West Winds Gin wants to raise $3.5 million via equity crowdfunding to make more people “fall in love” with gin
Monday, May 14, 2018/
Margaret River brand West Winds Gin has launched an equity crowdfunding campaign to raise $3.5 million to accelerate its growth, and while this form of fundraising is new to the Australian market, it’s been on the distiller’s radar for years.
West Winds chief executive Paul White tells SmartCompany a business like his is a perfect candidate for an equity crowdfunding campaign, because so many punters are keen to own a piece of the alcohol brands they consume.
“We were getting queries from people all the time, asking, ‘how do we invest?’,” he says.
“The appeal of [equity crowdfunding] is that it’s a great way to broaden the base of people on the journey with us.”
White started his entrepreneurial journey in 2006, when his “fascination with making things” led the engineer to investigate how to build a gin distillery, including travelling to the US to learn how to make spirits.
West Winds has been largely bootstrapped since launching in 2010, with the company raising “less that $2 million” from mainly friends and family over the past eight years, White says.
However, with fans of the gin brand regularly asking how they could buy a piece, White says he’s been considering an equity crowdfunding tilt for years, having met Equitise co-founder Chris Gilbert three years ago.
“We’ve been in touch for a long time, and as soon as the legislation went through in Australia, we started to talk seriously,” White says.
The West Winds Gin offer was open to a select few investors last week and went live to the public on the Equitise platform this week. According to the funding page, the business has so far raised $473,000 of a minimum required $500,000, with 64 days left to invest in the company.
Punters can buy a piece of the business for a minimum investment of $500.
The company will use the funds “primarily for working capital and for inventory as we grow,” White says.
In its first year, West Winds Gin sold around 5000 bottles of gin, White says. This year, “we’ll be north of 100,000 bottles”, White says. These are sold throughout Australia as well as into Canada, the UK, France, Singapore, the United Arab Emirates, Japan, China and Malaysia.
White says the capital raised in this crowdfunding campaign will go towards bridging the gap between the company’s payment of excise tax and its payment for products, as well as increasing marketing exposure, given West Winds has its eye on the US market.
“The focus at this point is South East Asia and the UK and Europe, but we’re looking closely at North America, looking very closely at the US,” White says.
Getting customers to “fall in love” with gin
White says this is a great time for independent spirits businesses in Australia, given the country is seeing a “reemergence of a craft spirits and cocktail culture”.
However, there are challenges to this competitive landscape, especially given customers only really form close relationships with spirits companies after experiencing their products first-hand.
“We want to increase our marketing exposure because it’s been pretty low-key so far,” White says.
“We’ve done a lot of festivals, and festivals are a great way to get people to taste our products and building awareness,” he says.
Forming a direct relationship with buyers is incredibly important, because customers are more likely to buy West Winds Gin products again once they have had that initial positive experience, White says.
“One of the things for us is that with our gins, is that if we can get people to taste them, then we get people to fall in love with them,” he says.
“People are much more receptive [to new gin products] now.”