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In recent years the global food market has experienced a macro-level shift, with an unprecedented number of consumers actively seeking healthy and nutritious foods. At the same time, Africa has emerged as a major new consumer trend and there has been a groundswell in demand for products with positive social and environmental impact.
As a purpose-driven brand that takes innovative African superfoods and markets them through mainstream food and drink categories, Aduna is at the intersection of all these trends. And we are growing fast.
In 2016, we rolled out into all 750 Holland & Barrett stores, secured our first grocery listing with Ocado, entered five new international markets, achieved our first two profitable months and hit over £1m in turnover. Our award-winning range of superfood powders and energy bars are now sold in more than 2,000 stores in 18 countries - and this is just the beginning.
Aduna was created to connect small-scale producers in Africa with the $1tn global Health & Wellness market, combining major commercial opportunity with social impact - in equal measure. We do this in four ways:
1. Ingredient Innovation
• We identify exciting new African superfoods like Baobab, Moringa and Super-Cacao and pioneer them into the market.
• This drives category expansion for our retail partners.
2. Supply Chain
• We develop our own exclusive, ethical supply chains.
• This creates competitive advantage whilst increasing producer income by up to 10 times.
3. Brand Stretch
• Aduna was built to stretch across multiple categories.
• Our range currently includes superfood powders (for boosting food and drinks) & raw energy bars (made from cold-pressed fruit & nuts) - with much more to come.
4. Social Mission
• By buying Aduna, consumers can "feel good while doing good".
• 33% of UK consumers actively choose to buy brands doing social good and 67% of millennials are willing to pay more for them.
Substantial accomplishments to date
• Exceeded budget by 25% with turnover of over £1 million*.
• Achieved our first two profitable months.
• Launched major #MakeBaobabFamous campaign that included window displays in all 750 Holland & Barrett stores and created an estimated 129m impressions**.
• Won listing with Ocado - our first step into mainstream grocery.
• Launched in five new international markets including South Korea and Taiwan.
• Tripled our Ghana baobab harvest to 144 tonnes, creating income for 700 women.
• Exceeded 1,000 pieces of media coverage to date.
• Built our community of 20,000 newsletter subscribers, 30,000 followers of our social media channels and 30,000 monthly visitors to our website.
• Increased turnover by 269%*.
• Won Holland & Barrett New Supplier of the Year Award.
• Finalist in Virgin's #VOOM contest winning £100k.
• Shortlisted for two Guardian Sustainable Business Awards.
• Won UKBAA's Social Impact Investment of the Year Award.
• Won Natwest SE100 Storyteller Award.
• Won GSC Most Innovative Supply Chain Award.
• Won two Great Taste Awards for our baobab powder and bars.
• Moved out of Andrew's flat and into grown up office!
• More than doubled turnover*.
• Gained listing with Holland & Barrett.
• More than doubled turnover*.
• Gained listings in Liberty, Whole Foods Market, As Nature Intended & key independents.
• Created baobab as the best-selling superfood in Planet Organic & Whole Foods Market.
• Launched Aduna (November).
• Gained listings in Planet Organic and Revital.
Aduna's primary revenue stream is from the manufacture and sale of consumer branded products, which are sold via various distribution channels:
• Direct to major multiple retailers
• Via distributors to UK independents
• Via exclusive distributors for sale in international markets
• Online via our webshop, Amazon and select e-retailers
Wherever possible raw materials are sourced directly from small-scale producers in Africa, processed in-country and then shipped to the UK where they are filled into final packaging. All UK manufacturing, including the bars, is outsourced.
Aduna's direct sourcing model means that we achieve better cost prices for our major raw materials than competitors and has also enabled us to open up a second revenue stream within the bulk ingredients trade.
Use of proceeds
We believe this is an exciting time to be involved with Aduna. We have established our brand and signature ingredients within two high-growth categories of the health food market, built a superb team and developed excellent relationships with our suppliers and customers - all of which gives us a fantastic platform for growth.
This convertible will help to finance the major growth initiatives we have slated for 2017, prior to a larger institutional raise which is planned for later in the year. These include:
• The launch of a major new product range which has already been sold into our existing global distribution
• Business development work for a major new international market
• Expansion of our sales team to lead the charge into new distribution channels
We believe 2017 is going to be another exciting year for Aduna and we look forward to welcoming you on the journey.
Note: Aduna has a working capital facility for baobab production and processing in Northern Ghana. Within this they have an outstanding balance of £75k for the 2015/16 season and has also drawn down the first £40k tranche of a total £100k facility that is available for 2016/17. None of the proceeds of investment are intended to be used to repay this.
*source: unaudited accounts
**based on an aggregate of approximate retail footfall, estimated views of digital, print & broadcast coverage and social media impressions
The typical Aduna consumer is affluent, educated, urban, healthy, active and environmentally and socially conscious. Although these characteristics cut across all demographics and geographies, the greatest concentration domestically can be found among the UK’s 14m+ ABC1 women (Upper Middle Class, Middle Class, Lower Middle Class), and particularly those aged 25-44.
In order to seed our brand and superfood ingredients, we initially focused on a sub-set of early adopters, including vegans, vegetarians, raw foodies, yoga mums and health and fitness enthusiasts. By enrolling influencers from these communities into our brand including health food bloggers, press and nutritionists, we have been able to successfully cultivate a loyal following of brand evangelists who have helped us establish ourselves in the market.
This has given us the platform we need to expand our reach to encompass more of our target market, through new, more mainstream distribution channels and products - such as the new range we are about to launch.
Characteristics of target market
Aduna operates within the global Health & Wellness market, which is estimated by Euromonitor at $1tn and forecast to grow at 5.9% over the next 5 years. Within this, the biggest and fastest-growing segment is ‘Naturally Healthy’, a $276bn slice of the pie which includes all of Aduna's current and planned categories, indicating that Aduna is well positioned for growth both domestically and overseas. Our current categories consist of:
a) Superfood Powders
New superfoods are considered to be one of the major drivers of growth within the market. Superfood powders are part of a Dietary Supplement sub-segment which is estimated at c$15.2bn (US) and €7.2bn (Europe). The sector is growing globally at a rate of 6% a year, fuelled by the increasing number of health-conscious consumers with high disposable incomes. In 2015, Holland & Barrett showed a 33% increase in the superfood category with superfoods continuing to drive towards the mainstream.
b) Energy Bars
Healthy snacking is in high-growth globally, and nowhere more so than the UK energy bar market. In the 5 years up to 2015, the segment tripled in size and is forecast to hit £206m by 2019, with CAGR of 15%. Driven by the anti-sugar movement, grocery multiples are removing confectionery from their till points and employers are replacing sugary snacks with healthy options in canteens. The Mintel Consumer Snacking report noted that 95% of UK adults snacked in Dec 2015, with 48% stating that they were trying to eat healthily ‘most of the time.’
We are experts in creative marketing. Our strategy is simple: we focus on creating awareness and educating consumers about our brand, ingredients and products. Through this, we drive rate of sale, fuel category growth and create sustainable new markets.
• Retail Marketing: "The Push"
Driving brand engagement and rate of sale through POS, merchandising, promotions, demos, sampling and events. We put a lot of focus on the "final five feet".
• PR: "The Pull" - Creating Trends
Enrolling press, bloggers & vloggers to spread the word about our products, resulting in 1,000+ pieces of coverage to date including The Times, Telegraph, Guardian, Metro, Stylist, Vogue, Tatler & more.
• Social Media: Direct Engagement with Early Adopters
We are highly-active on social media and have built a loyal following of 32,000 "Aduna Feel Good Tribers" on Instagram, Facebook, Twitter & Pinterest.
With 30-50,000 unique users a month, our website is a hub of information about our ingredients, their benefits & how to use them. Home to our high-margin web shop and the Aduna World blog through which we share value-added lifestyle content.
• Email Marketing:
Over 20,000 subscribers receive our 'Feel Good Vibes' newsletter featuring exclusive lifestyle content, offers and recipes. This helps us drive engagement, product use and online sales.
In 2016 we delivered a 'through the line' #MakeBaobabFamous campaign including window displays in 750 Holland & Barrett stores supported by POS, promos, staff training, website, emails and social media. We amplified this online enrolling celebrities, bloggers & major brands to spread the word about baobab to their networks. The campaign achieved an estimated 129 million impressions, driving brand awareness and increasing baobab sales by almost 10 times.
Aduna's USP is 'African Natural Ingredients'. With more than 25% of the world's biodiversity originating from Africa, this represents a truly ownable and scalable brand niche. We do not consider ourselves to have a direct competitor in this space.
However, competitors do exist within the specific categories we operate in e.g. superfood powders and energy bars. Our major competitive strategies are as follows:
• Early mover advantage:
We lead the market on our African ingredients, ensuring that we secure the most important shelf space long before competitors appear.
• Supply Chain:
Our direct sourcing model means that we believe our cost of raw materials is significantly lower than those who follow.
• Authentic Africa-inspired Brand and Packaging:
Innovative within the market and often the reason consumers try Aduna for the first time.
• Social Mission:
This resonates with a growing base of ethically-conscious consumers and is often the reason for continued loyalty.
This unique combination of factors makes Aduna a powerful, premium brand that is very difficult to replicate.