Omniblend, a subsidiary of New Zealand manufacturer Keytone Dairy, has signed a license agreement with beverages giant Baileys to distribute its non-alcoholic iced coffee drinks and powdered beverages.
Keytone Dairy will pay $280,000 as a minimum royalty to manufacture and sell three flavour SKUs, Original Irish Cream Iced Coffee, Iced Mochaccino and Iced Butter Caramel & Sea Salt until December 31, 2022. Premium Baileys powdered flavour products will also be introduced to market from August 1, 2020.
The dairy company said in a statement that new product development is well advanced to bring additional premium ready-to-drink flavours to the market “in the near future”.
“The sales through this period are expected to be magnitudes higher than the license cost and the range is manufactured in-house at Keytone’s Melbourne facilities and will deliver further margin benefit to the Company,” Keytone Dairy said on Friday.
“The direct sales attributable to Baileys products bring a strategic benefit and financial upside to Keytone, working with Baileys and their local representatives Assembl Brands Pty Ltd. Such sales further elevate the credentials and product recognition of the Company’s full proprietary product suite to Keytone’s existing and potential new distributors and retail partners as well as its contract manufacturing clients, existing and prospective.”
The iced coffee products are currently distributed nationally through Caltex service stations and will soon be rolled out at Woolworths’ BWS stores.
Keytone will look to roll out the range through its national distribution network and is eyeing distribution opportunities in New Zealand, Hong Kong and Taiwan, with “strong demand and upside expected over the short to medium term”.
“The licensing deal with a global company such as R & A Bailey & Co. and the Baileys brand validates the credentials of Keytone, positioning the Company for further distribution channel wins for the full proprietary product suite and provides a stepping stone for licensing of further global brands,” Keytone CEO Danny Rotman said.
“This is a valuable contract win for the sales opportunity directly attributed to the Baileys branded products, and the significant upside this brings across the Company’s proprietary products.”