BRITISH COLUMBIA WINE INSTITUTE ANNUAL REPORT. 100% BC VQA. Making history.

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1 BRITISH COLUMBIA WINE INSTITUTE ANNUAL REPORT 100% BC VQA. Making history. 1

2 Table of Contents A Message from the Chairman Table of Contents Message from the Chairman...1 Message from the Executive Director Wines of British Columbia Brand BCWI Vision, Goals & Business Objectives... 6 Membership Objectives & Highlights... 7 Advocacy Objectives & Highlights...8 Marketing Objectives & Highlights...11 Communications Objectives & Highlights Vintage Report Crop Report Acreage Report The British Columbia Wine Institute exists to protect and promote the interests of the BC VQA Wine Industry and ultimately to ensure continued profitable growth. Over the last year we have continued to focus on Government advocacy, marketing, BC VQA Wine education and communication. Government advocacy ensures we protect and maintain favourable Government policies and programs and push for changes to ones that impede our ability to grow competitively, both Provincially and Federally. Through hard work and communication, the current Government understands the importance of the domestic wine industry to the economy through jobs and investment in BC and Canada and we continue to ensure important information is regularly communicated. Our marketing initiatives in the areas of brand building, retail, licensee, and winery tourism ensure we continue to drive profitable winery sales and industry growth against all other wine world categories. BC VQA Wine education and communication continues to reinforce the knowledge of 100% BC wines. The British Columbia Wine Industry continues to grow in terms of acreage, wine production and the number of wineries. As we grow, it is important to continue to review our focus and ensure we align available markets with the size of our industry. This last year we revisited our vision and strategic plan for the BC Wine Industry for Fiscal 2013 and beyond. In doing so, we expanded our past focus of British Columbia only to now include marketing in other profitable markets outside of BC. MESSAGE FROM THE CHAIRMAN Category Update...37 Board of Directors, Committees and Staff...40 BCWI Member Wineries BC VQA Wine Stores In addition, we finalized the development of a core team of dedicated professionals at the Wine Institute who work tirelessly to promote the Wines of British Columbia brand and continue to grow our strategic alliances and relationships with our industry partners. British Columbia Wine Institute staff work hand in hand with Winery Member committees who provide input and guidance in the areas of focus Marketing, BC VQA Wine Stores, Government Relations, and Finance. This year we added an Export Committee to the list. We appreciate the hard work, expertise and significant contributions of the committee members combined with efforts of the staff. The continued growth in our membership is testament to the value we place on involving and engaging Members to ensure we represent their needs. We encourage everyone to get involved, and take an active role in building our industry. Thank you for making our industry s success a reality and we wish everyone the best in next year s ventures. Josie Tyabji, Chairman i 1

3 MESSAGE FROM THE EXECUTIVE DIRECTOR A Message from the Executive Director Canadians growing taste for wine saw the dollar value of red wine sales over the past decade rise 181%, while the dollar value of white wine increased by 66%, making our market very attractive to wine exporters from around the world. Similarly, the Provincial BC VQA long-term dollar sales growth trend continued, although not at the same pace of previous years, indicating that we will, if we haven t already, soon reach a plateau. The increase in dollar sales, combined with total volume sales down from last year, shows that BC VQA Wines enjoyed some of that market growth with the steadily improving quality of our wines finding a customer base willing to recognize their value by paying more. However, looking into the future with the aid of the 2011 BDO Wine Grape Crop Report and 2011 BC Wine Grape Acreage Report, and barring the winter-kill of the last couple of years, it is more important than ever that we look toward building and expanding markets outside of British Columbia to quench the rest of Canada s thirst for BC VQA Wines, and the Wines of British Columbia brand will help us achieve that. But what is a brand? Google the phrase and over 1.5 billion results return making what should be a straight-forward concept much more complex than it need be. Simply put, a brand is one, or combination of a, name, term, design, symbol, and/or any other feature that identifies a good or service as distinct from the others. Product: Wines of British Columbia is BC VQA certified wine. We educate and promote to consumers that they can trust that BC VQA Wine is 100% British Columbia grapes and will have no faults. Place: Consumers can share pride in what British Columbia is producing for them and they will want to support local (even if they re outside BC) knowing they are getting great quality. Place also speaks to the experience of visiting British Columbia Wine Country, its diverse terroir and lush renowned wine producing regions. Our brand communications paint a vivid picture of the place we represent, sharing the experience of the Wine Regions of British Columbia. People: Consumers want to know from where and from whom the wine comes, the faces behind the bottle, the real people that make the wine and are excited to share their passion. They want to feel a connection and build a relationship. These three brand pillars combine to make the Wines of British Columbia distinct in an ever-competitive environment. MESSAGE FROM THE EXECUTIVE DIRECTOR Miles Prodan, Executive Director We educate and promote to consumers that they can trust that BC VQA Wine is 100% British Columbia grapes and will have no faults. To be successful, a brand must be supported by real, tangible attributes. For the BC Wine Institute, our brand pillars lay the foundation of the Wines of British Columbia Brand (refer to page 4 to view the 2012 Wines of British Columbia Brand Blueprint) and enable us to make an emotional connection with the consumer. They express how we see ourselves and how we want others to think of us and are made up of: 2 3

4 2012 Wines of British Columbia Brand 2012 Wines of British Columbia Brand Personality: Brand Promise: Distinctly British Columbia Brand Essence Vibrant Innovative Approachable Confident Wines of British Columbia are an authentic expression of BC s spectacular and unique wine regions 2012 Wines of British Columbia Brand Pillars: Product: BC VQA; 100% BC grapes with no faults Place: BC wine country, regions & community - diverse, lush, renowned People: Winemakers, growers, locals & enthusiasts excited to share their passion 4 5

5 2012 BCWI Vision, Goals & Objectives 2012 British Columbia Wine Institute Vision, Goals and Business Objectives Our vision is straightforward and clear. Continued support and growth of the Wines of British Columbia (BC VQA) as the preferred premium wine brand; develop and execute strategies to create a business climate that encourages investment in the quality of BC VQA Wines; assist Members in realizing their full potential; and provide leadership on key industry issues. Our core values are reflected in all the work we do: quality, leadership, dedication, and passion. Our core purpose is to represent the interests of British Columbia wineries dedicated to producing BC VQA Wines through marketing, communications and advocacy of their products to all stakeholders. Our visionary goals are a broader expression of how we will achieve our vision. We support and grow the Wines of British Columbia (BC VQA) and Wine Regions of British Columbia brands as the preferred quality choice of consumers. We do this by educating our consumers to understand that we produce only 100 per cent BC wine (BC VQA). We will create a market share that absorbs our grape production. Our market share in dollars will be greater than any other category in BC (excluding Canadian non-bc VQA). We will be known for quality wine and Membership Objectives Attain and retain a membership representing 95 per cent of production of BC grapes, 60 per cent of licensed grape wineries and a representation of BC grapegrowers Attain and retain a membership with representation from each Designated Viticultural Area Membership highlights British Columbia Wine Institute membership grew by 15%, beginning the year with 109 wineries and ending with 125. Membership GROWTH % 12% 20% 18% 18% 15% Membership Objectives & Highlights memorable wine tourism experiences. We improve the profitability of and business climate for our Members. We will 40 work to provide margin enhancement through retail sales (BC LDB, BC VQA 20 Wine Stores, etc.), trade channels, relief from excessive taxation (for example, the Federal Excise Tax), and develop a tourism strategy to increase on-site sales and to increase the flow of tourism dollars to the Wine Regions of British Columbia / / / / / /2012 We provide a leadership role within the British Columbia Wine Industry. We will Member Winery representation from all five Designated Viticultural Areas create opportunities for networking, collaboration, partnership and education in the industry. We will provide leadership as the voice of industry to Government, trade, media, consumers and other stakeholders. We will find common ground amongst industry stakeholders. BC VQA producing wineries also continue to increase in number with 124, up from 117 last year Associate members: 20 BC VQA Wine Stores in operation 17 grapegrower partners 6 7

6 Advocacy Objectives & Highlights ADVOCACY OBJECTIVES Support the British Columbia Wine Institute s vision to create a business climate that encourages investment in the quality of BC VQA Wines while growing and sustaining demand for BC VQA Wine as well as improving the profitability and business climate for our Members through collaborative advocacy. ADVOCACY HIGHLIGHTS With Member Wineries representing 95% of the total Provincial wine production, combined with a full complement of professional staff, the BC Wine Institute is well positioned provide a singular leadership and advocacy role for the BC Wine Industry. We have continued to work closely with the Canadian Vintners Association and Wine Council of Ontario to further leverage the Wine Industry s national voice on issues of importance for the British Columbia Wine Institute and Wines of British Columbia, including: Ongoing support for Bill C-311 to amend the 1928 Importation of Intoxicating Liquors Act allowing for a personal exemption of cross-border Provincial shipment Advocate for Provincial Government support of Bill C-311 including setting a Provincial standard for a reasonable amount for personal exemption Continue to work collaboratively with other BC Wine Industry associations and BDO Canada LLP on the annual BC Wine Grape Crop Report and bi-annual BC Wine Grape Acreage Report Commissioned the BC Wine Industry Economic Impact Study from Okanagan College Advocated for qualifying wineries to be allowed to offer a wider range of alcoholic beverages by the Agricultural Land Commission and Liquor Control and Licensing Branch Advocated for changes to the Provincial Production Insurance program to recognize quality and risk factors Advocacy Objectives & Highlights of wine, including written submissions and a BC industry presentation to the House of Commons Standing Committee on Finance Advocate for the internationally recognized definition naturally frozen on the vine to protect the integrity of Icewine in Canada and around the world in the World Wine Trade Group Labeling Agreement Advocate for industry in consultations by the Canadian Food Inspection Agency regarding pending changes to wine labeling regulations Advocate BC Wine Industry position to the Federal House of Commons Standing Committee on International Trade to Europe and Provincial negotiators regarding issues around a possible Canada-EU Trade Agreement Cooperated with Canadian Vintners Association, Wine Council of Ontario, and Department of Foreign Affairs and International Trade Canada to support inbound mission of United Kingdom sommeliers to the Okanagan We also work closely with Government at the Provincial level, including: Ongoing industry updates and briefings to the BC Ministry of Agriculture, Solicitor General (Liquor Control and Licensing Branch), Ministry of Finance and Ministry of Jobs, Tourism and Innovation 8 9

7 Marketing Objectives & Highlights MARKETING OBJECTIVES Reinforce and measurably increase the Wines of British Columbia (BC VQA) and Wine Regions of British Columbia brands and help to lever partners and other stakeholders with their individual brand promotion and marketing objectives through the collaborative promotion of the British Columbia Wine Institute brands Increase BC VQA market share by 1.5 per cent per year (in dollar sales) in BC annually, until 2013 (attaining a 23.5 per cent market share by 2013). Annually, our market share in dollars will be greater than any other category in BC (other than Canadian non-bc VQA Wine) Continue to dominate the wine calendar in western Canada with events and programs that create measurable sales, awareness and loyalty with our target markets including trade, media and consumers. Conduct quantitative and qualitative research to evaluate and improve our marketing programs effectiveness and to better understand our target consumers (such as benchmarking how consumers make buying decisions, what influences their purchasing decision, understanding awareness levels of BC VQA, and determining what consumers think about our products) Marketing Objectives & Highlights Continue to dominate the wine calendar in western Canada with events and programs that create measurable sales, awareness and loyalty with our target markets including trade, media and consumers

8 MARKETING HIGHLIGHTS 2011 Bloom BC VQA Spring Release Attendees Marketing Objectives & Highlights Events: Bloom BC VQA Spring Release Tastings Our Bloom BC VQA Spring Release Tastings brought out a record number of wineries and attendees in each city. Vancouver 74 wineries, over 375 trade & media attendees Victoria - 61 wineries, over 250 trade & media attendees and 85 attendees at the Reception for Legislature Colour BC VQA Fall Release Tastings & ChefmeetsGrape This year, our Colour BC VQA Fall Release Tastings were our most successful to date. Once again, we set a record for the number of participating wineries and we also attracted a record number of attendees. Vancouver - 74 wineries, 650 attendees Edmonton 32 wineries, 75 attendees Other (27) 8% Educator (19) 6% Restaurant/ Hotel (94) 28% LRS (65) 19% Media (22) 6% VIP Media (20) 6% BC VQA Wine Store (41) 12% BC LDB (49) 15% Marketing Objectives & Highlights Calgary 34 wineries, 135 attendees Now in its 7th year, ChefmeetsGrape (Vancouver) was also our largest consumer event to date with 74 wineries, 10 top Ocean Wise partner restaurants and nearly 450 attendees Colour BC VQA Fall Release Attendees Tourism (11) 2% Educator (10) 2% Wine Enthusiast (15) 2% Other (15) 2% BC VQA Wine Store (35) 5% PR/Communications (42) 6% Restaurant/ Hotel (311) 47% Media (43) 6% BC LDB (59) 9% LRS (125) 19% 12 13

9 British Columbia Wine Institute Sponsored Events: Hosted annual BC Paired lunch, this year at Provence Marinaside. 18 wineries Marketing Objectives & Highlights Winnipeg Free Press A Taste of BC Contest The British Columbia Wine Institute, Winnipeg Liquor Marts (MLCC), and the Winnipeg Free Press partnered to host an evening to celebrate the Wines of British Columbia and generate awareness for our MLCC thematic in September 2011 promoting our theme region status for the Winnipeg Wine Festival in May BC VQA Wine sales at the MLCC in September 2011 were at $178,644, up 37% from the previous month and accounting for 57% of all MLCC VQA wine sales in September. Vancouver Playhouse International Wine Festival This fiscal, the British Columbia Wine Institute participated in two Vancouver Playhouse International Wine Festivals. March 28 to April 3, 2011 Sponsored the Wines of British Columbia Booth with a focus on Light, Bright, Fresh and Lively wine and food pairings. At each of the festival tastings, we featured a different wine for each category (20 wineries from 3 DVAs were featured) and paired with a small bite to demonstrate the versatility of BC wine and food pairing showcased 36 wines to a sold-out crowd of 150 wine savvy consumers and invited VPIWF accredited media guests, including John Schreiner, Cassandra Anderton, Glen Korstrom (Business in Vancouver), Russell Ball (BC Wine Appreciation Society & Adventures in BC Wine Blog), Mike Klassen (BC Wine Lovers Blog) and Katelynne Katona (The Wine Thief) Dine Out Vancouver Celebrating its 10th anniversary, Dine Out Vancouver (DOV) was bigger and better than ever this year. The expanded 17-day festival ran from January 20 to February 5, 2012 and featured over 220 participating restaurants, 20 special events and a hotel reservations program. Once again, only British Columbia Wine Institute Member Wineries were eligible to suggest a BC VQA Wine pairing for the Dine Out Vancouver menus ($18, $28, $38). DOV at a Glance: 232 restaurants, 43 hotels, 24 unique events Over 68,400 menus served and reserved via tourismvancouver.com and OpenTable (representing online reservations at 57% of total participating restaurants) Marketing Objectives & Highlights Hosted annual BC Paired lunch at O Doul s Restaurant and Bar. The Wines of British Columbia lunch has become a signature event during VPIWF. 18 wineries Estimated restaurant revenue exceeded $2.21 million (representing 57% of participating restaurants and based on base menu prices without add-ons) showcased 36 wines to a sold-out crowd of 125 wine savvy consumers and invited VPIWF accredited media guests, including John Schreiner, Shannon Borg (Seattle Magazine), Stan Garrod (Where to Eat in Canada), and Brigitte Detschelt 1.77 million unique menu views 354,756 unique page views to tourismvancouver.com/dov (Tran media/tv Deutsch) The Wines of British Columbia: February 27 to March 4, 2012 Cumulative gross sales of BC VQA product by participating restaurant Sponsored the Wines of British Columbia Booth with a focus on the festival s respondents: $213,328 feature varietal - Cabernets. At each of the festival tastings, we featured four Cabernets in a blind tasting. If participants correctly identified the Cabernet blend in the group, they received a $20 Wines of British Columbia Gift Card. A total of 88.5% of respondents offered BC VQA Wine during DOV 47.5% of respondents added new BC VQA Wine listings for DOV 192 gift cards were awarded during the festival. 48.2% of respondents reported an increase in BC VQA Wine sales during DOV 14 15

10 Marketing Objectives & Highlights This year, the Wines of British Columbia were also featured at a new DOV launch event, Plated and Paired at the Public Market. This innovative event featured 24 BC VQA wineries showcasing their wines next to 10 of Granville Island s top chefs and artisan producers to a sold-out crowd of 200 engaged wine and food consumers. Dine Around & Stay in Town Victoria This year, the Dine Around & Stay in Town program featured 50 restaurants and 23 hotel partners. As in Vancouver, only British Columbia Wine Institute Members were eligible to provide a BC VQA Wine pairing for the Dine Around menus ($20, $30, $40). The Wines of British Columbia were also prominently featured at their consumer and media launch event where 17 wineries showcased their wines to a crowd of 300 guests, including invited media outlets such as CTV, Eat Magazine and Victoria Times Colonist. Wine & Dine Thompson/Okanagan New to our program this year, the British Columbia Wine Institute is also now the exclusive wine sponsor for Wine & Dine Thompson/Okanagan. Only British Columbia Wine Institute Member Wineries were eligible to provide a suggested pairing for the 40 participating restaurants Wine & Dine menus ($15, $25, $35). Marketing Objectives & Highlights In addition, only British Columbia Wine Institute Member Wineries were able to participate in the launch event that attracted 150 consumers and invited media guests including Judie Steeves, Steve MacNaull and Glenna Turnbull. The Big Taste Calgary This marked the second year that the British Columbia Wine Institute has been the official wine sponsor for The Big Taste Calgary. During the 11-day dining event, over 75 restaurants offered prix fixe menus, many with suggested BC VQA Wine pairings, and the Wines of British Columbia were featured in 11 culinary events

11 Marketing Objectives & Highlights Retail: BC Liquor Distribution Branch As the largest wine retailer in British Columbia, we continue to build upon our solid relationship with the team at the BC LDB to maximize the exposure for BC VQA Wines in their 200+ stores across the Province. Year-round thematic program (May, August Super-Thematic, October, December, and March) The August Super-Thematic resulted in a 12% increase in sales in the featured stores and 7% across all stores Distribution of the 2012 BC Winery Touring Guide in stores Co-hosting the annual BC LDB BC VQA Advocate tour After the tour, Stephen Schiedel, Portfolio Manager for the Wines of Canada, US, and South America, reported that the tour contributed to an increase in sales of approximately 15% Distributed quarterly newsletter to ensure BC VQA Advocates are kept up-to-date on recent accolades, POS programs, vintage reports and more BC VQA Wine Stores The BC Wine Institute holds 21 BC VQA Wine Store licenses, with 20 in operation. These unique stores are an extension of British Columbia wine country and our Member Wineries. Hosted two BC VQA Wine Store Manager tours (spring and fall) providing 24 store managers and senior staff with in-depth information about the Wines of British Columbia and the Wine Regions of British Columbia Developed a series of BC VQA Wine Store specific POS materials to enhance sales, twice per year. These specific POS programs are also augmented by over-runs of our BC LDB thematics to ensure stores can maintain effective displays throughout the year On average, these in-store displays result in a direct increase in sales of 20% Distributed quarterly newsletter for this channel to ensure they are kept up-to-date on recent Marketing Objectives & Highlights accolades, upcoming events, POS programs and more As part of our continued partnership with Savour Magazine, we continued to develop and distribute shelf-talkers for the BC VQA Wine Stores to complement Rhys Pender s tasting notes in the tabbed BC VQA section of the magazine Implemented the Wines of British Columbia Gift Card Since being launched mid-december 2011, over 500 Wines of British Columbia gift cards have been activated for a total value in excess of $13,000. A quick sampling of a typical $50 card redemption shows a basket size of 15 items worth $ % of the gift card value and 7.5 times the industry average Executed the BC VQA Wine Store co-op advertising program 18 19

12 Marketing Objectives & Highlights BC VQA WINE STORE SALES CHART $20,000,000 $18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 Fiscal % April May June July August September October November December January February March Fiscal % 13% 12% 11% 10% 9% 7% 7% 7% 7% 7% Tourism: The British Columbia Wine Institute continues to provide a leadership role in supporting BC s wine tourism sector. To ensure that the Wines of British Columbia, and the Wine Regions of British Columbia, are well represented to an engaged, global audience, we continued to pay the $95 per Member cost for British Columbia Wine Institute Member Wineries and BC VQA Wine Stores to be listed on Tourism BC s consumer site, HelloBC.com. New this year, the British Columbia Wine Institute partnered with Tourism BC to produce the 2012 BC Winery Touring Guide. Unlike the majority of wine touring maps in the market, the 2012 BC Winery Touring Guide offers the complete list of licensed wineries, including grape, fruit, cider, etc. around the Province. Through this partnership, distribution of the guide will exceed 80,000 copies through the Visitor Information Centres across the Province, BC Liquor Stores, BC VQA Wine Stores, select wine and tourism events, as well as the HelloBC call centre and online through HelloBC.com s free travel guide order page. Competition Consolidations: The British Columbia Wine Institute consolidated and shipped 659 cases of wine to 22 competitions around the world. Not only does this program result in significant cost Marketing Objectives & Highlights Licensee Retail Stores (LRS) New this year, we expanded our thematic program to include the top LRS stores across the Province. The first materials were distributed in the fall of 2011, we have had 20 stores participate in the program and expect this to increase steadily next fiscal. savings for our Member Wineries, but entering competitions is also one of the best ways to generate international recognition for the Wines of British Columbia. These competitions resulted in over 2,100 awards for our outstanding BC VQA Wines, including: Best Icewine / Double Gold (Jackson-Triggs Okanagan Estate 2009 Gold Series Riesling Icewine) and Best Pinot Gris / Double Gold (Quails Gate Estate Winery Website: This year, the British Columbia Wine Institute launched our new corporate website, It was designed to be a functional tool for our Winery Members and BC VQA Wine Store operators as well as a great resource for media, trade and industry stakeholders with more in-depth information in the About BCWI, BCWI Programs and Press Room sections. Our Winery Members have their own Winery Only section where we post current programs, recent Member newsletters, as well as relevant industry updates and publications. When logged in, wineries can update winery listing (also add logo and images), add events, jobs or media releases and register for upcoming British Columbia Wine Institute events Pinot Gris) at the San Francisco International Wine Competition International Wine Trophy for Dessert Wine (Jackson-Triggs Okanagan Estate 2007 Proprietors Reserve Riesling Icewine) and Gold Best in Class (Jackson- Triggs Okanagan Estate 2007 Proprietors Reserve Riesling Icewine, Mission Hill Family Estate Winery 2005 SLC Riesling Icewine, and Mission Hill Family Estate Winery 2009 Reserve Riesling Icewine) at the 42nd International Wine & Spirit Competition in London Gold (Poplar Grove Winery 2008 Syrah) at the Decanter World Wine Awards in London Gold (Red Rooster Winery 2009 Chardonnay) 18th Chardonnay du Monde in Burgundy 20 21

13 Communications Objectives & Highlights COMMUNICATIONS OBJECTIVES Support marketing and advocacy objectives, support community in the industry, create strong relationships with partners, industry stakeholders and Government, and provide a leadership role and voice for the BC Wine Industry. COMMUNICATION HIGHLIGHTS Members: Distributed the First Press e-newsletter monthly to ensure Members were kept up-to-date on Member news, sales statistics, upcoming events and more Achieving an average monthly open-rate of 53% Circulated over 30 Member updates as required for time-sensitive issues such as CRF increases, event opportunities, staff changes, etc. Hosted 5th Annual Winemakers and Viticulturalists Seminar in December with 29 winemakers, proprietors and viticulturalists attending from the Okanagan Valley and Gulf Islands Contracted Mt. Kobau consulting to complete the 2011 BC Wine Grape Acreage Report Media & Trade: Media & Trade Tours The British Columbia Wine Institute hosted or co-hosted seven media tours reaching 17 media outlets. Overall these tours, combined with additional BCWI media relations and marketing efforts, resulted in nearly 200 articles at an approximate value of $222,435. Ben MacPhee-Sigurdson (Winnipeg Free Press) Carrie Mitchell (The New Yorker) Catherine Roscoe-Barr (Freelance - BCLiving.ca) Chris Waters and Amanda Allison (VINES Magazine) Darren Oleksyn (Wine Access) Deana Lancaster (North Shore News) Deby Beard (Beard & Associates, Mexico) Gwen Wright (High Tide Creative) John Schreiner Judith Lane Kathleen Bauer (Northwest Palate) Kerry Banks (BCAA s Travel Blog) Natalie Richard (Chatelaine) Ronald Holden (Seattle Food Blogger, cornichon.org) Sid Cross Communications Objectives & Highlights Hosted British Columbia Wine Institute Annual General Meeting, tasting and Tim Pawsey (hiredbelly.com, North Shore News) dinner in July 2011 at the Penticton Ramada Valerie Berenyi (Calgary Herald) Hosted British Columbia Wine Institute General Meeting, comparative tasting and We also worked with the Canadian Vintners Association, the Wine Council of Ontario dinner in March 2012 at Summerhill Pyramid Organic Winery and the Department of Foreign Affairs and International Trade Canada on a trade mission of four top United Kingdom sommeliers to the Okanagan, including David Almeida (Sommelier, Whatley Manor), Isa Bal, MS (Head Sommelier, Fat Duck Restaurant), Alan Holmes (Head Sommelier and Wine and Beverage Manager, Chewton Glen Hotel), and Ivo Stoyanov (Head Sommelier, L Atelier de Joël Robuchon)

14 Media & Trade Events Media & Trade Communications Communications Objectives & Highlights Attended Canada Media Marketplace 2011 in New York to highlight the Wines of British Columbia to influential print and television media from across North America British Columbia Wine Institute sponsored the closing reception to showcase 10 BC VQA Wines to all 300 CMM attendees (tourism industry partners and media) Had 26 appointments with journalists from major outlets including American Airlines Magazine, Traveling with MJ, British Columbia Magazine, Luxury Web Magazine, National Post, EnRoute Magazine, Sunset Magazine, San Francisco Chronicle, Globe and Mail, Food & Wine Magazine, Western Living, Cooking Light, and Bon Appétit Hosted pre-bloom VIP media and trade seminar in Vancouver to highlight BC wine regions including Okanagan Valley, Gulf Islands, Vancouver Island, Fraser Valley and the Similkameen Valley. The 20 attendees included Iain Philip, John Schreiner, Joyce Wegner, Kasey Wilson, Kurtis Kolt, Liam Carrier, Mark Taylor, Michelle Bouffard, Richard Curtis, Sid Cross, Stephen Schiedel, and Tim Pawsey Hosted pre-colour VIP media and trade seminar in Vancouver to showcase the ageability of BC VQA Wines. The 32 attendees included Andrea Vescovi, Daenna Developed and distributed Media Story Starters in November, December, February and March highlighting various stories of interest, feature wine region and BC VQA facts to nearly 250 media and tourism professionals Achieved an average open-rate of 45% Distributed quarterly Celebrate the Wines of British Columbia stakeholder newsletter to over 2,800 trade, media, tourism, and Government stakeholders to keep everyone up-to-date on relevant industry news, upcoming events, recent accolades and more Achieved an average open-rate of 38% Increased our Twitter followers by 66% in the past year (from 1,957 to 3,258) Contribute quarterly articles for Orchard & Vine Magazine and Canadian Grapes2Wine to highlight key industry news and events and to Thrifty Foods Fresh Magazine to highlight the versatility of wine and food pairing with BC VQA Wines Augmented the Press Room section of the new WineBC.org to include more information about the Wines of British Columbia and make it easier to navigate Communications Objectives & Highlights Van Mulligen, Debbra Mikaelsen (Edible Vancouver), Eric Pateman (Edible Canada), Harry Hertscheg, Iain Philip, James Nevison (The Province), Janice Greenwood- Fraser (Tourism BC), Jim Tobler (National Post), John Schreiner, Judith Lane, Julie Pegg (Eat Magazine), Mark Hicken, Mark Shipway, Phil Soloman (Edible Vancouver), Rob Carras (Everything Wine), Sid Cross, Tim Pawsey, and Treve Ring BC Wine Education Program: In partnership with Okanagan College, the British Columbia Wine Institute, with the assistance of Rhys Pender MW, developed the BC Wine Education Program. The purpose of this program is to update the current Okanagan College Wine Server Program for the 2012 sessions and for the British Columbia Wine Institute to be able to host educational Sponsored Dine Out Vancouver media launch that included over 40 top Vancouver wine and food media personalities such as Margaret Gallagher, Joanne Sasvari, Kasey Wilson, Richard Wolak, and Tim Pawsey wine seminars for wineries and trade to ensure that we are conveying a consistent message for the Wines of British Columbia. Program development was completed in this fiscal, and the execution will occur in fiscal

15 2011 Vintage Report 2011 Vintage Report White wine quality: Excellent. Wines show fresh fruit expression and vibrant acidity. Red wine quality: Good to Excellent. Varying quality due to challenging growing season. Experience and forethought generally produced very good wines throughout the Province with balanced flavours, ripe fruit and lower alcohol. Icewine quality: Very good. Despite being one of the coolest summers on record, the 2011 BC grape harvest promises to be another excellent vintage for the Wines of British Columbia vintage report Cool Spring Delays Bud Break Spring 2011 was once again cool and damp. As noted at the December 2011 Winemakers and Viticulturalists Seminar, overall there was less rainfall throughout the vintage, but it all came in the spring and early summer. Because of the cool, wet weather bud break was approximately two weeks later than normal throughout the Okanagan Valley and Similkameen Valley. As noted by Hooman Haftbaradaran, Winemaker & Estate Manager at Saturna Family Estate Winery, bud break was four weeks late on Saturna Island. Cool Summer Leads to Late Flowering, Early Crop Thinning With the cool temperatures continuing into early summer, flowering also occurred quite late, as much as five weeks later than normal in most areas. Because of the late flowering and uneven fruit-set, many winemakers and viticulturalists were already starting the first round of crop thinning. At Tinhorn Creek Vineyard in Oliver, Winemaker/CEO Sandra Oldfield noted that 25% of their total blocks were dropped early. Veraison also occurred 2 to 3 weeks behind, but August and September proved to be the saviours of the vintage. According to John Simes, Winemaker at Mission Hill Family Estate Winery, almost 50 per cent of the growing degree days happened between August 1 and October 1 when it was really needed

16 A Late Start to Harvest This year the first grapes were picked on September 15, the same date the 2010 BC Overall Despite the nail-biting conditions for winemakers and viticulturalists, the 2011 vintage is showing some exceptional wines. Both the whites and reds are showing extremely well and this vintage should age particularly well because of the outstanding balance of fruit, acidity, tannins, and alcohol. Standout varietals this year include Pinot Gris, Gewürztraminer, Riesling, Pinot Noir, Merlot, Cabernet Franc and Syrah. harvest began. At the beginning of their harvest, Jackson-Triggs viticulture expert Frank Hellwig stated that despite a cooler and wetter year, like 2010, the last three weeks of warm weather have really helped to advance veraison and kick start ripening. Most wineries did not begin their harvest until September 28 or later, some starting as late as Thanksgiving and continuing until early November vintage report Because the vintage had been late from the beginning, most wineries and grapegrowers took precautions early in the season to ensure a ripe crop and were rewarded with excellent fruit quality. The white wines are exceptional with vibrant acidity, pure fruit expression and great balance and the red wines (most of which won t be released until 2013) are also showing great promise. Sandra Oldfield went on to note that the quality of the red wines stems from phenolic ripeness occurring before the grapes reached optimal sugar levels, which allowed for winemakers to pick earlier and at lower sugar levels, which resulted in lower alcohol wines with no loss of flavour development. The overall crop* was up 28% from 2010, though, according to British Columbia Wine Institute Director and BC Grapegrowers Association Past-President Manfred Freese of Sun Ridge Vineyard in Osoyoos, In spite of the large tonnage increase over last year, the crop levels are actually simply returning to normal industry levels, yielding approximately 80% of the potential crop. Excerpts taken from the Winemakers and Viticulturalists Forum and the 2011 Vintage Media Preview. * Participation in the crop survey is voluntary and unaudited, therefore the tonnages and prices reported may differ from actual industry results and are meant as a guide only vintage report This marked one of the earliest starts to the Icewine harvest in BC, with the first grapes being picked on November 19, second only to the November 5 harvest in Icewine Harvest Mere days after completion of the grape harvest, the 2011 Icewine harvest began. This marked one of the earliest starts to the Icewine harvest in BC, with the first grapes being picked on November 19, second only to the November 5 harvest in Only a handful of wineries were able to start their Icewine harvest in November, however, as the cold-snap did not last. The second round of Icewine picking began on January 10 as the overnight temperatures hovered between -9 C (15.8 F) and -12 C (10.4 F) and continued through the week. The BC Wine Authority reported that 22 wineries picked a total of approximately 655 tons of Icewine grapes

17 2011 Crop Report 2011 Crop Report RED WINE GRAPE VARIETIES Listed by order of importance (value). VARIETY TONNAGE EST. TOTAL VALUE % OF RED Merlot 4,829.7 $11,450, % Cabernet Sauvignon 1,693.5 $4,183, % Pinot Noir 1,416.9 $3,563, % Cabernet Franc 1,060.9 $2,598, % Syrah/Shiraz $2,263, % Gamay Noir $694, % Petit Verdot $481, % Maréchal Foch $430, % Malbec $363, % Icewine Merlot 65.8 $170, % Zweigelt 62.7 $145, % Pinotage 45.8 $100, % Icewine Cabernet Franc 34.2 $84, % Pinot Meunier 35.9 $67, % Misc. Red Vinifera* 32.6 $67, % Sangiovese 25.3 $55, % Tempranillo 17.9 $55, % Zinfandel 24.7 $46, % Lemberger 19.5 $38, % Icewine Pinot Noir 11.5 $33, % Dunkelfelder 11.7 $24, % Misc. Red Hybrids 9.1 $18, % Mourvedre 5.7 $12, % Alicante Bouschet 4.3 $9, % Blattner 3.9 $6, % Chancellor Barbera CROP report Total 11,404.8 $27,093, % *Indicates unspecified red varietals; (-) indicates that data has been suppressed for reasons of confidentiality 30 31

18 WHITE WINE GRAPE VARIETIES Listed by order of importance (value). REPORTED TONNAGE BY PRODUCTION AREA 2011 CROP report VARIETY TONNAGE EST. TOTAL VALUE % OF WHITE Chardonnay 2,480.9 $4,848, % Pinot Gris 2,331.0 $4,699, % Sauvignon Blanc 1,425.8 $2,580, % Gewürztraminer 1,261.8 $2,453, % Pinot Blanc 1,173.1 $2,072, % Riesling 1,010.9 $1,907, % Viognier $820, % Ehrenfelser $258, % Auxerrois $253, % Semillon $246, % Bacchus $234, % Marsanne $204, % Summerland & Peachland 2.18% Lake Country 2.28% Similkameen 3.95% Westbank 4.19% OK Falls 4.45% Kelowna 5.84% Fraser Valley 0.51% Vancouver Island 0.48% Kootenays 0.12% Salmon Arm 0.06% Gulf Islands 0.05% 2011 CROP report Muscat 63.4 $134, % Icewine Riesling 46.9 $134, % Chasselas 62.9 $125, % Penticton 9.51% Schönburger 55.4 $103, % Siegerrebe 47.1 $86, % Ortega 39.2 $78, % Kerner 41.4 $73, % Reichensteiner 38.7 $63, % Osoyoos 16.78% Oliver 49.59% Madeleine Angevine 39.2 $59, % Vidal 22.6 $37, % Icewine Viognier 17.6 $37, % Optima 18.2 $36, % Madeleine Sylvaner 18.0 $32, % Roussanne 12.8 $31, % Icewine Pinot Gris 7.8 $16, % Misc. White Vinifera* 6.2 $10, % Sovereign Opal Icewine Vidal Icewine Chardonnay Icewine Muscat Icewine Gewürztraminer Verdelet Albarino total 11,317.8 $21,843, % *Indicates unspecified white varietals; (-) indicates that data has been suppressed for reasons of confidentiality 32 33

19 2011 Acreage Report RED WINE GRAPE VARIETIES WHITE WINE GRAPE VARIETIES VARIETY ACREAGE % OF WHITES % OF TOTAL GRAPES Pinot Gris 1, % 10.80% 2011 ACREAGE report VARIETY ACREAGE % OF WHITES % OF TOTAL GRAPES Merlot 1, % 16.23% Pinot Noir % 9.62% Cabernet Sauvignon % 7.65% Syrah/Shiraz % 5.54% Cabernet Franc % 5.24% Gamay Noir % 1.56% Maréchal Foch % 1.39% Blattner Reds % 0.99% Malbec % 0.97% Petit Verdot % 0.67% Zweigelt % 0.42% Zinfandel % 0.19% Pinotage % 0.15% Tempranillo % 0.14% Baco Noir % 0.13% Pinot Meunier % 0.12% Lemberger % 0.10% Sangiovese % 0.09% Leon Millot % 0.07% Chancellor % 0.07% Dunkelfelder % 0.06% Agria % 0.06% Castel % 0.05% Carmenere % 0.04% Grenache % 0.04% Mourvedre % 0.04% Dornfelder % 0.03% Barbera % 0.03% Rotberger % 0.03% Michurinetz % 0.01% St.Laurent % 0.01% Nebbiolo % 0.01% Chardonnay % 9.29% Gewürztraminer % 7.16% Riesling % 4.45% Sauvignon Blanc % 3.98% Pinot Blanc % 2.70% Viognier % 2.07% Ortega % 0.72% Ehrenfelser % 0.71% Blattner Whites % 0.64% Muscats % 0.60% Bacchus % 0.53% Semillon % 0.48% Auxerrois % 0.44% Siegerrebe % 0.44% Vidal % 0.36% Kerner % 0.29% Schönburger % 0.27% Chenin Blanc % 0.18% Müller Thurgau % 0.17% Madeleine Angevine % 0.17% Madeleine Sylvaner % 0.16% Optima % 0.14% Chasselas % 0.13% Roussanne % 0.13% Reichensteiner % 0.11% Sovereign Opal % 0.07% Marsanne % 0.06% Trebbiano % 0.05% Oraniensteiner % 0.04% Traminer % 0.02% Verdelet % 0.01% Sylvaner % 0.01% Miscellaneous Whites % 0.53% 2011 ACREAGE report Miscellaneous Reds % 0.34% total WHITE HYBRIDS (ACRES): % - total RED HYBRIDS (ACRES): % - total WHITE VINIFERA (ACRES): 4, % - total RED VINIFERA (ACRES): 4, % - total WHITE GRAPES (ACRES): 4, % 47.91% total RED GRAPES (ACRES): 5, % 52.09% 34 35

20 BRITISH COLUMBIA VINEYARDS/GRAPE ACREAGE BY REGION REGION # OF VINEYARDS ACRES % OF TOTAL Category Update 2011 ACREAGE report Oliver 174 3, % Osoyoos 99 1, % Kelowna / West Kelowna % Penticton / Naramata % Similkameen Valley % Okanagan Falls % Vancouver Island % Peachland / Summerland % Lower Mainland / Fraser Valley % Lake Country / Vernon % Gulf Islands % Kaleden % Spallumcheen / Shuswap % Kamloops area % Lillooet / Lytton % BC VQA Dollar Sales by Channel R12 period ended 2012 P12 (March 2012) Licensee Sales 20.48% Agency Sales 3.81% LRS Sales 16.83% Other Sales 1.09% BC LDB Counter Sales 24.50% CATEGORY UPDATE East Kootenays (Creston) % West Kootenays (Trail / Castlegar) % Grand Forks area % BC VQA Store Sales 8.79% Winery Sales 24.50% Other BC Regions % vineyards 864 9, ACRES % (3,946 HECTARES) BC VQA ChanNel Sales Change in dollars R12 ended 2012 P12 over 2011 P12 (March 2012) $50,000, % 2.12% $40,000, % 0.54% $30,000,000 $20,000, % $10,000, % % $0 BC LDB Counter Sales Winery Sales BC VQA Store Sales LRS Sales Agency Sales Licensee Sales Other Sales 2011 P P

21 total provincial wine market share in bc In dollars R12 ended 2012 P12 (March 2012) CATEGORY UPDATE BC Non-VQA 0.23% Cellared In Canada Non-VQA 25% BC VQA 19.27% New Zealand 2.60% South Africa 1.54% Spain 2.67% Other 2.87% Argentina 5.06% Chile 4.86% Italy 7.20% France 6.95% CATEGORY UPDATE United States 11.40% Australia 11.15% total provincial wine market share in bc Change in dollars R12 ended 2012 P12 (March 2012) $300,000,000 $250,000, % $200,000, % $150,000, % -2.63% $100,000,000 $50,000,000 $ % -1.56% New Zealand South Africa 13.07% Spain Other Argentina 0.14% 2011 P P % 0.03% Chile 5.47% 9.01% Italy France Untied States Australia BC VQA Cellare in Canada Non-VQA 6.35% BC Non-VQA 38 39

22 BOARD OF DIRECTORS, COMMITTEES & STAFF British Columbia Wine Institute Board of Directors, Committees and Staff Board of Directors Josie Tyabji, Chairman, Vincor Canada Shaun Everest, Vice Chairman, Tinhorn Creek Vineyards Greg Berti, Andrew Peller Bill Eggert, Fairview Cellars Ingo Grady, Mission Hill Family Estate Winery Mike Raffan, Township 7 Vineyards & Winery Chris Wyse, Burrowing Owl Vineyards Manfred Freese, Sun Ridge Vineyard, BC Grapegrowers Association Committees Government Relations Committee Josie Tyabji, Chair, Vincor Canada Greg Berti, Andrew Peller Bill Eggert, Fairview Cellars Gordon Fitzpatrick, CedarCreek Estate Winery Ingo Grady, Mission Hill Family Estate Winery Mike Raffan, Township 7 Vineyards & Winery Finance Committee Geri Davis, Chair, Gray Monk Estate Winery Helen Sarris, Summerhill Pyramid Organic Winery Josie Tyabji, Vincor Canada Marketing Committee Jody Levesque, Chair, Vincor Canada Julie Copland-Stene, Tinhorn Creek Estate Winery Shaun Everest, Tinhorn Creek Estate Winery Jane Hatch, Tantalus Vineyards Hanna Pederson, Andrew Peller Lori Pike-Raffan, Township 7 Vineyards & Winery Lavaughn Larson, BC Liquor Distribution Branch Paulette Parry, BC Liquor Distribution Branch Leah McDowell, Kensington Square Wines BC VQA Wine Store Committee Tyler Galts, Chair, Quails Gate Estate Winery Bill Eggert, Fairview Cellars Trudy Heiss, Gray Monk Estate Winery Rob Smith, Hester Creek Estate Winery Josie Tyabji, Vincor Canada BOARD OF DIRECTORS, COMMITTEES & STAFF Tony Stewart, Quails Gate Estate Winery David Wilson, Mission Hill Family Estate Winery British Columbia Wine Institute Staff Miles Prodan, Executive Director Export Committee Tyler Galts, Chair, Quails Gate Estate Winery Sharon Misselbrook, Meyer Family Vineyards Leona Snider, The Rise Cellars Josie Tyabji, Vincor Canada Maggie Anderson, Marketing Director Ryan Carachelo, Finance Manager Traci Deman, Administration Coordinator Lindsay Kelm, Communications Manager Kirsten Munro, Marketing Coordinator Peter Wille, Paradise Ranch Wines / Soaring Eagle Estate Winery David Wilson, Mission Hill Family Estate Winery 40 41

23 British Columbia Wine Institute Member Wineries (as of March 31, 2012) Member Wineries Aces Okanagan Estate Winery 1289 Smethurst Road Naramata, B.C. V0H 1N0 Ancient Hill Winery 4918 Anderson Road Kelowna, B.C. V1X 7V7 Baillie-Grohman Estate Winery Avenue South Creston, B.C. V0B 1G Black Hills Estate Winery Black Sage Road (71 Street) Member Wineries Antelope Ridge Road 13 Blackwood Lane Vineyards & Winery Avenue Langley, B.C. V4W 2G Arrowleaf Cellars 1574 Camp Road Bonitas Winery Lake Country, B.C. V4V 1K McDougald Road Summerland, B.C. V0H 1Z Baccata Ridge Winery 68 McManus Road Grindrod, B.C. V0E 1Y

24 Bounty Cellars Winery CedarCreek Estate Winery Church & State Wines (Victoria) De Vine Vineyards Lougheed Road 5445 Lakeshore Road 1445 Benvenuto Avenue 6181B Old West Saanich Road Kelowna, B.C. V1X 7R8 Kelowna, B.C. V1W 4S5 Victoria, B.C. V8M 1J5 Saanichton, B.C. V8M 1W Member Wineries Burrowing Owl Vineyards 100 Burrowing Owl Place Calona Vineyards 1125 Richter Street Kelowna, B.C. V1Y 2K Celista Estate Winery 2319 Beguelin Road Celista, B.C. V0E 1M Chandra Estate Winery Street (Road 5A) Church & State Wines (Black Sage) Clos Du Soleil Winery 2568 Upper Bench Road Keremeos, B.C. V0X 1N Columbia Gardens Vineyard & Winery 9340 Station Road Trail, B.C. V1R 4W Deep Creek Wine Estate & Hainle Vineyards Estate Winery 5355 Trepanier Bench Road Peachland, B.C. V0H 1X Desert Hills Estate Winery Black Sage Road (71 Street) Member Wineries Camelot Vineyards 3489 East Kelowna Road Kelowna, B.C. V1W 4H Street Church & State Wines (Oliver) Crowsnest Vineyards 2035 Surprise Drive Cawston, B.C. V0X 1C Dirty Laundry Vineyard 7311 Fiske Street Summerland, B.C. V0H 1Z Cassini Cellars Highway Street D Angelo Estate Winery 979 Lochore Road Penticton, B.C. V2A 8V info@dangelowinery.com Dunham & Froese Estate Winery Street (located on Covert Farms) gene@dunhamfroese.ca