Dragons' Den tycoon Peter Jones hopes to replicate the success of Reggae Reggae Sauce with beauty water brand Sip.

Jones bid for the business on Christmas Eve and it was finalised on New Year's Eve. Sip co-founder Kate Cazenove admitted that his approach was totally unexpected, although she did not take long to make up her mind.

"Peter has a contacts list that reads like a retail who's who, with close relationships among the multiples. It is a no-brainer to partner with him rather than a bank," she said.

Sales of Sip, which has a management staff of just two, grew from £40,000 to £500,000 in 2008 due to new listings in Tesco, Sainsbury's and Boots.

Jones had been following the progress of the brand after The Grocer raised awareness of its credit crunch-defying sales ('Sip boosts sales by aligning brand with fashion and beauty', 15 November 2008).

"I liked the brand's positioning, which emphasises the skincare benefits of the product. Kate has already achieved a solid distribution base so I felt there was something to build on," said Jones, adding that there was no reason why the brand couldn't emulate the success of Reggae Reggae Sauce.

"It has been a phenomenon," said Jones. "The range has been extended and we are beginning a licensing programme to build on the success of the brand and of founder Levi Roots," he said.

"Sip definitely has some of the same attributes: an excellent product, a charismatic manager in Kate and good distribution, so I'm hopeful," he added.

Steve Greenhalgh, former MD of cakes supplier Kate's Cakes, is also investing in the Sip brand. Greenhalgh sold the bakery to Dutch company CSM for £32.5m in 2007, and will balance a "strategic and client management" role at Sip with his other international ventures.

A British distributor has also expressed interest in launching the Sip brand in Australia, The Grocer has learned.