A joint venture deal between DB Breweries and Redwood Cellars gives it confidence to make Nelson the home of cider, says Redwood Cellars managing director Justin Hall.
The companies have announced that the new venture will be called Redwood Cider Company, will continue at the Redwood Valley site, and will be responsible for both companies' cider, making it the biggest portfolio of cider brands in the New Zealand market.
"It's a magic opportunity for us. It gives us real confidence about Redwood – confidence we are staying in Nelson, where our fruit supply is. We can make it the home of cider," said Mr Hall, who will become managing director of the new company.
It will have a five-member board of directors headed by DB Breweries managing director Brian Blake. He said cider represented an exciting opportunity for further growth and innovation.
Mr Hall acknowledged that the move – which gives DB a majority position in Redwood – might be seen as selling out to the big boys, but he would counter this by getting out and talking to people about the relationship.
He said DB's investment meant the creation of a business focused solely on cider.
Redwood Cellars, which makes Old Mout Cider, has had a relationship with DB through supplying its Monteith's cider.
Mr Hall said the new move would effectively free up DB of its cider product, marketing and sales so it could focus on beer.
Mr Hall spent a lot of yesterday talking with his 40 staff and letting suppliers and customers know of the change.
The move had been in the pipeline for a few months, and stemmed from Redwood co-owner Scottie Chapman's wish to get back into Asian exporting. Discussions with DB had intensified over the past few months, he said.
The biggest change would be dealing with multiple brands rather than its single brand.
Mr Hall said it would solidify Redwood's position in the market, give confidence in the company's longevity and be good for suppliers. All its apple and pear supplies came from Nelson.
Because the company took juice fruit, its business was not make-or-break for growers who depended on exporting, but it was a positive thing, he said.
"I would like to think we are here for the long term."
Nelson Tasman Chamber of Commerce chief executive Dot Kettle said it was fantastic news for Redwood Cellars and even better for the Nelson region.
"Redwood Cellars have had an amazing journey in the past six years and are an inspiration to businesses in the region. They have combined some of our region's natural advantages – the abundance of the best-quality fruit in New Zealand – with innovation and passion to produce quality products," Ms Kettle said.
"DB has recognised that they are the best cider makers and marketers, and this joint venture is testament to that.
"Given Redwood Cellars' remarkable growth, extra investment in the company was necessary to maintain that growth. To have that investment come into the region by way of a joint venture which will see the benefits of that extra investment stay in our region is stunning news indeed," she said.
The company was overall winner of the Westpac Nelson Tasman Chamber of Commerce Business Awards 2010, and had turnover of nearly $14 million last year.
- © Fairfax NZ News
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