科尔尼-三得利Beam Suntory-Emerging Asia Roadmap-Final Report-20161202

02December2016EmergingAsiaMarketModeling

FinalReportBeamSuntory© 2016,A.T.Kearney,allrightsreservedCONFIDENTIALAgendaEmergingAsiaRoadmapDetailedreportEmergingAsiasummaryCountryreportsApproachandmethodologyExecutiveSummaryWeseeatotaladdressablemarketofUSD9.1Bn(retailvalue)acrosspremiumspirits,mixeddrinksandbeerby2025.OuraspirationistocaptureUSD200millioninnetsales,equivalentto4%marketshareTheopportunityisdrivenbyalargeandgrowingLDApopulationandasubstantialgroupofyoungconsumers:273Mpeoplewillturn18from2016–2025andtherebyenterlegaldrinkingageWewillfocusonmarketswherefuturevaluecreationishighestacrossthosecategorieswherewehaveastrongoffering.Wefurtherprioritizemarketsbyeaseofcapturingthisvaluegrowth.Weconcludethat–outsideofChina–Korea,VietnamandthePhilippinesareourfuturefocusmarketsWewillexecuteathree-pillarstrategy:1)drivegrowththroughHighball,2)defend,expand,anddeepenourcorewhiskyandCognacportfolioand3)nurtureemergingcategoriessuchasRTDandmixeddrinksGrowthcategory–Highball:China,threefocusmarkets,Thailand,andTaiwan45millionpeopleinthe18–25agegroupin2016inKR/VN/PH/TH/TW,42millionby2025Stronggrowthinthepremiumbeersegment–double-digitoverthenext10yearsCoreportfolio–WhiskyandCognac:China,threefocusmarkets,Taiwan,ThailandStronggrowthinsinglemaltacrosstheregion:8.0%CAGR(2015–2025)LargestmarketsforimportedCognac/Whiskyby2025:China,SouthKorea,TaiwanEmergingcategories–RTD/MixedDrinks:China,threefocusmarkets,ThailandMixeddrinksarebiginChinabutlargelyalocalplay.GrowthopportunityinThailandNextstepswillbetovalidatemarketentryopportunitiesatthemicro-level,anddevelopgo-to-marketandfinancialmodelsSource:A.T.KearneyWeseeEmergingAsiaasaUSD200millionopportunitybasedonthreepillars:growth,emergingandcoreportfoliocategoriesEmergingAsia–Vision2025USD9.1BnatRetailValue.Netsalesequivalentabout5.5Mapplyinga40%taxanddutiesrateacrossallcountries

Weconsideraddressableallpremiumbrownspirits,allmixeddrinksand5%ofon-premisepremiumbeer–fordetailsseepage5Source:BeamSuntorymanagementteamdiscussions,IWSR,Euromonitor,A.T.Kearney2025

USD200MNetSales–4%MarketShareEmergingAsia–VisionGrowthHighball(PremiumBeer)Assumption:5%ofpremiumon-premisebeeraddressableforHighballconversionTop-5markets:

CN,VN,TW,SK,SG2%conversionacrossthetop-5marketswouldyield:

~USD42Mretailvalue/

~UDS26MnetsalesAddressablemarket:USD9.1Bn–premiumspirits,mixeddrinks,premiumbeer1USD100MillionInChinaUSD100MillionAcrossKorea,Taiwan,South-EastAsiaCoreEmergingWhiskyCognacRTDs/

MixedDrinksTop-5markets:CN,MY,TW,VN,IDChinaCAGR2015-25:XO: 1.7%VSOP: 3.1%Top-5markets:

SK,CN,TW,VN,THProjectedgrowthbytype

(CAGR2015-25)Singlemalt: 8.0%Blended: -0.1%Top-5markets:China,

Thailand,SouthKorea,

Myanmar,TaiwanTarget:Millennials/

newLDAs.273Mpeople

willturn18from2016–25Capitalizeonevolvingtasteprofiles:loweralcoholcontent,sweeterdrinksOurrighttowin:=high=medium=lowWeconsideraddressableUSD9.1Bnacrosspremiumspirits(7.6Bn),mixeddrinksand5%ofon-premisepremiumbeerEmergingAsiaaddressablemarketbycategory(USDbillion,2015)FABreferstoFlavoredAlcoholicBeverages(FAB)Assumptionthatonly5%ofon-tradepremiumbeerisaddressableSource:IWSR,Euromonitor,A.T.KearneyAddressableMarket43%AddressablemarketNon-addressablemarket214.0Wine21.9Total

235.8PremiumWhisky3.4

Cognac4.2BrownSpirits7.6MixedDrinks0.8OnPremisePremiumBeer+Cider10.7AddressableMarket9.1OtherPremiumSpirits9.6Non-PremiumSpirits(Non-Baijiu)11.2Non-PremiumSpirits(Baijiu)63.9Non-AddressablePremiumOn-TradeBeer+Cider213.9Non-PremiumBeer+PremiumOff-TradeBeer+Off-TradeCider106.3RelevantMarket5%oftotalonpremisepremiumbeer:addressableforconversiontoHighballFlavoredBeerNon/LowAlcoholBeerTraditionalBeerWhitespirits(Vodka,Gin)Othernationalspirits(e.g.Soju)FlavoredspiritsRum,Tequila,CaneFAB1LongDrinksPre-MixCocktailsSparklingStillLightRice-basedSingleMaltBlendedUSWhiskyCanadianWhiskyGrainScotchTowininEmergingAsia,weneedtoprioritizewhereweplay:wefirstrankedcountriesbygeneralattractivenessandfuturesizeScoreisindex-based(0-100)andtakeintoaccountmacro-economicfactorssuchasGDP,businessclimate,andcategoryfactors

Specificsonrankingmethodologyanddetailedmodeloutputcanbefoundintheappendix,section‘Approach’Source:EIU,WorldBank,IWSR,A.T.KearneyCountryattractivenessrankingsEmergingAsia–RankingsRankCountryScore11China73.22HongKong45.33Singapore43.64SouthKorea35.55Taiwan34.36Indonesia31.17Malaysia30.38Thailand26.49Philippines23.410Vietnam22.611Myanmar17.012Laos16.713Cambodia15.8RankCountryUSDBn1China296.52SouthKorea21.63Vietnam13.04Thailand11.55Philippines6.16Taiwan5.17Malaysia3.38Singapore3.19Indonesia2.710HongKong2.611Laos1.012Cambodia0.813Myanmar0.8RankCountryUSDBn1China8.82SouthKorea1.53Taiwan1.04Thailand0.65Vietnam0.56Malaysia0.57Indonesia0.38Philippines0.39HongKong0.310Singapore0.311Cambodia0.112Myanmar0.113Laos0.046MacroAttractivenessAlcobevMarketSizeRanking(USDBn,2025)BSIAddressableMarketSizeRanking(USDBn,2025)123Differencesincategorygrowthrates,macrofactorsandgrowthofLDApopulationneedtobefactoredintotheprioritizationScoreisindex-based(0-100).Indicatorsincludetotalpopulation,percentageofurbanpopulation,nominalGDPpercapitaandprivateconsumptionpercapitaScoreisindex-based(0-100).IndicatorsincludeLogisticsPerformanceIndex(LPI),EaseofDoingBusiness,CorruptionPerceptionsIndex(CPI).LegalDrinkingAge;figurereferstonumberofpeopleofage18andaboveLegalDrinkAgefiguresnotadjustedforpercentageofMuslimpopulation;Malaysia’sandIndonesia’sMuslimpopulationis87.2%and61.3%respectivelySource:EIU,WorldBank,TransparencyInternational(TI),IWSR,A.T.KearneyBSIAddressableMarketSizeRanking–ScorecardEmergingAsia–Rankings3RankCountryAddressableMarket(2025,USDMn)MacroFactors

(Index0–100)LDAPopulation3

(mn)YoungLDAs(18-25yearolds,mn)TotalHighballRTDBrownSpiritsMacroScore1BusinessClimate22016202120162021Change1China8,8131,8961,9115,00779.857.71,0911,111156130ê2SouthKorea1,51249511,41320.171.4424465ê3Taiwan1,009612192618.172.1202032ê4Thailand5892330526112.858.1545587ê5Vietnam48864641810.550.868731312ê6Malaysia44604245515.165.9212344é7Indonesia430412828322.451.31791923536é8Philippines27111726511.750.762691516é9HongKong25814524030.480.06611ê10Singapore25536321525.885.15511ê11Cambodia114391023.744.0101132ê12Myanmar96133627.638.8394288ê13Laos46710296.739.94511éRankCountryValueCreated2016–2025

(USDM)WhiskyCognacRTDs/MixedDrinksBlendedSingleMaltOther1China2,65829336777591,4572SouthKorea253(169)250168(1)43Philippines10873243714Vietnam108502672235Thailand10014853696Taiwan97(17)135<1(29)77Indonesia48(3)22101728HongKong4211343(5)(1)9Singapore3692422(1)10Myanmar34171131311Cambodia199118(<1)12Malaysia18(5)321(10)113Laos1461<1333,535238952797811,558Weshouldfocusonhighgrowthmarkets–SouthKorea,

ThePhilippines,Vietnam,Thailand,andTaiwanstandout+5%+6%0%6,9184,260+2%+5%+2%+2%+2%+6%+3%+2%+1%+2%20162025Source:IWSR,Euromonitor,A.T.KearneyBSIaddressablemarketgrowth,2016–2025(USDM)(Brownspirits,RTDs–excludespremiumbeer)EmergingAsia–RankingsTotalRankCountryValueCreated2016–2025

(USDM)1China1,2592Taiwan283Vietnam184Singapore125SouthKorea46Indonesia47Laos38Malaysia19Cambodia110HongKong111Thailand<112Philippines<113Myanmar<11,332Forpremiumbeer,valuecreation(outsideofChina)isforecasttobehighestacrossTaiwan,Vietnam,Singapore,SouthKorea22141332427412949453624644561331,8966371+2%+5%1~0%+7%+5%+1%+7%+4%+4%+1%1+13%+3%123+5%20162025Source:IWSR,Euromonitor,A.T.KearneyBSIaddressablemarketgrowth,2016–2025(USDM)(5%oftotalpremiumbeermarket)EmergingAsia–RankingsTotalValuecreationCAGR(%,2016-2025)Easeofvaluecapture

(Regulatoryantagonism,darkmarket,

competitivedynamics)LowSource:IWSR,Euromonitor,BeamSuntory,A.T.

KearneyCountryprioritization–valuegrowth&easeofvaluecaptureEaseofcapturingthisfuturegrowthleadstoourfinalselectionofmarkets:Korea,VietnamandthePhilippinesareourfocusEmergingAsia–FinalRankingTotalvaluecreated2016–2025(USDMn)BrownSpirits,RTD8.06.04.02.00.0-2.014Laos18Malaysia19Cambodia34Myanmar36Singapore42HongKong48Indonesia97Taiwan100Thailand108Vietnam108Philippines253SouthKoreaValuecreationCAGR(%,2016-2025)LowSource:IWSR,Euromonitor,BeamSuntory,A.T.

KearneyCountryprioritization–valuegrowth&easeofvaluecapturePremiumBeer:furtherinvestigationisrequiredacrossTaiwan,VietnamandSingaporetogaugeHighballconversionpotentialEmergingAsia–FinalRankingPremiumBeer10.04.0-2.00.06.08.02.0Taiwan0.4Thailand18.5Vietnam0.2Philippines3.83.1Laos1.2Malaysia1.2Cambodia0.2Myanmar12.2Singapore0.8HongKongSouthKoreaIndonesia27.93.6Totalvaluecreated2016–2025(USDMn)Easeofvaluecapture

(Regulatoryantagonism,darkmarket,

competitivedynamics)Nextstepswillbetovalidatemarketentryopportunitiesatthemicro-level,anddevelopgo-to-marketandfinancialmodelsGrowthChinaVietnamEmergingAsiaMarketsSouthKoreaThailandMalaysiaTaiwanHighballWhiskyCognacRTDs/

MixedDrinksFordiscussionSource:A.T.KearneyNextStepsNextstepsCorePortfolioEmergingIndonesiaPhilippinesSingaporeHongKongCambodiaMyanmarLaosDevelopChinastrategy:prioritizesub-markets,profileconsumerlandscape,identifymicro-trendsDevelopstrategyforeachfocusmarket-SouthKorea,Vietnam,Philippines:Prioritizesub-markets,profileconsumerlandscape,identifymicro-trendsIn-depthconsumerstudyforwhisky;refinewhiskystrategyforTaiwanIn-depthconsumerstudyforRTD;developstrategyforThailand/KoreaDevelopHighballstrategyforprioritymarketsandpotentiallyTaiwanandSingaporeFurthervalidatemixeddrinksopportunityinMyanmarforentryintothisgrowingmarketReinforcepositionacrossmajormarketsAccelerateTargetgrowthmarketsForChina,nextstepwillbetoprioritizemicro-marketsforroll-outandthendevelopon-/off-premisedistributionchannelmixBeijingShanghaiShenzhenGuangzhouTier-1citiesTier-2citiesHangzhouJinanTianjinChongqingQingdaoDalianNingboXiamenNanjingWuhanHarbinShenyangXianChengduChangchunChangshaFuzhouZhengzhouShijiazhuangSuzhouYantaiFoshanDongguanTaiyuanHefeiNanchangNanningKunmingWenzhouWuxiZiboHohhotLanzhouUrumchiGuiyangQuanzhouNantongChangzhouWeifangTangshanNextsteps:Chinamicro-marketprioritizationKeyquestionsWhichregions(e.g.central.,South-Eastern)withinChinashouldwebeexploringfurther?Assumingasample-basedapproachtodetailedanalysis,whichcitiesshouldbeconsideredfordetailedanalysis?Whatistherightdistributionchannelmixon-/off-premise:on-premisemarketasachanneltobuildbrandequity,increaseawareness&loyalty.Willprofitabilitythenmostlycomefromoff-premisesegment?Beijing/TianjinCluster(2)Chengdu/ChongqingClusterPearlRiverDeltaCluster(2)NextStepsSource:A.T.KearneyOutputActivitiesDefinitionoftargetcustomers,operatingmodel,andfinancialaspirationwillformthefoundationofadetailedgrowthplanNextStepsSource:A.T.KearneyDefine&prioritizeinitiativesDevelopdetailedroadmapDefineoperatingmodel&financialaspirationsDefinetargetcustomers&valuepropositionAssessEmergingAsiamarketsandprioritizebycategoryMega-trendsinEmergingAsiaalcobevmarketIdentifymarketpotentialValue/VolumeGrowthsegmentsReviewcompetitorlandscapeIdentifysizeoftargetsegmentsandgeographyPrioritizemarketbyattractivenessbycategory(growth/core/emerging)DefinetargetcustomersegmentsRunfocusgroupsInterviewsalesstaffRunquantitative/qualitativesurveys(asneeded)Identifywhatproducts,servicesneedtobeofferedtofulfillcustomerneedDefinedeliverymodel(channelmixon-/offpremise)Developmarketingstrategy/plan–whatdoesittakebymarkettopromoteHighball?E.g.leveragelocalcelebrities,definebrandvisualization.DefinestandardorganizationstructureOutlinecapabilitiesrequired:e.g.tosupporton-premisechannelDefineskill/staffacquisitionprioritiesandmodelDevelopspecificbusinessmodelDefinedetailedfinancialaspirationsanddevelopfinancialmodelMarketpotentialPrioritysegments/

geographyTargetcustomersegmentsandvalueproposition/solutionsDeliverymodel(channelmix)MarketingstrategyBusinessmodelFinancialeconomicsandaspirationsAssessgapsbetweencurrentandfuturebusinessmodelIdentifyinitiativesPrioritizeinitiativesbasedoninvestments,criticality,easeandtimetoexecutionEstimateresources&timelinetodeliverinitiativesDevelopreportingmechanismtomeasureprogressoninitiatives60dayplan2yearplanReportingmechanismCompletedNextstepsFordiscussionAgendaEmergingAsiaRoadmapDetailedreportEmergingAsiasummaryCountryreportsChina/HongKongTaiwan/KoreaSouth-EastAsiaApproachandmethodologySituationtoday:Chinatopsallcategories,SouthKorealeadsinWhisky,ThailandisstronginMixedDrinksMixedDrinks#CountryTotal1China4102Thailand2293SouthKorea474Myanmar195Philippines176Taiwan147Cambodia98Laos79Indonesia610HongKong511Singapore412Vietnam313Malaysia1Total771Cognac#CountryTotal1China3,1402Malaysia2703Taiwan2264Vietnam1295HongKong1036Singapore967Indonesia818Philippines399Cambodia3210Thailand1411SouthKorea1312Myanmar713Laos5Total4,156Countryrankingbycategory(addressablespend,USDM,2015)RankingbyCategoryWeconsider5%ofon-premisepremiumbeerasaddressableforpotentialHighballconversionSource:IWSR,Euromonitor,A.T.KearneyGrowthCategoryCoreCategoriesEmergingCategoriesOn-PremisePremiumBeer,5%#CountryTotal1China5362SouthKorea453Vietnam434Taiwan315Singapore226Thailand227HongKong138Indonesia89Laos310Malaysia211Cambodia212Myanmar113Philippines1Total730Whisky#CountryTotal1SouthKorea1,1202China6543Taiwan6024Thailand2105Vietnam1786Malaysia1707Indonesia1468Philippines999HongKong9210Singapore8211Cambodia4912Myanmar3213Laos12Total3,445Brownspiritsaredominatedbytop2players;PernodgraduallylosingshareinoverallBSIaddressablemarketCompetitivelandscapebycategory–2009to2015(%,USDM–retailvalue)Source:IWSRA.T.KearneyCompetitiveLandscapeCognacTotalMarketWhisky3,02238%38%10%DiageoPernodRicardEdringtonSooseokWmGrantsOthers20153,44540%29%17%20123,59038%36%4%11%2009PernodRicardLVMHDiageoRemy

CointreauRioOthers20158,49732%20%17%3%21%20129,04535%21%16%10%2%16%20095,80337%20%18%13%PernodRicardLVMHRemyCointreauCamusBeamSuntoryOthers20154,16041%39%17%1%1%4,94038%37%18%3%1%20092,59440%38%20%1%1%2%20122%AddressableAlcoBevMarketAsahiSiamWineryBacardiDiageoOthers201512%20%200915031%23%19%15%Rio77137%22%11%10%16%201241329%17%17%RTD(MixedDrinks)OverallLDApopulationisgrowingbutslowlyaging.18to25yearoldsaccountfor265Min2015and213Min2025RankCountryLDApopulation2015-2015(mn)15-25CAGR1China+0.92%-3.39%2SouthKorea+1.14%-2.87%3Taiwan+0.82%-2.75%4Thailand+0.97%-2.26%5Vietnam+1.88%-1.29%6Malaysia1+1.99%+1.08%RankCountryLDApopulation2015-2025(mn)15-25CAGR7Indonesia1+1.61%+0.36%8Philippines+2.28%+1.51%9Singapore+2.46%-1.21%10HongKong+0.56%-3.71%11Cambodia+2.68%-0.74%12Myanmar+1.84%-0.61%13Laos+2.99%+0.79%1201,003123994130981141965151946169915YoungLDA:18to25yearoldsMatureLDA:age26andabove4.140.64.540.04.939.15.338.25.537.25.536.31.918.22.118.02.317.82.517.42.517.12.616.86.649.76.949.07.448.17.847.18.146.18.345.112.064.511.962.811.960.812.358.612.956.113.653.54.519.74.419.04.318.34.217.64.116.94.016.235.3166.835.6161.835.6156.835.3151.834.8147.034.1142.217.357.016.954.516.452.115.949.915.447.714.945.50.84.90.84.70.84.50.94.20.94.00.93.82.49.62.39.22.38.82.38.42.57.92.67.37.736.67.835.57.934.38.033.08.131.88.230.51.23.51.23.31.23.11.13.01.24.03.71.20.55.70.55.70.55.60.65.60.75.50.75.4151719212325LDAfiguresnotadjustedforpercentageofMuslimpopulation;Malaysia’sandIndonesia’sMuslimpopulationis87.2%and61.3%respectivelySource:WorldBank,A.T.Kearney151719212325LDAPopulationLDApopulationdevelopmentbycountry(millionpeople)Weforecastthealcobevmarkettogrowat4.6%CAGRuntil2025–BSIhasarighttowininthismarketSource:IWSR,Euromonitor,BMIresearch,WSJ,A.T.Kearney2014201810.020169.310.5201520198.89.19.111.0201320129.3201120107.020096.020086.020075.213.52024202514.28.220064.6+4.6%+7.8%12.2202212.820232020202111.59.72017Alcobevmarketevolutionbycountry(USDBn)AlcobevMarketGrowthMyanmar

+18.3%Laos

+9.1%Cambodia

+10.7%Indonesia

+9.3%Philippines

+12.3%Singapore

+4.6%HongKong

+4.1%Malaysia

+5.4%Vietnam

+10.3%Thailand

+4.8%Taiwan

+3.7%SouthKorea

+0.5%China

+8.4%AddressableAlcobevMarketCAGR2006-2025Growthexpectedacrossallcategories;RTDsandpremiumbeerarethefastestgrowingcategoriesacrossmarketsSource:IWSR,Euromonitor,BMIresearch,WSJ,A.T.Kearney0.920169.34.23.50.820159.14.23.40.80.720148.8+7.8%+4.6%202514.25.04.72.42.2202413.54.84.52.24.13.40.720139.14.63.40.620129.34.93.60.420118.24.03.611.04.43.91.3201910.54.33.81.1201810.04.23.71.020179.70.320107.03.23.30.220096.02.63.020086.02.53.220074.22.02.920064.61.62.70.10.2202312.84.74.35.2202212.24.64.21.7202111.54.54.01.520203.61.9Alcobevmarketevolutionbycategory(USDBn)Cognac

+6.1%Whisky

+2.9%RTD

+16.6%5%ofon-premisepremiumbeer

+14.5%AlcobevMarketGrowthAddressableAlcobevMarketCAGR2006-2025OutsideofChina,Korea,TaiwanandThailandemergeasthelargestmarketsby2025Source:IWSR,Euromonitor,BMIresearch,WSJ,A.T.Kearney20184.41.30.90.50.40.420174.31.30.90.50.40.420164.21.30.90.50.40.420154.21.20.90.50.40.420143.91.20.80.40.30.420133.81.20.70.50.30.50.20.10.2+5.4%+2.2%20255.11.51.00.60.50.520245.01.51.00.60.50.520234.91.41.00.60.50.420224.71.41.00.60.40.420214.61.30.90.50.40.420204.61.30.90.50.40.420190.420123.81.30.70.50.30.320113.61.40.70.30.30.34.53.31.40.60.30.20.320092.91.40.50.30.20.320082.91.50.520100.10.220072.71.40.50.30.10.220062.61.41.30.90.50.40.40.3Alcobevmarketevolutionbycountry(USDBn)-ExcludingGreaterChina-SouthKorea

+0.5%Taiwan

+3.7%Thailand

+4.8%Vietnam

+10.3%Malaysia

+5.4%Indonesia

+9.3%Philippines

+12.3%Singapore

+4.6%Cambodia

+10.7%Myanmar

+18.3%Laos

+9.1%AlcobevMarketGrowthAddressableAlcobevMarketCAGR2006-2025WhiskyisthedominantcategoryoutsideofChina/

HongKong,butgrowingatalowerpaceSource:IWSR,Euromonitor,BMIresearch,WSJ,A.T.Kearney20062.62.00.40.10.1+5.4%+2.2%20255.13.50.90.50.320245.03.40.90.520234.93.30.90.420224.73.20.90.420214.63.92.60.80.320133.82.50.80.320123.82.60.80.320113.62.60.70.220103.32.40.620092.92.10.520082.92.20.520073.10.90.420204.63.00.90.420194.53.02.70.420184.42.90.90.420174.32.80.90.420160.92.80.90.420154.22.70.90.40.220142.10.54.2Alcobevmarketevolutionbycategory(USDBn)-ExcludingGreaterChina-AlcobevMarketGrowthWhisky

+3.0%Cognac

+4.5%RTD

+8.0%5%ofon-premisepremiumbeer

+5.9%AddressableAlcobevMarketCAGR2006-2025Stronggrowthinthepremiumbeersegment:double-digitoverthenext10years–significantopportunityforHighballAddressablepremium,on-premisebeermarketforecast

(5%oftotal–assumedaddressableforHighball,USDmillion)Source:IWSR,Euromonitor,A.T.KearneyPremiumBeerGrowthPremiumbeer:anon-premiseoccasionConsumerswillingtopayapremiumonpremiseforperceivedhigherqualityandtomakeastatusstatementMiddle-incomesegmentsmostpronetotradingupinasocial/mealoccasionsettingPremiumlagersdominatedbyimportedbrandsIncreasingnumberoflocal/internationalpartnershipstoreducedistributioncostandincreasereachPremiumizationandWesternizationdriveincreasingdemandforimportedbrands20242,01920231,88020221,74420211,59520201,44720191,30520181,1302017970201683920157302014492011318201026420092302008213200718920061672012+17.8%201350031106549453952025+11.5%2,1701,91015061605SoutheastAsia

+6.1%Taiwan

+7.6%China,HongKong

+18.2%SouthKorea

+4.0%EMCAGR2015–2021:16.9%ChinaRestofEmergingAsiaMixeddrinksarebiginChinabutlargelyalocalplay.WeseeopportunityinothermarketswhereimportedRTDsaregrowingMixedDrinksmarketforecast(USDmillion)Source:IWSR,Euromonitor,A.T.KearneyMixedDrinksGrowth401201350120154102182021201770120197161,4535131,0441,0262216212920092007192011342111,47320232025+45.0%+16.6%1,8881,911MixedDrinks-Local

+30.2%MixedDrinks-Imported

+9.4%Trends/evolvingconsumertastes14212264+14.5%+2.7%200725020093612322253804441542015311201334120192011202169128295265421201739928011532920251194711257110913320235811158MixedDrinks-Local

+9.5%MixedDrinks-Imported

+5.1%IWSRCAGR2015–2021:3.4%IWSRCAGR2015–2021:21.5%Megatrends:greaterhealthconsciousnessandchangingtasteprofilestoloweralcoholcontent,sweetertypeofdrinkswillboostsalesofmixeddrinks.HoroyoibranduniquelypositionedtocatertothissegmentChina:drivenbylargenumberofnewLDApopulation–from2016to202114to17millionpeoplewillturn18everyyear.Largeyoungdemographicreceptivetomixeddrinks.Limitation:marketdominatedbylocalplayerLargestmarketsforimportedMixedDrinksby2025:SouthKorea,Vietnam,ThailandSteadygrowthexpectedacrossVodkaandGin;super-premiumsegmentisgainingshareAddressableWhiteSpiritsmarketforecast(USDmillion)Source:IWSR,Euromonitor,A.T.KearneyWhiteSpiritsGrowth105691111820111072013982015912017842019792021802023542025292007200916103+22.1%+4.1%15PremiumSuperpremiumVodka56677520175020154620133720111920091320079443119291761+21.9%2023202120252019+5.0%GinIWSRCAGR2015–2021

9.6%IWSRCAGR2015–2021

4.2%Megatrends:growingcocktailculture–whitespiritscommonlyusedasbaseformix-abilityandversatility;increasinghealthawareness–proliferationofnewlightofferings(e.g.SmirnoffSorbetLight);eventification-popularityofpremierginfestival&masterclassesamongyoungaffluentdrinkers(e.g.EastImperialGinJubilee)China:demandforinnovativeginsusingunconventionalingredientsandsmallcraftbrands(e.g.SichuanPepperGin)LargestmarketsforimportedVodka/Ginby2025:Thailand,Indonesia,ChinaSegmentgrowth:superpremiumgainingshare(Larioscurrentlypositionedinpremiumonly)WhiskyCognacSingleMalttodrivegrowthinWhiskysegment;XOandVSOPtogrowsteadilyandaccountformajorityofCognacAddressableBrownSpiritsmarketforecast(USDbillion)Source:IWSR,Euromonitor,A.T.KearneyBrownSpiritsGrowthMegatrends:premiumization–singlemaltsoutperformblendedtypes,tradingupwithincategory;exclusivity-perceivedasthemostprestigioustypeofalcobev,consumersseekexclusiveofferings,manufacturerslaunchlimitededitionproducts;supplyshortage–unprecedentedunmetdemandforJapanesewhisky;China:Cognac(XOandabove)adverselyimpactedbyanti-extravagancepolicies;growingmiddleclassexpectedtodrivegrowthinmaltscotchWhiskyLargestmarketsforimportedCognac/Whiskyby2025:China,SouthKorea,Taiwan+3.2%4.020113.420073.40.42.20.720193.820170.83.6+2.1%20214.320253.00.30.12.24.71.8201320232.9201520092.63.6SingleMalt

+11.4%Others

+12.1%Blended

-0.8%2.620094.020194.520070.020110.44.30.820134.60.91.94.20.21.6202120154.24.720172.420231.80.2+9.6%+1.8%0.45.00.120252.0Extra

+3.7%XO

+4.6%Intermediate

+4.4%XXX/VS

+26.7%VSOP

+5.8%IWSRCAGR2015–2021:1.9%IWSRCAGR2015–2021:2.6%BlendedScotchsegmentisexpectedtoplateau,whileMaltScotchwilldoubleinsize,ridingonconsumerpreferenceshiftAddressableWhiskymarketforecast–evolvingconsumerpreferencesSource:IWSR,A.T.KearneyBrownSpiritsGrowth6256505916617106086666371,16930020192,1211,20927