Is The Pizza Cupcake BETTER Than Pizza? | Shark Tank US | Shark Tank Global
Summary
TLDRIn this Shark Tank episode, Michelle Jimenez and Andrea Machado pitch their innovative pizza snack, the 'Pizza Cupcake,' seeking a $125,000 investment for 5% equity. The New York-based couple aims to revolutionize the frozen pizza market with their gourmet, bite-sized pizzas made from a unique dough recipe. Despite initial skepticism, their product impresses the sharks with its taste and quality. After negotiations, they secure a deal with Lori Greiner for $125,000 in exchange for 12.5% equity and 2.5% in advisory shares, promising a potential partnership with Bantam Bagels and national distribution opportunities.
Takeaways
- 🍕 Michelle Jimenez and Andrea Machado, a married couple from New York City, are seeking a $125,000 investment for 5% of their company, which specializes in pizza cupcakes.
- 🎂 They introduce a new snack concept: pizza cupcakes, which are high-quality gourmet snacks that are easy to serve and made with a unique dough recipe, aiming to revolutionize the frozen pizza snack category.
- 🎈 The pizza cupcakes come in various flavors, with the margarita and pepperoni being their best sellers, and are designed to be enjoyed in more ways and places than traditional pizza slices.
- 👨🍳 Andrea, originally from Venice, Italy, has a background as a chef and has worked in renowned kitchens, including Soho House, before moving to New York City.
- 🤝 The couple met through a mutual friend, and their shared passion for pizza led to the creation of their business.
- 📈 They have a clear business plan and have already achieved $344,000 in revenue the previous year, projecting $100,000 in sales for the current year.
- 🛒 Their sales strategy includes direct-to-consumer sales, catering, participation in Smorgasburg (a popular New York City market), and stadium sales, with their first partnership being with Citi Field, home of the New York Mets.
- 🏭 The pizza cupcakes are currently made by hand in a commercial kitchen, but they have a co-packer in place to help scale production and reduce the cost per cupcake from 95 cents to 48 cents.
- 📦 The product is sold in packs, with a 12-pack priced at $24.99 and a shipping cost of $9.99, aiming to find fulfillment centers across the U.S. to improve distribution.
- 💰 Lori Greiner, a shark known for her experience with Bantam Bagels, offers $125,000 for 20% equity, recognizing the potential synergy between her company and the pizza cupcakes business.
- 🔄 After negotiations, the couple counters with a request for $125,000 for 10% equity, highlighting their strategic investors and ongoing discussions with a large distributor for a potential incubator program.
Q & A
Who are Michelle Jimenez and Andrea Machado?
-Michelle Jimenez and Andrea Machado are a married couple from New York City who appeared on the show seeking investment for their company.
What are they seeking from the sharks?
-They are seeking a $125,000 investment for 5% equity in their company.
What product are they pitching on the show?
-They are pitching a product called 'Pizza Cupcakes,' a gourmet, high-quality snack that is a new take on frozen pizza.
What is unique about their Pizza Cupcakes?
-The Pizza Cupcakes have a unique cupcake shape and size, making them easy to serve and eat on the go. They also have a trade secret dough recipe that delivers a fluffy texture.
What is the calorie count for one Pizza Cupcake?
-The Margarita Pizza Cupcake has 160 calories per cupcake, and the Pepperoni has 170 calories.
What is Andrea's background in relation to the food industry?
-Andrea was born and raised in Venice, Italy, and has been working as a chef since he was 16. He also worked in London at a fine Italian restaurant owned by Soho House before moving to New York in 2006.
How did Michelle and Andrea meet?
-Michelle and Andrea met through a mutual friend, and their first date was a pizza-making session.
What was the initial reaction to the Pizza Cupcakes from their target demographic?
-The initial reaction was very positive, especially from a group of Italian people at an event, who are known to be picky about pizza.
What are their current sales channels?
-Their current sales channels include direct-to-consumer sales, catering, Smorgasburg (a popular market in New York City), and stadium sales, specifically at Citi Field, home of the New York Mets.
What is the cost breakdown for one Pizza Cupcake?
-The cost to make one Pizza Cupcake is currently $0.95, but they believe they can reduce this cost to $0.48 per cupcake with the help of an investment to start production with a co-packer.
What offer did Lori make to Michelle and Andrea, and what was the final agreement?
-Lori initially offered $125,000 for 20% equity. After negotiations, the final agreement was $125,000 for 12.5% equity plus 2.5% in advisory shares.
Outlines
🍕 Pitching the Pizza Cupcake Innovation
Michelle Jimenez and her husband Andrea Machado introduce themselves as the creators of the pizza cupcake, a gourmet snack aiming to revolutionize the frozen pizza category. They seek a $125,000 investment for 5% of their company. The pizza cupcake is presented as a portable, high-quality alternative to traditional pizza, featuring a unique dough recipe that results in a fluffy texture. The couple shares their personal story, including their backgrounds in the food industry and how their product was well-received by a discerning Italian audience, hinting at the potential for broader success.
📈 Business Growth and Challenges
The entrepreneurs discuss their business's growth, having made $344,000 in revenue the previous year and projecting $100,000 in sales for the current year. They explain their transition from a restaurant business to an e-commerce model due to COVID-19 and the importance of direct-to-consumer sales. The script highlights the challenges of shipping frozen products and the high cost of production, which they aim to reduce with an investment to scale up production with a co-packer. The entrepreneurs also reveal their current sales channels, including catering, a popular market, and a partnership with Citi Field.
🤝 Negotiating the Shark Tank Deal
The pitch continues with the entrepreneurs facing the Sharks' scrutiny over their valuation and the practicality of their business model. Lori Greiner sees potential synergy with her Bantam Bagels company and offers $125,000 for a 20% stake, which the founders find too high. After a series of counteroffers and negotiations, they reach an agreement with Lori for $125,000 for 12.5% equity and an additional 2.5% in advisory shares. This deal is sealed with the promise of leveraging Lori's experience and distribution channels to grow the pizza cupcake business.
Mindmap
Keywords
💡Investment
💡Shark Tank
💡Pizza Cupcakes
💡Valuation
💡Co-packer
💡Distribution Channels
💡E-commerce
💡Calories
💡Brioche
💡Sourdough
💡Advisory Shares
Highlights
Michelle Jimenez and Andrea Machado pitch their pizza cupcake innovation to the sharks.
They seek a $125,000 investment for 5% equity in their company.
The idea of pizza cupcakes aims to revolutionize the frozen pizza snack category.
Pizza cupcakes are designed to be a gourmet snack that's easy to serve and made with high-quality ingredients.
The cupcake shape and size make them perfect for various occasions and places.
The secret dough recipe delivers a unique fluffy texture.
The Margarita and Pepperoni flavors are highlighted as best-sellers.
The dough is a hybrid between brioche and sourdough, with no butter, only olive oil.
The product is currently sold direct to consumer with plans for e-commerce.
They have partnerships with Citi Field, home of the New York Mets.
The cost to make one cupcake is currently $0.95, aiming to reduce it with investment.
They have a co-packer in place and a plan to scale production.
Sales projections for the year are $100,000 with $77,000 made year to date.
Lori Greiner offers $125,000 for a 20% stake, citing potential synergy with her Bantam Bagels company.
The founders counter with a request for $125,000 for 10%, highlighting their strategic investors and retail opportunities.
Lori agrees to invest $125,000 for 12.5% with an additional 2.5% in advisory shares.
The founders express excitement about scaling their business with Lori as their 'shark'.
Transcripts
next up is an innovation of a favorite
food
[Music]
hi sharks my name is Michelle Jimenez
and this is my husband Andrea Machado
and we're here from New York City we are
seeking 125 000 investment for five
percent of our company whoa sharks who
doesn't love pizza as we all know there
are Pizza Lovers all over the world
Pizza is delicious but when you think of
frozen pizza you don't think of it as an
appetizer or a high quality Gourmet
snack and let's be honest it can be hard
to eat those delicious slices on the go
plus the frozen pizza snacks category
has gone a bit stale but that is until
now sharks meet the pizza cupcakes
it's your birthday
[Music]
that's it get the hell out of here
the pizza cupcake is the next level of
pizza that belongs anywhere and
everywhere a fine Gourmet snack that's
easy to serve and made with high quality
ingredients plus our trade secret dough
recipe delivers a fluffy texture that's
unlike any pizza you've ever had and
because of its cupcake shape and size
the pizza cupcake is perfect for any
occasion and can be enjoyed in even more
ways and places than your traditional
slice so sharks who's ready to take a
bite of the pizza Cupcake Stop talking
let's eat yes if we dig in which one
should we try so those are our two best
sellers the margarita and the pepperoni
so the margarita is the vegetarian
pepperoni as you know it's one of the
wow Americans favorites and the sauce is
yours the sauces our sauce is the
marinara sauce that we made just before
we came in it's really delicious really
good thank you I hate you because I want
to eat these oh is now your regular
pizza dough it's a it's a hybrid it's so
good so like flaky paste there's got to
be a lot of butter in this exactly no
there is no butter what only olive oil
it's a hybrid between a brioche and a
Sourdough so you get the fluffiness of
the brioche and then you get the crunchy
how old is this like it tastes like you
made it this morning that's a frozen
product
New York City yeah
marinara sauce is our favorite really
good Kevin to be silent and just be
eating is amazing good and it's 160
calories for the margarita for one right
yes for one and 170 for the pepperoni
Andrea tell us your background how did
you come up with this magic so um born
and raised in Venice Italy and I work in
the kitchen as a chef since I was 16 and
I moved to London to learn English when
it was 19 years old and in London I
worked for one of the fine Italian
restaurants that is owned by one of the
largest private members Club in the in
the world Soho Soho House yeah and they
gave me the opportunity to move to New
York in 2006 to open one of their
members club and I spent 10 years doing
that until I met Michelle how did you
meet Michelle so we met through a mutual
friend and it was really funny because
he asked me out on a pizza date and I
said Pizza day no man has ever asked me
out for a pizza but the twist was he
wanted to teach me how to make pizza I'm
sure he did and I had to show off yeah
he had to show off and we've been
married for almost two years now and
this is our first baby congratulations
you know I was an event producer and
then I worked with social media
influencers and how did you go from this
incredible product you're making to
actually launching the business walk us
through that actually there was one
event that we did that it was for our
best friends that it was all a group of
Italian people and everybody loved it
and you know Italians are picky so I was
like sort of afraid but they all loved
it and she with her you know background
she was like we need to bring this to my
events and see what the reaction is and
that's how we started how do you sell it
yeah so so right now we sell direct to
consumer but last year our three
distribution channels were catering
Smorgasburg which is New York City's
most popular Market that gave us the
street cred you know to really have that
proof of concept and then we also did
stadium so our first partnership was
with Citi Field home of the New York
Mets and they actually approached us did
you get a commercial kitchen involved
yes we produced in a commercial kitchen
and we also have a co-packer who we've
been working with for the last nine
months Laura you might be familiar with
her co-packer we definitely sought them
out because their biggest client is
Bantam Bagel yes but what will sales be
this year so this year we're projecting
a hundred thousand dollars in sales oh
very nice we did 344 000 in Revenue last
year year to date we've done seventy
seven thousand dollars but we have a
plan and we know how to execute our plan
so prior to covid we were really a
restaurant business and so because of
the seasonality of our business we knew
that we had to launch e-commerce direct
to customer Frozen frog correct yes
direct to customer we we knew that was
in the road map because currently we're
New York City Base our customers are
from all around the country and they
wanted to know where they could find us
I learned something with Wicked Good
Cupcakes yes the first royalty deal in
Shark Tank history just paid its
millionth dollar to me in royalties wow
fantastic but the shipping Journey we
took in the cost of the weight of
cupcake jars made of glass we learned we
had to sell six not three then we went
to a dozen our goal right now is to find
a different fulfillment center who can
service one in the midwest one in the
Northeast and one in the South but what
do you charge Michelle what is this
12-pack is 24.99 and how much is
shipping 9.99 so it's three bucks five
dollars to get 12 credits three bucks a
cupcake what does it cost you to make
these one cupcake is 95 cents at the
moment that's expensive yeah that's
expensive it is expensive because we're
making it by hand in our commercial
kitchens the recipe that we have
allow us to go to 48 cents per cupcake
and that's why we're here for your
investment so we can start production
with our co-packers you're starting up
you haven't even figured out yet you
know how it's all going to come together
in terms of shipping a frozen product I
think you're going to have some
significant challenges there's no
question about it good luck to you I'm
out thank you thank you here's where I'm
at guys um
I'm not even going to get into the
valuation because you could be
optimistic really I just think that
I don't know if I'd be the greatest
partner as soon as I saw this I was like
this is Bantam Bagels in another
category I know other people up here who
have stadiums and a bunch of buddies
with stadiums so yeah with no one
showing up right now but they will
sooner or later right eventually yes so
uh I really wish you all the best but in
the best interest of being a good shark
for you I'm not the best partner up here
I'm out
thank you thank you Damon look I'm
really torn I think you're going to get
a better offer than I probably would
have made you but man you guys are the
real deal I'm out thank you thank you
first off um I think it's amazingly
delicious I mean listen you're from
Venice and you're from New York you guys
know what you're doing when it comes to
Pizza
um
I'm gonna make you an offer
because I think there's really great
Synergy with my Bantam Bagels company so
Banning Bagels as you know uh started
with a stuffed Bagel ball and we got
into Starbucks Nationwide and then we
got into all the major grocery stores
freezer sections so that might be fun
for them to also be involved I'm going
to make you an offer I'm going to offer
you 125
000 but for 20 percent
Mamma Mia
[Music]
three sharks are out Michelle and Andrea
have an offer on the table from Lori for
their business the pizza cupcake but she
wants a bigger slice of the pie than the
five percent they came in offering I'm
gonna offer you 125
000 but for twenty percent
Oh Mamma Mia what we can bring to the
table is worth it I think that we can
help you to Skyrocket
I'll be and no it's not at all it's a
great offer I could have gone higher
actually
I mean you have an offer that's pretty
interesting yes you can travel in our
footsteps of every single distribution
channel that we have
Mark yeah guys I mean look if you want
to stay frozen
working with Bantam is the way to go
here's the thing right
selling Frozen is hard as Lori will tell
you as we've all done getting into space
is really hard getting it to deliver at
a reasonable price is really hard and so
for those Reasons I'm out but
congratulations guys thank you thank you
so much you're left with Lori and yes no
Lori 20 is too high for us I feel like
we've already
um gone through a lot of challenges we
found the co-packer which I think is the
most difficult part would you be willing
to do 125 000 for 10 percent
we we work really hard you really
wouldn't have to a lot of heavy lifting
we have investors on board who are also
really strategic we've been in
conversations with one of the largest
Distributors right now who wants us to
participate in their incubator program
to get us into retail I know the time
and effort and all of that that we will
put in I know you're going to do the
heavy lifting but I know that I will
also be opening so many doors for you if
I can get you into Starbucks Nationwide
that's 9 000 locations and then getting
into Kroger Albertsons it will be so
worth it to you I will not go to 10
percent
um my bottom line my bottom line would
be 15.
[Music]
would you do 125 000 for 12 and a half
percent Lori please you know what I love
you but listen you will love me 15.
I got it you want me to be invested in
you would you be willing to go up to a
hundred fifty thousand dollars for 15
percent
125 15
and I promise you you will not regret it
so Bantam Bagel you invested at a 1.1
million dollar valuation when they were
on the show and we have higher Revenue
than them we've also have figured out
our co-packer situation we also have you
know we're shipping through go Michelle
it's okay to stick to your girl I know
what you guys I completely I completely
understand it but here's something you
don't know you said you were learning
the road right what I know is is that
there's so much more for you to learn
the thing that is invaluable is learning
experience I had no Mentor I had to
figure out everything for myself but I
do know that somebody could come and sit
with me for just one day and I could
save them two years worth of time of
mistakes guys you sound like Shark Tank
you know your numbers I got that but you
also know something else about Shark
Tank when you only have one offer yes
you're skating on really thin ice yes
and now you have to make a decision
no I know
um
can I make one more counter offer you
can do whatever you like would you be
willing to do 125 000 for 12 and a half
percent and then two and a half in
advisory shares
Lori what do you say
you got it yeah
congratulations guys shark hug
congratulations thank you thank you very
much thank you so much make sure my
pizza is at my house by this weekend
Arriva their cheek Pizza Guys
we're living that American dream where
we have our family business we have our
Dream shark on our team and we can just
really start scaling and you know having
pizza cupcakes as a household brand
wait you're not subscribed to the Shark
Tank Youtube channel well then for that
reason I'm out
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