Hambledon Vineyard, set on the slopes of the Hampshire South Downs, is inviting investors to join the "English Sparkling Wine Revolution" by offering a secured and convertible mini bond.
First planted in 1952, Hambledon Vineyard is well placed to compete with the Champagne growers of France just over 105 miles to the South East – with similar chalk soil and similar climatic conditions.
The market for English sparkling wine
The UK is the world’s largest Champagne export market (Comité Campagne, p. 14-17), per capita consumption is nearly ten times that of the USA. Since 2009, the UK market for sparkling wines has grown by 28% and last year reached 123.3 million bottles (WSTA), gaining market share at the expense of still wines. Within this growing market for Fizz, Champagne has been losing market share, between 2007 and 2014 declining from 39.1 to 32.6 million bottles (The Drinks Business).
The management believes that the market share of English sparkling wines is currently small (around 1.5%) but capable of major expansion. Given English rivalry with the French, there is already a tremendous sense of pride developing amongst Brits in the knowledge that England can make world beating sparkling wine.
Hambledon’s potential
Ian Kellett bought Hambledon Vineyard in 1999 because of its consistent chalk terroir on South East facing slopes and his belief that it has the best brand story of any English wine business. Throw in the fact that Hambledon village is known as the Cradle of Cricket (Lord’s predecessor in the sport and the place where the rules of the present game were first formalized in 1770) and the scope to develop Hambledon into the leading English wine brand seemed clear.
Hambledon’s sub-brand, Mill Down, won a Gold Medal in the 2014 English and Welsh Wine of the Year competition and Hambledon’s Classic Cuvée is also award winning, having won a prize at the Bollicine del Mondo competition, run by Italy's wine magazine Euposia, in 2014.
Ian said: “Our aim is simple; selling Englishness to the world in the form of an eventual one million bottles per annum of highest quality English fizz, from England’s oldest commercial vineyard and the ‘birthplace’ of cricket. We believe that Hambledon has the terroir, the potential for brand leadership, and the team to produce the finest brand of English sparkling wine and to become world renowned.”
Hambledon’s wine making team is led by Hervé Jestin, a highly experienced former chef de caves at a leading Champagne producer. The vineyard has entered into a mutually exclusive relationship with the wholesale agency division of Berry Brothers & Rudd, Fields Morris & Verdin, to develop sales to UK trade customers.
Why a new mini bond issue?
Proceeds of the mini bond issue will help Hambledon expand its output and build up stocks to enable it to achieve an initial sales target of 200,000 bottles a year within five years, with production far exceeding that amount.
Ian added: “Crowdfunding our mini bond is important to us so that we might share our journey with as many people as we can – the minimum investment is £1,600. We wanted to work with a partner who understood our ambition and CrowdBnk, with its strong mix of investor types, was the perfect fit.”
Ayan Mitra, CEO of CrowdBnk, said: “The English Fizz Mini Bond is our first mini bond and we are delighted to be hosting such a strong brand and product as Hambledon. The fact that the Mini Bond is both secured and convertible underlines our continued ability to deliver offerings that we believe our investors want. People can register and invest at crowdbnk.com”
Potential returns
The convertible mini bond structure offers a return of 8% per annum in cash, rolled up into a 40% interest payment after five years, plus Hambledon Classic Cuvée rewards and is secured on the company’s assets, ranking ahead of the shareholders who have already invested and after £1.5million of senior debt.
At maturity, convertible bond holders will have the option to convert into equity at £2.20 share (a 25% discount to the Directors’ expectation of the value of the business at 31 June 2020) and become equity shareholders in one of the most exciting projects in the rapidly developing English wine industry. Minimum investment: £10,000.
Hambledon is also offering the opportunity of Hambledon Classic Cuvée only Mini Bonds called “Fizz Rewards.” This gives investors a number of bottles of Classic Cuvée every year during the investment term. Minimum investment: £1,600 and £3,200 depending on level of wine rewards.
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Risk Warning
The Hambledon Mini Bonds are illiquid (they lack the ability to be sold quickly or without substantial loss in value), non-transferable investments that will lock up your money for five years. Interest is paid only at the end of the five year term. The assets on which they are secured may not be sufficient to pay back your investment in all circumstances. Your capital is at risk if you invest. Past performance is not indicative of future performance. This document has been approved as a financial promotion by Resolution Compliance, which is authorised and regulated by the Financial Conduct Authority.
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