Before COVID-19 forced us all into makeshift home offices, the MarketFinance working week ended with a teamwide Townhall. We would get together on the top floor of our office to hear company updates and celebrate individual milestones. Best of all, we’d regularly invite a customer down for a fireside chat. It’s a great opportunity for the whole team to get better insight into the businesses we help.

We do Townhall on Zoom now, and it’s a more relaxed lunchtime affair where beers are substituted for salads and sandwiches. Last week we welcomed Tony Trevillion, Director of White Label Cocktails, to meet the team virtually and tell us about his business.

Right place, right time

White Label Cocktails does exactly what it says on the tin. Set up by Tony’s mixologist son James nearly ten years ago, the company produces high quality “no compromise” bottled cocktails for a variety of businesses. And right now they’re going from strength to strength.

Tony joined the business in the middle of 2019 when James decided to move away from supplying pre-mixed cocktails exclusively for events. They made the call to change their business model, focusing on selling directly to restaurants, pubs and retailers that use their own branding.

Sadly, when the pandemic hit they saw a huge deal with a well known brewery fall through. “We closed the doors and had absolutely no idea where we were going”, Tony told us. But after furloughing their 14-strong team and trying to figure out what was next, the phone suddenly started to ring and sales skyrocketed.

Premixed drinks have experienced a meteoric rise in recent years. You’ve probably tried at least one on a Covid-friendly park meetup. “There’s no doubt about it”, Tony said, “we’re in the right market with the right product at the right time”.

Over the last year, restaurants scrambled to operate as takeaway only or through cook at home meal kits. For many that has meant getting restaurant-quality drinks out too, so some big names came to White Label Cocktails for help. By June, their order book was more than full and they had a completely different business model. Tony put it like this: “We went from artisan maker to volume producer overnight”.

Growth doesn’t come cheap

The surge in the market helped them get discovered by major retailers. Soon the kitchen they were using wasn’t big enough and they had to move into premises five times bigger. Now, with some huge opportunities coming up and a deal with a large retailer underway, they need to grow even faster.

“The challenges are really just starting to hit us as we’re coming out of lockdown and we’re seeing how much pent up demand there is”, Tony explains. They’re expecting to more than triple their output next year. But they need the right funding to get the space, people and equipment to support those contracts.

Let down by traditional banks

Last year’s fee and interest-free lending schemes were a huge attraction for many businesses. White Label Cocktails was no different, especially because they needed to fund growth. At this stage in their business, borrowing was the answer. “The alternative would have had to be angel investment”, Tony explains, “and we’ve worked too long and too hard to start giving it all away now.”

Much to their surprise they found that traditional high street banks wouldn’t lend to them. Their recent pivot has been a huge success for the business, but it was a little too recent for traditional lenders to feel comfortable with. Tony felt frustrated by their lack of understanding.

The banks were making a decision on the future of the business based on a different model. Despite Tony’s efforts, they wouldn’t look beyond previous years to focus on the recent growth the business was seeing. “I don’t know how you drive forward looking in the rear view mirror”, he says. In contrast, an alternative lender will try to understand where the business is headed, whatever size they are.

Unmanageable payment terms

It’s a problem we’re hearing across the board. “Everybody pays with a delay”, Tony told us, but their suppliers want to be paid immediately. The pandemic has really catalysed this issue. Right now they have to pay within two weeks, or even upfront, for their ingredients and packaging. Yet they have to wait 45 or 90 days to get paid themselves. It’s simply not sustainable, and is what brought the business to MarketFinance.

Tony already knew about invoice finance and liked the choice of only funding specific invoices rather than a whole ledger. After their broker put Tony in touch with us, we were able to approve their application and set them up with a £250,000 CBILS revolving credit facility. With that in place, they can access the cash they’re owed without waiting out lengthy payment terms. The convenience is really appreciated and Tony describes our platform as “a very useful and easy system to operate”.

We're excited to be working with agile and passionate entrepreneurs like Tony and James. The near future looks jam packed and we can’t wait to see where these huge opportunities take them this year and beyond.

If you’ve been particularly impressed by a premixed drink recently then chances are you’ve had one of theirs. Find out more about what they do and how you could work together on their website.