BEST PITCHES: Levi Roots' Reggae Reggae pitch lures Peter Jones! | Dragons' Den - BBC
Summary
TLDRLevi Roots, a musician turned entrepreneur, pitches his Reggae Reggae Sauce on a business show, seeking £50,000 for a 20% stake. With a background in music and catering, he presents a flavorful alternative to traditional barbecue sauces, claiming a potential order of 2.5 million liters. Despite initial enthusiasm, the dragons uncover a miscalculation in the order volume and question the scalability of his home-based production. After a series of rejections and a tense negotiation, Peter Jones and Richard Farley invest £50,000 for a 40% stake, believing in the product's potential despite the risks.
Takeaways
- 🎤 Levi Roots, a musician turned entrepreneur, pitches his Reggae Reggae Sauce on a business investment show.
- 🍯 The sauce is described as a jerk barbecue sauce that can replace ketchup and hot pepper sauce, offering a blend of flavors.
- 🎶 Levi has a background in music and food, having supplied his secret recipe sauce to Notting Hill Carnival for 15 years.
- 📈 He seeks £50,000 for a 20% stake in his business, aiming to scale up production to meet a large order.
- 📄 Levi presents a letter of intent from a meat company in Yorkshire for a significant order, which initially causes confusion among the investors.
- 🔍 The dragons, the show's investors, scrutinize the letter and uncover a misunderstanding about the order's volume.
- 📉 The potential order's size and financial projections are disputed, revealing a significant miscalculation by Levi.
- 🚫 Some dragons decline to invest, citing concerns over the business's scalability and Levi's initial overestimation of the order.
- 💸 Peter Jones and Richard Farley eventually agree to invest, but on the condition of a higher equity stake due to the revised valuation.
- 🔝 Levi accepts the revised offer, giving up 40% of his company for the £50,000 investment, securing both capital and business mentorship.
Q & A
What is the name of the sauce Levi Roots is pitching?
-The name of the sauce Levi Roots is pitching is 'Reggae Reggae Sauce'.
What is the unique selling proposition of Reggae Reggae Sauce according to Levi Roots?
-Reggae Reggae Sauce is described as a hot to mild jerk barbecue sauce that replaces the typical tomato ketchup and hot pepper sauce, retaining the flavors of garlic, peppers, coriander, scallion, and other herbs and spices.
How long has Levi Roots been in the music business?
-Levi Roots has been in the music business for over 30 years.
What role does Levi Roots play in the Notting Hill Carnival?
-Levi Roots has been supplying his secret recipe Reggae Sauce to most of the stalls at the Notting Hill Carnival for 15 years.
What is the initial order size Levi Roots claims to have received from a meat company in Yorkshire?
-Levi Roots initially claims to have an order for 2.5 million liters of Reggae Reggae Sauce.
What is the actual size of the initial order from the meat company as clarified during the pitch?
-The actual initial order size is 2,500 liters, not 2.5 million liters as initially claimed by Levi Roots.
What is the cost to produce one bottle of Reggae Reggae Sauce according to Levi Roots?
-The cost to produce one bottle of Reggae Reggae Sauce is 32 pence.
How much equity is Levi Roots originally offering in exchange for the £50,000 investment?
-Levi Roots is offering 20% equity in his company for the £50,000 investment.
What is the potential royalty Levi Roots could earn if the deal with the meat company materializes?
-The potential royalty Levi Roots could earn is 5%, which could amount to approximately £390,000 based on the initial order size.
What is the final deal Levi Roots accepts in the Den?
-Levi Roots accepts a deal for £50,000 for 40% equity, with the investment being split between two dragons, Peter Jones and Richard Farley.
What is the reaction of the dragons to Levi Roots' pitch and his potential to scale up production?
-The dragons express concerns about Levi Roots' ability to scale up production and fulfill large orders, questioning the feasibility of his business plan and the accuracy of the initial order size.
Outlines
🎵 Pitching Reggae Reggae Sauce
Levi Roots, a musician turned entrepreneur, introduces his Reggae Reggae Sauce to the investors, seeking £50,000 for a 20% stake in his business. He showcases his product as a unique jerk barbecue sauce that enhances the flavor of food without overpowering it. Levi has been in the music industry for over 30 years and has been supplying his secret recipe sauce to the Notting Hill Carnival for 15 years. He presents a letter of intent from a meat company in Yorkshire for a massive order of 2.5 million liters of his sauce, which he claims is a handshake deal. The investors are intrigued by his pitch and the potential of his sauce in the market.
📈 Analyzing Levi's Business Plan
Theo Paphitis inquires about Levi's background, revealing that 'Levi Roots' is a stage name and his real name is Keith. The conversation then shifts to the potential deal presented in the letter. Levi clarifies that he has been selling his sauce at carnivals for 15 years, with 2,500 bottles sold last year at £1.49 per bottle. The cost to produce each bottle is 32 pence, and he currently manufactures the sauce in his kitchen with the help of his family. The investors express concerns about the scalability of his operation and the legitimacy of the letter, which is not a firm order but a potential offer for a royalty-based partnership. The discussion highlights the complexity of scaling a small business to meet large-scale demands.
💸 Negotiating the Investment Deal
Peter Jones offers Levi half of the requested £50,000 for a 20% stake, which is a significant shift from the original ask. Richard Farley matches Peter's offer, making it a total of £50,000 for a 40% stake. This means Levi would need to give up more equity to secure the funding. After considering the offer and the lessons learned from the investors, Levi agrees to the terms, accepting £50,000 for a 40% equity share. The deal is closed with Levi gaining not only the funding but also two influential business partners, setting the stage for the growth of his Reggae Reggae Sauce business.
Mindmap
Keywords
💡Reggae Regis Sauce
💡Investment
💡Dragons
💡Cottage Industry
💡Manufacturing
💡Royalties
💡Miscalculation
💡Equity
💡Turnover
💡Food Standards
Highlights
Levi Roots introduces his Reggae Reggae Sauce, seeking £50,000 for 20% equity.
Levi's background includes music, production, singing, songwriting, and cooking.
Reggae Reggae Sauce is described as a jerk barbecue sauce, a replacement for ketchup and hot pepper sauce.
The sauce retains the flavors of garlic, peppers, coriander, scallion, and various herbs and spices.
Levi has received an order for 2.5 million liters of Reggae Reggae Sauce from a meat company in Yorkshire.
The sauce costs 32 pence to make per bottle, and Levi currently produces it in his kitchen.
Levi's business has received confirmation from the Food Standards Agency, allowing him to sell his sauce.
The Dragons question the scalability of Levi's production to meet the large order.
Theo Pathetis expresses concerns about the actual content of the order letter, suggesting it's not a firm order.
Richard Farley points out a miscalculation in the volume of the order, correcting it from 2.5 million liters to 2,500 liters.
Duncan Bannertine decides not to invest, citing the lack of a solid business plan and the complexity of the market.
Peter Jones offers half the requested amount for the full 20% equity, a significant shift in the negotiation.
Richard Farley matches Peter Jones' offer, bringing the total investment to £50,000 for 40% equity.
Levi accepts the deal, giving up 40% of his company for the £50,000 investment.
The investment will help Levi scale up his production and potentially enter the national retail market.
Transcripts
put some music in my
food for me and give me some regular
regulars
at reggae regis
it's so nice i had to name it twice
i call it rig registers
at reggae registers
put some reggae sauce on your lips
thank you my name is levi roots
i'm looking for fifty thousand for
twenty percent in my reggae regis source
i've been in the music business for over
thirty years
i'm a producer a singer a songwriter and
a chef
for 15 of those 30 years i've been doing
the notional carnival supplying
most of the stalls with my secret recipe
sauce
i entitled reggae sauce
so without further ado i like just let
you have a look
right the sauce what is the sauce reggae
reggie sauce
is a hot to mild jerk barbecue sauce
it replaces the typical tomato ketchup
all your hot pepper sauce
tomato ketchup is boring no flavors just
tomato
hot pepper sauce is hot no flavors it
ruins your food
with regular regular sauce it retains
the flavors of the garlic
the peppers the coriander the scallion
and all the herbs and spices which we
put in i've got a very nice order from
a meat company in yorkshire for wait for
it
two and a half million liters of reggae
reggae sauce as their first orders we've
had just like a
shook hands on a deal i've had a nice
letter from them which i have with me
now what we have to do now is just try
and get production up to standard
any questions please
[Music]
it's rare for the dragons to be
serenaded for an investment
but will that help levi root secure the
50 000 pounds he needs
in return for a 20 share in reggae
reggae source
theo pathetis wants to know more about
the entrepreneur in front of him
levi roots what a great name is it your
real name
no it's my student my real name is keith
no i don't think he would have been in
30 years in a regular house can i
introduce
keith you've just lost so much
credibility
you should have lied to him and said
yeah what you guys not if my mother
calls me keith right she calls me levi
i've been knowing that ever since then
oh yeah right you mentioned a letter you
had
with an order for 2.5 million liters
yeah
so have you got the letter with you i
have indeed well would you pass that to
theon let him read it well i'll ask you
a few more questions
no problem i think thea must be this
handsome guy right in front of me here
our soul
i like you already
so you've been selling this for 15 years
yes at the carnival not in your carnival
yes so how many bottles did you sell
last year
two and a half thousand two and a half
thousand bottles at the carnival and
approximately how much per bottle
149. so about four thousand pound
turnover or something
the sauce actually costs 32 pence to
make each bottle of this size
where do you make it how do you make it
you make it in your kitchen or yes at
the moment i make it at home in my
kitchen and my children help me and and
we just sort of do it as a family there
um it's very small kitchen we're not we
can't do
a very large amount can you legally make
things like that
in your kitchen and go out and sell them
nationwide
absolutely because we've had we've had
our lecture in a confirmation from the
food standard
okay which was one of the first thing
that i did have you spoken to anybody
about what it takes to produce the kind
of volumes that are going to be needed
to fulfill these and
what do you need to do what i need to do
is to rent a place
i mean i won't buy or anything like that
i would just rent a premises
and i think the equipment will cost me
about 25 000
for for all equipment you're 20 you need
to spend 25 000 pounds on equipment
levi's still sounding confident but his
ambitious plans mean transforming a
cottage industry
into a mass production line virtually
overnight
theo pathetis has been studying levi's
paperwork and has some concerns about
the order itself
i might have misunderstood you slightly
because i thought you
said that you had an order for two and a
half
million liters that's
not what this letter says this letter
says
if they were to try market your product
and if it was as successful as some of
the other lines that
are in national retailers that's the
sort of level that they would have to
produce
to make it happen is that your
understanding no
basically what he's saying to me and
says look we're ready to make an order
as long as you can supply us with this
this is what we will do right and and
they're going to pay you a royalty of
five percent
five percent providing the knocking
supply and
he thinks that that will create about
390
000 packs yeah which will retail at
about 1.7 million
so 5 of that is
so that would be to sing a song that
would be that would be that would be
your royalty
yes roughly roughly yeah that'll be and
then
you're gonna be selling these guys at
six pound fifty a liter per liter yeah
what's that in real money
i think it's 16 million something 16 16
and a half million
although levi's letter is not a firm
order he's still maintaining this
potential deal could generate 16 million
pounds
a huge turnover for such a small
business
but richard farley thinks he spotted a
fundamental flaw in levi's calculations
[Music]
libra can i just uh i just want to it's
something i don't understand um
uh you've got an order for two and a
half thousand kilos
is that the one you're saying is two and
a half million liters
yeah because i don't think that's right
not two and a half thousand
two hundred and fifty thousand isn't it
two thousand five hundred kilos
it's two so it's two it's a lot less
than you think it is it's two and a half
thousand
the order is for two and a half thousand
kilos well a kilo is about the same as a
liter if it's water it's exactly the
same
so it's not two and a half million
liters if you've got two and a half
thousand of kilos it's two and a half
thousand liters
okay and then it says that's an initial
requirement
and then a potential every week
thereafter of 500 kilos per week it's
about 25
000 a year okay and you and you're
getting six
pounds per 6 pounds 50 per liter
right so it's about 130 000
pounds worth per order per year
it's not 16 million
richard farley has exposed a disastrous
miscalculation by levi
potential royalties aside manufacturing
the source himself
would make him 130 000 pounds but not
16 million pounds duncan vanitine has
heard enough
be right there's no business in this um
so i'm going to let you know what i am
and i'm not going to invest so i wish
you the best of luck but i'm out
duncan bannertine thinks levi's source
has no future
will the four remaining dragons agree
[Music]
okay let me let me tell you where i am i
think you've got a great business but
it's for you
and you will do well out of it it's not
going to be on a big enough scale for me
so thanks for bringing it here but i'm
out thank you
eva let me come in here that letter's
not an order
and it's a hugely complex difficult
business to getting to major
supermarkets
in fact i've got as far to say you've
got pretty well very little hope
if on the other hand
the uh that letter becomes reality the
royalties alone on one line they're
offering you
is approximately 80 000 pounds
then on top of that you'll then receive
your money for supply and source
so at that stage you actually don't need
any help from
anybody here if that comes to fruition
so those are the two reasons why i won't
be investing so i'm afraid levi
i'm out levi is staring disaster in the
face
with three dragons out in quick
succession his chances of securing the
50 000 pound investment are fading fast
only peter jones and richard farley now
stand between him
and expulsion from the den it's a little
bit confusing because i mean you're a
fantastic guy a lot of fun right
but they always get
i mean that's completely irrelevant
really because in terms of you managing
a business i'd be a bit nervous
because as i discovered you're not doing
two and a half million liters you're
doing
two and a half thousand liters and i
noticed you didn't sort of say oh in
that case i'll only need a small room or
less money
so you probably admit to me that your
business skills probably would need a
little bit of help
absolutely i would say that yeah so i'm
just sort of sitting here thinking do i
want to take a gamble
you know can i just cut it gives rich a
bit of time to think about whether he
wants to gamble or whether think about
it because
i know where i'm going with it and i
just want to be clear where i am okay
um so you've got no illusions going
forward um
i think that trying to get into this
market we know how competitive it is
it's seriously seriously competitive
to try and range run product it's kind
of almost
impossible so to let you know where i am
i like impossible challenges good and
i've been sitting here for 10 minutes
i've been actually stuck i can't believe
this is the first time ever i've
actually started to sweat
and i don't know whether it's the source
that i've just taken or actually whether
it's what i'm about to say
um it is a complete punt
but i kind of probably would enjoy it
i've got a few people in the marketplace
that i could introduce you to
but i'd want a little bit more of a
slice but i wouldn't want to take too
much away from you because i think you
need to earn a living but i would offer
you half the money
for 20 percent
it's an extraordinary twist peter jones
has stepped in and offered levi half of
the 50
000 pounds he needs but he's demanding
the whole
20 equity stake in return under the
rules of the den
levi must secure all the money he's
asking for or he leaves empty-handed
his fate now rests with richard farley
is that an interesting offer to you i
mean it just
because on the one hand if this works
it's great if if it doesn't it doesn't
matter how many other sources you've got
um well so we're talking about 25 000
for 20
so uh no i think i think that's a fair
that's that's not a
it is a gamble it is a punt uh i'd match
that 25 000
for another 20 so you'd be talking 50
000 for 40
leaving you 60 percent
richard finally thinks there is money to
be made from levi's deal
but only if he has a big enough slice of
the company
levi could have the 50 000 pounds he's
come for
if he's prepared to give the two dragons
double the equity he was originally
offering
will he be prepared to sacrifice such a
large chunk of his business
well i came with you know thinking that
i'm going to be tough like you guys
but i must admit i have learned a few
things here you know from you guys
obviously i'm always up for learning
and um i think that that deal it's not
ideal for me
but at the same time i think this is
going to be fantastic for us
for for the source so i would accept
gladly
and levi has done it after a
rollercoaster ride in the den
he's giving away 40 of his company
having gained 50 000 pounds
and two extremely influential business
partners now he really has got something
to sing about
put some music in the food for me
and give me some reggae regular sauce
at reggae sauce
it's so nice i had to let me twice
i call it reggae regis
[Applause]
[Music]
blessed
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