Mercato Metropolitano

Market

Target market

We designed the Mercato Metropolitano format as a truly inclusive concept to address a wide range of retail and business customers of all ages.

Customer segmentation along traditional socio-demographic lines (income, age and gender) is no longer sufficient to understand and target the groups and sub-groups which make up today's and tomorrow's food and hospitality markets. Nor, we feel, does it help to counteract the isolating effect that the increasingly faster-paced and media-saturated lifestyle has on large inner cities and neglected suburban areas alike. Therefore, five years ago we set out on a journey to plan and design a concept that could combine the importance of sourcing natural, nutritious and affordable food, with the potentially positive effects that convivial eating and group learning have on building communities.

The outcome of this planning process is starting to show a truly remarkable picture. Today our producers and products come via a growing network of selected farmers and true artisans who find a great sense of fulfilment in the contribution they are able to make to MM, and our customers span a very broad socio-demographic spectrum. We are very proud of what we have achieved and we will use the data and customer feedback we are gathering in our Elephant and Castle site to create a truly replicable and scalable model.

We have opened our doors to anyone who wants to meet at our premises and talk, share ideas, have a good time, eat and drink well, watch a movie, attend a cooking class, read a book, do some yoga or take a boxing class, and generally contribute their presence to our local community.

The plan over the next five years is to open at least two more sites in London of similar size to the site in Elephant and Castle (approx. 25,000 to 40,000 sq. ft.), and have had initial contact with a local development company for a site in Manchester. Outside the UK, we are negotiating with a private development company for a ca. 3,000 sq.mt. site in the heart of Brussels for the development of a Mercato Metropolitano site. We also intend to roll out our online platform over the next 18 to 24 months.

Characteristics of target market

This campaign focuses on our first London site located between Borough and Elephant and Castle.

Elephant and Castle is a vibrant neighbourhood south of the River Thames in central London. It is key transport node with a major regeneration programme underway, where over £3bn of public/private money are being invested.

In 2015 Lend Lease started implementation of its approved scheme to build 2,500 new homes on their site between by 2025. We expect this to increase our already thriving customer footfall, particularly as we cater for a large cross-section of local and visiting residents interested in the alternative food retail sector, farmers' market, the street food vents and entertainment in general.

Our demographic analysis indicated that Southwark's population is young, ethnically diverse, densely spaced with turnover higher than national average. Population for 2016 is expected to be around 303,500 and the Government has projected a further rise to over 337,000 by 2026. Our research showed that 42% of the residents are aged 20 to 39, compared with 35% in London and 27% in England. With the London South Bank University and a number of colleges around Newington (where our site seats), the population density is 18,204 persons/sq. km. We concluded that this was a desirable mix for a socially-focused business offering high-quality food to young consumers who seek social interaction over an artisan, ethically sourced and affordable meal. We were right!

Marketing strategy

Our broad socio-demographic and market product segmentations require a holistic approach to measuring and analysing data in order to test our business plan assumptions. For the designing and structuring of our offline business, we look at political, economic, social, technological, environmental and legal aspects that may affect our market penetration and sustainability.

Our most popular sources of new customers are the word-of-mouth and the community events which we regularly host at our London site. This results in a very low cost of new customer acquisition.

For our online offering, we are preparing to reach the market with an offline-to-online entry strategy, by drawing potential customers from our considerable and growing media following into our physical stores. We intend to reverse the cycle by bringing physical presence back to our online platform through a unique format that our media and marketing advisers are currently designing and dry-testing.

We have a letter of intent from the owner of a 19,000 sq.ft. property in Canary Wharf (London), on the Isle of Dogs side of the South Dock, for the development of a Mercato Metropolitano over three floors of a quayside building (plus courtyard). If the deal goes ahead, the site is expected to launch before the end of 2017. We also have a letter of intent signed in connection with the proposed development of a ca. 3,000 sq.mt. Mercato Metropolitano sites within Camden Market (London).

In addition to the core business in development, we have secured letters of intent from operators in Miami (Florida – USA) and Tokyo (Japan) to open joint venture food and cultural markets under the brand Mercato Metropolitano. As these opportunities are still being structured, we have not included the revenue potential that may derive to Mercato Metropolitano in the current valuation for the purpose of this Seedrs campaign.

Competition strategy

Let's face it: the number of pioneers who are keen to take over a rundown area and help regenerate it with amazing food and community-building activities by giving small producers and food artisans a launching pad for their business idea is not that big! We believe we have created a model that is capable of delivering win-win-win results and, over the next three years, we plan to continue iterating it until it becomes the 'new norm' for urban renewal food and cultural activities.

Faithful to our vision, values and ethos, we have not set out to take on competitors by creating marginal improvements or attempt to rid the world of bad food through a cost leadership strategy. Instead, we are refining our differentiation strategy by creating a unique offering and a whole new industry; an industry where:

• Small and medium food producers and artisans thrive and expand.
• Community residents have access to outstanding, natural, ethically sourced and nourishing food.
• Our operator and community builders, nourish, entertain, educate and inspire.

We have already seen amazing results, both in Milan and in our Elephant and Castle site, of customers visiting several days a week from the neighbourhood and beyond and asking us how the can get involved with our activities. We think that when customers are so passionate to become our best ambassadors, we must be onto something!