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K.J.A. International Liquor Pty Ltd ("KJA")
liquor products, this business is interlinked with
Barossa Valley
International (Wine Packaging) Pty Ltd ('BVI')
this business, is for contract packaging for KJA
Liquor Products and for customer contract packaging. As
such, in parts of this business profile both businesses
are referred to.
Research undertaken by the principals has indicated
that, while there is quite some diversity in the
alcoholic beverages market already, further opportunities
exist to promote well-branded products, both within
Australia and overseas. A number of such
brands have been designed and developed. The
products will be of a boutique nature, targeting
the middle market and upwards, high quality but
pitched at realistic prices.
KJA’s business will be diversified across
a range of different alcoholic products (beer,
wine and RTDs) so as to reduce its risk of exposure
to rises and falls in individual market sectors,
and achieve additional market penetration. The
BVI business, the packaging arm, will position
itself as accessible to customers that are unable
to supply the very large quantities that are required
by the major packaging companies.
The financial goal is to grow the businesses to
a value of A$25m. While the liquor business
will start in the Australian market, export markets
(Asia, Europe and the Americas) will be targeted
to achieve the overall desired level of growth.
The company expects to achieve cross-selling between
the liquor and packaging businesses to increase
sales.
The liquor industry is highly competitive. In analysing
competitive strategy, KJA will be competing
directly against smaller, more specialised companies.
Importantly, the businesses will have a vertical
integration advantage, therefore being able to
compete on the same basis as the big players (with
control of the whole process) but will be actually
competing against smaller players, many of whom
do not have the vertical integration advantage.
The company has also decided to acquire state of
the art equipment imported from Italy, which will
allow for the bottling/packaging at an economical
cost of the various product lines that will be
produced.
Contracts for the sourcing of products are under
negotiation (in many cases already completed). Inputs
to the bottling process will be purchased for the
best price and at optimum quantities, balancing
economic considerations with storage issues in
the factory. Several KPIs will be used to
assess and monitor the efficiency and effectiveness
of the factory.
The marketing strategies include maintaining professional
looking brands, differentiated from other mainstream
brands; use of an extensive network of existing
contacts to achieve initial market penetration;
adoption of a quality/value-based marketing approach,
not a discounting price-based approach; and development
of a number of key strategic alliances to maximise
the reach of products.
The financial projections for the businesses have
been prepared using two alternative scenarios,
and demonstrate profitability in the first year
of operation, growing to a strong profit after
the second year. Which could see the businesses
more than double in size in year three and four.
The businesses will operate under the stewardship
of Mr Kevin Arthur, who has many years of experience
in sales and marketing and business management
in the liquor and other industries. Mr Arthur
will be supported by suitably skilled personnel
in managing the operations and administration of
the businesses.
The proprietors are encouraged by the prospects for
the two businesses, and anticipate the successful
achievement of their Vision for the businesses within
the medium term.
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