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Growth stage, multi-award winning Indian wine producer is looking for growth capital to expand in the UK and internationally.

Business Details

Short Description

Soul Tree Wine is a UK based company that produces wine in India and markets them in the UK and around the world. Founded by two Oxford MBAs, Soul Tree is now the fastest selling Indian wine in the UK, with sales growing into Germany, France and the USA. Soul Tree is listed in over 600 restaurants with circa 100,000 bottles sold till date. The brand grew 125% since last year and there is existing demand to grow over 300% annually to take the business from current revenues of circa £250,000 to over £12 million in 4 years.

The company is now seeking growth capital to expand and meet rapidly growing demand. We are raising £350,000 for 16.5% of the business on the crowdfunding platform Crowdcube and invite potential investors to visit our campaign page www.crowdcube.com/soultreewine and to invest. Get in touch!

Executive Summary

THE BUSINESS IDEA:

A £12.3b industry + 49m wine drinkers + 10,000 indian restaurants and a hugely popular cuisine + a wine that pairs superbly with spicy food = A huge consumer branding and business opportunity

We are striving to put Soul Tree at the forefront of the new wave of new world wines sweeping the globe today; we are democratising wine and opening the doors for exciting new products.

But this isn't change for change's sake. We believe it is welcome change for 49m wine drinkers in the UK who look, often in vain, for exciting new wines. We believe it is welcome change for those food and wine lovers who are often forced to complete their Indian meals with Indian beer, or with wines from France, Australia, or Chile. And it is very welcome change indeed for the small, underprivileged Indian farmer to whom we are determined that the benefits of success reach.

This is the dream that motivated our founders, two MBA graduates from the University of Oxford, who rejected well-paid post-MBA city jobs to do what some traditionalists said could not be done.

After all, with an industry worth nearly £13b, an ongoing love affair with curry (there are 10,000+ Indian restaurants in the UK that attract a phenomenal 2.5 million customers each week), and the undeniable logic of drinking the right wine with the right food; we see the gap in the market as being clear, present, and compelling!




ACHIEVEMENTS

The brand has carved a niche for itself with sales of 100,000 units through 24 UK distributors and listings in over 600 outlets . The wines are sold in France & Germany and other international markets are on the way including the USA where we are in advanced negotiations with a distributor. Current listings include Michelin star restaurants, premium boutique hotels, bars, and pubs all across the UK.




PRESS

The Soul Tree story has been much talked about in the regional, national and international press. Press coverage includes mainstream print, television, and radio, including The Daily Telegraph, Sunday Express, The Huffington Post, several BBC Radio stations. Our founder Alok has also appeared on BBC's The Bottom Line with Evan Davis on BBC Radio 4, BBC News, and BBC World.



AWARDS & RECOGNITION

Soul Tree was a national finalist at the National Business Awards, British Chamber of Commerce Awards, and Midlands Business Awards, and has won Startups 100, Real Business Future 50, and Birmingham Chamber of Commerce Awards. The business was rated as one of 20 new businesses to watch by the IOD's Director Magazine, and as one of 11 best new businesses by Smarta.



THE WINES

Soul Tree's well rounded portfolio includes two reds, a white, a rosé, an oak-matured reserve, and a sparkling wine. The wines are contract-produced from grapes grown by small, independent farmers in India's premier wine grape growing district of Nasik, and custom crushed by our own winemaker in partner wineries. The wines are then bottled at source and shipped into our bonded warehouse in the UK or to the other international markets.



WINEMAKING PHILOSOPLY

We believe that wine made in India should be a true reflection of the local conditions, tastes, and palate, rather than an imitation of wine from more established regions. So, while we use technology, expertise, and feedback from other parts of the world, we rely on our own skills, instincts, and the deep rooted knowledge of local conditions and cuisine to produce our wine. It is this winemaking philosophy, we believe, that makes Soul Tree's wines mainstream and distinctive at the same time - excellent wines with a tropical twist in the tail!



INDIA- THE REGION

India is fast emerging as one of the fastest growing new regions in the world and, we believe, is producing some truly exciting wines. The Nasik Valley, where Soul Tree is grown, is arguably coming up as the most exciting wine regions in all of Asia, and has also attracted one of the world's most reputable producers, Moët Hennessy, who has established a winery in the region.

Located perfectly in the tropics and at an altitude of around 2000ft above sea level Nasik Valley has the perfect tropical climate with a high day-night temperature swing in the growing and harvesting season. The soils are volcanic and mineral rich, and these result in wines that are full of character.

With India's growing urban wealth and young population, we believe that the region is ripe for development as a wine producer for decades to come.


VISION & NEED FOR FUNDING

Our vision is to see every quality Indian restaurant in the country listing the wine, millions of curry lovers enjoying superbly-paired wines with their favourite cuisine, and for mainstream restaurants, bars, pubs, and retailers to embrace India like they have embraced recently established regions like Chile and Argentina.

We also see the tens of small, independent, underprivileged Indian farmers who produce our grapes, and their entire families and communities, being lifted from the daily strife and struggles to lives of productivity and contentment.

Though a very solid foundation has been laid for the business and the brand, we now need your help, and your investment, to increase production levels to meet growing demand, improve quality and produce even more great products, employ more sales and operational personnel to support the growth, and to invest into marketing & PR to make Soul Tree a household name.



THE MARKET

FACT: The UK wine industry is worth £12.3bn.

FACT: There are 49m wine drinkers in the UK, of which 27.5m are regular drinkers.

FACT: Indian cuisine is one of the most popular in the world and is, arguably, the most popular cuisine in the UK. In the UK alone there are 10,000+ Indian restaurants that attract over 2.5 million customers each week.

FACT: The "experience" factor is immensely powerful (consumers love to drink Indian beer in Indian restaurants, Spanish wine in Spanish restaurants, etc.)

FACT: Practically none of the wine sold in the UK, or indeed around the world, so far, is Indian.



Key Trends

The last few decades have seen the rise of new world wine regions like Australia, South Africa, Chile, and New Zealand, at the expense of established, Old World regions like France. In recent years retail sales of New World wines has overtaken sales of Old world wines, indicating a very clear trend towards new and emerging regions. We believe that the centre of gravity will slowly shift towards even newer regions like India, Brazil, and China. We are seeing an increasing number of restaurants, hotel, and specialist store wine lists becoming adventurous and innovative, as well as consumers actively asking for 'something different'.

Our research suggests that consumers are also rapidly becoming less wedded to traditional notions of value and pre-defined definitions of quality, variety, origin, and price. They are now much happier to try wines from new regions, made from previously unfamiliar grape varieties, and at more flexible price points, than before.



Soul Tree Customers

Soul Tree currently sells through 24 UK distributors and 600+ on-premise (restaurants, bars, pubs, and hotels) and off-premise outlets (shops). Other customer channels include weddings and events, online sales channels, etc. The wines have even been shipped to Germany for a traditional German wedding there!

While our wholesale partners are our direct customers, we endeavour to engage very closely with the outlets who are our true window to the consumers, and with the consumers themselves through participation in fairs and events. This is critical to brand-building, driving demand, building relationships, and increasing word-of-mouth.



Competition and Sustainable Competitive Advantage

We believe that Soul Tree has carved a rapidly growing niche for itself due to its distinctive style, exciting origin, intriguing story, and an almost natural pairing with Indian and other spicy cuisines.

Our research suggests that there have been a handful of other Indian wines in the UK market for several years; however as the only Indian wine producer and brand owner to be headquartered in the UK we are close to the market, understand the pulse of the trade and the consumer, and engage with them on a one-on-one basis almost every day. We believe this gives us a unique and sustainable competitive edge that is very difficult, if not impossible, to replicate. We, however, also see other Indian wines as collaborators rather than competitors, as our collective success is required for long term and sustainable success of the region.



Marketing Activities

In the early years focus has sharply been on being out there and doing our job - achieving listings, building relationships, and growing a national and international presence. Press and PR has been fantastic, and word-of-mouth has grown tremendously. Marketing channels include a growing number of trade and consumer shows (most recently, the BBC Good Food Show, the Birmingham Wine Festival, an Emerging Regions Tasting, the Leeds Waterfront Festival, etc.), an active social media presence across Twitter, Facebook, and our Blog , and effective use of point of sale marketing material (wine lists, table cards, posters, etc.).



THE PEOPLE

Alok Mathur (Co-founder & Director) - FRSA, MBA (Oxon), Vice-Chairman, Midlands Wine & Spirit Association

Alok met Melvin at Oxford while completing his MBA at the University of Oxford. After completing his undergraduate degree in Engineering in India he joined Jaguar Landrover owners Tata Motors in 1993, and since then worked in various positions handling and running operations in India and in the UK. Alok is driven by a passion to create a sustainable business and a global consumer brand. He runs development, marketing, PR, and operations for Soul Tree.



Melvin D'Souza (Co-founder & Director) - MBA (Oxon), WSET certified

Melvin co-founded Soul Tree after completing his MBA at the University of Oxford. He was born and raised in the heart of the Indian wine country, Nasik Valley, and moved to the US for his undergraduate degree and following that headed Marketing and Sales for his family's poultry genetics business in India, Africa, and the Middle East. Melvin is driven by a love for wine, by the ambition to influence the fortunes of the Indian wine industry, & by a desire to give back to the Indian farmer. He runs the product and sales sides of the business.



Pavi Binning (Advisor) - President, George Weston Ltd., Past Group Controller and Head of Corporate Finance at Diageo

Pavi Binning is the President of George Weston Limited, Canada's largest private sector employer and owner of Selfridges, Loblaw Companies (Canada's largest retailer), and Associated British Foods that owns the retail chain Primark as well as brands like Twinings, Pataks, Ovaltine and Ryvita. Mr. Binning also spent 17 years at Diageo plc, one of the world's leading consumer goods companies, in a number of senior roles including CFO Europe, CFO Americas, Group Controller and Head of Corporate Finance.



Laura Clay (Advisor) - Wine educator, consultant, and writer; Past chairman - Association of Wine Educators; Past chairman - Midlands Wine and Spirit Assn.; Accredited Bordeaux tutor; and UK Champagne Ambassador 2010

Laura is an independent consultant and wine educator/presenter with over 25 years experience in the wine industry, and writes for both the trade press and lifestyle magazines. She is a member of the Circle of Wine Writers. Laura is one of only a handful of UK Accredited Bordeaux Tutors and was UK Champagne Ambassador in 2010. Laura is a respected wine judge for wine competitions and a Senior Judge with the International Wine Challenge.




THE FINANCIALS

SALES: Key sales drivers

UK: Currently 24 distributors and 600 outlets. We are appointing 8-10 new distributors each year resulting in an additional 30 new outlets per month.

The business grew at 125% Last year. We expect 35 distributors to be distributing through 1200 outlets by the end of 2015. The rate of sale per outlet will grow from 5 to 6.3 units/month.

International: We expect our export sales to double each year over the next 2 years though increasing the number of distributors



USE OF FUNDS:

Funds will be used to increase production levels, enhance UK stocks, develop new products, increasing the sales team and support growth through branding, marketing and PR.



EXPENSES AND PROFITABILITY:

Gross & EBITDA margins should steadily increase from 21% to 27% and -16% to 24% respectively over the next 4 years.

We anticipate generating a profit from 2016 onwards.

We are confident that our business is lean and our overheads modest - our fixed costs should reduce steadily relative to our sales over the coming years.



EXISTING DEBT OR EQUITY INVESTMENTS:

Current equity represents the fully paid-up founders share capital. The business has stocks worth approximately £64,000.

Current debt is comprised of £13,000 overdraft, £20,000 short term loans, £39,880 directors loans. The Founders have no intention to call in these loans in the foreseeable future.




THE EXIT

The company sees excellent opportunity for growth in value for investors as the company gains penetration into the global market with increasing brand recognition as a quality Indian Wine. In brand terms, Soul Tree aims to do for Indian wine what Fosters has done for Australian beer across the world or what Cobra and Kingfisher have done for Indian beer in the UK.

Ethnic food and drink brands have been some of the fastest growing in the UK, with potential for strategic trade sale. A recent investment round by Indian wine producer Sula valued the business at $130m while Pataks, a leading producer of ethnic food in the UK, was sold in 2007 to AB Foods for £200m. As a brand leading the way for Indian wines internationally, exit routes through a strategic sale or through an IPO could be very attractive options.

The Soul Tree board is also aware that many of its investors will seek EIS tax relief and they must not sell their shares for 3 years. In line with this, Soul Tree will aim to continue its growth endeavours for the next 3 years and continue to build brand value.

At the end of this period we can explore opportunities to maximise shareholder benefit and return, including a strategic sale or an IPO mentioned before. We can also explore provisioning for shareholder exit through future funding rounds.