euromonitor inia, 6-10-2010, pisco in nyc, p1euromonitor

Market Entry Strategy

Quantifying the Opportunity for Chilean Pisco in the New York CityChilean Pisco in the New York City

Market

A Euromonitor International Custom Research Proposal Submitted to Instituto de Investigaciones Agropecuarias

6/9/2010This proposal has been prepared exclusively for Instituto de Investigaciones Agropecuarias and includes information on Euromonitor International which must not be shared with third parties without explicit prior permission.

CLIENT CONTACTPaulina Cerda CollinsCoordinadora PIT Nuestro PiscoInstituto de Investigaciones Agropecuarias

Contacts Table of ContentsContacts / Table of Contents 2Project Background & Objectives 3Our Solution 5G hi S 6

g g+ 56 51 223290/anexo [email protected]

EUROMONITOR INTERNATIONALRYAN MORRISONInternational Account Executive

Geographic Scope 6Project Deliverable : Phase I 7Project Deliverable: Phase II 15Working with Euromonitor 22Methodology/Key Research Stages 24Overview of Custom Research 25TOM CONTOS

Business Development ManagerEuromonitor International312-922-1115 ext. [email protected]

Overview of Custom Research 25Euromonitor Custom Research 26Costs, Timing, & Contract Initiation 27

About Euromonitor InternationalEuromonitor International’s mission is to build on its positionas the leading provider of quality international market intelligence on consumer products, services and lifestyles. The company’s policy of continuously expanding and developing its products and technologies ensures it remains at the cutting edge of information solutions.

Privately owned since its inception in 1972, Euromonitor International employs over 400 full-time staff in its offices with a further 600+ field-based analysts in more than 80 countries worldwide researching a wide range of FMCG industrial service and B2B marketsworldwide, researching a wide range of FMCG, industrial, service and B2B markets

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Project Background & Objectives

Project BackgroundEl Instituto de Investigaciones Agropecuarias or The Institute of Agricultural Research in English (henceforth known simply as INIA), is a Chilean government organization which g ( p y ), g gaims to develop greater trade opportunities in forestry and agricultural products between Chilean companies and the global business community

Currently, INIA seeks to understand the market opportunity for pisco, a liquor distilled from grapes which is considered the country’s national beverage. Chile, along with Peru, is a world leader in the production of pisco and is currently seeking sales opportunities abroad.

Preliminary research indicates that New York City presents a potentially lucrative opportunity for Chilean producers.

Ultimately, the objective is to design a branding strategy and implement a marketing and promotion plan to best break into the New York City market.

Prior to this objective, INIA seeks to commission research to quantify the market opportunity for Chilean pisco in New York as well as interview New York City consumers and alcoholicfor Chilean pisco in New York as well as interview New York City consumers and alcoholic drinks industry leaders to gauge their attitudes, perceptions, and existing knowledge of Chilean pisco as well as estimate their association of pisco with Chile.

A key element of this research will be to interview Chilean producers to determine which features of Chilean-made pisco should be considered in a brand positioning strategy.

With its offices headquartered in Chicago including a strong network of analysts operatingWith its offices headquartered in Chicago including a strong network of analysts operating throughout the United States, Euromonitor aims to be a strategic and highly knowledgeable partner in helping INIA achieve its goals.

Objectives This project is divided up into 4 phases of research. Euromonitor will be responsible for all of Phase I and part of Phase II For the rest of Phase II Phase III and Phase IVof Phase I and part of Phase II. For the rest of Phase II, Phase III, and Phase IV, Euromonitor recommends working with Gustavo De Mello, Senior Vice President and Director of Strategic Planning at Lapiz USA, the Hispanic Advertising Division of Leo Burnett, one of the world’s largest and most reputable advertising firms based in Chicago.

Euromonitor’s and Leo Burnett’s respective portions of research are detailed on the following page.

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Project Background & Objectives

Objectives Euromonitor’s portion

Phase I: Market StudyPhase I: Market StudyObjective 1: Market Size & GrowthObjective 2: Top-selling Brands Objective 3: Importer Profiles Objective 4: Trends

Phase II: Consumer Research in CoquimboObjective 1: 30 In-depth Interviews with Producers

Phase II: Consumer Research in New York CityObjective 1: 2 Focus Groups with 8-12 Young AdultsObjective 2: 1 Focus Group with 8-12 BartendersObjective 3: 1 Online Bulletin with 18-20 Industry Experts

Euromonitor permits the sharing of all findings from Phase I and Phase II research with Leo Burnett. Study findings presumably will be used to inform the development of the brand and implementation of the marketing and promotional campaign.

Based on the results of the findings in Phase I and Phase II, INIA reserves the right to proceed with any supplier of its choosing to complete Phase II, Phase III, and Phase IV. INIA may also wish not to proceed at all based on findings which may indicate limited opportunities for expanded pisco sales in New York City.

Leo Burnett’s portion

Phase II: Developing the Brand Concept

Phase III: Finalizing the Brand and Developing the Marketing Campaign

Phase IV: Implementing the Marketing Campaign

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Our SolutionEuromonitor has considerable experience in researching and analyzing the overall alcoholic drinks market segment on a global scale and has completed many custom research projects involving this space. The experience and industry contacts gained from these previous projects as well as the expertise used in creating our syndicatedfrom these previous projects as well as the expertise used in creating our syndicated tools ideally place our firm to complete this project.

Given the industry under review a significant amount of work will need to be completed in both the retail and on-trade outlets themselves as well as through a heavy program of industry interviews. Our analysts teams are experts at drawing out a wide variety of information from retail and on trade outlets and from implementing trade interviews with key stakeretail and on-trade outlets and from implementing trade interviews with key stake holders within a given industry. Both formats help us reconcile data sources to answer specific client questions such as: brand sale size data, forecasted growth rates, along with a wide variety of qualitative insights. Our position as an independent publisher and custom research firm allows unparalleled access to wide-ranging networks within the Alcoholic Drinks industry as well as amongst market participants This reach extends into over 80as well as amongst market participants. This reach extends into over 80 countries and will be highly leveraged as this study evolves. Based on the objectives outlined by INIA and Euromonitor’s experience & capabilities, we are confident of our ability to deliver a highly tested and actionable deliverable at the conclusion of the study.

Approach DeliverableChallenge pp• Gather all secondary

source material available• Conduct audit/survey of

retail and on-trade channels• Robust program of industry

interviews to gather and test data

One deliverable will be presented to INIA at the project’s conclusion

• Microsoft PowerPoint deliverable exploring all aspects outlined in this proposal

g• Market size and growth for

7 distilled liquor segments in NYC

• Analysis of top 3 selling brands across each liquor segment

• Distribution breakouts for

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• Focus groups and in-depth interviews with industry leaders in Chile and NYC

p p• Quantitative deliveries

can be sent separately in Excel

each liquor segment• Importer profiles• Industry and consumer

trend analysis

Geographic ScopeINIA seeks this bespoke research project with specific focus on the NYC market. The United States lies within the 80 core markets Euromonitor researches on an annual basis as part of its syndicated offering. Euromonitor works with over 30+ analysts operating across the USA, including New York City, Chicago, Los Angeles, San Francisco, Atlanta,across the USA, including New York City, Chicago, Los Angeles, San Francisco, Atlanta, Washington DC and other major metro areas of the United States.

In keeping with Euromonitor’s tested research methodology, NYC will be researched independently by US analysts. Having analysts on the ground will provide INIA with a highly validated and tested final research deliverable which has taken into account the unique environment the alcoholic drinks

United StatesNew York City

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In Phase I, we will determine and quantify the opporutnity for pisco in New York (if any).Four key areas will round out the final deliverables in Phase I. These areas are segmented into distinct objectives for the organization of this proposal but will likely be highly inter-

i d h h h d li bl f i h i ifi ll d h h

Project Deliverable: Phase I

twined throughout the deliverable; referencing these sections specifically and others where analysts find meaningful and relevant information which may be of interest to INIA.

The final report deliverable will be submitted to INIA in Microsoft PowerPoint with all quantitative data points presented in Excel tables.

Objective 1: Market Sizes & Growth The first objective is designed to present the deliverable in its most relevant terms by sizing the market for pisco itself, as well as 7 key distilled liquor segments in New York City, segmenting each liquor segment by on and off-trade sales, and calculating both historical and forecasted growth. In all, there is a total of 8 liquors for which data will be provided.

These 8 liquor segments include: pisco, whiskey, brandy & cognac, white spirits (vodka d i ) t il li d th i itand gin), rum, tequila, liqueurs, and other spirits.

Background

New York City is considered a unique market in the United States. Known from its trend-setting, upscale, and eclectic atmosphere, liquor consumption is notably dissimilar from the rest of the country in terms of overall preferences, brands available for sale as well as drinking trendsavailable for sale, as well as drinking trends. Euromonitor has over 20 years of experience researching the distilled liquor market in the United States as well as in 80 other countries. Data coverage includes market sizes, by volume and value, leading company and brand shares, on vs. off-trade channel sizes by volume, trade statistics including production, consumption, exports, and imports, price points, qualitative reports analyzing trends, growth, and overall industry direction as well as analysis by format (specific to white spirits) whichindustry direction, as well as analysis by format (specific to white spirits) which covers super-premium and premium, vs. standard and economy varieties. An image sourced directly from Euromonitor’s database for alcoholic drinks illustrates this available data at the top of the following page. This coverage extends to all 7 non-pisco liquor segments under review for this study in addition to beer, wine, ciders, and ready-to-drink (RTE) alcoholic beverages.

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As mentioned, coverage is available at the national-level only. While our database doe s not explicitly address the New York City market, US-level market sizes and growth estimates will be used as logical starting points from which city-specific estimates will be segmented out.

Objective 1: Market Sizes & Growth Background


Methodology

City population will be the first logical metric applied to national figures, followed by city-disposable income levels, age demographics, and population growth, among other such key socioeconomic indicators. This top-down approach will be applied to each distilled liquor segment to estimate market sizes specific to New York Cityeach distilled liquor segment to estimate market sizes specific to New York City. Top-down city-level calculations will be cross-validated against sales estimates for each distilled liquor segment applying a bottom-up approach where Euromonitor analysts begin assembling secondary sources, aggregating local company and distributor sales data, and researching import volumes. Throughout both the top-down and bottom-up approaches, Euromonitor anticipates conducting large-scale store audits throughout New York City. Analysts willconducting large scale store audits throughout New York City. Analysts will physically enter a multitude of establishment across a diverse cross-section of channels, including bars, clubs, supermarkets, liquor stores, and convenience stores, to gain immediate exposure to each liquor segment under review. The objective is to identify which brands are most popular, feature the greatest visibility, and are the most heavily promoted. Euromonitor analysts will tabulate key data points including product names, store and channels in which they were found, observe promotional

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material, pricing, packaging, and positioning as well as interview key retail staff to discuss any recent sales trends.

Objective 1: Market Sizes & Growth Methodology

All li i d t i t ill b filt d d th i d t l h i th h


All preliminary data points will be filtered down the industry supply chain through an extensive and robust interview process to test, adjust, and/or confirm city-specific estimates. Interviewees sources will represent a diverse cross-section of varying stakeholders, specialists, and industry experts including distributors, manufacturers, associations, importers, and retailers, each providing fresh , unbiased, and wide-ranging opinions on the movement and sales of each distilled liquor segment under review in the New York City metropolitan area In the absence of published data andreview in the New York City metropolitan area In the absence of published data and scant, unreliable intelligence sources , building consensus around market and channel sales in this fashion represents a logical and prudent approach.

Deliverable

At the study’s conclusion, INIA will receive the following data points for all 8 liquor segments specific to New York City.

M k t Si b t il l d lMarket Size: by retail value and volume On-trade sales: (bars, foodservice, etc.): by total volumeOff-trade sales: (retail): by retail value and volume

Time Series: 2007:2014 for all solicited data pointsA hypothetical example of how this data may be presented is illustrated below:

Distilled Liquor Market: USA vs. NYC 2013 20142007 2008 2009 2010 2011 2012Distilled Liquor Market: USA vs. NYCUSA NYC USA NYC USA NYC USA NYC USA NYC USA NYC USA NYC USA NYC

Whisk(e)y ‐ Total Volume ‐ '000 litres 403,006.1 27,001.4 409,341.9 27,425.9 414,240.7 27,754.1 415,865.4 27,863.0 414,523.9 27,773.1 411,837.1 27,593.1 408,021.8 27,337.5 404,224.5 27,083.0Whisk(e)y ‐ Total Value RSP ‐ US$ mn ‐ Current Prices $13,363.6 $895.4 $13,678.4 $916.5 $14,027.7 $939.9 $14,569.1 $976.1 $15,078.9 $1,010.3 $15,599.4 $1,045.2 $16,082.1 $1,077.5 $16,579.1 $1,110.8Brandy and Cognac ‐ Total Volume ‐ '000 litres 96,947.1 6,495.5 96,391.4 6,458.2 95,117.8 6,372.9 94,066.7 6,302.5 93,677.0 6,276.4 94,205.8 6,311.8 95,021.3 6,366.4 96,135.8 6,441.1Brandy and Cognac ‐ Total Value RSP ‐ US$ mn ‐ Current Prices $5,778.2 $387.1 $5,666.6 $379.7 $5,420.7 $363.2 $5,406.2 $362.2 $5,476.9 $367.0 $5,596.3 $375.0 $5,761.6 $386.0 $5,995.4 $401.7White Spirits ‐ Total Volume ‐ '000 litres 582,445.6 39,023.9 608,303.0 40,756.3 624,821.5 41,863.0 641,060.9 42,951.1 653,982.4 43,816.8 665,418.1 44,583.0 675,233.8 45,240.7 684,478.2 45,860.0White Spirits ‐ Total Value RSP ‐ US$ mn ‐ Current Prices $16,300.3 $1,092.1 $17,001.5 $1,139.1 $17,523.2 $1,174.1 $18,464.3 $1,237.1 $19,450.9 $1,303.2 $20,345.7 $1,363.2 $21,217.3 $1,421.6 $22,097.9 $1,480.6Rum ‐ Total Volume ‐ '000 litres 217,337.5 14,561.6 223,161.4 14,951.8 227,804.1 15,262.9 231,814.6 15,531.6 235,359.5 15,769.1 238,207.5 15,959.9 240,471.3 16,111.6 242,062.3 16,218.2Rum ‐ Total Value RSP ‐ US$ mn ‐ Current Prices $6,197.1 $415.2 $6,361.1 $426.2 $6,504.9 $435.8 $6,735.5 $451.3 $6,969.7 $467.0 $7,208.6 $483.0 $7,450.8 $499.2 $7,685.0 $514.9Tequila (and Mezcal) ‐ Total Volume ‐ '000 litres 96677.7 6477.4 99912.9 6694.2 102832.1 6889.8 106028.8 7103.9 109596.3 7343.0 112914.6 7565.3 116034.0 7774.3 118867.5 7964.1Tequila (and Mezcal) ‐ Total Value RSP ‐ US$ mn ‐ Current Prices $3,539.6 $237.2 $3,644.8 $244.2 $3,744.5 $250.9 $3,965.0 $265.7 $4,216.1 $282.5 $4,473.3 $299.7 $4,752.3 $318.4 $5,050.3 $338.4Li T t l V l '000 lit 170 624 4 11 431 8 168 611 4 11 297 0 165 190 0 11 067 7 164 086 0 10 993 8 165 055 9 11 058 7 166 531 0 11 157 6 168 023 2 11 257 6 169 396 0 11 349 5

2013 20142007 2008 2009 2010 2011 2012

Liqueurs ‐ Total Volume ‐ '000 litres 170,624.4 11,431.8 168,611.4 11,297.0 165,190.0 11,067.7 164,086.0 10,993.8 165,055.9 11,058.7 166,531.0 11,157.6 168,023.2 11,257.6 169,396.0 11,349.5Liqueurs ‐ Total Value RSP ‐ US$ mn ‐ Current Prices $6,761.9 $453.0 $6,721.7 $450.4 $6,595.0 $441.9 $6,721.1 $450.3 $6,965.1 $466.7 $7,268.0 $487.0 $7,637.5 $511.7 $8,030.9 $538.1Other Spirits ‐ Total Volume ‐ '000 litres 10,903.7 730.5 11,097.9 743.6 11,212.7 751.3 11,280.3 755.8 11,306.3 757.5 11,392.3 763.3 11,542.7 773.4 11,732.6 786.1Other Spirits ‐ Total Value RSP ‐ US$ mn ‐ Current Prices $448.9 $30.1 $458.1 $30.7 $464.0 $31.1 $479.6 $32.1 $498.2 $33.4 $517.8 $34.7 $540.5 $36.2 $567.1 $38.0Pisco ‐ Total Volume ‐ '000 litres 2,047.5 137.2 2,023.3 135.6 1,982.3 132.8 1,969.0 131.9 1,980.7 132.7 1,998.4 133.9 2,016.3 135.1 2,032.8 136.2Pisco ‐ Total Value RSP ‐ US$ mn ‐ Current Prices $81.1 $5.4 $80.7 $5.4 $79.1 $5.3 $80.7 $5.4 $83.6 $5.6 $87.2 $5.8 $91.7 $6.1 $96.4 $6.5Pisco ‐ Total Volume ‐ '000 litres 170,624.4 11,431.8 168,611.4 11,297.0 165,190.0 11,067.7 164,086.0 10,993.8 165,055.9 11,058.7 166,531.0 11,157.6 168,023.2 11,257.6 169,396.0 11,349.5Pisco ‐ Total Value RSP ‐ US$ mn ‐ Current Prices $6,761.9 $453.0 $6,721.7 $450.4 $6,595.0 $441.9 $6,721.1 $450.3 $6,965.1 $466.7 $7,268.0 $487.0 $7,637.5 $511.7 $8,030.9 $538.1

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Objective 2: Top-selling BrandsObjective 2 is designed to identify and evaluate the top-selling brands across each of the 8 liquor segments included in this study. Euromonitor analysts will analyze the USPs (unique


liquor segments included in this study. Euromonitor analysts will analyze the USPs (unique selling points) of the top 3 selling brands most consumed by New Yorkers. Understanding which brand attributes resonate most with New Yorkers will be used to inform the development of a pisco brand and marketing strategy in the city.

As mentioned, Euromonitor already covers brand shares. Euromonitor share coverage for liquors extends to over 180 different brands as shown in the graphics below and on the following page While this data is only available at the US level it is expected that existingfollowing page. While this data is only available at the US-level, it is expected that existing national coverage may shed light on most popular brands consumed in New York City.

LiqueursJägermeister Mast‐Jägermeister AG 17De Kuyper Fortune Brands Inc 14.9Southern Comfort Brown‐Forman Corp 7.6Baileys Irish Cream Diageo Plc 6.3Kahlúa Pernod Ricard Groupe 5 1

RumBacardi Bacardi & Co Ltd 36.4Captain Morgan Diageo Plc 23.9Malibu Pernod Ricard Groupe 5.8Castillo Bacardi & Co Ltd 4Cruzan Rum Fortune Brands Inc 2 7 Kahlúa Pernod Ricard Groupe 5.1

Hiram Walker Pernod Ricard Groupe 4.9Grand Marnier Marnier‐Lapostolle SA 2.9Bols Lucas Bols BV 2.2DiSaronno Bacardi & Co Ltd 2E & J Cask & Cream E & J Gallo Winery 1.9Carolans Irish Cream C&C Group Plc 1.9Jacquin Cordials Jacquin et Cie, Charles 1.8Rumple Minze Diageo Plc 1.6Leroux Cordials Fortune Brands Inc 1.4Goldschlager Diageo Plc 1.3

Cruzan Rum Fortune Brands Inc 2.7Sailor Jerry William Grant & Sons Ltd 1.8Ronrico Fortune Brands Inc 1.7Myer's Diageo Plc 1.3Mount Gay Rémy Cointreau Group 0.9Appleton Lascelles de Mercado & Co Ltd 0.7Brugal Edrington Group 0.5Others Others 20.3Total Total 100Tequila (& Mezcal)José Cuervo Grupo Cuervo SA de CV 30

C ibb i ill C d (C C) 6 9g g

Cointreau Rémy Cointreau Group 1.2Yukon Jack Diageo Plc 1.2Tequila Rose McCormick Distilling Co Inc 1.1Tuaca Brown‐Forman Corp 0.8Emmet's Diageo Plc 0.8Frangelico C&C Group Plc 0.8St Brendan's Luxco Corp 0.7Midori Suntory Holdings Ltd 0.7Godiva Ülker Gida Sanayi ve Ticaret AS 0.6Chambord Brown‐Forman Corp 0.5

Patron Caribbean Distillers Corp Ltd (CDC) 16.9Sauza Tequila Fortune Brands Inc 12.7Juarez Luxco Corp 6Montezuma Sazerac Co 5.1Tequila 1800 Grupo Cuervo SA de CV 5.1Margaritaville Luxco Corp 2.2Don Julio Diageo Plc 1.7El Jimador Brown‐Forman Corp 1.5Pepe Lopez Brown‐Forman Corp 1.2Herradura Brown‐Forman Corp 0.8Matador Diageo Plc 0.6

Drambuie Drambuie Liqueur Co Ltd, John 0.5Bénédictine Bacardi & Co Ltd 0.5Black Haus Diageo Plc 0.4Campari Campari Milano SpA, Davide 0.3Irish Mist C&C Group Plc 0.1After Shock Fortune Brands Inc 0.1Tia Maria Illva Saronno SpA 0.1Others Others 17.1Total Total 100

Cabo Wabo Skyy Spirits LLC 0.5Gran Centenario Grupo Cuervo SA de CV 0.3Don Eduardo Brown‐Forman Corp 0.1Others Others 15.3Total Total 100Other SpiritsRomana Sambuca Diageo Plc 17.1Others Others 82.9Total Total 100

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Objective 2: Top-selling Brands


Whisk(e)yJack Daniel's Brown‐Forman Corp 10.4Crown Royal Diageo Plc 8.1

Brandy and CognacE & J Gallo E & J Gallo Winery 29.5Hennessy LVMH Moët Hennessy Louis Vuitton 18.7Crown Royal Diageo Plc 8.1

Jim Beam Fortune Brands Inc 7Seagram's 7 Crown Diageo Plc 5.4Black Velvet Constellation Brands Inc 4.5Canadian Mist Brown‐Forman Corp 4Johnnie Walker Diageo Plc 3.4Dewar's Bacardi & Co Ltd 3.1Evan Williams Heaven Hill Distilleries Inc 2.6Canadian Club Fortune Brands Inc 2.6Seagram's VO Diageo Plc 2.5Windsor Supreme Fortune Brands Inc 2

Paul Masson Constellation Brands Inc 12.6Christian Brothers Heaven Hill Distilleries Inc 10.9Rémy Martin Rémy Cointreau Group 5.6Courvoisier Fortune Brands Inc 3.8Korbel F Korbel & Bros Inc 3.5Raynal William Grant & Sons Ltd 2.2Presidente Pernod Ricard Groupe 1.6Martell Pernod Ricard Groupe 1.4Others Others 10.2Total Total 100White Spirits

Maker's Mark Fortune Brands Inc 1.8Jameson Pernod Ricard Groupe 1.7Rich & Rare Sazerac Co 1.6Kessler Fortune Brands Inc 1.6Canadian LTD Sazerac Co 1.5Clan MacGregor William Grant & Sons Ltd 1.4Wild Turkey Campari Milano SpA, Davide 1.4Early Times Brown‐Forman Corp 1.3Ten High Sazerac Co 1.1Lord Calvert Fortune Brands Inc 0.9

pSmirnoff Diageo Plc 13.2Absolut Pernod Ricard Groupe 6.7Grey Goose Bacardi & Co Ltd 4.7Svedka Constellation Brands Inc 4.1Seagram's Gin Pernod Ricard Groupe 3.8Skyy Campari Milano SpA, Davide 3.5Gordon's Diageo Plc 3.1Ketel One Nolet Spirits NV 3McCormick McCormick Distilling Co Inc 3Barton Sazerac Co 2.9Popov Diageo Plc 2.8

Chivas Regal Pernod Ricard Groupe 0.9Ancient Age Sazerac Co 0.9Old Crow Fortune Brands Inc 0.9Scoresby Diageo Plc 0.6Gentleman Jack Brown‐Forman Corp 0.6Glenlivet Pernod Ricard Groupe 0.6J&B Diageo Plc 0.6Heaven Hill Heaven Hill Distilleries Inc 0.6Canadian Hunter Sazerac Co 0.6Northern Light Sazerac Co 0.6Cl UB G 0 5

p gStolichnaya Soyuzplodimport ZAO 2.7Skol Sazerac Co 2.3Tanqueray Diageo Plc 2.2Burnett's Heaven Hill Distilleries Inc 2.1Three Olives Proximo Spirits Inc 1.8Fleischmann's Sazerac Co 1.8Seagram's Vodka Young's Holdings Inc 1.5Pinnacle White Rock Distilleries Inc 1.5Kamchatka Fortune Brands Inc 1.4Gilbey's Diageo Plc 1.4Aristocrat Heaven Hill Distilleries Inc 1.3Cluny UB Group 0.5

Inver House Thai Beverage Plc 0.4Cutty Sark Edrington Group 0.4Bushmills Diageo Plc 0.4Grant's William Grant & Sons Ltd 0.4Famous Grouse, The Edrington Group 0.3Buchanan's Diageo Plc 0.3Ballantine's Pernod Ricard Groupe 0.3Old Smuggler Campari Milano SpA, Davide 0.3Macallan, The Edrington Group 0.3Glenfiddich William Grant & Sons Ltd 0 3

Aristocrat Heaven Hill Distilleries Inc 1.3UV Vodka Phillips Distilling Co 1.2Bombay Sapphire Bacardi & Co Ltd 1.2New Amsterdam E & J Gallo Winery 0.9Crystal Palace Sazerac Co 0.8Beefeater Pernod Ricard Groupe 0.8Wolfschmidt Fortune Brands Inc 0.7Finlandia Brown‐Forman Corp 0.6Belvedere LVMH Moët Hennessy Louis Vuitton 0.6Taaka Sazerac Co 0.6Phillips Vodka Phillips Distilling Co 0.5Mr Boston Sazerac Co 0.5Glenfiddich William Grant & Sons Ltd 0.3

George Dickel Diageo Plc 0.3Lauder's MacDuff International Ltd 0.2House of Stuart Sazerac Co 0.2White Horse Diageo Plc 0.2Old Forester Brown‐Forman Corp 0.2Royal Canadian Sazerac Co 0.2Tullamore Dew C&C Group Plc 0.1Balvenie William Grant & Sons Ltd 0.1McClellands White Rock Distilleries Inc 0.1Others Others 17.9

Mr Boston Sazerac Co 0.5Jacquin Royal Jacquin et Cie, Charles 0.5Nicolai Sazerac Co 0.5Ciroc Diageo Plc 0.4Bombay Original Bacardi & Co Ltd 0.3Frïs Pernod Ricard Groupe 0.3Level Pernod Ricard Groupe 0.1Pravda Jacquin et Cie, Charles 0.1Hendrick's William Grant & Sons Ltd 0.1Chopin Podlaska Wytwórnia Wódek Polmos SA w Siedlcach 0.1Vox Fortune Brands Inc 0.1Others Others 18 3

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Others Others 17.9Total Total 100

Others Others 18.3Total Total 100

Objective 2: Top-selling BrandsDeliverable


Ultimately, Euromonitor will deliver 1-slide profiles for the top-selling 3-5 brands across all 7 liquor segments answering the following questions (21-35 brand profiles total). Key questions which will be addressed in each profile include:

Which are the largest brands across all key liquor segments by total sales?What characteristics make these brands especially appealing to local residents? Where are these brands primarily sold and at what price points?

Pictures of brands will be included here as well where available. To reiterate, top-selling brands will be those specific to the New York City liquor market only.

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Objective 3: Importer ProfilesObjective 3 is designed to further develop a strategic market entry plan by identifying and profiling the leading local buyers of pisco in New York City Buyers can include importers


profiling the leading local buyers of pisco in New York City. Buyers can include importers, distributors, wholesalers, and retailers. Profiles are likely to include the following:

Type of enterprise (importers, buyers, distributors, wholesales, retailers etcCompany organization: owners, any holding companies, affiliates, etc. Size ranking/importance as a buyer in the local market. Purchasers contacts – telephones, fax, emailK i b d d th li d t h d i l di t liKey pisco brands and other liquor products purchased including country suppliersMain retail, foodservice, and/or wholesale channels servedTypical prices and payment terms with foreign suppliers

Is that likely that liquor importers serving the New York City market may be scattered across the Northeast corridor of the United States. Preliminary research indicates that Newark-Elizabeth Marine Terminal may be a major hub of liquor importers serving New Y k Cit h it i ibl th t i i t th h j tYork City however it is possible that pisco imports may occur through any major port across the US before being shipped to the New York City area. In light of this possibility, Euromonitor’s will limit the number of profiles to approximately 10. Deliverable

List of all/most importers purchasing pisco from abroad in the USA1-slide profiles for the leading 7-12 pisco importers with emphasis on those with p g p p pcommercial ties to the New York City area.

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Objective 4: TrendsThe focus of Objective 4 is to identify and evaluate the key factors affecting the New York City liquor and pisco market itself and provide textual background as to how it is evolving,

Project Deliverable

y q p p g g,in which manner, and to map the foreseeable outcomes. This section will be delivered in a qualitative format relying on insights gathered in the first two objectives as well as research throughout the project which focuses specifically on the market evolution.

After studying New York City for a significant period of time, analysts will have built a strong sense of current market conditions, potential shifts in the future, and have a better understanding of the factors driving the market Furthermore analysts will have compiledunderstanding of the factors driving the market. Furthermore, analysts will have compiled a significant portion of collateral information that may be beyond what is outlined here. Where analysts find such relevant and useful information will be incorporated into the final deliverable. Topics likely to be covered include:

A summary evaluation of overall performance trends in the local liquor market including textual analysis of the key drivers of market, growth/stasis/decline, including key consumer industry and sales trendskey consumer, industry and sales trends.A summary evaluation of overall performance trends in the local pisco market including textual analysis of the key drivers of market, growth/stasis/decline, including key consumer, industry and sales trends.Analysis of typical consumers and local market preferencesLocal pisco company positioning, reputation, and image in the cityMacro forecasts, including analysis of economic, demographic and cultural trendsMacro forecasts, including analysis of economic, demographic and cultural trends and their impact on liquor consumption

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IntroductionIn the first part of Phase II, Euromonitor intends to focus on the most important attributes of Chilean-produced pisco by interviewing local producers and other relevant

t i th d ti d l f i Th id i t l t th tt ib t b t

Project Deliverable: Phase I and Phase II

actors in the production and sale of pisco. The idea is to select those attributes best-suited for the creation of a pisco branding concept from a Chilean perspective. This will be followed by consumer focus groups and in-depth interviews with liquor industry experts in New York whose opinions, perceptions, and attitudes are intended to build upon Chile-based findings but from an American perspective. Together, both angles are intended tocross-validate the other to achieve an all-g , geconmpassing consensus representing a diverse cross-section of industry and consumer opinion in both geographies. Utlimately, the objective is to create a best-fit pisco branding concept that will be represent Chilean pisco both in New York and potentially internationally in general. Feedback gathered in this phase overeall will also inform the development and excecution of a succesful marketing campaign for pisco.General Methodology of Phase I and Phase IIgy

In-depth face to face interviewsFace to face consumer focus groupsOnline focus groups

DeliverablesAudio and/or video recordings of interviews and focus groupsT i tTranscriptsTop-line reports and analysis

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The overall goal oh Phase II Coquimbo is 4-fold: To inquire about the perception that local pisco sector actors have regarding the challenges, opportunities, and performance of domestic pisco sales.

Project Deliverable: Phase II Coquimbo

To inquire about the perception that local pisco sector actors have regarding global sales including potential buyers , levels of demand, opportunities and threats. To describe the way in which the international pisco market as developed. To identify the principal actors in the import markets and delve more deeply into their level of knowledge, familiarity, perceptions, and expectations they have about Chilean pisco and working with Chilean exportersChilean pisco and working with Chilean exporters.

Phase II Coquimbo will be segmented by the following objectives:Objective 1: 30 In-depth Interviews with Producers

Objective 1: 30 In-depth Interviews with ProducersEuromonitor recommend conducting 30 interviews with key actors involved in the production and sale of pisco along the supply chain in Coquimbo Chileproduction and sale of pisco along the supply chain in Coquimbo ChileInterviews will be open-ended or qualitative in nature. Open-ended questions are intended to provoke likes, preferences, reasons, feelings, and sensations that might otherwise be hidden through a more close-ended quantitative approach. The principal advantages of the qualitative technique is flexibility, the speed with which data can be collected, and the ability to go more in-depth with interviewee targets since open-ended conversations tend to create an atmosphere of convenience , intimacy, and trust which enables mediators to gain access to specific topics of interest.

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Objective 1: 30 In-depth Interviews with ProducersMethodology

Euromonitor will first develop a discussion guide in the form of open-ended

Project Deliverable: Phase II Coquimbo

Euromonitor will first develop a discussion guide in the form of open-ended questions. All questions will be circulated to INIA for approval prior to distribution.Euromonitor will then recruit interviewee targets by identifying and contacting each person individually and arrange a time to meet face-to-face.In-depth face to face interviews will consist of dialogues between a professional mediator and key information-holdersAll interviews will be carried out face to face in the interviewee target’s office or place of business and last approximately 1 hour. Euromonitor will conduct 30 in-depth face-to-face interviews in the following areas:

Pisco production plants in the Coquimbo zonePisco grape growers, associations, and cooperatives in the Coquimbo zoneGovernmental and private entities that support and encourage the piscoGovernmental and private entities that support and encourage the pisco industry and exports in general including Prochile, CORFO región Coquimbo, and Asociación de plantas pisquers y Fundación imagen país.

Interviews will be segmented as follows:6 interviews with pisco production plants 10 interviews with Cooperativa Capel10 interviews with Cooperativa Control10 interviews with Cooperativa Control1 interview with Prochile1 interview with CORFO (sede regional Coquimbo)1 interview with Asociación de plantas pisqueras1 interview with Funación de Imagen País

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The overall goal of Phase II New York is 4-fold: To develop a stronger positioning for pisco that resonates among the core target and future users to drive increased/incremental usageT d t d h t b t iti i f f l N Y k Cit ll t

Project Deliverable: Phase II NYC

To understand how to best position pisco for a successful New York City rolloutTo better understand pisco and how it is currently positioned against the existing competitive set of other liquors To explore branding and messaging stimuli

Phase II New York will be segmented by the following objectives:Objective 1: One Focus Groups with 8-12 Young Adultsj p gObjective 2: Two Focus Group with 8-12 BartendersObjective 3: One Online Bulletin with 18-20 Industry Experts

Objective 1: Two Focus Groups with 8-12 Young Adults

Euromonitor recommend conducting two focus groups in New York City with adults g g p yaged 22-29 who fit the drink profile. One group will be with those familiar with pisco. The other group will be with participants unfamiliar with pisco, yet who fit the target profile in that they regularly go to bars, consume mixed drinks, etc.. It is our sense that those familiar with pisco are a passionate, educated minority with very strong opinions, so separating the two is advised. In both groups we would include a mix of genders. These groups would include both tasting as well as messaging discussion. We recommend conducting the groups at a research facility. To simulate a “cocktail party” atmosphere, we will create a living room set up including a bar with bartender.

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Objective 2: One Focus Group with 8-12 BartendersAs opinion leaders and key influencers who drive beverage trends, bartenders are critical to the success of new beverage rollouts. Given this, we recommend


g ,conducting one daytime focus group with this colorful constituency. Bartenders will provide a lively exchange, shedding insight on:

How pisco is currently perceived, in terms of taste, drink combinations, and its competitive set (Peruvian vs. Chilean vs. other varieties)What are the trendy South American drinks right now among 20-somethingsPositive and negative attributes and images currently associated with piscoPositive and negative attributes and images currently associated with piscoHow to best position pisco in the U.S.

MethodologyEach group will be 90 minutes long, conducted in Manhattan6-7 respondents per group (8-12 per group recruited)The groups will be held at a focus group facility with a living room atmosphere andThe groups will be held at a focus group facility with a living room atmosphere and bartenderBartender focus group will be held in the daytime20-something groups will be held in the eveningHomework assignment for the 20-somethings will be used to stimulate discussion as well as provide a deliverable. Possibilities include:p

Taking a photo of their favorite cocktail at the bar and describing the type of persona associated with this drinkBringing a magazine ad, blog post or other type of visual that makes them want to try a new drink

Part of the participants’ incentive will include money for a cab ride home and all participants will sign a waiver regarding their alcohol consumptionparticipants will sign a waiver regarding their alcohol consumption.

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Objective 3: One Online Bulletin (Focus Group) with 18-20 Industry Experts

Euromonitor recommends conducting a series of BoardTalk® discussion boards


Euromonitor recommends conducting a series of BoardTalk® discussion boards or “online bulletins” to capture opinions from industry experts in New York including liquor company managers, bar owners, distributors, liquor connoisseurs, retailers, industry analysts, and other experts in the liquor trade.Online bulletins are a form a virtual focus group that takes place via a secure web site and appears as a threaded discussion that can be viewed by participants at any time and in any place A hypothetical example is provided below in whichany time and in any place. A hypothetical example is provided below in which participants were asked to respond to a video promoting Peru as a tourist destination.

Bulletin Boards are asynchronous, meaning they are not a live “chat” session, but instead allow respondents to read the questions posted, contemplate a response, and type their responses at a time convenient for them. It works well for both consumers as well as business professionals as it is not disruptive and gives

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consumers as well as business professionals as it is not disruptive and gives respondents the ability to fit the research in to already busy lives. The only requirement (beyond the general screening specifications) is a computer with a high-speed Internet connection.

Objective 3: One Online Bulletin (Focus Group) with 18-20 Industry ExpertsMethodology


MethodologyThe bulletin itself will consist of approximately 15 respondents and will run for 3 business days. Following recruitment of various industry experts, Euromonitor will create a discussion guide that will be circulated to INIA for approval prior to the bulletin. A moderator will open up the bulletin by posting questions. Participants will be prompted to log on twice a day to post their responses. Each question posted will be customized in terms of what each respondent sees on the screen. Euromonitor can give them the option of either seeing (influenced) or not seeing (uninfluenced) the responses from the other participants after they record their own comments, depending on INIA’s preferences. Respondents will be “tagged” so that we know at a glance any details necessary –whether they are a business focused on liquor distribution, retail sales, production and any other demographic information required for analysis. They will also be able to upload a personal photo or “icon” to appear next to their responses, creating the feeling of communication between actual people with personalities, rather than simply text on the screen.Euromonitor will also be able to incorporate innovative projective techniques by using photos, a whiteboard, and other methods. For example, we could use picture sorts, including simple but rich metaphorical sentence completion exercises, and use storytelling or personality profiles to elicit underlying perceptions of various spirits which compete with pisco.Euromonitor will monitor the discussions as they occur, and suggest questions and additional probes to the moderator, using a secure “virtual back room.”The benefit of online focus groups is as follows:

Rich exchange over time results in deeper, more nuanced feedback than research conducted within a single session.Incubation yields results: self-paced participation allows respondents to think about what they want to say, resulting in very rich, in-depth responses. Id l f l t h j t d ti d l t i

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Ideal for exploratory research projects, and creative development sessions.Participants can be recruited nationally, internationally, or using a specified criteria, eliminating the need to conduct research in multiple markets.

Project Management

The project will be managed by a central project manager in Euromonitor’s Chicago offices who will oversee the work of our in-country analyst teams and act as the liaison to INIA

Working with Euromonitor

throughout the project. Project teams will be assigned upon initiation.

INIA

Euromonitor Project Manager (Chicago )

Euromonitor Analysts (Mexico)

9 June 2010

Stage 1 (week 1-2): AlignmentA key early step to ensure that both INIA and Euromonitor project team are fully aligned on key goals, priorities and how the project will evolve .P f i l h d b i fi j t t l d t l bj ti

Working with Euromonitor

Professional handovers, briefings, project tools and process control ensure objectives remain in sight throughout and are properly understood by the team.

Stage 2 (weeks 3 –12): FieldworkPrimary research asks answers to get questions not available in published sources.We use a range of survey tools (customer, trade, consumer) to interrogate sources, fill gaps collect new data seek perspectives on trends impact outlook and connect thegaps, collect new data, seek perspectives on trends, impact, outlook and connect the views of trade with suppliers, customers and consumers.Standardisation (approach & outcomes) is critical to clients’ decisions. We ensure you get the best local insight and central management to make results comparable.

Stage 3 (weeks 13– 24): Analysis, synthesis and deliveryCross-checks on all sources and interpretations and in depth analysis of all fieldworkCross checks on all sources and interpretations and in depth analysis of all fieldwork output to ensure our deliverable addresses INIA’s objectives and questions fully.Tailored (user-friendly, context, transparency) and innovative (latest visualisation and modelling tools) deliverables.

Stage 4 (weeks 25 – 30): Post delivery dialoguePost-delivery support is important and it makes sense for us to stay involved as you take on board the conclusions of the research, finalise decisions, start implementing.

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Methodology & Key Research StagesDesk research: in-house, client’s & secondary sources (5-10%)Our analysts are experts on published data sources. We have extensive in-house sources and industry teams with knowledge acquired over years of research. We also want to know what you know and what, if any, sources you use and why. Published data is a starting point and though useful for first estimates and insights need to be refined and confirmed.Desk research will account for 5-10% of total research time for the project.

Field work: in-country and industry (40-50%)Site visits to points of sale for product audits and face-to-face interviews whereby in-country analysts speak directly with personnel and observe product pricing, promotion, packaging, layout customer experience etc to generate live country level insightslayout, customer experience etc to generate live country level insights.Trade interviews with importers, distributors and retailers directly involved allow access to fresh data, opinions and insights. Interviews with government, semi-official and other industry observers provide perspective. Interviewing multiple functions in organizations enable coverage of a range of issues and help reconcile and validate a spectrum of data and opinions. A reliable data set and valid conclusions is reached by independently building industry consensus. Field work will account for 40-50% of total research time for the project.

Analysis: validate, interpret, contextualize (30-40%)All primary and secondary research sources are first standardized, checked and validated to ensure we have a robust research feed to the analysis. Confidence weightings are allocated to each data input. A critical analyses of all sources and insights is conducted whereby we compare data, insights and hypotheses to arrive at a set of data and conclusions. Findings are then synthesized into a structured management summary which addresses all your key

ti ith ti ith k d t d l iquestions with supporting with key data and analysis.Analysis will account for 30-40% of total research time for the project.

Management: coordination, engagement, consultation (5-10%)A project manager is responsible for overseeing all research and will be your primary point of contact during and after the project. Project managers coordinate the analyst team; closely engage with you throughout the research process to ensure expectations and outputs align and

DeliverableThe final deliverable will be presented in a format requested by the client.

deliverables directly address original project goals and objectives.

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Overview of Custom ResearchOverview of Custom Research

Tailored solutions

Designed to fit your unique needs

From simple data creation to in-pdepth strategising

Exclusive ownership of the research and follow-up

Helping clients make informed decisions

Our people

Research consultants, experienced in different methodologies

Regional research hubs and industry teams

Sector-specific expertise

Field-based country research, close to industry sources

Our service

Category

Company

Access to a wide range of local market contacts in multiple industries and functions

Company

Product

Distribution

2,500 projects, long-standing client relationships

Transparency – the answer and how we got there

Projects run in close partnership with

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Macroall client stakeholders

Research solutionsResearch solutions

Our research solutions provide a comprehensive framework to give you the all information and answers you need. Collecting new data is at the heart of what we do, from secondary data, B2C and B2B surveys, executive interviews and local fieldwork including product audits. But we aren’t just data providers, we analyse findings and work closely with clients to place in context relevant to their questionsto place in context relevant to their questions.

Category evaluationSizes, shares, growthSegmentationMarket entry strategy

ForecastingLaunch, sales, demand, lifecycleSuccess / failure probabilitiesDetermine risk exposure

Competitive intelligenceProfilingBenchmarkingP t l ti

Market entry strategy

Scenario analysisMarket simulationsPortfolio analysisT t b i

Determine risk exposure

Partner evaluation

InnovationNPD business caseConsumer insights

Test business cases

Consumer analyticsCustomer profilingIncome distribution models g

Product claims

Route to marketProduction, imports, exportsS l d l h i

Market analyticsMarketing effectivenessS b tit t d l t

Purchasing behaviour

MacroOpportunity frameworks

Supply and value chainB2B and B2C channels

Substitutes and complementsPrice and channel strategy

VisualisationDiscovery, sharing, communication

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pp yPESTQuarterly tracking

y, g,Market attractiveness plannersPerformance monitoring

New YorkPhase I: All Objectives US$58,000Phase II Coquimbo: 30 Producer Interviews US$25,000

Costs, Timing, & Contract Initiation

Phase II New York: Objective 1: 2 Focus Groups with Young Adults US$32,000Objective 2: 1 Focus Group with Bartenders US$18,000Objective 3: 1 Online bullet with Experts US$38,000

Total: US$171,000

Additional ItemsThere are no additional costs: all production and communication expenses are included.

Project TimingEuromonitor will deliver findings within 4-5 months project initiation.

Payment TermsyCosts are exclusive of VAT or any applicable local market taxes and invoices are payable in two parts: (1) 70 % net 30 days of commissioning (2) remaining 30% due upon project delivery

This Proposal is an offer by Euromonitor to provide its services to you subject to Euromonitor’sattached Terms & Conditions. You accept this offer, and a contract is made between you and Euromonitor on Euromonitor’s Terms and Conditions, by either (i) signing below and faxing this signed Proposal to +1-312-922-1157 or scanning and emailing it to

@ ( ) f [email protected]; or (ii) by submitting a purchase order, confirmation of order, acceptance of a quotation, or specification or other document to Euromonitor. Euromonitor’s Terms and Conditions are the only conditions upon which Euromonitor is prepared to provide the services and shall prevail over and take the place of any other terms and conditions stipulated, incorporated, endorsed upon, delivered with, referred to or contained in any document of communication from you, or implied by law, trade custom, practice or course of dealing.

For Euromonitor International Ltd. For Instituto de Investigaciones Agropecuarias

…………………….. ……………………………..

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David Cleveland I have read and agree to the terms set out in this Consulting Director Proposal and in Euromonitor’s Terms and Conditions

Reference Letter: Coca-Cola

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Reference Letter: APEX

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Reference Letter: USDA

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Reference Letter: PromPerú

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Reference Letter: PromPerú...continued

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euromonitor inia, 6-10-2010, pisco in nyc, p1euromonitor

Documents

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preliminary research

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overview of custom research

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