Premium wellness drinks maker Purearth is the latest fast-growing challenger brand to collapse as the tough inflationary grocery market ramps up the pressure on SMEs.
The business, which sold a wide range of organic health drinks, appointed insolvency firm Begbies Traynor on 20 October 2022 following a meeting of creditors last week.
Purearth ceased trading on 3 October after running out of cash to support its high-level of growth, Begbies told The Grocer.
It closed a £705k crowdfunding campaign on Seedrs in December 2021 to help expand in the UK and overseas but was unable to raise new investment to save the business. Its hundreds of shareholders will not see any return on their investment.
Begbies added Purearth - which had been lossmaking since being launched by Angelina Riccio and Tenna Anette in 2021 - also suffered from high overheads and cost inefficiencies.
The liquidator is seeking a buyer for the business and assets, including the brand, trademark and customer base.
Interested parties are invited to contact PDS Valuers, an independent agent instructed to run the process on behalf of Begbies.
“Time is of the essence,” Begbies said.
Pressure on fmcg challenger brands has intensified in recent months as input costs across the board soar. Last week, The Grocer reported confectionery brand Doisy & Dam was rescued from administration and online retailer The Vegan Kind was sold in a pre-pack administration deal.
In its latest red flag alert released last week, Begbies Traynor revealed there were almost 610,000 UK companies in significant financial distress, an 8% year-on-year rise.
Purearth supplied high-end wellness shots, plant-based broths, nut milks, cold-pressed juice and a dairy-free sparkling kefir water directly to consumers, as well as offering cleanse programmes. It was also stocked by the likes of Ocado, Planet Organic, Whole Foods Market and Selfridges.
Aside from rise in the price of raw materials, cardboard packaging and energy, the business faced a squeezed from the rising cost of glass bottles.
It was also offering steep promotions to attract new customers, including introductory offers of 50% off.
The struggle for survival affected its Trustpilot rating, which fell to a score of 4.1, compared with 4.6 referenced by Purearth in its crowdfunding campaign.
There has been a flood of one-star reviews on the platform in the past two months, with numerous similar complaints from customers that they haven’t received orders and also have been unable to secure a refund. Many customers on the reviewing site speculated the business had gone bust.
“Ordered as usual - got an update saying they unable to send the next delivery as unable to get hold of the raw ingredients,” one review said. “I asked for a refund. Never heard anything back since - shocking company. Like many on here believe gone bust.”
Purearth appointed Paul Gurnell as general manager in May 2020 to oversee its next stage of growth.
Gurnell was previously the CEO at juice brand Savsé, which also fell into administration.
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