Bristol drinks brand Koji secures follow-on funds to drive growth
Bristol-based Future Drinks Co has secured follow-on funding from the Government-backed Angel CoFund and its other investors to drive the next phase of growth of its Koji range of soft drinks.
The funding means the firm can continue to scale up its operations and take the Koji brand into new market sectors. Koji drinks use natural spring waters infused with Japanese fruits and botanicals.
Future Drinks co-founder Tim Chater said: “It’s great to have more funds in place, and especially from all of our original investors. The growth potential for Koji is huge, given the scrutiny that high-sugar food and drink is under both by consumers and by retailers.
“Koji offers a healthy, low-sugar alternative that we know appeals to adults in particular. The soft drinks and health drinks markets are worth more than £13bn in the UK so we know there is a great opportunity here.”
Future Drinks was established in 2010 to build on the market potential Tim and his co-founder Luke Sapsed could see for a natural and low-in-sugar soft drink.
Tim has a wealth of experience in the management and marketing of branded soft drinks and low-calorie products having worked for Zenith International, Nestlé Waters, Canderel and Premier Foods.
Luke has worked extensively in selling into the premium on-premises trade sector for major drinks groups Scottish and Newcastle, Diageo and SAB Miller.
They launched Koji in 2012 following the success of tests with the on- and off-trade. It is now sold in selected bars, cafes, delis, health food outlets, several retail chains across the UK and via the Koji website.
Tim and Luke still retain majority ownership of the business.
Tim added: “It was a big investment initially to break into the soft drinks market. You need to make a real impact with the brand and with sales and marketing, as well as needing working capital to secure intellectual property rights and to invest in full-scale production. We’ve jumped all of those hurdles and done well in our first two years of trading. Now we need to press on.”
Koji uses a patented technique developed by Tim and Luke that means the drink retains all the flavour and nutritional properties of the ingredients without large amounts of sugar being added. It is a traditional method still used in Japan to make liquids such as sake and soy sauce.
Support on the investment deal came from Jonathan Poole, a partner with Bristol law firm Temple Bright, who said: “This follow-up investment came together well because of the mutual trust between the investors and the management.
“Tim and Luke are experienced in this sector, and now have two successful years behind them with Koji. Put together with the original deal we secured in 2012, more than half a million pounds has now been put in by investors, so Future Drinks’ growth plans are on a really secure footing.”
Production of Koji is outsourced to Brothers Drinks in Somerset. The financial details of the investment have not been disclosed.
The Angel CoFund, which was launched in 2011, is a privately-run fund that works alongside groups of business angels to invest in high-growth small and medium-sized businesses across the UK, directly providing funding as well as encouraging the expansion of the business angel market.
Backed by the British Business Bank and the Government’s Regional Growth Fund, the £100m Angel CoFund is able to make initial investments of between £100,000 and £1m into businesses, alongside syndicates of business angels.
This article appeared in the Bristol Business Newsletter on 11 April 2014.