Kiwi drinks start-up Pals inks major distribution deal

Pals founders Nick Marshall (left) and Mat Croad. Photo / Supplied

A year-old alcoholic drinks start-up has landed a major distribution deal in Australia which will see its number of stockists grow from 800 to almost 2000.

Auckland-based Pals, which launched in October last year, has entered into a partnership with the Endeavour Drinks Group, owned by Woolworths Australia.

Endeavour Drinks Group is the largest liquor retailer in Australia, owning retail chains Dan Murphy's and Beer Wine Spirits (BWS), accounting for 50 per cent off the total off-premise liquor market across the Tasman.

Pals co-founder Mat Croad said the partnership meant that the company's RTDs have been sold in chains since November. He said the company was looking to increase its revenue by more than 300 per cent in the current financial year.

"The partnership provides us with a fantastic opportunity where from day one Pals will be available in over 1000 stores nationwide in Australia," Croad told the Herald.

"Going straight to retail means there is currently no need for traditional distribution or to have our own sales force on the ground in Australia. This allows us to put more time and focus into branding and innovation."

Most drinks companies that want to range in chain retailers had to typically go down the route of smaller independent stores before being able to pitch to the big players, he said.

"This communication [with Endeavour] was happening during Covid the whole time as we couldn't get over there and sit down with the team. It was a lot of phone calls and Zoom meetings back and forth, we're really excited that we managed to get this across the line.

"Pals is really starting to solidify ourselves in the New Zealand market and our plans are to try to expand on that and have a little bit more of a global reach. The first market that we were looking to target was Australia so this really is a great step in the right direction for us."

Pals is a extension of wine company Master of Ceremonies, which is run by the same founders. Photo / Supplied

The company has set itself the target for its export business to be 25 per cent of total revenue in the next two years. It experienced "over 1000 per cent" revenue growth last year and in this financial year it forecasts another 320 per cent growth in revenue.

New Zealand's RTD market is a $300 million industry while the Australian RTD market is worth more than $1 billion albeit much more competitive.

Pals is also eyeing export to China and the United States longer term.

"Our first port of call is pinpointing markets where we feel there will be demand for Pals and taking into account trading agreements and Covid situations. We're in a little bit of a confusing time in terms of a brand trying to export around the world so, taking that onboard, we will narrow down [our next export countries] and do our feasibility reports."

Pals was founded by four friends Mat Croad, Anna Reeve and Jay Reeve, and Nick Marshall, who were already in business together and run wine brand Master of Ceremonies.

Now a crowded market, Croad said Pals was one of the country's first "healthier" RTD (also known as seltzers) drinks companies.

"If you look at this category now in comparison to 12 months ago, it is very different from the competitive landscape of how many brands are in market.

"Twelve months ago, there were three or four, now you could go into any store and there are around 10 - the category as a whole is heating up; it is exciting to be a part of - it's probably the biggest shake-up the alcohol industry has seen for quite some time."