Game changer deal stirs up cocktail maker

Andrew Walker toasts VnC Cocktails' contract in the UK. Photo / Herald on Sunday

With a big UK distribution deal and a new investor under its belt, Kiwi cocktail company VnC Cocktails is expecting to more than triple its sales next year.

Launched in 2007 by 42 Below founder Shane McKillen, the ready-to-serve cocktail-maker is already on track to turn over 200,000 cases in its current financial year.

Now it has signed with British distiller Whyte & Mackay to distribute its Pacific mai tai, strawberry daiquiri, mojito and margarita products in the UK.

Next year's minimum Whyte & Mackay order quantity would be more than twice the volume VnC sold last year, executive chairman Andrew Walker said.

Meanwhile, former Fisher Funds Management chief investment officer Warren Couillault has taken a cornerstone shareholding in the business. Couillault left Fisher Funds two years ago, reportedly receiving more than $5 million for his 27 per cent stake in the business. He was subject to a restraint of trade agreement for a year. Since then, he has built up a few private investments including VnC.

But he is not involved in day-to-day operations.

"I think I have a skill at identifying growth and I very much see that in this case with VnC," said Couillault.

Walker said Couillault's investment provided working capital for the company to grow.

It follows its purchase this year of the former Pinto plant in Tauranga. "We saw the growth coming and we wanted to make sure that we had secured the supply chain."

Until then, VnC had been contract bottling which was a major risk, Walker said.

By this year, it was already producing 50,000 more cases annually than vodka success story 42 Below was when Bacardi bought the company for $138 million in 2006.

VnC employs 25 people in New Zealand and 20-25 around the world, including 12 in China. More than 90 per cent of its product is exported.

Walker said it had been selling minor quantities in the UK but the Whyte & Mackay deal was a "game changer".

It had approached VnC because it had a hole in its range for a "ready-to-pour" product.

Walker drew a distinction between these and ready-to-drinks (RTDs), which were mixed with a soft drink and designed to be consumed straight from the bottle.

VnC cocktails are made with premium alcohol and are designed to be poured over ice and shared with a group.

Kiwi high growth companies declining

The number of high-growth companies in New Zealand is falling.

Ministry of Economic Development figures show the percentage of high-growth firms has dropped from 7.6 per cent two years ago to 5.8 per cent last year.

High-growth companies are those with 10 or more employees and an average growth of more than 20 per cent a year over three years. They create jobs and contribute disproportionately to a country's GDP.

VnC Cocktails' Andrew Walker said New Zealand needed high-growth firms.

"We're going to have to rely on innovation and growth to keep up with rest of world, because we've got natural disadvantages of distance, time and shortage of capital."

It had got a lot harder, as access to capital across the funding spectrum had diminished greatly in the past two years.

"I believe part of the Government's portfolio in terms of where it should be allocating super money and the like should be into growth through innovation."

Walker advocated public private partnerships.

maria.slade@hos.co.nz