Bonaverde
Bringing coffee to the 21st century. Fresh in-home roasting, fair online direct-trade.
- Location
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Berlin,
Germany
Categories: Food & Beverage Digital Mixed B2B/B2C
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Investment
sought: - £750,774
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Equity
offered: - 2.90%
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Investment
amount: - £1,335,521
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Valuation
(pre-money): - £25,169,298
Idea
Please note that the share price for this round is £942. Due to this high share price, we have decided to allow investors to hold fractional shares. This means that we have reduced the investment multiple to £9.42 (representing 0.01 of a share), with the minimum investment being £18.84. As these shares will be held via the Seedrs Nominee, fractional entitlements are possible. In the event that shares were to be transferred out of the nominee structure, Bonaverde would take the steps required to subdivide its shares so that fractional entitlements result in whole shares.
Anyone who invests at least £500 in our campaign will have access to our soon to be released digital product for a month before it is available to the wider public. During this time, we will solicit your feedback and recommendations so we can make improvements and incorporate ideas we may not have thought of without the wisdom of the crowd.
Introduction
Bonaverde isn’t just disrupting one the world’s largest industries. We’re reinventing it. Our roast-grind-brew coffee machine transforms green beans into delicious coffee with the touch of the button. Coffee beans, currently a commodity, become a consumable, allowing us to disintermediate the world’s second-most traded commodity. Backed by respected Series A investors and with an infrastructure designed to scale, we're positioning ourselves to lead the way to a better coffee industry, bringing fresher coffee to consumers and fairer trade to farmers.
The secret is connectivity. We use the power of IoT to bring together producers and consumers. Built-in 3G technology will automatically connect machines to the cloud, while the RFID reader allows the machine to pick up the perfect roasting profile from our pouches. Coffee beans purchased through a soft subscription model are delivered in single-portion pouches with attached RFID chips carrying the beans’ exact roast-grind-brew profile. We expect that multiple new revenue streams from this network will allow us to grow rapidly as soon as the foundations are in place.
Intended impact
As a for-profit social enterprise, we have a double bottom line:
1. Fill an emerging gap in the coffee market. Growing discernment among consumers has increased demand for high-quality coffee. Yet most coffee is stale by the time it reaches consumers. By offering single-portion packages of green beans and the means to roast them directly before brewing, we provide truly fresh coffee. For one of the first times, consumers can experience coffee’s full flavour. Our research has shown that our coffee has low acidity, which can be easier on the stomach.
2. Empower growers beyond fair trade. The nuances of the commodities market still force many growers to sell close to or below production cost, creating an endless cycle of poverty. Guided by direct-trade principles, our ecosystem aims to tie every stakeholders’ profit directly to grower’s profits. Growers on our platform are guaranteed at least 25% over production cost and, for the first time, are able to increase revenue by building their own brands.
Substantial accomplishments to date
We launched in 2013 and since then have raised $4m in total. We have run three crowdfunding campaigns totalling over $2m in capital received (via a mix of equity and rewards based crowdfunding). This funding fuelled our product development. In 2016, it was followed by a €1.8m (approximately $2m) Series-A round from investors Dr. Jens Odewald (Tchibo Holding) and Dr. Christian Potthoff-Sewing (Poppe + Potthoff).
After a successful first round of Beta tests, we have 250 machines in the field, with another 3,208 machines ordered and in production. Our production line is currently producing up to 200 machines a day (5 days a week). Combining this with a second production line that we expect to activate in August, we're prepared to rapidly grow our potential sales base immediately after launch.
We’re currently seeking an infusion of growth capital that we expect will allow us to meet the demand for coffee arising from the distribution of these machines, building the backbone of our coffee sourcing and distribution capabilities. Prepared to scale quickly, we're at a pivotal moment in our industry-shaking trajectory. We're offering Seedrs investors the unique opportunity to take advantage of this moment by investing now.
Monetisation strategy
While in the beginning phases of our business, our revenue model remains product-based. We intend to generate revenue through sales of machines throughout the EU & US, as well as through coffee sales for those machines. This model serves to generate revenue while we lay the foundations of our service-based business. With a network in place, we intend to shift gears to become an IP and licensing company. Having proven the demand for our infrastructure and started to build, we intend to generate revenue through access to our operating system. We believe that growers, distributors, brands and retailers will join our ecosystem to access our consumers. Because offering the freshest and fairest coffee is an intrinsic part of our system, brands to which we license this technology are expected to gain substantial branding power from these unique selling propositions. Over time, we intend to generate our revenue entirely from ecosystem facilitation and technology licensing, moving product distribution to licensed distributors.
Use of proceeds
We’ve already tested the enormous coffee market and uncovered substantial demand for our product. We believe that we've set ourselves up to generate supply that meets this demand. While we’re flexible, we’d rather use our full supply capabilities to grow our revenue streams straight out of the gate. We believe that this Seedrs campaign will provide the necessary support to do so, serving as growth capital directed at growing our existing consumer base. We will use it to thoroughly establish the operational foundation we need for a strong, international enterprise, hiring special talents and bolstering special business development operations. It is widely believed that coffee is the most traded commodity in the world, second only to petroleum. The more capital we have to fuel infrastructure growth, the faster we believe we can stake out space in this market, on boarding more growers and building demand through an expanding distribution network.
Additional terms and conditions may apply to any rewards offered. Please contact the company to find out more and ensure you qualify.
Market
Target market
Technology is evolving the way we work, live, and trade at a rapid rate. As it touches each industry, those with an interest in new ways of operating as a society are always the first to join in. We're counting on these early innovators to lead the way as we use technology to reinvent coffee trade.
The third-wave of coffee, characterized by boutique coffee shops peddling origin-centric, in-house roasts, has created a large market of coffee drinkers who value exceptional quality coffee. We’ve created a product that not only brings high quality coffee into the home, but adds the experience of in-house roasting. Early targets are coffee drinkers who are passionate about what’s in their cup, gadget geeks envisioning a world changed via technology, and socially aware individuals looking to make a difference with their disposable income. As true innovators, these enthusiasts look for the next big thing in their respective passions. The buzz they create in their communities inspires other early adopters.
We expect this initial target to expand rapidly. Awareness from our crowdfunding campaigns and PR has driven enough interest for us to begin development of a second-generation machine. Coffee is one of the most-traded commodities in the world, second only to petroleum. In Germany alone, 64.1% of coffee drinkers report they regularly prepare filter coffee at home, and 50.5% report regularly drinking it outside the home. These filter coffee drinkers, both in Germany and around the world, are our target market. We expect consumers to demand the freshness and quality of our coffee, and the food and hospitality industry to respond, adopting the machine as a means to set themselves and their coffee apart. We’re currently scoping out another product specifically-tailored for these industries.
Consider how many individuals you see with a thermos or to-go coffee cup each morning. A significant percentage of those individuals (64% in Germany alone) are sipping filter coffee. These individuals are our target market - starting with those with their fingers on the pulse of how innovation is evolving our ways of working.
Characteristics of target market
According to the SCAA, the retail value of the U.S. coffee market alone is estimated at $48 billion dollars. Amongst Americans over 18, 54% drink coffee every day, amounting to over 130 million daily coffee drinkers in the US alone.
Despite how much coffee is consumed around the world each day, we haven't evolved the way its traded at the pace of technology. The coffee industry is based on an antiquated commodity market with a long supply chain that thrives on isolation, with single actors at different steps of the supply chain purchasing devices and beans. Our model interweaves players as part of a growing network, fostering direct connections with the aim of creating equitable trade for all.
In our coffee trade infrastructure, all stakeholders’ profits are interdependent. The current supply chain allows brands and importers to take hold of value-adding processes, effectively dismissing the art of the farmer and cutting them out of the bulk of the profit margin. We bring some value-added processes (roasting) to consumers, while empowering farmers to take on others (packaging and branding). Trade is online and direct between producers and consumers. All others only profit by supporting these two stakeholders.
Finally, we bring together machine and coffee, rather than treating them as separate entities. Through our traceable digital ecosystem, we’re able to create options like pay-as-you-go coffee, single-portion consumer pouches, and consumer networks based on interconnected machines.
Marketing strategy
We’ve already begun engaging our first target users. Our crowdfunding campaigns attracted early innovators in our three target communities: Coffee Aficionados, Gadget Lovers, and Conscious Consumers. Due to the disruptive nature of this product, our crowdfunding campaigns and journey to market have already created wide awareness. We plan to continue building on the momentum created by delivering our crowdfunded device with a twofold strategy: (1) Foster the naturally high referral rate of these innovators and (2) Attract new awareness by capturing the interest of influencers and distributors.
The first part of this marketing strategy is organic. Crowdfunding backers naturally feel a sense of pride and ownership over a product they’ve helped bring to life. Because they thrive on discovering and sharing new innovations, the early innovators who’ve crowdfunded our hardware project can be counted on to spread the word. We’ve seen throughout our development how rapidly our backers can drive the conversation around our product. We are ready to give them a product they can proudly evangelize.
Incentive to share is an intrinsic element of our product. Owning a Bonaverde Berlin is more than buying a coffee maker. It’s joining a movement. Our core message has always been that all members of our ecosystem are Coffee Changers, with a stake in a better world of coffee. Feeling invested in the success of this new ecosystem encourages our early innovators to spread the word.
The second half of our marketing strategy, attracting new awareness, will draw on our extensive experience running campaigns that share this new coffee experience. It’s important to remember that what we’re creating is not just a disruption, but an entire reinvention of a common product and enormous industry. We can’t just explain it - we need to allow people to experience it. Our experiential marketing campaigns focus on tasting events that aim to catch the attention of bloggers, influencers, and distributors.
Competition strategy
As an integrated coffee system, we enter two markets - coffee and coffee hardware. When approaching our relationship with the coffee industry, we adopt the mindset that a rising tide lifts all boats. We welcome any coffee producer and brand to join us in our direct-trade ecosystem. After all, those who make their business high-quality, well-priced, fairly traded coffee are our allies in building a better coffee industry. Whether they participate by offering beans or crafting roasting profiles, we are hoping they will join us, expanding the market and helping to create direct-trade coffee as a substantial force in this massive industry.
On the hardware side of the market, we are aware that increasing interest in the taste of freshly roasted coffee has drawn other home roasting devices to to the market. However, the market is still young, and we believe that we are offering the only truly comprehensive option. We understand that our end-to-end system is the only one of its kind, and no other machine is integrated into a complete coffee experience. In addition, we believe that none of the competing models offer the customizable experience the Bonaverde Berlin presents. While there are roast-only and even roast-grind-brew machines coming on to the market, they all work in isolation. We believe that faced with a choice between doing some solo experiments in home roasting or joining a vibrant, immersive, social coffee network, most coffee lovers will choose the latter.