High-growth health food brand bringing African superfoods to the mainstream: profit meets purpose.
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, there has been a groundswell in “conscious consumerism”, resulting in a growing demand for products with positive social and environmental impact. Africa has also emerged as a major new consumer trend.
As a mission-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. Our award-winning range of superfood powders and energy bars are already sold in more than 2,000 stores in 18 countries and we have recently secured a partnership with the UN – including a major grant to expand and scale up our supply chain.
With revenues already at £1m+ and growing, the business now in profit and two exciting new product ranges ready to launch - 2018 is set to be our biggest and best year to date.
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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.
2. Supply Chain
• We develop our own exclusive, ethical supply chains.
• This creates competitive advantage whilst increasing household 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), superfood energy bars (made from cold-pressed fruit & nuts) and our brand new African Super-Teas (organic herbal blends boosted with our signature superfoods)
4. Social Mission
• By buying Aduna, consumers can "feel good while doing good".
Substantial accomplishments to date
• Profitable for Year to Date
• Secured partnership with UN, including major grant to expand our supply chain in Northern Ghana
• Finished year with sales of £1.1m and ahead of budget on all key metrics – sales, gross margin, overheads and EBITDA
• Increased sales in Holland & Barrett by 16%, Ocado by 47% and Amazon by 215%
• Raised £472k from 370 Seedrs investors, smashing our target in 48 hours of our public launch
• Finalised recipes and packaging for two new ranges – bars and teas - although launch was delayed until summer 2018
• Featured on C4’s “Superfoods” series, sending baobab sales soaring by 1300%
• Launched major #MakeBaobabFamous campaign that included window displays in all 750 Holland & Barrett stores
• Won listing with Ocado
• Launched in five new international markets
• Tripled our Ghana baobab harvest to 144 tonnes, creating income for 700 women
• 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 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
• Created baobab as the best-selling superfood in Planet Organic & Whole Foods Market,,,.
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 retailers
• Via distributors to UK independents
• Via exclusive distributors for sale in international markets
• Online via our webshop, Amazon and select e-tailers
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. Our bulk business is currently 51% ahead of budget for the year and with a major grant from the UN going into building our supply chain, this is an area of the business that is set to continue growing dynamically.
Use of proceeds
We believe this is a very exciting time to be involved with Aduna. We have a high-calibre team, excellent relationships with our customers and have established our brand and signature ingredients within two high-growth categories of the health food market.
In 2018 the business has moved beyond break even into profitability and from this platform we are now gearing up to launch two major new product ranges into the mainstream.
With the business no longer burning cash on overheads all monies raised will go into growth initiatives:
- Working capital for scaling up production of bars and teas
- Working capital for inventory for our bulk ingredient business
- Investment in Digital Growth
- Investment in New Product Development
Moving forward we expect our working capital requirements to be financed through a debt facility.
Note: Aduna has a working capital facility for baobab production and processing in Northern Ghana. Within this they have an outstanding balance of £55k for the 2016/17 season and has also drawn down the first two tranches (£82k) of a total £100k facility that is available for 2017/18. They also have a €150k loan for the first production of their upcoming tea range. This is a long-term debt facility that will be paid-back over 4 years. None of the proceeds of investment are intended to be used to repay either of these loans.
*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, the greatest concentration 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 target market, through new, more mainstream distribution channels and products – namely the new bar and tea range we are about to launch.
Characteristics of target market
Aduna operates within the $1tn+ global Health & Wellness market, which is forecast to grow at 5.9% over the next 5 years. Within this, the biggest and fastest-growing segment is ‘Naturally Healthy’, a $276bn segment which includes all of Aduna's current and planned categories:
a) Superfood Powders
Superfoods fall within the €7.2bn (Europe) Dietary Supplement sub-segment. The sector is growing globally at a rate of 6% a year.
b) Energy Bars
Healthy snacking is in high-growth. In the 5 years up to 2015, driven by the anti-sugar movement, the UK energy bar market tripled in size and is forecast to hit £206m by 2019, with CAGR of 15%.
Tea is the only sector of the hot beverages market in growth in 2017, with sales having surged 3.5% to £642m in the past year [Kantar Worldpanel, May 2017]. With black tea suffering a long-term decline, this growth has been mainly driven by the continued surge of herbal teas (46% up from 2012 to 2017) and green teas (113% up from 2012 to 2017)
Aduna focuses on a few key areas to drive rate of sale, fuel category growth and create sustainable new markets:
• Retail Marketing
Driving brand engagement and rate of sale through POS, merchandising, promotions, sampling and events.
Enrolling press, bloggers & vloggers to spread the word, resulting in 1,000+ pieces of coverage to date
• Social Media
We have built a loyal following of 32k "Aduna Feel Good Tribers" on Instagram, Facebook, Twitter & Pinterest
With 30-50k unique users a month, our website is a hub of information about our ingredients, their benefits & how to use them
Over 20k subscribers receive our 'Feel Good Vibes' newsletter featuring exclusive lifestyle content, offers and recipes to 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. We amplified this online, achieving an estimated 129m impressions
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 niche. While we do not have a direct competitor in this space, competitors do exist within the specific categories we operate in. 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 before competitors appear
• Supply Chain
Our direct sourcing model means that our cost of raw materials is significantly lower than the competition
• 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
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