Winemakers gets closure from local firm

Esvin operations manager Doug Hallberg with aluminium caps the company hopes will be a hit here and overseas. Picture / Brett Phibbs

When the French manufacturer of most of the wine bottle screw caps used in New Zealand slowed shipments to a trickle in order to meet demand from bigger markets, local distributor Esvin and the wine industry felt the pinch.

"We lost a lot of market share because Stelvin couldn't supply," Esvin managing director Stephan Jelicich said. "They basically had us on a restricted allocation per month. Inadvertently they were killing our business."

But Esvin now has a guaranteed, timely new supply from its sister company Finito, which begins production today around the corner from Esvin's Mt Wellington headquarters.

The distribution company, which also supplies other goods to the winemaking industry, was an early advocate of the alloy caps used to seal nearly 80 per cent of the bottled wine produced in New Zealand.

Esvin has dominated the local market since 2001, when it sold 1.8 million of the approximately 2.1 million units used in New Zealand. This year it sold 56 million of what Jelicich estimates was a 75 million unit market for screw caps. Meanwhile, Esvin's annual cork sales have dwindled from about 18 million to 1.5 million over the same period.

Jelicich estimates the market will shift up to 100 million units worth about $17 million next year. But the company - whose clients include Wither Hills, Ngatarawa and Matua - last year forfeited market share because of supply problems and lengthy lead times between order and delivery.

"Many winemakers we dealt with were compromising export opportunities because they couldn't get the wine in a container."

Reasoning the answer was to make the caps here, Esvin formed Finito Closures with Katikati-based investor John Holwerda. Holwerda came up with most of the nearly $8 million needed for the plant.

Esvin runs the "front end" of the business, including design, art and marketing, as well as providing the expertise in terms of quality and standards won from its experience in the market.

Jelicich, a winemaker by trade, believes the Finito product is as good as Stelvin - which as the benchmark has its name used as the generic term for all wine screw caps. Having a high-quality product has been a critical factor for the new business.

"The New Zealand market's very, very tough. It's well known for having some of the highest packaging standards in the world."

The new plant has a capacity of about 180 million units a year, more than enough for the local market. Although focused on getting its product established, Jelicich said the company would soon be looking offshore.

Finito will look at Australia first, where penetration of screw caps is relatively low at about 20 per cent.

"In terms of a growth opportunity there's a lot there. However there are quite a few new companies."

Finito will target small to mid-sized high premium winemakers "where people are looking for better print quality and performance", rather than the big "commodity brands".

Jelicich said the US and Canadian markets would be next on the list and the large Argentinian market also beckons.