London – New Startup Capital Of The World?
by Alice Gallop
A new generation of food and drink entrepreneurs are powering a ‘foodie revolution’ in London, driven by strong demand for high quality, niche food & beverage options and quenched by the growing trend for food stalls, popups and supper clubs.
Across London, there are now estimated to be over 50,000 restaurants and catering companies, and five new restaurants opening every fortnight. Food and drink entrepreneurs now make more enquiries about start-up funding than any other sector, including technology. Frank Yeung is a prime example of this generation of food entrepreneurs. Yeung had been working as an investment banker for just under two years when he co-founded the burrito chain, Poncho 8. Fast-forward six years, Poncho 8 now has six outlets and over 100 staff across London. Whilst this explosion may not be ideal for the waistline, it is definitely an exciting time for the capital.
How realistic is the ‘good life’ dream? Can the seemingly insatiable public appetite for fancy foodstuffs quell the ambitions of thousands of foodie wantrepreneurs seeking a way out of the city rat race? How many trendy, niche food establishments can one economy sustain? It is no secret that the odds of starting up a small business are not favourable. The Federation of Small Businesses says that more than half of new businesses will fail in their first two years.
That being said, London does make for a particularly favourable destination for budding food entrepreneurs.
One perk of setting up in London is that there are vast opportunities to ‘beta-test’ your business at street-food stands, pop-up restaurants and festivals. This trend offers budding food entrepreneurs a golden opportunity to bring their products to an eager audience at a fraction of the cost of opening a restaurant or shop. They can test their product in a live environment and develop it as they go along. It also enables new food brands to build up an engaged local following before stumping up the cash for marketing and mass production.
MeatLiquor, along with Flat Iron, Pizza Pilgrims and Mother Clucker are all examples of brands that have done exactly that. Yianni Papoutsis, a full-time technician for the English National Ballet was among the first to exploit this trend in 2009, setting up a food truck in a car park next to an industrial estate in Peckham. His success is almost as much about the harnessing of social media and the collective power of bloggers as the powerfully seasoned beef, the gooey cheese and the meat-steamed buns he vended. The journey, of course, wasn’t without its obstacles – with the first MeatWagon being vandalised and destroyed and its replacement falling foul to local thieves. However, the practice had its intended results with the first permanent MeatLiquor restaurant opening in 2011. They now have 13 sites across the UK and the expansion plans have no signs of halting.
Another bonus of starting up in London is that you don’t have to go it alone. There’s a feast of resources right on your doorstep, ranging from opportunities to borrow the kitchens of professional chefs, to bespoke support from Toucan. Scottish chef, Adam Handling, is just one entrepreneur who did exactly the latter. Having worked in professional kitchens throughout his career, Adam, inspired by his love of Asian flavours and particularly Japanese techniques, was determined to launch his own independent restaurant. Adam reached out to Toucan for business support, mentorship and direction to funding sources. Toucan worked alongside the young chef to refine his growth strategy and connected him with a mentor and lead investor. As a consequence, in June 2016, Adam opened The Frog E1 to exceptional reviews and great success.
London has certainly shot up the global gastronomic pecking order in recent years. The London restaurant scene is now one of the most diverse and exciting in the world. If this was enough to whet your appetite and you are thinking about starting up your own food business, do your research and ask yourself if there is a market for your product. If there is, then, in the words of Ainsley Harriott (and not Lenny Henry – we won’t forget that one ITV), ready, steady cook.