LONDON (Alliance News) - Distil PLC has delayed plans to launch its new product aimed at the Latin American market until early next year, while it focuses on securing a distributor for its brands in the US, one of its key markets, the company's chairman told Alliance News.
The London-based drinks company was hoping to launch a new product later this year aimed at the Latin American market, but it has put the launch back until next year even though a lot of the work has been done.
"We have the liquid, packaging and designs done, it?s just we have so much on our plate right now to get Jago and Diva launched, we?ve decided to put it on the back-burner until we get those done," Non Executive Chairman Don Goulding told Alliance News. "Realistically now it won?t be until the early part of next year."
Over the past year, the company has redesigned and re-launched a number of its brands, including its Blackwoods gin and vodka and its RedLeg spiced rum. The company is set to to re-launch its Diva vodka brand, aimed at the premium and gifting market, and its Jago's cream liqueur brand in time for its peak Christmas trading period. Goulding said the company is already in talks with some major retailers about stocking its Jago brand.
"It?s a huge task to get new products into the market, and we are a very small team, so it is a question of prioritisation. But we will continue to add brands to our portfolio," said Goulding.
Distil is planning to home in on the Latin American market with its new brand when it does launch, a market popular for cachaca and vodka, and is targeting countries including Mexico and Chile.
"It's different brands in different marketplaces. There are lots of small markets out there that we will continue to push, as well as France," said Goulding.
However, the biggest problem for the company right now is finding US distributors for its two biggest brands: Blackwoods and RedLeg spiced rum, Goulding said.
"What we are trying to do at the moment is get Blackwoods in particular, into more key markets. Blackwoods is not in the US and it is a key market for gin, so we are trying really hard to find a good distributor," said Goulding, adding "We've got things in motion, it just takes time. It is a work in progress."
Goulding said the company is currently looking for one US distributor for Blackwoods gin and vodka and RedLeg, and another for its brand Blavod Black Vodka.
"It is unlikely we will find one distributor that would handle the complete portfolio. What we are looking for is someone that can handle both Blackwoods and RedLeg, and then another distributor for Blavod," said Goulding.
Looking further ahead, Distil said it may even look to expand into Asia, although it's not high on its radar at the moment.
"Asia is not the top priority at the moment, and doesn't rank in terms of places like the US. With the Asian market we would need to look at special packaging designs around gifting and super premium," Goulding added.
Distil, formally known as Blavod Wine and Spirits PLC, only recently changed its name after spending the last two years re-shaping the business away from distributing third-party brands, to developing a growing portfolio of its own brands.
This also meant a move to using third party distributors rather than its own direct sales force. That helped reduce operating costs in the business, but revenue also dropped as it quickly slowed third-party distribution while the revamp of its own brands has taken much longer.
Last year, the company increased marketing, spending a total of GBP235,000 on advertising and promotional costs. Goulding said the company will spend a similar amount on marketing this year.
"We increased the marketing budget over the last year, primarily going into packaging designs launches for the new products. We are likely to increase that level of spend going, but the shape of that spend will change, it will be more focused on brand promotion," said Goulding.
Distil's primary focus is to return to a sustainable break-even position, and ultimately turn a profit, a position it said it hopes to be in in the current financial year.
"We are still on goal and still on target for monthly break even this year. The key for us is as we go into the peak selling periods," said Goulding.
Distil shares were up 4.1% at 1.14 pence Wednesday afternoon.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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