CASE STUDY : 42 Below – Staying true to the spirit

The board of Bacardi – the liquor giant which bought 42 Below in late 2006 – consists of 14 members of the Bacardi family and four independent directors. Too polite to agree when the suggestion is offered that this could be nightmare, the new managing director of 42 Below, Paul Dibbayawan, does manage quiet laugh when commiserations are offered for the plight of the independent directors in the midst of these familial bonds.
An accountant by training, the former Philip Morris executive swapped cigarettes for liquor after being headhunted by Bacardi to manage its new acquisition, 42 Below and joined the iconic New Zealand brand last year. In changing direction, he would have been hard pressed to pick business afflicted with more marketing controversy than the tobacco industry, but with 42 Below he has come close.
Before joining the vodka company Dibbayawan had held variety of roles in general management, sales and marketing director positions in three continents for Philip Morris International. Taking over from 42 Below founder Geoff Ross, his task is to lead the company into its new phase as part of huge multinational.
People wondered how 42 Below would change under Bacardi stewardship but, larger board aside, Dibbayawan says “it’s business as usual”. He is still driving the edgy marketing that has characterised the brand, but he will also be doing that in way that is “socially responsible”.
The reality is that 42 Below is now part of huge, established liquor company and there are some relevant learnings from his previous career experiences that he has taken on board.
“It’s my personal style in that I’ve seen it from the tobacco side. I saw it from its heydays through to the times when it got very restrictive. What caused lot of that was the fact that the tobacco industry stuck its head in the sand and said ‘what we’re doing is absolutely right’. They were arguing fine line between legal point and what society would accept. So I would rather be working with regulators to ensure that we still have the freedom.”
For him it is “critical” to get right the four elements of social responsibility for drinking.
“We don’t want to be appealing to minors – we don’t want minors to drink. We don’t want drink driving – that’s big problem in New Zealand. We don’t want excessive binge drinking. And we don’t want people to think that if they drink the brand, they’ll immediately be sexually successful.
“These are the pillars of social responsibility that we want to work on with regulators. And Bacardi, as global organisation, is really pushing this.”
When the liquor giant bought 42 Below, it was aware of its reputation for getting very close to crossing the lines. Dibbayawan attributes success in never actually going too far to very clever marketing – based on viral campaigns. “Another important thing about the brand is that we’re not mass marketing. You’ll see some of our billboards here in New Zealand but we’re not taking that to the rest of the world.”
He specifically avoids advertising in newspapers and magazines, saying they don’t reach the target audience.
Part of Dibbayawan’s challenge is keeping abreast of the regulation in each jurisdiction. The United States, for example, is very strict. Strict to the point where he thinks regulators have lost the spirit (no pun intended) of what they are trying to achieve, instead favouring letter-of-the-law approach rather than dealing with the issues presented by Dibbayawan’s four pillars. That said, he understands the rationale for this in such litigious country. It can cause some headaches from an operational point of view though as everything has to be signed off through US lawyers.
The main risk to 42 Below’s reputation in New Zealand at the moment is the Bacardi buyout.
“We are no longer New Zealand company, we’re now owned by bunch of corporate guys,” he says.
The liquor giant managed this threat by making sure it appointed someone true to the spirit (so to speak) of 42 Below.
“They specifically wanted to get someone from the outside, someone who didn’t come from the Bacardi mould.” To stay true to the 42 Below brand, boundaries must be pushed. But to remain comfortable part of huge organisation, they must not be pushed too far and the name must not be jeopardised.
“That’s the biggest challenge – to get the Bacardi executives to understand that I’m not trying to push the rules, I’m just trying to stay true to the brand.”
He has personal reason to abhor drink driving – his wife’s brother was killed by drunk driver – but firmly believes social responsibility can have an effect on people and their actions.
“But it must be done in way which doesn’t come across as preachy.”

The future
Where is 42 Below going?
“It’s going to the world,” says Dibbayawan, who spent time before Christmas presenting the brand strategy to senior executives and gaining “their complete buy-in”.
First up is to consolidate the New Zealand base and build key markets in the Asia Pacific region.
“I was in China few weeks ago [pre-Christmas] and people there were asking for it. We haven’t even got it there yet but they’ve heard about it and want it.”
Europe and the United States are also marked for expansion – there is even talk of moving into Latin America and Africa with Dibbayawan getting calls all the time from countries wanting the product.
“Vodka as category is growing internationally at the moment – at the expense of gin and dark spirits. And in the more mature markets, people are upgrading to the premium products,” he says.
42 Below will remain New Zealand headquartered as he says the core values on which the company was established are crucial.
Decisions within Bacardi are relatively quick, as the company is not listed, but answering to the (500 or so) Bacardi family member shareholders can be challenging. In much the same way as the plus-size board.
“Whilst we are not publicly listed company, the Bacardi CEO is really setting the direction for us to be governed in the same way. We are putting lot of the systems in place as if we were.
“It just makes perfect sense. The regulations and transparency are there for reason so it is only sensible to follow that best practice.”
Dibbayawan is keen to reinforce that 42 Below hasn’t changed. It has refined its strategy for the brand and organisation and plans to tap into the Bacardi network (especially the global network).
“Sadly for my family and wife, the majority of my time has been spent overseas but I think that’s great thing for the company and for the reputation of New Zealand as whole as we do link with other New Zealand companies, such as Huffer.
“It makes sense to go in as collective group of New Zealanders to many of these new markets and we can also work in with the 100% Pure campaign.”
The 30-something Australian first heard about 42 Below few years ago through Kiwi friends in London. The name popped up again with other friends in Thailand and he says as result he was excited to get call from Bacardi early last year about the managing director role.
My key challenge is to ensure that I can keep the New Zealand energy, passion and love of this brand and take it to the global arena,” Dibbayawan said.
“The potential for this brand is enormous. We really just need to tap into [Bacardi’s] larger network but have everyone know it’s still New Zealand, it’s still original and it still has that same purity and irreverent style.”
Dibbayawan, who has settled in Takapuna with his wife and three children, said his relaxed management style would fit the 42 Below culture.
The entire staff of 42 Below will stay and the production remains in New Zealand though the company recently moved into bigger premises, taking over building in Auckland’s Britomart complex to accommodate its growth.
“It’s not really New Zealand company anymore, it’s global company – but it originates from New Zealand and that’s the exciting thing,” Dibbayawan says. “What that does for loc

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