Wednesday, 9 May 2018

Can Clan Wooha Scots beer put the A back into Tartan IP.




Wooha has valued itself at 5m on Crowdcube - this is for a business with a couple of years trading at well below the £500k mark. That tartan IP must be worth something!


It's good to see a Scottish company raising equity crowdfunding - there have been very few. Unfortunately this one has made a catastrophic error. Jam tomorrow has played its part in a £5m valuation when the fruit hasnt even boiled yet. 

A comparison to another brewing pitch launched just now on the same platform, valued at under £4m, is enough to convince me that Wooha will not fund at this level - despite some impressive sales pipelines and a founder who talks the talk. The other pitch already has revenues of almost £1m pa.

Of course we emailed them when we realised their predicament but its a little after the horse has bolted. The forum is already filling up with Qs on what the F is that valuation! 

In response to these Qs, the founders can only point to jam tomorrow - their US sales targets. This market has been ongoing for all of a few months yet it is held up as a banker for a £5m company. We all know the potential pitfalls of handing over distribution in foreign countries to overseas distributors. Then being disappointed that one of 100 reasons means the take up is slow. If you plan for a slower burn, then these things are doable - but then that would mean a lower valuation. Ah yes -back to that again. 

Reality will set in and they will lower the valuation at some stage - better to do it right now. But the damage may have been done - why not use some good old common sense and ask for our advice?

5 comments:

  1. They deleted my comment...

    Why they think their very very average beer (check rate beer) will sell amazingly in what is the home of craft beer with an ultra competitive market I have know idea. This is before many genuinely great Scottish breweries expand and start to export there more and more.

    The American owner just adds to the genuine Scottish beer made with foreign hops in untraditional styles to Scotland. I don't think this tartan marketing will last them very long.

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    1. Agree. I was looking at this again and thinking so how does a tiny brewer fir into this massive site. It must be the husband is a large scale farmer - Mr McDonald - and those are his new sheds. So much like the claim that they are sold in Asda but in fact its only Asda Scotland and they only have 20 stores in Scotland, the XX acre site isnt a brewery at all. It's a typical smoke and mirrors pitch for CC. The reviews on Ocado are not good.

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  2. Shouldn't they have called it something obviously Scottish like McDougal's?

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  3. why would anyone have a micro-brewery strategy primarily focused on export, with all the costs of shipping a heavy and relatively fragile product half way around the world, let alone the challenges of breaking into a crowded US market when you have no presence on the ground? Apparently it is because the UK market is saturated (for which read growing faster than in the US) and Americans love the idea of quaint Scottish beer (she seems to think they are less bothered about it being any good so long as it looks a bit bravehearty). Forget the valuation, the strategy is a complete nonsense.

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  4. As said above, any brewery with serious global ambitions builds a brewery in the target market or joins up with a local partner to brew the beers, see Stone, Brewdog, Fierce etc etc.

    They can't even compete in their local area where the only properly class brewery is Cromarty, they have no chance in the states.

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