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From humble beginnings selling small batches at the Matakana Farmers Market in 2009, Zeffer has grown to become a leading craft cider brand and the largest independent, dedicated cider producer in New Zealand.
Today we're producing over 460,000 litres per year (roughly equivalent to around 3,000 bottles a day), with our cider being sold across NZ and exported to China, Taiwan, USA, Australia, Thailand, Singapore, Germany, Hong Kong and Japan.
Unlike many brands that produce cider from concentrate loaded with sugar, we use natural juice from freshly crushed Hawke’s Bay apples, creating an authentic New Zealand cider with a drier, crisper flavour. Outside of our award-winning core red and green apple range, we produce world-leading, “new world” style ciders such as our Hopped and Apple Crumble ciders, using innovative local ingredients like kawakawa and NZ hops.
The cider market is experiencing rapid international growth with the global market picked to grow from US$10.7 billion in 2016, to US$16.3 billion in 2023. Here at home, cider is one of the fastest growing alcohol categories with grocery sales alone now reaching $54m per annum. Much like the trend from mainstream to craft beer over the last five years, consumers are now also seeking a more premium, handcrafted cider. With nationwide distribution and strong brand positioning, we’re set to continue growing with the premiumisation of the cider category.
While we currently export to nine markets around the world, this year we're honing our export focus on one of these markets (the largest by far), China. Cider is taking off in China, so we’re working closely with a leading Chinese distributor and have set up local, dedicated staff to drive sales in this exciting, emerging market. We are also currently recruiting for a Global Sales Manager to oversee our export team and add further focus to our China export efforts. In our first full year operating in China we achieved ex cidery sales of $365,000 and are forecasting this to grow to $630,000 in the coming year.
Here at home, our distributor, Quench Collective, is on track to continue growing sales through their high call frequency and merchandising coverage in all key retail outlets. Last quarter, we achieved ranging in 35% of all supermarkets in New Zealand and increased our sales on the same quarter the previous year by 72%.
Since our successful capital raise of $1.2m in March 2017, we have executed against our strategy and grown sales by 70%, from $1.6m to $2.8m, beating our FY18 forecast by $140,000 (on breakeven EBITDA). We successfully moved production from our previous cidery in Silverdale, north of Auckland, to the source of our apples in sunny Hawke’s Bay, resulting in a state-of-the-art site with the capacity to produce over 2 million litres of cider per annum. We also managed to take out the overall trophy at the International Cider Awards in London. This is considered the ‘Oscars’ of the brewing and cider industry, giving Zeffer the title of the makers of the world’s best cider. We were also awarded an International Growth Fund from New Zealand Trade and Enterprise (NZTE), which resulted in a 3-year investment of just under $500,000, designed to accelerate our growth in China. In the upcoming financial year we are forecasting $4.5m revenue (with EBITDA of $75k).
We have recently completed our 3-year strategic plan and defined our vision, which is ‘to sustainably grow to be a $10 million revenue company with positive EBITDA by 2021, with $8 million of revenue coming from branded sales in no more than four markets’. The timing is right to on-board additional investment to capitalise on four clear opportunities for the business:
We’re now raising up to $1.8m through Snowball Effect, on a pre-money valuation of $8.26m to drive forward with our 3-year strategy.
We love what we do and we love sharing our world-class, unique cider with New Zealanders. This is our opportunity to strengthen the Zeffer team at an exciting point in our growth journey, by on-boarding the Kiwis who love our cider, as shareholders. If you are an existing shareholder, we hope the information and engagement we have provided over the past year has given you confidence in the opportunity in front of us and our ability to execute. Together, we can create New Zealand’s next FMCG success story.
Since our $1.2m capital raise in March 2017, we have had a busy and successful year at Zeffer. In our Information Memorandum prepared for that raise (2017 IM), we outlined a number of targets that the capital was going to be used for. The table below provides an update on our progress against those targets in the 12 months since we completed that raise.
Our use of funds from last year’s raise was broadly in line with the forecasts in the 2017 IM.
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.