Cranes
Uniquely brewed with cranberries to produce naturally light cider and a cranberry & blood orange liqueur.
- Location
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Cambridge,
United Kingdom
Categories: Food & Beverage Mixed Digital/Non-Digital Mixed B2B/B2C
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Investment
sought: - £150,000
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Equity
offered: - 4.78%
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Investment
amount: - £230,083
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Valuation
(pre-money): - £2,986,700
Idea
Introduction
Cranes produce two delicious products: our innovative Cranberry Ciders and award-winning Cranberry & Blood Orange Liqueur.
Our ciders are naturally light, by using fruit sugars they have 30% fewer calories than leading fruit cider brands. This achieves a great natural taste and meets the consumer demand for healthier drinks. We produce our ciders in three exquisite flavours: Cranberries & Limes, Raspberries & Pomegranates and Blueberries & Apples.
Our unique Cranberry & Blood Orange Liqueur won the Gold Award at The Liqueur Masters presented by The Spirits Business. Our recommended recipes are: Cranbellini (with Prosecco), Lemon Berry, and Cosmopolitan. However, bars and mixologists have been using it in many different bespoke cocktails.
We will be listed in Asda from May, we are already listed in our local Morrisons, and in a host of farm shops, garden centres, bars and pubs across the UK.
Our aim is to be one of the top three leading brands in both the Fruit Cider and Fruit Liqueur UK Markets.
Intended impact
Our ciders have been developed by identical twin brothers Ben and Dan and align with three major driving factors:
1. Increasing Cider market – Second largest growing alcoholic drinks category in the off-trade driven by innovation in flavour.
2. Reducing sugar in products – Increasing consumer awareness of the sugar content of products, important considering recent sugar tax and further proposals.
3. Crafted drinks popularity – Premium brands are taking market share from cheaper brands. For example, Bulmers sales having almost halved since 2015.
It would be wrong to claim an alcoholic drink is healthy, but in moderation it remains an important part of how people socialise and relax. We believe people will always enjoy a drink, but are increasingly looking to choose a drink that has healthier ingredients without impairing the taste. We believe our ciders provide that choice to the mass market and along with our liqueur we are building a strong distinctive brand.
Substantial accomplishments to date
We achieved over £190,000 in funding with our first Seedrs round, doubling our original target, with investment from key industry players including Brothers Drinks Ltd (international cider producer and contract bottler, who are also shareholders in soft drinks company Fever-Tree).
During 2017 full rebranding completed of the company and products, the feedback from consumers and the trade has been overwhelmingly positive.
Won the Gold Award in the 2017 Liqueur Masters for our Cranberry and Blood Orange Liqueur by The Spirits Business.
Ran 27 Road Show events in Costco, trialling and selling both ciders and the liqueur. Currently in discussions for a permanent listing.
Launching ciders with Asda in May.
Stocked both the cider and liqueur in our local Morrisons stores as a trial, to then extend nationally if sucessful.
Listing with Blackmore SPAR who deliver to 700 SPAR’s across the Midlands.
Listed by Diverse Fine Foods, a premium food wholesaler, who sell to high end retailers, including Fenwick’s and Selfridges.
Ciders stocked in the Wyevale Garden Centres.
Gained listings in major on-trade wholesalers, including LWC, Matthew Clark, Amathus, Hammonds and Masters of Malt.
Agreed a UK distribution agreement with Paragon Brands to become one of their key brands. Paragon Brands is a premium drinks brand distributor owned by industry experts who have excellent links in the drinks industry which we believe will open us up to sales channels that were previously out of reach.
Monetisation strategy
To generate revenue, we will focus on two main channels: on-trade and off-trade.
The off-trade emphasis will be on a successful trial with Morrison’s to increase listings and to ensure a successful launch with Asda. The success of this will reassure and encourage other supermarkets to also list our products. We have been in discussions with Tesco who are potentially interested and are asking us to keep them updated on our progress.
On-trade is a complex sector with several routes to market with different regional and national wholesalers to target. We feel that our partnership with Paragon Brands ensures the successful navigation of this market with their vast experience, contacts and track record. With listings already in numerous major wholesalers we are in a great position to advance in this sector.
Use of proceeds
We are looking to raise £150,000 to help us achieve our long-term goal to become one of the top three leading brands in both the Fruit Cider and Fruit Liqueur UK Markets by 2028.
Specifically, in the shorter term we will use the funds to:
• Deliver our marketing plan to help achieve our 2018 revenue target.
• Invest in increasing distribution and support sales in the on-trade through Paragon Brands.
• Support working capital, so we can produce larger batches of cider and liqueur to achieve higher margins through economies of scale.
• Invest in production capability to ensure we can meet the expected sales demand in 2018 with major supermarkets now listing our products.
Please note, Cranes has an outstanding directors loan of £187,320.30. This loan accumulates no interest and repayments can only be made when the business has profits, at the directors discretion. No proceeds from this round will be used to repay this loan.
Market
Target market
We operate in two alcoholic drinks markets – fruit ciders and fruit liqueurs.
Our core consumers are ‘Millennials’, aged 18-35; a total of nearly 17 million people, or 25% of the UK population. Over half (57%) consume alcohol at least once a week, and 55% of millennials rank ‘high quality’ brands as being the ‘most authentic’. To maximise the effectiveness of our marketing we have divided Millennials into 3 groups. By understanding the behaviours and needs of each we have then been able to better identify opportunities for the two products.
The three groups are:
Group 1 – Students. 18-23 years old, live in shared accommodation, work part-time and go out 3-4 times a week.
Group 2 – Young Professionals. 24-29 years old, rent with partner or friends, work as executives full time, and go out 2-3 times a week.
Group 3 – Young Parents. 30-35 years old, live in own property, commute into cities for work, go out 3-4 times a month.
Characteristics of target market
Despite the excitement around craft beers and gin, the cider market is a huge market worth £3.2bn in 2016 and is expected to be worth £3.6bn by 2021. Fruit ciders have been a big success and now evidence suggests they account for a 29% share of the cider market – up from 15% in 2015 and 2% in 2005. The Grocer recently reported that cider was up 4.8% YOY.
There continues to be a desire for more crafted products with consumers willing to spend on drinks with clear provenance that offer higher quality. Furthermore, we believe that consumers are seeking lower calorie products that still retain natural taste – in line with what we have seen are general trends in food and drink.
The value of the UK spirits market is c.£9.8bn. Flavoured spirits account for 18% of the UK Spirits Sales in 2015. Over the 12 months to 5 November 2016, 28 million litres of liqueurs were sold in the UK market, with an up-lift of liqueurs in the on-trade due to an increased demand for innovative cocktails.
Marketing strategy
Our marketing strategy will raise awareness using PR, social media, bloggers, events and brand ambassadors and drive trial through sampling at events and in-store. This is expected to generate revenue in both the on-trade and off-trade.
PR – featured in national & local titles (including Vogue; Evening Standard; BBC Good Food Magazine; Bella; Cambridge Magazine and Student Pages) as well as trade publications (including Imbibe, Pub & Bar, Bar Magazine and The Spirits Business).
Social media – 13,000+ followers across social channels and growing.
Bloggers – working with 40 bloggers contributing 43 inbound links discovered by search engines with a combined following of over 1.6 million.
Email – 2,700 subscribers receive regular updates.
Collaborations – work with complimentary drinks brands to create cocktails for the on-trade, as well as subscription boxes and music festivals.
Student ambassadors – This planned expansion route will be focussing on distribution to universities.
In-Store sampling – consumers try the product next to the point of purchase.
Competition strategy
Sales of crafted and high premium drinks are increasing rapidly, moving with the consumer trends. As a brand that cares about quality ingredients and provenance this positions us well in this growing movement.
We've seen that the trend to reduce sugar is starting to gather pace, as shown by the sugar tax coming in for soft drinks and company’s like Starbucks promising to significantly reduce sugar in all their drinks by 2020. Alcoholic beverages are also coming under scrutiny which we believe will only help us as we look to lead by example as we use healthier ingredients without impairing the taste.
We feel we offer something new and innovative, along with our distinctive brand and marketing campaign we aim to win over consumers from the corporate brands. Once we build a loyal customer base, and generate profit, we will ensure we continue to innovate and grow the brand through product development as well as targeted, cost effective marketing.