Avallen Spirits, the fledgling Calvados supplier, is looking for investment to improve its own distribution and to try to build interest in the category.
Stephanie Jordan-Balmforth said she and fellow co-founder Tim Etherington-Judge were open to selling more equity to support the company’s export ambitions and to invest in efforts to market Calvados more broadly.
“It has to be someone with route to market, ideally with a strong presence in the US,” she said. “It’s very hard for Tim and I, as two solo founders, to take a brand like Avallen to America because of the cost and the burn rate on cash.”
The US is a key target for the company, which generates the bulk of its sales in the UK, where Jordan-Balmforth and Etherington-Judge – both former Diageo employees – sought to benefit from their connections when they started the business.
Jordan-Balmforth said they set out to “create the world’s most planet-positive spirits brand” and their research “took us to the orchards of Normandy”.
She said: “We are an accidental Calvados because the sustainability says … this is the most sustainable raw material to make liquid from and, guess what, it’s delicious. I think perhaps we were excited [and] we thought ‘Oh, we found something that no one else has found. There’s no innovation in Calvados, there hasn’t been for years but it’s one of France’s great brandies.’”
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However, Jordan-Balmforth said Avallen Spirits’ growth had been held back in part due to the lack of an established Calvados category outside France.
“There’s no category and that is a double-edged sword that we face. How do we drive volume and scalability as a small independent brand in a non-category?” she said.
The company generated revenue of €200,000 ($212,000) in 2022, with the UK accounting for around 80% of sales.
Jordan-Balmforth is forecasting revenue this year of €300-350,000. Moreover, the company is in talks with national accounts in the UK. “We’re in a bunch of tenders and, if they come through, overnight you double.”
Avallen Spirits, she added, is forecast to be profitable “three years from now”. Much of the company’s costs are tied up in how its Calvados is packaged, which is central to the business’ sustainability mission. In the retail and e-commerce channels, Avallen Spirits sells its Calvados in a bottle made from 94% recycled paperboard and a food-grade pouch. The company says that saves almost 0.5kg CO2e per bottle. Its spirit is bottled in glass for the on-premise.
“We are very much of the view that we need to end single-use glass but, in the meantime, our vessels cost us more than £1 ($1.22), not to mention all the rest, right? We’re not ever going to be able to get those costs down without any real scalability,” Jordan-Balmforth said.
Avallen’s Calvados is distilled by a contract manufacturer in Normandy, which also owns 3% of the business. To date, the founders, who, combined, still own just under 80% of the company, have raised around €750,000 through crowdfunding.
Jordan-Balmforth said she is not in any active discussions over possible investment in Avallen Spirits. Talks are being held over a potential distribution deal.
“We’re in another conversation which is pivoting now into a distribution deal to start but only in a couple of key markets,” she said.
“The bigger the distribution companies we can work into – if, of course they’ve got the right focus – the deeper pockets they have, the more we ensure that there is always an avenue for investment.
“I think we had to do a bit of a stop and think again and we’re ready to engage. What I don’t want to do is burn all our cash – because we’re in a fine cashflow position – trying to keep Avallen afloat until maybe Calvados is cool again. It’s the fine balance between how we get ahead on a deal before that moment arrives.”
She added: “You realise, though, that, through conversations with bigger corporates, profitability isn’t important. It’s fast-growing brands in a dynamic category. They’ll know how to make you profitable. They’ll know how to scale it but what they need is that case study that you can prove that this is something worth investing in.”
Avallen Spirits has teamed up with other Calvados producers to lobby for – and secure – EU cash to support efforts to build interest for the spirit in four US states: California, Illinois, New York and Texas.
Jordan-Balmforth said: “If you look at opportunities for brandy, premium brandy, apple brandy, female-founded brands, B Corp-certified brands … we know that if we could get it [to the US], it will take and they don’t have any preconceptions around Calvados.”