Successful wine & events company creating a technology driven Wine Bar in Shoreditch.
Business overview
| Location | London, United Kingdom |
|---|---|
| Social media | |
| Website | www.humblegrape.co.uk |
| Sectors | Food & Beverage Non-Digital B2C |
| Company number | 06936206 |
| Incorporation date | 17 Jun 2009 |
Idea
Introduction
Humble Grape, an existing and profitable wine merchant and events company are raising funds to take their brand to the high-street.
Humble Grape already has an existing private and corporate client-base in London, along with an extensive portfolio of 130+ unique wines, directly imported from boutique, family-owned, vineyards.
The plan is to pilot a retail premises in/near Shoreditch, London. In a stylish and relaxed environment, customers will be able to discover Humble Grape wines. They will be able to buy bottles to take home (or cases to be delivered or stored in bond) or to drink on the premises offered with a menu of small plate artisan high-quality food.
After the pilot site we plan to have 4 sites within 5 years. Investors will have a stake in Humble Grape, the existing company. The retail premises will be part of this company.
Because Humble Grape wines are purchased directly, the margins remain very profitable while at the same time retaining attractive prices for customers.
Intended impact
Our aim is to democratise and demystify wine for all, through the development of a high-street brand.
With a commitment to delivering high-quality and unique customer experiences, Humble Grape expects to achieve an 80% customer retention rate. We plan to take this ethic to the high-street, offering a highly curated experience to all customers, whatever their wine knowledge.
We will use a blend of outstanding hospitality and user-friendly technology to engage customers, facilitate their discovery of wine and foster brand loyalty.
Humble Grape wine experiences are unpretentious, educational and a fun way to allow individuals of all levels of knowledge to connect with wine. Humble Grape is developing software which will not only teach and offer suggestions but will also remember and develop clients’ preferences and flavour profiles. Think automated wine diary.
Easy to use mobile apps will enhance the client interaction with the brand and capitalise on the shift to mobile consumer spending. The experience delivered by the application will be highly curated and relevant to each individual and thus trusted more. The client experience will be continuous. From the retail premises to their living rooms, clients will be able to stay connected to Humble Grape using innovative apps. Functionality will also allow a seamless purchase and storage of wines in virtual cellars for those with little or less than ideal storage conditions.
Connecting wine buyers directly to small vineyards and their winemakers strengthens the brand proposition and means vineyards spend less money on marketing and instead reinvest to make better quality wines.
The idea is not to have the most high-tech wine business but to create a highly curated and high-touch customer experience with technology as both the enabler and connector to a previously under served sector.
Substantial accomplishments to date
Corporate clients include Deutsche Bank, JP Morgan, ICAP, HFI, IBM, Dassault, SH Legal, Linklaters, DataArt and RLAM Monthly orders from 3 catering firms, 7 restaurants and 5 independent merchants.
Including our corporate events, we aim to host 1,500 guests at our events each year.
Humble Grape hosts monthly tastings which are regularly sold out at 50 seats.
Founded in August 2009, Humble Grape was a hobby (passion) business of James Dawson, then MD of a finance company who started out delivering his favourite wines strapped to the back of his motorcycle. With no external investment to date, the company has generated significant profits with strong growth year on year.
Humble Grape exclusively imports wine from family-owned vineyards in France, Italy, Spain, Germany, Portugal, Australia and South Africa. All of our wines are organic, biodynamic or sustainably produced are of outstanding quality and are frequently awarded 5 stars by Decanter Magazine.
Monetisation strategy
Humble Grape aims to build on existing revenue streams plus maximise new revenue from the retail premises. The premises will have an existing client base and high footfall plus be close to finance and technology corporates.
In our experience, traditional wine bars and champagne bars in London could turn over between £500k and £1.2m/year without the added revenue streams that Humble Grape expects to be able to generate.
Existing revenue streams:
1. Monthly private client tastings
* 35-50 tickets sold at around £45pp - in addition to wine sold per night
* Hosting these bi-weekly in our own premises is expected to double this revenue
2. Bi-Monthly private client winemaker dinners
* 15-40 tickets sold at around £90pp, in addition to wines sold per event
* Hosting these monthly at our own premises is expected to double this
3. Corporate events from £1,000 to over £12,000 per night. Using our own premises is anticipated to reduce venue rental costs by £4,000 - £6,000/year
4. Wine sales: We sold a total of over 23,000 bottles in 2013, an average of 160 cases per month
New revenue:
5. On site sales of wines, foods and experiences. Humble Grape has an extensive portfolio of wines from £9 - £75/bottle. Currently our main source of wine sales is events (tastings and dinners). The premises will allow us to sell 7 days a week instead of 2-3 days a month. Current home-delivery model only allows wine sales by the case (6 or 12 bottles). The premises will enable sales of wine by the bottle and glass.
6. Online. Currently only a fraction of our of sales are online. Following a recent website upgrade, we plan to invest in a targeted digital marketing strategy, and expect strong growth via this channel. A premises will further enhance customer engagement online, using apps for wine discovery, food matching and purchases. Virtual cellar building - wine selection via smartphone to be stored in bonded warehouse.
7. Wine-tasting experiences to be sold in packages for people to replicate at home. Incentives will be provided to run these experiences.
Use of proceeds
£100,000 - existing restaurant rights
£40,000 - rent, taxes and salaries covering period from signing lease to opening
£30,000 - refurbish and refit of premises
£20,000 - software (apps and website for premises)
£25,000 - results-driven marketing campaign
£15,000 - enomatic machines (http://www.enomatic.co.uk/wineelite.php)
£10,000 - stock
£10,000 - miscellaneous
Total: £250,000
As outlined in the introduction, we plan to open an additional 4 sites over the next 5 years following the success of the initial site. We have assumed that the expansion post the initial site, will be fully financed from operating cash flow and external bank debt.
Market
Target market
Humble Grape will be serving a neglected sector of the market, young professionals who enjoy wine without knowing much about it but are interested to learn more. Those who might find traditional brands such as Berry Brothers, old-fashioned and socially exclusive. Humble Grape will provide an approachable, non intimidating, relaxed learning environment allowing people to discover their own tastes and preferences.
We will also cater for more sophisticated wine buyers with private wine-maker dinners, cellar building services and investment advice. This will allow people to take a journey towards deeper understanding of the wine world.
For wine experiences we will be targeting people who are interested in going out for dinner or a drink but want to have a little something extra while they do it. Our existing clients enjoy a few glasses of quality wine paired with some great food and learning some interesting anecdotes and facts about the grapes and wines of a particular region.
The typical age range will be 27 to 55 year old men and women that enjoy wine and want to learn more. We will be targeting couples, groups and men and women separately through various channels. Users of mobile apps will be an important sector of the client base and important growth market. Online purchases on mobiles exceeded desktop for the first time over Christmas 2013.
The location is vital to target the right market. With a premises in Shoreditch, Clerkenwell or Faringdon, Humble Grape would be able to leverage user friendly applications to appeal to the booming tech sector. This sector has a forward thinking approach to wine and food and are more likely to be interested in an offering that is pioneering and accessible as opposed to traditional.
Characteristics of target market
During the recession, food and beverage sales held up very well, particularly in London. Londoners typically eat/drink out 3-4 times per week. And market research shows a trend towards sharing small plate food rather than the traditional three courses.
Akin to the movements in fine food and coffee over the past 5 years, wine is becoming a part of our identity, Distinct wine preferences and knowledge are becoming more desirable.
The customer has become the new ‘critic’. Potential customers are often more swayed by online reviews, than those in newspapers and magazine. Our target market often checks reviews on Trip Advisor and other sites before booking. The customer is no longer satisfied with ‘good-enough’ and it takes an exceptional experience to motivate them to write a glowing review.
As with the traditional public house, wine bars are evolving. The market is looking for price transparency, social accessibility and high-quality yet affordable wines and foods.
Marketing strategy
Humble Grape Brand is built on trust, quality and service. All communication with our existing and new clients will reflect and reinforce this.
Our marketing strategy aims to build brand loyalty with existing clients and attract new clients via word-of-mouth referrals, digital marketing, print and social media.
Premises:
The premises will have an existing trade and high footfall. Once potential customers have crossed the threshold, we intend to convert them to clients for life. The services/products we can up-sell to happy and loyal customers are limitless: virtual cellar building, private wine tastings, wine holidays etc.
Partnerships:
We plan to partner with finance and tech businesses near the premises to offer corporate events and wine club memberships to employees.
Technology:
Apps will directly engage customers with social media and reviews sites such as Trip Advisor to increase our online presence. Our technology will also track our customers’ previous purchases and wine preferences. We will use this data to carefully select relevant products and services which could appeal to them.
Digital:
Humble Grape has over 6,000 people on mailing lists who have bought wine or tickets to events and have actively subscribed.
They receive biweekly emails highlighting upcoming events and blogposts. We have over 6,000 Twitter followers and a growing Facebook and LinkedIn following.
Our blog http://humblegrape.squarespace.com/ has around 2-3,000 visits/month.
PR:
Our marketing director has longstanding relationships with national newspapers and London publications. In addition to a press event at the premises, she plans to run a wide-scale campaign targeting radio, TV and print media in the run up to the launch. Following that she’ll work with Humble Grape to arrange media-engaging events throughout the year to maintain momentum. In addition, a list of highly targeted groups within the technology and food sectors will be contacted to share the opening with their networks.
Competition strategy
Traditional wine bars have established high-cost bases and business models which depend on traditional (non-direct) sales channels. Humble Grape buys wines directly from vineyards so can maintain highly profitable margins yet still provide wines of excellent quality at extremely attractive prices.
We will differentiate on brand, product, experience/service and technology.
Humble Grape intend to disrupt and differentiate using a combination of:
Product.
Boutique authentic wines from family-owned vineyards that speak of a sense of place. These wines are naturally lower in alcohol and sulphites - this trend is important to capture future growth. We will also offer products and services beyond a wine cafe visit (such as private tastings, cellar building).
Price.
High quality wines at moderate prices. The price will be transparent. Retail plus £10 corkage (Enoteca model). This offers excellent value when compared to restaurants where the mark up on wine is between 3x and 5x the retail price, with the retail price already inflated due to the many sales and distribution channels.
Technology.
We are developing apps to enhance the customer experience, create an automated high-touch service and facilitate a continuous relationship with clients from shop floor to home. (e.g. Our apps will make it easy (and offer an incentive) for customers to leave a review on Trip Advisor before they even pay their bill).
We also plan to use state of the art loyalty programs. http://rewardtechnology.com/
Experience.
We are fanatical about providing a high-quality service, hospitality and outstanding customer care. In addition we will offer our clients a unique and valuable experience: distinctive interior design, on the spot wine-curation at the table, virtual cellar building, wine-maker dinners and much more.
Marketing.
High engagement and targeted social media campaigns integrated across Facebook, Twitter, REDDIT, LinkedIn, Instagram and Blogging.
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