Sir Hans Sloane Chocolates
Hans Sloane is striving to put the chocolate back into drinking chocolate through its beautiful and award winning chocolate beads. Stocked in over 500 supermarkets across the UK and operating within a sector worth over £1.8 billion, Hans Sloane have already secured contracts with Waitrose and Tesco and are in discussion with Sainsbury’s, Ocado and Co-op amongst others. Now they are seeking investment to expand internationally.
HANS SLOANE – CHOCOLATE MADE FOR DRINKING
The mission of Hans Sloane Drinking Chocolate is to put chocolate back to drinking chocolate. So many of the current drinking chocolate brands have a powdery, sugary taste. Hans Sloane makes beautiful chocolate beads which actually taste of chocolate and not only do they taste great, they look great.
Amazon Review – Chocolate lover
‘Hands down this is the best drinking chocolate around. 10 times better than any of the powdered stuff (Cadbury,Wispa etc) if you are looking for some delicious hot chocolate look no further’
We have a range from Ecuador 70% and Madagascar 67% in addition to our popular Smooth Milk, Rich Dark and our unique Honey. The brand has won 4 Great Taste Awards and we were the Winner of the Best New Product in the My Family website. We sell most of our volume in our 270g retail packs plus we have Barista-size packs for coffee shops. We have also launched a bespoke single serve drinking chocolate. We make and pack our beautiful chocolate beads in our own studio in Surrey with a team of 5 made up of 2 Operations and 3 Commercial members of staff. We are certified by SALSA as an approved food manufacturer.
We are distributed in retail and foodservice outlets. We have listings in over 500 supermarkets (across Waitrose and Tesco) and in one supermarket sales have grown from 1150 units a month to 2000 per month. During promotions this has increased to 8500 units per month, demonstrating that consumers love the taste of Hans Sloane drinking chocolate.
We have distributors who handle sales to garden centres and independents and we also sell direct to signature outlets like Hampton Court, Tower of London and the British Museum as well as artisan coffee shops and cafes.
We are looking to raise £175,000 to fund marketing activity, working capital and some capex. Hans Sloane has been approved by HMRC for EIS.
Use of Funds
In 2014 we estimate that we sampled over 50,000 consumers in stores around the M25 and at shows like Salon Du Chocolate, London Chocolate Festival, Country Living and Taste of London. We plan to extend these activities by sampling in stores around the UK and exhibiting and sampling at consumer fairs around the UK.
With limited funds we have been able to gain coverage in The Times, Daily Mail and Telegraph, been featured on TV programmes such as Off The Beaten Track and in Magazines such as Country Life and Olive. The heritage story of Sir Hans Sloane and our beautiful chocolate beads have been well accepted and with more funds our PR agency aims to gain greater coverage for the Hans Sloane story and the brand.
We have been successful with the shows in London but mainly focussed on the speciality area. We would be able to expand our distribution by attending speciaility shows in the north and some of the major UK Food events like IFE.
We plan to purchase audit data for retail outlets, to help us build a compelling story based on market share and thus gain greater distribution in the larger retail stores. Also we will investigate changing consumer habits within speciality hot beverages to gain greater insight to allow us to take a greater share of this sector.
We would like to explore entering 2/3 markets over the next couple of years and funds will allow us to visit to investigate the opportunity and exhibit at trade shows like Fancy Food USA, ISM and SIAL.
John Spayne is a large investor (45%) in Hans Sloane.
John is a founding partner in Spayne Lindsay, an investment banking boutique which specialises in the international Food and Beverage industry. John has covered the Food and Beverage industry for over 25 years and his firm is widely recognised as one of the leading practitioners in its market. Prior to setting up his own business in 2004, John was a Managing Director at Lehman Brothers, having previously worked for 12 years at the merchant bank, Robert Fleming. John’s vast network and encyclopaedic knowledge of the food industry is a huge resource for Hans Sloane which will significantly enhance our prospects for growth and a successful exit.
Mandy Ferguson – Advisor
Mandy has extensive experience in general management and senior marketing roles having worked at Heinz, UB, ABF and was Managing Director at Ryvita. She is now VP Europe at Harlequin books, a division of Harper Collins. She has advised Hans Sloane on strategic marketing projects such as brand positioning and brand identity.
Bill McCarrick – Master Chocolatier (10% Shareholder)
Bill has worked as Head Pastry Chef at the Ritz Hotel and Harrods and won many awards from the Academy of Chocolate, Great Taste and across the hotel industry. He now teaches at the Institute of Culinary Arts in New York. Bill advises Hans Sloane on any new product development.
Hans Sloane is a member of the Federation of Small Businesses, IGD, Enterprise Nation and the UKTI Passport to Export. All these are good resources for advice for a growing buisness.
Hans Sloane has a small community programme which visits local schools to tell them about how Chocolate is made and the story of Sir Hans Sloane.
Every year on Hans Sloane ‘s birthday on the 16th April the Cadogan Estate allow us to give away samples of drinking chocolate under Sir Hans Sloane’s statue near Sloane Square.
DRINKING CHOCOLATE – AN UNLOVED CATEGORY
We have tasted every drinking chocolate available in the UK and some from abroad and it would seem that whilst consumers are passionate about their drinking chocolate most of the big companies have fallen out of love with the category, so their products have a sugary, powdery taste.
Our chocolatiers lovingly shine our unique chocolate beads, so as well as tasting great they look great. This takes more time but our consumers tell us it is well worth the effort.
Website Review – Ewan Wilkie Buckinghamshire
‘It’s the sort of thing where you are amazed how delicious each mouthful is. It doesn’t become boring or samey over time, it stays an utter treat. Certainly a testament to how lovingly this product is made.
THE MARKET – A VERSATILE PRODUCT WITH LOTS OF OPPORTUNITY
The UK hot beverages category is worth £1.8 billion (Nielsen) and the drinking chocolate part is worth £143 million. Hans Sloane will be able to play in the drinking chocolate market and in the speciality drinks market (cappuccinos, lattes and herbal tea) as consumers are looking for a premium drink experience. Our research has identified the ‘relaxation and comfort occasion’ associated with these drinks, as an area for growth. We see drinking chocolate as the ‘new coffee’ with an opportunity to introduce consumers to new origin blends and different ways of enjoying it at home and in coffee shops.
Hans Sloane has an opportunity to gain consumers in the UK Chilled Flavoured Milk category worth £266 million by encouraging consumers to use the beads to make cold drinks. In the summer of 2014 we heavily sampled cold drinking chocolate at Taste of London and in stores with very positive results. In 2015 we have a programme of tastings and social media through the summer to encourage consumers to use Hans Sloane beads for cold chocolate drinks or in a chocolate fruit smoothies (like Rich Dark beads, Skimmed Milk, Ice and Blueberries).
We have promoted the use of our chocolate beads for baking ( chocolate brownies) and for desserts ( sprinkle over ice cream) through social media. We have partnered with Suzy Pelta (Winner of GMTV Baking Competition) to promote baking and the use of Hans Sloane beads in various recipes.
Website Review Chocolate baking Queen from London
‘Not just for drinking ! 4/8/14
I’ve been baking with these babies for a while and felt the urge to spread the word ! They’re delicious! Far better that any chocolate slab available and of course, the beads melt so well and don’t need chopping like a slab. Delicious every time !’
NPD – Innovation in new sectors
As well as our Retail and Foodservice packs Hans Sloane has launched a range of single serve drinking chocolate. For this Easter Season there is the first Easter egg drinking chocolate. We simply filled the chocolate egg with our Hans Sloane beads so you can shake it, melt it and then drink it. In 2014 we successfully launched our Single Serve Christmas Bauble with sales of 2,900 to one customer and other sales to retailers, online, hamper companies and at consumer fairs. As well as these 2 seasonal items Hans Sloane has a single serve cocoa pod version for all year round sales.
TRADE SECTORS – CONTROLLED EXPANSION
We have grown sales in one supermarket from 1000 per month to 2000 per month and 8500 when on promotion. This success was driven by in store sampling, money off vouchers and a targeted PR campaign. We are in discussion with Sainsbury, Ocado and Co-op about listings for the next season.
In addition we have 2 distributors focusing on the independent sector with sales to independents and garden centres. We have range of Origin drinking chocolate (Madagascar 67% and Ecuador 70%) which are exclusive to these stores.
We are also listed in signature outlets like the John Lewis Food Halls, Historic Palaces & The British Museum.
We are members of IGD under their small company scheme and this helps us stay abreast of changes in the retail environment.
In response to requests from artisan cafes and hotels we have developed a range of Barista 1kg packs. Many of these artisan cafes said they found it incongruous serving premium Origin coffees then serving hot chocolate from a big tub of powder from under the counter. We will be exhibiting at the 2015 London Coffee Festival to expand our presence in this area.
Last Christmas we used our online store to launch our innovative Christmas Bauble Drinking Chocolate. After a feature in the Daily Mail we were very pleased with the sales uplift after the feature which we estimate to be over 2000 units. We use Facebook, Twitter and Google Analytics to drive sales to our website. We have just moved to Amazon Fulfilment to increase our sales in this growing online area.
Last year we did a test launch with a major retailer in the USA through 400 stores and initial results were positive. The investment will allow us to identify a route into the US market and launch for 2015/16. We have begun the process already and plan to meet with a prospective confectionery broker in May 2015. We are members of the UKTI Passport to Export programme which helps small companies grow internationally. As part of this programme we will have an MBA student for 3 months to help us investigate international opportunities. She will have access to the database at the Henley Business School.
We are well aware of the changes in major retailers and are constantly seeking to build relationships with new retailers and across different market sectors to maintain our growth plan.
Considering we are in less than 1000 outlets in the UK and there are around 108,000 outlets (Grocer/Nielsen 2013) it is fair to say there is room to grow.
WHO WAS HANS SLOANE ?
Physician, Botanist, Adventurer, CHOCOLATE PIONEER, Innovator, Collector and Benefactor.
Hans Sloane was a chocolate pioneer back in the 1680’s. He brought the first sample of Theobroma Cocoa from Jamaica to Europe, which is still on show at the Natural History Museum in London. While he was in Jamaica he tasted the local drink of cocoa and water and found it ‘nauseating’ and set about making a version he liked by adding milk and sugar. He brought this back to London and sold it as Sir Hans Sloane Milk Drinking Chocolate, the forerunner of the great British love affair with Milk Chocolate. The Cadbury Brothers used Hans Sloane’s recipe for over 45 years.
Hans was also one of Britain’s greatest collectors and his collection started the British Museum, Natural History Museum and the British Library.
He owned much of Chelsea and Sloane Square and Hans Crescent are named after him.
We have trademarked the name Hans Sloane and Sir Hans Sloane in connection with chocolate and beverages in the retail and foodservice sector.
THE PEOPLE – A STRONG TEAM THAT HAVE WORKED TOGETHER SINCE LAUNCH
Brian Watt – Managing Director (owns 45% of Hans Sloane)
Brian has 30 years of experience in general management, sales and marketing in FMCG with companies like Johnson and Johnson, United Biscuits and Kraft. He was Managing Director for Kraft’s Chocolate and Coffee business in Hungary where he grew the sales of the local and international brands. He has lived in 4 countries and worked in businesses across many international markets in the chocolate and hot beverage sector including the launch of Terry’s Chocolate Orange in Australia. After corporate life Brian set up his own consultancy working with major clients like Danone and Rainforest Alliance. He advised start ups in the UK and Switzerland and was an Octopus Ventures Partner.
Brian has a BA in Business Administration from Strathclyde University.
Brian is married with 3 grown up kids and lives 2 miles from the studio
John Jamison – Head of Sales
John has worked with marketing agencies such as JWT and has experience of building launch campaigns for brands in UK and Europe. John has a BA (Hons) degree in French from Exeter University.
John is married with 2 kids and lives 3 miles from the studio
Jamie Ewan – Head of Marketing
Jamie has worked in marketing roles in several prestigious organisations including Green and Blacks. She was part of the team that launched the G&B miniature bars successfully in the UK. She has experience in Product Development and Packaging Design as well working on the Advertising and Promotion execution for the launch.
Jamie is married with 2 daughters and lives 3 miles from the studio
Deb Richards – Head Chocolatier
Deb trained as a chocolatier in England and Switzerland and has worked in Claridge’s Hotel and Searcy’s at The Mansion House amongst others. She is trained in working with chocolate and sugar.
Deb is married with a son and lives 11 miles from the studio
Julio Teza – Chocolatier
Julio grew up in Brazil and has lived in Italy. He has worked under Master Chocolatier Bill McCarrick for 4 years and learnt his chocolate skills from Bill on the job.
Key sales drivers: Continued growth in supermarket sector plus expansion into more independents through distributors and fairs. New growth in Foodservice
Other key sales drivers: Launch in East Coast USA, Ireland & Nordics in 2015/16 and Germany, Middle East, China, Aus/NZ in 2016/17
USE OF FUNDS:
Extend marketing activities in sampling to bring in new users and PR activities to develop brand story.
Invest to make packing side of operations more efficient and expand capacity
EXPENSES AND PROFITABILITY:
2 staff on full time contracts 2 staff on flexible contracts to scale back in quieter periods.
Gross margins 50% (new foodservice range 60% margin) and EBITA to move to near 10% in 2015.
EXISTING DEBT OR EQUITY INVESTMENTS:
John Spayne equity £35,000 and loaned company £105,000
Brian Watt equity £30,000, loaned company £105,000 and worked without salary for 2 years.
The paid in capital is split 2,222 shares of £1.00 and then a share premium of £153,000
This is investment will cover our current plan. With some funds for contingencies
Next round: If we saw a major international opportunity above the current plan this may required additional fund raising
The Exit Strategy
The plan is to build Hans Sloane into an international premium brand of drinking chocolate which will attract interest from a wide range of potential strategic buyers, including the following:
1.Direct competitors in drinking chocolate seeking to capture a competitor, take out costs and drive further top-line growth.
2.Direct competitors seeking a more premium brand than they currently have to offer.
3.Hot beverage players (eg in tea, coffee or malted drinks) seeking to broaden their product range in hot beverages.
4.Chocolate retailers who see an opportunity to drive sales of Hans Sloane via their own captive retail network.
5.International companies (eg from the US, Middle East, China, Korea or Japan) keen to acquire branded, premium brands which are quintessentially English with expansion potential in their home markets.
6.Private equity investors, and family offices, wanting to invest in Hans Sloane to ‘take it to the next level’ in terms of international expansion and brand building.
Invest £10 and get
our thanks for your support plus you will receive our newsletter with special offers on the Hans Sloane range.
Invest £100 and get
our thanks for your support , the newsletter plus special seasonal discounts ( Christmas, Easter, Valentines) on Hans Sloane range
Invest £500 and get
our thanks for your support, the newsletter and seasonal discounts and we will send you a pack of our Honey and our Ecuador 70%. drinking chocolate
Invest £1,000 and get
our thanks for your support, the newsletter, seasonal discounts and we will be sending you our range of drinking chocolate Smooth Milk, Rich Dark, Honey, Madagascar 67% and Ecuador 70%
Invest £5,000 and get
our thanks for your support, the newsletter, seasonal discounts and we will be sending you our ultimate drinking chocolate hamper with our range of drinking chocolate our seasonal single serves, 2 Hans Sloane cups and a whisk
Invest £10,000 and get
our thanks for your support, the newsletter, seasonal discounts and you have a special invitation to visit the Hans Sloane studio with 3 guests for a master class with our chocolatiers. You will have a drinking chocolate tasting and our chocolatiers will show you how to hand temper chocolate and make your own chocolates to take home.
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