The Sharks Love How Sustainable Cabinet Health Is | Shark Tank US | Shark Tank Global

Summary

Cabinet Health is a sustainable healthcare company aiming to tackle the growing plastic waste problem in the medicine industry. They have developed a compostable, refillable system for over-the-counter medicines, addressing the 190 billion single-use plastic bottles produced annually. With a focus on sustainability, their products offer better value while reducing waste. Despite currently being in a phase of heavy investment, Cabinet Health has attracted attention from investors like Kevin O'Leary and Lori Greiner, who ultimately offer to partner in a deal to support the company's mission of eliminating plastic waste in the healthcare sector.

Takeaways

• 😀 Cabinet Health is focused on reducing plastic waste in the healthcare industry by offering sustainable alternatives to single-use plastic medicine bottles.
• 😀 The company has developed the world’s first compostable and refillable system for over-the-counter medicines and supplements.
• 😀 Over 190 billion single-use plastic medicine bottles are produced annually, and only 3-7% are recycled, leading to severe environmental issues like ocean and landfill pollution.
• 😀 Consumers ingest about 260 grams of microplastics every year, roughly the size of a credit card, highlighting the health impact of plastic waste.
• 😀 Cabinet Health’s product system includes refillable, stackable bottles and compostable refill pouches that meet FDA standards, offering a sustainable solution to plastic waste.
• 😀 Their pricing model offers customers savings of 20-30% compared to traditional medicine brands while promoting sustainability.
• 😀 Customers buy a starter set for $10-$20, which includes a ‘forever bottle’, with refills sold at a lower cost to save on both packaging and medicine.
• 😀 Cabinet Health currently serves 700,000 customers, with 100,000 repeat buyers due to the value of sustainability and savings.
• 😀 The founders have strong backgrounds in healthcare and sustainability: one is a third-generation healthcare entrepreneur, and the other has a background in environmental policy and consulting.
• 😀 Cabinet Health is asking for a $500,000 investment for a 2.5% stake, implying a $20 million valuation, though their valuation is a point of contention among investors.
• 😀 The company projects $25 million in revenue in the next 12 months, but expects to be negative $10 million in net income, with break-even expected by Q3 of the following year.
• 😀 Despite some concerns about profitability and scalability, Cabinet Health has raised $13 million in funding and is positioned to expand its sustainable healthcare model.

Q & A

What problem is Cabinet Health trying to solve?

Cabinet Health aims to tackle the growing issue of plastic waste in the healthcare industry, specifically targeting the 190 billion single-use plastic medicine bottles produced annually, most of which end up in landfills, oceans, and even in our bodies as microplastics.

How does Cabinet Health's product system work?

Cabinet Health offers a sustainable and compostable product system that uses refillable, stackable glass bottles and compostable refill pouches. Customers purchase the glass bottle once, and then buy affordable, compostable refill pouches. This system helps reduce waste and offers savings on refills compared to brand-name medicines.

How much do customers save by using Cabinet Health's system?

Customers save about 20-30% on pricing when they use Cabinet Health’s refill system, as opposed to buying single-use plastic medicine bottles from brand-name companies.

What is the startup cost for customers to begin using Cabinet Health’s products?

The initial cost for customers to purchase the starter set, which includes a refillable glass bottle, ranges from $10 to $20.

How does Cabinet Health ensure the sustainability of its packaging?

Cabinet Health’s packaging is made from backyard compostable materials that meet FDA standards. The compostable refill pouches are designed to look like plastic but are actually made from sustainable materials, and the bottles are refillable for long-term use.

What is the company’s revenue projection for the next year?

Cabinet Health projects a revenue of $25 million in the next year. However, they expect a net income of negative $10 million and anticipate breaking even by October 2023.

What is Cabinet Health’s current customer base?

As of now, Cabinet Health has 700,000 customers, with 100,000 of those being repeat buyers who value sustainability and savings.

What investment is Cabinet Health seeking from the sharks?

Cabinet Health is seeking a $500,000 investment for a 2.5% stake in the company.

How does Cabinet Health's pricing compare to other over-the-counter medicines?

Cabinet Health’s products are priced lower than brand-name over-the-counter medicines. They offer the same quality at a better value, while customers save on refills due to the sustainable packaging system.

What is the main challenge in Cabinet Health's business model according to the sharks?

The sharks are concerned about the high level of risk in Cabinet Health’s business model, particularly regarding the significant investment needed for research and development, FDA approvals for packaging, and the long wait time for returns on investment.