5 minutes with... Tej Lalvani, TV Dragon and CEO of Vitabiotics

The new dragon on finding a niche and his plans to expand the family supplements business into America.

by Adam Gale
Last Updated: 19 Jan 2018
Also in:
Down to business

Tej Lalvani is one of the new faces on Dragons' Den, where he’s earned a reputation for calmness and a refreshing willingness to take a punt on a well-grilled entrepreneur.   

Away from the fire-breathing and TV cameras, he’s busy running one of Britain’s more successful family businesses, Vitabiotics. The supplements firm was founded by Lalvani’s chemist father Kartar in 1971 and has a range of products including Wellman and Wellwoman, Pregnacare and Perfectil.

It’s a great example of a British business achieving substantial and sustained organic growth, without sacrificing profitability. According to Companies House filings, turnover increased 25-fold between 1997, the year Lalvani joined, and 2016. Pre-tax profits that year were £37.6m off £120.4m revenues, making it the UK’s biggest vitamin company. Global turnover, we’re told, is £300m

Lalvani, who took over as CEO in 2015 after running operations, has been largely responsible for the company’s recent product diversification, marketing campaigns and international expansion.

MT: You joined the family business straight from university – did you ever consider a different route?

Lalvani: I’d always wanted to work with my father. From a young age I saw him creating formulations at the kitchen table, and I’d try making my own concoctions. I began helping out with small things, coming into the office after school and at weekends, and kind of grew up with the business.

MT: You started out in the warehouse, didn’t you?

Lalvani: Nothing was handed to me on a silver platter. I wanted to work up from the bottom so I’d understand the whole business. I joined quality control, operations, marketing, then business development, international and finally the UK. Getting respect from the other staff was important, and for my comfort to know I could really handle any task I was given.

MT: Your growth has been enviable – what’s the secret?

Lalvani: As a family business you can think a lot more long-term than competitors that are more short-term focused. Ten years ago, Seven Seas was the number one vitamin company in the UK, and our goal was to try to reach their level. Today we’re almost double their size.

What we did best was analyse changing consumer needs and create new categories based on research. Now the market follows us, so we have to constantly innovate to stay ahead. Most of our competitors have been acquired by big pharma companies. That poses a challenge in terms of the resources they can put behind product launches and marketing. We’ve got to be more frugal.

We’ve got 18 different brands now, whereas most of our competitors are single-branded. That’s a strategy I took some time ago – I really wanted to create consumer trust in one particular product. For instance, pregnant women will see Pregnacare as a standalone brand. 

MT: You’ve also benefitted from the rise in healthy living, but the trend now is towards ‘all-natural’. Is there a backlash against nutrition by pill?

Lalvani: People are getting more aware about nutrition, but at the same time the nutritional content in food is a lot less than fifty years ago – the vitamin C in an orange for instance is almost half what it was. Then there’s the trend towards more hectic lifestyles. To have a balanced meal every day is quite difficult.

MT: You're already the leader in the UK. Is further expansion likely to come from abroad?

Lalvani: My goal is to be the number one specialist vitamin company in the world. Our model internationally has primarily been to work with a single distributor, so it’s important to find the right partner. In April, we’re going to launch nationally in the US with Walgreens, in all of their 8,000 stores. The mistake I don’t want to make is going in like I’m the number one in the UK, when they don’t know us. It’s important to grow organically.

MT: So, Dragons' Den. How did that come about?

Lalvani: A friend of mine mentioned the BBC was looking for new dragons. Initially I wasn’t sure. I loved the show but did I want that public profile? I spoke to my wife – she said you’ve always wanted to work with other entrepreneurs and it’s a great opportunity. So she actually put my name down without telling me... I was obviously pleased in any case. It’s been fun.

MT: What do you look for in an entrepreneur?

Lalvani: Can I work with them? Have they got the basic skills, are they persistent enough but not too stubborn to work with a mentor? Then there’s the business and the product. Is it unique, will the business model work, will it be profitable? And how can I add value? I don’t want to invest in a business for the sake of it.

MT: How would you pitch, if the boot was on the other foot?

Lalvani: You need to understand what the competition is and how your offering is unique. It’s better to have a niche product than trying to be everything to everyone, so I’d pitch a niche idea with a proven business model, with one to two years of sales track record and a clear plan of where I wanted it to go.

A lot of millennials particularly want instant gratification, but patience and persistence are important. It takes time to grow a business, it doesn’t happen overnight. It’s also important to keep your costs down. Sometimes there are pitches on Dragons' Den asking for x amount of money. You ask how much have you spent, and they’ll say £800,000. How do you spend that kind of money? It gives you cold feet as an investor. 

Image credit: Vitabiotics

Tags:

Find this article useful?

Get more great articles like this in your inbox every lunchtime