Deluxe Vodka Company Gets a Shot from BDC

Deluxe Vodka Company Gets a Shot from BDC

21/12/2011

December 21, 2011 – Oakville, ON - Oakville-based Multiculture Bevco, owner of two award-wining vodkas, has completed an investment with the Business Development Bank of Canada (BDC) and a credit line with Meridian, Ontario’s largest credit union, to provide growth capital to the Company.

John Vellinga, Chief Executive Officer of the company was featured on CBC’s hit show Dragons’ Den in March 2010.  The small, entrepreneurial Canadian company owns both Slava Ultra Premium (Slava) and Zirkova Premium (Zirkova) Imported vodkas. While the Company did not conclude a deal with the Dragons, their participation on the show opened the door to the BDC opportunity. Vellinga’s pitch for his vodkas ended up winning the Viewers’ Choice award, as voted on by the national TV audience of over 2 million viewers. The prize included complimentary consulting services from KPMG EnterpriseTM.

“We had the top Partners and the brightest minds at KPMG Enterprise working on our file”, says Vellinga. KPMG Enterprise helped the Company hone its business strategy and revisit its approach to raising financing, introducing Vellinga to BDC. They also recommended leveraging the Company’s high quality, low risk receivables.  Meridian is supplying credit secured with receivables primarily from provincial liquor boards.

“It was the middle of the financial crisis and raising money was challenging for a company like ours.  BDC stepped in to keep a promising Canadian entrepreneur growing when everyone else had adopted a wait-and-see approach” Vellinga remembers. “They drive a tough but fair bargain and promise to be there if the chips are down.  Meridian, with their customized approach to each Member, tailored a credit solution that exactly met our needs.”

CBC’s Dragons’ Den is airing a follow-up episode about the successes of Slava and Zirkova on Wednesday, February 29, 2012, almost exactly two years from when the original episode aired. Slava is now a top-five selling deluxe vodka at the LCBO and sales of Zirkova have nearly doubled over each of the last two years.

While the brands and formulations are owned by BEVCO, the vodka is distilled under license in the Cherkasy region of Ukraine, the historic birth-place of vodka. Both vodkas have won several top international awards. Zirkova won a Gold Medal at the San Francisco World Spirits Competition in March 2011 and Slava just received a medal for vodka at the Hong Kong Wine and Spirits Fair – the largest in Asia..  This follows Zirkova’s Best Buy Award from the prestigious Beverages Tasting Institute in 2010. “We are growing; however, we still face the challenges of an entrepreneurial company competing against large, foreign multinationals with huge budgets” says Katherine Vellinga-Koszarny, John’s wife and business partner.  “We know we have superior vodka at a better price. People also like to know that they are buying from a little guy; a Canadian under-dog.”

The Company has a unique approach to marketing, which focuses on education and sampling rather than the usual sexy image advertising.  Vellinga created and leads a program called ‘Vodka 101’ which educates people about the history, technology and traditions of vodka – including a tasting which includes Slava, Zirkova and other big, iconic brands for comparison. The program has become very popular with corporate events, wine clubs and even provincial liquor boards. The LCBO and the Manitoba Liquor Commission have used ‘Vodka 101’ to train more than 200 product consultants in a more unbiased program that allows tasters to draw their own conclusions.

Social media also factors strongly in the Company’s marketing approach. The Company has created on-line versions of the training on their web sites and ‘facebook’ pages.  “We believe that if people have a chance to try our vodkas and educate themselves, they will recognize that Slava and Zirkova are superior products. This new investment will allow us to create some unique programs to get that message out,” says Vellinga. “We will earn each customer, one at a time, by allowing people to experience our products, rather than resorting to gimmicks.”

Slava and Zirkova are sold at selected LCBO stores in Ontario, Liquor Marts in Manitoba, SLGA Liquor Stores in Saskatchewan and fine Alberta liquor stores. The company has just begun signing up distributors in China, Taiwan and Hong Kong and plans to enter the US market next year.


About Multiculture Bevco
Multiculture Bevco is a developer and marketer of owned-label and niche alcoholic beverage products. The Oakville, Ontario-based company has developed and launched two of its own vodka trademarks (Slava Ultra Premium and Zirkova Premium) in four provinces, including the LCBO in Ontario.  Their other products include: Slavutich Beer, Krimsekt Sparkling Wines and Lvivske 1715 Premium Lager.
Slava Information:    www.slavavodka.com www.facebook.com/SlavaUltraPremiumVodka
Zirkova Information:    www.zirkova.com www.facebook.com/ZirkovaVodka

About BDC
Canada’s business development bank, BDC, puts entrepreneurs first. With almost 1,900 employees and more than 100 business centres across the country, BDC offers financing, subordinate financing, venture capital and consulting services to 29,000 small and medium-sized companies. Their success is vital to Canada’s economic prosperity.



About KPMG Enterprise
KPMG Enterprise professionals focus exclusively on helping owners and entrepreneurs of Canadian private companies succeed. Dragons' Den provides a unique opportunity for Canada's aspiring entrepreneurs to pitch their ideas to a prestigious group of Canadian business moguls. KPMG Enterprise works directly with each Dragon as they review and assess the business opportunity. KPMG Enterprise professionals are well known for their experience in helping to get deals done. Whether multifaceted and complex in its structure or just a simple straight forward handshake, the advisers at KPMG Enterprise listen to entrepreneurs and investors and aim to achieve the most favourable outcome regardless of the size of the transaction.

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