DIET Chef, the food business founded by former Scottish dotcom entrepreneur Kevin Dorren, has beefed up its board as it targets a £50 million turnover.
Mike Smith, a former web sales executive at Laithwaites Wine, has joined the board as head of e-commerce along with marketing director Brigitte Read, who was previously at the People’s Postcode Lottery.
Sales of its home-delivery diet meals, which more than 100,000 slimmers in the UK now use, rose by more than 18 per cent to £16.5m last year.
The company is now thought to be number three in the diet market in the UK behind Weight Watchers and Slimming World.
It delivers pre-prepared calorie-counted meals to dieters who sign up for packages of up to three months.
Dorren said that, with the delivered diet meals market worth around £100m in the UK, he didn’t see any reason why Diet Chef couldn’t account for half of that in the two or three years ahead.
“We see a lot more room for growth in the UK and think we could comfortably get to 200,000-300,000 customers.”
Although Dorren said the start of the year had been slow due to the impact on the food industry following the horsemeat scandal, the firm had bounced back and had seen strong growth in customer numbers.
He said the company, which spends £3m a year on marketing and advertising, had also benefitted from the withdrawal from the UK market of Nestle’s Jenny Craig branded products.
Although the UK is the firm’s main focus, it has also expanded into France and Germany, where it has a partnership with the QVC home shopping television channel.
Dorren said the firm was looking at other European markets but wasn’t in any rush to expand.
“We are taking our time because we don’t want to expand into new markets too thinly, particularly when there is still a lot of potential in our existing markets,” he said.
Although the firm made a small trading profit of £27,158 last year, pre-tax losses were £118,881 after impairment charges, compared with a £147,363 profit a year earlier.
London-based private equity firm Piper, which specialises in consumer brands, bought a stake of around 40 per cent in the business in 2010, providing £3m of growth funding.
“They approached us rather than the other way round and Diet Chef is their only investment in Scotland,” Dorren said. “They really understand brands, having worked with Boden and Bottle Green.”
Dorren was one of Scotland’s highest-profile figures during the dotcom boom of the late 1990s when he led Orbital Software to an £80m flotation in 2000.
But the company struggled following its stock debut, Dorren resigned and Orbital was taken over by rival Sopheon in an £11m deal.
Although there has been a rash of successful flotations on the stock market of late, Dorren said he wasn’t tempted to make a return with Diet Chef.
“I know it’s the in thing to list at the moment, but perhaps I’ve become more cynical over the years,” he said.