Karma Drinks

Karma Drinks (Karma Cola) produce a range of organic sodas, probiotic kombuchas and switchels. Every Drink Does Good.

Minimum investment: $10,000.00 NZD

$1,795,000
Funded Wholesale
Min target: $1,000,000 Max target: $2,000,000 Equity offered: Convertible Note
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$1,795,000 Funded Wholesale
$1,000,000 Min. target (0.00% equity)
$2,000,000 Max. target
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Investor Webinar

Karma Drinks hosted a webinar for investors on Thursday 12th November. Below is a link to a recording of this session. Please note that there is a typo in the webinar presentation - further info relating to this can be found in the comments section of the webinar.

WEBINAR RECORDING

From The Founders

We made Karma Drinks to taste good and be good. Good for the land, good for the people who grow ingredients, and as good for you as fizzy drinks can be — so you can feel good about drinking them.

We set up the Karma Foundation to ensure this happens.

8 years ago we made the first bottle of Karma Cola. Since then we’ve made another 15 great tasting, Fairtrade, organic and functional drinks and created sugar-free versions of all our original drinks. Our company has grown to over 30 people who have sold over 28,000,000 good Karma Drinks in 23 countries.

All this has enabled the Karma Foundation to support farming communities in 8 villages in Sierra Leone and producers around the world. We’ve helped build 3 bridges, provided bursaries for 133 girls to go to school.

We’ve paid 8 teachers to educate a total of 614 children each year and established a revolving fund that has invested in more than 50 local entrepreneurs trading their way to a brighter future.

As we’ve grown we’ve encountered new challenges and restructured Karma Drinks to realise the opportunities ahead. While upgrading our executive and strategic direction we’ve also needed to adapt to a radically changing world struck by COIVD-19. The changes we’ve made allow us to be agile, resilient and viable in a post-coronavirus future and our new CEO, Ben Dando, is navigating this storm whilst finding way to make us faster.

Thanks from everyone at Karma Drinks, on behalf of everyone who benefits from the sale of our drinks.

The more drinks we sell, the more good we can do.


The online offer provides a summary of the information provided in the Information Memorandum which is available to download via the 'Offer' tab. The 'Offer' tab also provides access to additional information on the company that may be useful to investors as part of their due diligence process.

Executive Summary

What Makes Karma Special?

1. The worlds most ethical soft drinks company supported by the Karma Foundation

  • Our Karma Drinks Foundation contributes 1% of revenue to support community projects
  • FairTrade certified and awarded, listed by Ethisphere as one of the ‘World’s most ethical companies’
  • Finalising B-Corp certification substantiating Karma Drinks’ focus on a range climate crisis issues SDGs. We have a focus on 100% plastic free supply chain & becoming a carbon neutral organisation
  • We are a multi award winning challenger brand receiving accolades for taste, design and sustainability

2. Growing ahead of the CSD category

  • With 34.0% CAGR for the past 6 years. Since launching into the UK / EU this now contributes to >45% of the global revenue
  • FairTrade certified and awarded, listed by Ethisphere as one of the ‘World’s most ethical companies’
  • We have expanded to >20 markets across Western Europe, Asia, Australia & New Zealand and have further significant opportunity for expansion in existing geographies + Middle East & USA
  • We have an impressive penetration of the on trade channel with listings in more than 3,000+ premium outlets and > 70 distribution partners and the demand for our products continue to expand on a daily basis

3. Impressive future growth opportunity of over $19M

  • Our 3 year base forecast anticipates us achieving >$19M gross sales in FY23 through continued growth in on trade, off trade expansion, new geographies and innovation
  • Path to profitability already proven in NZ & Australia with the group forecast to achieve profitability by FY22. We are forecasting >34% gross margin and >$2M EBITDA in FY23.
  • With a modest spend to date and a further modest spend of 3-4% in marketing and trade spend, we have exciting beyond plan opportunities which could further accelerate growth rates, expansion and innovating in new categories for incremental growth

4. Premium on-trend brand with agile NPD capabilities

  • We are natural, organic certified, non GMO, vegan friendly, and only use glass bottles and aluminium cans in our portfolio (no plastic!)
  • We are an affordable premium with an accessible price point through our 250ml can and 300ml bottle pricing strategy
  • Our exciting innovation pipeline is helping us expand into functional healthy drinks which will deliver incremental growth and broaden Karma Drinks consumption occasion
  • We have a track record of success with innovation and have the ability to bring products to market from concept in <6 months

5. Strong operating model and successful management team

  • Proven ability to manage and operate a complex international supply chain, with capability to scale
  • Highly experienced and committed management team, focused on driving the business through the next phase of growth
  • Recent executive hires including Ben Dando (CEO) and Simon McLennan (NZ Sales Director) demonstrate the lift in capability of Karma Drinks’ management to deliver growth in off trade channels
  • Proven successes in soft drinks industry, Co-Founder Chris Morrison, previously founded and sold Phoenix Organics

6. A track record of success

  • We have strong distributor partnerships that have allowed us to access experience led customers such as Honest Burgers, Tortilla, Everyman Cinemas and many more
  • Our distributors continue to bring more Karma Drinks to new consumers in new geographies, channels and markets
  • We are expanding into the off trade channel through Foodstuffs, Farro, Progressives, Waitrose, Sainsbury’s, Ocado, Amazon + more
  • Our successful trial in Sainsburys shows that we were bringing new customers to the category (40% of all new customers) & that our rate of sale will help us succeed in grocery, convenience and fuel customers

7. Well Positioned to Benefit from Long-Term Market Trends


The Karma Foundation

Working alongside the grower families in Sierra Leone who helped us produce our original Karma Cola has always been at the heart of Karma Drinks. This continues with profound benefits to the communities in the Tiwai District.

Work is underway to evolve the focus of the Foundation with a view to broaden its purpose, impact and appeal to consumers on both social and environmental initiatives.


The Karma Drink Master Brand

Since launching in 2010, Karma Drinks has expanded beyond its original Karma Cola product; now it has a name that recognises that.

Karma Drinks’ growing product range now extends to over 20 SKUs and 7 flavours, resulting in a clear driver of a umbrella master brand.

This was implemented in November 2019 across all Karma Drinks products globally, to develop:

  • Brand Equity - increased recognition and consumer trust with newer sub-brands (i.e. Summer) benefitting from this ‘halo’ effect
  • Customr Retention - now able to connect with all customers through one recognised brand; increasing brand awareness
  • Efficient Marketing - ability to promote the entire product range using a single strategy; no confusion with Cola products any more
  • Competitive Strength - Karma Drinks has ability to become an iconic soft drinks brand

The Karma Drinks master brand is an umbrella for Karma Drinks’ growing product range. Karma Drinks has a pipeline full of innovative products, with scheduled activity to react to successful products throughout the plan


Growth Plan to Achieve $19.7m Sales by FY23

Karma Drinks’ growth will be delivered through:

  • Increased off-trade channel growth, focused on UK and New Zealand grocers
  • Continued penetration of the successful on-trade channel
  • A clear pipeline of innovative EPD/NPD launches
  • Improved international market distribution including Europe, Asia, Australia and a USA launch

Channel Strategy

Karma Drinks have benefited from strong brand and product development capability. To compliment this we’ve added strength in leadership, execution and sales. We’re commercially more savvy and we’re much more resilient. We’ve evolved our sales strategy.

We’ve previously succeeded in cafés in NZ and the UK, but after a successful trial in Sainsbury’s, with our new product range and with new leadership, we are confident to take on more significant grocery, convenience and fuel channel customers. We are ready to succeed in high volume channels in NZ grocery with a full range of products, high rate-of-sale functional drinks and a cohesive overarching brand that delivers strong shelf-presence.


Navigating COVID-19

Karma Drink’s business was impacted by COVID-19, particularly in the UK and Europe, because a high portion of our sales are through hospitality channels.

The impact on revenue across the business was significant as hospitality businesses around the world were forced to close their doors.

The impact of COVID-19 on the business together with the appointment of our new CEO resulted in some significant changes to the business, which combined with recent innovations and developments will result in a more efficient, focused and profitable business.

Faced with the prospect of limited sales and cashflow constraints, management undertook a review of the business to develop a model that would reduce losses in the business and provide a rapid pathway to profitability. The new budget is based on a number of key initiatives to ensure the business can weather the economic impact of COVID-19 and emerge better placed to profitably grow in the future.


Organisational Chart

The Board

  • Chris Morrison (Co-Founder / Director) - Chris founded, grew and successfully exited one of Australasia’s most successful organic drinks brands, Phoenix Organics. He is also a Director of All Good Bananas Ltd and Kokako Coffee.
  • Simon Coley (Co-Founder / Director) - former Marketing Director for 42 Below Vodka, Simon was responsible for marketing efforts, in NZ and internationally, and new products under the 42 Below brand. He is also a Director of All Good Bananas Ltd.
  • Matt Morrison (Co-Founder / Director) - Matt’s career began as an officer in the NZ Army and took him to NZ Treasury where he was responsible for helping set-up the Cullen Fund, monitoring SOE’s & export financing. He is also a Director of All Good Bananas Ltd and the Wellington Chocolate Factory.
  • Ant Howard (Chair) - former Chief Executive of Wang New Zealand, which under his leadership listed on the NZ Stock Exchange and became one of the country’s most innovative and successful systems integration and services companies.
  • Jonathan McHardy (Director) - Jonathan was a senior banker with Credit Suisse in London and in New York who returned to New Zealand in 2015. He now works with a small number of family offices and private companies.
  • Emma Loisel (Independent Director) - Emma is a Board Director, business owner and investor in high growth ventures. She is passionate about innovating businesses, consumer offerings and industries, particularly those delivering positive outcomes alongside profit. Her expertise spans business leadership and strategy, risk management, marketing and sales, plus general business operations and efficiency management. Emma focusses her time on her business, Volcano Coffee Works and holds a variety of the Board positions, including NZ Growth Capital Partners.

Chair of the Karma Foundation

Albert Tucker (Chair of the Karma Cola Foundation) - a native of Sierra Leone, Albert has a track record in leading and building successful social enterprises, working with organisations including Cafédirect, Divine Chocolate and Twin Trading.


The Executive

We have 20 employees globally, with 15 across New Zealand and 5 in London. We take exceptional care in recruitment and have appointed the key executives to drive our ambitions for the next 3 years.

Photo of Ben Dando

Ben Dando CEO

Ben started in March this year and is currently leading the business from the UK but is looking to move to NZ. Ben has an impressive track-record of driving global growth including leading Califia Farms success in UK & EU, Ella’s Kitchen (as head of global sales), Danone (as Sales Manager of UK grocery) and Coca-Cola UK (leading field sales).
Photo of Patrick Coyle

Patrick Coyle General Manager NZ and Australia and CFO - Auckland

Patrick runs NZ and Australia, and is our CFO. Prior to Karma Cola Patrick was with Direct Capital and in that role was involved in many early stage innovative companies. Patrick has the balancing act of driving our vision in NZ while leading our financial strategy.
Photo of Simon McLennan

Simon McLennan Sales Director

Simon was appointed as Sales Director of NZ & Australia in January 2020. Simon led Fonterra’s lifestyle drinks division and prior to that was National Business Manager for Red Bull NZ. Simon’s expertise and experience is key to growing Karma in the NZ grocery channel and into new distributors in Australia and Asia.
Photo of Jessamy Beeson-Jones

Jessamy Beeson-Jones Marketing Manager

Jessamy was appointed Marketing Manager earlier in 2020. Jessamy is creative, results-driven and a strategic brand builder, who's spent 8 years helping successfully launch brands within the competitive FMCG space. Having spent 7 years steering the Popchips UK marketing strategy from launch through to acquisition, and most recently helping launch Everleaf (the world's finest non-alcoholic aperitif), Jessamy developed a passion for working with food and drink brands with integrity at their heart.
Photo of Chris Morrison

Chris Morrison Co-Founder

Chris manages operations at Karma Drinks. He founded, grew and successfully exited one of Australasia’s most successful organic drinks brands, Phoenix Organics, and is an investor in ethical business startups and the former Chairman of the Sustainable Business Network and organic certifier, BioGro

Warning statement

It's crucial for you to understand the characteristics and risks of this investment opportunity. New Zealand law normally requires people who offer financial products to provide in-depth information to investors before they invest. The usual rules do not apply to offers by companies through Snowball Effect. As a result, you may not be given all the information you need to make an informed decision. Investing is risky. Some of the key risks include loss of capital, illiquidity, lack of returns, dilution, loss of key people and customers, and lack of control. You should only invest money that you can afford to lose.