21.01.2016

TAEFL brings a little sparkle to the health drink sector

Patent Office shelves are full of the good ideas which ran out of runway; developments on any number of fronts which lacked either the funding to implement them, or a marketplace advanced enough to provide a commercial return.  There is a wonderful example in the archives of a 19th Century machine invented to build brick walls. The only problem was that it could not turn corners. The developers had not thought their idea through quite far enough.

Not every ‘good idea’ demonstrates the degree of novelty needed to secure patent protection, but there is a whole raft of developments which, if funded and exploited commercially, can bring their creators significant returns so long as they keep ahead of the competition. The health drink marketplace is a case in point.  Identify emergent trends in healthy living, create a product to meet those criteria and ensure that retail distributors have stocks on their shelves when the editors of the weekend supplements and women’s magazines move into overdrive.

A UK start-up had identified back in 2013 a substantial call for new types of health drink. Retailers across the country were keen to meet their own customers’ likely demands in the immediate post-Christmas and New Year period.

Giving the retail trade products which allow vendors to capitalise on that demand can prove a major challenge for any entrepreneur. For a UK start-up which believed it had found a health drink which could expand beyond simply a niche market. There was the small matter of funding the £450,000 cost of having the products manufactured to their own specification in Europe, along with the associated distribution costs of stock once imported.

Faced with the prospect of losing out on this opportunity, the company was put in contact with TAEFL by its invoice finance house. While it was  clear that invoices on deliveries to major retailers could be funded through invoice-discounting after the event, this particular mechanism could not support the costs of stock purchase, importation and setting up the supply chain. It was, however, an area of expertise of TAEFL and its associated finance companies.

Rapid turnround ensures client secures market opportunity

Using industry-specific knowledge and contacts, TAEFL was able to secure for its client an offer to the value required of a facility with its finance partner UK EXIM Finance Ltd. More to the point, this was achieved less than two weeks after the initial contact.

As part of its growing relationship with the company, TAEFL organised the documentation and opened a dialogue between potential creditors and the invoice financiers. This has ensured that compliance and good working practice are maintained while the facility is in place. With the funding process handled by TAEFL specialists, the drinks vendor has been able to focus on marketing its new products and securing further orders.

Having been supported by TAEFL and UK EXIM Finance when it first entered the health drinks arena, the company was able to convince a UK supermarket and other retail chains that it could meet those retailers’ demand for consistency of supply.  The reputation which the drinks supplier has established has grown, and enabled it to start establishing new markets in the US.

Client able to devote resources to developing new markets

TAEFL is not directly involved in this export activity; concentrating instead on its ongoing support for the company in financing UK distribution.  It is prepared to finance financing specific purchase agreements, as  when the drinks business wants to order a further (sizeable) batch of canned drinks from its European manufacturer. UK EXIM Finance provides a finance package relating specifically to that deal; confirming the credit standing of the supplier (which it will be paying for the stock) and the UK distributor which will be acquiring the goods to place with retailers.

UK EXIM Finance has given its client access to flexible finance which ensures that its enterprising client can devote its efforts to developing its 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 of history.

Return to Case Studies Page >>