1. W. J. Deutsch & Sons
[ yellow tail ]
Growth analysis

2. Agenda
1. Problem Statement
2. Key Issues
3. Context
4. Alternatives Analysis
5. Recommendation
6. Financials
7. Implementation Plan
8. Risk Management
9. Sum up

3. 2. Problem Statement
Problem statement
How to maintain market
leadership in face of
the current crisis ?

4. 3. Key Issues
Key Issues
 Customers
 Economic Climate
 Product Identity

5. 4. Context
Context
1. Industry Status
2. Wine segments
3. Yellow tail profile
4. Customer profile

6. 4. Context
1. Industry Status
Wine Consumption in the USA

7. 4. Context
2. Wine Segments
Popular Premium
$3.00 - $7.00
TableWine
Super premium
92%
$7.00 - $14.00
Wine
Segments Ultra-premium
$14.00 - $20.00
Others
(sparkling wines, wine Luxury premium
coolers, pop wines, > $20.00
fortified wines)

8. 4. Context
3. Yellow tail profile
- Table wines (traditionally consumed with food)
- Prices
- $4.00 to the popular premium segment
- $10.00 to the super premium segment
- Big portfolio of wines
- 7 red
- 5 white
- 1 rose
- Modern brand

9. 4. Context
4. Customer profile
Age: 21 – 35
Alcohol consumption per age, 2006, USA

10. 4. Context
4. Customer profile

11. 4. Context
4. Customer profile
Main characteristics:
- Modern, young and cosmopolitan
- Middle class
- Sees wine as something more than a drink
“something you share with family and
friends”

12. 2. Problem Statement
Problem statement
How to maintain market
leadership in face of
the current crisis ?

13. Alternatives
Wine market division
Increase sales
Table Wine Other wines
 Red  Dessert and fortified
 White  Champagne and sparkling
 Rose  Aperitif

14. Alternatives
Alternatives
Expand &
Maintain Table Explore other
diversify Table
1. Focus on new 1. Business as 1. Move focus
segments usual into new
2. Focus on new 2. Consolidate categories and
table wines marketing products
efforts

15. Alternatives
Table wines are growing
Table vs Other Wines evolution
In thousand nine litter cases
300000
250000
account for
200000
150000 92% of
the market in
100000 2008
50000
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Table Other

16. Alternatives
Other wines sales have decreased 10%
in 10 years
Table vs Other Wines evolution
In thousand nine litter cases
35000
30000
Total
25000
20000
Domestic
15000
10000
Imported
5000
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

17. Alternatives
Yellow Tail Brand and current capacity
Successful branding strategy Mass production facilities
 The Coca-Cola of wine  30,000 bottles bottled per hour
 Wine for those who didn’t like  11 million cases per year
wine
 Round, fruity and user-friendly
 Complex, aristocatic

18. Alternatives
Alternatives assessment
Alternatives scorecard from 1 (low) to 5 (top)
Expand &
Canada Germany
Maintain Table Japan
Explore other
diversify Table
Sales share 5 3 2
Growth 4 2 1
Necessary Know
How 3 5 1
Brand identity 4 4 2
Total 16 14 6

19. Alternatives
Alternatives assessment
Alternatives scorecard from 1 (low) to 5 (top)
Expand &
Canada Germany
Maintain Table Japan
Explore other
diversify Table
Sales share 5 3 2
Growth 4 2 1
Necessary Know
How 3 5 1
Brand identity 4 4 2
Total 16 14 6

20. Alternatives
Alternatives assessment
Alternatives scorecard from 1 (low) to 5 (top)
Expand &
Canada Germany
Maintain Table Japan
Explore other
diversify Table
Sales share 5 3 2
Growth 4 2 1
Necessary Know
How 3 5 1
Brand identity 4 4 2
Total 16 14 6

21. Recommendation
Recommendation
 3 Objectives:
Widen Adjust
Wine
costumer pricing
“tutoring”
base strategy

22. Initiaves – Marketing Mix
• 375 ml. • 2$ Cage • [yellow tail] • Curtis
Bottles decrease in Store & Stone
Product
Promotion
Price
Placement
• Chardonnay
Lounge • Advertising
• 2 Pilot Stores campains
• Shiraz (NY and • Weekly
• Mix California) videocasts
• Merlot
Packages
• Cabernet- • Lounge and • Wine
Sauvignon sales space tasting
Workshops
• Instore
• Cock[tail]s Sommelier • Facebook
and
Youtube
• Online campaings
sales
• Free Wine
Guide
• Taxi
campaigns

23. Assessment Card
Product Price Placement Promotion
 
Wine Tutoring 
 
Widen  
 
costumer base
 
Adjust pricing 
strategy

24. Financial Impadct
Financial Impact

25. Financials
Investment By Item
Investment Total ($)
Rent Stores 2,700,000
Staff 200,000
Workshops 40,000
“Curtins Stone Campaign” 7,000,000
"Wine Instruction Manual" 239,600
Social Media Initiatives 900,000
The Mini Wallaby 950,000
Market Studies 1,000,000
Super-Market Staff + Initiatives 280,000
Taxi Advertising 1,200,000
Total 14,509,600

26. Financials
Financial Assumptions
Conservative Without Project
Conservative Scenario Without Project
Assumptions Assumptions
2009 2010 2011 2012 2009 2010 2011 2012
Calc. Calc.
Tax Rate 30% Tax Rate 30%
WACC 9% WACC 9%
% Yellow to
2,82% 3,5% 3,8% 4,2% % Yellow to Total 2,82%
Total
Total Wine
Total Wine
Consumptio -2% 10% 3% 3% -2% 10% 3% 3%
n Consumption
Inflation -0.40% 1.60% 3.20% 0.80% Inflation -0.40% 1.60% 3.20% 0.80%

27. Revenues Evolution
USD
1,200,000,000
1,000,000,000
800,000,000
Without Project
600,000,000 Conservative
Best
Worst
400,000,000
200,000,000
000
2012 2011 2010 2009 2008

28. Sensitivity Analysis
Best Conservative Worst
NPV NPV
$ 613,804,996.00 $ 458,860,457.73 NPV
$ 154,270,401.00
A.Payback A.Payback
Period A.Payback
Period
1 Years 1.5 Years Period
2 Years

29. Sensitivity Analysis
Conservative
NPV
$ 458,860,457.73
Adjusted
Payback
Period
1.5 Years

30. Est. Cost 2009 2010 2011 2012
Activities Objective
(Dolars) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Stores
$
Create Proximity
Rent Stores 2,700,000. P E E E E
Relation
00
$
Specialist Staff Costumer Suport P E E E E E
200,000.00
Educate Consumers
Create Social $
Workshops P E E E E E E E
Experience 40,000.00
$
"Wine Instruction Manual" Educate Consumer P E E
237,600.00
Virtual Proximity $
Social Media Initiatives P E E E
Relation 900,000.00
Capturate New Segments
$
The Mini Wallaby New product Offer P E
950,000.00
Evaluate Price
Pricing Experiment - P E
Sensitivity
Market Share
Pricing Strategy Expansion - P P P P
Boost
$
Understand
Market Studies 1,000,000. P
Consumers
00
Traditional Marketing
Super-Market Island Biggest Visibility - P E
$
Super-Market Staff Advise Consumer P E E E E E
280,000.00
$
“Curtins Stone Campaign” Boost Visibility 7,000,000. P E E E
00
$
Taxi ads Boost Visibility 1,200,000. P E E

31. 2009 2010 2011 2012
Activities KPI Contingency
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Stores
Store Profit >0.000 Don't Expand to New
Rent Stores P E E E E
after 2nd year Stores
Store Profit >0.000 Don't Expand to New
Specialist Staff P E E E E E
after 2nd year Store
Educate Consumers
Workshops > 200 / Event Increase Divulgation P E E E E E E E
"Wine Instruction 10%Year In SM Study Consumer
P E E
Manual" Knowledge Response
10% Likes / Subs. Hire SM consulting
Social Media Initiatives P E E E
Increase company
Capturate New
Segments
Discontinue if <2% /
> 5% Share of
The Mini Wallaby Increase Divulgation if P E
Total Sales
>2%
>10% revenues
Pricing Experiment better than End Trial P E
expected
Pricing Strategy >2% profits than
End Expansion P P P P
Expansion expected
Success of Other Change Consulting
Market Studies P E
Initiatives Company
Traditional Marketing
>10% Sales for
Super-Market Island Change Store P E
specific Store
>10% Sales for
Super-Market Staff Change Store P E E E E E
specific Store
“Curtins Stone
> 5% total sales Discontinue Campaign P E E E
Campaign”
> 2.5% total sales
Taxi ads Discontinue Campaign P E E
after 1st Year

32. Risk analysis
Risk Analysis
Probability
1. Store flop
2. Demand non-reaction
towards price decrease
3. Decrease in wine
consumption
Severity
32

33. Probability
Store Flop
Severity
1. New and Repeat costumers may not adhere to the store
concept.
Mitigation Plan:
1. Organize marketing campaigns and periodic store events
33

34. Probability
Demand non-reaction towards price decrease
Severity
1. Demand may not respond to the new princing strategy
Mitigation Plan:
• Advertise price campaign
34

35. Probability
Decrease in wine consumption
Severity
1. Demand may contract more than expected
Mitigation Plan:
• New marketing campaigns
• Store launch
• New product size and packages
35

36. Questions and Answers

37. Appendix

38. Financial Assumptions
Best Worst
Best Scenario Worst Scenario
Assumptions Assumptions
2009 2010 2011 2012 2009 2010 2011 2012
Calc. Calc.
Tax Rate 30% Tax Rate 30%
WACC 9% WACC 9%
% Yellow to
2,82% 4% 4% 5% % Yellow to Total 2,82% 3% 3% 4%
Total
Total Wine
Total Wine
Consumptio -2% 10% 3% 3% -2% 10% 3% 3%
Consumption
n
Inflation -0.40% 1.60% 3.20% 0.80% Inflation -0.40% 1.60% 3.20% 0.80%

39. (nine liter cases) (in thousands)
USA Consumption of Wine
Year Item Total Consumption % Growth Total Total Yellow Tail % Growth Yellow Tail % Yellow to Total
294,740 8,300 2.82%
2008 0.91% 3.11%
292,090 8,050 2.76%
2007 3.21% 0.00%
283,000 8,050 2.84%
2006 3.40% 7.33%
273,685 7,500 2.74%
2005 2.10% 15.38%
268,062 6,500 2.42%
2004 3.81% 51.87%
258,232 4,280 1.66%
2003 4.86% 256.67%
246,268 1,200 0
2002

40. Without Project
USA Consumption of Wine
Year Item Total Consumption % Growth Total Total Yellow Tail % Growth Yellow Tail % Yellow to Total
4.20%
2012 337,079.46 3.00% 14,157 13.84%
2011 327,261.61 3.00% 12,436 11.83% 3.80%
3.50%
2010 317,729.72 10.00% 11,121 36.72%
2.82%
2009 288,845.20 -2.00% 8,134 -2.00%
2008 294,740.00 0.91% 8,300 3.11% 2.82%
2007 292,090.00 3.21% 8,050 0.00% 2.76%
2006 283,000.00 3.40% 8,050 7.33% 2.84%
273,685.00 7,500 2.74%
2005 2.10% 15.38%
268,062.00 6,500 2.42%
2004 3.81% 51.87%
258,232.00 4,280 1.66%
2003 4.86% 256.67%
2002 246,268.00 1,200 0

41. Conservative Scenario
USA Consumption of Wine
% Yellow
Year Item Total Consumption % Growth Total Total Yellow Tail % Growth Yellow Tail
to Total
2012 337,079.46 3.00% 14,157 13.84% 4.20%
2011 327,261.61 3.00% 12,436 11.83% 3.80%
2010 317,729.72 10.00% 11,121 36.72% 3.50%
2009 288,845.20 -2.00% 8,134 -2.00% 2.82%
2008 294,740.00 0.91% 8,300 3.11% 2.82%
2007 292,090.00 3.21% 8,050 0.00% 2.76%
2006 283,000.00 3.40% 8,050 7.33% 2.84%
2005 273,685.00 2.10% 7,500 15.38% 2.74%
2004 268,062.00 3.81% 6,500 51.87% 2.42%
2003 258,232.00 4.86% 4,280 256.67% 1.66%
2002 246,268.00 1,200 0

42. Best Scenario
USA Consumption of Wine
% Growth % Yellow
Year Item Total Consumption % Growth Total Total Yellow Tail
Yellow Tail to Total
2012 337,079.46 3.00% 15,169 15.88% 4.50%
2011 327,261.61 3.00% 13,090 3.00% 4.00%
2010 317,729.72 10.00% 12,709 56.25% 4.00%
2009 288,845.20 -2.00% 8,134 -2.00% 2.82%
2008 294,740.00 0.91% 8,300 3.11% 2.82%
2007 292,090.00 3.21% 8,050 0.00% 2.76%
2006 283,000.00 3.40% 8,050 7.33% 2.84%
2005 273,685.00 2.10% 7,500 15.38% 2.74%
2004 268,062.00 3.81% 6,500 51.87% 2.42%
2003 258,232.00 4.86% 4,280 256.67% 1.66%
2002 246,268.00 1,200 0

43. Capex 2008 2009 2010 2011 Total
Rent Stores 450,000 450,000 900,000 900,000 2,700,000
Staff 50,000 50,000 50,000 50,000 200,000
Workshops 10,000 10,000 10,000 10,000 40,000
Tv Ads 500,000 500,000 500,000 500,000 2,000,000
Wine Instruction Manual 61,400 59,400 59,400 59,400 239,600
Social Media 600,000 100,000 100,000 100,000 900,000
Mini Wallaby 50,000 300,000 300,000 300,000 950,000
Market Studies 1,000,000 0 0 0 1,000,000
Super Market Staff 70,000 70,000 70,000 70,000 280,000
Taxi Advertising 300,000 300,000 300,000 300,000 1,200,000
Total (M$) 2,791,400 1,539,400 1,989,400 1,989,400 9,509,600

44. Stores
Area (sq feet) 1500
Price sq feet 300
Total Stores 2
Total Stores 900000
Grand Total
Wine Instruction Material
Conception 2000
Per Bottle 0.1

45. Adjusted
Payback Period
Cenario Year 2008 2009 2010 2011 2012
Adjusted Cash
Worst -2,791,400.00 -2,539,945.40 29,836,455.01 52,411,928.15 140,235,981.11
Flow
Adjusted Cash
Conservative -2,791,400.00 -2,539,945.40 116,647,782.04 247,990,261.81 381,059,313.02
Flow
Adjusted Cash
Best -2,791,400.00 -2,539,945.40 205,562,059.31 379,700,619.11 432,114,103.78
Flow

46. Cenario 2008 2009 2010 2011 2012
Inc. Revenues -2,791,400.00 0.00 38,576,445.60 39,733,738.97 152,161,972.92
Worst CAGR 345%
NPV $ 154,270,401.00
Inc. Revenues -2,791,400.00 0.00 143,427,253.20 212,527,869.89 307,892,683.42
Conservative CAGR 692%
NPV $ 458,860,457.73
Inc. Revenues -2,791,400.00 0.00 248,278,060.80 255,726,402.62 374,634,416.49
Best CAGR 897%
NPV $ 613,804,996.00

47. Growth of Wine Sales
Source: Silicon Valley Banking

48. BACK UP
1. Industry Status

49. Back-up

50. Expected sales in volume
Expected Case Sales 2009 2010 2011 Expected Case Sale 900 1090 1050
Cabernet-Merlot
% Growth - 21,11% -3,67%
Expected Case Sale 440 430 470
% Growth - -2,27% 9,30% Chardonnav
Shiraz-Cabernet Expected Case Sale 1450 1600 1650
Expected Case Sales 375 390 430
% Growth - 10,34% 3,13%
% Growth - 4,00% 10,26%
Pinot Grigio Merlot
Expected Case Sale 585 610 660 Expected Case Sale 950 1100 1050
% Growth - 4,27% 8,20% % Growth - 15,79% -4,55%
Riesling
Cabernet Sauvignon
Expected Case Sale 410 450 480
% Growth - 9,76% 6,67% Expected Case Sale 1100 1250 1200
Pinot Noir % Growth - 13,64% -4,00%
Expected Case Sale 480 520 570
Reserve Cabernet
% Growth - 8,33% 9,62%
Rose Expected Case Sale 500 600 650
Expected Case Sale 290 320 340 % Growth - 20,00% 8,33%
% Growth - 10,34% 6,25%
Total 7700 8641,226 8900,662
Sauvignon Blanc
Expected Case Sale 220 280 350 % Growth - 12,22% 3,00%
% Growth - 27,27% 25,00%
Shiraz

51. Back up
Appendix
Expected Sales in volume until 2011
1800
Cabernet-Merlot
1600 Shiraz-Cabernet
1400 Pinot Grigio
Riesling
1200
Pinot Noir
1000 Rose
800 Sauvignon Blanc
Shiraz
600
Chardonnav
400 Merlot
Cabernet Sauvignon
200
Reserve Cabernet
0
2009 2010 2011

52. Back up
Appendix
Expected Sales in volume until 2011
1700
1600 Shiraz
1500
1400
Chardonnav
1300
1200
Merlot
1100
1000
Cabernet Sauvignon
900
800
2009 2010 2011

53. Back up
Appendix
Expected Sales in volume until 2011
700
Cabernet-Merlot
600
Shiraz-Cabernet
500 Pinot Grigio
400 Riesling
300 Pinot Noir
Rose
200
Sauvignon Blanc
100
Reserve Cabernet
0
2009 2010 2011

54. Consumption per person – Countries
Compared

55. Supermarket sales
Nielsen also tracks varietal sales by package
size (e.g., 750 ml. bottles, 1.5 liter "magnums,"
187 ml. single-serve bottles, etc.). Over the past
year, the biggest dollar sales increases were for
varietals bottled in the 1.5 liter (+20%) and 750
ml. (+18%) sizes. During the same period, 750
ml. wines accounted for roughly 50% of
supermarket dollar sales, compared to 31% for
1.5 liter magnums.
Premium wineries enjoying the greatest
percentage increases in supermarket sales over
the past year were Sutter Home, up 23% in
dollar sales, followed by Fetzer, up 18%, Robert
Mondavi-Woodbridge, up 15%, and Beringer, up
12.5%.