Blog: Olly WehringSunbathing's over, it's back to business for Bacardi

Olly Wehring | 2 October 2006

You’ve heard it here first. Summer is officially over - at least for those of us in the northern hemisphere anyway.

The sun may be still just about shining here in London, but last week marked the end of the industry’s annual summer slowdown as it rolled up its sleeves and got back to business.

Bacardi, in particular, has been busy. The privately-owned spirits giant has made a couple of changes to its distribution partnerships here in the UK. First, it has sold its stake in First Drinks Brands to its venture partner, UK distiller William Grant. Bacardi has also moved to extend its relationship with Brown-Forman in a deal that will see the two companies work together in the UK for five more years.

However, the highlight of Bacardi’s busy week was its NZ$138m (US$90m) bid for New Zealand’s upstart distiller 42 Below. The company, best known for its namesake premium vodka, was only founded in 1999 but has managed to build the brand into one of the most in-demand vodkas worldwide through irreverent advertising.

Bacardi’s move, approved by 42 Below’s founder and chief executive Geoff Ross, looks to be a win-win situation for both parties. Bacardi gets a premium vodka with great potential, which has been a hit in style bars on both sides of the Atlantic.

Sure, it’s only two years since Bacardi paid a whopping US$2bn for Grey Goose and super-premium vodka has proved highly competitive but 42 Below has succeeded due to its cheeky and unique brand proposition.

For 42 Below, the company gets capital. 42 Below needs greater financial and distribution muscle and Bacardi will take its vodka into far more markets worldwide. The company will also continue to operate from New Zealand, which is key, as much of the brand’s cachet has come from the country’s clean and fresh image.


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