Investment opportunities in the New Zealand Alcoholic Spirits industry

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









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









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


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


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









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


$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


$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





3.NewZealandspiritexportaregrowing 20




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


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









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)


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


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


4

0

2

4 2 0high medium low

Examplesofnon-domesticallyproducedspiritsbottledinNewZealand(2012)

2.BOTTLEDINNEWZEALANDAnumberofspiritsareproducedelsewherebutpackagedandsoldbyNewZealandbasedfirms


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


NewZealand Global - Countries regulatingagainstbulkexportsofspirits

- Historicalimportationofbarrelsofspiritsfromaroundtheworld

- StolenRum- SevenTiki RumfromFiji(42Below)- TahitiDarkRum(42Below)- KentuckyBluebourbon

- ASMLiquorinAustraliabottlingNewZealandvodkainAustralia

- NumerousbottlersofScottish whiskeyblendsoutsideScotland

- NumerousbottlersofMexicantequilaoutsideMexico


- 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


4

0

0


ExamplesofspiritsproducedinNewZealandfromprimarilylocalingredients(2012)

3.CONVENTIONALSPIRITSMADEINNZNewZealandproducesawiderangeofconventionalspirits


Vodka Whisky Rum Gin

Liqueurs Schnapps Brandy

Valueshareofglobaltradeinselectspiritsbykeycountriesandother(%ofUS$;2010)

3.CONVENTIONALSPIRITSMADEINNZ– CONSOLIDATEDGlobaltradeinsome majorconventionalspiritsaredominatedbyahandfulofcountries;newandemergentproducerswillfinditdifficulttobreakintothisenvironment


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


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


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


ConventionalspiritsmadeinNZ– Situation&PotentialStrategicdirections AttractivenessScorecard

Conceptsummary

- ProduceconventionalspiritstotraditionalformulationsinNewZealand- LeveragepositiveattributesofNewZealand(water, nature,remotelocation,lowpopulationdensity)inadvertising

Easeofexecution

DefensibletoNZ

Long termgrowth


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


- 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


4

2

4


ExamplesofspiritsproducedinNewZealandcontaininguniqueorsignatureNZflavours(2012)

4.CONVENTIONALSPIRITSWITHUNIQUENZFLAVOURSNewZealandproducesanumberofspiritswithuniqueNewZealandflavoursusingeithernativebotanicals(e.g.kawakawa)orsignature/identityfruit(e.g.kiwifruit)


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


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


- 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


2

4

2


ExamplesoftrulyuniquespiritsproducedinNewZealandcontaininguniqueorsignatureNZflavours(2012)

5.NEWZEALANDUNIQUESPIRITSNewZealandhasyettodevelopauniqueandiconicspirit;Ti-toki isthebestexampleofthepotentialoftheideatodate


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


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


NewZealand Global - Strongpushonpremium/super-premiumduetomuchhigherprofitabilityandhaloeffect

- Early settlersdistilledawiderangeofNewZealandnativebotanicals

- Varioussmallscaleproducers(primarilyTi-toki)

- Ti-toki liqueur - Amarula (SouthAfrica)- Kahlua(Mexico)- Tequila(Mexico)- Cognac(France)- Bourbon(Kentucky)


- HugerangeofNewZealanduniqueplantsavailablenowhereelseonearth

- RediscoveringtraditionalMaoriknowledgeandwidespreadexperimentationofearlysettlers

- Easier saidthandone- Creatingaregionalproducttied toNewZealand

ratherthanabrandsoldoffshore

- Agoodproduct

5.NEWZEALANDUNIQUESPIRITS– SITUATION&POTENTIALSTRATEGICDIRECTIONSDevelopingaunique,defensibleandprotectedNewZealandspiritisagreatideaintheorythatiseasiersaidthandone


0

4

2


TABLEOFCONTENTS

Section Page

Contents 4

Glossaryofterms 5





3.NewZealandspiritexportaregrowing 20




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…


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


SPIRITS– KEYFIRMS

PAGE62


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


SPIRITS– KEYFIRMS

PAGE63


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

Investment opportunities in the New Zealand Alcoholic Spirits industry

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