IFAB 2011 Beverages

Food & Beverage Information Project 2011
Sector Stream – Beverages
Final Report
October 2011; v1.8
www.foodandbeverage.govt.nz
This information was prepared by Coriolis solely for the use of our client; it is not to be relied on by any third party without prior written consent.
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The objective of this report is to provide a factual source of high
quality information on the current situation in the New Zealand
beverage sector for four audiences:
‐ Investors (domestic or international)
‐ Industry participants (firms & individuals)
‐ Government (across all roles and responsibilities)
‐ Scientific researchers (academic, government & firm)
It creates a common set of facts and figures on the current

situation in the industry.
It draws conclusions on potential industry strategic directions
and highlights opportunities for further investment.
It forms a part of the wider Food & Beverage Information Project
and will be updated annually.
PAGE 3
TABLE OF CONTENTS
Section Page
Contents 4
Glossary of terms 5
Methodology & data sources 6
F&B IP Overview 7
Summary & conclusions 9
Sector overview 17
Wine 43
Appendices 62
GLOSSARY OF TERMS
This report uses the following acronyms and abbreviations
A$/AUD Australian dollar N.H Northern Hemisphere

ABS Absolute change NZ New Zealand
ANZSIC AU/NZ Standard Industry Classification NZ$/NZD New Zealand dollar
AU Australia R&D Research and Development
Australasia Australia and New Zealand S Asia South Asia (Indian Subcontinent)
b Billion SE Asia South East Asia
CAGR Compound Annual Growth Rate S.H Southern Hemisphere
C/S America Central & South America (Latin America) SS Africa Sub‐Saharan Africa
CRI Crown Research Institute T/O Turnover
CY Calendar year (ending Dec 21) US/USA United States of America
E Asia East Asia US$/USD United States dollar
EBITDA Earnings before interest, tax, depreciation and UK United Kingdom
amortization
FAO Food and Agriculture Organisation of the UN YE Year ending
FY Financial year (of firm in question) YTD Year to date
£/GBP British pounds Sources
JV Joint venture AR Annual report
m Million Ce Coriolis estimate
n/a Not available/not applicable Ci Coriolis interview
NA/ME/CA North Africa / Middle East / Central Asia K Kompass
Nec/nes Not elsewhere classified/not elsewhere specified Ke Kompass estimate
PAGE 5
METHODOLOGY & DATA SOURCES
Data was from a variety of sources, and has a number of identified limitations
- This report uses a range of information sources, both qualitative - Coriolis makes no representation, warranty or guarantee,
and quantitative. whether express or implied, as to the quality, accuracy,
reliability, currency or completeness of the information
- The numbers in this report come from multiple sources. While we provided in the report.
believe the data are directionally correct, we recognise the
limitations in what information is available. - All trade data analysed in all sections of the F&B Information
- In many cases different data sources disagree (e.g. project are calculated and displayed in US$. This is done for a
Statistics New Zealand vs. FAO vs. UN Comtrade). range of reasons:
- Many data sources incorporate estimates of industry 1. It is the currency most used in international trade
experts. 2. It allows for cross country comparisons (e.g. vs. Denmark)
- As one example, in many cases, the value and/or volume 3. It removes the impact of NZD exchange rate variability
recorded as exported by one country does not match the 4. It is more comprehensible to non‐NZ audiences (e.g. foreign
amount recorded as being received as imports by the investors)
counterparty [for understood reasons]. 5. It is the currency in which the United Nations collects and
tabulates global trade data
- In addition, in some places, we have made our own clearly noted
estimates. - The opinions expressed in this report represent those of the
industry participants interviewed and the authors. These do not
- Coriolis has not been asked to independently verify or audit the necessarily represent those of Coriolis Limited or the New
information or material provided to it by or on behalf of the Zealand Government.
Client or any of the data sources used in the project.
- The information contained in the report and any - If you have any questions about the methodology, sources or
commentary has been compiled from information and accuracy of any part of this report, please contact Tim Morris, the
material supplied by third party sources and publicly report’s lead author at Coriolis, on +64 9 623 1848
available information which may (in part) be inaccurate or
incomplete.
PAGE 6
F&B INFORMATION PROJECT
The New Zealand Food & Beverage Information Project is designed to be the foundation of facts and figures on
which a range of audiences can build
Structure of the New Zealand Food & Beverage Information Project
(2011)
Investors Firms Government
Overview Investor’s Guide Industry Snapshot
Sectors Dairy Meat Seafood Produce Processed Beverages Nutraceuticals

Sector Sector Sector Sector Foods Sector Sector Sector
Markets Global Markets High Potential

Market Profiles
PAGE 7 Note: Every year two subsectors are completed in more detail. This year it is Seafood and Nutraceuticals
BEVERAGES SECTOR ANALYSIS
This analysis of the New Zealand beverages sector forms a part of the wider Food & Beverage Information
Project
Structure of the New Zealand Food & Beverage Information Project
(2011)
Investors Firms Government
Overview Investor’s Guide Industry Snapshot
Sectors Dairy Meat Seafood Produce Processed Beverages Nutraceuticals

Sector Sector Sector Sector Foods Sector Sector Sector
Markets Global Markets High Potential

Market Profiles
PAGE 8
TABLE OF CONTENTS
Section Page
Contents 4
Glossary of terms 5
F&B IP Overview 7
Sector overview 17
Wine 43
Appendices 62
BEVERAGES – WINE – SITUATION
The wine industry has shown rapid growth driven by Marlborough Sauvignon Blanc; further diversification into
new varieties and new regions should occur going forward
New Zealand wine (exports US$774m) top three wineries foreign owned; New World wines are an
important part of a global portfolio.
- Wine production is a fast growing industry for New Zealand with
a number of large players
- Many wineries are now foreign owned (Montana, Nobilo); Competitors
ongoing acquisitions are occurring
- New Zealand wine competes directly with other premium
- Large group of small‐to‐medium sized New Zealand owned temperate climate countries
wineries who are capital constrained
- France, Germany, USA, South Africa, Chile
- The New Zealand wine industry has achieved spectacular growth
over the last 40 years
- From NZ£51 in exports in 1960 to NZ$1b in 2009 Consumers/Markets
- Achieved premium price position in–market on par with - Global Financial Crisis (GFC) depressed global demand, pushing
France (which has been producing wine for ~2,000 years) down prices; this in turn triggered a decrease in global production
- Competes successfully with major old world wine - These falling prices have impacted New Zealand wines
producers (e.g. France, Germany) - Wine consumption is declining in many EU markets (France, Italy,
- Success to date almost exclusively Marlborough Sauvignon Blanc Spain) due to economic conditions; however, New Zealand’s key
markets (AU, UK, USA) have been stable to increasing
- A “must‐have” wine for major wine players
- Wine sales success to date in wine has been primarily in Anglo‐
- Good Marlborough wine area is now almost all used Saxon 4 (USA, Canada, UK & AU);
- Emergent secondary regions are 20 years behind Marlborough in - China is an emerging growth market; now New Zealand’s #5
terms of development export destination
- Hawkes Bay, Waipara and Central Otago stand out as the - Available market data suggests that the growth of New Zealand
next best prospects wine is at the expense of French wines (i.e. that the two are close
substitutes to consumers)
- Other than Gimblett Gravels Syrah, most still to find “their”
wine
- Foreign ownership plays a big part in the wine industry, with the
PAGE 10 GFC = Global Financial Crisis; Source: Interviews; Coriolis
BEVERAGES – OTHER BEVERAGES – SITUATION
Outside wine, the New Zealand beverage sector is primarily focused on production for domestic consumption;
however, exports are growing
Beer (exports US$26m) Coca‐Cola
- Beer brewing is a low growth duopoly controlled by two - Frucor, former Apple & Pear Marketing Board Juice
international companies brewing for domestic consumption Business, now a division of Suntory (Japan); maker of V
energy drink and Pepsi licensee in New Zealand
- Lion, founded in New Zealand, owned by Kirin (Japan)
- Smaller innovators emerging outside soft‐drinks/water (e.g.
- Dominion Breweries, founded in New Zealand, now owned Charlie’s/Phoenix recently acquired by Asahi)
by Asia‐Pacific Breweries (Heineken/F&N)
Juice (exports US$38m)
- There are a wide range of smaller/micro breweries
- New Zealand exports apple and kiwifruit juice, primarily as a
- New Zealand is a minor beer exporter1, and imports +50% more secondary product of the fresh fruit industry; New Zealand
beer than it exports2, driven in part by the foreign ownership of imports +20% more juice than it exports2
its two key breweries; however beer export surged in the last
year (driven by smaller microbreweries) Water (exports US$8m)
Spirits (exports US$58m) - New Zealand has excellent theoretical potential to produce and
export premium bottled water; however to date it has realised
- Independent Liquor, recently purchased by Asahi, is the largest very little of this potential despite 30 years of trying
player in spirits; Independent initially developed its business
around flavoured RTD3 drinks, however it is diversifying into other
alcoholic beverages
- There are a range of smaller firms in spirits achieving strong
growth and the sector is well positioned for further growth
Soft‐drinks (exports US$67m)
- Non‐alcoholic beverages are a duopoly controlled by two
international companies that primarily manufacturing for
domestic consumption
- Coca‐Cola Amatil, Australian‐listed Asia‐Pacific licensee of
PAGE 11 1. Mexico, for example, exports 87x as much beer as New Zealand; NZ currently exports about as much beer as the Dominican Republic; 2. in value terms; 3. RTD = ready‐to‐drink
BEVERAGES – QUANTITATIVE SCORECARD
Most of the beverages produced in New Zealand are consumed in New Zealand; the wine industry is the key
export success story to date
Key metrics # CAGR CAGR ABS Key markets % US$m CAGR CAGR ABS
(2010) (00‐10) (09‐10) (09‐10) (2010) (2010) (00‐10) (09‐10) (09‐10)
Turnover (NZ$) $4,240m 5% 7% $271m East Asia 5% $51 12% 20% $9m

SE Asia 3% $25 20% 36% $6m
Exports (US$) $971m 18% 23% $182m Europe 28% $274 18% 23% $51m
North America 25% $241 22% 29% $54m
Enterprises1 519 6% 10% 49 Australia/PI 38% $370 18% 19% $59m
Other 1% $10 15% 52% $4m
Employment 8,900 3% ‐4% ‐410
Total 100% $971 18% 23% $182m

Turnover per $476,404 ‐ ‐ ‐
employee
Key products US$m CAGR CAGR ABS Key firms Employ Turnover Key competing

export value (2010) (00‐10) (09‐10) (09‐10) (#; 10) (NZ$m; 10) countries Key regions
Wine $774 24% 21% $137 Lion 1,400 $605m France ‐ Loire Valley (Sancerre,
Spirits $58 9% 46% $18 Pernod Ricard 750 $337m Pouilly Furme)
Beer $26 12% 64% $10 Delegats Group 50 $220m ‐ Bordeaux Regions (Entre‐
Soft drinks $67 7% 23% $13 Constellation Brands 270 $215m Deux‐Mers, Pessac‐
Juice $38 7% 5% $2 Villa Maria 250 $141m Leognan)
Water $8 18% 51% $3 DB Breweries 500 $461m Germany ‐ Alsace, Mosel
Independent Liquor 300 $414m USA ‐ Washington State, Oregon
Total $971 18% 23% $182 Coca Cola Amatil 1,100 $493m Chile ‐ Valparaiso, Casablanca
Frucor 900 $380m Valley
PAGE 12 1. Manufacturing only; Source: various company annual reports; various company websites; Kompass; Coriolis analysis
BEVERAGES – WINE – SWOT ANALYSIS
The New Zealand wine industry is well positioned for further growth, but pressures will continue
Strengths Weaknesses
‐ Islands in the middle of the South Pacific the size of Italy but with only the population ‐ Large number of small wineries with low/no economies of scale
of Singapore; therefore relatively unspoilt
‐ High debt levels of many small and medium sized wineries
‐ Strong and growing success in premium/super‐premium
‐ Highly dependant on four countries (AU, UK, USA and Canada)
‐ Achieves a strong price premium in key markets (similar to France)
‐ Increasing exports of bulk wine
‐ New Zealand Sauvignon Blanc now a “must have” for global wine companies
‐ Lack strong super‐premium heritage brands as demanded by brand and status
‐ Growth in market share in key markets (e.g. USA) conscious Asian consumers
‐ Innovative and quality‐focused winemakers
Opportunities Issues/Threats/Risk
‐ Continued income growth in Asian markets ‐ Growing consolidation of the wine industry
‐ Continued growth of New Zealand wine consumption in China ‐ Difficult finding good distributors to gain access into key markets
‐ Low share in Europe (two thirds of global wine consumption) outside British Isles ‐ Continued growth of bulk wine trade reducing the value of wine
‐ Joint in‐market activity spreading cost of marketing ‐ Continued impact of GFC, reducing wine spend
‐ Automated vineyard pruning technology reducing requirements for labour ‐ Oversupply of wine globally increasing pressure on price
‐ Strong and growing demand in Asia for premium fortified wines/wine based spirits ‐ Continued growth of retail brands/store brands in wine
(e.g. cognac)
PAGE 13 Source: Interviews; Coriolis
BEVERAGES – NON‐WINE – SWOT ANALYSIS
New Zealand is currently less well positioned outside wine; however the country is well positioned for further
growth
Strengths Weaknesses
‐ Islands in the middle of the South Pacific the size of Italy but with only the population ‐ No deep cultural unique “spirits” associated with New Zealand
of Singapore; therefore relatively unspoilt
‐ Long shipping distance to traditional western markets
‐ Closer shipping distances to Asia compared to European competitors
‐ No large New Zealand owned champion growing and driving New Zealand brand
‐ Demonstrated capabilities in beverage production position in beverages
‐ On‐going growth and success of Frucor/V, and Charlies/Phoenix in non‐alcoholic ‐ Limited culture or mentality of super‐premium branding or positioning (e.g. relative
drinks category to France)
‐ Emergent success in spirits (e.g VoC and 42Below) ‐ Low levels of skills outside wine relative to peer group
‐ Not a producer of many base ingredients of typical beverages
Opportunities Issues/Threats/Risk
‐ Leverage success of New Zealand wine industry; build on awareness of New Zealand ‐ Limited opportunity shipping “water” around the world if it isn’t a premium product
in wider premium beverages segments
‐ Changing consumer sentiment (e.g. bottled water backlash)
‐ Wide range of New Zealand unique plants available as flavouring (e.g. 42 Below
‐ Failure to achieve large scale export traction outside wine
Manuka honey)
‐ Hollowing out of management skills in New Zealand industry due to foreign
‐ Rapidly growing demand for premium alcoholic beverages in Asia
ownership
PAGE 14 Source: Interviews; Coriolis
BEVERAGES – POTENTIAL STRATEGIC DIRECTIONS
Five potential high potential strategic directions are identified for the beverages industry
Situation creating opportunity Resulting potential strategic Opportunity Challenges

direction
‐ New Zealand has built a strong position 1. Continuous improvement of ‐ Build on existing position ‐ Competitors improving as well
in Sauvignon blanc Sauvignon Blanc from ‐ Create upward price pressure through ‐ Spreading best practice across large
‐ Competitors improving and pushing into Marlborough improvement in relative quality number of industry participants
variety (e.g. South Africa) often at lower ‐ “Vineyard‐to‐glass” approach
price point
‐ NZ still a very young wine producer 2. Nurture emerging regions to ‐ Marlborough accounted for 70% of NZ ‐ Corporate group‐think and prevailing
finding its way Marlborough Sauvignon Blanc wine production wisdom
‐ Industry emerged from vision of handful status ‐ New Zealand over dependant on one ‐ Capital
of people, primarily EU/AU immigrants variety/one region relative to peers ‐ Biosecurity limiting introduction of
‐ Peers have much wider range of regions ‐ Discovering new varieties that suit new genetics
and wines New Zealand conditions ‐ Barriers to immigration
‐ Expand immigration allowance of
skilled wine industry participants
‐ The four large Anglo‐Saxon countries 3. Diversifying away from ‐ Significant untapped potential for ‐ Language and cultural barriers
account for 20% of global wine traditional Anglo Saxon growth in Northern Europe, specifically ‐ In‐market legal structures (e.g.
consumption but 86% of New Zealand’s markets into wine drinking Denmark, Netherlands and Sweden Sweden’s Systembolaget1)
wine export value Northern Europe ‐ Requires many years of hard work
‐ Northern Europe accounts for 32% of ‐ Need to achieve minimum critical mass
global wine imports but only 4% of NZ “tipping point”1
wine exports
‐ Asian consumers, particularly Chinese, 4. Move into fortified wines ‐ Fortified wine gets high prices ‐ Lack of experience or skills
favour smaller amounts of strong spirits ‐ Fortified wine can support unique ‐ No heritage in space (need to do “new
‐ Asian consumer are clearly signalling positioning (e.g. Cognac, Armagnac, world” approach)
with their wallets that they want Pisco, Jerez)
fortified wine not table wine
‐ Many countries have a strong identity 5. Nurture development of a ‐ Find New Zealand “spirit” (e.g. ‐ Lack of heritage or history
with a specific alcoholic spirit spirit industry Mexico=Tequila)
‐ Peer group countries suggest spirits a ‐ Build on existing premium position in
strong area for growth going forward wine
PAGE 15 1. For example a retail bay with the word “New Zealand” on the sign overhead
BEVERAGES – POTENTIAL AREAS FOR INVESTMENT
Alcoholic beverages is a major opportunity for investors; wine has shown rapid growth; opportunities exist in
second tier wine regions and developing a premium spirits category
Wine - Peer group countries suggest strong future growth possible
- New Zealand Sauvignon Blanc a “must‐have” component of - Limited entry vehicles; greenfields by global player with
portfolio for major global wine companies skill sets recommended
- Three of the top five US wine companies in NZ
- Three of the largest EU alcoholic beverage companies in NZ Beer
- Three of the top five Australian wine companies in NZ - No revealed demand for New Zealand beer in world markets
- Lion owned by Kirin
- Some opportunity in Marlborough - DB owned by Asia Pacific Breweries
- Due to lower price of wine (due to GFC) - Independent Liquor owned by Asahi
- Future area growth of Marlborough limited due to - Microbreweries small and growing but primarily domestic
geological constraints focussed
- Large firms either foreign owned by majors or committed NZ Soft drinks
family owners - In Soft drinks, Frucor/V and Charlie’s/Phoenix are attractive but
- Delegats and Villa Maria both committed owners both recently changed hands for top dollars; both now Japanese
owned
- Opportunities for investment in next tier down layer of firms
(e.g. Giesen, Lawsons Dry Hills, Chard Farm, Allan Scott, Coopers Water
Creek, Kumeu River etc.) - Limited opportunities in export bottled water
- Best fit would be for investor with transferrable capability
- Investors looking to unlock value in other regions; investigate
emergent secondary regions (i.e. the next “Marlborough”)
Premium alcoholic spirits
- Clear potential in premium alcoholic beverages
- Building on New Zealand positioning in premium wine
PAGE 16 GFC – Global Financial Crisis; Source: Interviews; Coriolis

TABLE OF CONTENTS
Section Page
Contents 4
Glossary of terms 5
F&B IP Overview 7
Sector overview 17
Wine 43
Appendices 62
BEVERAGES – SUPPLY CHAIN
Beverages have a relatively simple supply chain
Simplified model of New Zealand beverage supply chain
(model; ANZSIC codes as available))
Domestic
Imported Grocery Supermarkets
market
beverages wholesale & other retail
(F360‐100)
Apple/pear Soft drink Distributor Liquor

growing manufacturing wholesaler specialists
(A013‐400) (C121‐100)
Other fruit Liquor/tobacco1 Hospitality/

growing wholesale Foodservice
(rem. A013) (F360‐600)
Other Beer
ingredients/ manufacturing
imports (C121‐200)
Spirit Seafreight Beverage/liquor Supermarkets

manufacturing Airfreight wholesale2 & other retail
(C121‐300) (in‐market)
Grape Wine making Hospitality/

growing (C121‐400) Foodservice
(A013‐100) International
markets
PAGE 18 1. Tobacco inseparable at source; 2. There may be one or more layers of wholesaling, depending on product or market; some wholesale functions may be captive inside retailers or
foodservice operators; Source: Coriolis
BEVERAGES – # OF ENTERPRISES
The number of enterprises involved in beverage manufacturing in New Zealand is growing strongly, driven by
wine
Number of enterprise units in beverage manufacturing in New Zealand1 Comments
(enterprises; 2000‐2010) ‐ Question: What does the experience of other
CAGR countries tell us about the long term industry
(00‐10) (09‐10) structure for wine? If we double production again,
will we have ~700 wine manufacturers?
519 6% 10%
470
436 441
406
369
354
331 Wine 8% 12%
358
308
297 319
287 281 290
258
210 225
201
180
165 180
Notes/Definitions
27 27 Spirits 8% 4% ‐ Soft Drink, Cordial and Syrup Mnfg. (C121‐100)

20 21 25 27 26
12 15 16 ‐ Beer Manufacturing (C121‐200)
11 47 39 39 51 Beer ‐1% 31%
46 48 46 ‐ Spirit Manufacturing (C121‐300)
54 45 46
47 ‐ Wine and Other2 Alcoholic Bev. Mnfg. (C121‐
Soft drinks, 400)
78 77 81 85 86 83 other non‐ 4% ‐3%
59 68 68 75 alcoholic
56
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PAGE 19 1. Uses persons employed by enterprise unit; 2. Such as port, brandy, etc.; Source: SNZ business demographics (detailed industry for enterprise units) and (detailed industry for
geographic units); Coriolis analysis
BEVERAGES – # OF ENTERPRISES BY EMPLOYMENT SIZE
Looking at the same group split by employee size, we find growth is coming from an explosion of smaller
beverage manufacturers
Number of enterprise units in beverage manufacturing in New Zealand by employment size1 Comments
(enterprises; 2000‐2010) ‐ Question: Are the firms with no employees small
CAGR family enterprises or something else?
(00‐10) (09‐10)
519 6% 10%
Notes/Definitions
470
As sub‐aggregate level data not available this
436 441 aggregates:
406 ‐ Soft Drink, Cordial and Syrup Mnfg. (C121‐100)
‐ Beer Manufacturing (C121‐200
250 No employees 9% 17%
369 ‐ Spirit Manufacturing (C121‐300)
354 213 ‐ Wine and Other2 Alcoholic Bev. Mnfg. (C121‐
331 186 400)
194
308
297 177
287
148
139
115
99 112
101
105 1 to 5 9% 1%
109 104
97
93
88 89 97
89 76
80 48 6 to 9 8% 30%
32 37
38
32 29 39
33 36
23 23 41 44 49 10 to 19 4% 11%
41
41 33 39 38
32 37 37
35 39 47 46 41 20‐49 2% ‐11%
33 29 32 38 37 34
9 11 9 8 10 11 12 14 13 14 14 50‐99 5% 0%
9 9 9 9 10 11 12 13 13 12 12 100+ 3% 0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PAGE 20 1. Uses persons employed by enterprise unit; Source: SNZ business demographics (detailed industry for enterprise units) and (detailed industry for geographic units); Coriolis analysis
BEVERAGES – EMPLOYMENT
The number of people employed in beverage manufacturing grew at 3%/per annum over the past decade;
however sector employment rate was ‐4% in 2010
Number of persons employed in beverage manufacturing in New Zealand1 Comments
(people; 2000‐2010) ‐ Employment not growing as fast as enterprise
CAGR numbers; are we increasing efficiency or
(00‐10) (09‐10) fragmenting?
9,310
9,090 ‐ Almost all employment loss in 2010 in wine
8,900 3% ‐4%
8,770
8,500
8,190
8,030 Notes/Definitions
7,680
‐ Soft Drink, Cordial and Syrup Mnfg. (C121‐100)
7,270 7,290
‐ Beer Manufacturing (C121‐200
‐ Spirit Manufacturing (C121‐300)
6,470 5,230 ‐ Wine and Other2 Alcoholic Bev. Mnfg. (C121‐
5,080 4,790 Wine 5% ‐8%
4,770 400)
4,580
4,150 4,230
4,110
3,710 3,750
3,030
520 510 Spirits 8% ‐2%

460 590 580 520 540
230 270 280 270
1,470 1,440 1,490 1,540 Beer 0% 3%

1,400 1,410 1,580 1,700 1,470 1,490
1,530
Soft drinks,
2,010 2,030 2,070 2,060 other non‐ 2% ‐0.5%
1,680 1,890 1,850 1,720 1,720 1,900 1,850 alcoholic
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
BEVERAGES – EMPLOYMENT BY ENTERPRISE SIZE
Looking at employment by employee size highlights (1) the importance of large firms and (2) that the larger firms
have been more impacted in the last year
Number of persons employed in beverage manufacturing in New Zealand by employment size1 Comments
(people; 2000‐2010) ‐ Larger firms more impacted than small
CAGR
9,310 (00‐10) (09‐10)
9,090 3% ‐4% Notes/Definitions
8,770
280 8,900
300 280 ‐ Soft Drink, Cordial and Syrup Mnfg. (C121‐100)
8,500 280 1 to 5 2% 0%
250 240
8,190 250 570 340 6 to 9 7% 21% ‐ Beer Manufacturing (C121‐200
8,030 270 540
260 290 ‐ Spirit Manufacturing (C121‐300)
7,680 240 550 640 10 to 19 4% 12%
220 540 ‐ Wine and Other2 Alcoholic Bev. Mnfg. (C121‐
260
7,270 7,290 240 400)
230 460
530 1,500
250 220 1,510
160 240 1,270 1,310 20‐49 2% ‐13%
570 1,090
6,470 1,080
530 530
230
1,160
170
1,160 860 990
440 910 830 920 940 50‐99 4% ‐5%
990 810
720
1,080 530
750 610
620
5,640 5,690 5,400 100+

5,200 5,290 5,530 5,510 3% ‐5%
4,950
4,670 4,720
3,940
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
BEVERAGE – EMPLOYMENT BY REGION
Industry employment is concentrated in Auckland and the key wine producing regions
Number of persons employed in the beverage industry in New Zealand by region Comments
(people; 2010)
‐ Soft drinks and beer more location neutral;
wine more place specific
Otago/Southland
356 4%
Notes/Definitions
For example as Nelson/Tas/WC 260
“grape growing” ‐ Statistics New Zealand calculates its statistics
Canterbury 3% based on the predominant business activity of
600 7% the enterprise
‐ A firm that is defined as “beverage
manufacturing” at the enterprise level may
Classified elsewhere have a subsidiary at the geographic level that is
2,450 28% classified as “grape growing”
Marlborough 1,110 Wellington
12% ‐ Data here is “geographic” units not
90 1% “enterprise” units (pages prior)
Man/Wan/T ‐ “Classified elsewhere” is the difference
Northland 40 0% between geographic unit employees and
Hawke's Bay ar 85 1%
enterprise unit employees; it represents firm
600 7% subsidiaries not involved in “beverage
manufacturing,” for example those classified as
Auckland 2,930 “grape growing” or “beverage wholesaling”
33% Gisborne 110 1%
‐ Man/Wan/T = Manawatu, Wanganui, Taranaki
Bay of Plenty 160
2% ‐ Wellington includes Martinborough and other
Waikato 110 1% Wairarapa wineries
Total = 8,900
PAGE 23 Note: Uses persons employed by geographic unit; Source: SNZ business demographics ; Coriolis analysis
BEVERAGE – EMPLOYMENT BY REGION
Auckland and major wine growing regions only areas creating large scale employment growth
Number of persons employed in the beverage industry in New Zealand Comments
(people; 2000‐2010) 10 year
Absolute ‐ Auckland and major wine growing regions only
Change areas creating large scale
(00‐10)
9,310
9,090 +2,830
8,900
8,770
8,500 Notes/Definitions
8,190
8,030 ‐ Statistics New Zealand calculates its statistics
2,550
7,680 2,540 Classified elsewhere based on predominant business activity; firms
2,350 2,450 +910
7,270 7,290 1,970 (e.g. grape growing) are classified by their predominant activity.
1,740
1,640
‐ Data here is “geographic” units not
1,700 40
6,470 “enterprise” units (pages prior)
1,640 1,530 55 50 50 40
55 70 Northland +22
‐ “Classified elsewhere” is difference between
35
1,540 20 geographic unit employees and enterprise unit
18
employees; it represents firm subsidiaries not
3,000 involved in “beverage manufacturing,” for
2,830 2,950 Auckland +440
18 2,900 2,920 2,960 2,930 example those classified as “grape growing” or
3,050 “beverage wholesaling”
2,960 3,030
‐ So a firm that is defined as “beverage
2,490 120 110 manufacturing” at the enterprise level may
110 110 170 110 Waikato +35
100 230 100 200 160 Bay of Plenty ‐20 have a subsidiary at the geographic level that is
220 250 260 160
250 150 110 Gisborne ‐10
270 280 120 580 classified as “grape growing”
90 440 500 600 Hawkes Bay +310
90 85 160 500 75
150 95 470 480 61 90 95 Mana/Wanga/Tara +36
75 170 90 130 100 100 85 ‐ Wellington includes Martinborough and other
180 200 430 61 62 120 90 Wellington ‐60
400 150 140
120 360 56
130
Wairarapa wineries
290 44
110 1,210
49 52
130 1,320 1,170 1,110 Marlborough +460
150 1,060 1,040
960
1,210 ‐ Mana/Wanga/Tara = Manawatu, Wanganui,
830
650 740 225 Taranaki
141 139 210 245 260 Nel/Tas/Marl/WC +65
195 190 188 195 134
550 600 620 660 600 Canterbury +30 ‐ Nel/Tas/Marl/WC = Nelson, Tasman,
600 520
570 570 560 510
Marlborough, West Coast
240 260 350 300 403 366 373 433 356 Otago/Southland +196
160 160
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PAGE 24 Source: SNZ business demographics detailed industry for geographic & enterprise units; Coriolis analysis
BEVERAGE – INDUSTRY AGGREGATE TURNOVER
The New Zealand beverage industry has a wide range of firms
Aggregate beverage (and tobacco) industry turnover/total income Comments
(NZ$; FY10 or as available) Likely mostly wine; may ‐ Lion split into Lion Nathan Wine & Spirits and NZ
currently includes Breweries and Maltexo
tobacco
Vavasour 1% ‐ Data includes tobacco, inseparable at source
Mount Riley 1%
Cloudy Bay 1%
Sacred Hill Non‐alcoholic ‐ Suggest Statistics New Zealand remove tobacco
1% ~20% from data as this does not help industry
Mud House 1%
Other 490 firms 9%
St Clair 1% Coca‐Cola Amatil 12%
Giesen 1%
Yealands 1%
Wither Hills 1% Notes/Definitions
Frucor 9%
Treasury Wine 2% ‐ Wine growing aggregated into fruit/horticulture
EnzaFoods 1%
‐ Table reference MFG001AA
Charlie's 1%
Villa Maria 3%
Just Water 0%
Constellation 5%
dbbreweries 11%
Lion 5%
Delegat's 5% Independent Liquor 10%
Wine
~50% Non‐wine alcohol
Pernod Ricard 8%
~30%
Lion 9%
Bacardi/42 Below 0%
Harringtons 0%
TOTAL = $4,240m
PAGE 25 Source: SNZ (Manufacturing survey); Coriolis analysis
BEVERAGE – TURNOVER OF KEY FIRMS
While non‐alcoholic and beer/spirits are relatively consolidated, the wine sector is more fragmented
Turnover of select large beverage industry firms Comments
(NZ$m; FY10 or as available) ‐ Lion is aggregated business revenue , which
includes significant wine and spirits
Coca‐Cola Amatil $493 ‐ Includes significant estimates
Frucor $380
EnzaFoods Non‐
$52
alcoholic
Charlie's $32
Just Water $17 Notes/Definitions
Lion $605 ‐ Excludes importer wholesalers (e.g. firms the
dbbreweries $461 wholesale imported spirits)
Independent Liquor $414 Non‐wine ‐ Consolidated group revenue for all companies
Harringtons alcohol
$20
Bacardi/42 Below $11
Pernod Ricard $337
Delegat's $220
Constellation $215
Villa Maria $141
Treasury Wine $106
Wither Hills $53
Yealands $50
Giesen $45 Wine
St Clair $40
Mud House $39
Cloudy Bay $37
Sacred Hill $36
Mount Riley $25
Vavasour $22
PAGE 26 Source: various companies annual financial statements (as filed with NZ Companies Office or available company website); Coriolis analysis

BEVERAGE – INDUSTRY AGGREGATE TURNOVER
The beverage industry has been showing constant growth
Aggregate beverage industry turnover/total income Comments
(NZ$m; nominal, non‐inflation adjusted; 2000‐2010) CAGR ‐ Data includes tobacco, inseparable at source
(00‐10) (09‐10)
$4,500 ‐ Suggest Statistics New Zealand remove tobacco
Beverage & from data as this does not help industry
tobacco product 5% 7%
mnfg.
$4,000
Notes/Definitions
‐ Wine growing aggregated into fruit/horticulture
$3,500
‐ Table reference MFG001AA
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$‐
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PAGE 27 Source: SNZ (Manufacturing survey); Coriolis analysis
BEVERAGE – TURNOVER OF KEY FIRMS
Companies are driving growth through both acquisition and organic growth
Turnover of select large beverage industry firms Last 5 yr Comments

CAGR
(NZ$m; FY2005‐2010 as available) ‐ Question: Why is Pernod Ricard ‘s (Montana)
(05‐10)
revenue shrinking during a period of New Zealand
$800 wine industry growth? Will recent sale of some
assets to Lion accelerate this process?
‐ Lions figures supplied by Lion (not taken from
$700 yearly annual reports as per the other companies)
Notes/Definitions
‐4.3% ‐ Consolidated group revenue for all companies
$600
‐ CCA & Frucor CAGR = (04‐09)
2.4%
$500
5.4%
$400
‐4.7%
$300
‐0.4%
(cross) 12.3%
$200 (triangle) 30.5%
$100 6.2%
$0
2005 2006 2007 2008 2009 2010
PAGE 28 Source: various companies annual financial statements (as filed with NZ Companies Office or available company website); Coriolis analysis

BEVERAGE– KEY FIRMS
There are two key groups in non‐alcoholic beverages – Coca‐Cola Amatil and Suntory/Frucor
Key firms in the New Zealand beverage sector
(2010 or as available)
Year
Turnover % Export Employees Ownership founded Notes
$492.9m 1,100 Australia; listed 1939 www.coke.co.nz; ccamatil.com; www.cokecareers.co.nz

(2009) (2010) (ASX: CCL) CCA is licensed bottler by US brand owner
$380.4m 900 Japan; private 1965 www.frucor.co.nz; www.vrepublic.co.nz; www.suntory.com

(2009) (Suntory Holdings; 90% Originally NZ Apple & Pear marketing board; listed; acquired
Kotobuki Realty; Torii family; by PEP, then Danone, now Suntory
others) Brands: V, Just Juice, H2GO, McCoy, Pepsi (licensed), Simply
Squeezed, Mizone, Frank, others
$45m 85 (FT) + 200 New Zealand; listed 1962 www.enzafoods.cco.nz; www.turnersandgrowers.com

Enza Foods only seasonal (NZX: TUR) Parent company is Turners & Growers Ltd
(Ce; 2010) (Ce) Concentrated apple juice, apple sauce
$31.6m ~40% 80 (K) Japan; listed 1999 www.charliesgroup.co.nz

(2010) (Ce) (Asahi; TYO: 2502) Increasing presence in AU market; winning distribution
through Coles and WWX; (sales increased 95% in first half of
2011)
Acquired by Asahi (Japan) August 2011
$17.1m 60(K) NZ; listed 1987 www.justwater.co.nz

(Ke) (NZX:JWI) In office water coolers
PAGE 29 Source: various company annual reports (AR); various company websites (WS) ; Kompass (K); Kompass estimate (Ke); interviews (Ci); Coriolis analysis and estimates (Ce)
BEER/OTHER ALCOHOL – KEY FIRMS
There are three large firms manufacturing beer and spirits in New Zealand
Key firms in the New Zealand other alcohol sector
Year
$461.4m 500 Singapore; listed 1930 www.dbbreweries.co.nz; http://www.apb.com.sg

(2010) (K) (Asia Pacific Breweries; www.heinekeninternational.com
SGX:A46) www.fraserandneave.com
Asia Pacific is 42.5% owned by Heineken; 40% by F&N
Previously NZ company, moved listing to Australia; acquired
Brands: DB, Tui, Export, Monteith’s, Heineken, others
$414.4m 60% 300 Japan; listed 1987 www.independentliquor.co.nz; www.pep.com.au

(2010) (Ce) (Asahi; TYO: 2502) Originally winery; moved into RTDs & spirits
Brands: Woodstock, Cruiser, Cody’s, Canterbury Cream, others
Acquired by PEP following death of founder (M. Erceg)
Acquired by Asahi (Japan) August 2011
$605m 1400 Japan; listed 1968 www.lionco.com; lion‐nathan.com.au; www.kirin.com;

(2010) (NZ) (Kirin; TYO: 2503) www.kirinholdings.co.jp
1800 Lion, Beer Spirits Wine (NZ) trading at Lion (as of Jul 2011)
(Au) Previously NZ company, moved listing to Australia; acquired
Brands: Steinlager, Speight’s, Lion, Mac’s, Waikato Draught,
Canterbury Draught, others
$20.0m 0% 70 NZ; private 1991 www.harringtonsbreweries.co.nz
(Ke) (K) (Harrington family) Beer and RTD
$10.8m 65% TBD Bermuda; private 2000 www.42below.com; www.bacardi.com

(2010) (Bacardi family) www.bacardilimited.com
Formerly listed in NZ; acquired
$1.9m 90% 25 (NZ) NZ; private 2007 www.vnccocktails.com

(2010) (Ke) 20‐25 (Int’l) (McKillen,Couillaut & others) VNC Cocktails Limited established by ex founder 42 Below
$1‐5m 10‐50 29% Scott Family (of Allan 2003 www.moabeer.com

(Ce) (Ce) Scott), rest is Business Bakery Largest NZ beer exporter to US (still very small)
and Pioneer Capital Partners Super premium, boutique beer from Marlborough
Investors include Geoff Ross (42 Below)
WINE – KEY FIRMS
There are five large companies in New Zealand with sales over $100m
Key firms in the New Zealand wine sector
Year
$337.2m 750 France; listed [1797] www.pernod‐ricard‐nz.com; www.pernod‐ricard.com

(2010) (Euronext: RI) 1936 Purchased Montana in 2005
$605m 1400 Japan; listed 1968 www.lionco.com; lion‐nathan.com.au; www.kirin.com;

(2010) (NZ) (Kirin; TYO: 2503) www.kirinholdings.co.jp
1800 #2 wine player in NZ; brands include Lindauer, Saints,
(Au) Corbans, Wither Hills etc. Recent acquisition of 12 Pernod
Ricard brands
Lion, Beer Spirits Wine (NZ) trading at Lion (as of Jul 2011)
$219.7m 88% 50(K) New Zealand; publicly listed 1947 www.delegatsgroup.co.nz; www.delegatwines.com

(2010) (2008) (NZX:DLG) Owns Oyster Bay
(Delegat family 66%) Publicly listed 1991
Marlborough and Hawke’s Bay vineyards
11% of total NZ wine exports
$214.6m 270 (K) USA; listed 1943 www.cbrands.com

(2010) (NYSE:STZ & STZ:B) Largest wine company in the world
Owns Nobilo, Kim Crawford, Drylands, Monkey Bay, Selaks
$141.3m 250 (K) New Zealand; private 1961 www.villamaria.co.nz

(Ke) (Fistonich family) Brands: Villa Maria, Esk Valley, Vidal Estate
Marlborough, Hawke’s Bay, Auckland vineyards
$105.8m 70 Australia; listed 2011 www.fostersgroup.com; www.treasurywineestates.com

(2010) (ASX: TWE) Brands AU include Beringer & Penfolds
$46.8m Recently (April 2011) demerged from Fosters Group
(2010; AR; Owns Matua; also distributors of international wines
Fosters Matua 2009 Fosters NZ Matua merged with Shingle Peak &
only) Waikoukou Vineyards
WINE – KEY FIRMS
There is also a strong group of mid‐to‐large size wineries
Year
$52.7m 55 Japan; listed 1994 www.witherhills.co.nz; lion‐nathan.com.au; www.kirin.com;

(2010) (K) (Kirin/Lion Nathan) www.kirinholdings.co.jp; Marlborough vineyards
$50m 34 New Zealand; private 2002 www.yealands.com

(2008; K) (K) (Yealand family) Environmentally conscious wines
Marlborough winery
Giesen Wines $40‐50m 95% 30 New Zealand; private 1981 www.giesen.co.nz; Marlborough winery

(Ce) (K) (Giesen family) Exports primarily to Australia
$30‐40m 66% 17 New Zealand; private 1978/ www.saintclair.co.nz

(Ce) (K) (K) (Ibbotson family) 1994 Marlborough winery
$3m
(Ke)
$39.4m 30 New Zealand; public 2001 www.mudhouse.co.nz

(2010) (K) (unlisted) Marlborough, Central Otago, Waipara
$37.3m 50 France; listed 1985 www.cloudybay.co.nz

(2009) (K) (Euronext:MC) Purchased Cloudy Bay 1990
Marlborough‐based vineyards
$36.0m 50% 36 New Zealand; private 1985 www.sacredhill.com

(2010) (K) (Mason family 63%; Hawke’s Bay winery
Jebsen & Co (China) 29%)
$30.8m 120 Australia; private 1998 www.craggyrange.com

(2009) (K) (Peabody family) Vineyards in Marlborough, Martinborough, Hawke’s Bay,
Central Otago
$20‐30m 70% 20 New Zealand; private 1992 www.mountriley.co.nz

(Ce) (NZTE) (K) (Buchanan family) Marlborough winery
WINE – KEY FIRMS
… continued
Year
$22.0m 70% 15 USA; private 1989 www.vavasour.com; www.cliffordbay.co.nz

(2009) (K) (Foley Family Wines/Foley www.foleyfamilywines.com
family) Brands: Clifford Bay, Vavasour
Marlborough winery
70% of grapes are from contract growers
Allan Scott $15‐25m 25 New Zealand; private 1993 www.allanscott.com

(Ce) (K) (Scott family) Marlborough‐based winery
$17.1m 60 New Zealand; private 1999 www.amisfield.co.nz

(Ke) (Darby family; others) Central Otago winery
60 ha of vineyards
$14.3m 50 New Zealand; private 1989 Also a restaurant; Hawke’s Bay vineyards

(Ke) (K) (Preston family) www.millsreef.co.nz
$14.3m 50 New Zealand; private 1937 www.soljans.co.nz

(Ke) (K) (Soljan family) Auckland region based winery
$9m 57% 30 New Zealand; private 1916/ www.babichwines.co.nz

(Ke) (K) (Babich family) 1959 Vineyards in Auckland, Hawke’s Bay, Marlborough
BEVERAGE – KEY FIRMS ‐ WHOLESALERS
There are a range of larger importer/wholesalers in beverages
Key firms in the New Zealand wholesale sector
Year
$163.9m 150 (K) Australia; listed www.tasmanliquor.co.nz; www.metcash.com

(2010) (Metcash; ASX:MTS) Importer/distributor/wholesaler of wine, spirits, beer
$77.1m 100 (K) New Zealand; private 1859 www.hancocks.co.nz

(2001; K) (Jakicevich family) Importer/distributor/wholesaler of wine, spirits, beer
Also retail stores
Parent is The Booze Borthers
$102.4m 60 (K) USA; listed 1999 www.jimbeam.co.nz; www.beamglobal.co.nz;

(2009) (NYSE: FO) www.fortunebrands.com
Importer/distributor/wholesaler of wine, spirits, beer
$30.3m 50 Austria; private [1984] www.redbull.co.nz; www.redbull.com

(2010) (Mateschlitz; Yoovidhya) 2001 Parent company Red Bull (Austria)
Importer/distributor/wholesaler of soft drinks
Negociants $44.5m 20 (K) Australia; private 1985 www.negociantsnz.com; www.negociantsaustralia.com

(2010) (Smith family) Wine, spirits and beverages distributor
BEVERAGES – WINE TRANSACTIONS
There has been a constant stream of transactions in the New Zealand wine industry, particular foreign
investment in NZ wines…
Recent major wine industry transactions
(2005‐2011)
Date Acquirer Target Price Details
2011 Starborough Farming Co Clansman's Marlborough $2.02m 30 ha vineyard sold in Awatere Valley
2011 Foley Family Wines (USA) Te Kairanga Wines $11m 127 ha freehold land in Wairarapa, including 6.6 ha of McLeod Vineyard
2011 Foster’s (Australia) and Rapaura Vintners N/A Based in Marlborough – make wines for Babich and Matua and contract winemaking
Babich Wines Was 1/3 owned by Goldwater Estate, Foster’s and Babich, now 50:50 Foster’s and Babich
2011 Foley Family Wines (USA) 34% of Te Kairanga Wines ~NZ$1‐2m Te Karainga Wines has been in financial troubles; 70,000 cases produced per year
2010 Lion Nathan 12 Pernod Ricard brands from NZ NZ$88m Sale includes Lindauer, Corbans, Saints and other sparkling wine/still wines from Hawkes Bay and Gisborne region,

(Australia/Japan) Pernod Ricard retains significant NZ investment elsewhere
Indevin Partner Indevin will take ownership of the Gisborne Winery, some vineyards in the Gisborne region
Oct 2010 Delegat’s Remainder of Oyster Bay TBD takeover bid for grape grower Oyster Bay, of which it already owned 54.9%
2010 Delegat’s Gravitas N/A Gravitas was founded 1993 and recently placed in receivership sale
2010 Foley Family Wines/ Eurowine N/A Eurowine taken over as a JV; renamed Eurovintage; company distributes many top NZ wines to restaurants; Vintage

Vintage Wines & Spirits Wines & Spirits distributes to supermarkets
2009 Foley Family Wines (USA) New Zealand Wine Fund N/A New Zealand Wine fund includes Vavasour, Goldwater, Clifford Bay; deal includes 100 hectares of mostly sauvignon

blanc, brands produce 280,000 cases per year
2009 Saint James Company Waimea Estate NZ$9m Saint James is involved in several wineries in Australia and California; previously involved in waste disposal and

(USA) known as Radiation Disposal Systems; unsuccessfully bid for Lawson’s Dry Hills in 2009
2006 Waipara Hills Canterbury House N/A One Canterbury winery acquires another
2006 New Zealand Wine Fund Goldwater Estate NZ$10m Production in Waiheke and Marlborough
2006 Mud House Wines Waipara Winery N/A Winery has crush capacity of 1,200 tonnes
2005 Pernod Ricard (France) Allied Domecq (France) NZ$814m Montana Wines passed on to another French company

2005 Ager Sectus The Crossings NZ$21.4m Winery and vineyard including 225.2ha
2005 Delegat’s 25.98% of Oyster Bay N/A Already controlled 32.58% of company taking to 50.1%
400,000 cases (05)
2005 Villa Maria Estate Thornbury Wine N/A 3 vineyards in Marlborough; 11 contract growers
560t; 46,000 cases
PAGE 35 Source: various companies annual financial statements (as filed with NZ Companies Office or available company website); various press releases and news articles; Coriolis analysis
BEVERAGES – WINE TRANSACTIONS
…continued
Recent major wine industry transactions
(1998‐2003)
2004 Pernod Ricard (France) Framingham Wines NZ$6.67m Established 1991; 10.7ha freehold land; 5.94ha leasehold land; includes Tylers Stream brand
270,000l; 30,000 cases
2003 Constellation Brands BRL Hardy (Australia) Au$1.9b Part of a series of acquisitions worldwide
(USA)
2003 Vincor (Canada) Kim Crawford NZ$14.8 Part of a series of acquisitions worldwide; Vincor encountered financial troubles and was bought by
Constellation Brands (USA) for US$1.09 billion in 2006
2003 LVMH (France) Cloudy Bay N/A LVMH has invested in wineries in Argentina, California, Australia and a distillery in China

2002 Aster Family De Redcliffe Winery N/A Aster family of Oregon purchases De Redcliffe and Firstland brand as well as Hotel du Vin luxury hotel;
40,000 cases
2002 Rangitira 25% of Te Kairanga N/A Rangitira (JR Mckenzie Trust) acquires 25% share of Te Kairanga Wines
2002 Lion Nathan Wither Hill Wines NZ$52m From founder John and Brent Maris

(Australia/Japan)
2002 Foster’s (Australia) Ponder Estate Wines NZ$11.1m Winery purchased to provide fruit for Matua Valley wines

2002 Foster’s (Australia) Hawkesbridge NZ$3.5m House/cellar door; brand; plant & equipment
10,000 cases (02)
2002 Rangitira Te Kairanga N/A Rangitira (JR Mckenzie Trust) acquires 25% share of Te Kairanga Wines
2001 Sacred Hill Cairnbrae Wines N/A Allows company access to Marlborough grapes
2001 Allied Domecq Montana Wines N/A Allied purchases Montana Wines the largest wine company in New Zealand
2001 Jebsen & Co (China) 30% of Sacred Hill Winery Ltd $3m Jebsen & Co is a diversified company importing products into China

2001‐04 Foster’s (Australia) Matua Valley Wines ~NZ$25m Large Australian investment in NZ wine industry
2000 Montana Wines Corbans Wines NZ$151m Montana buys Corbans, then a subsidiary of DB Breweries; including 623ha in Gisborne/Hawkes Bay,
130ha Marlborough and 87ha leasehold in Marlborough; was NZ’s 3rd largest winery
2000 BRL Hardy (Australia) Nobilo Wine Group ~NZ$50m Acquires remaining 75.32% shareholding; 167ha including 142ha in Marlborough
1998 Nobilo Vintners Selaks Wines N/A Selaks produced 100,000 cases
BEVERAGES – NON‐WINE ALCOHOL TRANSACTIONS
There have been limited transactions recently in beer and spirits
Recent major non‐wine alcohol industry transactions
(1993‐2011)
Aug 2011 Asahi (Japan) Independent Liquor NZ$1.5b Major Japanese brewer acquires #3 player in beverages in New Zealand
2010 Warren Couillault Former Pinto (beverages) factory N/A Warren Couillault invests in VnC ‐ current supply of 200,000 cases

Purchased the former Pinto (beverage) factory to secure bottling facility
2009 Kirin (Jp) Lion N/A Kirin (Japans #1 beer company) acquires the remaining 54% share of Lion
2008 Foodstuffs (NZ) Liquorland (DB Breweries) N/A DB Breweries sold Liquorland to Foodstuffs
2006 Bacardi 42 Below NZ$138m Bacardi global spirits player purchased NZ owned 42 Below
2006 Pacific Equity Partners Independent Liquors (NZ) NZ$1.25b Independent Liquors is #1 (NZ) and #2 (Australia) premixed drink manufacturer

(Australia)
2004 Asia Pacific Breweries DB Breweries N/A APB completed purchase of DB Breweries, DB Breweries de‐listed in NZ

(JV between Heineken
(Dutch) and Fraser &
Neave (Singapore))
2002 Tasman Liquor Allied Liquor N/A Tasman Liquor Company, a subsidiary of Metcash (Australia), bought Allied Liquor to increase turnover

Company
1998 Kirin (Japan) 46% of Lion Nathan Kirin Japan (Japan #1 beer company); acquires 45% (later 46%) of Lion Nathan
1993 Asia Pacific Breweries 50% of DB Breweries N/A Part of regional consolidations

(JV Heineken and Fraser
& Neave(Singapore))
BEVERAGES – NON‐ALCOHOLIC TRANSACTIONS
There has been a range of transactions in the non‐alcoholic sector
Recent major non‐alcoholic beverage industry transactions
(2002‐2011)
Aug 2011 Asahi (Japan) Charlie’s Beverages NZ$129.3m Major Japanese brewer acquires NZX listed juice firm with $31.6m turnover for $129m
2009 Frucor Simply Squeezed from Crescent N/A Frucor purchases Simply Squeezed fresh juice (orange) company, adds Simply Squeezed, Supreme,

Capital Partners (AU; PE) Allganics and Bay Harvest brands to its stable
2009 Suntory (Japan) Frucor from Danone (France) NZ$1.3 b Frucor sold by Groupe Danone to Japanese international beverage company Suntory
2007 Frucor Arano N/A Frucor purchases Arano fresh juice (orange) company
2006 Charlie’s Phoenix Organics NZ$10m Charlies purchased Phoenix Organics and moved to plant in West Auckland
2006 Crescent Capital Simply Squeezed N/A Purchased 60% of SS from Brownlie (based in the Hawkes Bay)

Partners (AU Private
Equity)
2006 Just Water International Clearwater International NZ$14.7 Clearwater is a water dispenser company, purchase was move to expand into Australia

(NZ) Australian company is proving to be massively unprofitable
Apr 2004 Just Water Aqua‐Cool N/A Water delivery business
July 2002 Coca‐Cola Amatil Rio Beverages from Thexton NZ$40m include Rio Gold, Keri and Thexton fruit juice drinks; also makes e2 lifestyle beverage, Ikon energy drinks

Family Trust and Cerebos Gregg's and Kiwi Blue mineral water; 220 employees; $100m sales; 2 bottling plants (AKL & CHC)
2002 Danone Frucor N/A French based Danone purchases Frucor juice and beverage company
BEVERAGES – ACTIVITY
Other alcoholic industries have had limited activity in NZ
Recent major beverage industry activity
(2006‐2010)
Date Company Activity Cost Details
Non‐alcoholic
2011 Coca Cola New bottling plant in Christchurch $15m Coca‐Cola Amatil is to build a NZ$15m bottle manufacturing and filling facility at its Woolston site in
Amatil Christchurch, New Zealand
2010 Charlie’s Overseas expansion Expanding into Australia, selling juice at Coles and Woolworths

Trialling juice at 60 ParknShop supermarkets in Hong Kong
Exports to 14 countries
2009 Coca Cola New automated plant in Auckland $90m In 2008 CCA Announced investment of NZ$80m in automated distribution centre in Auckland

Amatil
2008 Charlie’s Built juice factory in South Australia Au$2m Limited supply of citrus in NZ and exports to Australia meant investment in Australian plant
Beer/spirits
2011 Monteith’s Brewery makeoever $4m $4m redevelopment of Greymouth facility to increase tourism to area
2010 Lion New brewery $250m New manufacturing and warehousing facility in East Tamaki, Auckland. Central location for brewing and

distributing beer and Contract Bottling; floor space of 23,000 sq m and storage capacity for 26,000 pallets
Fully automated bottling plant
Wine
2006 Giesen Winery upgrade, new bottling plant $3.5m Established new bottling and packaging plant in Chch, expanded capacity in Marlborough vineyard
Wines
BEVERAGES – THEMES (NON‐WINE)
There has been a recent growth in microbreweries and craft beer and growing foreign investment in the non‐
wine beverages sector
Identified firm level activity or investment themes
(2010)
Theme Details Examples
Growth
Growth of Microbreweries are increasing in number ‐ Three Boys Brewery, Dux de Lux, Moa Brewing Company, Harringtons, Green Man, Epic Beer, Green Fern, Peak

microbreweries Brewery, Tuatara Brewery
Foreign Investment
Asian companies Foreign investment in NZ alcohol to increase ‐ APB purchasing DB Breweries

buying NZ breweries presence , not for exporting. No signs of beer ‐ Kirin Investing in Lion Nathan
and distillers production moving overseas ‐ Asahi buying Independent Liquor & Charlie’s
Supply chain
Vertical integration Investing downstream ‐ VnC purchased the Pinto (beverage) former factory to secure bottling facility, with expected growth, important to

secure the supply chain (previously been contract bottling)
BEVERAGES – EXPORTS BY TYPE
New Zealand beverage exports have shown strong growth driven by wine
New Zealand beverage export by form 10 Year Last Year

(US$m; 2000‐2010) CAGR Absolute CAGR Absolute
$971 TOTAL 18% +$793m 23% +$182m
Can spirits and soft drinks show the same
growth over the next 10 years, replicating
wines growth in the past 10 years?
$816
$789
$722
$774 Wine 24% +$684m 21% +$137m

$524
$454 $644
$637
$560
$378
$396
$258 $332
$245
$208
$178 $184
$158 $58 Spirits 9% +33m 46% +$18m
$127 $40 $38
$90 $97 $15 $39 $26 Beer 12% +$18m 64% +$10m
$35 $30 $31 $14 $16
$30 $13 $14 $11 $64 $67 Soft drinks 7% +$32m 23% +$13m
$25 $32 $25 $11 $67 $55
$8 $7 $9 $50 $50 $52
$35 $26 $29 $38 $48 $38 Juice 7% +$19m 5% +$2m
$19 $19 $16 $32 $24 $31 $34 $36
$2 $2 $15
$2 $5 $3 $3 $3 $8 $6 $6 $8 Water 18% +$7m 51% +$3m
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PAGE 41 Source: UN Comtrade database; Coriolis analysis

BEVERAGES – EXPORTS BY REGION
New Zealand beverage exports have achieved strong growth to the developed world
New Zealand beverage export by region 10 Year Last Year

(US$m; 2000‐2010) CAGR Absolute CAGR Absolute
$971 TOTAL 18% +$793m 23% +$182m

$51 E Asia 12% +$35m 20% +$9m
$25 SE Asia 20% +$20m 36% +$6m
$10
Other 15% +$8m 52% +$4m
$816
$789
$38
$17
$9 $43
$722 $18
$7
$28 $370 Australia/ 18% +$299m 19% +$59m
$14
$7
Pacific Islands
$337
$524 $311
$269
$20
$9
$5
$454
$23
$9
$4
$378 $187 $241 N. America 22% +$208m 29% +$54m
$21
$8
$4 $155
$176 $188 $187
$258 $137
$16
$6
$208 $2 $147
$178 $184 $15 $121
$5
$2 $93
$16
$4
$16
$5
$2 $92
$3 $74
$67 $274 Europe 18% +$222m 23% +$51m
$71 $58 $229 $227 $222
$43 $156
$33 $36 $141
$116
$58 $69 $83
$52
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

TABLE OF CONTENTS
Section Page
Contents 4
Glossary of terms 5
F&B IP Overview 7
Sector overview 17
Wine 43
Appendices 62
WINE – METRICS
Grape prices have fallen sharply over the past two years
NZ Average Grape Price
(NZ$/tonne; 1991‐2010)
$2,500
$2,000
Change
(09‐10)
10 year ‐20.6%
$1,500 CAGR
(00‐10)
0.8%
$1,000
$500
$0
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
PAGE 44 Source: NZ Wine Statistical Annual; Coriolis analysis
WINE – METRICS
After a strong period of rapid growth, New Zealand wine area increases have slowed and production has been
cut (in part to improve quality)
NZ Wine Producing Area Last yr NZ Wine Total Production
Last yr
(ha; 000; 1990‐2010) 4.6% (l; m; 1990‐2010)
‐7.4%
33
205
205
32
190
29
10 yr
CAGR 10 yr
(00‐10) CAGR
25
12.6% (00‐10)
148
12.2%
23
133
21
119
18
102
16
89
14
12
10
61
60
60
57
56
55
54
9
53
50
46
8
7
42
41
7
6
6
6
6
33
5
5
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
PAGE 45 Source: NZ Wine Statistical Annual; Coriolis analysis
WINE – PRODUCTION BY REGION
Close to 70% of grapes crushed are in Marlborough and the region has grown its share over the past decade
New Zealand grape crush by region Share of grapes crushed by region
(t; 1992‐2010) (t; %; 1992‐2010)
10 yr Last
CAGR year
100%
13% ‐7%
Northland/Akld 0% ‐15%
Waikato/BOP ‐16% ‐42% 90%
Gisborne ‐2% ‐21%
250,000
80%
Hawkes Bay 5% 5%
200,000 Wrpa / Wgtn* 13% ‐11% 70%
60%
150,000
50%
40%
21% ‐5%
100,000 Marlborough
30%
20%
50,000
10%
Nelson 18% ‐23%
Canterbury 22% 7%
‐ Otago 20% ‐0.4% 0%
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
PAGE 46 * Wairarapa/ Wellington; Source: New Zealand Wine Growers Survey; Coriolis analysis
WINE – NZ WINE EXPORTS BY VARIETY
Close to 90% of the growth in New Zealand wine exports comes from Sauvignon Blanc
10 Year Last Year
CAGR Absolute CAGR Absolute
NZ Wine exports by grape variety 141 TOTAL 23% +123m 25% +28
(millions of litres; 2000‐2010)
113
88
116 Sauv Blanc 30% +108m 27% +24m

76
92
59
51 67
57
43
31
27 36
23
18 20
20 8 Pinot Noir 39% +8m 33% +2m
17 6 6
10 12 6 Chardonnay 5% +2m 9% +0.4m
8 3 4 5 5
2 4 6 Pinot Gris 60% +3m 36% +0.7m
0 1 1 1 5 4 1 1 2 3 Merlot 24% +2m 36% +0.7m
3
0 3 3 3 4 0
1 0
1 2 2 2 3
2 0
1 0
1 0
2 0
2 3 2 2 2 2 2 Sparkling ‐1% ‐0.1m ‐12% ‐0.2m
5 5 4 4 4 4 5 5 5 5 5 Other 1% +0.3m 5% +0.2m
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PAGE 47 Source: New Zealand Wine; Coriolis analysis
WINE – NZ WINE EXPORTS BY REGION
New Zealand wine exports have been showing strong value growth across all regions; Australia, the UK and the
USA are our top markets 10 Year Last Year
NZ Wine exports by region $774 TOTAL 24% +$684m 23% +$50
(US$m; 2000‐2010)
$29 E Asia 26% +$26m 28% +$6m
$14 SE Asia 28% +$13m 42% +$4m
$8 Other 42% +$7m 46% +$2m
Top 5 countries
(2010)
China $644 $637
$20 $16 $22
Other $10
$6
Canada $10
$5 $240 Australia/ 32% +$225m 15% +$31m
$92
$45 Australia $560 Pacific Islands
$236 $11
$7
$5
$224 $210
USA
$168 $159
$396
UK $8
$214 $5
$3 $213 N.America 27% +$193m 26% +$43m
$332
TOTAL = $774 $7
$4
$2 $102
$151 $163 $170
$76
$245
$6
$3
$1
$54 $122
$103
$158
$127 $4
$2
$1 $69
$29 $271 Europe 18% +$220m 23% +$50m
$97 $3
$1
$0
$90 $24 $226 $224 $221
$3
$1
$0 $45
$3
$1
$0 $14 $32
$15 $140 $154
$20 $23
$112
$66 $77
$51 $56
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
WINE – AUSTRALIA IMPORTS BY COUNTRY
The Australian wine market is New Zealand’s biggest success story: Australia is our largest export market, our
largest market share and our strongest growth vs. competitors 10 Year Last Year
Australian Wine imports by country $449
(US$m; 2000‐2010) $439 TOTAL 21% +$375m 20% +$74m
$365
$325 $222
$237 NZ 32% +$223m 15% +$32m
$206
$155
$223
$166 $98
$151
$133
$73 $143 France 18% +$115m 40% +$41m
$114 $102
$96 $51
$74 $29 $89
$64
$53 $22 $60
$14 $52 $37
$13 $43 $31 $32 $30 Italy 9% +$17m ‐6% ‐$2m
$28 $29 $7
$21 $21 $5 $8 Spain 12% +$5m 29% +$2m
$13 $16 $20 $6
$13 $12 $12 $2 $3 $3 $21 $31 $21
$2 $1 $2
$9 $2
$9 $11 $10 $11 $19 Other 13% +$15m 7% +$1m
$6 $5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
WINE – AUSTRALIA IMPORTS BY COUNTRY
NZ is taking market share from France and Italy in the Australian wine market
10 Year Last Year
Australian Wine imports by country
(US$m; 2000‐2010) TOTAL 21% +$375m 20% +$74m
$14
$13
$22 $29
$51
$73 $98
$155 $222
$237 NZ 32% +$223m 15% +$32m
$206
$28 $21
$29
$43
$52
$60
$89 $114 $151
$102 $143 France 18% +$115m 40% +$41m
$13 $12 $12

$13
$16
$2 $20 $31 $37
$2 $1 $21 $32 Italy 9% +$17m ‐6% ‐$2m
$2 $2 $30
$3 $5 $7
$9 $3 $6 $8 Spain 12% +$5m 29% +$2m
$6 $5 $9 $11 $31
$10 $11 $21 $19 $21 Other 13% +$15m 7% +$1m
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
WINE – UK IMPORTS BY COUNTRY
The UK is NZ’s second largest market, NZ is the number 6 country, but a fast growing player
10 Year Last Year
UK Wine imports by country
$5,141 $5,206
(US$m; 2000‐2010)
$4,518 TOTAL 6% +$1,973m 6% +$256m

$4,274 $4,256 $4,239 $4,262
$1,916 $2,000
$3,561 $1,574 France 6% +$661m 9% +$256m

$1,374 $1,424 $1,448
$1,530
$3,012
$1,210 $460 $528
$2,639
$2,545 $416
$455 $648 Italy 9% +$386m 7% +$42m
$995 $402 $606
$972 $836
$888 $319
$913 $874 $561 Australia 3% +$140m ‐5% ‐$31m
$255 $871 $827 $592
$658 $358
$249 $350 $352
$262 Spain 6% +$159m 9% +$29m
$622 $308 $323
$299 $288 $304 $310
$496 $270 $206 $306 Chile 9% +$180m 1% +$2m
$421 $197 $304
$239 $164 $116 $214 $210 $206
$209 $86 $143 $147 $188 $235 NZ 18% +$189m 25% +$47m
$194 $142 $348 $248 $236
$126 $140 $63 $284 $239 $235 $164 $217 USA 3% +$51m 32% +$53m
$46 $52 $227 $223 $242
$166 $203 $232 $255 $231 $193 $227 $211 S Africa 7% +$100m ‐7% ‐$16m
$111 $133 $178
$378 $397 $403 $458 $489 $409 $414 Other 3% +$107m 1% +$5m
$307 $269 $291 $338
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
WINE – UK IMPORTS VALUE BY COUNTRY
NZ has the second highest price for its wine in the UK market
10 Year Last Year
UK Wine imports by $/l by country
(US$/litre; 2000‐2010) TOTAL 3% +$0.88 ‐3% ‐$0.11
$10.0
$9.0
Growth in “bulk wine” sales to
the UK, reducing dollar per
litre value
$8.0
France 8% +$4.20 ‐15% ‐$1.32
$7.0
$6.0
$5.0
NZ 1% $0.34 ‐2% +$0.09
$4.0
Other 7% +$1.66 3% +$0.10
Spain 4% +$0.99 ‐10% ‐$0.35
Italy 5% +$1.06 ‐9% ‐$0.39
$3.0
Chile ‐1% +$0.13 ‐7% ‐$0.20
Australia ‐3% ‐$0.66 ‐6% ‐$0.14
$2.0 S Africa ‐1% +$0.11 10% +$0.18
USA ‐1% ‐$0.29 15% +$0.24
$1.0
$‐
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
WINE – US IMPORTS BY COUNTRY
NZ is a small player in the US wine market, but is the fastest growing over the long and short term
10 Year Last Year
US Wine imports by country
(US$m; 2000‐2010)
$4,856 $4,841
$4,462 TOTAL 7% +$2,123m 6% +$272m

$4,370
$4,190
$1,336 $1,360
$3,945
$1,217 $1,323 Italy 8% +$719m 7% +$86m

$3,578
$3,409 $1,238
$1,117
$1,000
$2,802 $960
$1,515 $1,494
$1,047 France 1% +$67m 3% +$30m
$2,339 $2,355 $1,377 $1,017
$803
$1,146
$604 $653 $1,087
$1,172
$649 Australia 8% +$355m ‐5% ‐$37m
$844 $745 $686
$971
$815
$979 $861 $814 $300 Chile 7% +$153m 1% +$2m
$775 $243 $298
$226 $290 Argentina 23% +$254m 25% $58m
$663 $197
$184 $143 $232
$490 $181 $101
$365 $75 $286 $296
$282 Spain 10% +$173m 10% +$25m
$294 $165 $257
$151 $52 $223 $251
$150 $149 $42 $194 $152 $152 $206 NZ 27% +$187m 30% +$47m
$147 $37 $166 $101 $110 $159
$36 $39 $139 $65 $128 $152 $155 $147 Germany 12% +$101m 16% +$20m
$109 $116 $33 $48 $86 $106 $127
$19
$46 $22
$46 $53 $75
$105 $103 $126 $132 $153 $182 $187 $201 $198 $177 $218 Other 8% +$113m 23% +$41m
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
WINE – SKEWED TO ANGLO‐SAXON
NZ wine exports are currently skewed towards the Anglo‐Saxon countries; the Northern European market stands
out as the next logical market to target as it accounts for 1/3 of global wine import value
Comparison of global wine consumption share vs. global wine import value share with New Zealand wine import value
(%; 2008/2009)
2%
5% 2% 1%
1% 0%
Other 14% 4% 0%1%
4%
4%
Other Asia 1% 0% 1%
4%
Japan 6%
China 6%
Other Europe 7% 3% 31%
France/Italy 32%
32%
/Spain/Portugal
27% 89%
Russia 4%
19%
Northern Europe 15%
UK/Ireland 5%
32%
22%
20%
USA/Canada 13%
Australia 2% 2%
% of global wine % of global wine import % of New Zealand export
consumption value value
PAGE 54 Note: NZ uses receiving country reported value not NZ export value; Source: UN Comtrade; UN DESA; Wine Institute (CA); Coriolis analysis
SUMMARY
While there are a range of opportunities in Northern Europe, research to date suggests an initial focus on the
Netherlands, Denmark & Sweden
Key metrics: Northern European wine markets & New Zealand
(various; 2009)
Pop GDP Grape Wine cons Total import Import value Import $/l New NZ imp NZ imp $ as NZ imp
(m; 09) /capita area /capita value CIF per capita (US$; 09) World % of $ share a % of AU $/cap CIF
(US$; 09) (ha; 09) (l; 09) (US$m; 09) (US$/cap; 09) import (% of $; 09) imp $ (US$; 09)
value (% of $; 09)
(%; 09)
U.K. 62.0 $35,049 700 19.8 $3,776m $61 $3.33 TBD 5.0% 32% $3.03
Ireland 4.5 $50,948 ‐ 14.0 $272m $61 $4.31 46% 4.6% 30% $2.84
Netherlands 16.6 $47,707 50 21.7 $1,114m $67 $4.18 24% 1.0% 17% $0.64
Iceland 0.3 $38,166 ‐ 17.7 $19m $59 $3.30 49% 1.0% 6% $0.60
Sweden 9.4 $43,356 ‐ 20.3 $636m $68 $3.26 32% 0.8% 13% $0.51
Denmark 5.5 $55,881 ‐ 28.1 $638m $115 $3.35 31% 0.8% 12% $0.34
Finland 5.4 $44,276 ‐ 11.7 $222m $41 $3.37 44% 0.6% 7% $0.24
Norway 4.9 $78,029 ‐ 15.3 $333m $68 $4.38 15% 0.2% 4% $0.14
Switzerland 7.8 $64,277 14,820 36.2 $1,016m $131 $5.33 8% 0.1% 6% $0.13
Belgium 10.8 $43,271 50 25.3 $1,256m $116 $4.10 7% 0.1% 7% $0.11
Germany 81.8 $40,934 99,800 24.1 $2,774m $34 $1.96 13% 0.2% 7% $0.06
Austria 8.4 $45,971 45,098 30.3 $221m $26 $3.62 8% 0.1% 3% $0.02
Russia 141.9 $8,672 42,100 7.5 $639m $4 $1.41 15% 0.2% 27% $0.01
Luxembourg1 0.5 $104,437 1,400 52.7 $123m $245 $5.33 0.3%1 0.0% N/A N/A
Poland 38.2 $11,268 1 2.3 $219m $6 $2.42 TBD 0.0% 7% $0.01
PAGE 55 1. Inter‐EU data issues; needs more work; Source: UN DESA; UN FAOStat; UN Comtrade; World Bank; CIA World Fact Book; Wine Institute (CA); Coriolis analysis
MARKET ATTRACTIVENESS MATRIX
In terms of market attractiveness, five Northern Europe markets stand out: Switzerland, Denmark, Belgium,
Sweden and the Netherland
Market attractiveness matrix: Northern European wine markets and New Zealand
(2009)
$140 Big wine drinkers who spend a

lot per capita on imports
$130
Switzerland
$120
Denmark
$110 Belgium
$100
How to read: the Danes
$90 drink a lot of wine and
spend a lot per person on
Do they spend lots $80 imported wine but could
per person on spend more on NZ wine
imported wine? $70
Norway Sweden Netherlands
Wine import value $60 Ireland
Iceland
per capita
(US$; 09) $50
$40 Finland United Kingdom

Germany
$30
Austria
$20
$10 Size of bubble = expenditure on NZ wine per capita (US$; 09)
Poland Russia
$0
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38
Do they drink lots of wine?
Total wine consumption per capita
(l/capita; 09)
PAGE 56 Source: UN Comtrade; UN DESA; Wine Institute (CA); Coriolis analysis
MARKET POTENTIAL MATRIX
In terms of market potential, three Northern European markets stand out: Netherlands, Sweden and Denmark
Market potential matrix: Northern Europe markets and the opportunity for New Zealand wine
(2009)
$400
U.K.
Germany
$300 High potential markets for further
NZ export growth
Netherlands
How to read: Sweden is a relatively
How big is the big market that likes New World
wines but could spend more on NZ
market for New wine
$200 Sweden
World wines?
New World wine
Denmark
import value
(US$m; 09)
Ireland
$100 Finland
Russia
Belgium
Switzerland
Norway
Size of bubble = expenditure on NZ wine per capita (US$; 09)
Austria
Iceland
$0
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Are they favourable to New World style wines?
New World wine as a % of total wine import value
(% of US$; 09)
PAGE 57 Source: UN Comtrade; UN DESA; Coriolis analysis
NZ WINE IMPORT VALUE GROWTH
The markets that stand out for potential – Netherlands, Denmark and Sweden – are also the markets where New
Zealand has achieved growth to date
10 year
New Zealand wine import value (CIF) by select Northern European country 10 year Absolute
(US$m; 1999‐2009) CAGR Growth
(99‐09) (99‐09)
$31.4 14% +$23m
$30 $29.3
$28.0
Netherlands 17% +$8m

$25
$19.9
$20 $19.2
Denmark 17% +$4m
$15
$12.3 Sweden 15% +$4m
$10 $8.8 $8.6 $8.6

$7.7 $8.1
Germany 8% +$3m
$5 Finland 36% +$1m

Belgium 5% +$1m
Russia 50% +$1m
Switzerland 3% +$0m
Norway 27% +$1m
$‐ Other 4 countries 7% +$0m
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
PAGE 58 Note: data is as reported by receiving country; Source: UN Comtrade; UN DESA; Coriolis analysis
WINE – THEMES
While sales growth is increasing, wineries are suffering from declining value and global oversupply
Identified firm level activity or investment themes – difficult conditions PRELIMINARY

(2010) ‐ In progress ‐
Declining value
Value Average value of bottled wine exports declining ‐ Bottled wine value similar to those current in early 2006
Growing Debt Many growers and smaller wineries building up ‐ Boutique wineries suffered an average loss of nearly 32 per cent in 2010, or five bottles of wine for every case

debt levels ‐ Fall in vineyard values
‐ Grape prices falling (lowest price per tonne for a decade)
‐ “Profitability in the wine sector is under siege on all fronts.” NZ Wine Annual report, 2011
Global Oversupply
Controlling supply To prevent falling prices it is necessary to keep ‐ Australia production an example of oversupply resulting in collapsed pricing

production and market demand in alignment ‐ Emphasise and focus on quality
‐ Niche markets
‐ Move away from flat domestic market
Bulk sales – export Reduces average price ‐ Bulk wine now accounts for 27% of total export volume

‐ Exported and used in overseas brands and supermarket private label e.g. Tesco own brand sales #1
Bulk sales ‐ import Price pressure ‐ Bulk cheap imports increases in‐market price pressure for local wineries
WINE – THEMES
Significant cost savings are being made in the sector with significant overseas investment
Identified firm level activity or investment themes – cost savings PRELIMINARY

Cost savings
Industry Consolidation Fewer larger firms, gaining economies of scale ‐ Pernod Ricard ‐ owns 100% Montana 100 % Brancott Estate, Camshorm, Penfolds Wines NZ, Tylers Stream Wine
Company
‐ Villa Maria Estate: Whale Bay Wine, Half Bay Wine, Aotea Wines, Atlas Wine, Breakaway Bay Wines, Caroline Bay
Wines, Carter Rock Wine, Esk Valley Estate, First Barrel Wine, Glenvale Estate, House of Wine, Kapua Springs,
Moneo Vintners, Riverstone, Silverlake, Southern Cross Wines, Te Whetu, Terra Vitae , Thornbury, Vidal Estate.
‐ The New Zealand Wine Company: Grove Mill Wine Company Limited, Sanctuary Wine Company Limited, Bedford
Road Investments Limited
‐ Delegat’s Marlborough‐Gold Wines, Oyster Bay Wines (USA) Ltd
Automation Research into pruning automation to reduce ‐ Wine Industry funding research into automatic pruning

labour costs ‐ Mechanical thinning for yield management
‐ Lion new facility has increased automation
Processing joint Local joint venture in contract winery, cost ‐ Rapaura Vintners Ltd, biggest NZ contract winery (makes Marlborough wines for Babich Wines, Vavasour Wines and

ventures sharing and maximising capacity Foster's own Matua Valley Wines label)
‐ Was third held by Fosters, Babich and Goldwater Shares; now its 50/50 between Babich and TWE (Foster’s Group/
Treasury Wine Estate/Matua)
Joint marketing Shared overseas marketing reduces cost ‐ The Family of Twelve (international marketing)

‐ New Zealand Winegrowers USA (21 Companies in Super Premium category)
Foreign Investment
Searching for new European and Australian firms are looking for ‐ Sauvignon Blanc is rising in popularity and is well developed in NZ

flavours popular wines such as Sauvignon Blanc to ‐ Traditional heavier wines from Europe/Australia are declining in demand
extend portfolio ‐ Investment in new varieties (Pinot Gris, Syrah, Viognier, Gewurztraminer, Riesling)
‐ Foreign companies such as LMVH, Pernod Ricard, making significant investments in NZ vineyards
Growth of existing Companies with significant investments in NZ ‐ Matua increasing vineyards and production

investments are expanding production and exports
New entrants Companies are newly investing in NZ vineyards ‐ Large multinationals, investment firms
for export
WINE – THEMES
Wine companies are looking to grow the market
Identified firm level activity or investment themes – growth PRELIMINARY

Growth strategies
Pushing sustainability Leveraging NZ’s clean green image ‐ Membership of Sustainable Winegrowing NZ represents 90% of wine production

‐ Growth of organic wines e.g. goal to increase organic wineries to 20%; OWNZ has 140 members; currently 4.5% of
wine area e.g. Millton Winery
‐ Vineyards are beginning to present data on carbon footprint
Development of new While traditional markets are still of primary ‐ Japan/Asia/China increasing wine consumption and growth of income

export markets importance, other countries are being targeted ‐ Shipments to China increased 180% to $17m (now NZ’s 6th largest export destination)
‐ The highest average prices are achieved in Asia now, and total sales have reached over $60 million, compared with
just $10 million only five years ago.
Higher value‐added Sparkling wine, method traditionalle ‐ Launched Oyster Bay Sparkling Cuvée Brut and Oyster Bay Sparkling Cuvée Rosé ( Delegats)

products ‐ NZ wines in the “Super premium” categories
‐ Mount Riley, Allan Scott, Lindauer starting to offer sparkling Sauvignon Blanc
New wines Growth of new wine varieties increasing range ‐ Growth in Pinto Gris, Reisling, Viogner (light, fresh wines)
Branding NZ wine Generic Marketing raising awareness of all NZ ‐ Generic NZ wine marketing; Wine NZ marketing brand NZ

wines and brands ‐ Creating regional wine identities for instance Otago Pinot Noir wines are spicy/complex
TABLE OF CONTENTS
Section Page
Contents 4
Glossary of terms 5
F&B IP Overview 7
Sector overview 16
Wine 43
Appendices 62
BEVERAGES – INDUSTRY SCIENTIFIC RESEARCH
A number of research institutes are researching in the wine sector
Key scientific research organisations involved in beverage industry research in New Zealand
(2010)
Total Total
Income Staff Focus & activities
N/A 24 ‐ Aroma studies‐ geological etc. effects on Sauvignon Blanc aroma www.wineresearch.org.nz

‐ $12m FRST funding of sauvignon blanc (with Plant and Food), Auckland and Lincoln
Universities)
‐ Conjunction with Nelson Marlborough Institute of Technology
N/A N/A ‐ Chemistry research into high acid, co‐ferments, yeasts, polyphenol analyses http://web.auckland.ac.nz/uoa/scie

‐ Pinot Noir research into aroma colour, polyphenols, soil profiles (Funding from nce/about/departments/chemistry/
liquorland and about/subjects/winescience/researc
Wine Research Institute ‐ Sauvignon blanc programme researching aroma compounds (FRST funding $1.6m/yr) h/furtherwineresearch/furtherwiner
(Dept. of Chemistry – (Wine esearch.cfm
Science Programme)
N/A N/A ‐ Pest and Disease Management www.plantandfood.co.nz/page/hom

(2010) ‐ Viticulture production systems e/landing‐pages/wine‐industry/
‐ Biological controls
‐ Applied sensors
‐ Viticulture and Wine research (18 staff at Marlborough Research Centre)
‐ Sensory Science
‐ Developing fining agents from
N/A 8 core ‐ Focus on Pinot Noir www.lincoln.ac.nz/Research‐at‐

19 assoc ‐ Climate and soil effects on vine growth and grape composition Lincoln/Research‐centres/Centre‐
‐ Enhancing nature’s ecosystem services in vineyards for‐Viticulture‐and‐Oenology/
‐ Enhancing innovation and adoption of new technologies in the grape wine sector
‐ Sensory evaluation and psychological aspects of flavour perception
$56.7m 116 academic ‐ Viticulture and Wine courses http://www.nmit.ac.nz/courses/area

+110 general ‐ Situated within the Marlborough Wine Research Centre ofstudy/mid/12245/a/25/viticulture‐
wine.aspx
N/A N/A ‐ Sustainable farming fund http://www.maf.govt.nz

‐ others
PAGE 63 Source: Company websites; annual reports; Coriolis
BEVERAGE – INDUSTRY ORGANISATIONS
There are four key industry organisations representing the New Zealand beverage industry
Key industry organisations involved in beverage industry research in New Zealand
(2010)
# of website
members Details
New Zealand Wine 1,000 growers ‐ Funded through: a levy on the sale of grapes collected by the Grape www.nzwine.com
700 winery Growers Council under the Commodity Levies Act 1991;
‐ a levy on the sale of wine collected by the Wine Institute under the Wine
Act 2003;
‐ user pays activities and sponsorships
12 ‐ Represent views of producers and marketers of premium spirits and www.distillers.co.nz
liqueurs
77 ‐ Represent views of producers and marketers of juices and non‐alcoholic www.nzjba.org.nz

beverages
46+ ‐ Represents all of the breweries in New Zealand brewersguild.org.nz
PAGE 64 Source: Company websites; annual reports; Coriolis

IFAB 2011 Beverages

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IFAB 2011 Beverages

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Food & Beverage Information Project 2011

We address all the problems that are involved in growth: strategy,

We bring to our clients specialised industry and functional expertise.

A hallmark of our work is rigorous, fact‐based analysis, grounded in

However, we deliver results, not reports. To that end, we work side by

The Coriolis name

PO Box 90‐509, Victoria Street West, Auckland 1142, New Zealand

It creates a common set of facts and figures on the current

A$/AUD Australian dollar N.H Northern Hemisphere

Investors Firms Government

Overview Investor’s Guide Industry Snapshot

Sectors Dairy Meat Seafood Produce Processed Beverages Nutraceuticals

Markets Global Markets High Potential

Investors Firms Government

Overview Investor’s Guide Industry Snapshot

Sectors Dairy Meat Seafood Produce Processed Beverages Nutraceuticals

Markets Global Markets High Potential

Turnover (NZ$) $4,240m 5% 7% $271m East Asia 5% $51 12% 20% $9m

Total 100% $971 18% 23% $182m

Key products US$m CAGR CAGR ABS Key firms Employ Turnover Key competing

Situation creating opportunity Resulting potential strategic Opportunity Challenges

PAGE 16 GFC – Global Financial Crisis; Source: Interviews; Coriolis

Apple/pear Soft drink Distributor Liquor

Other fruit Liquor/tobacco1 Hospitality/

Spirit Seafreight Beverage/liquor Supermarkets

Grape Wine making Hospitality/

27 27 Spirits 8% 4% ‐ Soft Drink, Cordial and Syrup Mnfg. (C121‐100)

520 510 Spirits 8% ‐2%

1,470 1,440 1,490 1,540 Beer 0% 3%

5,640 5,690 5,400 100+

PAGE 26 Source: various companies annual financial statements (as filed with NZ Companies Office or available company website); Coriolis analysis

Turnover of select large beverage industry firms Last 5 yr Comments

PAGE 28 Source: various companies annual financial statements (as filed with NZ Companies Office or available company website); Coriolis analysis

$492.9m 1,100 Australia; listed 1939 www.coke.co.nz; ccamatil.com; www.cokecareers.co.nz

$380.4m 900 Japan; private 1965 www.frucor.co.nz; www.vrepublic.co.nz; www.suntory.com

$45m 85 (FT) + 200 New Zealand; listed 1962 www.enzafoods.cco.nz; www.turnersandgrowers.com

$31.6m ~40% 80 (K) Japan; listed 1999 www.charliesgroup.co.nz

$17.1m 60(K) NZ; listed 1987 www.justwater.co.nz

$461.4m 500 Singapore; listed 1930 www.dbbreweries.co.nz; http://www.apb.com.sg

$414.4m 60% 300 Japan; listed 1987 www.independentliquor.co.nz; www.pep.com.au

$605m 1400 Japan; listed 1968 www.lionco.com; lion‐nathan.com.au; www.kirin.com;

$10.8m 65% TBD Bermuda; private 2000 www.42below.com; www.bacardi.com

$1.9m 90% 25 (NZ) NZ; private 2007 www.vnccocktails.com

$1‐5m 10‐50 29% Scott Family (of Allan 2003 www.moabeer.com

$337.2m 750 France; listed [1797] www.pernod‐ricard‐nz.com; www.pernod‐ricard.com

$605m 1400 Japan; listed 1968 www.lionco.com; lion‐nathan.com.au; www.kirin.com;

$219.7m 88% 50(K) New Zealand; publicly listed 1947 www.delegatsgroup.co.nz; www.delegatwines.com

$214.6m 270 (K) USA; listed 1943 www.cbrands.com

$141.3m 250 (K) New Zealand; private 1961 www.villamaria.co.nz

$105.8m 70 Australia; listed 2011 www.fostersgroup.com; www.treasurywineestates.com

$52.7m 55 Japan; listed 1994 www.witherhills.co.nz; lion‐nathan.com.au; www.kirin.com;

$50m 34 New Zealand; private 2002 www.yealands.com

Giesen Wines $40‐50m 95% 30 New Zealand; private 1981 www.giesen.co.nz; Marlborough winery

$30‐40m 66% 17 New Zealand; private 1978/ www.saintclair.co.nz

$39.4m 30 New Zealand; public 2001 www.mudhouse.co.nz

$37.3m 50 France; listed 1985 www.cloudybay.co.nz

$36.0m 50% 36 New Zealand; private 1985 www.sacredhill.com

$30.8m 120 Australia; private 1998 www.craggyrange.com

$20‐30m 70% 20 New Zealand; private 1992 www.mountriley.co.nz

$22.0m 70% 15 USA; private 1989 www.vavasour.com; www.cliffordbay.co.nz

Allan Scott $15‐25m 25 New Zealand; private 1993 www.allanscott.com

$17.1m 60 New Zealand; private 1999 www.amisfield.co.nz

$14.3m 50 New Zealand; private 1989 Also a restaurant; Hawke’s Bay vineyards

$14.3m 50 New Zealand; private 1937 www.soljans.co.nz