeks to May 8th

“Do you have an employee dedicated to analyzing your consumer data?”How valuable are client lists now?

5Source: SVB 2019 State of the Wine Industry Survey

Full-Time18%

No55%

Part-Time27%

D R I N K S O R D E R E D W I T H TA K E O U T / D E L I V E R Y

37%

42%

43%

44%

47%

47%

50%

51%

55%

60%

Neat Spirit

Dom Non-Craft Beer

Sparkling wine/Champagne

Cocktail kit

Spirit Mixer

Pre-made cocktails

White Wine

Craft Beer

Imported Beer

Red Wine

Have Ordered

NGCA COVID-19 IMPACT SURVEY APRIL 1 2020, SAMPLE SIZE: 159

27%

33%

35%

38%

39%

39%

40%

42%

42%

45%

Red Wine

Imported Beer

White Wine

Spirit Mixer

Pre-made cocktails

Craft Beer

Cocktail kit

Dom Non-Craft Beer

Sparkling wine/Champagne

Neat Spirit

Would Consider Ordering

*Consumers select have ordered, would consider ordering or neither per beverage

SOURCE: RESTAURANTRAK + CUSTOM CONSUMER RESEARCH

[6]

Y O U H A V E S A I D Y O U T Y P I C A L L Y D R I N K T H E F O L L O W I N G . W I L L Y O U D R I N K T H E S E M O R E O R L E S S F R E Q U E N T L Y W H E N R E T U R N I N G T O B A R S A N D R E S T A U R A N T S , C O M P A R E D T O P R I O R

T O C O V I D - 1 9 .

D R I N K S W H E N R E T U R N I N G T O B A R S A N D R E S TA U R A N T S

42%

41%

28%

21%

33%

26%

27%

25%

30%

23%

26%

24%

26%

21%

21%

22%

41%

48%

58%

62%

54%

56%

53%

57%

49%

55%

57%

56%

55%

64%

60%

62%

Cognac

Brandy

Gin

Liqueurs and cordials

Hard seltzers

Sparkling wine/Champagne

Rum

Tequila

Cocktails

Import beer

Craft beer

Whiskey

Vodka

White wine

Domestic non-craft beer

Red wine

More Frequently The Same

NGCA COVID-19 IMPACT SURVEY MAY 13 2020, SAMPLE SIZE: 1136SOURCE: RESTAURANTRAK + CUSTOM CONSUMER RESEARCH

40%

33%

31%

28%

28%

24%

22%

22%

18%

18%

14%

13%

11%

10%

8%

6%

% who drink category

[7]

A look at Channels

Less than pre Covid-19

As often as pre Covid-19

More often than pre Covid-19

Premium Nightclubs 50% 44% 6%

Airport bars 50% 45% 6%

Stadiums 48% 47% 5%

Game-based/experiential bars 48% 47% 6%

Premium Bars 47% 47% 6%

Sports bars 46% 47% 6%

Casinos 46% 47% 7%

Brew pub/Tap rooms 45% 48% 6%

Groceraunts 44% 49% 6%

Neighborhood bars 44% 49% 8%

Fine dining restaurants 38% 53% 9%

Polished Casual restaurants 38% 55% 7%

Casual dining chains 35% 55% 10%

Independently owned restaurants 33% 53% 14%

[8]www.cga.co.uk

Thinking about when normal service in the following outlet types resume, which of the statements applies to you? I plan on visiting....

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10%15%20%25%30%35%40%45%50%55%60%65%70%75%

52 w/e 2-29-2020

7-Mar-20 14-Mar-20 21-Mar-20 28-Mar-20 4-Apr-20 11-Apr-20 18-Apr-20 25-Apr-20 2-May-20 9-May-20 Covid-19YTD

Total U.S. – Nielsen Measured Off Premise ChannelsPercent change vs Year Ago (Dollars)

Total FMCG Alcohol Total Beer/FMB/Cider Total Wine Total Spirits

Spirits leads Off Premise retail growth, Wine closely behind, and Beer trailing

Source: Nielsen Measured Off Premise Channels; Total U.S. (Dollars) COVID-19 to Date; w/e March 7 through May 9, 2020

Pre-COVID

COVID-19 period

Value Volume

Wine +30.7% +27.7%

Spirits +35.6% +32.9%

Beer +21.2% +17.0%

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DtC Wine Shipments

Source: Nielsen in collaboration with

0%

5%

10%

15%

20%

25%

30%

35%

40%

2017 2018 2019 Jan + Feb 2020 Mar + Apr 2020

Direct to Consumer Wine Shipments (total U.S.)Percent change vs YAG

Volume Value

Avg Price/bottle• -$4 March 2020 vs YAG• -$9 April 2020 vs YAG

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Hard Seltzers --

Source: Nielsen Measured Off Premise Channels

$-

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

$90,000,000

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1 W

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2/22

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1 W

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2/29

/20

1 W

/E 0

3/07

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1 W

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3/14

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1 W

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3/21

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1 W

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3/28

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1 W

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4/04

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5/2/

20

Weekly Malt-based Hard Seltzer Dollar Sales

Current 52 weeks 1 Yr Ago 2 Yr Ago 3 Yr Ago 4 Yr Ago

• Now $2.3 Billion; approaching 10% of Beer category• Seltzer/Seltzer-like Ciders/Spirits/Wine – another $150MM

13

2020 Allied Grape Growers Bunch Counts 2020 % Change % ChangeVariety and Location Bunch From FromWhites Count 2019 5-Year AvgChardonnay (Dist 11 & 17 - Lodi/Clarksburg) 74.0 -14.0% 2.8%Chardonnay (Dist 12 & 13 - San Joaquin Valley) 88.6 -15.1% -5.0%French Colombard (All San Joaquin Valley) 142.9 -5.3% 11.7%Muscat of Alexander - (All San Joaquin Valley) 65.4 -26.1% -5.1%Pinot Grigio - (All San Joaquin Valley, including Lodi) 91.1 -8.8% 0.2%Thompson Seedless - (San Joaquin Valley) 25.9 -19.9% -19.5%RedsBarbera 86.4 -35.2% -13.7%Cabernet Sauvignon (Dist 11 - Lodi) 87.0 -13.2% -7.4%Cabernet Sauvignon (Dist 12 & 13 - San Joaquin Valley) 95.7 -8.2% -1.7%Grenache (All San Joaquin Valley) 95.7 37.1% 17.3%Merlot (Dist 11 - Lodi) 80.8 -2.4% 9.0%Merlot (Dist 12 & 13 - San Joaquin Valley) 97.5 -4.4% 1.0%Petite Sirah - (All San Joaquin Valley, including Lodi) 52.2 3.5% -7.3%Rubired (All San Joaquin Valley) 185.2 4.5% 19.3%Syrah (All San Joaquin Valley) 131.2 15.0% 29.6%Zinfandel (Dist 11 - Lodi On wire) 56.5 -4.2% 9.6%Zinfandel (Dist 11 - Lodi Head trained) 47.6 -4.8% 5.3%Zinfandel (Dist 12 & 13 - San Joaquin Valley) 90.7 11.1% 16.1% 14

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