'Strange Grains' Made Millions WITHOUT A Credit Card | Shark Tank Aus | Shark Tank Global

Summary

Jenny, the owner of Strange Grains, a gluten-free bakery in Western Australia, seeks a $350,000 investment for 10% of her business. The bakery, born from Jenny's personal experience with Celiac disease, has gained significant traction. Despite challenges, her business has grown to $2 million in turnover. However, the sharks express concerns over scaling and brand integrity, with one shark offering $350,000 for 25% ownership. After considering the offer, Jenny negotiates with her family, ultimately agreeing to a 20% share, securing the partnership and the resources to expand nationwide.

Takeaways

• 😀 Jenny is seeking an investment of $350,000 for 10% of her gluten-free bakery business, Strange Grains.
• 😀 The bakery was founded due to Jenny's personal experience with Celiac disease and the lack of palatable gluten-free bread options.
• 😀 The business started as a market stall and quickly grew, necessitating the hiring of distributors to handle deliveries.
• 😀 Jenny values her company at $3.5 million based on her projected turnover of $2 million for the current financial year.
• 😀 The best-selling loaf costs $160 to make and is sold at a premium price between $13 and $15.
• 😀 Despite the success, Jenny has never used a credit card before this year, demonstrating a conservative financial approach.
• 😀 Four sharks opt out of the deal due to a lack of interest in the health food market or concerns over the niche focus of the business.
• 😀 Naomi, the last remaining investor, offers $350,000 for 25% of the business, proposing expansion into supermarkets but with concerns over brand integrity.
• 😀 Jenny is unsure whether expanding into large supermarket chains would dilute the artisan nature of her brand.
• 😀 Jenny consults with her family (sister and nephew) to discuss Naomi's offer, eventually negotiating a 20% stake for the investment.
• 😀 The final deal is made for a 20% stake, allowing Jenny to expand while maintaining a balance between growth and brand integrity.

Q & A

What is Jenny's business and where is it located?

Jenny owns a wholesale artisan bakery called Strange Grains Gluten-Free Bakery, located in Western Australia.

Why did Jenny start her bakery business?

Jenny started the bakery because she is a Celiac and couldn't find palatable gluten-free bread. After experimenting with recipes, she created one that worked for her and decided to start selling it at a market stall.

What is the amount of investment Jenny is seeking and what percentage of the business is she offering in return?

Jenny is seeking an investment of $350,000 for 10% of her business.

What is the cost to produce Jenny's bestselling loaf of bread, and what is its price point?

The cost to produce a large loaf of Jenny's bestselling bread is $160, and it is priced between $13 and $15.

What was the turnover of Jenny's business last year, and what is it expected to be this year?

The turnover last financial year was just under $1 million, and it is expected to be double that, around $2 million, this financial year.

Does Jenny have any debt in her business?

No, Jenny's business has no debt. She has paid for everything out of turnover.

How did Jenny fund her business initially?

Jenny initially sold $80,000 worth of shares in the business and has used some of her personal money to fund the business when necessary.

Why do some of the sharks decide not to invest in Jenny's business?

Some sharks decide not to invest because they are not interested in the health food market or feel that they can't add value to the business, particularly in terms of scaling it up.

What is the concern about scaling the brand, and why does Naomi make an offer to Jenny?

Naomi is concerned that scaling the brand into big supermarkets like Woolworths or Coles would dilute the brand's artisan appeal. However, Naomi offers Jenny $350,000 for 25% of the business to help scale it to a larger market while maintaining its quality.

What final deal does Jenny agree to, and what is the role of her family in the decision?

Jenny agrees to a deal with Naomi for $350,000 in exchange for 25% of her business. She consults with her family, including her sister and nephew, who help her decide to accept the offer but negotiate for 20% ownership instead.