English winemaker Chapel Down is aiming to raise up to £4m via crowdfunding to expand its vineyard holdings and prepare for a coming consolidation period in the English wine sector.
Chapel Down has launched the fundraising project via crowdsourcing website Seedrs. It has sought a minimum amount of £1m from public investors in return for shares and discounts on wine and beer, but company chief executive Frazer Thompson said the firm has a top target of £3.9m.
‘I’m pretty certain we will get there,’ Thompson told Decanter.com, adding that he expects to recruit around 5,000 ‘pilgrim’ investors.
Alongside that, Chapel Down said it has raised £670,000 by placing shares worth 28 pence each with institutional investors.
Proceeds will be primarily used to fund the lease on 400 acres of land in Kent, where the group will plant vines in an effort to double production in the next few years.
The firm also wants to build a new winery, construct new distribution and storage facilities, build a brewery and a visitor attraction.
Its ambition is another example of England‘s fledgling wine industry attracting serious investment.
Thompson said he expects consolidation over the next few years, as the English wine industry becomes more professional and ‘vanity’ producers begin to fall away. ‘Some of the rose-tinted mist will be removed from people’s eyes,’ he said.
Earlier today, Chapel Down reported a 21% rise in net sales for the first half of 2014 versus the same period of last year. Sales reached £2.44m, with wine volume sales up by 12% after the company saw early benefits of their biggest harvest-to-date in 2013.
The group’s Curious beer range, introduced to mitigate against wine harvest washouts in 2011 and 2012, saw sales increase by 60% to £733,000. The firm also announced it will launch a cider.
However, higher administration costs meant Chapel Down sank to net losses of £182,306 in the six months to the end of June.
Thompson said he was confident that the situation is retrievable over the full-year. Chapel Down recovered from losses of £97,570 in the first half of last year to post profits of £28,450 for 2013 as a whole.
‘We won’t make a loss,’ said Thompson. ‘We are not going to drain cash from shareholders.’
Written by Chris Mercer