1. San Joaquin Valley WinegrowersAssociation Annual ConferenceClaudia Schubert, President Diageo Chateau & Estate WinesFresno, CaliforniaNovember 29, 2012

2. Wines Video2 3. Happy 10th to the SJVWA! 3 4. AgendaIntroduction to DC&ETrends we seeOpportunities for SJVWAQ&A4 5. Who We Are Diageo Chateau & Estate Wines 5 6. Who We Are Our Winery and Vineyard Footprint Lake County DC&E Wineries North Coast Napa Valley Acacia SonomaMendocino County Sierra FoothillsSonoma Facility SonomaSonoma CountyBeaulieu Vineyard NapaSolano CountyMarin County Provenance Vineyards NapaSan FranciscoLodiSterling Vineyards NapaLivermoreRosenblum Cellars Alameda (SF) Santa Cruz Central Valley DC&E Wineries - Central Coast Monterey County Blossom Hill Winery Central CoastSan Luis Obispo / Paso Robles Chalone Vineyard Monterey CountySanta Barbara South CoastLos Angeles San Diego 6 7. Who We Are Our Wine PortfolioHighly acclaimedTop imports Fast growing portfolio California portfolio of Lifestyle wines 7 8. Who We Are Our Growth Plans HERITAGE WINESLIFESTYLE WINES We have a highly acclaimed portfolio of We have an aggressive new product growthheritage brands agenda targeting the lifestyle segment We are focusing our efforts on engaging We are focusing on offering wines towith high value wine consumers andconsumers who are looking for antrade gatekeepers approachable package & wine styleDriving quality and value Launching several new brandsfrom vineyard to shelf nationally, including Butterfly Kiss,Stark Raving Wines, RoseNBlum 8 9. Who We Are DC&E is a Business Unit of DiageoWho isDiageo is the Great heritage Global presence: In the U.S., 3 In UK, BlossomInnovation a keyworlds leading brands across24,000 people in core businessHill is the largest driver and corepremium drinksour entire about 180units: U.S.wine brand. It is competence.business. portfolio. countriesSpirits, Diageo- sourced around the Guinness USA primarily from world. and Diageo Central ValleyChateau &here in CAEstate Wines.9 10. Industry Trend Overall Wine Consumption Wine Category Gaining As Wine Consumption IncreasesTBA Value Share Value Share, P52WPer Capita Consumption Indexed to 2002 Beer, 61% +15%Spirits, 23% +14%Wine, 16% Annual Value Growth, P52W Wine+5.6% Spirits +5.3% (6%) Beer+6.6%20022010 IRI 11/4/12 release, 52 week data. Beverage Information Group.10 11. Industry Trend Retail PricingPremium Wine Growing StronglyWith Pricing Stabilizing 0.5 16% 0 -0.5Avg. Retail v. LY (% change)13% -1 -1.5 13%10%-2 6% 4% 6%1% -2.5-3$7-10 $10-15$15-25 $25+ $7+IRI Price Tier Value Growth vs. LY12 Week52 Week Outside of IRI, the $7+ category is growing 5-6%IRI 11/4/12 release, 52 week data.11 12. Industry Trend Varietal Trends Growth driven by select varietals indicative of change in consumerVolume Growth vs. LY (% change) taste over last decadeVolume Share Chardonnay 3.5% 30%27% White Wine Cab Sauv6.8% 25%200120%Merlot3.4% 20%2012Pinot Noir8.2% 15% 10%8% Pinot Grigio 9.5%3%4% 3%4%5%Sauv Blanc 12.0%1%0% Muscat 27.1%Chardonnay Pinot Grigio Sauv Blanc MuscatWhite Blend Zinfandel 0.2% Riesling -4.7% 20% Red Wine15% 15%12% Red Blend 24.0% 10% 10% White Blend25.6% 5% 4%5% 3% Total 2.5% 1%1% 2% 0%0%-10% -5%0%5% 10% 15% 20% 25% 30% Cab SauvMerlotPinot Noir Zinfandel Syrah Red Blends IRI 11/4/12 release, 52 week data. IRI data for 2001; 2012 data in 52wks 11/4/2012 release 12 13. Industry Trend Innovation is KeyNew Products driving category growth 3,000 new SKUs reported in IRI since 2009 These products driving 30-40% of category growthLifestyle wines, wines with approachable packaging and winestyles, are fueling the category growth 7 of 10 fastest growing wines in $7-10 segment 3 of 10 fastest growing wines in $10-15 segment13 14. Industry Trend Wine SupplyAfter short V10/11, outlook for V12.Grape Prices Increasingmore balancedCA Wine Supply and Demand 800(Million of Tons)7004.06003.53.0 5002.5 4002.0 3001.52001.01000.500.0 2007 2008 2009 2010 20112012*est.20092010 2011 2012EWhite Grapes Red GrapesTotal GrapesGrapes CrushedWine Shipped Unified Symposium State of the industry 2012 California Grape Crush Reports (08-11)14 15. Opportunities for the SJVWAThese trends represent great opportunities but also challenges forSJVWA members1) Right supply of right varietals to fuel new product launches Increasing supply in high growth varietals Maintaining balanced supply of 3 Core Varietals2) Right cost structure Retail pricing stabilizing but not increasing across the board Imports will impact domestic pricing 15 16. Opportunities for the SJVWA and DC&EWe are pursuing an aggressive new product strategy 30% of our requirement comes from Central Valley Envision our requirements to grow Quality ever more importantWe are supporting Diageo Wines Europe with contracts for Blossom Hill UKs leading wine brand in Blossom Hill 6m cases: billion glasses sold per annum 16 glasses every second! The top 3 selling skus in UK the nations favorite16 17. Thank You and Q&A17