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Executive Summary

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Table of Contents
Executive Summary ................................................................................................................................. 1
The Business............................................................................................................................................ 4
1.1 Overview ..................................................................................................................................... 4
1.2 Mission ........................................................................................................................................ 4
1.3 Vision ........................................................................................................................................... 4
1.4 Unique Selling Point (USP) .......................................................................................................... 5
1.5 Company Legal Structure .................................................................................................................. 5
1.6 Product .............................................................................................................................................. 5
1.7 Product Design .................................................................................................................................. 6
1.8 Vendors ............................................................................................................................................. 6
Markets and Competitors ....................................................................................................................... 6
2.1 Industry Analysis ............................................................................................................................... 6
2.2 Target market.................................................................................................................................... 8
................................................................................................................................................................ 9
2.3 Competitor Analysis ........................................................................................................................ 10
2.4 Competitors Reaction ..................................................................................................................... 11
2.5 Market Opportunity ........................................................................................................................ 12
Marketing and Sales.............................................................................................................................. 12
3.1 Key to our Success........................................................................................................................... 12
3.2 Brand Promotion ............................................................................................................................. 13
3.3 Social Media Endorsements ............................................................................................................ 13
3.4 Televised Advertisements ............................................................................................................... 13
3.5 Launch ............................................................................................................................................. 14
3.6 Sales Strategy .................................................................................................................................. 14
3.6 Sale Contribution ............................................................................................................................ 14
Operations ............................................................................................................................................ 15
4.1 Capacity ........................................................................................................................................... 15
4.2 Employees and responsibilities ....................................................................................................... 15
4.3 Management and Ownership ......................................................................................................... 16
SWOT .................................................................................................................................................... 16
6.1 SWOT Analysis................................................................................................................................. 16
Expansion .............................................................................................................................................. 17
6.1 Expansion Plan ................................................................................................................................ 17
Financial Forecasts ................................................................................................................................ 17
7.1 Start-Up ........................................................................................................................................... 17
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.............................................................................................................................................................. 17
7.2 Key Assumption .............................................................................................................................. 18
7.3 Projected Profit and Loss ................................................................................................................ 18
7.4 Projected Assets and Liabilities ....................................................................................................... 18
7.5 Projected Cash Flows ...................................................................................................................... 19
Bibliography .......................................................................................................................................... 20
Appendix ............................................................................................................................................... 23
Appendix 1.1 ......................................................................................................................................... 23
Start-Up Expenses ................................................................................................................................. 23
Appendix 1.2 ......................................................................................................................................... 24
Appendix 1.3 ......................................................................................................................................... 25
Appendix 1.4 ......................................................................................................................................... 26
Appendix 1.5 ......................................................................................................................................... 27

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The Business

1.1 Overview
Mangosteen Gin is a private limited company in its infancy that has pioneered the first British
Dry Gin to be infused with purple Mangosteen fruits which originate from the Sunda Islands.
The combination of quintessential botanicals and this tropical fruit results in a distinctive
sweet and piquant flavour. The gin will be produced within the rural county of Dorset by the
in-house micro distiller and be targeting the luxury/high-end segment of the market. The sole
subscriber of Mangosteen Gin Ltd will also be acting in the capacity of Chief Executive Office
under whom will be a Secretary, Certified Gin Distiller and intermittent Accountant.

Variety: Mangosteen Gin Ltd. will offer a single product, that being - 70cl bottle of British
Dry Gin with an Alcohol by Volume (ABV) of 47% and Recommend Retail Price (RRP) of
£37.50.

Location: Mangosteen Gin Ltd. will be domiciled within the rural county of Dorset and
sold within the South West, London, East and South East of England, until we expand
operations, by upmarket retailers.

Objectives: 1) Obtain 0.05% of the UK Gin market in the inaugural year and a further
0.01% per annum henceforth. Therefore, gaining a 0.1% market share by 2023. 2) Secure
distribution channels at the UK’s most prestigious retailers and begin exporting globally
by 2023.

Expansion: our plan to begin exporting globally by 2023 is contingent on whether we
meet our median-term targets. Therefore, the expansion should occur by 2023, but may
occur before or after.

1.2 Mission
Our mission at Mangosteen Gin is to successfully pioneer the first traditional British Dry Gin
to be infused with purple Mangosteen fruits and ensure our product is peerless, both in terms
of taste and aesthetics.

1.3 Vision
Our vision at Mangosteen Gin is to be the Gin of chose for discerning and exploratory Gin
lovers alike and see our product sold and served at the UK’s most prestigious retailers and
establishments.

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1.4 Unique Selling Point (USP)
Mangosteen Gin’s Unique Selling Point (USP) is multifaceted and includes:
I. Our unique botanical composition, that is, the use of purple Mangosteen fruits as an
infusing agent.
II. Our innovative bottle design that incorporates a metric measure pourer that will
dispense 35ml or 70ml of our Gin depending on the setting selected.

1.5 Company Legal Structure

Under Companies Act 2006 (c46) Mangosteen Gin is incorporated as a private company,
limited by shares, with a sole subscriber.

1.6 Product
Mangosteen Gin, an ultra-premium British Craft Gin which in addition to the archetypal
botanicals: Juniper Berries, Angelica Root, Coriander Seed and Orange Peel is infused with
purple Mangosteen fruit. We intent to produce a standard 70cl bottle exclusively, with a sole
proof of 47% (ABV). The unit cost of our Gin is approximately £4.64 and the Recommended
Retail Price (RRP) is £37.50, this equates to a product specific margin of £32.86 or 86.7%. The
design of our packaging and bottle are illustrated pictorially below in Figure 1 and Figure 2.

Packaging Design Bottle Design

Metric Measure Pourer

Figure 2: Bottle Design

Figure 1: Packaging Design

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1.7 Product Design
Mangosteen Gin will be packaged within a dark purple orthotope box, with our logo
embossed on the front in golden Edwardian script font. Our innovative bottle design will be
based on an 18th century short-neck port bottle, coloured in purple with our golden logo
embossed on the front. Furthermore, it will also be the first Gin bottle to incorporate a metric
measurement pourer that will dispense a single 35ml or double 70ml shot of our Gin
depending on the setting selected, which will differentiate Mangosteen from its competitors
highlighted in section 2.3. We designed our packaging and bottle to specifically appear: 1)
reminiscent of the fruit with which it is infused 2) aesthetically pleasing as to appeal to its
intended target market, highlighted in section 2.2) highly distinguishable on the shelves of
high-end retailer store or establishments.

1.8 Vendors
Mangosteen Gin is aiming to secure distribution channels at the UK’s most prestigious retail
stores, upmarket supermarkets, independent specialist stores, bars and hotels: 1) Harrods, 2)
Harvey Nichols, 3) Fortnum & Mason, 4) Selfridges, 5) Waitrose, 6) Marks & Spencer, 7)
Vagabond Wines, 8) The Sampler London, 9) Hedonism Wines, 10) Bottle Apostle, 11)
Borough Wines, 12) Lea & Sandeman, 13) Handford Fine Wines, 14) Yapp Brothers, 15)
Cambridge Wine Merchants 16) Barts, 17) Dukes bar 18) Buddha Bar, 19) Aqua Shard, 20)
Madison, 21) The Savoy, 22) The Dorchester 23) The Ritz 24) Mandarin Oriental 25) The
Lanesborough – to mention but a few. The rationale behind targeting upmarket
establishments exclusively is that our product’s (RRP) is 40.2% higher than the industry
average of £26.75 and thus, falls within the ultra-premium segment of the market.
Consequently, we believe it would be a fruitless endeavour to sell our product at lower-end
or budget conscious establishments such as Tesco, Sainsbury’s and Asda.

Markets and Competitors

2.1 Industry Analysis

Over the last several years the UK Gin market has experienced an astounding resurgence,
mainly driven by an explosion in new premium Gins and an increase in demand from the
millennial generation. Newly released data makes this evident because it suggests 18 to 35
years olds account for the largest proportion of Gin consumption at 42% (Eric Sampers, 2017).

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According to (Davies, 2017), last year Gin was the largest growth driver in the spirits category,
with market value growth of 14.5% and annual sales growth of 16%; See Figure 4 below.
Furthermore, 283,000 hectolitres, the equivalent of 40,000,000 bottles, of Gin were sold
during 2016 at an average price of £26.75 which generated revenues of £1.07 billion (Talbot,
2017). Furthermore, according to HMRC the number of UK Gin distillers stood at 273, with
40 new distillers opening in 2016 alone. Moreover, new figures suggest most gin consumers
are now spending between £30 - £40 per bottle and the so called £40 “cliff edge” for Gin
prices remains as true as ever (Gin Foundry, 2017). It states that Gins priced over £40 will see
drastically lower sales than Gins priced under £40. Approximately 75% of every bottle of gin
imported around the world are from the UK, with British gin now sold overseas in 139
countries (Talbot, 2017) See Figure 5 Below. Furthermore, exports overseas grew by 12% to
£474 million last fiscal year, according to HMRC figures released by the Wine and Spirit Trade
Association (WSTA), with exports to the USA up 553% in the last decade
(Thespiritsbusiness.com, 2017). Moreover, the world’s bestselling gins in terms of units sold
are as follows: See Figure 3.

Figure 3: World's bestselling Gins (Thespiritbusiness.com, 2017)

UK Annual Sales Growth for Gin

Figure 4: Annual Sales Growth for UK Gin - 2016

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 UK Annual Gin Exports 2016

Figure 5: UK Annual Gin Exports 2016

2.2 Target market

Based on the industry analysis we will be targeting individuals who we believe our product
would not only appeal to, but would also be willing and able to layout the £37.50 required to
purchase it. Mangosteen Gin will be marketed as a gender natural product and be specifically
targeting individuals who fall within the following brackets: 1) Individuals who reside within
the geographical regions of the United Kingdom that exhibit the highest level of gross
disposable household income (GDHI) and thus, would be able to afford non-essential
purchases. 2) Individuals between the age of 18 and 35, as they account for 42% of total gin
consumption. 3) Individuals who are exploratory, discerning, exhibit brand loyalty and would
consume our product at a predictably moderate usage rate, 1-2 units per month. 4)
Individuals who lead highly social lives, enjoy hosting parties and espouse British values. See
Figure 6 below for the detailed target market segmentation. Our estimates suggest this this
translates to an approximate market size of 7.2 million individuals and realistic potential
market base of 360,000 thousand individuals.

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 Target Market Segmentation

Figure 6: Target Market Segmentation

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 2.3 Competitor Analysis
Although Mangosteen Gin’s botanical composition is unprecedented and offers a unique
bottle design, we have identified several direct competitors currently available on the market
See Figure 7 below. To exemplify, we believe there to be several qualifying characteristics for
a gin to be consider a direct competitor for our product:

 Craft Gins produced in the United Kingdom.

 Ultra-premium Gins
 (RRP) between £35 - £40
 Infused with an exotic or unique botanical.
 Small or relatively new brands of Gin.

Mangosteen Gin' Direct Competitors

Figure 7: Mangosteen Gin's Direct Competitors

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 We have also identified several qualifying characteristics of Gins we believe would be
indirect competitors for our product:

 Ultra-premium Gins.
 (RRP) > Mangosteen Gin’s of £37.50.
 Produced in any geographical region.
 Infused with a unique or exotic botanical.
 Well established/newly established companies.

See Figure 7 Below.

Mangosteen Gin' Indirect Competitors

Figure 7: Mangosteen Gin's Indrect Competitors

2.4 Competitors Reaction

We believe that Mangosteen Gin’s direct competitors would react by either plagiarising our
idea or by pursuing a predatory pricing strategy. The first seems far less likely than the second
as it would mean incurring the additional cost of research, development, production and
marketing which could easily out way the loss that they may incur as a result of a new entrant.
The second would entail our nearest competitors reducing their (RRP) as to appear
comparatively better value. However, we vehemently believe that the uniqueness of
Mangosteen Gin will be sufficient to persuade potential customers to purchase our product
instead of a slightly less expensive substitute good.

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2.5 Market Opportunity
The Gin market is exhibiting vast growth rates, which according to (Eric Sampers, 2017) is
being driven by premium gins and the millennial generation, both of which our product caters
to. Furthermore, Mangosteen fruits are consider by many to be world’s most sought-after
fruit, due to being perceived as a “super fruit” rich in antioxidants and its delightfully sweet
and piquant flavour (Stewover.com, 2017). Therefore, we strongly believe that Mangosteen
Gin offers a (USP) which is currently in very high demand.

Marketing and Sales

3.1 Key to our Success

The key to our success is going to be intelligent advertising and marketing strategies that
expeditiously create a conversion channel for our product. See Figure 8 below.

Figure 8: Advertising Conversion Channel

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3.2 Brand Promotion
To raise our brand awareness, we will be attending all seventeen UK Gin festivals in 2018 and
visiting our main distribution channels to offer free 20ml samples and provide disseminate
information about Mangosteen Gin’s unique infusion and innovative bottle design. The
customer feedback we receive at these outlets will enable us to gauge the response to
Mangosteen Gin and predict whether our product is in fact commercially viable.

3.3 Social Media Endorsements

To precipitate positive brand association, we have allocated a significant proportion
(£188,808) of our advertising budget to celebrity endorsements via the Internet-based photo-
sharing application Instagram. Furthermore, we have selected brand ambassadors based on
their public notoriety, numbers of Instagram following and who we believe represent the
target market of our Gin brand. See Figure 9, for information pertaining to our target brand
ambassadors, their following and the approximate cost – Figures are based on the assumption
that is costs approximately £0.00406 per follower.

Mangosteen Gin’s Target Brand Ambassadors

Figure 9: Celebrity Ambassadors

3.4 Televised Advertisements

As televised advertisements are still the most effective method in terms of resultant purchase
intention (Ebrahimian Jolodar and Ansari, 2011) We intent to broadcast an advertisement on
the British public-service television broadcaster channel 4, since the demographic of their
audience in concurrent with our target market, with approximately 50% aged between of 18
and 35 (AnthonyPaulKeys, 2017). See Figure 10 for details.

Televised Advertisements details.

Figure 10: Televised Advertisement Costs

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3.5 Launch
The official launch of Mangosteen Gin will be on the 1st of January 2018 by which time we
intent to have our product on the shelves of our main distribution channels highlighted in
section 1.8. Furthermore, by the 1st of February 2018, after a month of advertisements and
promotions, we aim to have our product at all targeted distribution channels.

3.6 Sales Strategy

After conducting our industry analysis, we ascertained that there appears to be a positive
correlation between units sold and the (RRP) of a gin. To exemplify, gins with the lowest (RRP)
sold the greatest number of units and gins with the highest (RRP) sold the fewest number of
units. Consequently, as Mangosteen Gin’s (RRP) is 40.2% higher than the industry average we
will be pursuing a strategy based on high profit sales. This means we aim to sell comparatively
lower volumes at a higher than average price of £37.50. Precisely, we our aiming to sell 20,000
(70cl) units in the augural year, equivalent to obtaining 0.05% of the UK gin market in terms
of units sold. Based on our research we believe 0.05% is not only achievable, but a
conservative sales objective for a unique craft gin and hope this strategy ensures that demand
for our gin always supersedes supply.

3.6 Sale Contribution

Data from (Gin Foundry, 2017) suggests a slight deviation from the perceived sexual
neutrality of gin, with an 8% majority now saying they perceive gin to be a more feminine
drink. Therefore, based on the aesthetics, marketing strategy and brand ambassadors of our
product, we believe that a majority our sales will derive from female customers. See Figure
11.

Gender Sale Contributions

Figure 11: Male and Female

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Moreover, owing to the uniqueness of our product we believe that once we’ve established a
client base, our customer retention ratio will be very high. Furthermore, after conducting
consumer research we ascertained that once an individual finds a gin they like they seldom
deviate to other brands and remain loyal. See Figure 12 for our projected sales contributions.

Customer Sales Contribution

Figure 12: Customer sales Contribution

Operations

4.1 Capacity
If we produced 400 litres of gin per week utilizing our Kothi K900N 400litre Pot still the weekly
capacity would be approximately 571 bottles of 70cl gin. This equates to 2,285 bottles of 70cl
gin per month and 27,428 bottles of 70cl gin per year. However, it can produce up to 1,200
litres per week, translating to a total yearly production capacity of 82,285 bottles of 70cl gin.

4.2 Employees and responsibilities

Mangosteen Gin will be employing: 1) a company secretary whose duties include handling
correspondence, arranging appointments and preparing and collating reports. 2) An
accountant whose duties include preparing annual accounts and filing tax returns 3) a
certified Gin Distiller whose job it will be to produce our gin to our unique specification.

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4.3 Management and Ownership
Mangosteen Gin Limited Company was formed as a Corporation in England and Wales on July
28, 2017. Ninety five percent of the company's shares are owned by its principal, Charles W.
Joseph. The company’s secretary and distiller hold the residual five percent spilt equally. The
principal with also be acting in the capacity of a direct and is responsible for leading the
development and execution of the company’s long-term strategy with a view to creating
shareholder value.

SWOT
6.1 SWOT Analysis
Our SWOT analysis highlights the internal and external risks for Mangosteen Gin along with
the counterpoising opportunities that a changing macro environment may present.
See Figure 13.

Figure 13: Mangosteen Gin's SWOT Analysis

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Expansion

6.1 Expansion Plan

Our expansion is contingent on whether we have achieved our medium-term financial
objectives of generating sales revenue of £1,500,000 by 2023, which equates to selling 40,000
units at our (RRP) of £37.50. If we achieve these objectives, we plan to: 1) begin exporting our
gin to capitalise on the vast non-domestic customer base. 2) Expand our production capacity
from 82,285 units per annum to 164,570 units per annum. 3) Introduce 5cl and 100cl variants
of our gin.

Financial Forecasts

7.1 Start-Up
Our calculations suggest that the net start-up expenses necessary to proceeded with this
business endeavour equate to approximately £214,937 and the start-up assets amount to
£94,256. See Figure 14. To raise the necessary funds, we intent to issue high-yield corporate
bonds to prospective investors – corporate bonds rated below BBB or Baa3 by established
rating agencies that offer significantly higher coupons than government bonds or higher rated
corporate bonds (Bodie, 2013). The issuance will generate approximately £220,000 of debt
capital that we intent to redeem by 2023. See Appendix 1.1 and Appendix 1.2 for additional
information.

Figure14: Start-Up Funding Requirements

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7.2 Legalities of Corporate Bond Issuance
We will be offering our bonds to qualified investors and angel investors exclusively, as to not
contravene section 755 of The Companies Act 2006, which states that private companies can
only issue their bonds to targeted investors and not to the public indiscriminately.

7.3 Key Assumption

All figures are predicated on the assumption that Mangosteen Gin achieves its objective of
selling approximately 20,000 units in the inaugural fiscal year, all of which would be sold at
the (RRP) of £37.50. Thereafter, we aim to increase the number of units sold by 20% per
annum, which equates to 24,000 units sold during Year 2 and 28,000 units sold during Year 3.
This translates into an average revenue growth of 14.86% per annum.

7.4 Projected Profit and Loss

We project revenues of £750,000 in the inaugural year, which equates to 20,000 units sold at
the (RRP) of £37.50. Revenues our forecast to grow at an average of 14.86% per annum
thereafter which equates to revenues of £900,000 in Year 2 and £1,050,000 in Year 3. Total
expenses in the inaugural year are £719,962, £618,312 in Year 2 and £716,148 in Year 3. This
translates to a 3.24% net profit margin of £24,331 in Year 1, 19.7% net profit margin of
£177,137 in Year 2 and 23.4% net profit margin of £244,135 in Year 3. Moreover, our product
specific profit margin remains at £32.86 or 86.7% throughout.

For a detailed Income Statement Forecast for 2018 to 2019, See Appendix 1.3

For a 5 Year Income Statement Forecast, see the external Excel file.

7.5 Projected Assets and Liabilities

During the inaugural fiscal year, we expected to accumulate assets worth £119,366 and
accrue liabilities of £178,780 which equates to a net worth of (£59,414). During the preceding
two years total assets are expected to reach £272,891 and £340,515 with liabilities also rising
at a less than commensurate rate to £221,654 and £244,753. This translates to a net worth of
£51,236 and £95,762 in Year 2 and Year 3, respectively

For a Detailed Balance Sheet Forecast for 2018 to 2019, See Appendix 1.4

For a 5 Year Balance Sheet Forecast see the external Excel file.

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7.6 Projected Cash Flows
Cash receipts from customer sales is forecast at £750,000, for the fiscal year ending Dec 31,
2018. Furthermore, Net cash flow from operations is expected to be (£17,717), Net cash flow
from investing activities (£89,700), Net cash flow from financing activities £220,000 and total
Net cash flow £112,583, for the fiscal year ending Dec 31, 2018.

For a detailed cash Flow Statement for 2018, See Appendix 1.5

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 Bibliography

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 Appendix
Appendix 1.1

Start-Up Expenses

Figure15: Start-Up Expenses

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Appendix 1.2

Figure 16: Star-Up Assets

Figure 17: Star-Up Funding Sources

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Appendix 1.3

Figure 18: Mangosteen Gin’s Income Statement

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Appendix 1.4

Figure 19: Mangosteen Gin's Balance Sheet

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 Appendix 1.5

Figure 20: Mangosteen Gin's Cash Flow Statement

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