James Dale is a man with a mission: Create controversy. And he's got a pretty good track record.
The brawny Kiwi is the mind behind the macho marketing in the United States of 42 Below, an ultra-premium vodka from his native New Zealand that Bacardi offered to buy Thursday for $91 million cash.
42 Below has become the tipple of the über-trendy, thanks to push-theenvelope ads and stunts that raise hackles -- and get oh-so-valuable press in the process.
Take the video on the company's website, which struck a New York bar owner as anti-gay and sparked a boycott of 42 Below. Dale's obscenity-laden response landed him the jackpot of publicity -- a blurb on Page Six of The New York Post.
Or the raucous, 42-Below-fueled party on a Broadway storefront display window that got so lewd the cops -- and the TV cameras -- were out on the sidewalk.
And there was the poster that provoked protest from the Colombian Consulate: ``Purer than the driven snow, even if you drove it yourself from Colombia.''
That one, with its slang reference to cocaine, sparked an uncharacteristic apology from Dale.
''I thought their complaint was fair enough,'' says the 35-year-old, 42 Below's chief marketing and importing bloke for the United States for the past three years.
But Dale, who lives in Miami Beach and flits up to New York for a few days every week, remains uncontrite about the rest of it. After all, it's working.
Bacardi, the world's largest private spirits company, has tendered an offer to buy 42 Below's parent company for 77 cents a share, a 35 percent premium. The offer is backed by the company's major shareholders. Bacardi plans to invest heavily in the vodka to expand its distribution, particularly in the Asia-Pacific region.
''That quirky irreverence from New Zealand is one thing that has made it stand out,'' said Bacardi spokeswoman Pat Neal. ``They've been quite successful in a relatively short period of time.''
Although 42 Below has yet to turn a profit, its growth has been exuberant. Last fiscal year, which ended in March, revenue zoomed to about $11.5 million -- up 39 percent from 2005. Losses narrowed 37 percent to about $2.1 million. And case sales were up 58 percent over 2005, according to the company's annual report.
Named for New Zealand's location 42 degrees below the equator, the vodka was concocted seven years ago in the Wellington garage of company founder Geoff Ross. Since then, industry awards and eccentric antics with a healthy dose of political incorrectness -- such as a ''Win a Russian Bride'' contest -- have helped fashion it into a hipper-than-thou vodka in 25 countries.
42 Below aims at the ''tastemaker'' market -- the young and trendy. But in the ultra-competitive U.S. scene, Dale's had to ramp it up a couple notches, especially since he doesn't have a big advertising budget. He dubs his approach ''spider-monkey marketing'' -- nimble, cheeky moves -- as opposed to guerrilla (gorilla) marketing.
''I saw I wasn't going to get any cut-through without organic marketing,'' says Dale, who heads his own company, Panache International. ``I don't believe traditional advertising is that effective any more. Only big businesses can afford it.''
One of his gimmicks: a ''Snow Patrol,'' in which a 42 Below-jacketed crew shoveled snow off the stoops of New York's top night clubs and gave shots of vodka to shivering bouncers.
Cops were called and Dale got busted for drinking in the street. He was disappointed when charges were later dropped. ''I was inviting the media to court,'' he says.
He started ''Gotcha Mate'' viral videos, a sort of salacious Candid Camera. One involved a woman recriminating a surprised stranger in a bar for leaving her. ''You told me you loved me,'' she says, before yanking up her top.
The stunt Dale ranks as his most successful was the run-in with the New York bar owner who found a video so offensive he refused to carry the vodka.
Dale was delighted. He let loose in a profanity-strewn e-mail addressed to ''f---face . . . if you are suggesting that we are anti-gay, then speak to my f------ hand you fool,'' it started.
Dale soon heard from the New York City Department of Consumer Affairs, to which he adopted a more apologetic tone.
''We have always consulted, supported and had fun with all communities on a global scale and have not and will never single out a community in an effort to offend,'' he wrote.
The spat made the New York Post's famed gossip column. The next day, the phone rang off the hook. ''Everyone started placing orders,'' Dale says.
Dale continued his vitriolic tone in a website ''I'm James Dale, so f--- you,'' a mock advice column. ``I decided to make the brand about me, as a person, without being egotistical about it.''
Public relations expert Richard Weiner says that faced with a cluttered vodka shelf, Dale's on the right track.
''I'm amenable to controversial promotion. It's very, very clever,'' says the author of The Skinny about Best Boys and Other Media Lingo. ``And public relations is a very cost-effective tool. Other vodkas spent enormous amounts of money on ads.''
Dale, who possesses a low-key manner but is clearly no pushover, says the rude-boy style is all in jest. But it's also part of his strategy to pitch 42 Below as a ''discovery brand.'' That's to say, convince consumers they're stumbling on to the edgiest, newest thing before everyone else.
Nevertheless, controversy is a risky marketing tool because it can unleash a backlash against the brand.
''You do walk a very careful line there,'' said Steve Hall, publisher of adrants.com, an advertising critique website. ``But 42 Below vodka has just straddled that line perfectly.''
NO FORMAL TRAINING
Dale has no formal marketing training. Born in India to British parents, he grew up since the age of 2 in Auckland. He started working at 15 as a bar back and since then has served and sold booze. ''I don't read a lot,'' he admits. ``I get told a lot.''
His latest marketing project is Clubland, a documentary series for Internet viewing that takes a behind-the-scenes look at South Beach's competitive nightclub panorama.
Dale, who's partially financing the work as an executive producer, works 42 Below into camera shots, appears wearing a 42 Below T-shirt and drops the name 42 Below into voice-over narration. It's all part of his gospel of stealth branding in pursuit of hipness.
''You can't force cool,'' he says.
2. Priciest Champagne Set to Sparkle
November 7, 2006
French drinks group Pernod Ricard has announced plans to launch the world's most expensive bottle of champagne.
To be sold under the Perrier Jouet Belle Epoque name, it will retail in wine shops for 1,000 euros ($1,276; £670) for a standard-sized bottle.
Deep-pocketed wine lovers can already spend more than £500 a bottle on such champagnes as Louis Roederer Crystal Rose and Krug Clos de Mesnil.
It is not yet known when or where Pernod will launch the new champagne.
"We won't do many cases and won't be offering it in France," said Pernod chairman Patrick Ricard.
Pernod, which is also launching a new brandy costing £130 a bottle, is bringing out the new super-expensive products as a means to take its brands upmarket.
"It is a fact that consumers all over the world want to identify with brands that represent themselves and this has to be brands with quality which are exclusive," said managing director Pierre Pringuet.
"It's the same for fashion, cars... and spirits."
Existing Perrier Jouet Belle Epoque wines are well-known for being some of the most competitively priced so-called prestige champagnes.
They are also renowned for having flowers painted onto the bottles.
It is something that many of us have long suspected - hangovers really do get worse as you get older. Scientists have shown that teenagers have a greater resistance to alcohol.
Not only are they less clumsy and sleepy on the night itself, they do not suffer as much the next day.
It is thought that the adolescent brain, which develops rapidly during the teenage years, copes better with the intoxicating effects of alcohol.
It is not all good news, however, as youngsters may be lulled into a false sense of security, leading them to do untold damage to their health.
Study author Professor Elena Varlinskaya said: 'This ability of adolescents to rapidly counteract some unpleasant alcohol effects may allow them to have more drinks per occasion.
'This pattern of binge drinking, being unsafe in general, might be extremely dangerous for adolescents, given that their brain is especially vulnerable to alcohol damage.'
The U.S. psychologist studied the effects of alcohol on rats with the equivalent age to human teenagers and adults.
The rats - chosen because their brain development mimics that of humans - were dosed with alcohol and their movements monitored.
The dose given was equivalent, weight for weight, to a man or woman drinking three or four alcoholic drinks in quick succession.
Five minutes after being injected with alcohol, both age groups were more inhibited.
They were less playful, less active and groomed themselves and their fellow creatures less. Thirty minutes later, there was a noticeable difference between the groups.
While the adult rats were still sluggish, the younger animals were almost as frisky as rats that had not been given any alcohol at all, the journal Alcoholism: Clinical And Experimental Research reports.
Other studies have shown that teenage rats suffer less from clumsiness and sleepiness after being given alcohol and rarely suffer the symptoms of a hangover. Professor Varlinskaya, of Binghamton University in New York, said: 'We found greater tolerance in adolescent than adult animals at alcohol levels comparable to binge drinking.
'The findings support the notion that the adolescent brain functions quite differently than the adult brain, particularly in response to alcohol.'
But this tolerance does have its drawbacks. It is thought the hangover is nature's way of ensuring we do not damage our bodies by drinking to excess, leaving those who are hangover-free at greater danger of harming their health.
Prof Varlinskaya said: 'Unpleasant physical symptoms associated with alcohol intoxication and hangover, which make adults stop drinking, are not experienced to the same degree by adolescents.
'A lack of overt signs of intoxication may mask the more potentially harmful effects of alcohol on learning and memory.'
4. Pernod Pleads the Fifth in U.S. Havana Club Dispute
November 7, 2006
PARIS, Nov 7 (Reuters) - Pernod Ricard (PERP.PA: Quote, Profile, Research), the world's second largest wines and spirits group, said on Tuesday United States constitutional rights may have been infringed in its dispute over U.S. rights to the Havana Club Cuban rum brand.
A United States government agency denied in July an application for a license to renew the brand's registration in the U.S., opening the way for competitor Bacardi Limited to launch a rival "Havana Club" made in Puerto Rico.
"We will make use of the fifth amendment (of the U.S. constitution)," Pernod Ricard Chairman Patrick Ricard told the company's annual shareholders meeting, saying Pernod's marketing partner had launched a legal challenge to the decision.
The fifth amendment says no person should be deprived of property without due process of law.
Pernod is already taking legal action against Bacardi through the district court of Delaware, alleging the use of the "Havana Club" trademark is misleading and should be stopped.
Pernod, through its Havana Club Holding SA joint venture with Cuban government agency Cubaexport, last year sold 2.4 million cases of Havana in 80 countries outside the U.S., 13 percent more than in its 2004/05 financial year.
Bacardi is also contesting ownership of the brand in Canada and Spain, according to Pernod's annual report.
HERE'S a row that could put most boozy brawls in the shade.
A billionaire, a couple of international drinks companies and two brands of vodka are locked in a ferocious legal battle in America - over whether a vodka is truly Russian or not.
It all began when Pernod Ricard, the French drinks giant, spent a fortune promoting Stolichnaya to the Americans as the authentic Russian vodka.
Then a rival drinks company, Russian Standard - led by billionaire Rustam Tariko - launched Imperia, with plans to invest $100m in America over the next five years.
The punches began flying with an advertising campaign for Imperia that claimed it was the only truly Russian vodka sold in America.
Better still, Imperia launched a lawsuit against Pernod, and its subsidiary Allied Domecq, suggesting that Stolichnaya isn't what it says it is - authentically Russian.
Pernod has decided to fight fire with fire and demanded that the National Advertising Division, the body that settles advertising disputes, intervene to get the Imperia advertising changed.
I'm told that Pernod has also dismissed the Russian Standard lawsuit as nothing but a stunt to "create noise" in order to boost sales in America.
The case continues.
6. Ketel One Makes Splash With Ice
Sports Business Journal
November 6, 2006; Page 6
The buzz inside the World Golf Hall of Fame following the induction of the class of 2006 last week wasn't so much on the inductees, but on the booze flowing within the Hall.
Ketel One Vodka, in the first year of a five-year deal as an official partner of the PGA Tour and supporter of the World Golf Hall of Fame induction weekend, erected its Ketel One martini ice bar inside the venue as part of the annual postinduction gala. The all-ice structure consists of anywhere from one to four ice luges and an ice garnish tray that usually takes Iceculture, a Toronto-based ice design and manufacturing company, three days to construct. The ice bar was shipped to St. Augustine, Fla., five days before the gala in a truck packed with dry ice and was stored in a refrigerated truck upon arrival.
"In many cases, the (Hall of Fame's) guests have traveled from around the globe to make it here, so we feel compelled to 'wow' them as best we can while they're here," said Jack Peters, senior vice president and COO for the World Golf Hall of Fame. "This year we knew it would be important to integrate Ketel One's product into the induction ceremony gala appropriately. When they presented the Ketel One martini ice bar concept to us and sent pictures, we knew immediately it would provide a fun and unique experience for our guests. Our instincts were correct . it has been the most talked about aspect of the induction ceremony gala."
Ketel One's deal with the PGA Tour includes being the preferred vodka of the tour's 23-course Tournament Players Club network. The PGA Tour deal is the only official relationship Ketel One has with a sports property. It does have the Ketel One Club in the United Center.
7. Boston Beer on Target
By TSC Staff
11/7/2006 4:23 PM EST
Boston Beer (SAM - commentary - Cramer's Take - Rating) beat third-quarter targets but said it expects margins to slip for the year.
The Boston-based brewer made $5.9 million, or 41 cents a share, for the quarter ended Sept. 30, up from the year-ago $4.2 million, or 29 cents a share. Revenue rose to $76 million from $73 million a year earlier.
Analysts surveyed by Thomson Financial were looking for a 33-cent profit on sales of $74 million.
Boston Beer guided to full-year earnings of $1.16 to $1.26 a share, in line with the $1.21 Wall Street estimate, but said gross margin would drop 2 percentage points from a year ago.
The company also said it continues to consider its options for expanding capacity in the light of Miller's decision to drop it as a brewery customer.
"We have revised upward our capacity needs in New England based on healthy Craft category growth, our own growth trends, and higher freight costs, and are now exploring production capacity in excess of 1.0 million barrels of Samuel Adams brand products and Twisted Tea," Boston Beer said. "After further considering our estimated capacity needs, along with more detailed site construction estimates, it now appears that construction of the facility and all equipment costs could be between $130 million and $170 million.
"In addition, the land acquisition costs, other site specific costs and other startup costs could be between $25 million and $40 million. The cost of the project will ultimately depend on the final specifications, including, but not limited to, initial capacity and capabilities, expansion potential and site specific costs. We are evaluating this potential investment in brewery ownership along with other supply strategies to determine which investments are appropriate for the Company, given the growth of the Craft beer category and known and unknown risks in supply-chain alternatives."
Shares fell $1.55 to $35.22 ahead of the report.
II. IOWA NEWS. 8. Templeton Gives Rye a New Shot
By Mike Kilen, Staff Writer – Des Moines Register
November 7, 2006
From a priest's grave, the secret of a town's whiskey flows anew after more than 70 years.
Templeton, Ia. — How we ended up in a cemetery at midday unscrewing the bolts of a long-dead priest's monument should really not be told.
But much of the story about Templeton rye whiskey was never intended to be told.
It only happened after a shot or two loosened a few tongues.
The man doing the dirty work in the cemetery comes by his mischief honestly. He's the son of a bootlegger.
Meryl Kerkhoff, 77, had already performed what may be considered a civic duty by supplying the recipe for Templeton Rye to Scott Bush.
RODNEY WHITE/REGISTER PHOTOS Bush is a sharp young businessman who knows the market value of a good, old-fashioned story and a smooth whiskey.
Inside a monument belonging to a long-dead Catholic
priest at the Sacred Heart Cemetery in Templeton, He and Kerkhoff and a few others put their heads together (along with rye, sugar and yeast) and are now cooking whiskey, legally, in this tiny
Meryl Kerkhoff hopes to uncover a clue into the
tight-lipped town’s tale of hiding bootleg whiskey hamlet in west-central Iowa, once known far and wide for its Prohibition-era bootlegging.
cooked during prohibition more than 70 years ago.
As we speak, Templeton Rye is being bottled in a spanking new, wooden-barrel-filled distillery. Last week, the first shipments began to appear in retail stores for $31.99 a bottle.
The citizens who bottle the whiskey were recruited via an advertisement in the Catholic Church bulletin.A couple of blocks from the church is the cemetery, where the bolts off the monument are easily falling into Kerkhoff's big, leathery hand.
"Ain't the first time they've been off," he said.
With those words we will see that the Templeton Rye story is not all fabrication - proof being the measure of this legendary whiskey.
Bush, 31, was busy studying at the MIT Sloan School of Management near Boston in 2002 when a entrepreneurial fire was lit, born of his heritage.
His great-grandfather cooked rye whiskey. Whenever the family gathered for holidays, a jug was produced and the stories flowed.
Thus began two years of research.
He started with George Washington, who reportedly made rye whiskey long before the Canadian whiskeys watered down the culture.
Meryl Kerchief, Scott Bush, Ken Behrens and Keith “Canadian whiskey is Folgers. Rye whiskey is Starbucks,” Bush said. “This is taking us back to the time when men were men and character
Kerkhoff, from left, sample the product at the Templeton was supreme.”
Rye Distillery. The whiskey became famous during
bootlegging days and recently returned to production. The “character” of Templeton Rye dipped into illegality when Prohibition became the law of the land in 1920.
But times were hard. There were farms to save. The economy was tough.
Many of the residents - Kerkhoff swears it was close to 90 percent - became skilled in the fine art of cooking whiskey that earned more than $5 a gallon.
"When life dealt Templeton lemons," wrote resident Lisa Irlbeck in an essay, "the people of Templeton made Templeton Rye."
They were darn good at it. So good that as many as three trucks a day filled with rye whiskey were dispatched to Des Moines, Denver and Chicago. Al Capone was said to be a satisfied customer.
It was known far and wide as "the good stuff."
Federal agents didn't think so, however, and they often descended upon the town. Locals say that various tricks were employed to elude the authorities.
Hilda Steffes remembers one used by her father, Frank Fisher. The family of nine children lived on a farm, and her dad, when he wasn't calling on her to watch for strange cars coming down the gravel road, was digging holes.
Bootlegging farmers would often dig a post hole deeper than necessary to accommodate three or four gallons of whiskey, which fostered easy extraction and became a pickup point.
The "revenuers" looked for fresh dirt, however, so Fisher placed wooden planks over the top of his hole, covered it with dirt and placed a swing set on top. Ground under a swing set is naturally disturbed and not likely to be suspicious.
Alas, old dad's luck eventually ran out. He ended up in jail for a month and quit the business, as did many others, until Prohibition was repealed in 1933.
But for years afterward, and up to today, people around Templeton made a hobby of cooking whiskey.
They just never admitted it.
The whiskey goes legit
Bush decided a colorful history was as important to good whiskey as the finish.
So he started calling around for recipes. People hung up on him.
Even after all these years, shame and silence still surrounded the whiskey-making in Templeton.
Kerkhoff remembers his first call from Bush. He said about four words and hung up.
"Folks caught wind of it, and people were all up in arms. People here thought Templeton Rye belonged to the community," said Mayor Ken Behrens.
"It was a personal issue to a lot of people."
Bush didn't give up. The Wall Lake native made an effort to know people.
Finally, he negotiated with Kerkhoff and his son, Keith, both of nearby Manning, and asked them to become partners.
Businessman Ted Bauer was added because he held the trademark, the fourth to have it over the years, although he could never use it.
"There are huge, powerful people in this business," Bush said. "It's hard to get into."
Finally, Meryl Kerkhoff supplied a recipe, and the boys started cooking.
Here's the kicker: They even talked Templeton's development group into constructing a $75,000 building for Templeton Rye to rent.
The first batch of 5,000 cases has now been aged for four years.
It starts in an uber still, a huge 300-gallon copper barrel where the clear liquid trickles through the methodical process - grain cooking, adding yeast, firing it to steaming hot and, finally, condensation.
After the single-malt liquor is aged in a single white oak barrel, a fine amber is produced.
One day last month, the group gathered and filled up some shot glasses for a toast to the quirks of history.
One of the biggest raids in Templeton came after The Des Moines Register ran a photograph of whiskey barrels tied to Christmas lights in 1931.
Five years later, a Register story described agents who smashed three stills a day, writing that "after a visit to Templeton I can say that I know of no reason why anyone would be compelled to leave here either thirsty or empty-handed, providing he has the money to make the purchase."
After all this, the boys offered a toast to the Register, and the rye swirled down their throats, rich in character, warming, even historic.
And now it is available in any fine Iowa business that sells booze.
One more story
There was still the matter of the cemetery.
Apparently, another way to beat the feds was hidden in a well-known spot in the Sacred Heart Catholic Cemetery - in a certain monument, 12 feet high and hollow.
After twisting the bolts, the plate bearing the name of a late priest came off handily. After all, said the modern rye makers, the German Catholics weren't too excited about demonizing whiskey.
Sure enough, this hollow monument could hold quite a stash. On the bottom was a glass beer bottle.
Perhaps a new generation had come to this spot, filled with nostalgia for a monument to the underground whiskey trail that saved a few farms and was known to create a hopping good barn dance or two.
By Nick Hytrek, Staff Reporter – Sioux City Journal
November 3, 2006
IA - The black-and-white sticker looks like a bar code found on any other product.
Except most bar codes don't come with a message that says "Do not remove under penalty of law."
Beginning Friday, any keg of beer bought in Woodbury County will have one of those stickers affixed to it. A new keg registration ordinance makes it a crime to return the keg with the sticker missing or damaged.
"Some kids are excited. They've had kegs stolen at a party. Now we'll be able to track it if (thieves) try to return it," said Laddy Peck, manager of Hy-Vee Wine & Spirits, 3301 Gordon Drive.
But the Woodbury County Board of Supervisors had more in mind than protecting a buyer's deposit refund when passing the ordinance in August. The reason behind the new law is to try to cut down on underage drinking that is common at keg parties.
Damaging or removing a keg sticker would be a violation punishable by a $500 fine and up to 30 days in jail.
"I've told people, if it's not on there (when the keg is returned), there is no refund coming and we have to report it," Peck said.
Supporters say the ordinance will save lives once buyers decide having a keg party isn't worth the risk of being prosecuted for procuring alcohol for minors.
"We think it can have a very positive impact in the college age," said Carolyn Goodwin, a West High School counselor and Sioux City Mayor's Youth Commission adviser.
Keg registration supporters aren't worried that underage drinkers will instead turn to hard liquor or drink beer by the case.
"That's not the kind of feedback we're getting from other states (with keg registration laws)," Goodwin said.
Nationwide, 27 states, including Nebraska, South Dakota and Minnesota, have keg registration laws.
Frustrated with unsuccessful efforts lobbying the Iowa Legislature to pass a similar law, supporters have turned their attention to individual counties while keeping the heat on state lawmakers. Woodbury County joins 17 other Iowa counties and four cities with keg registration ordinances.
"It's a statement by (local) government that this is a concern," Goodwin said. "We wish our state legislators would get on board."
At Hy-Vee, Peck pulls out a blue three-ring binder containing the keg buyer's log. The added paperwork won't be an inconvenience for liquor store employees, he said, and likely won't be much of one for customers already accustomed to the time it takes to buy a keg, pay the deposit and rent a tub and pump.
"If it slows us down a minute, that'll be about it," Peck said.
A West Des Moines business will pay a $500 fine for selling alcohol to someone under the legal age.
El Rey Burriots, 1714 Grand Ave., on Dec. 15, 2005, sold alcohol to someone younger than 21. It was the first violation for the business. The business appealed the fine in July, and the state’s Alcoholic Beverages Division found the business to have violated the liquor law.
11. Police Say Alcohol May Have Been Involved in Eyebrow Shaving Stunt
November 8, 2006
(11/08/06 - CEDAR RAPIDS, IA) - A makeover and a trim led to assault charges against a teenager. Dallas R. Esparza, 16, of Cedar Rapids, is accused of shaving off the eyebrows of Shawn Weaver while he was unconscious, police said.
Esparza also is accused of shaving off some of Weaver's hair and taking his tennis shoes, which were valued at less than $200.
Alcohol may have been involved, police said.
Esparza was charged with assault and fifth-degree theft. A hearing is scheduled for Dec. 5 in Linn County juvenile court.