- Investment sought:
- Equity offered:
We aim to be *the* brand for cocktails in the home, helping people mix the best drink they've ever made, without fuss or wastage.
We’re taking advantage of two key trends in consumer behaviour:
* Consumers are now spending more on drinking at home than in bars
* Subscription models are proving successful
In 2013, spending on home-drinking overtook spending in pubs and bars for the first time.
And subscription businesses are becoming well established:
* Graze has 300,000 weekly UK deliveries
* Abel & Cole ship 50,000 boxes per week
* Beer52 went from 2500 to 5000 members in 6 months
* Naked Wines has 140,000 customers in the UK
Our core product is a monthly mail-order subscription which we soft launched 6 months ago. For £24, members get premium ingredients and recipes sent to their door in an elegant package, with just the right amount of spirits and mixers to make 5 drinks.
Brands work with us to promote their products and learn more about consumers in a powerful new way.
As well as our kits being popular gifts in the corporate sector, we aim to soon be supplying them to the hotel market to shake up the mini-bar experience; and we’re in advanced talks with a major retailer to bring our kits to their shelves too.
FOR THE HOME
At the moment, we see the home cocktail industry as being at the same stage as coffee was 15 years ago.
Back then, people could go out for a good cup of coffee but at home they were probably stuck with instant. Quality coffee in the home was for geeks or snobs. Now, good coffee is available in most kitchens - and we want to do the same for cocktails at home, by making them easy, cost-effective and fun. Above all, it’s about giving people the skills, ingredients and confidence to make great drinks.
We believe that the main barriers for most people are:
* Cost - you need to buy large bottles of spirits and mixers to make a single drink, so this limits experimentation
* Wastage - you might only need 30ml of Chartreuse for a cocktail, but you still need to buy a 70cl bottle, which then ends up sitting in a cupboard getting crusty
* Knowledge - cocktail techniques can seem intimidatingly mysterious to the uninitiated, and the existing online guides can assume an uncommon amount of prior knowledge
Our kits are aimed at overcoming these barriers by providing an affordable package with only the straightforward instructions and ingredients that you need.
“A lovingly curated alcoholic care package” - Evening Standard
We take a Jamie Oliver approach to cocktail making: simple instructions and great ingredients help you mix the best drink you've ever made. After their first drink, we educate members bit by bit to broaden their range.
Harper’s Bazaar have already called Shaken “fantastic and modern cocktails at home” - and we think the party is only just getting started.
Beyond this, we intend to develop partnerships with hotels that we expect will have massive impact on the in-room experience which has barely changed for 30 years. Shaken turns the mini-bar into a cocktail bar and makes it an experience - perfect for those who want to enjoy their time in their hotel suite without traipsing down to the bar.
We’re also in advanced talks with a major retailer to create standalone retail kits (ideal as gifts), co-branded with a spirits partner.
Underlying all of this is *data*. As we grow, the qualitative and quantitative market insight we get from our members will become more and more detailed and comprehensive, which we believe would enable us to track and predict future trends. This is invaluable information for drinks brands who are currently forced to make expensive long-term bets on the future with limited information. We believe that Shaken has the potential to plug that gap in the same way that Tesco Clubcard did for retail 20 years ago.
Substantial accomplishments to date
* Working part-time on the idea, we have grown to over 100 members each paying £24 per month (with no paid advertising, only word of mouth).
* Significant industry support, from global brands to the world's top bartenders:
--"I believe the Shaken Cocktails answers a genuine need. This could create a large following of enthusiastic advocates" - Kevin Abrook, Global Whisky Specialist at Wm Grant (Owners of Glenfiddich)
--"Shaken is the best idea I've heard in years” - Dick Bradsell, inventor of the Espresso Martini
* High quality press coverage from the likes of Harper’s Bazaar, the Evening Standard and Huffington Post
* Established strong working relationships with many global and boutique drinks brands - resulting in significant free stock, media support and an appetite for future partnerships
In 2015, we will focus on the core product of cocktail kits, supplied monthly to members, as gifts, and sold in bulk to hotels and retail.
We aim to scale to 5000 monthly members by the end of the year.
We already make an acceptable margin on the kits but could make this much better with scale, as we reduce unit costs.
Unlike a typical drinks supply business, we have a more fluid cashflow - we only need to order enough stock to fulfill the number of members we have, rather than holding unsold stock to anticipate demand. This gives us a predictable 'per kit' pricing model that we can scale up using third-party logistics.
As we grow, we expect to be able to unlock additional streams of revenue such as partnerships, co-branding and market research that leverages our consumer data.
Use of proceeds
We're seeking investment in order to aggressively grow our customer base in 2015.
Our core strategy is focused around predictable Cost Per Acquisition (CPA) and Pay Per Click (PPC) marketing, though we will also invest a portion in PR for general brand and awareness building. Further details are in the "Reaching the market" section.
We also have some fixed costs: a small office and salaries.
We've kept the team lean: 3 full-time staff covering key roles, with part-time support in other areas. There are more details in the team section.
We have two markets: our members to whom we provide premium cocktails and advice; and the distillers to whom we provide marketing services. We’re focusing on the UK market at first (though we have also had interest from emerging markets such as China).
On the consumer side, we have found traction and enthusiasm among two core groups: affluent individuals working in finance or technology who enjoy the luxury of cocktails both at home and in bars; and couples or individuals who are cutting back on going out (due to financial or family commitments), using our cocktail kits as a substitute for a night on the town.
Examples of customer feedback on Twitter:
"Every @ShakenCocktails is a delight. If you haven't signed up to receive their monthly concoctions, you're missing out #justsaying"
"I love you, @ShakenCocktails. You make me feel like an alcoholic alchemist."
Characteristics of target market
1: Consumers are drinking more at home
In 2013, UK spending on home-drinking overtook spending in pubs and bars for the first time.
The market for spirits is set to grow by 50% between 2013 and 2018, and distillers expect the majority of that growth to come from premiumisation: up-selling customers to a higher quality of spirit.
2: Subscription models are succeeding
We’re one of the first mail order cocktail subscription businesses in the UK, but comparable businesses include:
* Beer52 (monthly craft beer subscription) grew from 2500 members to 5000 in 6 months
* Naked Wines (wine subscription) has 140,000 customers in the UK
* Graze (boxed snack retailer) has over 300,000 weekly UK customers
* Abel & Cole (organic veg box) delivers over 50,000 boxes per week
We plan to focus heavily on paid digital advertising that we can track, tweak and enhance to ensure a predictable and decreasing cost per sale.
We intend to augment this through member-get-member incentives. Our members are our most powerful advocates and we’d like to supercharge that word-of-mouth.
In addition to this we have a solid PR strategy to help generate press, and will grow a community and brand around cocktails, via content produced in-house and with partners.
We also intend to run a variety of regular and one-off events, designed to drive interest and memberships. Here in particular we're able to leverage our brand connections to greatly increase our reach.
We expect that our marketing efforts will be split as follows:
* Cost Per Acquisition email broadcast - 40%
* Mailing list re-marketing - 30%
* Google Pay Per Click advertising and Facebook media - 10%
* Events - 10%
* Member referral scheme - 5%
* Sign up discount shared via partners - 5%
We believe that we have a headstart on our potential competitors in this market. To stay ahead, we will aim to grow these three key advantages:
* Superior brand partnerships: our CEO is respected in the drinks industry and we've been forming strong relationships based on his previous contacts and new introductions.
* Better value for money: with scale and the partnerships mentioned above, we believe that we can profitably undercut our competitors.
* An established, premium brand and community squarely focussed on making great cocktails at home. We want Shaken to be the authoritative voice of home cocktails.