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INVESTMENT OPPORTUNITIES IN THE NEW ZEALAND SPIRITS INDUSTRYFebruary 2014
1
ThisinformationwaspreparedbyCoriolissolelyfortheuseofourclient;itisnottobereliedonbyanythirdpartywithout priorwrittenconsent.
InvestmentopportunitiesintheNewZealandAlcoholicSpirits industry
PartoftheFood&BeverageInformationProjectAugust2012v1.01
www.foodandbeverage.govt.nz
STAGEIIIThisdocumentrepresentsthethirdstageofawiderindustryscreendesignedtoidentify,develop&highlightemerginggrowthopportunitiesinNewZealandfoodandbeverageexportsforpotentialinvestorsandotherinterestedparties
StageIISecondaryScreen
StageIIIDevelopOpportunities
StageIPreliminaryScreen
Initialinputtoprocess
559
Passedthrough
129
Passedthrough
25
Identified
20
Exploredindepth
3
HoneySalmonSpirits
SeerelatedStageI&IIdocumentfordetailsAvailableatwww.foodandbeverage.govt.nz
Youarehere
PAGE3
TABLEOFCONTENTS
Section Page
Contents 4
Glossaryofterms 5
Methodology&datasources 6
Summary&conclusions 7
1.Largeandattractivemarket 8
2. Growingglobalexports 16
3.NewZealandspiritexportsaregrowing 20
4.NewZealandcanwin 25
5.Potentialstrategicdirections 31
6.Investmentopportunities 58
GLOSSARYOFTERMS
PAGE5
Thisreportusesthefollowingacronymsandabbreviations
ANZSIC AU/NZStandard IndustryClassification
b Billion
CAGR CompoundAnnualGrowthRate
e Estimate
f Forecast
FOB FreeonBoard
FT Fulltime
HSCodes Harmonised SystemCodesforcommodityclassifications
m Million
n/a Notavailable/notapplicable
NZ NewZealand
NZ$/NZD NewZealanddollar
PT Part time
S.H./N.H. Southern/NorthernHemisphere
SKU StockKeepingUnit
T/O Turnover
t Tonne
US/USA United StatesofAmerica
US$/USD United Statesdollar
UK United Kingdom
METHODOLOGY&DATASOURCES
PAGE6 *FoodandAgricultureOrganisationoftheUnitedNations
Datawasfromavarietyofsources,andhasanumberofidentifiedlimitations
- Thisreportusesarangeofinformationsources,bothqualitativeandquantitative.
- Thenumbersinthisreportcomefrommultiplesources.Whilewebelievethedataaredirectionallycorrect,werecognisethelimitationsinwhatinformationisavailable.- Inmanycasesdifferentdatasourcesdisagree(e.g.
StatisticsNewZealandvs.FAO*vs.UNComtrade).- Manydatasourcesincorporateestimatesofindustry
experts.- Asoneexample,inmanycases,thevalueand/orvolume
recordedasexportedbyonecountrydoesnotmatchtheamountrecordedasbeingreceivedasimportsbythecounterparty[forunderstoodreasons].
- Inaddition,insomeplaces,wehavemadeourownclearlynotedestimates.
- CoriolishasnotbeenaskedtoindependentlyverifyoraudittheinformationormaterialprovidedtoitbyoronbehalfoftheClientoranyofthedatasourcesusedintheproject.- Theinformationcontainedinthereportandany
commentaryhasbeencompiledfrominformationandmaterialsuppliedbythirdpartysourcesandpubliclyavailableinformationwhichmay(inpart)beinaccurateorincomplete.
- Coriolismakesnorepresentation,warrantyorguarantee,whetherexpressorimplied,astothequality,accuracy,reliability,currencyorcompletenessoftheinformationprovidedinthereport.
- AlltradedataanalysedinallsectionsoftheF&BInformationprojectarecalculatedanddisplayedinUS$(otherthanafewplaceswheredetaileddataisnotavailable).Thisisdoneforarangeofreasons:1. Itisthecurrencymostusedininternationaltrade2. Itallowsforcrosscountrycomparisons(e.g.vs.Denmark)3. ItremovestheimpactofNZDexchangeratevariability4. Itismorecomprehensibletonon-NZaudiences(e.g.foreign
investors)5. ItisthecurrencyinwhichtheUnitedNationscollectsand
tabulatesglobaltradedata
- Theopinionsexpressedinthisreportrepresentthoseoftheindustryparticipantsinterviewedandtheauthors.ThesedonotnecessarilyrepresentthoseofCoriolisLimitedortheNewZealandGovernment.
- Ifyouhaveanyquestionsaboutthemethodology,sourcesoraccuracyofanypartofthisreport,pleasecontactTimMorris,thereport’sleadauthoratCoriolis,on+6496231848
SUMMARY– THESPIRITSOPPORTUNITY
Overview- SpiritsisaUS$47mexportindustry.Exportshavebeengrowingata
compoundrateof10%peryearforthepastdecade.KeymarketsareAustraliaandthePacificIslands(36%),NorthAmerica(31%)anddevelopedAsia(31%).
- ThesuccessoftheNewZealandwineindustryoverthepast20years–growingfromalmostnothingtoabilliondollarindustryandbecomingahighlyrespectedproducerofsuperpremiumwineshasopenedthedoorforthegrowthofNZspiritexports.
- Priorto2000therewereawiderangeofsmallspiritventures,producingsmallscalenichespiritsforthedomesticmarket.AtthesametimeIndependentLiquorlaunchedRTD*spiritbeveragesprimarilyfordomesticconsumptionandexporttoAustralia.Everythingchangedwiththelaunch,rapidgrowthandfinancialsuccessof42BelowwhichcreatedglobalawarenessofNZasasuper-premiumspiritsprovider.Inthewakeof42Belowalargenumberofnewfirmshaveenteredtheindustrywithawiderangeofproductsandbrands.
- Theexperienceofotherpeergroupcountries– withstrongparallelswithNZ– suggesttheNZspiritsindustryisstillattheearlyphaseofitsgrowthcycle.Weexpectcontinuedgrowthfortheforeseeablefuture.
Drivers1. NZhasamassive,globallycompetitivedairyindustrywhichproducesas
aby-product,veryhighqualitywheyalcohol.ThealcoholisusedasabasealcoholbymanyNZandinternationalspiritproducers.
2. Spiritadvertisingstronglyleveragescountryenvironmentandidentity(e.g.Finlandandvodka).NZiswellpositionedinkeymarketsasatrusted,premiumproducerofsafefoodsinanaturalenvironment.
3. Theindustryisthrivingwithagoodmixoflargeplayersandnewentrants.Significantinnovationisoccurringacrossproducts,packagingandmarketing.
4. Similartowine(butunlike,say,razorblades)spiritretailersandconsumersgloballywelcomenewproductsandconstantinnovation.
5. ThesuccessofNZspiritsintheinternationalmarketisbeingdriveninpartbytheuseofNZuniqueorsignatureflavours,examplesincludemanukahoney,feijoa,tamarillo,kawakawaandkiwifruit.Theseflavours provideadefensiblepositionforNZspirits.
Opportunities- NZspiritsisintheearlyphasesofitsgrowthcycle.Thehandfuloflarge
firmsthatexistarealreadycontrolledbyglobalmulti-nationals- IndependentLiquor(Asahi;listedJapan)- Lion(Kirin;listedJapan)- DBBreweries(Heineken;Dutch;F&N;Singapore)- 42Below(Bacardi;Bermuda)
- Thisownershipstructure- andthefactthatmanyofthesefirmshaveonlychangedhandsinthelast5years- appearstolimitopportunityfornewparticipantsinthelargerendoftheindustry.
- However,beyondthistop4,thereisalargeandgrowinggroupofsmall-to-mediumsizedspiritsfirms.Mostofthesefirmswouldwelcomeinvestmentduetothecapitalintensiveandcashflownegativenatureofbeinganexportdrivengrowthcompanyinthespiritsindustry.
- Duetoitscurrentinfancy,therearestillawiderangeofopportunitiesfornewstartupsintheNZspiritsindustry.TheindustryiscurrentlyakintotheNZwineindustrycirca1970,perhapsonthecuspofahugeexplosionofnewproducts,newflavoursandnewproducers.
- ThetwolargestspiritexportersintheworldaretheUKandFrance.NZhasdemonstratedcapabilitytocompetesuccessfullywithproducersinthesecountries.
PAGE7 *ReadytoDrink
Thespiritsindustry,whilestillinitsinfancy,appearstohaveabrightfuture
TABLEOFCONTENTS
Section Page
Contents 4
Glossaryofterms 5
Methodology&datasources 6
Summary&conclusions 7
1.Largeandattractivemarket 8
2. Growingglobalexports 16
3.NewZealandspiritexportsaregrowing 20
4.NewZealandcanwin 25
5.Potentialstrategicdirections 31
6.Investmentopportunities 58
Product Madefrom Typical%alcohol
Whatisit? Origin Examples
Beer - Maltedcerealgrains(wheat,barley,corn,others)
- Hops- Yeast- Water
4-6%(1-20%)
- Crushedgrainsfermentedwithyeast
- Hopstypicallyaddedasapreservative/flavour
- Fermentedbeverages:Mesopotamia~3,500BC
- Modernbeer:Germany1500AD
- Stout- Porter- Lager- PaleAle- Pilsener
Wine - Grapes[andotherfruit]- Yeast
~13% - Grapejuicefermentedusingyeast - Georgia/MiddleEast:~6,000BC - Pinotnoir- Chardonnay- Cabernetsauvignon- Gamay- Merlot- Champagne
Spirits - Carbohydrate containingsubstance(e.g.sugar)
- Yeast- Water
~20-40% - Anythingcontaininganyformofsugarfermentedwithyeast
- Resultisthendistilledtopurifyandincreasealcoholcontent
- DistillationinventedbyGreeksinEgyptin200AD
- SpreadtoEuropeviaArabs
- Vodka- Whisk(e)y- Brandy- Rum- Gin- Tequila
Comparisonofthreemajorclassificationsofalcoholicbeverages(2011)
TYPESOFALCOHOLICBEVERAGESSpiritsareoneofthreetypesofalcoholicbeverages
PAGE9
Comparisonofglobalalcoholicbeveragesacrossthreemetrics(2010orasavailable)
COMPARISONACROSSALCOHOLICBEVERAGESSpiritsaccountfor10%ofglobalalcoholicbeveragevolume,36%ofglobalsalesand45%ofglobalpurealcoholconsumption
PAGE10 Source:Coriolisfrommultiplesources
80%
33% 36%
10%
32%19%
10%
36%45%
%volume(inlitres) %sales(US$b) %alcohol
Beer
Wine
Spirits
234b US$577b 100%
Product Globalvolume
Globalsales Industrystructure Shareoftop10firms
Topglobal firms KeyfirmsinNew Zealand
Beer 1,864mhls US$188b(2010)
- Severaldominantmultinationalcompanies
- Manythousandsofsmallerproducers
61% - Anheuser-BuschInBev (Brazil)343mhls- Heineken/FEMSA(Dutch)161mhls- SABMiller(UK)159mhls- Carlsberg(Denmark)102mhls- ChinaResourceBrew.(China)93mhls- Tsingtao(China)67mhls- Modelo (Mexico)[50%ABIB]53mhls- BeijingYanjing (China)49mhls- MolsonCoors(Canada)47mhls- Kirin(Japan)30mhls
- Heineken (DBBreweries)
- Kirin(Lion)- Asahi(Independent)- Numeroussmaller
Wine 2.6bcases(9l)
31.5bbottles(2009)
US$183.1b(2009)
- Somelargefirms- Howeverhighly fragmented
globally
13% - ConstellationBrands(USA)$4.1b(11)- E&JGallo(USA)- TheWineGroup(USA)- GCFGroup(France)€700m(08)- Pernod Ricard (France)- LVMH(France)
- Pernod Ricard(Montana)
- Delegats (NZListed)- Kirin(Lion)- Constellation(Nobilo)- VillaMaria(NZprivate)- TreasuryWine(Aust.)- Numeroussmaller
Spirits 2.7bcases(9l)
(2009)
US$205.9b(2009)
- Somelargefirmsfocusedonkeyglobalbrands
- Manysmallerproducers
26% - Diageo(UK)£13b(10)- Pernod Ricard (France)€7.6b(11)- Bacardi(Bermuda)US$5.5b- Brown-Forman(USA)US$3.4b- BeamInc.(USA)US$2.7b- LVMH(France)€2.7b(alcohol)- ThaiBev (Thailand)- Belvédère Group(France)€1.2b- WilliamGrant(UK) £838m- CampariGroup(Italy)€1.1b
- Asahi(Independent)- Bacardi(42Below)- Numeroussmaller
Comparisonofthreemajorclassificationsofalcoholicbeverages(2011)
TYPESOFALCOHOLICBEVERAGESThethreemainalcoholicbeverageshavedifferentindustrycharacteristics;spiritsissomewhatmoreconsolidatedthanwinebutmuchlessconsolidatedthanbeer
PAGE11
Product What isit? Examplebrands
VodkaAquavitOkovita
FermentedgrainorpotatoesDistilledOftenwithaddedflavours
MoskovskayaSmirnoffAalborg
Baijiu Fermentedgrainsorrice;distilled Maotai
Whisk(e)y Fermentedbarley andothergrainsDistilled
JohnnieWalkerJackDaniels
BrandyCognacPisco
Distilledwine HennessyRemyMartinCourvoisier
FruitBrandyEau devieRakiaSchnapps1
FermentedfruitDistilled
Pascal
Rum/TafiaCachaça
Fermented molassesorsugarcaneDistilled
BacardiCaptainMorgan
Gin EthylalcoholflavouredbyJuniperberriesandotherbotanicalingredients
GordonsBeefeaterTanqueray
TequilaMescal
FermentedheartofagaveplantDistilled
JoseCuervoSauza
SojuShochu
FermentedriceDistilled
Haamonii
Liqueurs Alcohol plusflavour&sugarSeenexttable
Classificationofmajortypesofspirits(2011)
TYPESOFSPIRITSSpiritsthemselvescanbebrokendownintomultiplemajortypesofproduct
PAGE12 Note:simplifiedsummary;manymoreproductsanddefinitionsexist,someoverlapping;1.Note:Americanschnappsareliqueurs;Source:Coriolis
Keyflavour Product names/types Example brands
Anise OuzoArakAbsinthePastisSambucaOthers
Yeni RakiMetaxa OuzoGrandAbsinthePernod Pastis
Coffee KahluaTiaMaria
Cream BaileysIrishCream
Fruit Citrus/TripleSecBerriesPlum(Sloegin)
CointreauGrandMarnierChambordMidoriPAMASouthernComfort
Honey Drambuie
Nuts Amaretto Frangelico
Others(e.g.herbs) GallianoGoldschlägerChartreuseBenedictine
EXAMPLE:NumberofitemsintotalalcoholrangeonLiquorKingNewZealandwebsite(#ofSKU1;2/2012)
RANGEBYPRODUCTCATEGORYSpiritsaccountforaboutathirdoftherangeofthetypicalsmallerliquorstore;spiritsrangeisspreadacrossmultiplevarietiesproportionaltosalesorprofits
PAGE13 1.SKU=StockKeepingUnits(i.e.differentbarcodes);Source:LiquorKingonlineFeb2012;Coriolisanalysis
Whisky, 60,31%
Rum20
10%Vodka
168%
Gin11
6%
Tequila126%
Brandy,10,5%
Liqueur65
34%
Total=194sku (items)
Whitewine11319%
Redwine9116%
Sparkling448%
Fortifiedwine244%
Fruitwine31% Beer
6611%
RTD's468%
Spirits, 194,33%
Total=577sku (items)
EXAMPLE:Shareofspiritrangeacrossselectglobalretailers(%ofSKU1;2/2012)
RANGEBYPRODUCTCATEGORYSpiritSKU1 mixsimilaracrossAnglo-Saxoncountries;depthofrangevariesdependingontypeofretailer(largevs.smallformat)
PAGE14 1.SKU=StockKeepingUnits(i.e.differentbarcodes);Source:LiquorKingonlineFeb2012;BevMo,Sainsbury&DanMurphyonlinewebsite;Coriolisanalysis
23%27% 30% 31%
9%
11% 6%10%
18%13%
10%8%
4%6%
3%
6%
14%1%
4%
6%
11%
11%
11%
5%
21%31%
37% 34%
BevMo Sainsbury DanMurphy's LiquorKing
Whisk(e)y
Rum
Vodka
Gin
Tequila
Brandy
Liqueur
(California) (London) (Australia) (NewZealand)
448
177
361
73
271
217
420
Whisky
Rum
Vodka
Gin
Tequila
Brandy
Liqueur
194SKU878SKU344 SKU1,967SKU
EXAMPLE:#ofSKUinspirits:BevMo!vs.DanMurphy’s(%ofSKU;2/2012)
260
55
88
23
34
93
325
Whisky
Rum
Vodka
Gin
Tequila
Brandy
Liqueur
ThemoreSKUinthecategory,themorelikelyanewSKUcan
enter
Worldtradeinspiritsbykeycountryandregion(US$;b;2010)
GLOBALSPIRITTRADETheUS$23bglobalspirittradeisdominatedbyEuropeontheexportsideandrichWesterncountries(particularlytheUSA)andAsiaontheimportside
PAGE15 Source:UNComtrade database;Coriolisanalysis
$0.8
$6.6
$1.2
$3.9
$1.4
$1.3
$1.4
$0.5
$0.4
$0.7
$0.1
$0.8
$3.4
$2.7
$1.0
$0.2
$5.7
$1.4
$0.7
$0.3
$0.5
$0.1
$0.1$0.7
$0.3$0.4
$0.5$0.6
$0.1 $0.3$0.1 $1.1$1.3 $0.5$0.3 $0.3$0.9 $0.9$0.7 $1.0$0.4
ImportExport
UnitedKingdom
France
GermanySpainItaly
Ireland
OtherEurope
RussiaUnitedStates
Canada
UnitedKingdomFrance
Germany
SpainItaly
OtherEurope
Russia
UnitedStates
CanadaAustraliaChinaHongKongJapanSouthKoreaSingaporeOtherSEAsiaMexicoOtherC/SAmericaOther
SingaporeOtherSEAsia
MexicoOtherC/SAmerica
Other
NewZealand
$22.3$23.0
Europe72%
Europe43%
NorthAmerica29%
E/SEAsia16%
TABLEOFCONTENTS
Section Page
Contents 4
Glossaryofterms 5
Methodology&datasources 6
Summary&conclusions 7
1.Largeandattractivemarket 8
2. Growingglobalexports 16
3.NewZealandspiritexportsaregrowing 20
4.NewZealandcanwin 25
5.Potentialstrategicdirections 31
6.Investmentopportunities 58
Aggregateglobalexportsofspirits(US$;b;1965-2010)
GROWINGTheglobalspiritstradeisgrowing
PAGE17 *CAGR=CompoundAnnualGrowthRate;Source:UNComtradedatabase;Coriolisanalysis
$0.6 $1.0$1.9
$3.8 $3.5
$7.5
$9.6$10.4
$16.2
$22.3
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
CAGR*(65-10)
8% 11%
14%15%
-2%
17%
5%
2%
9%
7%
65-70 70-75 75-80 80-85 85-90 90-95 95-00 00-05 05-10
5 yearCAGRofaggregateglobalexportsofspirits(%ofUS$;1965-2010)
average(65-10)
8%
Shareofaggregateworldspiritsexportsbykeycountryandregion(%ofUS$;1965-2010)
SHAREOFEXPORTVALUEInexports,thehistoricaldominanceoftheUKandFranceontheworldspirittradeisdiminishing;consumersappeartobewelcomingawiderrangeofspiritsfromawiderrangeofcountries
PAGE18 Source:UNComtrade database;Coriolisanalysis
55%50% 47% 49%
44% 43%36% 37%
32%29%
18%
19% 22%26%
25% 26%
21% 18%18%
17%
1%
1%
1% 1%
4%2%
5%6%
1%
1%
1% 2%
1%
2% 2%2%
1% 2%
2%
3% 2%
3%4% 3%
3%
2%5% 5%
4%5% 4%
3%
4%5% 4%
5%4% 5%
11%9% 12%
12%
0%0% 0%
0%0% 0%
1%
2%2% 2%
2%3% 4%
4%5% 5%
6%
18%18%
13%
7% 8% 5%3%
4% 2%
1%
1% 2%3%
2% 2%2%
0% 0% 2% 4%2% 3%
6%
1% 2% 1% 2%5% 4% 4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
UnitedKingdom
France
GermanySpainItalyIreland
OtherEurope
RussiaUnitedStatesCanada
SingaporeOtherSEAsiaMexicoOtherC/SAmericaOther
CanadaAustraliaChinaHongKongJapanSouthKorea
NewZealand
Shareofaggregateworldspiritsimportsbykeycountryandregion(%ofUS$;1965-2010)
SHAREOFIMPORTVALUEInimports,therelativeimportanceoftheUSmarketisfalling,drivenbythegrowthofEuropeandAsia
PAGE19 Source:UNComtrade database;Coriolisanalysis
6% 5% 7% 7% 6% 6% 4% 6% 5% 4%
4% 4%4% 4% 5% 7%
5% 5% 5% 5%
4% 6%8% 9% 7%
7%7% 6% 7% 6%
1% 1%
1% 2%2%
5% 8% 7% 8%6%
10% 9%
12%11%
9%
12% 14% 14% 15%15%
56% 54% 35% 31% 40% 24% 20%
29%28%
26%
1% 1%
5%7%
6%16%
12%
8% 4%3%
4% 5%7% 8%
5%3%
4% 4% 3% 4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
UnitedKingdom
France
Germany
SpainItaly
OtherEurope
Russia
UnitedStates
CanadaAustraliaChinaHongKongJapanSouthKoreaSingaporeOtherSEAsiaMexicoOtherC/SAmericaOther
NewZealand
Ireland
TABLEOFCONTENTS
Section Page
Contents 4
Glossaryofterms 5
Methodology&datasources 6
Summary&conclusions 7
1.Largeandattractivemarket 8
2. Growingglobalexports 16
3.NewZealandspiritexportsaregrowing 20
4.NewZealandcanwin 25
5.Potentialstrategicdirections 31
6.Investmentopportunities 58
NumberofspiritmanufacturingenterprisesinNewZealand(#;actual;2000-2010)
NEWZEALAND– FIRMS&EMPLOYMENTAfteraperiodofstronggrowththrough2005/06,theNewZealandspiritsindustrynowappearstobedrivingproductivityincreases
PAGE21 Source:StatisticsNewZealand;Coriolisanalysis
1211
1516
2021
25
27 2726
27
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
NumberofpeopleemployedinspiritmanufacturingenterprisesinNZ(#;actual;2000-2010)
230
270 280 270
460
590 580
520540
520 510
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
NewZealandspiritexportvaluebytype(US$;m;2010)
NEWZEALAND– EXPORTBYTYPE&DESTINATIONNewZealandexportedUS$46.8minspiritsin2010;RTD’s/other,liqueursandvodkawerethebiggestproducts;marketsaresplitbetweenAustralia/PacificIslands,NorthAmericaandAsia
PAGE22 Source:StatisticsNewZealand;Coriolisanalysis
NewZealandspiritexportvaluebydestination(US$;m;2010)
Australia29%
PacificI.7%
USA16%
Canada15%
UnitedKingdom1%
OtherEurope2%
SouthKorea7%
HongKong2%
OtherEAsia1% Singapore
6%
OtherSEAsia12%
Other2%
TOTAL=US$46.8m
Brandy1%
Whiskies6%
Rum2% Gin
2%
Vodka15%
Liqueurs15%
RTD's/Other59%
TOTAL=US$46.8m
36%36%
31%
31%
NewZealandspiritexportvaluebytype(US$;m;2000-2010)
NEWZEALAND– EXPORTVALUEBYPRODUCTThevalueofNewZealand’sspiritexportshasbeengrowing,achievinga10%CAGRoverthepastdecade;growthstandoutsincludevodka,liqueursandrum
PAGE23 Source:UNComtrade database;Coriolisanalysis
$0.4 $0.1 $0.2 $0.2 $0.3 $0.1 $0.1 $0.1 $0.3 $0.2 $0.3$1.4 $1.8 $1.5 $1.1 $1.6 $1.3 $1.1 $1.6 $2.6 $2.0 $2.8$0.3 $0.4 $0.4 $0.8
$1.1$0.7 $0.7
$1.2$1.2
$0.8$1.1
$0.3 $0.4 $0.5 $0.5$1.1
$0.6 $0.8$0.8
$1.1$0.8
$1.0
$0.3 $0.3 $0.2 $0.7
$4.2$3.2 $4.4
$8.5$3.9
$4.4
$6.9
$1.3$3.1 $4.1 $2.7
$1.5
$1.3$0.8
$0.9 $7.8$6.6
$6.8
$14.8
$21.2
$13.3
$20.1
$20.5
$18.5
$21.3
$23.9$18.8
$16.9
$27.8
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010BrandyWhisky
RumGin
Liqueurs
RTD’s/other
Vodka
$18.9
$27.4
$20.1
$26.1
$30.3
$25.8
$29.2
$37.1$35.7
$31.7
$46.8
-3%8%
13%0%
18%
6%
36%
CAGR(00-10)10%
CAGR(00-10)
NewZealandspiritexportvaluebydestination(US$;m;2000-2010)
NEWZEALAND– EXPORTVALUEBYDESTINATIONNewZealandspiritexportsaregrowingtomostdestinationsotherthanAustralia
PAGE24 Source:UNComtrade database;Coriolisanalysis
$15.3$18.6
$9.2$12.5
$15.6$13.8
$16.6 $17.3$15.5
$13.6 $13.5
$0.6
$1.5
$1.7
$2.2
$2.5$2.4
$2.2 $2.4$2.4
$2.5 $3.1$0.0
$-
$0.0
$0.3
$3.3
$2.5
$3.1$4.8
$3.6
$2.8
$7.4
$-
$0.7
$1.2
$1.4
$1.8
$2.2
$2.5
$4.4
$5.2
$5.2
$7.1
$0.2
$1.1
$1.7
$4.2
$2.3
$0.3
$1.1
$0.6
$0.1
$0.3
$0.7
$0.1
$0.0
$0.2
$0.3
$0.4
$0.2
$0.0
$0.7
$0.8
$0.4
$0.8
$0.3
$1.3
$2.7
$2.8
$1.3
$2.4
$2.1
$2.6
$3.4
$3.1
$3.5
$1.5
$3.0
$1.4
$0.5
$1.4
$0.7
$0.1
$0.1
$0.1
$0.1
$1.2
$0.1
$0.2
$0.3
$0.5
$0.4
$0.2
$0.1
$0.4
$0.4
$0.3
$0.5
$0.1
$0.1
$0.3
$0.1
$0.2
$0.3
$0.5
$0.2$0.4
$0.3
$2.8
$0.6
$0.9
$1.2
$1.2
$1.0
$1.0
$0.6
$3.5$3.7
$3.1
$5.5
$0.0
$-
$0.0
$0.0
$0.2
$0.0
$0.3
$0.1$0.1
$0.1
$0.9
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Australia
PacificIslands
U.K.OtherEurope
Canada
USA$18.9
$27.4
$20.1
$26.1
$30.3
$25.8
$29.2
$37.1$35.7
$31.7
$46.8
-1%
17%
17%30%
30%
98%
CAGR(00-10)10%
CAGR(00-10)
SouthKorea 27%
HongKong -3%OtherE.Asia 21%Singapore 40%
OtherSEAsia 24%
Other 111%
TABLEOFCONTENTS
Section Page
Contents 4
Glossaryofterms 5
Methodology&datasources 6
Summary&conclusions 7
1.Largeandattractivemarket 8
2. Growingglobalexports 16
3.NewZealandspiritexportaregrowing 20
4.NewZealandcanwin 25
5.Potentialstrategicdirections 31
6.Investmentopportunities 58
48%
31%
21%
15%
13%
12%
10%
10%
10%
10%
9%
9%
8%
8%
7%
7%
6%
6%
6%
6%
6%
0%
Latvia
Estonia
NewZealand
Argentina
Germany
SouthAfrica
Finland
Chile
Sweden
Belgium
Netherlands
Spain
Italy
Portugal
Australia
Mexico
Ireland
France
UK
Denmark
Greece
Canada
Alcoholexportspercapita(US$;2010)
$6,284
$3,710
$3,499
$2,852
$1,984
$1,847
$1,335
$1,029
$989
$945
$735
$719
$628
$614
$558
$524
$293
$286
$158
$108
$82
$6
France
UK
Italy
Germany
Spain
Netherlands
Mexico
Australia
Chile
Belgium
NewZealand
SouthAfrica
Ireland
Argentina
Portugal
Sweden
Latvia
Denmark
Estonia
Finland
Greece
Canada
10yearvaluegrowth(US$;m;2000-2010)
10yearCAGRexportvalue(%ofUS$;2000-2010)
Totalalcoholexportvalue(US$;m;2010)
NZVS.PEERS– TOTALALCOHOLEXPORTS– SELECTMETRICSNewZealandhasachievedstronggrowthintotalalcohol exports(wine,beer&spirits)overthepastdecadedrivenbywine;awidepeergroupofcountriessuggestssignificantfurthergrowthispossible
PAGE26 Source:UNPopStat;UNComtrade database;Coriolisanalysis
$13,509
$8,225
$6,333
$4,061
$3,403
$3,164
$2,758
$2,017
$1,581
$1,562
$1,345
$1,084
$1,057
$858
$857
$809
$718
$640
$299
$184
$172
$169
France
UK
Italy
Germany
Spain
Netherlands
Mexico
Australia
Chile
Belgium
Ireland
Portugal
SouthAfrica
Sweden
NewZealand
Argentina
Canada
Denmark
Latvia
Greece
Finland
Estonia
$161
$110
$79
$73
$64
$57
$49
$47
$44
$36
$35
$30
$28
$21
$15
$13
$12
$9
$8
$7
$5
$3
Ireland
France
Netherlands
UnitedKingdom
Denmark
Belgium
Portugal
Italy
Australia
Sweden
Chile
Spain
NewZealand
Canada
Germany
Mexico
Finland
Greece
Estonia
SouthAfrica
Argentina
Latvia
Alcoholexportvaluemixbyalcoholtype:NewZealandvs.widepeergroup(%ofUS$;2010)
NZVS.PEERS– ALCOHOLEXPORTMIXNewZealandappearsoverweighted towine;aspirationally NewZealandshouldhaveamorebalancedmixsimilartoGermanyorFrance
PAGE27
98%
95%
92%
90%
82%
74%
74%
73%
62%
42%
28%
19%
18%
13%
8%
7%
4%
2%
1%
0%
1%
0%
0%
0%
3%
0%
0%
2%
0%
0%
1%
2%
0%
0%
0%
1%
0%
0%
0%
0%
0%
1%
4%
3%
2%
20%
2%
3%
2%
13%
31%
50%
3%
16%
10%
10%
34%
6%
26%
68%
0%
0%
1%
1%
1%
0%
4%
0%
0%
0%
1%
6%
1%
3%
1%
7%
1%
10%
16%
0%
0%
0%
1%
0%
1%
0%
12%
6%
6%
0%
6%
1%
5%
0%
1%
3%
15%
7%
0%
0%
1%
4%
2%
5%
11%
5%
9%
15%
29%
46%
32%
22%
72%
67%
80%
71%
46%
76%
57%
32%
Chile
Australia
Argentina
NewZealand
Italy
Portugal
SouthAfrica
Spain
France
Greece
Germany
Denmark
Latvia
Estonia
UnitedKingdom
Finland
Canada
Sweden
Ireland
Mexico
Wine Vermouth Beer Cider/otherferm Industrialalcohol Spirits
$171
$12
$70
$11
$10
$96
$25
$23
$85
$2
$4
$11
Ireland
Italy
Sweden
Spain
Canada
Latvia
Denmark
Finland
Estonia
SouthAfrica
Australia
NewZealand
Spiritexportspercapita(US$;2010)
$267
$316
$344
$333
-$87
$213
$91
$83
$107
$68
$45
$28
10yearvaluegrowth(US$;m;2000-2010)
10yearCAGRexportvalue(%ofUS$;2000-2010)
$763
$697
$655
$508
$333
$215
$140
$123
$113
$91
$81
$47
Ireland
Italy
Sweden
Spain
Canada
Latvia
Denmark
Finland
Estonia
SouthAfrica
Australia
NewZealand
Spiritexportvalue(US$;m;2010)
Population(people;m;2010)
NZVS.PEERS– SPIRITS– SELECTMETRICSPeerssuggestNewZealandcanexportmorespirits;suggesta3-6timespotentialexportgrowth
PAGE28 Source:UNPopStat;UNComtrade database;Coriolisanalysis
4.5
60.3
9.4
47.0
34.2
2.2
5.5
5.4
1.3
49.3
22.4
4.4
Ireland
Italy
Sweden
Spain
Canada
Latvia
Denmark
Finland
Estonia
SouthAfrica
Australia
NewZealand
4%
6%
8%
11%
-2%
55%
11%
12%
34%
15%
8%
10%
Shareofspiritsexportvaluebykeytype(%ofUS$;2010)
NZVS.PEERS– SPIRITS– EXPORTMIXBYTYPEPeerssuggestNewZealandspiritexportmixcurrentlyoverweighted toRTD’s/other
PAGE29 Source:UNComtrade database;Coriolisanalysis
0%
2%
9%
0%
13%
24%
40%
13%
7%
22%
11%
1%
33%
4%
18%
74%
53%
33%
6%
3%
4%
30%
20%
6%
0%
0%
0%
2%
3%
1%
21%
7%
1%
4%
4%
2%
0%
0%
1%
0%
2%
2%
1%
0%
1%
2%
2%
2%
1%
91%
3%
4%
8%
27%
1%
7%
62%
9%
16%
15%
66%
2%
66%
16%
16%
5%
21%
57%
6%
9%
8%
15%
0%
1%
3%
3%
5%
9%
10%
13%
20%
23%
39%
59%
Ireland
Sweden
SouthAfrica
Canada
Estonia
Latvia
Spain
Italy
Finland
Australia
Denmark
NewZealand
Brandy Whiskies Rum Gin Vodka Liqueurs RTD/other
Whiskey,IrishCrème
Vodka
“Irish”Crème
Whiskey
Whiskey,Vodka
Vodka,Whiskeys,Brandy
Brandy,Rum
Liqueurs,Brandy
Vodka
Whiskeys,Brandy
Multiple
RTD’s,Vodka,Liqueurs
Keyproducts
- - -
2
3 3
8
9
2
12
9
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
EXAMPLE:NumberofawardswonbyNewZealandfirmsattheSanFranciscoWorldSpiritsCompetition(#;2000-2010)
NEWZEALAND– AWARDSNewZealandspiritsarewinningawards
PAGE30 Note:VodkaOandJinnDryGinaremadefromNewZealandwheyalcoholbutbottledinAustraliabyASMLiquor;StolenRumismade inTrinidadbutsoldbyaNZfirm;Source:SanFranciscoWorldSpiritsCompetition;Coriolisanalysis
Notheld
TABLEOFCONTENTS
Section Page
Contents 4
Glossaryofterms 5
Methodology&datasources 6
Summary&conclusions 7
1.Largeandattractivemarket 8
2. Growingglobalexports 16
3.NewZealandspiritexportsaregrowing 20
4.NewZealandcanwin 25
5.Potentialstrategicdirections 31
6.Investmentopportunities 58
Proposed“S-Curve”positioningofNewZealandspiritsandwineindustry(model)
EARLYINTHELIFECYCLEItisimportanttorecognisethattheNewZealandspiritsindustryisatanearlypointinitslifecycle
PAGE32 Source:Coriolis
Spirits
Wine
Earlystageoflifecyclecharacterised byhighindustrygrowth,mediumcompetition,
highlyfragmented
HighgrowthFragmentedbutconsolidating
NEWZEALANDSPIRITS– SWOT ANALYSISContinuedgrowthandsuccessinspiritsexportsispossiblebutnotguaranteed
PAGE33 Source:Interviews;Coriolis
Strengths Weaknesses
- NZrecognisedinalcoholandholdsastrongpremiumposition inwine(particularlyinAustralia,UK andtheUS)
- Multinationalinvestmentinthesector(Asahi,Kirin,Heineken,F&N,Bacardi)
- Endorsinghighgrowthpotentialofthisemergentsector
- Abletofeedproductsintotheirsalesnetworks
- BuildingnewbrandsaroundRTD’s(e.g.Woodstock,Vault)
- NewZealandtrustedcountryandproductswithsecurefoodsource
- AbletoleveragefavourableopinionofNewZealandinkeymarkets(e.g.China,Korea,Japan)
- StrongScottishheritageinSouthIsland;historicalspiritsproductionbyearlysettlers
- Fragmented;mostNZfirmshavelow/noeconomiesofscale
- Lackofindigenousalcoholheritage(e.g.vs.Mexico)
- Lackofglobalpowerbrands;mostNZbrandshaverelativelylowbrandvalue
- Limitedindustrydepthandinstitutionalknowledgebothinsidefirmsandacrosswidervaluechain
- Societyandgovernmentattitudetowardssector
- LackofcriticalmassoutsideRTD’s
- Lackofcapital
Opportunities Issues/Threats/Risk
- Immigrantsbringingskillsandexperience
- GrowthofwealthinAsia
- NewZealanduniqueplants
- Increasingglobalinterestinnewanduniquepremium/super-premiumspirits
- Globalgrowthofmicro-distilleries(cf.microbreweries)
- Leveragingexistingwineindustryinputs,outputsandsalesnetworks
- NoNZrulesordefinitionsonformulationofspecificspirits
- Governmentrequirementtobalancedesirablegrowthofsectorwithpotentialsocialandhealthissuesrelatedtoalcoholconsumption
- Strongforeignownershipofsectorlimitingvisionandvigour
- Growingaliquorstartup iscapitalintensiveandcashflow negative(duetopipelinefill)
- NoNZrulesordefinitionsonformulationofspecificspirits
- Growingaspiritproductinexportmarketsishugelycashflow negative;numerousstartups struggle,gounderoraresold(e.g.26000Vodka)
IdentifiedpotentialstrategicdirectionsfortheNewZealandspiritsindustrygoingforward(model;2012)
POTENTIALSTRATEGICDIRECTIONSOurresearchhasidentifiedfivepotentialstrategicdirectionsfordrivinggrowthinNewZealandspiritsexports;thepotentialdirectionsshouldnotbeseenasexclusive,ratherasdifferentwaystogrow
PAGE34 Source:various;photocredit(fairuse;lowresolution;completeproduct/brandforillustrativepurposes);Coriolisanalysis
RTDbeverages
Madeelsewherebottled inNew
Zealand
ConventionalspiritsmadeinNewZealand
ConventionalspiritsmadeinNew
ZealandwithNewZealandflavours
NewZealanduniquespirits
wu v x y
TwokeytypesofRTDproductsinNewZealand(2012)
1.RTDBEVERAGESMuchofthesuccesstodateofNewZealandspiritexportshascomefromRTDs;thesecanbecategorisedintothoseproducedandbrandedinNewZealandandglobalbrands(eitherimporterorpackedinNewZealand)
PAGE35 Source:various;photocredit(fairuse;lowresolution;completeproduct/brandforillustrativepurposes);Coriolisanalysis
NewZealandinvented brands GlobalbrandssoldinNewZealand
- NewbrandsinventedinNewZealand inthelasttwodecades- DevelopedandpackedinNewZealand, thenexported
- Historicglobalbrands- MaybepackagedinNewZealandfromimportedbulkspirits
Businesstype Manufacturer ManufacturerRetailer
Manufacturer Manufacturer(AU)Retailer
ImporterWholesaler
Importer Importer
DomesticNZ-inventedbrands
Woodstock(bourbon)
Dakota(bourbon)Cody’s(bourbon)Cruiser(vodka)Tattoo(vodka)Segers (Gin)KGB(vodka)Pulse(vodka)
CrazyMexican(teq.)Mudshake (vodka)Black Heart(rum)PurpleGoannaBellini(wine)
Diesel(bourbon)Maverick(bourbon)
Vault(vodka)ParkLane(Gin)Stil (vodka)Envy(vodka)
Cactus(tequila)Amy’s(vodka)
Bulleit (bourbon)
Barrel51(bourbon)Barrel71(bourbon)
Fuse(vodka)Vudu (vodka)
KentuckyState(bourbon)TropixAmp’d
- - -
Globalbrands - ArchersAquaBarcadi BreezerCoruba &Cola
Cuervo MargaritaGordon’sG&T
HeavenHill&ColaMcKenna&Cola
SmirnoffIce
- - JackDaniels&ColaSouthernComfort
Kahlua&Milk JimBeam&ColaCanadianClub
IdentifiedproducersofRTDbeveragesinNewZealand(activity;2012)
1.RTDBEVERAGES– KEYFIRMSThreekeyfirmsmanufactureRTD’sinNewZealand– IndependentLiquorandthetwomainbreweries(TheMill-aNZretailer– manufacturersinAustralia);keywholesalersalsoimportspecificglobalbrands
PAGE36 Source:Coriolis
RTDBeverages– Situation&PotentialStrategicdirections AttractivenessScorecard
Conceptsummary
- Pre-prepared,ready-to-drink alcoholicbeveragesinabottleorcan;typicallywithastrongnamedflavour- Targeted atnewer,entry-leveldrinkers throughpricepointandsweet flavour profile- Convenienceakeypartofoffertoconsumer- Oftensegmentedbysex(malevs.female),pricepointandbrand(strongknownbrandvs.weakpricefighter)- Typically specificallyformulatedtominimiselocaltaxviavariabletypeand%ofalcohol
Easeofexecution
DefensibletoNZ
Long termgrowth
Examples Keyglobaltrends HistoryinNZ
NewZealand Global - Categorymovingfromstart-upbrandstodominatedbyglobalplayers
- Greaterregulationandindustryscrutiny(e.g.advertising)
- Breweriesleveragingexistingstrengths(e.g.distribution)intocategory
- GrowthinAsia
- WineCoolerslaunchedinCaliforniain1981byE&J Gallo
- NZexpatMichaelErceg returnedtoNZandcopiedconceptinNewZealand
- Strong growthofsectorthroughnewproductdevelopment
- Majorbrewersentersector
- Woodstock &Cola- Vault88- VodkaCruizer
- Bacardi Breezer- Skyy Blue- SmirnoffIce- JackDaniels&Cola
Opportunities Challenges Whatisrequiredtowingoingforward?
- BrandsdevelopedorinventedforRTDproductsbeingtransitionedintobottledspirits
- Canactasa“bootstrap”togetspiritsindustryoffground;industrycanthentransitiontohighervalue
- Growthofstorebrands/controlledlabel- Growthofconsumption inAsia- Low consumptionamongolderconsumersandaging
babyboomers
- Strongmovesbyglobalspiritsfirmswithwellknownheritagebrandsintothecategory
- Multiplecountriestargeting productsthroughspecific“alcopop”taxes(e.g.Australia,Ireland,Germany)
- Relatively lowvalue;littlesenseinshippingaroundtheworld(i.e.typicallymadeinmarket);IndependentLiquorexportedtoAustraliain1997thenopenedtwoin-marketproductionplantsthere
- Growthofstorebrands/controlledlabel
- Constantinnovation throughnewflavoursand fastfollowingofglobaltrends
- Manoeuvringthroughchanginglawstargetingproduct andcategory
- Strong brandsdemandedbyconsumers- Highvolume,lowcostproductioninfrastructure- Constanttacticalactivitiesatretailtomaintainand
buildshelfspace- Constantlyattractingnewconsumerswhileavoiding
targetingunderagedrinkers
1.RTDBEVERAGES– SITUATION&POTENTIALSTRATEGICDIRECTIONSRTDbeverageshaveservedtogettheNewZealandspiritsindustryofftheground;theabilityofthesectortocontinuetodriveexportgrowthgoingforwardisunclear
PAGE37 Source:Coriolis
4
0
2
4 2 0high medium low
Examplesofnon-domesticallyproducedspiritsbottledinNewZealand(2012)
2.BOTTLEDINNEWZEALANDAnumberofspiritsareproducedelsewherebutpackagedandsoldbyNewZealandbasedfirms
PAGE38 Source:various;photocredit(fairuse;lowresolution;completeproduct/brandforillustrativepurposes);Coriolisanalysis
Rum Bourbon
BottledinNZ– Situation&PotentialStrategicdirections AttractivenessScorecard
Conceptsummary
- Add valuetohighqualitybutlowpricealcoholproducedelsewherebywrappingitinaNewZealandbrandandstory- TypicallyproductswhereNewZealanddoesnothavescaleand/orproduceinputs(e.g sugarcaneforrum)orprotected
names(e.g.bourbon)- GrabbingbrandvalueinNZ,typicallyfromlowskills/capabilitiesproducingcountries- Lowcostwaytogetofftheground
Easeofexecution
DefensibletoNZ
Long termgrowth
Examples Keyglobaltrends HistoryinNZ
NewZealand Global - Countries regulatingagainstbulkexportsofspirits
- Historicalimportationofbarrelsofspiritsfromaroundtheworld
- StolenRum- SevenTiki RumfromFiji(42Below)- TahitiDarkRum(42Below)- KentuckyBluebourbon
- ASMLiquorinAustraliabottlingNewZealandvodkainAustralia
- NumerousbottlersofScottish whiskeyblendsoutsideScotland
- NumerousbottlersofMexicantequilaoutsideMexico
Opportunities Challenges Whatisrequiredtowingoingforward?
- TransitiontoNewZealandproductionofproduct(ifandwherepossibleandeconomic)
- Leveraginglowcostentryintostrongerwidersectorposition
- Bottleat pointofproduction forexport toothercountries;whydoitinNewZealand?
- Multinationalsbuyingthebusinessand takingitawayfromNewZealandorkillingproduct
- Mixedmessagetoconsumer:whereisitfrom?- Producingcountrieschangingbulkexportrulesand
requiringbottlingtoconsumerreadyathome(e.g.singlemaltScottishWhisky)
- Doubleexposuretoexchangeratefluctuations- Maturingconsumersdeveloping productknowledge
andrealisingproductisnot“authentic”
- Existingbottlinglineswithsparecapacity- Leveragable assets(e.g.salesforce)- Building andnurturingstrong brandsdemandedby
consumers- Constanttacticalactivitiesatretailtomaintainand
buildshelfspace- Hedging andexchangeratemanagement
2.BOTTLEDINNEWZEALAND– SITUATION&POTENTIALSTRATEGICDIRECTIONSPackingandbrandingsomeoneelse'sspiritsisunlikelytobeadefensible,longtermstrategyforrobustandongoing exportsuccess
PAGE39 Source:Coriolis
4
0
0
4 2 0high medium low
ExamplesofspiritsproducedinNewZealandfromprimarilylocalingredients(2012)
3.CONVENTIONALSPIRITSMADEINNZNewZealandproducesawiderangeofconventionalspirits
PAGE40 Source:various;photocredit(fairuse;lowresolution;completeproduct/brandforillustrativepurposes);Coriolisanalysis
Vodka Whisky Rum Gin
Liqueurs Schnapps Brandy
Valueshareofglobaltradeinselectspiritsbykeycountriesandother(%ofUS$;2010)
3.CONVENTIONALSPIRITSMADEINNZ– CONSOLIDATEDGlobaltradeinsome majorconventionalspiritsaredominatedbyahandfulofcountries;newandemergentproducerswillfinditdifficulttobreakintothisenvironment
PAGE41 Source:UNComtrade database;Coriolisanalysis
France70%
Spain5%
Armenia3%
Germany2%
Italy2%
Other18%
Distilledwine/brandy/cognac/etc.
U.K.67%
USA11%
Ireland3%
Canada3%
Other16%
Whisk(e)y/Bourbon
U.K.77%
Germany7%
France2%
Other14%
Gin
Top3=78% Top4=84% Top3=86%
Valueshareofglobaltradeinselectspiritsbykeycountriesandother(%ofUS$;2010)
3.CONVENTIONALSPIRITSMADEINNZ– FRAGMENTEDGlobaltradeinother majorconventionalspiritsishighlyfragmented– amorewelcomingenvironmentfornewentrants
PAGE42 Source:UNComtrade database;Coriolisanalysis
Sweden26%
France19%
U.K.11%
Russia6%
Poland6%
Ukraine5%
Netherlands4%
Germany3%
Finland3%
Latvia3%
Other14%
Vodka
Germany19%
DominicanRep.11%
Spain11%
USA10%
Italy5%
Jamaica5%
France4%
Mexico4%
UnitedKingdom
4%
Barbados3%
Netherlands3%
Guyana3%
Venezuela2%
Guatemala2%
Panama2%
Nicaragua2% Brazil
2%
TrinidadandTobago
1%
Other8%
Rum
Ireland18%
Germany17%
France14%Italy
14%
UnitedKingdom
9%
Netherlands5%
Spain4%
USA3%
SouthAfrica2%
Canada2%
Other12%
Liqueur
Existingareaofcomparativeadvantage
Point(s)ofleverage Potentialoractualusageinspiritsindustry
Dairy - Ethanol(purealcohol)aby-productproducedfromwhey,whichisproducedduringvariousdairyprocessingtechniques
- “Cream”(typically milkpowder)isaningredientofcreamliqueurs
- Asabasealcohol towhichflavourIsadded- CurrentlyusedbynumerousNZandinternationalspiritsmanufacturersto
manufacturevodka,gin, RTDsandotherspirit-basedproducts
Apples&pears - Secondgradefruit- Global reputationasaqualitysupplierofapples- Growingciderexports
- Asaflavourinspirits- As aningredientintoliqueurs- Fruitbrandy
Kiwifruit - Secondgradefruit- Global reputationasaqualitysupplierofkiwifruit
- Asaflavourinspirits- As aningredientintoliqueurs
Honey - Growinghoneyproductionandexports- Medicinal benefitsofManukahoney
- Asaflavourinspirits- As aingredientintoliqueurs- Asan liqueur-ceutical (cf.nutraceutical)
Wine - PremiumpriceandpositionofNewZealandwine- Growing strengthinmanymarkets- Winefromsecondaryregionsandexcesswine
currentlybeingexportedasabulkproduct- Wastefromwineproductionprocess(lees,etc.)
- Grappa(madebydistillingtheskins,pulp,seeds,andstemsleftoverfromwinemakingafterpressingthegrapes)
- Brandy/Cognac(producedbydistillingwine)- Port, sherry, madeira,marsala, vermouthandotherfortifiedwine(winethathas
hadaspirit– typicallygrapebrandy- addedtoit)
ExistingNewZealandcomparativeadvantageasapointofleverageintospirits(simplifiedmodel;2012)
3.CONVENTIONALSPIRITSMADEINNZ– LEVERAGENewZealandhastheabilityto– andis– leveragingitsexistingcomparativeadvantageintospirits
PAGE43 Source:Coriolis
Brand CurrentpositionCurrentproductexample
Examplepotentialliquorproduct Exampleglobal model
- SingledesksellerofallNewZealandexportkiwifruitoutsideAustralia
- Strongbrand andbrandposition,particularlyinJapan,ChinaandotherAsia
- Industry currentlystrugglingfromimpactofPSAvirus
Zespri Goldliqueur PAMAPomegranateliqueurusing100%CaliforniapomegranatesUS$20.99/750ml
- 2IPcontrolledvarietiesofapple– EnvyandJazz- developedinNewZealandbyHortResearch
- OwnedbyT&G/Enza,itselfrecentlypartiallyacquiredbyBayWa ofGermanyandMrApple
- Beingpromotedacrossmajorglobalmarkets
Envyappleschnapps SchoenauerApfelAppleSchnappsUS$$23.99/750ml
- NewZealandiconicchocolatebrand Whittaker’schocolateliqueur
GodivaChocolateLiqueurUS$29.99/750ml
- NewZealandfarmer-ownedcooperativecontrolling~93%ofNZmilkproduction
- Portfolioofstrongbrands;strengthinAsia- Significantproducerofethanolfromwhey
AnchorZealandia Cream BaileysIrishCreamUS$18.99/750ml
HypotheticalexamplesofbrandextensionsbyexistingiconicNewZealandbrandsintoliquorspace(2012)
3.CONVENTIONALSPIRITSMADEINNZ– BRANDEXTENSIONTheremaybeanopportunitytoleverageexistingiconicNewZealandbrandsintotheliquorspace
PAGE44 Source:various;photocredit(fairuse;lowresolution;completeproduct/brandforillustrativepurposes);Coriolisanalysis
ConventionalspiritsmadeinNZ– Situation&PotentialStrategicdirections AttractivenessScorecard
Conceptsummary
- ProduceconventionalspiritstotraditionalformulationsinNewZealand- LeveragepositiveattributesofNewZealand(water, nature,remotelocation,lowpopulationdensity)inadvertising
Easeofexecution
DefensibletoNZ
Long termgrowth
Examples Keyglobaltrends HistoryinNZ
NewZealand Global - Growthandemphasisonpremium/super-premium
- Searchforauthenticity;increasingconsumersophistication
- Increasingrangeandvarietyacrossmanycategories
- Emergenceof newspiritsandnewproducersintoworldmarkets
- Gifting/giftpacks
- Robust andvibrantspiritproductionbyearlyimmigrants
- Industrykilledbyregulationearly1900’s
- Recentindustryrevivalandblossoming
- 42Belowvodka- Thomsonwhisky- CanterburyCream- Zumwohl schnapps- Lemon-Zlimoncello- BrokenShedvodka
- Absolutvodka- Bacardirum- JohnnieWalkerwhisky- JackDaniel’sbourbon- Hennessycognac- BaileysIrishCream
Opportunities Challenges Whatisrequiredtowingoingforward?
- Transformingwineandwinewasteintospirits- LeveragingverystrongScottishheritageofNew
ZealandSouthIslandintowhisky- Lowcostinputs(e.g.wheyalcohol)
- Making“worldclass”productsthatachieveapremiumisdifficultinsomeproducts(e.g.whisky)
- Lackoftraditionandheritagein products
- Trulypremium/superpremium productsthatconsistentlywinblindtestsandawards
- Distinctive positionandcharacterthatstandsout- Strongdistribution- Inmarketpresenceandpush
3.CONVENTIONALSPIRITSMADEINNZ – SITUATION&POTENTIALSTRATEGICDIRECTIONSTodateNewZealandhasachievedearlysuccessinproducingconventionalworldclassspirits;continuedgrowthwillrequiremoreofthesame
PAGE45 Source:Coriolis
4
2
4
4 2 0high medium low
ExamplesofspiritsproducedinNewZealandcontaininguniqueorsignatureNZflavours(2012)
4.CONVENTIONALSPIRITSWITHUNIQUENZFLAVOURSNewZealandproducesanumberofspiritswithuniqueNewZealandflavoursusingeithernativebotanicals(e.g.kawakawa)orsignature/identityfruit(e.g.kiwifruit)
PAGE46 Source:various;photocredit(fairuse;lowresolution;completeproduct/brandforillustrativepurposes);Coriolisanalysis
42BelowVodka
ManukaHoney
Zumwohlschnapps
Feijoa
LighthouseGin
Kawakawa
SouthGin
ManukaberriesKawakawa
8th TribeLiqueur
GoldKiwifruit
Schnapp DragonLiqueur
Tangelo
ManaShochu
KiwiGold
Nativebotanicals NZsignature/identityfruit
Source:BevMo website;various;photocredit(fairuse;lowresolution;completeproduct/brandforillustrativepurposes);Coriolisanalysis
Useofuniqueorsignatureflavoursisagrowingtrendinthespiritscategoryastheseglobalexamplesshow
Examplesofnon-NewZealandproductsleveraginguniqueorsignaturebotanicals(selectexamples;2012)
CASESTUDY– SIGNATUREINGREDIENTSFROMOTHERCOUNTRIES
PAGE47
KaiLycheeFlavored Vodka
Vietnam
44DegreesNorthMountainHuckleberryflavoured vodka
USA
ZubrowkaBuffaloGrassVodka
Poland
containsanactualbladeofbuffalograss
“ThisvodkaisproducedinnorthernVietnamintheRedRiverDeltafromanaturallysweetandglutinousricecalledyellowblossomrice.ThismakesitglutenfreeforpeoplewhoareCeliacsorotherwisewheatintolerant…Forthesakeofclarity;thisisflavored withlychee,notmadedirectlyfrom,infused,ormaceratedlychee.”
“DistilledfromIdahopotatoes,blendedwithRockMountainwaterfromtheSnakeRiverAquiferandthensteepedinmountainpickedHuckleberriesfor10days!”
“ForcenturiesineasternPoland,massivebuffalohaveroamedthelushandfertilefieldsthatarefullofrichflowersand“Zubrowka”or“BisonGrass,”anherbsteepedinintrigue,mystiqueandromanticism. HighSocietywouldcelebratehuntingsuccesseswithaspecialvodkaflavoredwith“BisonGrass,”inbeliefthiswouldyieldgrandpower,increasestatureandyouthfulnesswhichcenturieslaterhadbeenbannedfromAmericanshores.”
ConventionalspiritswithNZflavours– Situation&PotentialStrategicdirections AttractivenessScorecard
Conceptsummary
- Add uniqueNZflavourstoconventionalspiritsmadeinNewZealand- LeveragepositiveattributesofNewZealand(water, nature,remotelocation,lowpopulationdensity)inadvertising- PotentiallyleverageexistingNZpositioningwithglobalconsumers(e.g.kiwifruit,dairy)
Easeofexecution
DefensibletoNZ
Long termgrowth
Examples Keyglobaltrends HistoryinNZ
NewZealand Global - Countriesregisteringandprotectingtheirregionalproductnames
- Constantemergenceofnewflavourssimilartonon-alcoholicbeverages
- Nutraceuticalsinto alcohol=alcoceuticals (alcoholthat’sgoodforyou)
- Early settlersdistilledawiderangeofNewZealandnativebotanicals
- Varioussmallscaleproducers(e.g.kiwifruitorhoneyliqueurs)
- Strongre-emergenceoftheconceptinthelastdecade
- 42BelowVodkaManukaHoney- Zumwohl Feijoa- LighthouseGinwithkawakawa- SouthGinwithmanuka &kawakawa- Mana Shochu Zespri Goldkiwifruit
- Scottishwhisky
Opportunities Challenges Whatisrequiredtowingoingforward?
- HugerangeofNewZealanduniqueplantsavailablenowhereelseonearth
- RediscoveringtraditionalMaoriknowledgeandwidespreadexperimentationofearlysettlers
- Can becomeaflavourexporterinbulk;valuecapturedbymarketleaders
- Multinationalsbuyingfirms leadingtolossofvisionandvigourintoconservativebureaucracy
- Marketing,marketing,marketing- Inmarketpresenceandpush;salesforceexecution- Uniqueflavoursyetsuitedtoglobaltastes(i.e.rather
thanacquiredtastes)- Controloverproduct/ingredientnametoprevent
becomingaflavoursupplier
4.CONVENTIONALSPIRITSWITHUNIQUENZFLAVOURS– SITUATION&POTENTIALSTRATEGICDIRECTIONSConventionalspiritswithuniqueNewZealandflavoursisahighlydefensiblepositioning;executioninsalesandmarketingisthekeytosuccess
PAGE48 Source:Coriolis
2
4
2
4 2 0high medium low
ExamplesoftrulyuniquespiritsproducedinNewZealandcontaininguniqueorsignatureNZflavours(2012)
5.NEWZEALANDUNIQUESPIRITSNewZealandhasyettodevelopauniqueandiconicspirit;Ti-toki isthebestexampleofthepotentialoftheideatodate
PAGE49 Source:various;photocredit(fairuse;lowresolution;completeproduct/brandforillustrativepurposes);Coriolisanalysis
Inthemid1970's,aWestAucklandwinemakerdrewinspirationfromthesurroundingnativefloratocreateadistinctiveNewZealandliqueur.Usingindigenousplantssuchaskawakawa,manukaleavesandtheoilsfromtheti-toki treeberry- thoseuniqueflavoursbecame'Ti-TokiLiqueur'.
Ti-toki Liqueurismostoftenrecognisedbythe500mlhand-madeceramiccrockintheshapeofa"Tekoteko",thecarvedfigurethatguardsagainstevilspiritsonthetoporinfrontofaMaorimeetinghouse.
Availableinabeautifulgreenstone-inspiredglazewithpaua eyes,thiscrockislovinglymadeinasmallceramicsstudiominutesfromMuriwai Beach,north-westofAuckland.
Ti-TokiLiqueur (37%alc/vol)canbesavoured'straight-up',chilled,inadeliciouscocktail,specialcoffeeorservedwithcranberryjuice,soda,tonicwaterorgingerbeer.
Product Whatisit? Whereisitproduced? Protection Annualproductionorsales
Armagnac Distinctivekindofbrandy Armagnacregion, Gascony,France Appellationd'origine contrôlée 3,700ha6mbottles
Cognac Distinctivekindofbrandy Cognacregion,CharenteandCharente-Maritime, France Appellationd'origine contrôlée -
BrandydeJerez Distinctivekindofbrandy Jerezarea, Andalusia,Spain ProtectedDesignationofOrigin(PDO) -
PlymouthGin Styleofgin Plymouth,England ProtectedGeographicalIndication -
Steinhäger Styleofgin ThevillageofSteinhagen, NorthRhine-Westphalia,Germany
ProtectedGeographicalIndication -
IrishCream Irishwhiskey,cream,andotheringredient
Ireland ProtectedGeographicalIndication -
Pisco colourlessgrapebrandy SpecificregionsinbothPeruandChile Appellationoforigin -
Tequila Fermented anddistilledblueagaveplant
thestateofJaliscoandlimitedregionsinthestatesofGuanajuato,Michoacán,Nayarit,andTamaulipas
NormaOficial Mexicana;Mexicanlaws;internationaltreaties
-
Ouzo ananise-flavouredaperitif GreeceandCyprus ProtectedDesignationofOrigin -
Mezcal Fermented anddistilledmanguey plant
Durango,Guanajuato,Guerrero,Oaxaca,SanLuisPotosí,TamaulipasandZacatecas,Mexico
330,000ha2mlitres
EXAMPLES:Distinctiveunique/signaturespiritstiedtospecificregions(various;2012)
NZUNIQUESPIRITS– REGIONALUniquespiritscancomeintheformofspecificnamedproductstiedtoaspecificregionbutmadebymultipleproducers
PAGE50 Source:“TheUltimateEncyclopaediaofWine,Beer,Spirits&Liqueurs”;Wikipedia;variouspublishedarticles;Coriolisanalysis
EXAMPLE:Pricepointsofselecttequilaproductsamong273itemsforsaleatBevMo!Californiaonlinewebsite(US$;2/2012)
CASESTUDY– TEQUILAPRICEPOINTSSuccessfulregionalspiritscreatevaluethroughawiderangeofpricepoints,typicallyusingpackaging,barrelaging,andexclusivesmallerregionalproducerstodriveperceptionofvalue
PAGE51 Source:BevMo online;photocredit(fairuse;lowresolution;completeproduct/brandforillustrativepurposes);Coriolisanalysis
$8.99 $10.99 $13.99 $22.99 $26.99 $28.99$49.99 $52.99
$99.99
$239.99
$469.99
52x
Product Whatisit? Who inventedit?Whoownsit? Typicalusage
Midori Brightgreenmelonliqueur - DevelopedbySuntory (Japan)in1980’s- MidoriisJapanesewordforgreen- Uniquebottle;greencolourfromdyenotmelons- Instantsuccessworldwide
- Asamixerincocktailrecipes- Toaddcolourtoadrink
SouthernComfort Peachand bourbonliqueur - OriginallycreatedbybartenderMartinWilkesHeroninNewOrleansin1874
- NowownedbytheBrown-FormanCorporation
- Neator ontherocks- Asamixerincocktails
TiaMaria Coffee-flavoured liqueur - InventedbyDr. EvansinJamaicajustafterWorldWarII- BoughtbyPernod Ricard in2005,soldtoIllva Saronno in2009
- Neator ontherocks- Asamixerincocktails
Pimm’s Gin-baseddrink/liqueur(technicallyafruitcup)
- Firstproducedin1823byJamesPimm,afarmer'ssonfromKentwhobecametheownerofanoysterbarintheCityofLondon
- PurchasedbyDiageoin2006
- Withlemonadeorsoda
Frangelico Hazelnutandherb-flavoredliqueur
- 1980’s;claimedtobebased on300yearoldlegend- ProducedinthePiedmontregionofnorthernItaly- DistinctivebottlewhichresemblesthehabitofaFranciscanfriar,- brandwaspurchasedbyGruppo Campariin2010,havingpreviously
beenownedbyWilliamGrantandC&CGroup
- Onice- Asamixerincocktails
Malibu Coconut-flavoured rum - Developed tosimplifythemakingofPiñaColadasbybartenders- First producedinCuracao,thenBarbados- SoldtoDiageoin2002thenPernod RIcard
- Asamixerincocktails
Kahlua Coffeeflavouredliqueur - PedroDomecq(cf.AlliedDomecq)beganproducingKahlúa in1936inMexico;nowpartofPernod Ricard
- Onice- Asamixerincocktails
EXAMPLES:Distinctiveunique/signaturespiritstiedtospecificregions(various;2012)
UNIQUESPIRITS– REGIONALUniquespiritscanalsobeuniquebrandedproductsownedbyspecificfirms
PAGE52 Source:“TheUltimateEncyclopaediaofWine,Beer,Spirits&Liqueurs”;Wikipedia;variouspublishedarticles;Coriolisanalysis
SouthAfricanspiritsexportvaluebyselectcategories(US$;m;1992-2010)
CASESTUDY– SOUTHAFRICAThesuccessofSouthAfrica’sAmarula crèmeliqueurshowsthatasingleproductcandriveexportsuccess
PAGE53 Source:UNComtrade database;photocredit(fairuse;lowresolution;completeproduct/brandforillustrativepurposes);Coriolisanalysis
$-
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
$80.0
$90.0
Liqueurs
Whiskey
Otherspirits Liqueurs
Whiskies(primarilyre-export)
Otherspirits
Ingredients:Sugar,cream, nativeMarula treefruit
“TheAmarula phenomenonisapremiumcreamliqueurfromAfrica. Amarula totallydominatesthecreamliqueurmarketlocallyandithasresoundingsuccessinsomeinternationalmarkets. Amarula isendowedwithexcellentintrinsics – anaccessibleandself-indulgentcreammadefromauniquesubequatorialAfricanfruit,theMarula. IthastrulyuniquepackagingwithstrongAfricanicons,suchastheAfricanelephantandtheMarula fruit.
ThestoryofAmarula datesbackto1989whenitfirstappearedontheSouthAfricanmarket. Sincethenithasgrowntremendouslyandtoday itsgreattasteisenjoyedinover100countriesworldwide. Amarula canbeenjoyedoverice,inauniquerangeofcocktails,aswellasindeliciousdishes. ”Distellwebsite,Feb2012
EXAMPLE:LineextensionsofKahluacoffeeflavouredliqueur(selectitems;2012)
CASESTUDY– KAHLUALINEEXTENSIONSOnceastrongbrandisdeveloped,productandlineextensionscanbeusedtoextendreachandincreaseshelfpresence
PAGE54 Source:various;photocredit(fairuse;lowresolution;completeproduct/brandforillustrativepurposes);Coriolisanalysis
Ready-to-drinkPre-mixcocktailsFlavours
NZUNIQUE
Source:variouspublishedsources
NewZealandhasawiderangeofuniqueplants/treesthathavebeenusedhistoricallytobrewalcohol;allcanprovideunique/defensibleingredientbases…
PAGE55
NewZealanduniquepotentialplantsusedaswaipiro(2010orasavailable)
Name Partused Historical usage Suitable attributes Notes
Cabbage treeCordyline australis /terminalisTikouka/ti pore
RootYoungstem(2yrs old)Cookedtaproot
- Rootsusedforbrewingatypeofbeer usingtheyoungstem
- Cookedrootmadeintoasweetpaste
- Fastgrowing- Distributed throughout
NZinwetareas
- terminalis is20%sucrose
TutuCoriaria sarmentosa/arborea
Petals andfleshofseedONLY
- Madeintowinebyearly settlers(usedsimilartoElderberry)
- Theediblejuiceorjellymixedwithseaweed
- Distributed throughoutNZinforest, scrub&subalpine
- Seeds/plantishighlypoisonandingestingcausesdeath- Absinthleveragesdangerouselementsofwormwood
(Artemisiaabsinthium)tocreateproductsmystery
Kawakawamacropiper excelsum
BerriesLeaves
- Leavesusedtomakebeer- Berries eaten- Aflavoured jellymadefrom
seaweed- Leavesmadeintotea
- DistributedsouthtoCHCH;abundant shrubinlowlandandcoastalforest
- RelativeofnativeFijian Kava(butnotthesameproperties)
KohekoheDysoxylum spectabile
LeavesBark
- Theleavesandbarkarecookedtobrewbeer
- NorthCapetoNelson;coastalforests
KiekieFreycinetia banksii
Bracts(tawhara)FlowersPulpoffruit
- Overripetawhara madeafermentedliquor
- PrizedfoodofMaori
- MostcommoninnorthbutfarsouthasMarlborough
- Ascramblingclimberupto20minshelteredmoistareas- HighlyprizedbyearlyMaori
TitokiNewZealandAshAlectryon excelsus
Berries - Madeadistilledliqueurfromberries
- Ediblefruitandfleshy partofroot
- Liqueur exportedtoCalifornia
NZUNIQUE
Source:variouspublishedsources
…continued
PAGE56
NewZealanduniquepotentialplantsusedaswaipiro(2010orasavailable)
Name Partused Historical usage Suitable attributes Notes
MakomakoAristotelia serrateWineberry
Ripeberries - Berrieseatentraditionally- Berry jammadebyearlysettlers- Winemadebyearlycolonists
- Fastgrowing- Forestandscrubland
throughoutNZ;Often onroadsidesafterclearing
- Smalltreeupto10m- Similartoelderberrywine
Manuka/KanukaLeptosperrnumscoparium
Leaves - Used asatea(byCaptainCook)- Usedtobrewbeerbyearly
settlers
- Veryfastgrowing,- Nationalcoverage
- CaptainCookhadrecipeforbrewingbeerindiary- BeermadeatMusselInn“CaptainCooker”andinBelgium
RimuDacrydiumcypressiniumRedpine
FruiteatenrawLeaves
- Leavesbrewedtomakeabeer;addedtomanukaleavesandmolasses
- Commoninallbutdriestforestsuptomontanealtitues
- Tallforesttree;slowgrowingsonotideal
Kareao;piritaRipogonum scandensSupplejack
RootsJuice fromvineFleshofberriesshoots
- Beerbrewedfromroots- Juicedrunkfromvine- Shoots eatentocurescabies
- Veryfastgrowingat5cm/day
- Fastgrowingvine
MataiPodocarpus spicatusBlackpine
SapBerries edible
- SapoftreecalledMataibeer- Drilledbasewithaugerand
tappedtree
- Foresttreereaching30m- CommonthroughoutNZ
inlowlandandmontaneforest
Nikau palmRhopalostylis sapida
HeartsFlowersImmatureberries
- Medicinal;usedaslaxativeandtorelaxmusclesduringchildbirth
- South toCHCH - Veryslowgrowing thereforeheartnotsuitableforeating asitkillstheplant(onlyifdesparate)
NZUnique spirit– Situation&PotentialStrategicdirections AttractivenessScorecard
Conceptsummary
- Create auniquedrinkleveragingNewZealandnativebotanicalsoringredients- Productshouldideallyrespondwelltobarrelagingtodrivemultiplequality-drivenpricepoints- Productshouldideallysuitconsumptionstraignt/on-the-rockandasakeycomponentinasignaturecocktail
Easeofexecution
DefensibletoNZ
Long termgrowth
Examples Keyglobaltrends HistoryinNZ
NewZealand Global - Strongpushonpremium/super-premiumduetomuchhigherprofitabilityandhaloeffect
- Early settlersdistilledawiderangeofNewZealandnativebotanicals
- Varioussmallscaleproducers(primarilyTi-toki)
- Ti-toki liqueur - Amarula (SouthAfrica)- Kahlua(Mexico)- Tequila(Mexico)- Cognac(France)- Bourbon(Kentucky)
Opportunities Challenges Whatisrequiredtowingoingforward?
- HugerangeofNewZealanduniqueplantsavailablenowhereelseonearth
- RediscoveringtraditionalMaoriknowledgeandwidespreadexperimentationofearlysettlers
- Easier saidthandone- Creatingaregionalproducttied toNewZealand
ratherthanabrandsoldoffshore
- Agoodproduct
5.NEWZEALANDUNIQUESPIRITS– SITUATION&POTENTIALSTRATEGICDIRECTIONSDevelopingaunique,defensibleandprotectedNewZealandspiritisagreatideaintheorythatiseasiersaidthandone
PAGE57 Source:Coriolis
0
4
2
4 2 0high medium low
TABLEOFCONTENTS
Section Page
Contents 4
Glossaryofterms 5
Methodology&datasources 6
Summary&conclusions 7
1.Largeandattractivemarket 8
2. Growingglobalexports 16
3.NewZealandspiritexportaregrowing 20
4.NewZealandcanwin 25
5.Potentialstrategicdirections 31
6.Investmentopportunities 58
Date Target Buyer Seller Price Details
Aug2011 IndependentLiquor Asahi(Japan) Pacific EquityPartners(AU)
NZ$1.5b - From Australianprivateequityfirm
Oct2010 TheNewZealandWhiskyCompany
“NineinternationalinvestorsledbyInterglobal BrandsPty,ofTasmania”
WarrenandDebbiePreston(TBC);firminreceivership
N/A - placedinreceivershipinFebruary2010bySouthCanterburyFinance,owinganestimated$3million
- Purchasedthe450whiskybarrelassetsfromreceivership- “About225werebarrelsofsinglemaltabout18to24yearsold,
whichhadbeenbrandedLammerlaw,andtheother225barrelsweretheformerWilsonsbrand,whichwereatleast12yearsold”
- SinglemaltsincludeMilford,1987,(caskstrength)1988andSouthIslandSingleMalt,andblendstheWaterofLeithandDunedinDoubleWood
Oct2009 26000Vodka McCashin’s Brewery WakefieldQuay;inreceivership
N/A - KenTelfar andWarryn Bermingham started26000Vodkain2006,workingfromacorrugatedironshedinMapua
- Fellvictimtotheworldeconomicdownturn
Dec2006 42Below Bacardi(Bermuda) ListedonNZX US$90mNZ$131m
- Bacardiacquiresthe42Belowvodkabrands,includingfourflavored vodkas- ManukaHoney,Kiwifruit,FeijoaandPassionfruitandthenewlydevelopedproductsofSouthGin,Stil Vodka,SevenTiki WhiteRum,TahitiDarkRumand420springwater
2006 IndependentLiquor PacificEquity Partners Erceg family N/A - PacificEquityPartnersandUnitas bought80percentofIndependentLiquorfollowinghelicopterdeathoffounder
- Erceg familykeeps20%infirm
2006 Ti-toki Liqueur Douglas,Murray&Hirst N/A N/A
IdentifiedacquisitionsintheNewZealandspiritssectoroverthepast5years(2006-2011)
ACQUISITIONSTheNewZealandspiritssectorhasseensomelargetransactionsinthepastfiveyears
PAGE59 Source:variouscompanywebsitesandarticles;Coriolis
Source:variouscompanywebsites;variousarticlesearches;Kompass(K);Coriolisanalysisandestimates
ThereareahandfuloflargerfirmsmanufacturingspiritsinNewZealand
KeyfirmsintheNewZealandotheralcoholsector(2010orasavailable)
Yearfounded Turnover Emp. Ownership Keyproducts Notes
1987 $414.4m(2010)
300 Japan; listed(Asahi;TYO:2502)
RTDsSpiritsBeer
www.independentliquor.co.nz;www.asahibeer.comOriginallywinery;movedintoRTDs & spiritsAcquiredbyPEPfollowingdeathoffounder(M. Erceg)AcquiredbyAsahi(Japan)August2011
1968 $605m(2010)
1400(NZ)1800(Au)
Japan;listed(Kirin; TYO:2503)
BeerWineRTDsSpirits
www.lionco.com;lion-nathan.com.au;www.kirin.com;www.kirinholdings.co.jpLion,BeerSpiritsWine(NZ)tradingatLion (asofJul2011)PreviouslyNZ company,movedlistingtoAustralia;acquiredBrands:Steinlager,Speight’s,Lion,Mac’s,WaikatoDraught,CanterburyDraught,others
1930 $461.4m(2010)
500(K)
Singapore;listed(AsiaPacificBreweries;SGX:A46)
BeerRTDs
www.dbbreweries.co.nz;http://www.apb.com.sgwww.heinekeninternational.comwww.fraserandneave.comAsiaPacificis42.5%ownedbyHeineken;40%byF&NPreviouslyNZ company,movedlistingtoAustralia;acquired
2000 $10.8m(2010)
TBD Bermuda;private(Bacardifamily)
VodkaGinRum
www.42below.com;www.bacardi.comhttp://www.southgin.com/www.bacardilimited.comFormerlylistedin NZ;acquired
2007 $1.9m(2010)(Ke)
25(NZ)20-25(Int’l)
NZ;private(McKillen,Couillaut &others)
Premixcocktails www.vnccocktails.comVNCCocktails Limitedestablishedbyexfounder42Below
1980/2009
N/A 11-20(K) NZ;private(McCashin family)
BeerCiderSpirits
http://mccashins.co.nz/Regionalsmallbrewer;acquired2600vodkaandismovingintospirits
N/A N/A N/A NZ;private(ChrisSimkin)
[Retailing]RTDsSpirits
http://www.themill.co.nz/DiscountalcoholretailerOperatesRTD/spiritplantinAustralia
SPIRITS– KEYFIRMS
PAGE60
Source: variouscompanywebsites;variousarticlesearches;Coriolisanalysisandestimates
Thereareawiderangeofsmaller/emergentspiritsfirmsinNewZealand…
KeyfirmsintheNewZealandotheralcoholsector(2010orasavailable)
SPIRITS– SMALLER/EMERGENTFIRMS
PAGE61
Yearfounded Turnover Emp. Ownership Address Notes
2010 N/A VariousAustralianinvestors
14-16HarbourStOamaru 9400
http://www.thenzwhisky.com/
2009 N/A NZ;private(Thomsonfamily)
ThomsonWhiskyNewZealand (3471691)POBox44356,Pt Chev,Auckland1246
http://thomsonwhisky.com/
2009 N/A NZ;private(Holmes;Duff;others)
InternationalTradingCartel(2261517)L3BucklandBuilding,34CustomsStreet,Britomart,Auckland1010
http://stolenrum.com/
2007 N/A 1-5 NZ;private(Carran family)
Mana Shuzou NewZealand(1917224)20OscarRoad,Greenhithe,Auckland0632
http://www.manashuzou.co.nz/
2009 N/A NZ;private(Turner,O’Brien)
BrokenShedLtd.(2363655)333BeaconPointRoad,Wanaka,9305
http://www.brokenshed.com/
1970’s/2006
N/A 1-5 NZ;private(Hirst,Murray)
Ti-toki Limited(1775736)30ElliotSt,Riverhead
http://www.ti-toki.com/http://boozee.co.nz/liqueur-2874.html
2005 N/A NZ;private(Willmott; Wheeler)
SouthernDistillingCo.(1592715)627Te Atatu Road,Te Atatu Peninsula,Auckland
http://www.hokonuiwhiskey.com/
19791993
N/A 6-10 NZ;private(Broome, others)
KingsLiquorLtd.(595034)16-18Greenhithe Rd,Greenhithe,
Creamliqueurs AmorandTe Kahahttp://www.amor.co.nz
Source:variouscompanywebsites;variousarticlesearches;Coriolisanalysisandestimates
…continued
KeyfirmsintheNewZealandotheralcoholsector(2010orasavailable)
SPIRITS– KEYFIRMS
PAGE62
Yearfounded Turnover Emp. Ownership Address Notes
1994 N/A 1-5 NZ;private(Deinlein family)
DittoCo.Ltd.(610478)656MindenRoad,Rd6,Tauranga3176
http://www.distillerie.co.nz
1980/1983
N/A NZ;private(Fitzpatrickfamily)
SouthernGrainSpirits(202999)9aPeraki Street,Kaiapoi
http://www.southerngrainspirits.co.nz/
1992/2009
N/A 21-50 NZ;private(Steadman;Wilfred)
ThePrenzel DistillingCo.(2344048)POBox246,RiverlandsEstate,Blenheim035782800
http://www.prenzel.co.nz/http://www.theprenzelshop.co.nz
2006 N/A NZ;private(Knight;others)
Schnapp DragonDistillery1Hoddy Alley,Takaka,Nelson
http://www.schnappdragon.co.nz
2009 N/A NZ;private(BrentKing)
PurpleMonkeyFingerLtd.(2238575)441RobertsonRd,RD1,Ruawai,Northland
http://www.purplemonkeyfinger.comMadefromKumara
2010 N/A NZ;private(Karani family)
ExoticaEnterpriseLtd.(2449730)7ReevesRoad,PakurangaAuckland2010
http://www.exoticaenterprise.com
2011 N/A NZ;private(Loggia;Turcato)
VillaItaliaLtd.(3684535)37KingfisherDrive,Kerikeri,0294
http://www.limoncello.co.nz/
SouthPacificDistillery 1982 N/A NZ;private(BrianHetzel)
SouthPacificHoldingsLtd.(150932)POBox1359,Nelson
http://www.roaringforties.co.nz/
Source:variouscompanywebsites;variousarticlesearches;Kompass(K);Coriolisanalysisandestimates
…continued
KeyfirmsintheNewZealandotheralcoholsector(2010orasavailable)
SPIRITS– KEYFIRMS
PAGE63
Yearfounded Turnover Emp. Ownership Address Notes
2004 N/A NZ;private(Grigg family)
LemonZLtd.(1526884)5GeneralGatesAve,Kerikeri,BayofIslands
http://www.lemon-z.co.nz/http://www.hancocks.co.nz/brand.jsp?name=LEMON%20Z
LighthouseGin 1994 N/A NZ;private(Wright;Catherall;others)
Greytown FineDistillates(620865)POBOX113Greytown 5742
http://www.lighthousegin.co.nz
2008 N/A NZ;private(Fuhrer;others)
AotearoaDistillersLevel7,36BrandonStreet,Wellington,6011
http://www.zumwohl.co.nz
WildDaysRum 2003 N/A NZ;private(Duurloo)
WildDaysRum(1332982)21ViewRd,Onetangi,Waiheke Island
http://wilddaysrum.co.nz
Bemrose Estate 1993/2005
N/A NZ;private(Atkin)
Wildfern NewZealandLtd.(16442655Tarras Grove,LowerHutt
Honey Meadhttp://www.bemrose.co.nz/http://www.wildfern.co.nz/
www.foodandbeverage.govt.nz