Funding for drinks company in highly competitive market
Patent Office shelves are full of the good ideas which have come to grief because they lacked either the funding or a marketplace large enough to provide a commercial return. But there is a whole raft of well financed and cleverly positioned innovations which bring their creators significant returns so long as they keep ahead of the competition.
The energy drink marketplace is a case in point. Identify emergent trends in healthy living. Create a product to meet those criteria. Ensure that retail distributors have stocks on their shelves when the editors of the weekend papers and women’s magazines move into overdrive.
Aspire Brands was still a UK start-up back in 2008 when its founders identified demand for new types of energy drink which provided a broad range of vitamins and nutrients – and had zero calories. Free from sugar, it would be an alternative to the products which had saturated that market sector.
By 2010, the team had formulated a cold drink based on a particularly high grade of green tea whose health properties are well documented. Aspire director Darren Linnell explained that the company offers three varieties of the product. “These are achieved by adding natural extracts of cranberry, mango, and a blend of apple and acai. Our range spans tartness, sweetness and the exotic.”
The preparation was trialled in Birmingham and the Food & Drinks Expo, and proved popular. Aspire was ready to play on a larger stage in 2013. Manufacturing in-house would clearly have been a logistical issue for the newcomers: outsourcing production to a specialist producer in Austria minimised the investment required in plant and resources. Taking the product to market would also have been risky if the owners had had to knock on the doors of supermarket buyers and the independents. The Aspire team opted instead to reach the UK marketplace through a long-established food distributor whose brand values matched their own, and who were already selling into the target customers for other producers.
TAEFL stepped in to help finance sourcing, production and transport to the distributor.
There remained the small matter of financing the cost of raw materials, manufacturing, packaging and transport to the UK. It was clear that invoice discounting could not cover those costs, and Aspire’s invoice finance house recommended the company to contact TAEFL, which secured a facility with its finance partner UK EXIM Finance Ltd. This deal was put together in under two weeks. The finance company purchases the materials, pays the manufacturer and the cost of transport to the UK.
With the manufacturing and supply chain established, the wholesaler has been able to secure contracts for the Aspire range n the UK from outlets which include Tesco, Holland & Barrett and, most recently. the Costco network. The energy drink, which delivers a balanced cocktail of vitamins and nutrients. and is described as ‘calorie burning’, marks the Aspire range out from an array of energy brands.
With growing brand recognition and market share in the UK, Aspire Brands has been establishing markets across Europe and the US, where it works through master distributors in each State. Product for the US is manufactured in Minnesota; for the rest of the world it is sourced from the Austrian factory.
While Aspire Drinks continue to be sold in the same three variants across the world, they are sometimes ‘tweaked’ to meet local tastes. Darren Linnell again. “As an example, American customers prefer their energy drinks to be sweeter-tasting, while in Turkey, customers want a ‘drier’ taste and we are also limited in the amount of natural caffeine we can include per litre.”
The company’s expansion continues: it has recently engaged with an international distributor that is active in seventy countries including Mexico, Nigeria, Nigeria, the UAE and China, which is the fasting growing energy drinks market in the world.
UK EXIM Finance gave its client access to flexible finance which ensured that its enterprising client could devote its efforts to developing the business. Observing the relationships that TAEFL and its finance companies establish with their clients, it is clear that tailored finance is a service which is helping ensure that good commercial ideas do not gather dust amongst the also-rans.