Barbara & Lori FIGHT For A Deal With Oatmeals! | Shark Tank US | Shark Tank Global

Summary

Sam Stevens, founder of Oatmeals, pitches her unique oatmeal café to the Sharks, seeking a $500,000 investment for 20% equity. Oatmeals offers build-your-own oatmeal bowls with diverse, creative toppings, including savory options. Sam has one store in New York and wants to expand. Despite low profits, her passion and product creativity attract two offers: Lori offers $500,000 for 33.3%, contingent on retail packaging, while Barbara offers the same for 50% of a mobile cart business. Sam chooses Lori's deal, aiming to scale her brand through retail channels.

Takeaways

• 🍲 The business, Oatmeals, is a build-your-own oatmeal café offering steel-cut oatmeal with 80 toppings and 30 signature bowls, including savory options like parmesan and truffle oil.
• 💼 Sam Stevens, the founder, is seeking a $500,000 investment for 20% of the business, with a vision to expand Oatmeals across the U.S., starting in New York City.
• 🍴 The café operates in a single location in Greenwich Village, New York, with a small footprint of 380 square feet.
• 📈 Oatmeals has been operational for six years, generating $2.5 million in total revenue, with $500,000 projected for the current year.
• 💰 Although gross sales last year were $470,000, the net profit was only $45,000, making profitability a concern for the investors.
• 🍳 Oatmeals offers bowls in three sizes (Baby, Mama, and Papa Bear), with prices starting at $4.25 for a small bowl and going up depending on toppings.
• 🎯 Investor Lori Greiner offered $500,000 for 33.3%, contingent on packaging and retailing the oatmeal for distribution through outlets like Starbucks.
• 🚚 Barbara Corcoran proposed a different model, offering $500,000 for 50% of a new cart business focused on serving oatmeal in the morning and risotto for lunch.
• 🤔 Despite initial interest in Barbara's offer, Sam chose to partner with Lori, citing her success with a similar venture, Bantam Bagels, as the deciding factor.
• 📦 A key challenge highlighted by investors was the public's perception of oatmeal as a breakfast-only food, which could limit growth unless the product is repackaged for wider distribution.

Q & A

What is the business idea presented by Sam Stevens?

Sam Stevens presents 'OatMeals,' a build-your-own oatmeal café that serves steel-cut oatmeal with nearly 80 toppings and 30 signature bowls, ranging from healthy to sweet and savory.

What kind of toppings does OatMeals offer?

OatMeals offers toppings like parmesan cheese, truffle oil, poached eggs, bacon, bananas, chia seeds, dark chocolate chips, and many more, with nearly 80 choices.

How does Sam want to expand OatMeals?

Sam plans to expand OatMeals by opening more locations, starting in New York City, and potentially branching out to Midtown and other areas.

How long has the OatMeals café been in operation, and how has it performed financially?

OatMeals has been in operation for six years, and Sam has made $2.5 million in sales over that period. In the current year, she is on track to make $500,000.

What sizes and price points does OatMeals offer?

OatMeals bowls come in three sizes: Baby Bear (8 oz) at $4.25, Mama Bear (12 oz) at $5.25, and Papa Bear (16 oz) at $6.25. These prices include two toppings, with additional toppings costing 50 or 25 cents.

What role does Sam have with Quaker Oats, and how much does she earn from it?

Sam is a spokesperson for Quaker Oats, and she earns $60,000 annually from her contract with them.

What challenges did the sharks identify with the business model?

The sharks were concerned about the scalability of the business, the low profit margins, and the difficulty of changing consumer perceptions about oatmeal being primarily a breakfast food.

What offers did Sam receive from the sharks?

Lori offered $500,000 for 33.3%, contingent on Sam packaging her oatmeal products for retail, while Barbara offered $500,000 for 50% of a new cart business to serve oatmeal in the mornings and savory options like risotto for lunch.

Why did Sam ultimately choose Lori's offer over Barbara's?

Sam chose Lori's offer because of Lori's track record of success with Bantam Bagels and her belief in expanding the business through retail distribution, which aligned with Sam's goals for growth.

What was Barbara's concern after Sam accepted Lori's offer?

Barbara expressed concern that Sam had chosen the wrong path by focusing on packaged oatmeal, which might not freeze well or retain its quality, suggesting that Lori's offer wasn't the best long-term strategy.