Tell us what your business does:
We make good quality wine, in cans, that people are proud to be seen with.
Where did the idea for your business come from?
Lucy was scrolling through Instagram one weekend (very millennial of her) and stumbled across a brand of canned wine in the US.
Having become immediately obsessed with the concept of wine in a can, Lucy was amazed to see that it didn’t exist in the UK yet, despite the British love of having a drink on the move.
How did you know there was a market for it?
It was really encouraging to see the growth of the category in the US (2015 $5M, 2016 $14M, 2017 $39M), but what was most interesting is to see how the adjacent categories had grown in recent years in the UK.
The craft beer revolution helped to premiumise the can, whilst the emergence of canned Gin & Tonics and other pre mixed alcoholic drinks showed that the can had a big future.
Impulse-format wine products were also in growth, and that was despite the lack of tangible innovation in the space for a long time.
What were you doing before starting up?
Jeremy was one of the early employees at premium popcorn brand Propercorn leading their growth in export, and was most recently the head of international markets for Vita Coco, the #1 brand globally for coconut water.
Lucy co-founded Cuckoo straight out of University, and having run it for 4 years, sold the business to Windmill Organics. After Cuckoo, Lucy set up her own consulting business, where she consulted for brands big and small throughout the food and drink industry.
Have you always wanted to run your own business?
Lucy has never really known anything other than running her own business, and Jeremy’s decision to join Propercorn in 2014 from a much larger food and drink business was always motivated by the desire to learn how to build a business from the ground up.
How did you raise the money?
Lucy and Jeremy have built a big network in the start up FMCG world, and that was an obvious place to start when looking for Angel Investors. They set out to raise £300,000 in 2 months, and actually closed the round
Describe your business model and how you make money:
We have a pretty lean business model, and we outsourced as many of the back office functions as possible. At the moment, that includes outsourced finance, and we have an outsourced logistics provider.
We are a pretty simple product-based business, so we buy final finished goods from our manufacturer at one price, and sell on to our customers at a higher price, which gives us enough margin to run the rest of the business.
We have a multi-channel sales strategy, which involves working with supermarket retailers, travel retail, trains and airlines, large alcohol wholesalers and events businesses. We are also building our presence in the direct to consumer space, by having our own website and selling on Amazon.
What challenges have you faced and how have you overcome them?
The biggest challenge to our business, and I think to most businesses at the moment, is the uncertainty about what is happening with Brexit.
This poses two big challenges to us. The first is around exchange rates, as a lot of our direct costs are in Euros, and exchange rate volatility means it’s difficult to know what our cost of goods will be. The second is the risk that a no-deal Brexit poses for stock movements at the borders.
It is anticipated that a no-deal Brexit will lead to long delays at ports, increasing the cost of transport from Germany to the UK.
In the short term, we’re able to deal with the currency risk by hedging currency by buying forward contracts, and we are boosting our stock levels in the UK ahead of a possible no-deal departure on 31st October.
What was your first big breakthrough?
The first customer we agreed a deal with was Sainsbury’s and we were lucky enough to be launched into over 600 stores, which is a really big deal for a startup brand like ours!
It meant that we had nationwide distribution from day one, which means that we can run nationwide PR and advertising campaigns alongside.
What advice would you give to budding entrepreneurs?
Some great advice I got from Richard Reed (Innocent co-founder) was “just start”. Lots of people have an idea, and want to wait until every single little detail is perfect before getting started, but there’s no substitute for just getting going.
I’m also a big advocate of the old adage “Revenue is vanity, profit is sanity, and cash is king”. Cash flow is the single most important thing to a growth business.
Where do you want to be in five years’ time?
We plan to be the #1 canned wine brand in Europe in five years, and we’re not going to stop until we get there.
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Poppy Mortiboys-Harrison, Khareem Sudlow
