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Big Drop Brewing Co

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A world-leading alcohol-free craft brewer. Doing for alcohol-free beer what craft beer did for...beer

123%
 - 
Funded 13 Apr 2020
£500,003 target
£617,566 from 716 investors
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Business overview

Location Ipswich, United Kingdom
Social media
Website www.bigdropbrew.com/
Sectors Food & Beverage Non-Digital Mixed B2B/B2C
Company number 10305828
Incorporation date 1 Aug 2016
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Investment summary

Type Equity
Valuation (pre-money) £7.5M
Equity offered 7.55%
Tax relief

EIS

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Business highlights

  • 150% YoY growth over 3 years to revenue of nearly £900k in 2019*
  • £1.3m in private funding already secured
  • Sector specialists, private equity professionals already invested
  • Meaningful distribution in the UK and 12 overseas markets
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Key features

  • Secondary Market
  • Nominee investment min. £13.20 +
  • Idea
  • Key Information
  • Team
  • Updates
  • Investors 716
  • Discussion
  • Documents

Idea

Introduction

Big Drop Brewing was created when City lawyer Rob Fink quit drinking for a few months following the birth of his first son. A craft beer fan, Rob was underwhelmed by the uninspiring alcohol-free beer (AF) options available at the time.

Realising that the craft beer "revolution" had left AF beer behind, he tried to find breweries dedicated to AF craft beer but couldn't. So he set up Big Drop to fill the gap. And not only are they AF, they're gluten-free, many are low in sugar and our award-winning lager is vegan-friendly.

Big Drop brews beer naturally: we use specialist brewing methods to ensure the alcohol never exceeds 0.5%. This means we don't remove the alcohol after brewing, unlike many other AF brewers. Which in turn means we don't lose mouthfeel, flavour and aroma. The result is full-flavoured beers which many can't tell apart from their alcoholic cousins.

And our award-winning range means that, whatever the reason, if you're not drinking, you can still enjoy a great beer of any style.

Intended impact

Three years ago, typically the only AF beers available were bland mass-produced lagers.

However, with alcohol consumption around the world falling, but with a commensurate increase in lo/no alcohol products, Big Drop fills the gap for great tasting AF craft beer.

We want to mirror the impact that craft beer has had on the world of beer but in the AF sector. The growth of AF beer has been exponential and is predicted to continue to rise: the global AF beer market is expected to reach $25 billion by 2024 and we want to make sure that a good portion of that is great quality craft beer.

We are a proud nomad brewer. In other words, we don't have a brewery. And we don't want one. We partner with reputable breweries around the world, who share our brewing values, to produce our beer.

Not only does this mean we can scale without the need for significant capex, but given our large export volume we can produce our beer locally, ethically and with a minimal carbon footprint.

Substantial accomplishments to date

Big Drop was one of the first brewers to dedicate itself to AF beer.

We continue to lead the way in defining and shaping this rapidly growing category. Our beer has won prestigious international brewing awards, not only in AF categories but against full-strength beers.

We reached nearly £900,000 revenue* in 2019 after just 3 years which is CAGR of 150%.

We have already secured £1.3m in investment from sophisticated sector specialists, including the founders of Camden Town Brewery, professional private equity investors and a variety of business angels and high net worth individuals.

We have UK off-trade listings in Tesco, Morrisons and Ocado.

Our on-trade team has gained us listings with major groups including D&D Group, Searcys, Mitchells & Butlers, Fullers, Youngs, Brunning & Price, Food & Fuel, Brewhouse & Kitchen, St Austell, Everards, Barworks, Bel & Dragon and Cirrus Inns. Together these groups manage nearly 3,000 sites which is a real opportunity for us. Our non-traditional beer product has meant that we have secured listings with retailers not normally associated with beer, including Holland & Barrett and Milk & More.

Internationally we have listings in nearly 900 stores: Albert Heijn supermarket (Netherlands), Systembolaget (Sweden), Alko, S Group & K Group (Finland), and LCBO (Canada).

With production and distribution in place for the US and Australia, we plan to expand further into those territories in 2020.

Monetisation strategy

Big Drop sells beer to distributors and wholesalers. It does not, largely, sell direct to customers.

We outsource our production to breweries around the UK which means we can control quality and process with our trusted brewing partners but without the capex required to build and expand a brewery to keep up with our rapid growth.

Given our significant foreign expansion, we have put in place a decentralised production model which means 2020 will see us brew in Sweden, Canada and Australia. This reduces significantly our freight costs (a significant financial and environmental benefit).

As thought-leaders in this sector we have collaborated with reputable craft breweries to produce innovative styles, generating revenue and interest in this sector.

Use of proceeds

50% - Sales & Marketing

Our plans include the opening of an experiential taproom in London and a mobile bar for use at trade shows and events. We will recruit brand ambassadors in our large export markets, particularly Australia, US and Canada.

30% - Packaging launch and related marketing
A relaunch of our packaging is due this month and these funds will be used to launch our updated website and retain PR & marketing agencies to drive awareness of our new packaging designs and availability.

10% - Production costs

This will cover the start up costs necessary to start brewing in new markets (ie, R&D brews, upfront packaging costs and trips to oversee any production issues)

10% - Product development

We constantly innovate and will never rest on our laurels. Just as alcoholic craft breweries are constantly striving to create new and better beers, so will we. So whilst we do not want to build our own brewery, these funds will give our Head Brewer a state-of-the-art experimental brew kit to trial new styles and techniques.

* Based on unaudited management accounts

Key Information

Director's Loan

The current outstanding director's loan is £56,843. There is no interest payable on the amount and there is no particular date on which the loan is to be repaid. The proceeds from this round will not be used to repay this loan.

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If you successfully purchase a share lot of this business, you will be granted access.

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If you successfully purchase a share lot of this business, you will be granted access.

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Investing involves risks, including loss of capital, illiquidity, lack of dividends and dilution, and should be done only as part of a diversified portfolio. Please read the Risk Warnings before investing. Investments should only be made by investors who understand these risks. Tax treatment depends on individual circumstances and is subject to change in future.

This campaign for Big Drop Brewing Co has been approved by Seedrs Limited (trading as Republic Europe) ("Republic Europe", "us" or "we"), as of 12 February 2020 as a financial promotion. Republic Europe is authorised and regulated by the Financial Conduct Authority with firm reference number 550317. In approving this campaign, Republic Europe has concluded that the information, taken as a whole, is "fair, clear and not misleading." This means that for factual statements we have reviewed evidence of their accuracy, and that for aspirational statements we believe they are phrased appropriately in light of their speculative nature. You should note that in the case of factual statements, the evidence we review is provided by the business, and we do not audit it, which means that we may not be able to identify forged or altered evidence. You should further note that in the case of aspirational statements, the nature of the type of businesses presented on the Republic Europe platform is such that they are likely to have high ambitions, and we may approve statements that convey those ambitions even where we do not believe, or we do not have a view on whether it is likely, that they will be fully realised. The pre-money valuation and investment sought in the campaign are those set by the business: they are not reviewed or established by us, and the valuation is not an independent view of what the business is worth. Given the nature and type of businesses presented on the Republic Europe platform, it is possible that the business has very little cash remaining prior to receiving this investment, and the investment sought may be necessary for the business's on-going existence.

Republic Europe does not make investment recommendations to you. No communications from Republic Europe, through this website or any other medium, should be construed as an investment recommendation. Further, nothing on this website shall be considered an offer to sell, or a solicitation of an offer to buy, any security to any person in any jurisdiction to whom or in which such offer, solicitation or sale is unlawful. Republic Europe does not provide legal, financial or tax advice of any kind. If you have any questions with respect to legal, financial or tax matters relevant to your interactions with Republic Europe, you should consult a professional adviser.

Tax Relief (SEIS)

This business is eligible for SEIS relief - providing qualifying investors with income tax relief of 50% of their investment and certain other tax reliefs. Tax treatment depends on individual circumstances and is subject to change in future. Click to learn more.

Tax Relief (EIS)

This business is eligible for EIS relief - providing qualifying investors with income tax relief of 30% of their investment and certain other tax reliefs. Tax treatment depends on individual circumstances and is subject to change in future. Click to learn more.

Valuation (pre-money)

Valuation rounded from £7,542,040

This is the fully-diluted pre-money valuation of the business (i.e. before the new investment comes in and including issued options and other equity interests). In contrast, the post-money valuation is based on inclusion of the new investment in the value.

It is calculated as the pre-money valuation plus the amount of new investment. e.g. If Company A is ascribed a pre-money valuation of £1,200,000 by prospective investors investing £300,000, its post-money valuation is £1,500,000.

The investee business is responsible for setting its own valuation, it has not been prescribed by Seedrs.

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Equity Offered

The equity offered is the percentage of the company’s shares being issued in return for the amount of investment raised.

When the amount raised is less than 100%, the equity offered is based on the target raise. Once the company has raised over 100% it is based on the total raised.

In some scenarios, entrepreneurs may accept additional direct investment after closing their Seedrs campaign. Provided this is within 6 months of the closing and on the same terms, we do not typically offer pre-emption rights on that extra investment (where you have the opportunity to invest again to maintain your percentage shareholding).

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If you invest in this Campaign, Seedrs will act as Custodian rather than provide our standard nominee service. This is due to the fact that the business is not directly involved in the share sale and Seedrs will not benefit from any rights under a shareholder agreement. As a result, Seedrs will handle administrative tasks as we do normally, but you will not have information or voting rights, updates from the business, preemption on future fundraising, or ongoing support about business trading activity.

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Secondary market

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Direct investment

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Payment options

We are not able to accept card payments for investments into this sector. You can pay for your investment by creating a bank transfer, using funds in your investment account or create a Pay by Bank payment. Your investment will only be completed once the funds have reached our account.

Business Involvement

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Payment options

We are not able to accept Pay by Bank payments for investments into this sector. You can pay for your investment with a card payment, by creating a bank transfer or by using funds in your investment account. Your investment will only be completed once the funds have reached our account.

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