FAST FACTS

Cladist is a distribution company in the area of import of alcoholic and non-alcoholic beverages. The company works with both manufacturers and regional distributors.

KEY HIGHLIGHTS: 

A MAJOR PROBLEM

The wholesale business of alcoholic beverages is not that complicated. And to be perfectly honest, the goods our company purchases from the market are not that expensive. The major problem that we are currently facing, in 90% of the cases, is turnover.

The cost of our products for the mass market is not terribly high -- literally you can purchase a bottle of good vodka for less than 1-2 EUR (1 EUR equals $1.16 USD). But the real problem is the excise tax, which should be paid up front. The excise tax in Latvia for 1 liter of 40% alcohol equals 6.57 EUR (which is approx. $7.65 USD).

Thus, if we want to put a full truck of bottles worth a market value of approximately 20,000 EUR, we will pay excise tax of roughly 100,000 EUR. In our case, the turnover issue is the major problem to fulfill customer needs.

The demand for our products exceeds the offer, because of the lack of turnover, therefore we are not so efficient in terms of profit margin. Having a bigger turnover in our case would make us a bigger profit, but with the same expenses as we are having now.

READY TO THRIVE

Our problem is actually really hard to solve. All our products are delivered on 30-day post-payment terms, which is the most common payment terms in Latvia. Thus, the turnover money will be available again in 30-32 days, if the client pays on time.

Factoring is not an issue for us because:

SIGNIFICANT OPPORTUNITY
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ALTERNATIVE PRODUCTS

We do sell wines primarily (sparkling wines) from Italy, and sweet/semi-sweet wines from Spain. The thing in Latvia, as was mentioned before, is a customer preferences of strong drinks rather than beer and wines, so in our product portfolio democratically priced wine comes straight after strong spirits, which do not exceed the price level of more than 12 EUR.

Our company delivers several brands of sparkling and non-sparkling water. Because we do a door-to-door delivery to our clients, some of our clients do prefer to order non-alcoholic beverages along with the alcohol, primarily water to their trading units, and hence we do all the delivery logistics with alcohol, we do also make a profit by reselling the popular non-alcoholic sparkling and still water, which makes a good margin. This is a win-win situation to non-alcoholic beverages producers since we do have delivery contracts with all major chains in the country.

In summary, we offer demanded alcoholic and non-alcoholic beverages to our customer, providing logistics on a pan-Latvian level.

TRACTION & ACCOMPLISHMENTS

We selected a portfolio of products (alcoholic beverages) from Moldova, Russia, and European Union which are demanded by the market. Was the first company to introduce those products to the local market.

Within a short period of time, a tremendous success came to us. Within the past six months we’ve become a partner of local chains of supermarkets as well as specialized liquor stores, and we obtained customer choice on the products which we selected to sell in Latvia.

We have a distribution warehouse and transport available for processing orders and delivering goods. As an alcoholic beverages wholesaler, the business is strictly regulated by the government which obliges us to have a special license. From time to time the regulator initiates routine checks as we work with goods for which excise tax should be paid.

MEET THE TEAM

ALEKSEJS ZELINSKIS | CEO

• Strong financial background as a private banker working for top 10 Latvian commercial banks for 8 years
• Successful entrepreneur and after his banking career has built and sold several businesses which still operate, namely a hotel in the city centre of Riga (rated 8.9 on Booking.com), catering company, and corporate consulting company

OLGA PETRENKO | SALES DIRECTOR

• Experience working at Transact Pro, the first licensed electronic money institution in Latvia with the right to render payment services as Merchant Billing Specialist
• Having gained excellent and long-term experience as a trade manager, as well as looking at trade from a specialist in discussing accounts of merchant's side, Petrenko joined our team as a Sales Director, full of enthusiasm and faith in a productive business
   

MAX KORZANOFF | STRATEGIC MANAGER

• General Manager of the company providing IT consulting services and hosting
• Trusted partner with broad horizons thinking, along with the CEO
• Korzanoff is responsible for company’s strategy, identifying growth objectives, etc.

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