To celebrate 2018’s English Wine Week, we’ve put together a list of our favourite wine businesses, mapping the way this sector is benefitting the UK’s high-growth sector and the broader economy (not to mention all the British sommeliers looking for something a little more homegrown).
The UK’s high-growth wine sector can be split roughly into four sections, ranging between suppliers, the merchants (both e-commerce and physical), and actual English vineyards.
Five English vineyards have taken on equity investment since 2011:
black dog hill vineyard
digby fine english
giffords hall vineyard
bolney wine estate
Of these, some are relative newcomers, such as Black Dog Hill, whereas others such as Bolney Wine Estate are much older, having produced wine since the early 70s. Hambledon Vineyard claims to be the oldest commercial vineyard in the country, and was first planted by Guy Salisbury-Jones, a British Army officer, back in 1952. The wine he produced was the first English wine in around 100 years. However, the vineyard virtually ceased production in the 90s, and was only reopened in 2011, under new management.
Digby Fine English, which operates a sparkling wine brand, is actually a négociant. Rather than owning their own vineyard, they contract other independent vineyards to grow the fruit. They’ve raised over £1m through four rounds, including two on Seedrs.
Of the vineyards, just Bolney is generating a profit. Clearly, this isn’t a suitable sector for impatient capital, and the potential returns for investors are limited. That’s not to say English vineyards are any less good than their Continental counterparts, it’s just not really a playpark for venture capitalists (though this might not be the case for Digby).
The most recent big success story from an investment perspective has been Naked Wines. Having started up in 2008, in the aftermath of the financial crash when London’s tech scene was still very much in its infancy, this online marketplace grew its turnover quickly to £34m in 2013. That same year, it raised £6.4m from the international wine distributor WIV Wein. Several years later, in 2015, it was acquired by the UK’s wine giant Majestic Wines, for around £70m.
Naked Wines operates a unique, not-quite-ecommerce business model, insomuch that they also act as a crowdfunding platform for the wine producers they feature on their website. Customers (or “angel investors”) put in £20 each month, which is invested in independent producers. In return, the customers can buy bottles at wholesale price.
With such returns, investors will be on the hunt for the next Naked Wines. The UK’s high-growth scene is certainly very active for wine startups, though it’s hard to see whether most are gunning for a truly innovative product.
As such, we’ve selected our top three wine startups who could disrupt the market:
abercrombie fine wines
Abercrombie Fine Wines has identified a niche in supplying wine to the pleasure yacht market. Since starting up in 2013 they’ve raised £252k through two unannounced rounds, and are under the helm of Thomas Bradshaw, who spent five years ar JP Morgan. Pulp, on the other hand, offer a subscription-box service for wine tasting. Co-Founder and CEO Paolo Zanelli is on a mission to “desnobbify” wine for milennials, after a career in Deutsche Bank and Singapore’s sovereign wealth fund. Whilst the startup is still in its very early stage, they’ve already gone through the MassChallenge accelerator. The last startup on our list, Vinterest, offers an on-demand wine delivery app. This could certainly prove a hit, especially in London’s more affluent boroughs.
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