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2008 Cline and Jacuzzi National Sales & Marketing Meeting

2008 Cline and Jacuzzi National Sales & Marketing Meeting. Growth. Waves of growth Red truck Red truck sale 2005 Avzin, cal zin, cal syrah, Viognier, cashmere 2007 = red truck revenue 2008 Case volume = red truck/Cline units 2005 2008 Jacuzzi opening brand launch total 350,000 cases

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2008 Cline and Jacuzzi National Sales & Marketing Meeting

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  1. 2008Cline and JacuzziNational Sales & Marketing Meeting

  2. Growth • Waves of growth • Red truck • Red truck sale 2005 • Avzin, cal zin, cal syrah, • Viognier, cashmere • 2007 = red truck revenue • 2008 Case volume = red truck/Cline units 2005 • 2008 Jacuzzi opening brand launch total 350,000 cases • 2009 next monumental wave 375,000 cases • Canada 78% increase this year

  3. Field Feedback Melanie – what’s the focus and message on JFV? Chip – where are we going? Karl – create an Reg Mgr activity calendar Keith – with importance of PN on the JFV brand need to re-launch with focus on Cab and PN with POS to tell the story CA Zinf – any changes/label? Sonoma Syrah – supply meet demand with LCBO Larger Backcards for Bigger Displays on CA Zinf Petaluma winery and our 5 year projection Back labels – adding new info to Cashmere and the others?

  4. Nielsen Topline

  5. Zinfandel Category Leaders Over $8 Category$9.78, +4.7% Nielsen 52 weeks 12/13/08 Total US #1, $9.04 -4.6% #2, $9.86 +63% #3, $15.14 +39% Total US #4, $10.75 +16.5% #5, $8.25 -9.2% #6, $11.98 +2.8%

  6. CLINE Zinfandel • Category Data - Total US (Nielsen 52 weeks 12/13/08) • Total Zinfandel Category: +7% in $, +5% Cases • CLINE ranked #7 Total Zinfandel Category • CLINE Zinfandel sales $2.6MM and +21.6%, units sales +21.1%, ACV 12% • $9.60, (+$0.54 higher than #1 ranked Zin) • Unique Points • In over 3,000 restaurants around the US representing approximately 30% of all accounts sold • Taste profile consumer friendly • Accolades • 2006 - Top 40 Wine Award runners-up, Sunset, September 2008 • 2005 - “250 Great Values”, 85 pts, Wine Spectator, October 31, 2007

  7. CLINE Ancient Vines Zinfandel • Category Data - Total US (Nielsen 52 weeks 12/13//08) • CLINE Ranked #7 > $12 per bottle • CLINE Ranked #26 Total Zinfandel Category • CLINE ANCIENT VINES Zinfandel, bottle $14.68, sales $1.3MM and +20.1%, units sales +21.7%, ACV 8% • Unique Points • Strong margins to wholesale and trade • Grapes from 50+ year-old vines in Oakley and Lodi • Featured in over 2,000 restaurants BTG representing approximately 33% of all accounts sold • PF Changs national BTG program utilizing multi-part back label recipe • Accolades • 2006 - 86 pts, Wine Enthusiast,October 2008 • 2005 - "Very Good”, Consumer Reports,December 2006 • 2004 - “Editors' Choice”, 90pts, Wine Enthusiast,November 1, 2005 • 2003 - “Best Value Reds”, 100 Values for $15 or less,Wine Spectator,May 15, 2005

  8. CLINE Syrah • Category Data - Total US (Nielsen 52 weeks 09/20/08) • CLINE Ranked #11 Domestic Syrah Category, $9-11.99 • CLINE Syrah sales $503K and +8%, units sales 54K and +10%, ACV 4% • Selling Points • All Sonoma fruit consumer friendly taste profile • Accolades • 2006 - “Very Good- Best Value”, The Wall Street Journal, June 8, 2007 • 2005 - 86 pts, Wine Spectator, March 2007

  9. Syrah • Category Data - Total US (Nielsen 52 weeks 09/20/08) • CLINE Ranked #11 Domestic Syrah Category, $9-11.99 • CLINE Syrah sales $503K and +8%, units sales 54K and +10%, ACV 4% • Selling Points • All Sonoma fruit consumer friendly taste profile • Currently sold in CPWM, Safeway Group, and some Kroger KMAs • Accolades • 2005 - “Best Values”, 86 pts, Wine Spectator,December 31, 2007-January 15, 2008 • 2004 - “Recommended”, Decanter, November 2007 • 2003 - “Best Buy”, 86 pts, Wine Enthusiast, Best of the Year 2005

  10. CLINE Viognier • Category Data - Total US (Nielsen 52 weeks 09/20/08) • CLINE Ranked #2 Total Viognier Category • CLINE Viognier sales $627K and +6%, units sales over 67K and +5%, ACV 4% • Smoking Loon #1, sales $880K and -13%, unit sales 115K and -13% • Selling Points • Featured in approximately 1,000 restaurants BTG representing approximately 38% of all accounts sold • Stainless steel fermentation offers consumer friendly taste profile • Currently sold in CPWM, Safeway Group, and some Kroger KMAs • Accolades • 2006 - “Very Good- Best Value”, The Wall Street Journal, June 8, 2007 • 2005 - 86 pts, Wine Spectator, March 2007

  11. CLINE Cashmere • Category Data - Total US • Category +21.0% (Category – Domestic Red Blends, Nielsen 52 weeks 09/20/08) • Depletions +269% • +205% Accounts sold growth • Unique Points • Strong margins to wholesale and trade • Currently authorized in CPWM and has sold approximately 2,000 cases in 9 months • Taste profile consumer friendly • Strong strategic brand and Rhone focus alignment • Great expression of Cline’s vineyards – Oakley and Sonoma • Green String farmed – naturally and sustainably • $25,000 donated to Breast Cancer Network of Strength • Accolades • 2006 - 85 pts, Wine Enthusiast, July, 2008 • 2005 - 87 pts, Wine Spectator,February 29, 2008

  12. New Countries in 2008 Taiwan – 2 wines authorized in Carrefours Ireland – high end importer/retailer - initial purchase was 440 cases India Puerto Rico – importer, distributor and retailer Jamaica Bermuda – from Rolf Lutz Colombia – via Service Innovations Mexico – Cabo San Lucas – via Service Innovations

  13. Transportation Hits for 2008 Continental Airlines – AV Zinf (First Class) and CA Zinf (Business) Delta – two rotations of Cashmere – bought 3,400 cases!! British Air – Sonoma Cool Climate Syrah and LC Syrah for 1st Class (Jancis Robinson and Hugh Johnson on juding panel) Royal Caribbean Cruise Lines – CA Zinfandel BTG Holland American – CA Zinfandel BTG Norwegian – CA Zinfandel BTG Disney Cruise Lines – CA Zinfandel BTG Great job by Devine and Sons

  14. Business Review Total USCase Sales (Aug 2008)

  15. Cline Depletions by SKU(YTD Aug 08)

  16. Jacuzzi & Oakley SKU Depletions

  17. Sept Ships-YTD By Region

  18. On-Premise Case Sales

  19. Chain/ Club Case Sales

  20. State Sales Performance

  21. State Sales Performance

  22. Accounts Sold Analysis by SKU - thru August 08 2007 2008

  23. October program Ancient Vines Zinfandel (10/8-11/4/08) Oakley 5 Reds  (10/8-11/4/08) Syrah  (10/8-11/4/08) On ad, but not in a national stack location • No vendor POS • POS materials will be produced in-house • Ensure no out of stock issues • Support CPWM with any distributor discrepancies

  24. Safeway Corporate Wine Team Contact Sheet

  25. Team Cline

  26. Cashmere • $25,000 to sponsor Ride to Empower in Solvang, October 25 • 9 business partners donated $7,000 ($3,000 from CPWM thru Cline ’06 program) • More than $15,000 raised by team • Lisa Tuttle, Peggy Phelan, 3 wine club members; 8 riders on Team Cline

  27. Centurion

  28. Cashmere October Breast Cancer Awareness Month • MO - St Louis Cellars, Cellar Rat (Kansas City), October WOM program • SoCAL - Wineworks for Everyone, Tasting hosted by Karl • TX - CPWMs extra cases for October w/ 9 demos all over state • OH - Hospitality Restaurants, Cleveland

  29. PF Chang’s Partnership • AV Zin Multi-part back label recipe • National mandatory BTG program

  30. Cal Zin $2 off IRC-FL • Objective to gain Cal Zin warehouse placement at Publix • Ran program March 1 to May 31, low competitive promotional activity in category • Produced 6M IRCs • Redemption 1830 coupons, $3660 • Total program cost, ~$6500

  31. Cline Wooden Racks • Holds 3 cases • COGs $95 per unit • Placement: 20 to LA, 8 to CO, 2 to NM

  32. Reaching The MillenialsViral Marketing • Cline Cellars on Facebook • Facebook demographics: young adults (26-34) and middle-aged (35-44) • Little interaction gives measurable connections • Joining new groups, adding an application, or uploading a photo, every single friend is notified • After 24 hours eight friends added to Cline’s facebook • 1,747 people were informed about Cline Cellars • Facebook page links web site and blog site • Blogspot (short for web log) acts as a mini newsletter http://clinecellars.blogspot.com www.facebook.com/pages/Cline-Cellars

  33. Displays Around the Country Whole Foods, Atlanta Whole Foods, Cleveland Town & Country Market, Bainbridge Island

  34. Economic Affect on Grocery ConsumersTough Times Create a Revival of the Dining Room, IRI Point of View • Wine purchased at grocery because of better prices/promotions • Baby boomers and seniors (45+) largest purchasers • Consumers eating out less frequently • Revival of family dinner (60% eating out less often) • Make food and wine convenient one-stop shopping • Increased spending on affordable luxuries such as wine • Category growth comes from $9-11.99 and $12.00-14.99 segments (blended at 14.2%) • Alternative wine varietals increasing in popularity • “Party” wines usually purchased at club stores, liquor chains or specialty

  35. Cline – Who are we and more? What is our winery position? Perceptions? – by you, the distributor, the trade and the consumer Where are we going? What is our focus? What are we doing new? 3 year strategy and Brand direction? Impact of this direction? JFV impact? Expectations from Marketing Are we on the same page?

  36. National Accounts Evaluation

  37. June 2009 New Item Submission FormCline Cellars, Cashmere, Red wine (Grenache, Syrah, Mourvèdre) California Item/Brand Specs Avg SRP: $14.99 Blended margin: 30% Forecast: TBD (buyer input) Buyer input A = 5K, B = 3.75K, C = 2.5K Preferred launch timing: April, 2009 Acceptable launch timing: May, 2009 Selling Points Currently authorized in CPWM and has sold approximately 2,000 cases in 9 months Taste profile consumer friendly Category growth +21% Price appreciation Naturally and sustainably farmed grapes $25,000 donated to Breast Cancer Network of Strength

  38. Off Premise National Accts Objectives - 2009 Costco (#1) – maintain & grow AV Zinf distribution and sales present wooden box program RMs to carefully mine select opportunities with SVDs and Cashmere Trader Joe’s (#2) – fill regional distribution voids around the US with CA ZN expand to AV Zinf with current regional successes in WA and OR present Viognier for CA stores CPWM (#3) – maintain current 4 core national authorizations RMs to approach regionally on Viognier and special promotions Achieve Wine of the Month status in May or Sept/Oct Business review in January - TBD

  39. Off Premise National Account Objectives - 2009 Safeway (#4) – expand distro in underdeveloped regions (VA, OR, WA, NV) to parity with our 5 authorizations in CA, TX, AZ and IL Gain Cashmere authorization Present to go “down clusters” where appropriate Achieve one or two floor programs Appt with Kent on December 10th Present AV Zin wooden box program Sam’s Club (#5) – maintain and fill distribution on AV Zinfandel in all stores Present wooden box program Expand opportunities with Cashmere, SVD Zinf and Viognier Whole Foods – get one “Top 12 under $12” RMs to continue calling on Regional Specialists Special multi-part label, Sonoma Syrah or AV MV

  40. Off Premise National Account Objectives - 2009 • Kroger – enhance exposure with the regional buyers to gain the proper distribution by KMA and learn more about their centralization plan • SuperValu – created sales pitch for National Presentation on November 12th. Presenting CA Zinf, AV Zinf, Cashmere and Viognier. • Target – presenting Cashmere for National authorization in A stores • AAFES – working with Melanie and Glazers to get an appointment • Wal-Mart – will evaluate in Spring with Glazers AE • Rite Aid – will evaluate in Spring and after Long’s acquistion • Walgreens – will evaluate in early winter

  41. Accounts Sold Targets for 2009Benchmarks for Success • CA Zinfandel = equal to Ravenswood VB or 80% of A/B accounts • AV Zinfandel = to 90% of CA Zinfandel • Cashmere = to 60% of CA Zinfandel • Viognier = to 50% of CA Zinfandel IT’S TIME TO EXECUTE AGAINST THESE STANDARDS

  42. Accounts Sold Analysis by SKU - thru August 08 2007 2008

  43. Oakley • Concepts • 8,000 cases red in inventory • May/June label change opportunity • Who do we want to market to? • What do we want to look like?

  44. Jacuzzi Marketing Tools Jacuzzi Tasting Cards Jacuzzi Tasting Mats

  45. Jacuzzi Media Visits Dick Rosano • writes for a number of national publications about wine and food, including The Washington Post, Wine News and the American Wine Society Journal • writing his second book about Italian-American winemakers. Wes Marshall • writes for the Austin Chronicle and is also writing a book about the “best” varietals to be found Lorri Hambuchen • Lorri writes a weekly wine column in the “Food Section” of the Arkansas Democrat–Gazette. She also judges numerous competitions. Jose Garrigo • Is the wine writer for Miami based, Diario Las Américas which is the largest Spanish publication in the US Jeff Cox • Writes about food and wine for the Press Democrat. His focus is on all things “green” Dan Thiessen • Is a Seattle-based radio show host and accomplished chef

  46. Distribution Drive • Cashmere • Cal Zin • AV Zin • Viognier • Jacuzzi Pinot Noir • Jacuzzi Cabernet Sauvignon • Jacuzzi Sei Sorelle Chardonnay • Increase accounts sold • Increase distribution

  47. Jacuzzi Marketing Tools Olive Oil & Vinegar 50mLs 100 per region Barrel Racks 60 remaining in inventory Olive Oil and Vinegar 105 OO remaining 70 vinegar remaining Valeriano 3Ls 120 remaining

  48. Cashmere – 3L Program • 5 cases single purchase, on-premise single get a 3L • COGs $40

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