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GROWTH BRANDS - Continued

RISING STARS

The Rising Star category includes relatively new brands (on the market four years or less) that can sometimes point toward several of the latest trends in the marketplace. For example, once again this year there are several vodkas (eight) and flavored spirits among the 14 brands included in the category. And 12 of the 14 Rising Stars appeared in this category last year.

Seagram's Vodka (Pernod Ricard USA) has had a notable initial success. The launching of a companion vodka to the renowned Seagram's Gin hit a healthy 460,000 cases in its first year on the market and followed that up in 2004 with a 38.9% increase, to 639,000 cases. Hpnotiq (Heaven Hill Distilleries) is another remarkable success story. The liqueur -- a blend of cognac, vodka and tropical fruit juices -- took off in 2003 with sales of 610,000 cases, and while growth has slowed, the brand still hit sales of 630,000 cases last year. Bacardi Party Drinks (Bacardi USA) joined the pre-mixed cocktail market with a bang, hitting sales of 425,000 in 2003, and last year gained a hefty 45.9% to 620,000 9-liter cases. A Rising Star the last two years, Three Olives Vodka (White Rock Distilleries) doubled its sales in 2004 to 350,000 cases, with some of the gain attributable to successful flavor line extensions. Tarantula Azul (McCormick Distilling), the ready-to-drink Margarita, had a stellar year, nearly tripling its sales in 2004 to 261,000 cases. UV Vodka (Phillips Distilling), which features several flavors, gained an impressive 78.3% in 2004 to 214,000 cases. The superpremium vodka Level (Absolut Spirits Co.), a first time Rising Star, notched sales of 100,000 cases in 2004, its first full year on the market. Yet another vodka, McCormick Flavored Vodka (McCormick Distilling), grew to 62,000 cases last year, while Dewar's 12 (Bacardi USA), the higher-end version of Dewar's White Label Scotch, reached sales of 61,000 cases. The superpremium French imported vodka Ciroc (Diageo) gained 37.5% in 2004 to 55,000 cases, while another vodka, Polar Ice (McCormick Distilling), rose 43.2% in 2004 to 53,000 cases. Pearl Vodka (David Sherman) grew by 30.0% to 52,000 cases, while Forty Creek Canadian Whisky (Shaw-Ross International Importers) registered sales of 42,000 cases. Finally, Corazon Tequila (Sidney Frank Importing), a new Rising Star, notched sales of 28,000 cases in 2004.

Brands less than five full years of age that have exhibited substantial growth over the past few years.

DISTILLED SPIRITS (thousands of 9-liter cases)
Brand Supplier 2001 2002 2003 2004p

'03/'04 % Chg

Seagram's Vodka Pernod Ricard USA -- -- 460 639

38.9%

Hpnotiq Heaven Hill Distilleries -- 85 610 630

3.3%

Bacardi Party Bacardi USA -- -- 425 620

45.9%

Three Olives White Rock Distilleries 27 85 175 350

++

Tarantula Azul McCormick Distilling -- 11 95 261

++

UV Vodka Phillips Distilling 15 65 120 214

78.3%

Level Absolut Spirits -- -- -- 100

--

McCormick Vodka - Flavored McCormick Distilling 8 37 41 62

51.2%

Dewar's 12 Yr Old Bacardi USA 31 36 50 61

22.0%

Ciroc Diageo -- -- 40 55

37.5%

Polar Ice McCormick Distilling 10 21 37 53

43.2%

Pearl Vodka David Sherman 11 26 40 52

30.0%

Forty Creek Shaw-Ross Int'l Importers -- 2 40 42

5.0%

Corazon Sidney Frank Importing -- 8 20 28

40.0%

(p) Preliminary    ++Greater than 100%

Wine Rising Stars number 22 this year compared to 16 last year. Most of these wines retail for under $10, while a handful may sell for between $12 and $15. Half of them are imported wines, beginning with the Australian Yellow Tail (W.J. Deutsch & Sons), which in a few short years has overwhelmed the competition, becoming the top-selling imported wine in the U.S. The brand gained more than 2 million cases again last year for a total of 6.5 million, representing a 51.2% increase. Indeed, Yellow Tail's success has apparently spawned a following of flavorful value-priced wines adorned with cute, colorful labels. Other Australian wines include Black Swan (E&J Gallo), which gained 20.0% to 1.2 million cases; Little Penguin (Southcorp), which scored 372,000 cases its first year on the market; Jindalee (Frederick Wildman), which reached 150,000 cases last year; McWilliams (E&J Gallo), which hit 140,000 cases in its third year on the market; and Jackaroo (Click Wine Group), which notched 60,000 cases in 2004. Also from that part of the world, the New Zealand wine Nobilo (Pacific Wine Partners) registered a 61.8% increase (123,000 cases). And from South Africa, Fairview/Spice Route wines (Vineyard Brands) moved up to 73,000 cases.

Brands less than five full years of age that have exhibited substantial growth over the past few years.

WINES (thousands of 9-liter cases)
Brand Supplier 2001 2002 2003 2004p '03/'04 % Chg
Yellow Tail W.J. Deutsch & Sons 225 1,200 4,300 6,500 51.2%
Bella Sera E & J Gallo Winery 550 1,300 1,400 1,650 17.9%
Black Swan E & J Gallo Winery -- 25 1,000 1,200 20.0%
BV Century Cellars Diageo Chateau & Estates -- -- -- 390 --
Little Penguin Southcorp Wines USA -- -- -- 372 --
Black Box Pacific Wine Partners/
Constellation
-- -- 4 216 ++
Papio Robert Mondavi Winery -- -- 32 194 ++
Stimson Estate Cellers Ste. Michelle Wine Estates -- 39 100 172 72.0%
Frei Brothers E & J Gallo Winery 40 110 115 150 30.4%
Jindalee Frederick Wildman -- -- 60 150 ++
McWilliams E & J Gallo Winery -- 35 100 140 40.0%
Red Bicyclette E & J Gallo Winery -- -- -- 140 --
Wild Horse Peak Wines International -- -- 28 133 ++
One.6/One.9 Brown-Forman Beverages -- -- -- 130 --
Red Diamond Ste. Michelle Wine Estates -- -- 26 129 ++
Nobilo Pacific Wine Partners/
Constellation
35 51 76 123 61.8%
Osborne Solaz W.J. Deutsch & Sons 7 20 26 84 ++
Fairview/Spice Route Vineyard Brands 11 30 56 73 30.4%
MacMurry Ranch E & J Gallo Winery -- 6 35 65 85.7%
Jackaroo Click Wine Group -- -- 30 60 ++
Aquinas Don Sebastiani & Sons -- -- 8 55 ++
Fusee Don Sebastiani & Sons -- 6 17 50 ++

(p) Preliminary     ++Greater than 100%

Nine California wines are designated as Rising Stars: BV Century Cellars (Diageo Chateau & Estates) sold just under 400,000 cases in its first year on the market; the varietal bag-in-box wines Black Box (Pacific Wine Partners) also had an impressive 2004, with sales of 216,000 cases; Papio (Robert Mondavi), with bongo-thumping and horn-blowing monkeys on the label, hit 194,000 cases; Frei Brothers (E&J Gallo) reached 150,000 cases, while Wild Horse (Peak Wines) reached 133,000 cases; the low-carb wines One.6 and One.9 (Brown-Forman) registered 130,000 cases in its introductory year, while MacMurray Ranch (E&J Gallo) notched 65,000 cases. Two wines from Don Sebastiani & Sons, Aquinas and Fusee, also had noteworthy sales in 2004.

Two Rising Stars are produced by Washington's Ste. Michelle Wine Estates: Stimson Estate Cellars, which grew 72.0% to 172,000 cases, and Red Diamond, which totaled 129,000 cases.

Other Rising Stars include Bella Sera Italian Table Wine (E&J Gallo), which grew another 250,000 cases last year to 1.65 million; Red Bicyclette, a French import from Gallo, which sold 140,000 cases in its first year on the market; and Osborne Solaz (W.J. Deutsch & Sons), which notched 84,000 cases.

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