MARKETING AND SUSTAINABILITY

Ramón López-Doriga, Familia Torres Marketing Manager 06

.20

20

4th and 5th generation

3150 YEARS OF HISTORY

1870Jaime and Miguel Torres

(1st generation),

found the company

1928 Juan Torres (2nd generation),

distills Brandy for the first time

1573The earliest documents showing the Torres familyas winegrowers

1939/40

Miguel Torres i Carbó (3rd generation),

rebuilds the winery after it was bombed

during the Civil War and bottles

the first wine in the Penedès

1979First foreign

winery: Chile

1982 Marimar Torres (4th generation),

pioneer in California, USA Expansion“Back-up”

1991Transfer between generations,

Miguel A. Torres(4th generation)

2005Launch of Celeste, the first Familia

Torres wine in Ribera del Duero

2008Opening of

the Waltraud Winery

2012 Transfer between generations,

Miguel Torres Maczassek(5th generation)

2018Opening of

the Purgatori Winery

2010Mireia Torres Maczassek

(5th generation)

assumes management

of the Jean Leon winery

“The more we care for the earth and the environment, the more we take care of ourselves.We have the responsibility to share, in particular with those groups most in need.Cooperating for development and promoting a good education in childhood can contributeto make this a better world for tomorrow.”

Familia Torres

Notable Recognitions

2014, 2015, 2017, and 2018The World’s Most Admired Wine BrandDrinks International

2011 - 2020The Most Admired Wine Brand in EuropeDrinks International

2010Green Company of the YearThe Drinks Business

2006The Best European WineryWine Enthusiast

Cabernet Sauvignon – Finca Mas La Plana

TORRES IN

NUMBERS

173182

204196

185

206215

232 227240

263 264 266258 257

0

50

100

150

200

250

300

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Mill

on

es

SALES EVOLUTION

Total income

Source: BPC. Datos Consolidados Grupo Torres

76%24%

67%33%

Domestic vs. Export

71%29%

69%31%

Brandy vs. Wine and Sparkling

Share wine-spirit, export-domestic

Volume % and Value %

volume

value

volume

value

SALES BY REGION IN VALUE 2019

España26%

AfricaY MID.E.

0,1%

Asia-Pacífico

4%

EEUU-Canada

4%

Latinoaméricaincl. Mexico

23%

EuropaY RUSIA(sin España)

39%

Fuente: BW

Travel Retail

4%

Source: BPC.

MARKET SHARE – EXPORT WINE

Source: OEMV y BI datos internos

Torres market share vs Spanish wine bottled with appellation of origin

Our Wineries

Familia Torres en Cataluña

DO Penedès

DOQ Priorat

DO Conca de Barberà

DO Costers del Segre

Propiedad de la Familia Torres

Vardon Kennett

Pago del Cielo

La Carbonera

Bodega Magarín

Pazo Torre Penelas

Awards

Vintage 201393+ points – Wine Advocate (2018)

Vintage 201295 points – Decanter Wine Awards (2017)

Vintage 201193 points – Wine Spectator (2016)

Vintage 1970Primer Premio de la Olimpiadadel Vino de Gault-Millau, París (1979)

Awards

Vintage 201592 points – JamesSuckling.com (2018)90 points – Decanter (2018)

Vintage 201492 points – JamesSuckling.com (2017)

Vintage 201291 points – Wine Enthusiast (2016)

Miguel TorresChile

Bodega Miguel Torres,Curicó

Fair trade

Organic viticulture

Innovation

Our pillars

OUR PORTFOLOLIO

BEST-SELLING

BRANDS

TOP TRENDING BRANDS

1 Hennessy 1 Hennessy

2 Pierre Ferrand 2 Martell

3 Martell 3 Pierre Ferrand

4 Courvoisier 4 Remy Martin

5 Torres Brandy 5 Hine

6 Merlet 6 Torres Brandy

7 Hine 7 Camus

8 Camus 8 Metaxa

9 Metaxa 9 Courvoisier

10 Tariquet 10 KWV

STOP PRESS: TOP 10 BRANDIES IN

“THE WORLD'S 50 BEST BARS”

TORRES BRANDY RECOGNIZED BY THE BEST BARS WORLDWIDE*

Source; *Drinks International Annual Brands Report 2019

1 POSITION GAINED IN BOTH LISTS V.S PAST YEAR

Let´s Keep Updated

1. HEALTH & WELLNESS

3. PERSONALIZATION

2. SENSORY &

INDULGENCE

4. TRUST &

TRANSPARENCY

7. NOVEL &

EXPERIENTIAL

5. PREMIUMIZATION

6. SUSTAINABILITY &

ETHICS

HEALTH AND WELLNESS

Let´s Keep Updated

MAKE

CONSUMPTION

HEALTHIER

Lighter/

lower

calorieoptions

Alcohol moderation

&

avoidance

Natural & pure

ingredientsFlavour over

ABV

NOVEL AND EXPERIENTIAL

Let´s Keep Updated

MAKE LIFE MORE

FUN

Create

experiences,

not products

Make it

“shareable”

Novel Flavors

& Colors

SENSORY AND INDULGENCE

Let´s Keep Updated

MAKE LIFE EASIER

Simple, clear

designand

labelling

Safe time & Effort

Simplifypurchase

process

PERSONALIZATION

Let´s Keep Updated

MAKE

DIFFERENTIATED

PRODUCTS

Offer

customization

Target specific

life-style

needs

Offer

personalization

PREMIUMIZATION

Let´s Keep Updated

MAKE EXCLUSIVE &

UNIQUE PRODUCTS

Threat

from

“premium”

private

labels

Differentiatefrom the

mainstream

Consumer is

willing to

pay more

PREMIUMIZATION

PREMIUMIZATION

&

EXTREME CRAFT

Added

differentiation

Locallyproduced

Differentiation

at experiential/

sensory level

Sensory experimentation

Localization as main part ofnarrative concept

Productswith intrinsic

& extrinsicbenefits

Think out ofthe box

35%

Active buyers of craft productsin Central/South America

Sell experiences and addeddifferentiation

40%

Willing to pay more for better quality*

40%

Interested buyers of craft

products in LATAM, MENA & Asia

58%

Craft style fans are

hipster friendly Millenials

Premium/Luxury alcohol offers

* Consumer behaviour when shopping Alcoholic Drinks

Premiunization

Target strong emerging youngmiddle class: premium as an

expression of their success

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TRUST AND TRANSPERENCY

Let´s Keep Updated

MAKE YOUR

BRAND´S

PRINCIPLES KNOWN

Make sure

info is easy

to find

Communicate

the brand´sstory and

history

Communicate

the ethicalvalues

SUSTAINABILITY AND ETHICS

Let´s Keep Updated

MAKE AN IMPACT

ON THE

ENVIRONMENT

Take care of

the

communities

Not and exception, it

is the rule

Minimizenegative

effects onthe planet

SUSTAINABILITY AND ETHICS – WALK-THE-TALK

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ETHICAL &

SUSTAINABLE

Reduce, reuse, recycle

Packaging

Reduce use of

energy

Use less water

Sustainable packaging

Communicate Brand´sobjetives, efforts & practices

Added functional ingredients

Fair trade &

conditions

Consistency

13%

Consumer´s purchase

Ingredient Transperency: N.S.A

22%

Consumer´s purchaseOften influenced by how

ethical / environmentally-friendly /

socially-responsible the

product is

46%

Interested in buyingsuch products

Sustainable POS

Let´s Keep Updated

1. HEALTH & WELLNESS

3. PERSONALIZATION

2. SENSORY &

INDULGENCE

4. TRUST &

TRANSPARENCY

7. NOVEL &

EXPERIENTIAL

5. PREMIUMIZATION

6. SUSTAINABILITY &

ETHICS

CONVENIENCE VS PREMIUM

Could we use the same brand?

CONSUMER PERCEPTION

OFF-TRADE VS ON-TRADE CONFLICT

Could we use the same brand?

Two different businesses approaches

CONVENIENCE

PREMIUMIZATION

Premiumization Business

CONSUMER

+ EDUCATED

+ SOFISTICATED

+ PURCHASING POWER

URBAN

GLOBAL

AB

CONSUMER BEHAVIOUR

SELECTIVE

SEGMENT (CLIENT)

PREMIUM HORECA

SPECIALIZED STORES

ON-LINE

COCKTAIL BARS

Convenience Business

CONSUMER

+ YOUNG

BC

CONSUMER BEHAVIOUR

MASSIVE

SEGMENT (CLIENT)

INFORMAL RESTAURANTS

SUPERMARKETS

RESTAURANT CHAINS

HOTEL CHAINS

Different Value Approach

PRESTIGE

SELECTIVE

SUPER PREMIUM

PREMIUM

BRAND AMBASSADORS & ENOLOGIST

PRESCRIBERS

COMMUNICATION

ESSENTIAL

STANDARD

PROMOTIONAL ACTIVITY

COMMUNICATION AND OTHER SUPPORT

CO

NV

EN

IEN

CE

BRAND PRODUCT PROMOTION/ACTIVATION PLAN

PRICE

ADDED VALUE

INFORMATION

TRAINING

TASTING

SOMMELIER

BARTENDERS

SPEZIALIZED MEDIA

LIFESTYLE

MASS MEDIA

SOCIAL NETWORK

BILLBOARDS

PR

EMIU

MIZ

ATI

ON

Up to 2016… From 2016 on…

Wine Strategy

ESSENTIAL SEGMENT SELECTIVE & PRESTIGE SEGMENT

95% OF PRODUCT IMPACTS

ON PREMISE OFF PREMISEON PREMISE OFF PREMISE

Wine Strategy

ESSENTIAL SEGMENT SELECTIVE & PRESTIGE SEGMENT

95% OF PRODUCT IMPACTS

ON PREMISE OFF PREMISEON PREMISE OFF PREMISE

Wine Strategy

Mas La Plana Cellar

Mas de la Rosa Estate

Recognitions

2016 Vintage94 points – Decanter (2018)

94+ points – Robert Parker (2018)

ESSENTIAL SEGMENT SELECTIVE & PRESTIGE SEGMENT

95% OF PRODUCT IMPACTS

ON PREMISE OFF PREMISEON PREMISE OFF PREMISE

Wine Strategy

white

celebraterosé

seductionLimited editions

celebrate * with elegance

sparkling

INFLUENCERS

VIÑA ESMERALDA INFLUENCERS DAY

Let´s Keep Updated

1. HEALTH & WELLNESS

3. PERSONALIZATION

2. SENSORY &

INDULGENCE

4. TRUST &

TRANSPARENCY

7. NOVEL &

EXPERIENTIAL

5. PREMIUMIZATION

6. SUSTAINABILITY &

ETHICS

Sustainability

Sustainability

Sustainability

Source: Nielsen 2019

Sustainability

Sustainability

“Why not make our own energy, reuse water, and, above all, reduce CO2 emissions? Torres & Earth is the project we’re using to turn this dream into a reality, little by little.”

Miguel A. Torres

In 2019 we already achieved our goal.

Our commitment for 2020:

To reduce CO2 emissions by 30% per bottle compared to 2008

MISSION ACCOMPLISHED!

Renewable

EnergyEnergy

Efficiency

Sustainable

transport

Water

managementLighter

bottles

Carbon

capture

Waste

management

Reforestation in the south of Chile Torres has started to plant trees in an area of almost 6.000 hectares

to recover the forest landscape that was typical for this area and to capture CO2.

Reforestation in the south of Chile. Torres has started to plant trees in an area of almost 6.000 hectares (bought in 2018) to

recover the forest landscape that was typical for this area and to capture CO2.

SUSTAINABILITY COMMUNICATION

Online platforms

SUSTAINABILITY COMMUNICATION

General and specialized press

SUSTAINABILITY COMMUNICATION

Climate change conferences

SUSTAINABILITY COMMUNICATION

POS

https://www.iwcawine.org/

The Creation of IWCA International Wineries for Climate Action

SUSTAINABILITY WILL BE A MUST

BUT IT HAS TO BE REAL

WELCOME TO REALITY

LOCKDOWNS AROUND THE WORLD → JANUARY 23

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LOCKDOWNS AROUND THE WORLD → MARCH 12

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LOCKDOWNS AROUND THE WORLD → APRIL 27

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LOCKDOWNS AROUND THE WORLD → MAY 11

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VACCINE & THERAPEUTIC DEVELOPMENT

Testing and clinical trials

growing exponentially

ModernaPhase I trials

Pfizer + BioNtechTo be tested

80%

Some confidence on therapeutic agent available within 12 months

So

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| W

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El E

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Oxford + AstraZenecaPassed animal study

Remdesivir

first Drug Approved for

COVID-19 Treatment

China

3 vaccines in phase II

ENVIRONMENTAL IMPACT

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BB

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EEA

| G

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CAR USE Due to perceived

risk of public

transport

-40%Avg less nitrogen

dioxide

-10%Concentration of

polluting particles

WASTEManagement?

MASKS + GLOVESWill increase

contamination

+11,4%Days with “Good

quality air”

-0,3%Global Emissions

HABITS?Temporary vs

long term impact

POSITIVEIMPACT

FUTURE´SUNCERTAINTY

“Customers will scrutinise your every move”

LOCAL RESPONSE MATRIX – READINESS TO RESTART ECONOMY

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Mc

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Brasil

Spain

Nordics*

USA

Mexico

Russia

Stage 1

Stage 2

Stage 3

Stage 4

UK

Understanding the outbrake.

*Excluding Sweden

Sweden

HIERARCHY OF NEEDS

Physiological Needs:Food, water, warmth, rest

Safety Needs: security, safety, …

Belongingness & Love needs: Friendship, family, sense of connection

Esteem needs: Esteem, status, freedom, accomplishment

Self Actualization:Achieving one´s full

potential, including creative

activities

Self-Fullfilment

Psychological

Needs

Basic Needs

Being-Needs

Deficiency-

Needs

PRE COVID-19

STATUS

“UPDATED” NEEDS

Physiological Needs:Food, water, warmth, rest

Safety Needs: security, safety, …

Belongingness & Love needs: Friendship, family, sense of connection…

Esteem needs: Esteem, status, freedom, accomplishment

Self Actualization:Achieving one´s full

potential, including creative

activities

Self-Fullfilment

Psychological

Needs

Basic Needs

Being-Needs

Deficiency-

Needs

WEEKS

1-3

WEEKS

4 - X

CATEGORY VARIATION DURING ISOLATION

WEEK 1 - 2 WEEK 3 - 4

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PATH TO PURCHASE – OFF TRADE

MENTALITYRoutine

shopping

INFO SEARCHHigher impact of

out of shop touchpoints

CHANNEL+ Online

Store due toproximity and

comfort

Price +

PromotionKey activation

driver

Out of stockFidelity to retailer

over brand

SatisfactionHigher in online shopping than

at the stores

Pre-

Store

In-Store

Out-of-

Store

E-COMMERCE

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AEC

OC

o Spain → +46,4% SPLY

o 20% has started to buy

online

o 50% bought less in-store

o 1 out of 10 bought for the

1st time online

o 17% consumers would buy

more online after

quarentine

E-COMMERCE

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AEC

OC

o Spain → +46,4% SPLY

o 20% has started to buy

online

o 50% bought less in-store

o 1 out of 10 bought for the

1st time online

o 17% consumers would buy

more online after

quarentine

STRUCTURAL

STRATEGIES

- Optimize the productivity of

resources

- Manage cyber security risk

- Focus + increase production

of focus brands

- Understand rapidly changing

consumer behavior → How to

reposition existing marketing?

- Manage supply chain disruption

- Take care of consumers: enjoy

without feeling anxious

- Diversify & revise supply chain

arrangements

- Adapt to consumers budget:

Add value for money ranges

- Develop|Reinforce online

channel

- Develop alternative distribution

strategies to overcome delayslogistics and distribution

- Define new channel

management strategies

- Join forces with HORECA

- Monitor carefully changing

consumer consumptionpatterns

- Rebalance product portfolios

to best match your segment(s)

- Revise consumer

engagement strategies

- Account for permanent

changes in the occasions andlocations of consumptionpatterns

SHORT TERM6 – 12 Months

MID TERM 1 – 3 Years

LONG TERM 3 – 5 Years

Q&A

Vilafranca del Penedès

¡THANK YOU!