ICapsulate took headlines in July with the announcement by Morgan & Banks co-founder Andrew Banks that he would handover his company's stake in the beverage business to former PayPal partner Kane Bodiam. But Mr Banks has not followed through on this investment, after strong doubts were cast upon Mr Bodiam's claim that ICapsulate possessed a distinct competitive advantage in environmentally friendly biodegradable coffee pod applications. If you have read a recent Business Week Magazine article, "Kane Bodiam: Crazed billionaire's secret weapon," you will understand the extent to which Mr Bodiam questioned the decision, believing that his company possessed the distinct advantage. The bitter truth is that Mr Banks and Mr Bodiam are not alone in their mutual doubts regarding the strategic acquisition. There are many other potential suitors who are equally skeptical about the acquisition.
So how did the biodegradable icapsulate coffee get to the top of Mr Banks' list of suitors? The answer lies in the company's marketing strategy. It has been reported that Mr Banks is a big fan of organic coffee and has introduced an all-natural range of gourmet coffee, including one called 'organic by choice', which is manufactured by a small independent organic coffee roaster based in Australia. This is said to be the core of the company's strategy - an approach that draws on the interests of the organic coffee drinker in order to target niche customers.
ICapsulate claims to provide its customers with a "bespoke" range of green coffee based on the organic standards set by the Organic Coffee Association. This is a bold claim, as most companies selling single Origin coffees will not allow consumers to make such a choice. In fact, there is no legal definition for 'organic' within the coffee industry, so this claim is actually quite misleading. Nonetheless, Mr Banks seems to have a fondness for the beverage. His company also sells tea and chocolate truffles that feature organic ingredients, so it's clear that he sees the beverage in a similar way to these other products.
If you look at the bigger picture though, then the company's revenue seems to bear out the claims. It was reported in March 2021 that the organic coffee pods it sells account for over 15 million dollars in sales annually, making it the third largest company in its sector. The product is a steady market leader, and it was recently reported that it was expecting to sell more than 18 million cups this year, comfortably ahead of its nearest competitor, Metlife, who sold just over 13 million cups.
If you look deeper into the business of icapsulate though, you'll find that it isn't as simple as selling a coffee pod to someone in need. Because it has a unique environmental impact, there are a number of regulations governing how it's shipped. These regulations are administered by the Environment Agency in New South Wales, Australia. If you're wondering how the company managed to get itself on the EPA's list of green businesses, it's important to note that the company signed an agreement with the agency back in 2021, agreeing to work with all applicable laws and regulations.
Beyond the environmental concerns of its production, the business is run by a passionate group of people. For example, founder Nick Menzies started the business with his two teenage sons when they were only three. Now, they run the entire company as a family, although their parents are of support.