13 March 2007

New Zealand’s award-winning vodka 42 BELOW began life as a boutique garage industry in 1999 with a very audacious goal – to be one of the top super-premium vodkas competing on the world stage within a decade. Seven years later 42 BELOW has reached its dream, with the world’s largest privately held spirits company – Bacardi – investing NZ$138 million to take over the New Zealand company.

42 BELOW Chief Executive Officer Geoff Ross and Chairman Grant Baker have made some valiant decisions along the way. Their first was to produce New Zealand’s first super-premium vodka when the category ‘super premium’ did not exist in the country. Ross and Baker wanted to create a quality product that could compete with global competitors’, which is precisely what they did. But to succeed they needed to export.

Listing on the New Zealand Stock Exchange in 2003 was the next radical move – to raise capital to build the global brand and export 42 BELOW to new markets.

When probed about his approach, Ross quotes the New Zealand scientist famous for splitting the atom, Ernest Rutherford: “We had no money so we had to think”.

42 BELOW’s global competitors were spending multimillions of dollars on advertising, something the company could not afford to do, so Geoff Ross came up with ideas to generate word of mouth – his most powerful marketing tactic, he admits.

The fresh approach worked and 42 BELOW now exports 65 percent of its vodka to 25 countries including the United Kingdom, the United States (US), France, Russia, Germany, Canada, Singapore, China, Japan and Dubai, and is served in more than 4500 of the world’s best bars, including The Ritz in London and El Bulli in Spain (voted the Best Restaurant of 2006).

42 BELOW’s innovative marketing and sales strategies have attracted fans around the planet and also grabbed the attention of giant spirits companies. Bacardi has an impressive track record for successfully building spirits brands – Martini, Bombay Sapphire and Grey Goose among them. It now plans to invest heavily in 42 BELOW, further building the New Zealand brand’s presence on the world stage.

Ross suggests, “The only global brands New Zealand has are the All Blacks (rugby) and Emirates Team New Zealand (America’s Cup yacht racing). With ourselves and Bacardi, we will really start to see 42 BELOW become a very prominent New Zealand brand worldwide.

“Brands have potential to offer far greater value than the more traditional bricks-and-mortar style investments that have been typical of New Zealand’s past. And those with international appeal are especially valuable,” adds Ross.

New Zealand Trade and Enterprise (NZTE, incorporating Investment New Zealand) Food and Beverage Sector Manager Michael Fountaine says, “42 BELOW has demonstrated the importance of marketing. It is extremely focused and has developed a very successful model, based on careful channel selection, for breaking into new markets. It has also demonstrated a unique lateral ability to bring its brands to global markets using its talent and innovation.”

42 BELOW is a fine example of an innovative New Zealand business that has attracted the attention of serious investors offshore, says Fountaine.

The company is a recognised creative pioneer and recently won a New Thinking Award at the 2006 NZTE Export Awards. Last year it also won Emerging Exporter of the Year and the Deloitte Fast 50 Fastest Growing Company of the Year Award. Geoff Ross has also won NZ Marketing Magazine’s Marketer of the Year Award.

The company is more than clever marketing ideas and sound business acumen; what’s inside the bottle is also a demonstration of excellent New Zealand creativity. 42 BELOW vodka has won more taste awards than any other vodka on the market, including the Grand Slam of gold medals at all four major spirits awards in Europe and the US in 2006.

The edgy marketing that has made 42 BELOW famous worldwide will continue under Bacardi.

Atul Vora, Bacardi’s Vice-President of Business Development, says, “Bacardi is looking forward to nurturing this brand to allow it to reach its full potential.”

“There’s absolutely no chance of 42 BELOW losing its New Zealand identity,” Ross adds. “There will just be more activity on a much larger scale. Here’s to creating a New Zealand icon, we can’t wait.”

For more information, please contact:

michael.fountaine@investmentnz.govt.nz

+64 9 919 9005