BEST PITCHES: Levi Roots' Reggae Reggae pitch lures Peter Jones! | Dragons' Den - BBC

Summary

Levi 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

00:00

🎵 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.

05:01

📈 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.

10:01

💸 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.

Keywords

💡Reggae Regis Sauce

Reggae Regis Sauce is a hot to mild jerk barbecue sauce that the entrepreneur, Levi Roots, is promoting in the script. It is intended to replace traditional tomato ketchup and hot pepper sauce, offering a more flavorful alternative. The sauce is described as retaining the flavors of garlic, peppers, coriander, scallion, and various herbs and spices. In the video, it is the central product around which Levi Roots seeks investment, aiming to scale up production to meet a potential large order.

💡Investment

Investment in this context refers to the financial backing Levi Roots is seeking for his Reggae Regis Sauce business. He is looking for £50,000 for a 20% stake in his company. The concept is central to the video as it depicts a pitch to potential investors, known as 'dragons,' who are considering whether to provide the capital needed to grow the business.

💡Dragons

In the script, 'dragons' refers to the panel of potential investors who are listening to Levi Roots' pitch and deciding whether to invest in his business. The term is commonly used in the format of the show 'Dragons' Den,' where entrepreneurs present their ideas to a panel of wealthy investors who may choose to finance their ventures.

💡Cottage Industry

A cottage industry is a small-scale, often home-based business. In the script, Levi Roots initially makes his Reggae Regis Sauce in his kitchen, which is a classic example of a cottage industry. The term is relevant as the dragons discuss the challenges of scaling up from such a small operation to meet large-scale orders.

💡Manufacturing

Manufacturing in this context refers to the process of producing goods on a large scale. Levi Roots discusses the need to transition from making his sauce in a small kitchen to a more industrial setting to meet the demand of a potential large order. The dragons question his plans for manufacturing, highlighting the challenges of scaling up production.

💡Royalties

Royalties in the script refer to the percentage of sales that Levi Roots would earn if his sauce is sold by a larger company. The potential deal with a meat company includes a royalty of 5%, which is a common business arrangement where the creator of a product receives a percentage of the sales revenue.

💡Miscalculation

Miscalculation is evident in the script when Levi Roots initially misunderstands the scale of the order he has received, thinking it is for two and a half million liters instead of two and a half thousand liters. This error is pointed out by one of the dragons, illustrating the importance of accurate financial and logistical planning in business.

💡Equity

Equity in this context refers to the ownership stake in a company. Levi Roots offers 20% equity in his company for the £50,000 investment. As negotiations progress, the dragons request a larger equity share, which Levi eventually agrees to, demonstrating the negotiation of business terms and the trade-offs involved in securing investment.

💡Turnover

Turnover refers to the total sales revenue of a business over a specific period. In the script, Levi Roots mentions a turnover of about £4,000 from selling 2,500 bottles of his sauce at the carnival. This figure is used by the dragons to assess the potential profitability of his business and to calculate the potential return on their investment.

💡Food Standards

Food Standards are the regulations and guidelines that ensure food safety and quality. Levi Roots mentions having confirmation from the food standards agency, which is crucial for合法地生产和销售食品。This is an important aspect of the business that the dragons consider, as it demonstrates compliance with legal requirements for food production.

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