Digby Fine English Wine
The Digby brand of English sparkling wine is authentically modern with a respect for the past, focussed first and foremost on quality yet remaining playful, like the lining of a Savile Row suit.
The Company is developing a portfolio of fine sparkling wines that are structured, rich, classy, fresh, but with underlying strength of being punchy, confident, bold. Wines that are true to their origin: England.
Sales of Digby’s first ever vintage of sparkling wine were launched at a quintessentially English event on the Bowls Lawn, Hyde Park, London on 30th July 2013. This 2009 Vintage consists of the 2009 Reserve Brut and 2009 Rosé Brut and retail for £35-£45 in shops like Selfridges and £60-£80 in top restaurants.
We believe our approach to quality, that of a pure négociant, will enable us to produce the finest wines in England by building long-term relationships with a number of meticulously managed vineyards across English Wine Country then focusing on achieving the ideal blend.
Innovations: Why will we win?
The traditional approach to starting a wine business is to focus initially on buying land and planting a vineyard. This is not only capital intensive, but slow (it takes 3-6 years for a vine to mature) as well as risky since a good site is never really known until proven by good crops. We are instead focussed on building a luxury brand, leveraging the availability of grapes for sale from farmers and winemaking capacity from contract winemakers. Our experience is that this is a well-proven strategy in the Old and New World wine regions, but is not prevalent in England.
For example many of the large French Champagne houses follow the négociant model like us. Branding is at the heart of all we do. We have a design-led presentation of our products, achieved by collaborating with one of London's best brand agencies, Big Fish.
Great care and attention go into the production of every single bottle of our English sparkling wine. We spend much time in our partner vineyards to help ensure top quality fruit is available for harvest. In October, grapes are hand-harvested in whole bunches to preserve the delicate skins. Pressing at the winery is performed with very gentle pressure so that only the best juice is removed.
The Founders work collaboratively with our winemaking supremo, Dermot Sugrue, to develop the Company’s slowly emerging house style and determine the best wines to make with each year’s individual grapes. The Traditional Method wines are made using the Pinot Noir, Pinot Meunier and Chardonnay varieties, with an average of three years cellar ageing in bottle.
And then there is the element of experimentation – combining the art and science of winemaking – that comes into play every year. It is this craft and patience that come together to make a product worthy of our brand. The exact disgorgement date that marks every bottle of our wine is a nod to this care that has been taken from vineyard to glass.
Substantial accomplishments to date
Contracted for highest quality grapes & one of England’s best winemakers.
Built & trademarked innovative brand identity with one of London's top branding agencies.
Closed first fundraising round, bringing total cash invested to date to over £400,000.
Won Silver medal from Decanter 2013 (putting our wine in the top 11% of all 14,362 wines tasted) & UKVA competitions.
Formally launched brand & sales on 30th July 2013 with a positive reaction from wine critics & press (clippings: http://tinyurl.com/DigbyPress).
Initial customer list is prestigious:
• Selfridges – Voted Best Department Store in the World.
• Vagabond Wines – Harpers 2013 Best UK Independent Wine Retailer.
• La Trompette – One Michelin Star.
• Gillray’s Steakhouse & Marriott London County Hall, Five star hotel.
• Restaurant Story – One Michelin Star.
• Hedonism Wines – Decanter 2013 London Wine Merchant of the Year.
The Company is focused on the production and marketing of fine English sparkling wine made using the grape varieties of Pinot Noir, Pinot Meunier and Chardonnay, as are the top Champagnes.
The Company is taking an approach recommended to it by established industry players outside the UK:
• Buying grapes, rather than planting a vineyard, which means we have a much faster time to market and much, much lower CAPX.
• Producing sparkling wine through a contract manufacturer rather than by building a winery, leveraging existing capacity and skills and with almost no CAPX.
• Focusing intensively on branding and marketing, while keeping sales and distribution in-house – building a close, loyal customer base to achieve a high but sustainable price point. The brand goals for the Company are to establish a deep, emotional resonance with our customers, thereby achieving lasting margin defence. This approach plays to the weakness of the competition and to the strengths of the Founders.
It also means that most of the capital that goes into the Company would go into inventory. The Company contracts to buy in its grapes for several reasons:
• Ability to select the very best grapes from across southeast England.
• To obtain a variety of flavour profiles from different vineyards for blending.
• For increased scalability.
• To significantly reduce the Company’s capital investment required as we avoid land / equipment / infrastructure spending, planting of vines and care of the vines for several years before they become productive.
• For much faster time to market, since a new vineyard would take from three to six years to produce fruit in commercial quantities.
• To lower the overall risk level as it is not dependent on the weather and topography of one or a small number of locations, but rather can source the best grapes from multiple sites across the southeast of England.
Use of proceeds
The Company has had substantial cash investment of over £400k already by the Founders and from its pre-launch First Fundraising Round. These past investments paid for initial production and the CAPX required for launch. This Seedrs campaign forms part of the Company’s Round 2 of external fundraising. Round 2 will provide growth capital to help scale up our production. The production of our luxury sparkling wine takes a minimum of three years after the October grape harvest to be ready for sale, so the main use of capital by the Company is investing in work in progress on the Balance Sheet. The production costs to be invested in are buying raw materials (i. e. English-grown, high quality grapes) and paying our contract manufacturer to manufacture and store new English sparkling wine for future sale for an average of three years.
Professional men and women aged 30–45 (or aspiring to be / remain) and living in one of the World’s great cities such as London. They are discerning pleasure-seekers who enjoy new discoveries and sharing the moment; people for whom it’s the little things that make the difference. They have a respect for the past, yet they are keen to embrace the new with a thirst for knowledge. They make intelligent choices.
UK demand for sparkling wine is strong:
• UK's sparkling wine market is £1.1 billion p.a. (off-trade £658m, on-trade £437m).
• UK is predicted to become the No.1 sparkling wine export market in the world by 2016.
• UK is where the luxury sparkling wine drinkers are: UK is the No.1 market for Champagne exports at 32.5 million bottles in 2012.
• UK is where the sparkling volume growth is, of the top 10 countries in sparkling consumption (by volume), the UK has the second highest growth rate predicted from 2010 - 2014, at 12%.
Asia demand: Sparkling wine sales in top East Asian cities are rapidly expanding.
If the UK is the No.1 market for Champagne exports at 32.5 million bottles in 2012, the top Asian importing countries are:
• Japan: 9.1 million bottles (4th in volume rankings).
• China: 2.0 million bottles (12th in volume rankings) .
• Hong Kong: 1.6 million bottles (14th in volume rankings).
• Singapore: 1.5 million bottles (17th in volume rankings).
It is important for the Company to develop markets outside the UK as a key part of its margin protection strategy, especially as the volume of English sparkling wine available increases.
Exporting is a high margin distribution channel. We see few other English producers taking the step to export and develop their brands abroad. Prestigious English luxury brands like Dunhill, Burberry and Bentley find a natural home in these Asian markets, where there is appreciation of Englishness.
Characteristics of target market
Reasons to enter the English sparkling wine market:
• Small but rapidly growing wine production market: Estimates of the size of the market are just that, estimates, but the Company estimates that it was £25 million in 2011, that it grew by a third and that the growth is accelerating. By 2016 English sparkling wine is predicted to grow by 300+% to a total of 480,000 cases.
• Small is beautiful: the UK currently has 1,200 hectares under vine, (vs. 33,000 hectares and sales of £3.6 billion a year in Champagne)—the Company intends to be a big player in a small but rapidly developing industry.
• A high level of growth is expected to continue for two reasons: significantly more hectares of vineyard have been planted and English wine accounts for less than 1% of domestic wine consumption.
“Sparkling wine is the future here (in England). We are on a roll.” — Hugh Johnson.
By selective distribution to prestigious, on-brand outlets around the globe we intend to maintain an aura of scarcity and maintain our prices. The Company's most important method of reaching the market is by 'keeping it personal' - building direct relationships with both B2B and B2C customers. This all comes down to the meticulous selection of our team and partners and collaboration with our investors. Here is an overview of our key team members:
• Trevor Clough - CEO - With big dreams of creating a truly global brand of English fizz, Trevor left his job in strategy consulting and is now intent on bringing happiness to Digby customers, one glass at a time.
• Jason Humphries - Co-Founder - Dedicated to detail, Jason is working on cultivating close and careful contact with Digby’s partner vineyards, ensuring the maintenance of the wine’s distinctive quality and character.
• Lee Sargent – Investor and Marketing Expert – Helping Digby steer a path somewhere between conformity and outlandishness, Lee brings his years of drinks industry experience to suggest original and exciting ways of telling the Digby story.
• Arthur Voulgaris - Investor and Sales Expert - Naturally gregarious and with years of wine sales experience, Arthur is very knowledgeable about hospitality sales best practice.
• Dermot Sugrue - Winemaker - One of England’s most celebrated winemakers, a man dedicated to experimentation and analysis, Dermot’s extraordinary palette is responsible for Digby’s individuality.
• Big Fish Design - branding / creative agency, with a team of 40+ for marketing, design, production and website development.
There are three categories of competition.
It is the belief of the Company that, though the Grand Marques (most well known brands of Champagne houses) have obvious presence of mind and share of wallet with consumers, as well as large marketing budgets, fine English sparkling can match or exceed them on quality and use fresh, innovative marketing to carve out a loyal niche of customers.
Sparkling wine competition:
2011 was the first time that the value of UK sparkling wine sales through the off-trade were larger than Champagne.
English sparkling competition:
The Company views its home industry in three categories: English fine wine, English mid-market and English local. The English Fine Wine segment is the one to watch with all in this category producing high quality estate wines. Their wines are available in some of England’s better venues and retailers. The Company is happy to have them as competitors, but believes that it can exceed their development of a brand.
According to David Cowderoy, who is a rare UK industry participant in that he has both decades of experience as well as much international exposure to commercial wine businesses:
"Many new players are following the same format, planting a small estate of 5-10 hectares with the traditional grape varieties and aiming to sell wine at around £25 per bottle and sticking to “safe”, “simple” winemaking techniques. This multiplying number of wine labels will find it very difficult to differentiate themselves. Copying all that is done in Champagne is not going to work either - though many elements are similar, the devil is in the details."
It is the view of the Company that the industry needs a different sort of participant - one backed up by a strong marketing and sales approach that can take advantage of any growing pains as the industry develops by being a major buyer of grapes.