Why are sports stars investing in food and drink and how can you sign one up?

Insane Grain’s very public wooing of footballing superstar Harry Kane was one of the more uplifting stories in grocery last year. The protracted courtship saw the healthier snacking brand unveil several TikTok stunts aimed at grabbing the England and Bayern Munich star’s attention. And it worked – with an announcement made in December that Kane had become an investor in the challenger brand, which has raised about £1m since its launch in 2020.

It’s not Kane’s only investment in the fmcg space. In fact he has become a rather prolific investor – along with Insane Grain, he’s backed gut health cereal brand Bio&Me, Urban Legend non-HFSS doughnuts, and more – and he’s far from alone.

The list of sports stars putting their money where their mouth is includes footballers such as Lucy Bronze, who’s invested in Soccer Supplement, Reece James who backed Mighty Slice, and Chris Smalling, who’s even started his own VC fund named ForGood. There’s also seven-time Formula 1 world champion Lewis Hamilton, former world heavyweight champion boxer Anthony Joshua, numerous Olympians, a smattering of tennis legends, and many more.

So why are sports stars investing in food and drink startups? How do you sign them up? And what sort of impact can they have on your brand?

In traditional marketing, major fmcg brands fork out millions for a sports celebrity to endorse their brand, whether that’s Muller’s use of Declan Rice, Persil enlisting Usain Bolt or, of course, the 25-year relationship that Gary Lineker has enjoyed as the face of Walkers crisps.

“Gary Lineker is still known more than 25 years after he stopped playing football, and is still directly linked to Walkers – the ambition is for Harry to be the same for us”

Rushina Shah, founder of Insane Grain

 

But sports investment has provided a new dynamic, enabling startups to enjoy arguably even greater benefits in terms of PR endorsement, contacts, and advice – while receiving a cash injection from the sports star to boot. And all you have to give away is an equity stake.

Of course, it’s not quite that simple. The first challenge is to find your sports star. Or for them to find you. And in truth there’s no set route – and serendipity often plays a part. There are, though, three main categories into which most fall.

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Leveraging the love

The first is direct contact with the athlete. That’s easiest, of course, if the founders have a relationship with the athlete directly. That was the case with Chelsea and England footballer Reece James’ investment into high-protein cheesecake brand Mighty Slice.

“We’re lucky,” says Mighty Slice co-founder Emily Tout. “We have a somewhat unique partnership with Reece as an investor, in that he and my co-founder Jamie are childhood friends and play for the same football team, Chelsea. Paired with his love of the desserts since the very start of the business, it has given the partnership a real edge of authenticity.”

Brands have also been proactive in leveraging an athlete’s existing love for their product. Ehsen Shah, who co-founded sports marketing agency B-Engaged with footballer Héctor Bellerín, even recalls one brand he knows that spotted a sportsperson’s name on the shipping address of their products and reached out.

Shah also recommends brands scanning social media to see where their product is appearing: “There are so many of these interviews now, like ‘What’s in your fridge?’ and those types of things. We had a client that did one, and there was a lot of a certain drink product in there, so the brand got in touch and said: ‘We’d be interested in seeing how we can work together.’ So, there are those kinds of moments that pop up.”

 

And then there’s direct contact from the sports star themselves, as was the case with Moju for example. Shah cites how B-Engaged and Bellerín co-invested in Moju, simply because both he and Bellerín were avid consumers of the product. “It was like, he’s always buying it on Ocado anyway, so when we started to look at diversifying away from just the traditional methods of investing, it made sense. We said ‘let’s approach them and see whether they’re interested in us being involved’.” And one thing led to another as they say.

Another way to attract investment from sports stars is to get in touch with the sports star’s ‘people’, according to Ben Peppi, a specialist commercial advisor to athletes and consumer brands at law firm JMW. “You typically have three categories of athletes: those that will manage the majority of the conversation themselves; others where agents manage literally all their conversations and you’re not doing a deal unless the agent approves it; and the third type is those who go through their investment managers and wealth managers, who may have allocated a specific proportion of capital to early-stage investing.”

Avoid agents!

It’s advisable to network to find out who the financial advisors, accountants, wealth managers and investment funds working in that space are, says B-Engaged’s Shah – and to avoid agents. “The problem with football agencies and agents is that they’re usually only contracted for two years. So, most of the time, their job is to maximise earnings in those two years – not necessarily to take those earnings and push them out somewhere else.”

Joe Seager-Dupuy, director, VC investment at investment firm True Global, also advises “reaching out to other founders or investors that have raised money from sports stars to learn about their approach and see if there’s a way to get a warm introduction. There are also several VC funds emerging that are actively marketing the fact that athletes are part of their limited partner base.”

One is The Players Fund, which has brought together seasoned VCs alongside influential athlete-founded collectives such as 4Cast (an athlete entrepreneurial group led by cricketers Ben Stokes and Stuart Broad, and Aston Villa footballer Tyrone Mings), ForGood (the VC network founded by Roma and former Manchester United footballer Chris Smalling), as well as Shah and Bellerín’s B-Engaged.

“Sports stars like to put their capital to work in businesses they can resonate with”

Ben Peppi, JMW

The Players Fund describes itself as “the UK’s first athlete-led venture capital firm” and aims to educate and empower athlete investors and founders. “The idea was: ‘There’s all these groups within the sports world; why don’t we come together and create a vehicle that’s a bit more of a professional setup, with all the right regulations, with an ops team that can go through all these things,” says B-Engaged’s Shah.

Another port of call for interested brands is equity crowdfunding company Seedrs. “Over the years, several high-profile sports men and women have invested in some of the trailblazing F&B startups that have raised on Seedrs,” says UK campaigns team lead Scott Simpkin. “Often, these famous backers are existing early investors in the business and, in others, they have invested through our platform. Examples include Andy Murray, who was on the Seedrs advisory board and invested in various F&B companies, and Chris Smalling, who invested in vegan food brand This.”

Why sports stars are investing

In most cases the reasons for investing in a food and drink business are partly, of course, financial. Investing in early-stage UK-centric companies, where those businesses are EIS or SEIS-approved, results in tax relief for the athlete, as it would for any angel investor.

But it’s not just about saving tax. As Shaun Browne, chairman of consumer, food & retail, Europe at Houlihan Lokey says: “In most situations, the player is investing in expectation of capital appreciation. So they need to believe in the brand, its management and, while they might not devour the entire business plan, feel that it will grow and emulate success stories such as Little Moons, Lily’s Kitchen, Tyrrells, and others.”

Most modern athletes are also knowledgeable about nutrition and the impact of diet, which creates a natural affinity with food and drink. As Peppi says, they will likely understand the business more “than they would if they were investing into a B2B tech company, for example. They like to put their capital to work in businesses they can resonate with.”

“He’s always buying it on Ocado anyway, so we said: ‘let’s  approach them and see whether they’re interested in us’”

Ehsen Shah, co-founder of B-Engaged

That’s certainly been the case with Mighty Slice. Speaking to The Grocer, Reece James says he never wanted to invest in something that wasn’t “authentic to me. Mighty Slice’s emphasis on healthier eating, alongside a genuinely great-tasting product, really stood out as the perfect combination and an ideal investment opportunity. This, coupled with the opportunity to be involved in product development, flavour selection and marketing efforts, meant investing in Mighty Slice made perfect sense.”

And Tout can vouch for the value of his involvement. “Reece’s involvement extends far beyond financial support. From the start, he was keen to be involved in the business more widely – having brilliant ideas on marketing opportunities, promoting the products on social media, even having a say in the products and flavours we release and develop. For us this was crucial – we wanted this to be a partnership where Reece could really get involved.”

 

Hands-on Harry Kane

In a similar way, Rushina Shah, founder of Insane Grain, has found working with Harry Kane “brilliant”, and the picture she paints  is of an incredibly enthusiastic and engaged investor: “It’s more than a financial relationship. He really cared about the longer-term mission and bought into our health agenda. Harry and his family tried the products, and only once it had his seal of approval could we proceed. He and his team have also been involved in the packaging design and the imagery of him on our Insane Kane packs.

“Harry also helped write the back-of-pack copy and was involved in the flavour name generation – Salt & Vinegoaaal and Strikin’ Hot, because he’s a striker, of course. His team has also been very supportive in helping us get in front of buyers and unlocking sales channels. He was certainly involved more than you would expect the England men’s football captain to be!”

Even where the investment is more silent, the impact of these sports stars on challenger brands can make a huge difference. As Seedrs’ Simpkin says: “They get access to growth capital and the support of an investor whose profile can help increase visibility of the brand.”

“Harry Kane and his family tried the products, and only once it had his seal of approval could we proceed”

Rushina Shah, founder of Insane Grain

 

That’s all the more important in the cost of living crisis. Building a brand has arguably never been harder, and Seager-Dupuy feels that, along with the cash injection that comes from a sports star’s investment, “leveraging the platform, credibility and following of famous figures offers an important route to cut through the noise and stand out”.

Sports stars can also help patch a business into their network, says Peppi. “They’re likely to have an incredibly powerful contacts book and network, which can be extremely valuable to these companies. So, you might have an athlete that’s well plugged into the CEO of a big retailer – Sainsbury’s, Waitrose, M&S, whoever it might be. Perhaps they’re members of the same golf club, and through one or two phonecalls they can plug that business into their wider network beyond just sports.”

Advisory role

They can also play an important advisory role, Peppi adds. “They can’t advise on the formulation behind a nutrition product, but they can advise on elements relative to their career as a professional athlete. So, they will be product users, perhaps drinking recovery drinks, or using a different type of consumer product – meaning they can advise on [what] they would want to see in businesses.”

Insane Grain’s Shah can certainly testify to the value Kane has brought, with listings now in Tesco, Waitrose, Co-op, Ocado, Selfridges and Amazon. And she believes the sky’s the limit.

“There’s a huge opportunity with the upcoming Euros this summer – having the England captain’s face on our packs has allowed us to unlock listings. But we also talked about the longer-term plan and being able to directly equate it to how Gary Lineker is still known, more than 25 years after he stopped playing football, and is still directly linked to Walkers – the ambition is for Harry to be the same for us.

“Whereas before it was hard to compete with a goliath like PepsiCo, the investment, mass brand awareness, and unlocking of retail listings allows us to more closely compete with brands like Walkers.”

And who knows, high-profile investments from the likes of Kane, James, and many more (see boxes), could be the tip of the iceberg, according to B-Engaged’s Shah. “I think we’ll see an uptick in it,” he says. “Because the first movers have happened now. They’ve opened the door to younger athletes and others within that ecosystem, who now understand that this can be done.

“From a food and drink perspective, it’ll be the independent brands that benefit the most, because they’re the ones that can show growth, scale, and an exit plan. Also, the income within football in particular is just increasing – there’s only so many houses you can buy, right?”

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