Craft brewers team up to boost exports

MARIA SLADE
Last updated 05:00 03/08/2014
Zeffer Cider team

CHEERS: the Zeffer Cider team, left to right, Josh Townsend, Sam Whitmore, Hannah Bower, Greg Small.

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Matakana Cidery Zeffer and Wellington boutique beer brewer Tuatara hope their newfound relationship will blossom into a marriage of international significance.

The two craft drinks makers have a distribution agreement which sees Tuatara's national sales force also selling Zeffer ciders.

Zeffer sales and marketing manager Josh Townsend said the deal meant its products were now in bars and retail outlets the company may have otherwise struggled to target, particularly in the lower North Island where Tuatara is strong.

"It's quite a unique situation to have - most distribution companies will have a huge amount of brands, but to have a team only focusing on two brands, we're noticing some good results everywhere."

Tuatara chief executive Richard Shirtcliffe said the deal was mutually beneficial, as Zeffer also had relationships and accounts Tuatara didn't have, and it was great to be able to offer a cider along with a craft beer product.

But more importantly he sees the opportunity for replicating the joint distribution model offshore.

Both craft brewers are developing promising export businesses. Zeffer now sends about 15 per cent of its production to Australia, the US and Hong Kong, and is about to start exporting to Thailand and Vietnam.

Tuatara exports about 10 per cent of its production to a wide range of markets including Canada, the US, the UK and a number of Asian countries.

"If we were able to climb into containers together the chances of us all being able to hit container loads and get the better economies of scale increase," Shirtcliffe said.

New Zealand businesses did not collaborate enough, he said.

"One of the ways to get offshore in a way that's financially viable is to collaborate around logistics and those sorts of things.

"It kind of makes sense to collaborate in New Zealand first and see what comes of that and build business together."

Craft cider was still a young category, and hadn't yet seen the same surge in popularity as craft beer, Townsend said.

"We see ourselves as trying to lead the way in educating New Zealand on what real cider is, and that it doesn't have to be this really sweet, mass-produced product."

While mass-produced ciders are often made from fruit syrup with water, alcohol and sugar added, craft ciders are made solely from the raw fruit, in a similar manner to wine.

In New Zealand cider is seen as a summer drink like rose, so developing northern hemisphere markets balanced out the seasonal nature of the product, Townsend said.

Some of Zeffer's product is sold to overseas bars in "one-way" kegs - an important opportunity because the kegs are much lighter than bottles to transport and can be disposed of when empty. "Zeffer is suited to being on draught because it's not sweet cider," he said.

"Offshore I see [cider] down the line following what New Zealand wine has done, probably not to that extent, but using the New Zealand brand . . . leveraging off that."

Co-founder of Nelson craft brewer Peckham's Cider, Caroline Peckham, agrees.

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Peckham's sells a little to the US, but does not have plans to ramp up exports at this stage as its production is still on a smaller scale than Zeffer's.

However, the craft cider category was expanding, with an increasing range of styles available, she said. "People are learning very quickly and experimenting with lots of different ciders."

Peckham's has its own cider apple orchards - varieties of the fruit grown specifically for cider-making - whereas other producers use dessert apples, she said.

It made for more complex, full-bodied juice that was left for at least six months to mature into cider.

"I'm saying this to illustrate the type of variety that's out there now," Peckham said.

Zeffer has so far been funded by its shareholders - co-founders Sam Whitmore and Hannah Bower, Townsend, and chief financial officer Greg Small - plus a silent partner, and is OK for capital at the moment, Townsend said.

"Based on forecasts we hope we won't need to raise again." But if it got to the point where cash flow couldn't keep up with growth then there was the potential for one more capital raising, he said.

Unlimited magazine, published by Fairfax Media, is New Zealand's leading digital business magazine dedicated to entrepreneurs, startups, leaders and innovators. Subscribe at unlimitedmagazine.co.nz.

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