Yoke Har Lee: Syrup-makers take a shot at big time

Richard Plimmer says SHOTT expects to get into the Australian market this year. Photo / Mark Mitchell

A small New Zealand company is succeeding in the beverage business, by chipping away at its major foreign competitor.

Armed with fresh confidence in their niche product, Tami Louisson and Richard Plimmer, the co-owners of SHOTT Beverages, are now looking at doubling their turnover this year and are on track to move into the much larger Australian market.

When drinks such as chai or caramel latte became popular in this country, cafe owners became familiar with syrups from French supplier Monin. Now the SHOTT range of coffee syrups and fruit-based concentrates are competing for a share of the market, attracting cafe owners who like the idea of stocking a Kiwi brand.

Last year SHOTT's sales totalled nearly $3 million, up from $600,000 in 2008 when it had been operating for only 18 months. The company hopes to reach $6 million in sales this year. To achieve that goal it will have to lift sales in the domestic retail market and quickly latch on to a few key distributors in Australia - a goal which Plimmer thinks the company will attain this year.

SHOTT's story is the classic entrepreneurial journey, full of obstacles, hard falls, fortuitous connections, rapid learning and lots of hard work.

When Louisson first bought into juice-making company Nectar Juices, she quickly learned how naive she was, not having done proper due diligence. Nectar didn't have real ownership of its customers and relied on distributors who owed no loyalty to the company.

Louisson realised she desperately needed help. She tried rebranding and repackaging the product but that proved fruitless. A friend, a former advertising hot-shot, visited her factory and gave her a frank assessment of what needed doing.

Through networking Louisson found out that Richard Plimmer, once a part-owner of Juice Express, was looking to set up a new venture. She pursued the opportunity and together they set up a new 50:50 venture. They didn't bother to resuscitate Nectar. "We started from scratch, with a new set of products, and a new brand and a new company," she says.

Born in Israel, Louisson met her New Zealand husband Simon when he was working at a Kibbutz. She left her silversmith training and worked as an apprentice to learn leadlight glass production, eventually setting up her own workshop which kept her occupied for 20 years before her Nectar purchase.

Plimmer has led a few lives - first as a systems analyst, then as a sharebroker during the boom-and-bust days of 1987 - before setting up a company to sell and deliver morning tea and lunches to offices. He later became part-owner of Juice Express which he then sold.

Orbit, the company commissioned to design and research the market for Louisson and Plimmer, found that there was indeed demand, but the product had to be of high quality and sexy, and needed a brand to fit.

SHOTT set out to create a new cafe culture for consumers, focusing on a product that was not only high quality but of value to cafe owners. The jewel in the company's crown is a lemon and ginger concentrate which Louisson says "knocked people's socks off" with its taste.

Plimmer says New Zealand cafe owners were keen to support a local brand and a high quality product. "We invested a lot of time, targeting the food service industry. The majority of the distribution for coffee syrups was done through the coffee roasters. When we tried the supermarket chains, they said to us 'your bottle is way too big for the shelves, your price point is too high. Come back with a smaller bottle and a price of under $10.' So we started looking at food shops that were outside the supermarket chains."

After the cafes, other channels of distribution opened up, including wholesalers, delis and speciality food retailers. When the supermarket chains began seeing competition in the cordial/concentrates segment from other retailers, they came back to SHOTT and asked to stock its products.

Plimmer reckons the move into the Australian market will happen this year. Part of the challenge in gaining a toehold across the Tasman will be overcoming the strong place occupied by own brands in Australian supermarkets.

Despite its growth spurt, SHOTT's finances have not been stretched as Nectar provided cashflow and the physical assets needed for production and development. Nectar assumed the role of a contract packer for SHOTT, which soon became Nectar's largest customer. SHOTT then bought Nectar's assets and took over responsibility for production, including employing the nine staff.

Louisson and Plimmer hope SHOTT will continue to grow as a national brand. "Because we are Wellington-based, our sales are skewed in that direction. At present, Wellington sales are six times Auckland's and, based on population, it should be the reverse," Louisson says.