If ever you were looking for a barometer of how much appetite there is for fresh, original foodservice concepts, Aussie coffee and food group Beany Green’s recent crowdfunding exercise undoubtedly provides it. FEJ assesses a chain that is firmly on the rise.
When Beany Green launched an £800,000 ‘Bondi Bond’ on Crowdcube last month to help fund its expansion to two additional prime central London locations, it set itself six weeks to raise the cash. Within the first 24 hours the Bond had smashed through the £300,000 barrier, followed by the additional £500,000 of investment swiftly after. Subsequently, it was able to close its campaign 38 days early.
Just over 220 investors rushed to back the four-year Bondi Bond, which carries an interest rate of 11% per annum, paid semi-annually, and offers enthusiasts a range of rewards from artisan coffee and bottomless brunch to full-blown cocktail parties for 40 guests.
The fundraising was the first opportunity for investors to get involved with the group, which to date had been privately funded by founders Prue Freeman and Tom Onions. “The speed and size of investment from our loyal customers and the crowd has been very overwhelming and extremely humbling,” comments Freeman. “It’s so exciting to now have more than 200 enthusiastic supporters on board with us for the next stage of the journey.”
We will use the £800,000 investment to help fund our expansion to two additional prime central London locations next year”
So what was it that attracted investors to the chain? The combination of solid historical revenue growth, rare early profitability and an attractive 11% interest rate drove many to step up their ticket sizes and get on board early. The company’s expansion since 2012 also encouraged interest, with Beany growing from a 1985 Ford Transit on the streets with KERB to five very individual central London locations including Broadgate Circle, Paddington, Marylebone, Regent’s Place and the Southbank.
The business, which creates almost everything fresh in-house every day, is generating run rate revenues of £3m per annum and EBITDA (post central costs) of around £400,000, which it expects to increase to £1.1m by April 2018.
It will now direct the finance it has raised towards acquiring and fitting out new sites.
“We will use the £800,000 investment to fund our expansion to two prime central London locations in 2016,” confirms Freeman. “We are committed to creating truly individual destinations with real personality, great coffee and big, bold healthy food.”
Branded chains face fight from artisan rivals
Branded coffee shop chains continue to dominate the UK coffee sector, but the rapid emergence of independent artisan outlets is leaving them looking over their shoulder, new research suggests.
According to the latest Horizons ‘Ones To Watch’ survey, which tracks the growth of new and emerging brands with between five and 25 outlets that have shown more than 20% growth over the past three years, those that specialise in high quality, freshly roasted coffee with a strong food offer are winning share.
“There is an element of coffee drinkers who are no longer satisfied with standard coffee, but want something higher quality which is why we are seeing these chains growing fairly rapidly,” comments Horizons analyst Nicola Knight.
It cites Beany Green, Grind and Filmore & Union among the chains that are blazing a trail, along with novel coffee bars such as the Red Kiosk Company, which operates 12 units out of unused, iconic red telephone boxes, and Ziferblat, a Russian-owned brand that charges customers for the time they spend in the shop, with free coffee included.