BOS iced tea is already sought-after in Europe. Now, after securing additional growth equity from an investment consortium, BOS looks set to go big in the UK – one of the world’s top five rooibos markets.
The popular ready-to-drink iced tea, notable for its vividly coloured packaging, launched in South Africa in June 2010. It is already sold throughout southern Africa, North America, in France, the Netherlands, Belgium and Singapore and other markets.
Next spring, BOS iced teas will be sold in 250ml cans and 1-litre plastic bottles in premium retailers, restaurants and online. The organic dry teas will be sold by specialist retailers in the UK.
The company ships the rooibos extract to contractors in Europe, who manufacture the ready-to-drink beverages. The dry teas are produced in South Africa and then exported.
Supported by Invenfin, Remgro’s corporate venture capital company, BOS Brands has partnered with Mazars and Cala Capital Africa to advise on the equity raise.
The investment consortium involves Springbok Rugby captain Siya Kolisi and his wife Rachel, in her capacity as the CEO of the Kolisi Foundation, the Banducci family (including the CEO of Woolworths Australia), former Manchester United football coach Sir Alex Ferguson’s family and others.
BOS CEO Will Battersby told Business Maverick that the UK is an obvious market for the brand because they have been in Europe since 2015.
“The focus has been primarily on three main markets, which are France, the Netherlands and Belgium, which was the first market that we went into,” the boss of BOS said.
Iced tea is an enormous category and the biggest organic retail category in beverages in western Europe. The French iced tea market, Europe’s biggest, is worth about €1-billion a year. But in the UK, rooibos consumption only started picking up in recent years.
Battersby said a large number of brands are coming into the UK, capitalising on the wellness trend. This has helped drive the consumption of iced tea. Iced tea is now the second-fastest growing category in the UK, albeit off a small base. It’s dominated by Lipton, which is black tea. BOS uses caffeine-free and organic rooibos.
“We think now’s the right time to knock on the door [of the UK market]. We’ve had a lot of people from the UK ask in the past five years, ‘When are you coming?’ So I think it’s a good time,” Battersby said.
BOS in Europe uses organic-certified sugar, sourced from a supplier in Germany. The iced tea flavours are 100% natural, but not organic.
“In Europe specifically our natural flavours are 95/5 compliant with EU legislation, which means 95% of the flavour comes from real fruit,” Battersby said. “In our dry tea-flavoured range, our flavours are 100% organic, certified by the EU and USDA [United States Department of Agriculture].”
Mark Taylor, CEO and founder of Cala Capital, assisted BOS with the deal. Cala is a specialist dealmaker in finding investors for high-quality African businesses in the $10-million to $100-million range.
Declining to disclose the quantum of the latest equity raise, Taylor said capital raising for any business is becoming increasingly demanding. Macroeconomic challenges mean there is less capital available in the market, both locally and internationally.
“As advisers, Cala Capital Africa and Mazars felt that the BOS opportunity was both very credible and attractive, so, in consultation with BOS management and shareholders, we agreed to take a more nuanced and long-term strategic approach to BOS’s capital requirements instead of going to the local institutional market.”
Further international growth
Taylor said that once BOS achieves traction in the UK, the company will probably need to raise more capital to fund further international growth to expand into the US, for example.
“A future raise may be quite significant, and we wanted to keep BOS’s strategic options open. We felt that a funding strategy focused on family offices that could directly add value to BOS’s business plans would be better suited for this particular capital raise, rather than local institutional investors.
“This approach was dead right for BOS, but obviously made our job more challenging as it reduced the list of possible investors. Family offices are very discreet about what they do which can make them harder to find,” Taylor said.
“With an asset as appealing as BOS, however, and some creative structuring, Mazars and Cala Capital Africa were able to rapidly and successfully conclude a transaction which was good for all parties.”
Founded by Grant Rushmere and rooibos farmer Richard Bowsher, BOS sources all its teas from our very own Klipopmekaar, which is one of the biggest organic rooibos tea farms in the world.
Rooibos is endemic to the Western Cape, only grown in a 100km² region in the Cederberg. So far, none of the attempts to grow rooibos in Argentina, the US, China and Australia has succeeded.
Last year, rooibos was awarded protected designation of origin status by the EU, alongside Feta, Parmigiano-Reggiano, Champagne and Port. The Rooibos Council says more than 6,000 tonnes of rooibos tea are exported each year to more than 30 countries.