Kiwi drinks deal offers sales tonic

Beverage start-up Ti Tonics has partnered with the maker of Charlie's and Phoenix drinks in a distribution deal its co-founder says should provide a solid increase in sales.

The Auckland-based brand, which was launched in 2010, produces a range of tea-based drinks marketed as a healthy alternative to rivals - with grape skin extract, antioxidants and only 2g of sugar per 100ml. They are sold in New World and Countdown supermarkets, as well as cafes.

The Better Drinks Co (formerly NZX-listed Charlie's, which was acquired by Japanese brewing giant Asahi in 2011 and changed its name last year) has exclusive distribution rights for the Ti Tonics range.

Ti Tonics' co-founder and developer, Tracey King, will manage the brand with The Better Drinks Co.

King said the deal would widen distribution "quite massively" and could result in a fourfold sales rise.

"We've never really had any resources and we don't have any sales reps or own any fridges out there in the marketplace. Now we get to tag on to all of [Better Drinks'] existing infrastructure."

Craig Cotton, chief executive of Better Drinks, said the company had identified an opportunity to work with Ti Tonics instead of creating its own competing product.

"This came from recognising that Ti Tonics is a uniquely differentiated product that we love - it just needs a push and a helping hand to educate consumers and widen its reach."

King said The Better Drinks Co would distribute the Ti Tonics brand under licence and take full margins on the products while paying royalties back to her company.

There could be an opportunity for the Japanese-owned firm to acquire Ti Tonics in the future, she said.

"I think any time that you partner up so closely like we are there's an understanding that further down the track [an acquisition] might be a logical next step, but it's very early days."