Ride the food revolution with the SEIS!
There’s a food revolution going on out there! New research published this week by food retail research specialists Kantar Worldpanel indicates a massive shift going on in food retail. It’s being led by younger people and it’s all about health. According to the research, which has a research base of 30,000 households, 54% of all people had bought a “free from” food product within the last 3 months. My own experience tells me the same – the Free From section in my local supermarket just gets bigger and bigger every month. “Gluten free” and “dairy free” are the two biggest trends, but the obsession with health extends to lactose, refined sugars, processed ingredients and genetically modified materials. The research suggests only about 5% of the UK population have a serious gluten allergy, but a majority of people are embracing free from foods in the belief they are generally more healthy. Eating and drinking healthy ingredients has become a national obsession.
We recently launched a SEIS fund called Epicure focusing on food and drink products, the first of its kind. This fund has just had its first closing but is remaining open for investment in the new tax year. Most of the investments made in the first financing round are in products which are using healthy ingredients as the main selling point. Only by Nature produces yogurts, smoothies and ice cream which are “low in fat, gluten free, vegetarian, and with no added sugar”. Two Birds produces super seed cereals “free from GMO, gluten, lactose, refined sugars and processed ingredients” to enable you to “super seed” your breakfast! The portfolio includes a new anti-pollution soft drink to detoxify the human body from the toxic particle benzene; a ground-breaking supplement to reduce wrinkles and fine lines; a plant protein for active women; and then there’s Olly’s Olives, which is a bit more down to earth and which promises to “give the olive market the shake-up it needs”.
What is remarkable is that the major food retailers spotted this trend some time ago and have programmes in place to support and promote this new age of product. Waitrose, Ocado and Tesco are just three examples. Our Epicure Fund is being supported by the Tesco “Backit” programme, which offers new food and drink startups the opportunity to trial their products in selected stores.
So, back to the SEIS. The tax benefits are well-known, including 50% income tax relief and the ability to write-off an element of a capital gain. The only sensible way to approach investing in the SEIS is through a fund structure, which is effectively a spread portfolio where the investment choices are being made by an experienced start-up manager.
The Epicure fund is advised by the Startup Funding Club, who have an outstanding reputation in the SEIS sector. They are highly experienced managers, having invested in well over 85 SEIS companies since 2013, 15% of which have been food and drink companies. Last year they were voted Lead Angel Syndicate of the Year at the prestigious UK Business Angels Association Awards. They provide a full nurturing and support service, including the provision of lead investors, mentors and professional advisers on very favourable terms.
It’s time to ride the new food revolution and get the benefit of SEIS tax relief in the process!
Martin Sherwood, Partner
Martin Sherwood has many years’ experience of small company fundraising and in particular the tax-efficient investment market, specialising in the Hospitality & Leisure Sectors. Martin is currently chairman of the four British Country Inns companies and of Halcyon Hotels and Resorts plc, which is in joint venture with Luxury Family Hotels, which he helped launch 20 years ago. He was founder and head of Tax Efficient Solutions, first at Teather & Greenwood (1997-2004) and subsequently at Smith & Williamson (2004-2010), which he left to found Enterprise.
Martin has been closely involved in both Venture Capital Trusts and Enterprise Investment Schemes (EIS) since their inception, and is a founder director of the EIS Association, the official trade association of the EIS industry.
Martin works very closely with a wide range of Hospitality & Leisure entrepreneurs and has a significant network of investors and professional contacts as well as being a serial investor in his own right.