Tej Lalvani big interview: Vitabiotics, the US and life in the Dragons' Den

”America is the graveyard of British companies,” claims Tej Lalvani. A raft of them have tried to launch in the US and failed, he says. But far from finding this daunting, the CEO of the UK’s largest vitamin company, Vitabiotics, has set his sights on his own American dream.

“It’s the next step for us. It’s the toughest market to launch a supplement in, but it’s also the largest. I’ve been trying to launch in America for years. And I wanted to start with retailers because of their national footprint. It’s taken a while to get the right deal.”

He’s done it though. Earlier in the year Vitabiotics secured a $20m deal with giant US pharmacy chain Walgreens, which has 6,500 stores in the US. And Lalvani is prepared to be patient.

“I’m not planning to grow the business vertically in America. I need to launch sensibly, strategically and systemically. It’s a new market for us and every market is different. The mistake that’s been made in the past is introducing multiple products in one go. Swisse Vitamins spent $30m launching in America with 15 different SKUs and they were out in two years.”

Lalvani is testing the US waters with Perfectil, Vitabiotics’ beauty supplements, which this year won the Queen’s Award for Enterprise, Innovation. “The US is a big market but there are certain products they are lacking where ours could do rather well.”

He’s also spotted an opportunity in the Chinese market. “Now China has changed its one child per family policy to two children, nutrition supplements like Pregnacare have become very popular there. We have a Chinese website, but I want to get into retail.”

With Vitabiotics selling in over 100 countries, this process of breaking into new markets is hardly new for the London-based Lalvani. Since joining his father’s company two decades ago he has transformed sales from £2m to £300m globally.

His portfolio of business interests is also widening, from an artisan wool supplier (Wool Couture) to an Indian online community for women (POPxo). Both ventures that stemmed from Lalvani’s new role as the latest steely venture capitalist to join the Dragons’ Den (after his wife signed him up). “Initially, I thought I’d be adding value to businesses in the health market, but my interests lie in all businesses.”

Having said that, one entrepreneur who appeared on the series last year allowed Lalvani to delve into a market he’d been eyeing up for a while. “We had thought about developing our own vitamin tea, but were unsure whether we’d have the time to build a new category and develop the products. So, when the opportunity came on the Den, I thought it was great.”

The other Dragons were less impressed, but Lalvani saw T Plus as an opportunity. “James [Dawson, founder] knew what he was talking about and I liked the taste of the product. Trying to get a good taste by putting vitamins and minerals in a drink is difficult.”

But Lalvani would only put up the £75,000 investment if Dawson was willing to co-brand the tea with Vitabiotics and give up half his business. “The only way it could work is if Vitabiotics owned part of the business. I wanted to put in all the effort of marketing and growing the brand. I knew I had the connections to be able to get the distribution. And that’s important.

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“With the Vitabiotics name behind it, a product like T Plus would be taken seriously and there is a gap in the market for it.”

T Plus is now set to launch later this year having undergone a complete redesign. “The original packaging didn’t do the product justice. It was a bit all over the place, the brand wasn’t clear and it wasn’t obvious that it was a vitamin tea. The new branding is a lot clearer.”

Driving the forklift

Lalvani has built up Vitabiotics on good marketing like this. But he didn’t start his career in branding.

“When I decided to the join the business properly, I started at the bottom, driving the forklift and sticking labels on boxes. My dad [chairman Kartar Lalvani] wanted this but I wanted it as well, to learn everything about the business so that when I did eventually get to a more senior role I would understand it comprehensively and see the potential. I could then identify the bottlenecks and improve the process to make it more efficient. I then spent a lot more on advertising and marketing the products than we had previously to raise their awareness, and a lot of time travelling to build the international part of the business.”

Lalvani has since brought in the likes of Nicole Scherzinger and David Gandy as brand ambassadors, people who “authentically take the product, have benefited from it and genuinely want to talk about it.” The newest ambassador is none other than Peppa Pig, and this is where he sees the biggest opportunity.

“Children’s vitamins are a massive area for growth. Parents are a lot more concerned about the nutrients their children need today than they were before. And partnering with Peppa Pig on WellKid (for ages four to 12) has been phenomenal. It’s selling so well I’m now exploring other areas of licensing.”

“Children’s vitamins are a massive area for growth. Parents are a lot more concerned about the nutrients their children need today”

But though this and recent launches WellWoman Vegan and SuperDog are proving popular, Lalvani is still feeling the pinch from a shift to e-commerce. “It’s causing a stress point on the relationship between suppliers and retailers because of the downward pricing pressures from online stores. Retailers are trying to force prices down, which is pushed back on suppliers.”

His advice to bricks and mortar operations that can’t compete on price is to find another way to stand out. “E-commerce will win on convenience and price so instead of competing on these, retail stores need to look at improving the in-store experience. In grocery, celebrity chefs could come in to cook, working with different brands. That’s difficult to replicate online.

“Some retailers are focused on short-term profit and that needs to change. There needs to be a shift towards the long term. What can they do differently to online retailers?”

In other words, adopt the kind of long-term approach to the UK high street and global expansion that Lalvani prides himself on. And which he hopes will see him defy the odds and achieve his American dream.