1	The Grape/Wine Market in the Global Marketplace Glenn Proctor, Partner Joseph W. Ciatti Co., LLC San Rafael, Ca Phone: 415/458-5150 Fax: 415/458-5160
2	Points to Discuss Sales Update Grape/Wine Market International The Future Questions
3	Wine Shipments YTD (Nov ‘06 ) Wine shipments +2.2% (bttld) 2.2% Overall YTD GFA Premium Wine Index +7% Premium growth offset by losses in economy wines Bulk Exports +2% YTD; Bottled -2% YTD Limited gain given world supply
4	Wine Shipments YTD (Nov ‘06) Imports growing faster than domestic Total imports to US + 9% (bottled +2%, Bulk +109%) CA > US +2.8% Australia +4%; Spain +13%; France +24% (mostly bulk) Imports could reach 30% of all wine consumed in U.S. by end of the year.
5	Wine Shipments YTD (Nov ‘06)
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8	2006 Winegrape Market PINOT, PINOT, PINOT!!!! Large Statewide CH picked up late; CS and ME unsold or custom crushed ’05 Hangover - Major wineries on sideline or selling fruit/wine Notice on existing contracts – Growers have been willing to Custom Crush
9	Central Coast Tons
10	Central Coast Prices
11	Central Coast White Grape Tonnages 2002 – 2006
12	Central Coast White Grape Pricing 2003 - 2006
13	Central Coast Red Grape Tonnages 2002 –2006
14	Central Coast Red Grape Tonnages Cont. 2002 –2006
15	Central Coast Red Grape Pricing 2003 - 2006
16	Central Coast Red Grape Pricing Cont. 2003 - 2006
17	2007 Grape Market Outlook Overall Market will improve CH continues to strengthen – especially Santa Barbara & No. Mont. Cty PN Strong – but less pkg deals. Spot Mkt will soften SY weakness outside of varietal market CS will show signs of improvement – prices still below expectations – Opportunistic buyers ME continues to be challenged. Significant amts of grafting
18	California Bulk Market VERY LARGE Carry-over of ’05- working thru it Current Central Coast Bulk Market CH – Balanced (’05 Long) CS – Long ME – Long ZN – Balanced PN - Short Market has begun to recover Normal Buyers reappearing Middle of market beginning to return Seeing activity on ’05 Cabernet ‘05 will be used in other vintages Good Initial ’06 Activity
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20	CHARDONNAY Pricing Valley $3.00 – 4.00 Coastal $6.00 – 9.00 (’05 $3.50 – 5.25) Napa/Sonoma $10.00 – 15.00
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22	MERLOT Pricing Valley $2.50 – 4.00 Coastal $4.00 – 7.00 Napa/Sonoma $6.00 – 12.00
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24	CAB SAUV Pricing Valley $2.50 – 4.50 Coastal $4.50 – 8.00 Napa/Sonoma $8.00 – 22.00
25	ZINFANDEL Pricing Valley $6.00 – 8.50 Coastal $8.00 – 10.00 Napa/Sonoma $10.00 – 16.00
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27	PINOT NOIR Pricing Valley N/A – N/A Coastal $14.00 – 20.00 Napa/Sonoma $20.00 – 25.00
28	SAUV BLANC Pricing Valley $3.50 – 4.50 Coastal $5.00 – 7.00 Napa/Sonoma $7.00 – 10.00
29	SYRAH Pricing Valley $3.50 – 5.50 Coastal $5.00 – 8.50 Napa/Sonoma $9.00 – 14.00
30	USA vs. World
31	Global Winegrape Production 2006
32	Australian Production
33	Imported Wine Shipments Bulk/Bottled YTD Sept
34	International View All wineries weighing global opportunities – the supply is there! Bulk importing could increase category base w/ short varieties – produce future CA demand? Imports will continue to grow if consumers indifferent and cost advantages exist CA must compete based on quality and price Need Understanding CentralCoast/CA/World Supply/Demand Balance
35	"’06 Crop severly impacted by..." ’06 Crop severly impacted by ’05 hangover Strong early season bulk activity Market should strengthen, when we move through ’05 bulk, Ltd. New Acres/Growing Demand CC is still oversupplied relative to Premium Brand Development ’07 grape demand to improve – longer term contracts CH/PN PN may soften on spot, but will remain solid Long term effects to CA of off shore sourcing? “Future looking Brighter”
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37	Thank You for your time and Attention Joseph W. Ciatti Co., LLC Glenn Proctor/ Chris Welch T.415/458-5150 E. glenn@ciatti.com www.ciatti.com