Tom Maclean was drinking aperitifs in Italy when he was inspired to create an Australian take on the spritz, the classic fizzy wine cocktail. Today his idea is worth A$6 million ($6.4m).
Nearly three years after scoring a A$130,000 deal on Shark Tank, Aussie alcohol start-up Sofi Spritz is serving two million cocktails a year — and believes it's on the verge of cracking a market worth half a billion dollars.
From humble beginnings at the Bondi Farmers Markets in 2013, the ready-to-serve wine cocktail is now stocked in more than 2000 locations including Dan Murphys, BWS, Vintage Cellars, First Choice, and even on Virgin flights.
Maclean appeared on the 2016 series of the Channel 10 show, where his pitch impressed four Sharks enough to make him offers. He ultimately went with tech investor Steve Baxter and Greencross founder Glen Richards, who joined forces to offer A$130,000 for a 10 per cent stake in his company.
"Just the publicity from the show was huge for us," Maclean said. "We're a small brand up against big brands and big marketing budgets. We're on track to serve up over two million cocktails this calendar year. Our revenue is over A$2m, we're growing 50 per cent year-on-year."
While many Shark Tank deals fizz out after the cameras stop rolling, Maclean said he had developed a strong relationship with his two investors. "They've been really good, super-generous with their time," he said. "Steve has an annual retreat which is great to meet with other founders and share war stories."
Baxter said the business had "come a long way" over the better part of two-and-a-half years. "It's growing at 50 per cent per annum, it's fantastic," he said. "I've put in A$150,000 so far, we're very supportive shareholders. We're primarily a tech investor so this one for us is a bit of diversification. I wouldn't say we're experts in the food and beverage field."
The challenge Sofi Spritz faced was marketing and growing distribution, he said. Richards agreed. "I think we're almost coming to a tipping point with the number of consumers now engaging with Sofi Spritz," he said.
"We obviously need more bars to stock us so it's ready to drink when you come in. We are in Dan Murphy's, the big retailers, and available to drink on Virgin flights, so we're getting good brand presence — now we've just got to build on that."
Sofi Spritz now wants to raise money from everyday investors to fund the next phase of its expansion, with Maclean identifying a A$500m market opportunity in the ready-made drinks category.
A campaign through equity crowd-funding platform Equitise, which allows investors to buy a stake in the business starting at A$250, has already raised more than A$275,000. Maclean says the capital raise will "accelerate our growth rate".
"We're investing in a sales and marketing team primarily, with a focus domestically for now. We're probably in 40 per cent of liquor stores and about 5 per cent of venues. We want to increase our penetration," he said.
The company also plans to begin exporting internationally in 2020, after testing a few local markets in the South Pacific last year, but "we don't want to over-invest in export" before laying groundwork in Australia first, Maclean added.
Sofi Spritz's core audience is millennials, typically females between 20 and 34, and Maclean said the crowd-funding was also aimed at brand's customers. "If they enjoy the product, we think they would want to support a local product up against big global behemoths," he said.
"We think we do have some competitive advantages, we think we can beat the big guys, and we think there is a big potential financial reward if we get this right. First and foremost we want people who enjoy the brand."