Following ‘The Crowd’…

Crowd funding is a phenomenon that’s taking the UK and the world by storm with more and more start-up food and drink businesses turning to ‘the Crowd’ to realise their growth ambitions. ‘But why now?’ I hear you ask; well let me attempt to explain my view on this.

Since the financial crash the UK food and drink market has presented two opportunities: one of consolidation and one of niche, reactionary opportunities. The consolidation end of the spectrum has seen the likes of Warren Buffet merge huge global enterprises increase the power held by market-leading business. This, in turn, has made big companies less agile and less able to react to emerging market trends which has allowed start-up companies to get a foothold in retail and meet the needs of the fickle consumer. This opportunity wouldn’t have been afforded to emerging businesses little over ten years ago as they would have been strategically strangled off supermarket fixtures by category powerhouses. One example of this can be seen in the Crisps and Snacks category in the UK with the rise of the premium popcorn sub-category led by Propercorn. Traditionally Walkers would have seen off the challenge to their market share in bullish fashion but the market shift has meant that the Leicester-based manufacturer had kept hold of their core products tightly and allowed Propercorn to own a sub-category and space on shelf. So the global financial shift has brought about more opportunities for fledgling businesses to flourish but why has crowd funding proven such a popular method of fuelling growth?

I believe that this method of fund raising offers more benefits to the entrepreneur and business than just hard cash. Crowd funding acts as a phenomenal marketing tool and a great way to get a large number of people to see your brand and business and have a vested interest in how you perform. Unlike Angel Investment, it provides a brilliant ‘shaggy dog’ story to talk to the press about if you’re successful. Unlike a bank loan, ‘the Crowd’ offers a cost-effective way of raising capital without it heavily impacting your bottom line. Finally, I believe crowd funding to be a success because it allows your Average Joe to feel like Duncan Bannatyne and play at Dragon’s Den without having to give away £200k of your children’s inheritance.

Crowd funding has raised over £115M in the UK in the last five years alone and is only set to increase as more start-up businesses exploit the multiple benefits it holds for them. There are some great opportunities for Food Adventurers to further explore their passion and get involved with a young business and potentially find the next Propercorn!

Here is just a couple of great Northern food and drink businesses that I’ve found who have chosen to turn to ‘the Crowd’ to further their journey:

www.seedrs.com/charbrew

www.seedrs.com/coeur-de-xocolat

www.brewdog.com

Northern Munkee