Mark Neal (left) and Daniel Mclaughlin, brothers-in-law and founders of Scapegrace.
Mark Neal (left) and Daniel Mclaughlin, brothers-in-law and founders of Scapegrace.
New Zealand spirits maker Scapegrace is set to move into a $25 million custom-built distilling facility in Central Otago, currently under development.
The drinks company that started out in 2014 as Rogue Society expects to triple the size of its business within the next five years once it is distillingand fully operational in the new facility.
Construction of the Bendigo site is advanced, with half of the facility already built. Two buildings make up the project, the first building - housing its head office, bottling hall and warehouse - will be completed in August. The team will move into the office portion this week.
The second building, which will house the new distillery and food and beverage venue, will be completed in October next year.
Once fully complete, Scapegrace plans to offer distillery tours for visitors.
Scapegrace founder Daniel Mclaughlin said the distillery project was New Zealand's largest by size at 36ha, and one of the largest in the southern hemisphere.
The company recently expanded into the whiskey category, with its first single-malt product set to hit shelves next month. Mclaughlin said the site was ideal for producing ageing whiskey and would allow the business to significantly increase production of its gin, vodka and whiskey.
"It gives us increased production capability of around about $30 million of increased sales from this facility, and about a 20-fold increase in single malt whiskey production. New world whiskey at the moment is in very hot demand internationally, so it is pretty awesome to be able to have that capability of meeting demand," Mclaughlin told the Herald.
"Operationally it combines all of our businesses into just one site."
Scapegrace had been hunting for a site for the facility for over five years, and locked it under contract about three years ago.
"The site has a huge amount of access to good water, run-off from the Southern Alps, which is great for making whiskey and also white spirits with our gin and vodka portfolio," he said.
"We needed the ability to grow and scale on that site, so we can put down our foundations here and never have to move. With everything we are doing on the site, we need a lot of room for future barrel rooms and a lot of space between us and our neighbours for compliance, so it was trying to find a magical spot that was kind of remote and isolated."
About 60 per cent of Scapegrace's shareholders are based in Otago, which made the location on the fringes of Lake Dunstan ideal, McLaughlin said.
The new site will allow the business to focus on its sustainability efforts and work towards its goal of becoming carbon-zero. It is currently working with sustainability consultants to work towards this.
It has recently switched from diesel boilers to electric boilers to power its distilleries.
"Five years from now (once our single-malt becomes available), the site will enable us to increase our revenue substantially, and switch that split from export to domestic to more like 80 per cent export and 20 per cent domestic, with a revenue of about $30 million in five years. It is a really awesome project to take the business to the next level."
Scapegrace is spending $25 million to build its new headquarters and distillery in Bendigo. Photo / Supplied
Scapegrace hit $10 million in sales revenue this year, and is expecting 40 per cent growth of around $14m in sales next year, consistent with previous years' growth.
The company was founded almost nine years ago as a gin company by brothers-in-law Mclaughlin and Mark Neal, before expanding into vodka and will next month release its first single-malt whiskey. It exports to 35 countries and employs 20 staff.
Approximately 60 per cent of its business is export, with the United States, Australia and Britain its largest markets. It sells 45,000 cases of spirits and 170,000 cases of RTDs each year.
From September, the company will be looking to raise $6 million from private investors to fund the second half of the distillery.
