Online drinks retailer Beer Cartel is raising up to $1.5 million from investors through equity crowdfunding platform Birchal to fuel the next phase of its growth. The average person can invest anywhere between $100 to $10,000 to own a share in the business, while high net worth investors can invest over $10,000. The campaign, which is still in the “expression of interest” phase, has already attracted a lot of attention. “We’ve been told by Birchal that we’ve been th
e been the fastest business to get 1000 people interested during this stage, so that’s fantastic and hopefully [that level of interest] continues throughout the whole campaign,” Richard Kelsey, co-founder of Beer Cartel, told Inside Retail.
Kelsey and co-founder Geoff Huens have been quietly plotting a crowdfunding campaign for a couple of years as a way to include their 100,000-strong pool of loyal customers in the business.
“We have a really loyal following,” Kelsey said. “We always wanted to involve our supporters and fans in the business, and so this was the perfect opportunity to let them have a share in the business and get access to that massive range of 1000+ beers.”
There are also plans to introduce investor perks such as free shipping and discounted pricing on beer.
The funds raised through Birchal will be used to improve the website, logistics and marketing.
“The website itself is such a big channel for us. If we make refinements and improve that, we can definitely get more people on board. From a marketing point of view, it’s about making more people aware of us. And we want to enhance our logistics offering so that we can manage higher demand,” Kelsey said.
“The other part is developing a membership model where we reward customers for being loyal to us. If they’re making regular purchases from us, they’ll get extra benefits.”
Covid kind to craft beer
Beer Cartel launched its beer subscription service back in 2009 and it now accounts for about 80 per cent of the online business, according to Kelsey. But consumers can also make one-off purchases on the site.
“Our advent calendar that we do each year is just crazy popular. Last year, we sold out of them in just 23 days so it was a record for us.”
This latest move comes off the back of an unprecedented 75 per cent sales jump over the past 12 months.
“When the lockdowns began in late March, all of a sudden we were seeing 100 per cent growth in some months and 200-300 per cent growth in others. It was very hard to keep up with demand.”
Fortunately, the uptick in sales over Covid has continued, with May 2021 sales surpassing the same month last year.
Not your average bottleshop
And while now there is more competition than ever in the online alcohol segment, Beer Cartel is unperturbed by the growth of major rivals.
“There’s more competition but there’s also a lot more people buying online. And if they’re searching for beer or craft beer we’re generally coming up at the top. We haven’t felt any impact from the increase in suppliers online because we’ve seen such a big uplift ourselves.”
Beer Cartel’s key advantage over competitors is their close relationships with craft breweries globally. Each week, 20-30 new beers come online, ensuring plenty of choice for curious consumers.
“We’ve had 12 years [in the market] now, we’ve been through three different website platforms, and we’re constantly learning about giving a great offer to our customers.”
Beer Cartel hit the market when Australia was in the early stages of the craft beer trend and very few consumers were buying alcohol online.
“We’re very different from the average bottleshop. We started online and always had a view that online would come into growth. But when we first started out, people weren’t buying beer online at all,” explained Kelsey, who earlier this year was ranked at #25 on Inside Retail’s Top 50 People in E-commerce.
In 2011, Beer Cartel purchased a bottleshop that had a storefront as well as a large warehouse where it could grow the online business.
“For the first few years the bricks-and-mortar store was the thing that supported us, and then online far outpaced that and is growing massively.”