Oatmeal with truffle oil and shaved Parmesan makes for a tasty proposition.
On Sunday's episode of Shark Tank, Lori Greiner agreed to invest $500,000 for a 33.3 percent stake in OatMeals, a New York City-based business that sells build-your-own oatmeal bowls from a single store in Manhattan. Founder Sam Stephens launched the company in 2012 and has generated $2.5 million in revenue during the past six years. She came to Shark Tank seeking $500,000 for 20 percent of the business, which sells small oatmeal dishes for $4.25, plus the cost of toppings.
"I hate oatmeal, and this is delicious," Shark Daymond John said as Stephens served sample bowls made with ingredients including bacon, shaved Parmesan, truffle oil, sea salt, and pepper.
A former executive assistant at an investment bank, Stephens attended culinary school on the side to hone her skills as a chef before launching the company. She expects to generate $500,000 in revenue in 2018, from which she'll be able to pay herself a salary of $40,000. She also earns $60,000 per year working as a spokesperson for Quaker Oats.
While the Sharks were impressed with the quality of Stephens's product, they questioned her desire to expand her retail presence by opening more Manhattan locations. Greiner advised Stephens to instead take some of her top-selling flavors and create a packaged product to be sold in places like Starbucks and grocery stores. Greiner cited the fact that, after investing in New York City-based Bantam Bagels--creator of a line of bagel bites stuffed with cream cheese--she made a deal to sell the product in Starbucks, helping the company hit $40 million in sales.
Barbara Corcoran, however, had other ideas for the business, advising Stephens to develop oatmeal carts serving corporate offices at breakfast and lunch. Corcoran offered to invest $500,000, but for 50 percent of the cart business--not Stephens's existing company. Kevin O'Leary couldn't believe OatMeals had started a bidding war.
"We must be on the planet Zuton right now," O'Leary said. "You have a store that makes no money and have two half a million dollar offers, which doesn't happen on the planet Earth."
After accepting Greiner's deal, Stephens said she had followed Greiner's work with Bantam Bagels and liked the idea of having her company pursue a similar business model. While many food and beverage entrepreneurs have landed deals on Shark Tank, Greiner insisted that Stephens had a truly exceptional product.
"These are some of the most delicious things ever brought in here," she said. "The interesting thing is that they're very different."