Some of the biggest and most successful companies in the world are food and bev giants, such as Swiss-based Nestle with a $9.4 billion profit in 2016. Or, Belgium-based Anheuser-Busch InBev, that thanks to a proposed merger with SABMiller, is poised to account for a whopping 30% of the planet’s beer sales. Then there’s Coca-Cola, weighing-in with profits of $7.3 billion in 2016.
The UK’s seen its fair share of positive foodie startup growth stories too. For example, the Innocent brand of smoothies (sold to Coca-Cola) was valued at $500 million back in 2014. Then there’s BrewDog, valued at a billion after US-based TSG Consumer Partners paid out £213m on a 22% holding in the Scottish-based brewer earlier in 2017. Or what of Ella’s Kitchen, the organic baby and children’s food that sold the company for an undisclosed amount to America’s Hain Celestial Group in 2013, after their products conquered the UK and then became stocked by the mighty Walmart in the US?
So, with all these success stories, it’s easy to see the mouth-watering potential that the food and beverage sector represents.
Seedrs also hopes to see some big success stories in the future from the Alumni businesses in this sector, such as:
Tossed are putting the fun back into healthy eating. They were the first made-on-site company in the UK to display all their nutritional information and create healthy twists on favourite dishes. The raise was a huge hit with investors, with Tossed overfunding by 169% and raising £1,269,830 in around a month and a half. After raising, they were amongst the first in the UK to open cashless tills, then they expanded to Dubai.
Chapel Down is an award-winning winemaker that’s challenging the better-known winemaking regions. It’s also a respected craft brewer. It invited customers, neighbours, suppliers and stockists to invest as a way to build long-turn brand engagement and help spread the gospel.
Based in Britain, back in 2014, Chapel Down became the first publicly-listed company to offer its shares through equity crowdfunding. The company raised almost £4 million from a combination of an institutional and high net worth (HNW) placing alongside the crowd, with all 1,463 investors participating on the exact same terms through Seedrs. Chapel Down went on to raise a further £1.7 million on Seedrs, to build a brewery for their growing ‘Curious Drinks’ beer and cider business.
Oppo create guilt-free luxury ice cream. That’s because Oppo have produced a delicious dessert range that replaces cream and most of the sugar with virgin coconut oil and stevia leaf, boosting each flavour with delicious superfoods.
Initial funds to support product and packaging development, came from grants, University innovation investment, and friends and family. The money helped Oppo to launch into 117 Waitrose stores and with Ocado.com. After turning down VC investment offers, they decided to crowdfund with Seedrs to help them grow further, reaching their initial £100,000 target within hours of going live and hitting 300% in just a few days.
Four emerging trends for food and beverages
From the campaigns and proposals we’ve seen at Seedrs, and from studying this sector in general, there seem to be a few trends emerging that could be worth looking out for over the next 12 months, including:
People are in love with organic – again
Perhaps because there have been so many less than favourable news stories involving mass-produced food, from processed meat to pesticides affecting chicken eggs, that more and more people are seeking out food and bev that’s certified organic. And on top of that, people seem more conscious about what they eat in general. No wonder sales of organic food and beverages increased by over 7%, so the total market is now worth a lip-smacking £2.09 billion in the UK.
Here’s to craft spirits
Did you know that 50 distilleries in the UK alone opened up in 2016 alone? After the craft beer trend of the last few years, gin and whiskey from small and independent labels is also tipped to be big. Part of the appeal stems from being able to profess an appreciation for the craft and authenticity.
Eating in to be ‘in’
The boom in food delivery is continuing, with companies such as Just Eat apparently testing ‘pavement droids’. Anyone thinking of helping themselves to a meal before the droid makes it to its delivery point should note that the food will probably be PIN protected to keep it secure. Cook at home meal kits, and even home chef apps are set to be popular. Gadgets to make preparing food and drinks at home easy or more similar to restaurant/café standards look set to rise in popularity.
Water, water, everywhere
Twenty per cent of the UK population is set to be teetotal and around 33% in London. Although anyone in the capital on a Friday night would find that hard to believe. However, water looks set to become even more popular than ever, but not just the usual still or sparkling varieties. Water is about to get more creative:
- Aloe water.
- Bamboo water.
- Birch water.
- Cactus water.
- Coconut water.
- Floral essence water.
- Honey-infused water.
- Maple water.
The opportunity for food and bev offered by Brexit
There’s only one thing certain about Brexit right now is that there’s still a lot of uncertainty. But despite concerns over a shrinking workforce, trade barriers, and the exchange rate making imported raw ingredients more expensive, there are potential positives for the UK food and beverage sector. In fact, some in the sector are going for growth.
People in Britain may end up drinking less wine produced in the EU, and be further tempted by a tipple made in the UK. Did you know that there are now 470 vineyards and 135 wineries throughout the UK?
New product development, reduction in waste and advances in automated production are thought to be areas for optimism.
Also, because the UK is a net importer of food (we only produce 60% of our own food), there should be opportunities to grow and produce more in the UK. And, that will reduce the impact of the weak pound. Especially if the UK exports more, and exports to other parts of the world – rather than the EU.
So, all in all, although the continuing daily barrage of headlines about Brexit are generally pessimistic, it’s not all doom and gloom. Perhaps the food and bev sector may even have reason to feel bullish. If you found this article interesting, you may like to read our post on the fintech sector.