Watneys Beer Company

Idea

Introduction

A growing market, recognised beer brands with great stories, a passionate, experienced team and a very different approach. We are Watneys Beer Company.

We are a craft beer business with a difference. Our brands are iconic. We have reinvented them for today’s consumers with the single minded mission to make them great again.

We have grown quicker than our traditional craft beer peers & have built a business turning over in excess of £400,000 a year*. We have done this without a brewery, without a lorry, without owning a barrel. This is a different approach and we believe it’s a great model that sets us up to scale in this dynamic market.

Brewed in London since 1837, Watneys is still etched into the architecture of pubs around the country and in the hearts of many. The brand disappeared in the 1980s, but now it's back, and ready to become a great brand once again.

We have started our journey, now we need your help to deliver our vision.

Intended impact

Watneys Beer Company was born in 2014 (as Brands Reunited) to relaunch beer icons of the past making them modern and relevant for today’s drinker. Nostalgia allows brands like ours to leverage the optimistic feelings that come with a walk down memory lane. Nostalgia gives us provenance, but to engage a new generation of drinkers, we need to be relevant and modern, and our beers need to fit in to the exciting craft beer market.

In 2015 we launched the first of our four brands, Home Ales, back into its Midlands heartland. 2016 saw the launch of Watneys in London. Once the UK’s biggest brewing group, Watneys is key to delivering our business vision. Three years in and affection for the brand is strong and a new younger generation love the new, modern Watneys. Our focus now is to make Watneys a national brand once more and to build a portfolio of strong regional craft brands. We also own the rights to Federation from the North East, and Matthew Brown from the North West.

Substantial accomplishments to date

- Total sales of £900k since launch*.
- Sales in Y/E Feb 18 of £428k*.
- Average year on year growth over 130%*.
- Over 400,000 pints sold in the last 12 months.

We have established key distribution partnerships with great national and regional pub companies including:

- Star Pubs and Bars.
- Enterprise Inns.
- Admiral Taverns.
- Stonegate Pubs.
- Urban Pubs and Bars.
- Mosaic Pubs.
- Antic Pubs.

2018 saw the launch of our modern craft 'Headliners' range of keg beers. Irony Lager, Sarcasm Citrus Pale and Slapstick DIPA. These are supported with great in-outlet activation including 'Pop-up Stand-up Comedy Nights'.

This year we will look to continue to build distribution and throughout with existing customers, and we believe there is significant headroom in the market for us. From May 2019 we have two lines available permanently in Ei Pubs for the first time. Ei own thousands of pubs across the UK including many ex-Watneys pubs still with the retro-branding in place.

In addition to this we will aim to continue launching our modern cask range of beers, which take inspiration from Watneys' past, all delivered with a modern twist.

* Based on unaudited management accounts.

Monetisation strategy

We derive almost all of our current revenue from sales to pubs, either directly served by us and our fulfilment partners, or via national distribution companies. This is a key channel to build brand awareness, and brand value, before looking to move into the 'off-trade' and grocery markets.

In 2018 we launched our online shop, and that together with sales to other online and off-trade retailers accounts for a small percentage of our current sales.

Going forward, we will be looking to build and deliver our range into the Grocery market.

Use of proceeds

Your investment will be used across 3 key areas:

1. Sales Resource. We currently have 2 FT and 3 PT members of our sales team, we are looking to increase that over the next 12 months to help further sales with existing customers and to drive new distribution contracts.

2. Off-trade (Grocery) development. We need to invest in format development, sales and marketing resource, and our marketing support to build off-trade distribution.

3. Export. We are targeting 10% of sales from export in 3 years time. We need to start to build expertise and invest in the right pack formats for this important segment of the market.

As we are a brand business all of the work we do must be underpinned with great marketing and activation plans. We commit to do all of this as close to the point of purchase as possible, and in digital channels, to maximise effectiveness and reach.

Important information

The company currently has two classes of shares, 'A' ordinary shares and ordinary shares.
The 'A' ordinary shares carry a 1x participating preference on exit. 'A' ordinary shareholders will first receive the subscription price they paid for their 'A' ordinary shares before the remaining exit proceeds are distributed between all shareholders pro rata.

In addition, if the Company does not exit within 6 years, 'A' ordinary shareholders, as a class, will be pro rata entitled to 50% of any total distribution of dividends declared, with the remaining 50% to be distributed amongst ordinary shareholders. This ratio increases to 60:40 after 7 years and 65:35 after 8 years, in favour of 'A' ordinary shareholders.

This is an unusual provision for an early/growth stage company and future investors may seek to amend or remove such protections as a condition to further funding.

The company has obtained approval from HMRC to issue EIS certificates to existing 'A' ordinary shareholders. All investors in this round, including Seedrs, will be issued 'A' ordinary shares.