Photo - ÖselBirch
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ÖselBirch

Drinks and food supplements based on organic birch sap

Germany
Market: Food industry
Stage of the project: Operating business

Date of last change: 13.06.2021
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Idea

We don't cut the birch trees, we tap the sap instead and work it into healthy products for you! It is preserving forests and contributing to biodiversity.

Current Status

The birch water drinks are selling on the market in Germany, Switzerland, Estonia and UK, whereas UK is currently in a testing status.
In Germany we are listed in REWE supermarket. The drinks sell very well in the shops (ca 20+ units/per shop/per week). In addition we recently started our Amazon sales, which have doubled our online sales income.
In Switzerland we are listed at Alnatura organic shops, and the sale numbers per week/per shop are comparative to the German.
In Estonia we are listed in several retailers and cafes/restaurants like Rimi, Selver, Prisma.

Market

Consumers are increasingly embracing social causes, they seek products and brands that are aligned with their values. 57% of consumers are willing to change their purchasing habits to help reduce negative environmental impact.
*IBM 2020 Global Consumer Study
Target consumer:
25-54-year-old urban, mid-high $$$ social class, with a child, male and female. Health focused consumer who values products with real ingredients. (S)he cares deeply for the environment and believes that a good health comes from consuming unprocessed and straight-from-nature products.
For them, HEALTH IS A CONSTANT JOURNEY
◦ CHARACTERISTICS: Very positive, self-confident, rational and with a daring attitude. Hard to win over but once on your side they stay loyal.
◦ VALUES: They live by the credo: ”Life is what you make it”. They are planners; social life structured around their closed circle. They value authenticity and quality. In products they need that *something* to believe in.
◦ MOTIVATORS: Professional success provides self-fulfillment, quality time with family is important. Environmental aspect is important
◦ CONSUMES: They live a healthy lifestyle but consider water boring however an important part. They usually have strategies to drink more water. Not soft drink drinkers. Flavored sparkling water is the “new soda”
◦ PRICE SENSITIVITY: Is not very price sensitive.

Global birch water market was valued at 65M $ in 2018 and is expected to grow to 426$ by 2029 (CAGR 2018-29 18,64%). Whereas the Europe food supplements market size was valued at USD 14.95 billion in 2019 and is projected to reach USD 33.80 billion by 2027, exhibiting a CAGR of 9.3% during the forecast period. COVID-19 outbreak surges the demand for immunity boosting food supplements products even more.

Problem or Opportunity

Biodiversity provides functioning ecosystems that supply oxygen, clean air and water. BUT researches have revealed a global species loss of 68 percent in less than 50 years. And deforestation is one of the MAJOR treats to biodiversity!

Solution (product or service)

We at ÖselBirch solve it by repurposing birch woodland with tapping and developing birch water based products like refreshment drinks and food-supplements, that improve immunity, skin health and birch pollen allergy.
Our solution is much better than competition because it is a win-win for the consumer: while boosting their immunity with a vitamin complex or quenching their thirst with a healthy drink, they also actively give their contribution to improve biodiversity for a better health of our planet.

Competitors

Biggest players in birch water markets are Nordic Koivu and Straikas, but also Nature on Tap, Sibberi, Säpp, Treo brands and Belseva. Nordic Koivu is focused more on white label but also sells under their own brand. Straikas carried other juice products next their birch water label SipSap. See below in photos a visual of existing competitors in birch water and their estimated market share.

Advantages or differentiators

We carry a fermented products line, which include lactic acid bacteria proven to be beneficial to the gut health. The fermentation is a difficult process for birch water. In order to describe the difficulty of it, maybe following can help: As participants in Nestle R&D accelerator in 2019 we tried to improve the fermentation process to make it quicker. However, as Nestle researches are lacking the specific knowledge of birch water, we did not manage to create a drinkable product from the fermentation process we worked on together.

Other key points to give as competitive advantage is
- our brand story: We are a family company with a long tradition of tapping and fermenting birch water. The story is 100% true and gives credibility to the product. It also helps the consumers to bind themselves on an emotional level, knowing exactly who they support when purchasing the product.
- and our focus on sustainability

Finance

We are currently tracking especially the following Indicators:
Turnover and turnover growth
Gross profit and profit margin
EBIDTA
Operating cashflow

We sell the products (drinks) at 1,25€-1,68€ for a retailer and for the consumer they land between 1,99-2,50€
Food supplements are sold 12,70-17,90€ for a retailer and for the consumer they land at 21,99-31,99€

Given we receive the needed financing to accelerate sales, we expect to create following turnover (in EUR):
2022: 1,500,000
2023: 7,500,000
2024: 15,000,000
2025: 30,000,000

Business model

We are selling our products via online and offline sales channels.
Online channels include: own webshop, Amazon, Avocadostore and other online resellers. Currently expanding also to Amazon UK, France and USA.

Offline channels: retailers like REWE, Alnatura etc. Each retailer has a different way of implementing a new products. Whereas Alnatura has a central listing and all shops carry the products, then REWE requires us to approach every shop singularly and inform the shops that we are now listed via REWE ordering system. It is a bureaucratic process in which the shops first need to ask to be "switched free" for the ordering system by REWE central and once they have received the OK after few weeks, they can place their order. This means that we have to be constantly on top and remind them to do the steps, because store owners have several things to remember and many salesmen approaching with hundreds of products a day.

Money will be spent on

The money will be spend on sales and marketing for the next 12 months.
100 000€ will go on B2B sales
50 000€ will go towards advertising and marketing

Offer for investor

We are ready to offer 15% equity for the sought investment.

Team or Management

Risks

The greatest risk we see is in growing speed. There are several birch water brands that have come on the market recently and also bigger companies like Nestle, Danone and PepsiCo have shown interest in the category. We have an excellent sales team put together and we have the proof that the consumer is interested in such products, but if we are unable to invest into aggressive sales now, other brands who have the financial capacity will accelerate past us.

Incubation/Acceleration programs accomplishment

Participation in Nestle R&D Accelerator in 2019 (very first pilot of the accelerator, we were handpicked by Nestle itself)
Participation in Growth Train accelerator in Denmark 2020

Won the competition and other awards

FoodTech500 company in 2019 (in top 100)
"Green Technology Application of the Year" Award from Saaremaa, Estonia

Photos

Photo 1 - Drinks and food supplements based on organic birch sap

Product Video

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Idea
Current Status
Market
Problem or Opportunity
Solution (product or service)
Competitors
Advantages or differentiators
Finance
Invested in previous rounds, $
Business model
Money will be spent on
Offer for investor
Team or Management
Mentors & Advisors
Lead investor
Risks
Incubation/Acceleration programs accomplishment
Won the competition and other awards
Invention/Patent
Photos
Product Video