Bourbon

Logan BallewDavid Hill

Total alcohol sales in the U.S. is $59.24 billion

Bourbon is responsible for $3.8 billion in sales

Jack Daniels is the market leader accounting for $1.32 billion in sales (www.insiderlouisville.com)

Industry Overview

128 SKUs Around 60 SKUs per retailer. Smallest Store 48 SKUs (Adams) Largest Store 72 SKUs (Popatop) In the stores audited there were 0 private

label SKUs Less SKUs than 2011, more depth. Assumption = Smaller Stores

Audit Overview

Audit Overview

Prevalent Brands• Jack Daniels

• Jim Beam• Evan Williams • Maker’s Mark• Wild Turkey

Demographics

LifeStyle

BehaviorStage

50 51 61 48 23 112 59

51 93 51 50 29 35

126 31 50 86 23 68

161 74 53 105 38 37

78 110 72 78 91 66

72 164 90 87 54 66

127 79 106 57 61 44

168 92 118 52 131 292

130

159 213 191 116 109 181

59

72

82

83

73

226 220 190 156 104

151

172

167

100120 119 106 81 69 105Total

Senior Couples2+ person HHs, No Children, 65+

Empty Nest Couples2+ person HHs, No Children, 55-64

Established Couples2+ person HHs, No Children, 35-54

Senior Singles1 person HHs, No Children, 65+

Independent Singles1 person HHs, No Children, 35-64

Young TransitionalsAny size HHs, No Children, < 35

Older Bustling FamiliesLarge HHs with Children (6+), HOH 40+

Younger Bustling FamiliesLarge HHs with Children (6+), HOH <40

Small Scale FamiliesSmall HHs with Older Children 6+

Start-Up FamiliesHHs with Young Children Only < 6

TotalPlain Rural

Living

Modest Working

Towns

Struggling Urban Cores

Comfortable Country

Affluent Suburban Spreads

Cosmopolitan Centers

51

Demographics

Main Market

Higher income Older, generally 55+ (changing) Not a significant difference in demographics

between brands

Category Role

We believe a destination role is appropriate Goal = Build traffic and be the primary

category provider Purchase cycle average = 30ish days

Total sales, brand loyalty, and brand familiarity

drives the high stocking rate for these brands These 5 dominant brands can be found nearly

everywhere .

Strength of Leading Competitors

Brand Stocking Rate Percentage

Jack Daniels 42%

Jim Beam 49%

Evan Williams 40%

Makers Mark 42%

Wild Turkey 38%

High gross margins of over 45% on all leading

brands Consistent with a destination role because of

higher gross margin and turnover Higher gross margin = more depth.

Gross Margins

There is no PL presence in the stores we audited in the

Bourbon category Our assumption is that PL will continue to lack presence

in the Bourbon market because retailers are attracted to the current high gross margins in national brands

Total bourbon sales are hardly affected by the state of the economy

We assume that if private label were introduced, it could target the lower income demographic

We would not suggest retailers start carrying private label because of already high gross margins of national brands.

Private Label

Questions?