Outline of Strategic Planning Process

Introduction

We started this process with the premise that an industry wide plan covering the next two decades and reflecting a coordinated approach toward developing a more competitive U.S. wine business was necessary, even critical, because of sweeping changes already occurring in the worldwide business of wine, in part because of changes in consumer consumption patterns as well as the global boom in vineyard plantings over the last decade. We saw that these changes included consolidation at all levels of production, distribution and retailing; the internationalization of what had been disparate local and regional wine industries; new technology such as the Internet that was revolutionizing the once distant link between producer and consumer; and increasingly more complex consumers, who now span three generations of drinking-age adults with remarkably diverse demographics.

From the original call to action in March 1998, the WineVision planning process sought involvement from a broad spectrum of the American wine industry. Association staffs and industry representatives helped collect preliminary data, participated in a two-day Napa retreat, and are involved with the work/study groups developing the plan. Telephone and mail surveys were used by to collect wider vintner and grower input.

In the near future, the WineVision planning progress will be updated and presented at industry meetings around the country to build national support and participation for the process.

Beginning

We launched a series of brainstorming sessions with dozens of key industry decision makers that:

a) assessed the strengths and weaknesses of the U.S. wine industry, and, b) began exploring objectives and strategies that would make us more competitive in the future.

Assistance

The process has been funded through voluntary contributions of more than 60 winemakers and winegrowers from all levels of the U.S. wine industry.

The San Diego, Calif., strategic planning firm of Nuffer, Smith, Tucker was hired to guide the industry through an 18-month planning process that should culminate with the first stages of plan implementation in June of 2000. From the beginning, we have reiterated our intention that the WineVision strategic planning process would not create a new organization, but would provide a forum for industry wide coordination and unity on strategies of common interest that can be implemented by existing organizations and industry leaders.

The Vision

Leaders from all industry segments this summer reached agreement on three goals of a vision statement that sets over-arching objectives to strive for over the next 20 years:

To make wine an integral part of the American culture To be the preeminent supplier to the global market To be a leader in sustainable practices

A fourth plank, which was seen as forming a base for the above three, also has emerged in the months following creation of this vision for the future, namely:information.

-- To enhance industry wide communication, coordination and marketplace

Critical Factors to Success

Critical factors for success were developed at a June retreat of 60 wine industry representatives. These factors were identified as,

1) creating an image of U.S. wine that will enhance consumer demand; 2) facilitating industry wide coordinated legal and political strategies to address resurgent anti-alcohol sentiment; 3) enhancing the distribution system; 4) eliminating global and domestic trade barriers; 5) maximizing relationships with stakeholders and public officials at all levels of government; 6) developing the best sustainable environmental practices; 7) funding and supporting coordinated research and market databases; and, 8) enhancing the industry talent pool.

Champions

The Planning Team Champions in their four strategic areas and their industry affiliations are:

-- American Culture: Mark Chandler, Tim Hanni, John Gillespie (Wine Market Council), Bill Turrentine, Ron Larson (Trinchero Family Estate) , Alan Dreeben (Block Distributing), Jon Moramarco (Allied-Domecq Wines USA) and Jerry Lohr (J. Lohr Winery). -- Global Marketplace: Paul Dolan (Brown-Forman Fetzer Vineyards), Herb Schmidt (Robert Mondavi Corp.), Eric Morham (Delicato), Joe Rollo (Wine Institute), Terry Lee and Doug Walker (Beringer - Blass Wine Estates). -- Sustainability: Karen Ross, (CAWG), Andrew Beckstoffer (Beckstoffer Vineyards), Brad Alderson (Robert Mondavi-Woodbridge) and Randall Lange (Lange Twin Vineyards)and Patrick Gleeson. --Communication/Coordination/Marketplace Information: Simon Siegel (American Vintners Association), David Freed (Wine Industry Financial Symposium, UCC Vineyards), Karen Ross (California Association of Winegrape Growers), Phillip Woodward, Paul Wagner (Balzac Communications), July Ackerman, Tary Salinger (WinerySite.com and Salinger & Associates) and Richard Cartiere (Wine Market Report).

The Next Steps

The next stage is to communicate newly developed strategy options to the industry at large and work with trade organizations and individuals on implementation tactics. We also will be setting up a system to monitor progress and make adjustments to the various strategies and objectives to match changing realities. Later this year and early next year, we will be working to refine the prospective roles and commitments of both key individuals and wine trade associations.

Your Participation

We had had involvement from all the major trade organizations and from a pool of more than 400 individuals who expressed an interest in contributing time and effort to completing and implementing this plan.

It is not too late for you to participate. In fact, we are still in the beginning stages of what we hope will be a better coordinated, unified and strategically placed U.S. wine business, but it will need an even greater level of participation from all of you to come to fruition.

The WineVision Steering Committee consists of:

Paul Dolan Fetzer Vineyards, Hopland 707-744-7600
David Freed UCC Vineyards Group, Napa 707-252-9200
Jerry Lohr J. Lohr Winery, San Jose 408-288-5057
Bill Turrentine Turrentine Wine Brokerage., San Anselmo 415-454-4546