You’re most likely to achieve investment on Dragons’ Den if you pitch a food & drink related business, according to new research from business data site Company Check.
The study, which aimed to explore the composition of a successful Den business, found that almost a fifth (17.11%) of all investments awarded in the Den over the past 14 series went to food & drink companies. This was followed in popularity by clothing businesses, which accounted for 11.2%. We analysed all 187 businesses form 13 series; our findings look at the businesses which were offered investment in the Den, even if that investment later fell through, as we wanted to better understand what appealed to the Dragons.
Food and drink wasn’t the most popular category in the early seasons, but picked up speed after the successful investment made by Richard Farleigh and Peter Jones in Reggae Reggae Sauce in series four. This remains the most successful business in terms of net worth that still has Dragon involvement – with inventor Levi Roots now worth an estimated £30m.
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The most successful food business overall is Hungry House. Entrepreneurs Shane Lake and Tony Charles asked for £100,000 for their fledgling online takeaway service and received joint investment from James Caan and Duncan Bannatyne – a deal which later collapsed after the show. Today, according to Company Check data, Hungry House has a networth of £1,800,000.
The entrepreneurs most likely to invest in food businesses were Peter Jones and Deborah Meaden, having invested in 17 and nine food businesses respectively.
As a percentage of his total investments, Simon Woodroffe OBE, founder of YO! Sushi, was the most prolific food investor, with his only deal in the den being a food company.
Speaking of the success of food businesses on the show, Jane Milton of Jane Milton Food Industry Expert, a specialist management consultancy service for the food industry which works with a number of the Dragon food businesses, said:
“The Dragons work with food businesses because they already have experience in this market, they connect to experts in different fields who can offer advice, contacts etc and because you can make real changes, often without major investment.
“Food and drink are fast moving sectors where you can quickly see the effects of changes made. Because the Dragons have great contacts with retailers etc, they can open doors.”
Jane mainly works with Deborah Meaden and is currently working with Dragon businesses Yee Kwon, Vini and Bal and Propermaid. She also worked with Phom Teas before Kelly Hoppen sold her share in the business.
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Chika Russell appeared in the Den in series 13. She accepted an offer from the Dragons for her food business but later turned it down. She said:
“Food and drink businesses work on Dragon’s Den for a few reasons: first, there are major changes in consumer eating patterns and the large players are just not set up to innovate to meet the demand for new, contemporary food products. Second, the Dragons are inevitably all consumers of food and drink and can immediately have their own view as to whether it can be successful in the market place.
It was a great experience going on Dragons Den to have our business model challenged in that environment and be vindicated with five offers. Although I accepted Peter Jones’ offer initially, during the whole process I gained the confidence to realise that while it might be easier to get outside help from a Dragon I could go it alone. And, ultimately, knowing how hard it is to build this business I didn’t want to share it with anyone who wasn’t going to sweat it in the same way as I do.”
Dev Biswal, head chef and owner of The Ambrette, explained why he thinks food businesses are so popular amongst the Dragons. He said:
“Food has one of the largest profit margins of all commodities, and packaged foods especially have great returns. This sector of the market is constantly growing and changing – it’s an exciting place to be. It’s also an area that is dictated by trends – if the product is right at the time, the Dragons will strike while the iron is hot!
The Dragons are consumers too – if they’d like to eat that chocolate, drink that craft beer or eat in that restaurant, the chances are that their friends and family would too – it’s this gut feeling that can often mean be the difference between an ‘in’ or an ‘out’.”
Discussing the survey results, Company Check founder Alastair Campbell, who recently announced $1,000,000 investment in his new venture Carsnip, said:
“It’s really interesting to see that the categories of business that receive investment on Dragons’ Den haven’t really changed over the years. Food became more popular following the Levi Roots investment but areas such as technology, which you might expect to grow, haven’t.
“Of course, the investors on the show are all from certain backgrounds and will have interests in certain areas. It was a surprise not to see Piers Linney, having founded Outsourcery, driving the tech investments but at the same time, they can only invest if the pitch is there. Hopefully, we’ll see more tech pitches in the Den this series.”
The table below shows the number of food businesses investment in over the 13 series:
