Bernard Hickey talks to Zumwohl's Ulf Fuhrer about how he built a firm making schnaps in Wellington to export to China and eventually Germany

By Bernard Hickey

New Zealand isn't known for its schnaps.

But then New Zealand also wasn't known for its Vodka either before 42 Below bubbled up from nowhere to be worth NZ$138 million when bought by Bacardi in 2007.

Now Ulf Fuhrer is hoping that one day the German-style schnaps he is distilling and bottling in Wellington, Zumwohl, can be exported back to the country of his birth -- Germany.

That would complete a journey Fuhrer began in 2008 when he returned from a family holiday in Germany with a taste for genuine schnaps without the sickly sweetness of the American style schnaps sold in New Zealand.

"We wanted to carry on the Germany tradition and have a few schnaps, but when going around bars and bottle stores we only found American style sweet schnaps," he told me in a recent interview in Wellington.

That's when Fuhrer, a marketing executive, saw an opportunity and a light went on. What if he could create shnaps in New Zealand?

By chance, he mentioned the idea to a client who put him in touch with her husband, Tony Green, a wine maker from the Hawkes Bay with 25 years experience.

"Him and I spent 12 months developing and refining exactly what we wanted to do with our schnaps and then I spent nearly 12 months travelling around the countryside with our little plastic bottles getting friends and family to try it," Fuhrer said.

It was a long slog, but eventually Zumwohl won its share of fans and Fuhrer decided to raise capital to build up the manufacturing and marketing sides of the business.

"I have a brother who had in the banking industry and he had good connection with a decent sized group of investors and said lets get involved and take the product to the next level," he said.

Zumwohl built its workforce up from 1 person to 7 people, including a bunch of relationship managers out on the road working with bars and liquor stores, particularly in the alpine regions of the South Island where the German-style Schnaps is most popular for a warming shot or cocktail after an evening on the slopes.

Zumwohl is distributed by Allied Tasman nationally and by Beaver Liquor to the Southern Lakes region.

"This is our time of year. This winter we've reached a good agreement with NZ Ski, which means we're on all the mountains in the South Island this ski season," Fuhrer said.

China the next step

Fuhrer said the next area for expansion is China, which has a new set of challenges. He met with distributors in China last year to scope out the market.

"It's a very different market there to what we thought it was. In Shanghai 60% of the people we met were Chinese and the rest were Koreans, Japanese, Americans, New Zealanders. It's a real mixing pot of cultures," he said.

"One of the big issues is our product getting copied. We did a lot of product research in the bars. Half of the back bars were copies, and the other half were all copies," he said.

Zumwohl decided to go with a bottle where the branding was baked onto the glass, which make it harder to copy. Zumwohl in China also has a higher alcohol content to ensure it competes with the fiery liqours that the harder-drinking Chinese customers are used to.

Not liver glue

Fuhrer is confident Zumwohl can compete in a market crowded with umpteen new vodka, tequila and whiskey brands.

Bars are often reluctant to take on new brands, particularly if they have strong brands in the existing categories, but Zumwohl slips in between the main spirits brands. Its closest competitor in the schnaps market is Jagermeister, originally developed as a cough medicine or 'liver glue' for gamekeepers in German forests.

"The advance we've got over Vodka is the vodka market is flooded. Every week a new brand crops up. At the moment people think of schnaps as a sweet liqueur. We're not seen as competition to vodka. We straddle the vodka, tequila and whiskey space from a product point of view," Fuhrer said.

"The world's our oyster in terms of how large our market can be. My personal thing would be to export it back to Germany," he said.

"Personally I see Europe as an opportunity. There's plenty of bankers and politicians who could do with a stiff drink about now."

Fuhrer has learnt a few things during the growth of Zumwohl.

"I probably would have gone into it full time a lot earlier on. In the first two years I was still working full time. One thing I would do is commit it to far earlier."

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