Mercato Metropolitano represents a revival of traditional street food market with an Italian soul within the UK and beyond. The current London location has already attracted an estimated 590,000 people* through its doors since November 2016 to July 2017. Yet, MM is more than just a food market. The MM concept is proving popular because it offers visitors a trusted destination for friends to enjoy a fantastic range of highly-curated Mediterranean street food, artisan groceries to take home and inclusive entertainment, featuring an immersive cinema offering as well as local live music. What stands out for many visitors, is the relaxed atmosphere focused on the local community.
Ultimately, we are developing a sustainable business model which celebrates food as an important catalyst for conviviality and social cohesion, in a quest to help build inclusive local communities, contribute to economic development and help with the regeneration of declining urban areas. The FT recently listed Mercato Metropolitano as one of the five best London night markets.
We have grand plans for the future!
* Based on an assumed average spend of £10 per person.
Food markets provide an excellent venue for smaller-scale growers and restaurateurs to try their hand at direct marketing with minimal upfront investment, ideal conditions for product development and instant customers' feedback. Research shows that, by making a place for social activity, farmers and food markets help to promote a sense of society and make a positive economic impact for local businesses. Over the past thirty years, cultural projects have played an important role in urban regeneration.
At Mercato Metropolitano (MM), we are combining these concepts with impressive results and relatively low capital investment. MM revolves around individuals, from small-scale farmers to local producers and members of the local community. We provide an experience that goes beyond eating. With our 'glocal' approach, we want to help raise awareness about sustainability, environmental, economic and social issues that affect the community.
Substantial accomplishments to date
- Mercato Metropolitano started with our pilot project in 2015 during the World Expo in Milan, helping regenerate a 150,000 sq ft disused railway station. Over a four-month period, our customers spent over €8 million** on anything ranging from €1 for a coffee to €10 for some of our finest artisan cuisine.
- Our first flagship site in London is the place where we are starting to refine our business model for our future expansion.
- Since July 2016, we have been aggregating a group of artisan food entrepreneurs, including a Sicilian deli, one of the best pizza parlours outside Naples, an outstanding Argentinian grill, a zero-waste vegetarian restaurant, an innovative kebab restaurant, and a must-visit wine cellar.
- We have welcomed an estimated 590,000+ customers.
- Since January, we have been witnessing an average month-on-month growth in gross sales of 18%, going from £342,000 sales in January to over £900,000 in July, with an estimated footfall in July of over 90,000 customers**.
- Our immersive 150-seat cinema is often sold out, and we have a growing list of artisans who want to trade with us.
- We have also launched a series of community-based offerings, such as a cookery school, an urban gardening project, a boxing gym and a popular indoor cinema, and have received attention from the Financial Times, through Retail Week, to the Evening Standard.
- We have already identified a number of potential new sites, some of which are being negotiated with the property developers. Among these is a development of over 28,000 sq. ft. within Camden Market, and a development of a 18,000 sq. ft. space in Canary Wharf.
** Based on unaudited management accounts
Mercato Metropolitano operates as an aggregator of small producers, farmers, food entrepreneurs and artists, as well as a catalyst for community activities.
Our monetisation strategy has several core elements:
1. Entry fee charged to our 3rd-party operators as a contribution towards the cost of their shack and the site generally;.
2. Profit sharing with all 3rd-party operators of 18% of net sales on food and 25% on everything else;.
3. Licence fees charged on floor space to non-food operators, such as cinema, gym, co-working spaces, etc. (current).
4. Directly operated activities, such as event-hosting, cooking schools and pop-up markets, providing a combination of sales and sponsorship revenues (current).
5. Own-label products to be manufactured and developed with our partners (in development).
6. Worldwide retail expansion programmes for private businesses and countries' regions (in development).
Use of proceeds
The proceeds raised from this Seedrs campaign will be used as follows:
1. Up to £200,000 may be put towards assisting MM Elephant and Castle in finalising payments on remaining capital expenditures for the opening of the Elephant and Castle site. By repaying some of the outstanding creditors, we will be able to free-up operating cash flow which the Company will use to improve the site and expand the business;
2. Assist MM Elephant and Castle in installing a power substation, which we estimate will allow the Elephant and Castle site to save approximately £10,000 per month on electricity costs (currently using a diesel generator);
3. Assist MM Elephant and Castle launch an affordable 120+ desks co-working space for promising food and agribusiness entrepreneurs on the second floor of the Camara building at Elephant and Castle (currently empty);
4. The due diligence for our second site (likely to be Canary Wharf) and retain a team of project and planning consultants to work alongside the landlord of the Canary Wharf site;
5. Carry out improvement works at the Elephant and Castle site and for general working capital of Mercato Metropolitano Ltd.
Please note, the company has an outstanding loan of £615,025 with an annual interest rate of 3.5%. The company plans to start repayment in January 2018 over the next 5 years. The proceeds from this round will not be used to repay this loan. However, the company plans to repay 50% of the loan from the proceeds of their next funding round.
We designed the Mercato Metropolitano format as a truly inclusive concept to address a wide range of retail and business customers of all ages.
Customer segmentation along traditional socio-demographic lines (income, age and gender) is no longer sufficient to understand and target the groups and sub-groups which make up today's and tomorrow's food and hospitality markets. Nor, we feel, does it help to counteract the isolating effect that the increasingly faster-paced and media-saturated lifestyle has on large inner cities and neglected suburban areas alike. Therefore, five years ago we set out on a journey to plan and design a concept that could combine the importance of sourcing natural, nutritious and affordable food, with the potentially positive effects that convivial eating and group learning have on building communities.
The outcome of this planning process is starting to show a truly remarkable picture. Today our producers and products come via a growing network of selected farmers and true artisans who find a great sense of fulfilment in the contribution they are able to make to MM, and our customers span a very broad socio-demographic spectrum. We are very proud of what we have achieved and we will use the data and customer feedback we are gathering in our Elephant and Castle site to create a truly replicable and scalable model.
We have opened our doors to anyone who wants to meet at our premises and talk, share ideas, have a good time, eat and drink well, watch a movie, attend a cooking class, read a book, do some yoga or take a boxing class, and generally contribute their presence to our local community.
The plan over the next five years is to open at least two more sites in London of similar size to the site in Elephant and Castle (approx. 25,000 to 40,000 sq. ft.), and have had initial contact with a local development company for a site in Manchester. Outside the UK, we are negotiating with a private development company for a ca. 3,000 sq.mt. site in the heart of Brussels for the development of a Mercato Metropolitano site. We also intend to roll out our online platform over the next 18 to 24 months.
Characteristics of target market
This campaign focuses on our first London site located between Borough and Elephant and Castle.
Elephant and Castle is a vibrant neighbourhood south of the River Thames in central London. It is key transport node with a major regeneration programme underway, where over £3bn of public/private money are being invested.
In 2015 Lend Lease started implementation of its approved scheme to build 2,500 new homes on their site between by 2025. We expect this to increase our already thriving customer footfall, particularly as we cater for a large cross-section of local and visiting residents interested in the alternative food retail sector, farmers' market, the street food vents and entertainment in general.
Our demographic analysis indicated that Southwark's population is young, ethnically diverse, densely spaced with turnover higher than national average. Population for 2016 is expected to be around 303,500 and the Government has projected a further rise to over 337,000 by 2026. Our research showed that 42% of the residents are aged 20 to 39, compared with 35% in London and 27% in England. With the London South Bank University and a number of colleges around Newington (where our site seats), the population density is 18,204 persons/sq. km. We concluded that this was a desirable mix for a socially-focused business offering high-quality food to young consumers who seek social interaction over an artisan, ethically sourced and affordable meal. We were right!
Our broad socio-demographic and market product segmentations require a holistic approach to measuring and analysing data in order to test our business plan assumptions. For the designing and structuring of our offline business, we look at political, economic, social, technological, environmental and legal aspects that may affect our market penetration and sustainability.
Our most popular sources of new customers are the word-of-mouth and the community events which we regularly host at our London site. This results in a very low cost of new customer acquisition.
For our online offering, we are preparing to reach the market with an offline-to-online entry strategy, by drawing potential customers from our considerable and growing media following into our physical stores. We intend to reverse the cycle by bringing physical presence back to our online platform through a unique format that our media and marketing advisers are currently designing and dry-testing.
We have a letter of intent from the owner of a 19,000 sq.ft. property in Canary Wharf (London), on the Isle of Dogs side of the South Dock, for the development of a Mercato Metropolitano over three floors of a quayside building (plus courtyard). If the deal goes ahead, the site is expected to launch before the end of 2017. We also have a letter of intent signed in connection with the proposed development of a ca. 3,000 sq.mt. Mercato Metropolitano sites within Camden Market (London).
In addition to the core business in development, we have secured letters of intent from operators in Miami (Florida – USA) and Tokyo (Japan) to open joint venture food and cultural markets under the brand Mercato Metropolitano. As these opportunities are still being structured, we have not included the revenue potential that may derive to Mercato Metropolitano in the current valuation for the purpose of this Seedrs campaign.
Let's face it: the number of pioneers who are keen to take over a rundown area and help regenerate it with amazing food and community-building activities by giving small producers and food artisans a launching pad for their business idea is not that big! We believe we have created a model that is capable of delivering win-win-win results and, over the next three years, we plan to continue iterating it until it becomes the 'new norm' for urban renewal food and cultural activities.
Faithful to our vision, values and ethos, we have not set out to take on competitors by creating marginal improvements or attempt to rid the world of bad food through a cost leadership strategy. Instead, we are refining our differentiation strategy by creating a unique offering and a whole new industry; an industry where:
• Small and medium food producers and artisans thrive and expand.
• Community residents have access to outstanding, natural, ethically sourced and nourishing food.
• Our operator and community builders, nourish, entertain, educate and inspire.
We have already seen amazing results, both in Milan and in our Elephant and Castle site, of customers visiting several days a week from the neighbourhood and beyond and asking us how the can get involved with our activities. We think that when customers are so passionate to become our best ambassadors, we must be onto something!