Southern whisky distillery seeks $2m for expansion

One of the reasons The New Zealand Whisky Collection wants crowdfunders is because they make good brand ambassadors, according to general manager Grant Finn.

The Oamaru-based company has launched its PledgeMe bid to seek a minimum of $500,000 and maximum of $2 million.

NZ Whisky Collection originated from the 2010 receivership of the New Zealand Malt Whisky Company, which went under owing $3m to South Canterbury Finance.

Australian Greg Ramsay and fellow investors saw the opportunity to buy 443 barrels of mature-aged whisky and set up another company, which he wants to expand with the proceeds of the crowdfunding.

The expansion would allow the company to take warehouse and distilling space in a heritage building in Oamaru, and set up a nearby tasting and retailing bar.

The company competes with about 18 Kiwi distilleries, although Ramsay said they tend to collaborate more than compete.

There is about five years of stock remaining based on current sales, and it takes more than three years to make and mature a new batch.

The first new production is expected before Christmas, and involved a deal with Dunedin’s Speight’s to supply ‘‘wash’’’, the base single malt whisky.

Since relaunching the range in 2011 the company has been exporting South Island Single Malt and Dunedin DoubleWood to Australia, Europe and Asia.

‘‘We have enjoyed steady export growth, even while increasing price and reducing bottle sizes. Crowdfunding will allow us to operate additional production days from our current plan and lay down more spirit to become whisky after twothree years,’’ Ramsay said.

Ramsay will remain a majority shareholder – his current 71 per cent will reduce to 64 per cent if the $500,000 threshold is reached, and 52 per cent if the maximum subscription of $2m is reached.

Other company officers hold smaller shareholdings as outlined in for all an information memorandum available on the PledgeMe website.

If the maximum $2m target is reached, crowdfunders would own 16 per cent of the company, which is valued at $9.8m based on a multiplier of 4.9 times annual turnover of $1.9m. Investors are being offered three share packages involving investment sums from $500 up to $40,000 and above. The information memorandum contains details of the product range and revenue forecasts.

Dividends will be considered in light of future performance.

For example, even factoring in the cost of the cask and costs to mature whisky such as rent and insurance, whisky provides a better return per litre of alcohol than other spirits or even blended malt whisky (made with unmalted barley or a grain other than barley).

Single malt whisky achieves a sales price premium of 40 per cent to 80 per cent, and only costs $1 to $2 more per bottle more to make.

Ramsay previously managed the development of the Nant distillery in Bothwell.