English Wine Producers Trade Tasting, 11 May 2015
The English wine industry is facing several positive challenges, and some major players are turning to crowdfunding as a means to best take advantage of opportunities in a fast growing market.
The English Wine Producers annual tasting for the drinks trade and media took place on May 11 just off Parliament Square, Westminster. It is a major event for EWP directed at the wine trade prior to the English Wine Week consumer event, running this year May 23-31. I spoke with several industry leaders.
Some notable wine writers and reviewers were also present, including Oz Clarke and Jane MacQuitty, wine writer for The Times.
Some quick background. 2014 was a bumper year for the English grape harvest, and production rose by over 40% to 6.3m bottles. Of which an estimated two-thirds are sparkling wines. Part of this growth is also because the amount of land under vines has doubled in the last seven years to around 2,000 hectares.
The largest English wine producer is Chapel Down in Kent. They reported record sales of £6.1m in 2014, and have recently secured a further 326 acres on long leases to plant more vineyards.
Future plans are being financed with £3.95m raised against 14.1% equity through the Seedrs crowdfunding platform in three weeks last September. This made Chapel Down the first publicly listed company to use crowdfunding. They are also building a brewery, and preparing for a period of consolidation within the industry.
Frazer Thompson, CEO, told me one of the greatest benefits of crowdfunding was that he had acquired not only the money but nearly 1,500 brand advocates who will continually support Chapel Down, not only through future personal purchases but also gift purchases and relentless word-of-mouth support.
If you’d like further information and advice about using crowdfunding to generate an investment budget please contact me, [email protected]. Your plans don’t have to be as big as Chapel Down’s. For example, in the brewing business the Camden Town Brewery recently raised £2.7m. Yet the Hop Stuff Brewery in south east London launched after raising £58,000 through crowdfunding.
Favourable comparisons to Champagne helped English sparkling wine establish an early market position and a price point far removed from Prosecco and Cava. These days, some English producers are more keen for their products to stand on their own two feet. Simon Bladon, proprietor of Jenkyn Place in Hampshire, didn’t mince his words: “Why should I want my English sparkling wines compared to an inferior product?”
Brad Greatrix, winemaker at Nyetimber, at the top quality end of the English sparkling wine market, told me wine makers from Champagne are being brought in by several wineries to contribute and share their skills. “Chalky soil in southern England is very similar to the Champagne region, though they marvel at the better quality of the English grapes they are given to work with.”
He believes English sparkling wine producers also benefit from greater freedom to use grape varieties of their choice than their counterparts in Champagne.
Another producer using crowdfunding right now is Hambledon Vineyard, England’s oldest commercial vineyard (est 1952), in Hampshire. MD Ian Kellet worked in finance and the corporate food and drink industry before buying Hambledon. He has brought these skills to bear with a crowdfund through CrowdBnk to raise a target of £2.75m through loans, rather than equity. Ian told me he saw no reason to part with any share of his company.
The minimum investment is £10,000 for a five year term. For a £10,000 investment after 5 years an investor will get their £10,000 principal back, plus a £4,000 lump sum, which is 8% interest per annum. They also receive 1/2 a case of Hambledon Classic cuvée every year and at the end of the term have the option to convert their principal into Hambledon shares at £2.20 per share and/or Hambledon wine.
At May 14, with 18 days to go, 20 investors have so far pledged £2,329,400, almost 85% of target.
A testament to the growing quality of English wines was the presentation of Sommelier Wine Awards 2015 to Gold Medal winners Wiston Wine Estate on the South Downs, and Sharpham Vineyard in Devon. These awards are internationally contested, and as well as being Gold Medal winners they received the added Critics Choice accolade as being particularly suitable for sale by the glass.
Dermot Sugrue, left, and Harry Goring, right, winemaker and co-founder respectively of Wiston Wine Estate, receive the Critics Choice award for their Blanc de Blancs 2010.
It was certainly a very pleasant day for me to sample many of the splendid wines available at the tasting. My thanks to the EWP Marketing Team for allowing me to attend.
Please contact me for further information and advice about using crowdfunding to generate an investment budget, [email protected].
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