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Beverage distributor (II)
100% Funded

100%
100%
Need:0.00€
Min.:0.00€
Interest rate:17%
Period:9 months
Target: 50 000€
Min. target: 10 000€
Opens: 2020/04/17
Expires: 2020/05/15
Type: SME
Location: Latvia
Investments: 383

Summary

The current investment opportunity offers CROWDESTOR investors to make a secured loan to the upcoming project of Organika Distribution Baltic.

Organika Distribution Baltic SIA already has successful cooperation with several retail chains, including ELVI retail chain according to a previous successful crowdfunding campaign in November 2019 with CROWDESTOR investors.

Due to the current market situation and increased purchases of food and alcoholic beverages, Organika Distribution Baltic sees on average 20-30% increased sales compared to invoices issued before the pandemic.

Organika Distribution Baltic is adding one more food retail chain to its cooperation partner list, namely AIBE retail chain in Latvia. Loan will be used to finance the distribution of alcoholic beverages with AIBE. Loan amounts will be used on a revolving basis, i.e. funds received from AIBE for sold alcoholic beverages will be used only to finance the next delivery dedicated to AIBE.

Current investment opportunity offers CROWDESTOR investors to make a loan with 17 % annual interest rate with a monthly repayment of the principal amount and interest. Minimum target to be raised in this fundraising phase is EUR 10 000,00 and the maximum target is EUR 50 000,00.

The loan is secured with a commercial pledge on the total stock of the company and a personal guarantee from company management.   

 

Loan

Minimum target: EUR 10 000,00. 

Maximum target: EUR 50 000,00. 

Loan term: 9 months. 

Interest rate: 17 % per annum. 

Interest payments: paid monthly.

Loan repayment: repaid monthly from second month in similar instalments

Crowdestor BuyBack fund: Yes. 

Collateral: The loan is secured by first-hand commercial pledge on the total stock of the company and a personal guarantee from company management.

 

About Borrower

Organika Distribution Baltic began to build its cooperation with retail chains in 2018 and up till now has made a success being represented with its products in the food retail chain LATS and Elvi, specialised alcoholic beverage store chains Boozie, AlkoMarket, AlkoOutlet and other approximately 100 privately held non-chain shops in Riga, Jurmala, Daugavpils, Ventspils, Liepaja, and other Latvian major cities.

Organika Distribution Baltic is engaged in international trade of alcoholic beverages. Company is actively cooperating within Duty Free sector in distribution of its products in tax-free points in Latvia, Lithuania, Poland, Germany, and Switzerland.  

Company’s development so far has been financed by personal funds of the owner’s team. Entry in Elvi retail chain has been done using first loan from CROWDESTOR investors in 2019. Cooperation with Elvi so far is even more successful than previously estimated. Sales ensure that all monthly payments to investors, both interest and principal amount, are in line with schedule despite current overall situation.  

Since the emergency of COVID-19 was declared in Latvia, on 12th March 2020, a lot of industries experience stagnation and it’s not yet clear, how long the recovery period will take. Despite the global pandemic situation, some industries have significantly increased their turnover, namely grocery stores and pharmacies. As it is recommended to stay at home and keep safe from the disease people started to make food and beverage purchases for at least 4-5 days, says leading local grocery stores statistics. Among the purchases, alcoholic beverages are found almost in every consumer basket in Latvia.

The Latvian government in order to protect population from COVID-19 adopted a law allowing from 21st March to trade alcohol on the Internet.

Among major clients Organika Distribution Baltic sees on average 20-30% increase in sales compared to invoices issued before the pandemic. The increase was not only seen from one particular client, but from middle class consumer retail chains, low price discounters  and expensive supermarkets.

Seeing high demand for their products and having received offers from other retail chains to cooperate the company decided to obtain additional financing for further growth.

The company wishes to borrow loan with the total amount EUR 50 000 to satisfy demand on the product from one of the leading Latvian food retail chains AIBE. Funds will be used to purchase Euro-Alco (Moldova) and Zernoff (Moldova) factory products for distribution through AIBE shops on revolving basis, i.e. funds received from AIBE for sold alcoholic beverages will be used to finance the next delivery dedicated to AIBE etc.   

Estimations based on the existing cooperation with other Latvian and pan-Baltic retail chains and approved plans with AIBE show that EUR 50 000 of combined Euro-Alco (Moldova) and Zernoff (Moldova) products will be sold through AIBE each month.

This allows Organika Distribution Baltics to offer investors monthly repayment of the loan amount from second month and interest payments each month. The loan therefore will be repaid fully during 12 month period by similar instalments.  Repayment of the loan is secured by commercial pledge over the stock at Organika Distribution Baltic warehouse and personal guarantee from company management.

Premium segment is represented by vodka Organika, being in the same market’s niche as its direct competitor brands Beluga, Grey Goose and others. Its quality has been proved by high demand in Latvia being in the same line as for other above mentioned top brands. Different types of Organika branded vodka are represented in a significant number of exclusive Latvian restaurants in Riga and Jurmala, such as 36 line, Ozo restaurant, Lighthouse Jurmala and others. Overall there are more than 50 HoReCa (hotel, restaurant, cafe) customers recurrently purchasing this brand production from the company. 

Also, Organika Vodka is represented in leading and most prestigious retail grocery stores and shopping centers, namely Sky, mc2, and Stockmann, and leading specialized market makers within Latvian alcoholic beverage retail industry, namely Spirits & Wine Outlet and Kabinets. 

Medium segment is represented by vodka Kamoflage and products of Zernoff factory (vodka under the brands Mendeleev, Petrovskaia, Zernoff). Comparing to other products available in the Baltics in the same price range Zernoff products are much softer because of being distilled seven times for the essence of grain vodka purity. Quality of the product and well-managed pricing policy made it one of the top choices for customers in the medium market segment.

 

Organika Distribution Baltics are operating in the field of distribution of alcoholic beverages in the Baltics. Detailed information about products, such as vodka, wines and sparkling wines, can be found on the company’s webpage www.organikabaltic.eu/en/our-sortiment/

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