Until last year, Wayne Starkey still filed his own VAT returns. Many co-founders of four-year-old companies do – old habits die hard and it saves a few quid in accountancy fees. What VAT-DIYers don’t do, however, is turn down £85m buy-out bids. Ever. Yet that’s the jaw-dropping offer Wayne and co-founder James Whiting rejected just a few months ago.
Those facts indicate how far and how fast The Skinny Food Co has come since its 2018 launch. They also reveal how down-to-earth yet ambitious these two entrepreneurs are. The pair still get hands-on with every part of the business, from setting up and manning trade stands to warehouse logistics. But they also know their company’s value, understand its vast potential, and plan to take it much further.
“We’re just winging it,” jokes Wayne, a graphic designer by training. But in the same breath, he says (seriously this time): “I look at what Heinz did in the 1980s and think we can be as big among Millennials and Generation Z. That’s one reason why we turned the bid down.”
And there you have The Skinny Food Co in a nutshell: all DIY graft, hustle and sharp-sighted ambition in equal measures. Many start-ups have the same attributes, but few can boast the same growth trajectory with as few staff (just 25) or elicit as much interest from prowling buyers. “At least ten businesses have approached to buy us so far,” says Wayne.
That’s not surprising considering the growth figures since Wayne and James’s modest initial investment of £3,000.
Year 1 sales: £1.5m.
Year 2: £4.5m.
Year 3: £17.5m.
Year 4 projected sales: £20m+.
What’s more, The Skinny Food Co’s products are now stocked in Asda, Morrisons, Aldi, Lidl, Co-op, Home Bargains, TK Maxx, Spar and B&M Bargains. The co-founders have turned down Wal-Mart (for now) but are talking to Tesco, Superdrug, Iceland and Ocado. And because they have a whopping 280 products in their range, they can straddle both business-to-business and business-to-consumer sales, shifting plenty of non-supermarket-assigned products via their website. Furthermore, international sales account for less than 2% of revenue, so the potential for global growth is mindboggling.
So what’s going on? Why is The Skinny Food Co so in demand? The answer is that its products promise to deliver a kind of food utopia: fast, flavoursome treats without sugar and saturated fat. Go to their website and you’ll find zero-calorie syrups and sauces, low-sugar chocolate spreads, high-protein bars and ‘healthy treats’. These deliver quick fixes and a little luxury minus the cookie jar guilt. What’s more, the new supermarket category these products inhabit is expanding exponentially – a few years ago it was niche, now it’s mass market.
However, Wayne and James’ company is no exercise in cynical marketing; its roots lie in combatting severe family health issues. Wayne says: “Five years ago, my children were diagnosed as autistic. Studies shows that the gut may play a big role in autism, and that’s definitely true for our kids. Through trial and error, we found that sugar worsened their moods and gave them IBS. Also, both James and I have diabetic family members. So the idea behind Skinny was to offer low-sugar and low-fat products that still appeal to kids’ and adults’ desire for tempting flavours and convenience. And thanks to food science, we’ve created plenty of low-calorie but flavoursome products.”
Wayne and James are also on a mission to fight childhood obesity, teaming up with the charity Sugarwise and trying to replace everything in the pantry that’s unhealthy with a lower-sugar option.
Yet despite all that, The Skinny Food Co isn’t trying to be a health food or diet brand. Instead, its unique starting place is to regard the treat cupboard as an inescapable fact of life but to give customers and their kids a better choice once they find themselves rootling around in there. Wayne sums it up as: “It’s about being realistic. Enjoy your burger but don’t put another wodge of sugary ketchup on it.”
He continues: “Because our name is ‘Skinny’, people assume we’re a weight-loss band. We do help people to reduce calories but we’re not a diet company. ‘Skinny’ means our products are skinny in sugars, fats & calories”. So our name tells our story but it’s also a clever way of being number one in more than 30 categories on Google.”
Canny business decisions and intelligent brand positioning seem to come naturally to Wayne and James (James is not at this interview due to family commitments). Wayne grew up in a one-bedroom flat in Blackpool and left school with one art GCSE, yet scraped his way to business success through hard work and cunning.
“While studying for an art degree, I did three jobs,” he says. “I’d lifeguard in the morning, study, work in a gym and wait at a restaurant. Then, ahead of graduation day, I had an idea. I scoured the car park, found the best car, and contacted the owner to ask for a job. The car was an Aston DB7 and its driver owned a nutritional brand.
“I contacted him and said: ‘I’ve got no experience but I’d love to work for you, and he gave me a job. Years later, after travelling around the US, New Zealand and Australia, and setting up a design business, I called him again. This time, I wanted to launch a brand, so I asked whether he’d sell me vitamin tablets and protein powders in bulk. He agreed, so I created the branding and sold my products to rugby and martial arts clubs. It grew into a £60,000 business – OK, but not enough.
“Through a friend, I reached out to a social media influencer, hired her, and rapidly grew to a £2m business with just two staff. That’s when I met my current business partner James. My specialty was branding and product sourcing; his was marketing and social media, so we were a good match. We worked on a few brands together before creating The Skinny Food Co.”
Wayne and James launched their company with three products and quickly trademarked ‘The Skinny Food Co’ along with various other names. “The word ‘skinny’ has different meanings in the UK and America,” says Wayne.
Growth was rapid from the getgo, and by the time they expanded their range to 200 products, the pair employed just ten staff. What started as eight pallets in a garage grew to 30 pallets in an old mill, which is now 4,000 pallets across six warehouses. Today, there are 280 products across 20 categories, of which the ‘hero categories’ are syrups, sauces, spreads and snacks.
However, The Skinny Food Co is still incredibly – no pun intended – lean. Despite moving towards sales of £20m, it comprises just 25 staff, including Wayne, James and new MD Ian Crosby, who arrived in June 2021. “Before he joined, I was managing every step of the supply chain, plus doing other jobs on top of my core role of product design and branding,” says Wayne. “It’s been crazy. For example, during the pandemic, we received £2m worth of purchase orders in one day. The growth has been challenging. We could probably double in size again in six months if we wanted to, but we need to be cautious. We don’t want to go through such violent growing pains again without careful planning.”
And that’s the enviable position in which The Skinny Food Co now finds itself. It hasn’t just attained proof of concept but smashed the concept to smithereens. Moreover, it’s achieved that, comparatively speaking, with a shoestring budget. Not bad for a couple of entrepreneurs who – in Wayne’s words – “are just winging it”.
Of course, these modest co-founders are doing so much more than winging it and they now have every option available: stay and grow fast, or stay and grow more steadily, sell now or sell later. However, choosing what to do next won’t be easy. “We are passionate and dedicated to the core,” says Wayne. “We love what we do, we’re on a mission to improve people’s health, and we know there’s a massive opportunity for us to go well beyond what anyone in our sector has done before. There’s more UK growth to come but the big next thing for us will be international growth. We’ve not even scratched the surface.”
What The Skinny Food Co has achieved in four years with little more than a head designer, a head marketer, and a small team is hard to fathom. The magic ingredient, of course, is crackling entrepreneurial energy, created by a duo driven to make the world a better place and to give their family better health and better lives. With so many buyers sniffing around and so much growth potential for The Skinny Food Co to explore, the future is an exciting, unknowable ride. But there’s one thing we can say for sure: Wayne Starkey will never do his own VAT returns again.