New Zealand-based non-alcoholic RTD producer AF Drinks, which has attracted investment from Pernod Ricard, has a Target to triple its sales in its current financial year.
The Auckland-headquartered company does not disclose figures but is aiming for a three-fold increase in sales compared to its 2023-2024 year, which ended in April.
Speaking to Just Drinks, founder Lisa King said the company's growth would be supported by exports. Its sole market outside New Zealand is the US, a market it entered in 2023.
In the US, the company operates under the name Free AF. Last month, the business secured listings with Walmart and Target. It now sells its products in 2,000 stores.
King, who set up AF Drinks in 2020 when she began to cut back on consuming alcohol, said Free AF was one of the first non-alc RTD brands to appear in US retail stores.
“Surprisingly, in the US, the retailers hadn’t made space for this category [at the time], King said. She said the brand’s first US retail customer, Sprouts Farmers Markets, had “established a permanent set and range” and, a year on, grocers stateside are “investing and creating space for the category”.
AF Drinks’ US range includes a vodka-style RTD called Vød%a Spritz, a non-alcoholic Cuba Libre and an alcohol-free version of the Tequila-based Paloma cocktail.
The company is “soon” going to launch a new SKU in the US, King said, adding continued innovation was key to meeting consumer demand in the country, which is already the company’s largest market by sales.
“We have been focusing all of our efforts and resources on growing in the US market,” she said. “And it's huge. In 12 months, we’ve gone from being in 400 stores to now having stock in 2,000 stores, with the biggest retailers, Target and Walmart as well.”
Next, King is eyeing what she called the “obvious” options of the UK, because it’s the “most advanced” market for non-alc RTDs and Australia, because of its proximity to the company’s home market of New Zealand.
Earlier this year, AF Drinks was in talks with the “largest supermarket of Australia” but King said the company decided to delay the launch in the country because opportunities to expand in the US emerged.
However, the company is planning to launch in Australia and the UK in the next 12 months.
At home, the company has taken on Pernod Ricard as its distributor in New Zealand, where AF Drinks has an approximately 40% share of the market for non-alcoholic RTDs.
“We worked with retailers and grocery to really establish the category there, so we are very much seen in this leadership role in New Zealand,” she said.
“New Zealand is such a great market because it’s easy to establish a business. It’s great for testing a concept and we were able to do that very quickly. But, as it’s a country with 5m people, we always knew it was going to be very limited. We always had global ambitions for AF.”
Nevertheless, the company is trying to grow sales in New Zealand’s on-premise, where the category is less developed.
While Pernod owns around 15% of AF Drinks, King holds a 29.8% stake in the business through an entity called The Antisocial Company, of which she is the sole director.
Pernod Ricard invested in the company at the begininng of 2023.
