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Distell adds top premium brand, Cruz Vodka, to its portfolio

Distell, Africa’s leading producer of wines, spirits, ciders and ready-to-drinks (RTDs) today announced the formation of a partnership that owns the rights to the Cruz Vodka brand and business worldwide. Distell has agreed to acquire a 75% shareholding with Blue Sky Brand Company Proprietary Limited (“BSBC”) holding the remaining 25% shareholding. BSBC will be integrally involved in the Cruz Vodka brand going forward.

This means Cruz Vodka, a luxury imported vodka made from hand-selected American wheat, will be now be distributed on Distell’s platform in South Africa and the rest of Africa.

Through Cruz Vodka joining Distell’s portfolio of iconic brands, the company will strengthen its position in the premium vodka category. Premium vodka is one of the fastest growing spirits categories in South Africa and Cruz Vodka will significantly enhance Distell’s premium vodka offering.

“We are excited to offer another high quality luxury product to consumers who have come to trust Distell for its exceptional products. We are certain that Cruz Vodka will continue to delight consumers,” said Wim Bührmann, Managing Director, Distell Southern Africa

“Cruz Vodka provides us with a leading brand in one of the fastest growing spirits categories with strong future growth potential,” he added.   

David de Mardt, Managing Director BSBC, commented, “The decision to partner with Distell was logical as combining Cruz Vodka’s powerful brand equity with Distell’s strong distribution capabilities in South Africa creates an unbeatable proposition. I firmly believe that the partnership has all the potential to make Cruz Vodka the biggest premium vodka in South Africa”.

Cruz Vodka is available in Vintage Black and four flavoured varietals.

Cruz Vintage Black vodka has won numerous gold medals at leading international competitions such as London Vodka Masters, Consumer Choice Awards USA, SIP Awards USA and Fifty Best Vodka’s New York.

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In cider trading

STELLENBOSCH-based liquor conglomerate Distell might be best known for its wine and brandy brands – but the company’s spirited growth in the last decade-and-a-half has been underpinned by incredible successes in the cider segment. In fact, so successful has Distell been in marketing its Hunters Dry and Savanna brands that the company now ranks as the second largest cider player in the world. This is a remarkable achievement for a company that first marketed its cider products in the late eighties.

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Bump and grind for 2016

PROSPECTS for business in the Western Cape for 2016 look daunting. Political ructions have sent the Rand spiralling down against major currencies, the country’s fiscal policies look anything but disciplined and brittle trading conditions, across the board, look overwhelming. But local commerce and industry have proved hardy and resilient over many generations, and CBN expects local business – especially the inventive companies in the Western Cape – to endure tough times thanks to their built-in innovative fortitude. Here are the 16 developments that might bear watching in Western Cape business during 2016.

  • Cash is king for prince of deals Jannie Mouton

Just before 2015 closed out the mighty Stellenbosch-based investment house PSG collected R2,2bn in a book-build offer. Investors literally fell over each other to hurl money at PSG – which has enjoyed huge successes with Capitec Bank and private education venture Curro Holdings. CBN does not expect PSG to sit on that cash for very long, and reckons 2016 could be the year Mouton and his team really move and shake in the deal-making arena. The smart money says watch PSG’s agri-business associate Zeder for new deal-making activities.

  • Private equity appetite

Cape Town-based fresh produce retailer Food Lover’s Market looks set for a growth splurge. The company attracted a R760m investment from private equity investor Actis, which now holds a substantial minority stake in the business (which was founded by local entrepreneurs Brian and Mike Coppin.) Food Lover’s Market has over 120 stores and also operates over 200 FreshStop convenience stores at Caltex service stations. It recently bought artisanal coffee brand Seattle Coffee.
Mike Coppin said the deal with Actis was a great business fit for Food Lovers’ Market’s growth strategy in the future.

  • A word to the Wi(e)se

CBN reckons readers should watch developments at retail tycoon Christo Wiese’s smallest investment – Stellar Capital Partners (SCP.) SCP recently raised R1bn in fresh capital, and is now in the throes of buying full control of Retreat-based electronics manufacturer Tellumat. It seems almost certain SCP will also push for a bigger stake in vibrant industrial company Torre in the year ahead.

  • A steep learning curve

In one of the most unexpected shifts Cape Town investment company Trematon Capital Investments – which owns mainly property investments – made a cautious shift into the private education market by setting up a ‘Generation’ school in Sunningdale - Cape Town’s fast growing north-western suburb. CBN hears the school enrolments for this year were so overwhelming that Trematon is likely to extend the Generation concept to other areas of Cape Town.

  • Taking growth supplements

Steenberg-based health care brands conglomerate Ascendis has more than doubled its market value to close to R5bn since listing in late 2013 after a series of successful acquisitions. CBN understands Ascendis will not be taking a ‘chill-pill’ in 2016, and that several deals – including further offshore forays – are likely to be tabled.

  • Bulking up in the food sector

What chances that 2016 is the year local food companies opt for a consolidation recipe. CBN has a gut feel that the mix of local food companies – ranging from the large like Pioneer Foods and Premier Foods to the more niche offerings of Rhodes Food Group, Quantum Foods and Bounty Brands, Sea Harvest and Premier Fishing – could find new corporate recipes via mergers or takeovers.

  • Flawed but feisty

Parow-headquartered diamond miner Trans Hex Group has struggled through a tough few years. The outlook for diamond prices looks somewhat tarnished, but efforts to bring the recently acquired Namaqualand Mines (acquired from gem giant De Beers) into production could be a critical turning point for Trans Hex.

  • Drinking in new opportunities

Epping-based plastic packaging specialists Bowler Metcalf decision to pour its Quality Beverages soft-drink operations into the larger SoftBev amalgamation looks like it could pay dividends this year. SoftBev hit the ground running by snagging the Pepsi bottling contract, which will test the operational and marketing efficiencies of the new business. If things go as planned SoftBev might look to raising fresh capital to grow the business – an event that might see Bowcalf increase its stake in the company as well as the possible emergence of a new strategic partner.

  • Go west young man

The Saldanha Industrial development Zone (IDZ) will hopefully gain further traction this year. The Western Cape economy certainly needs a dedicated industrial hub to provide extra growth impetus and boost job creation. Let’s hope the oil price, which has driven so many African economies and will stimulate shipping/oil rig maintenance and repair activity, starts firming markedly this year. Increased property activity in the Mykonos precinct seems to suggest things are well on track for an encouraging 2016 on the Weskus.

  • Spurring on Burger King

At the end of 2015, CBN could count 51 Burger King stores scattered around the country (albeit mainly concentrated in Cape Town and Johannesburg.) Empowerment investor Grand Parade Investments has carefully rolled out Burger King to ensure margins are suitably succulent and that the balance sheet is not starved of development capital. CBN wonders whether the year ahead will see GPI capitalise on its relationship with Spur Corporation, in which it has a 10% stake, to accelerate the roll-out of Burger King stores? Spur has a muscular balance sheet with plenty cash, and the company’s experienced management could only add flavour to GPI’s efforts to build GPI into a strong fast food brand.

  • Taming the lion

Iconic empowerment group Brimstone will have its work cut out in 2016 to clean-up a rather unsavoury mess at its shot-term insurance subsidiary Lion of Africa. While Brimstone would probably prefer to be scouting for new investment opportunities, a successful turnaround at the Lion would add to its credibility as determined long-term investors that are not afraid to roll up their sleeves and get stuck into the investment portfolio.

  • Armed to the teeth

Just before the end of the year African Empowerment Equity Investments (the old Sekunjalo Group) finalised a R100m deal to take a 25% stake in defence contractor Saab-Grintek. The deal guarantees minimum annual dividends of R18m, which appears to underpin confidence that Saab-Grintek might be a very industrious investment for AEEI.

  • Raiding the vineyards

There were a number of forays by foreign buyers into the wine sector – including the mergence of buyers from China and India. With the Rand tanking against major currencies, the SA winelands must look like bargain real estate compared to the vineyards up for sale in traditional vino areas like California, Australia and France.

  • The runt might save us

The rout in the Rand after the shock dismissal of finance minister Nhlanhla Nene, and the following debacle around the finance ministry, might well have a silver lining for the Western Cape economy. Looking in the bright side … as a tourist destination the Cape becomes cheaper to overseas visitors, our wine and fruit farmers can bring in additional export revenue and the beleaguered clothing manufacturing sector gets a reprieve as imported garments are no longer cheap.

  • Asset test

Cape Town has traditionally been the home of the asset management industry – what with old school ‘wealth managers’ like Old Mutual and Sanlam calling the city home turf. What will be interesting to gauge, however, in 2016 is whether asset management poster child Coronation Fund Managers – for so long the undisputed market leader – is on a slippery slide and whether feisty newcomer Sygnia is about to unleash a revolution that could completely disrupt the wealth management hub.

  • Stoking the brandy war

It looks like brandy heavyweights Distell and KWV could be at each others throats in 2016 in a bid to secure a viable portion of the fast shrinking brandy market. KWV has already fired the first salvo, intimating that Distell – which owns best selling brands like Klipdrift and Richelieu - is betraying the ‘premiumisation’ of the brandy category with dangerous discounting. It will be interesting to see if KWV plugs away in the premium sector with its award winning brandies…or whether it takes the fight to Distell with a mass market offering.

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Distell extends its national supply contract with Afrox

Stellenbosch-based liquor group Distell has extended its national supply contract with Afrox to support an upgrade at its secondary cider packaging plant in Springs, east of Johannesburg, which is Distell’s biggest cider production site. Distell is the leading cider producer on the local market through its best-selling Savanna and Hunter’s Dry brands and is ranked as the second-biggest cider company globally.

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