Shark Tank US | Modern Picnic Entrepreneur Packs Lunch For The Sharks

Summary

Ali Kinety, founder of Modern Picnic, pitches her stylish, sustainable lunchboxes to the Sharks, seeking $400,000 for 6.5% equity. The brand aims to transform the outdated lunchbox market with vegan leather, functional, and chic designs. Despite strong sales, a diverse product range, and impressive margins, the company is struggling with high marketing expenses, which hinder profitability. While Ali’s growth story and determination impress, the Sharks are concerned about her excessive spending on brand marketing and customer acquisition, leading to all of them ultimately passing on the deal.

Takeaways

• 😀 Ally Kinety, founder of Modern Picnic, is seeking $400,000 for 6.5% equity in her company.
• 😀 Modern Picnic offers fashionable, insulated vegan leather lunch boxes designed for young professionals.
• 😀 The company started in 2018 with the goal to transform the outdated lunchbox industry, offering stylish alternatives to plastic and paper bags.
• 😀 Modern Picnic's product line includes different shapes and sizes, such as the 'luncher,' 'snacker,' and 'toad,' along with newly launched food containers.
• 😀 The company's average order value (AOV) is $155, positioning itself as an 'attainable luxury' brand.
• 😀 Modern Picnic's gross margins are strong, averaging around 60%, but the company is currently not profitable due to high marketing costs.
• 😀 Approximately 25% of Modern Picnic's revenue is spent on digital marketing, with the total marketing spend making up about 50% of their gross margin.
• 😀 The company has sold over 40,000 units, generating just under $6 million in total sales to date, with $2 million projected for the current year.
• 😀 Ally raised $900,000 in a seed round after cold-emailing 1,300 investors, and is currently raising an additional $900,000.
• 😀 Investors express concern over the company's excessive spending on marketing, which they believe is hindering profitability despite strong product margins.
• 😀 Several investors, including Mark Cuban, are out due to concerns over the sustainability of the brand's marketing-heavy strategy and profitability challenges.

Q & A

What is the main problem that Ali Kinety's company, Modern Picnic, is trying to solve?

Modern Picnic addresses the issue of outdated and unprofessional lunchboxes, offering stylish, functional, and sustainable lunch solutions for professionals. The brand seeks to replace traditional lunch packaging like brown paper bags and plastic bags with fashionable insulated vegan leather lunch boxes.

How did Ali Kinety come up with the idea for Modern Picnic?

Ali Kinety, as a young professional in New York City, found that the available lunchbox options were either unprofessional or unsustainable. She decided to create a more stylish and functional solution that could help people carry their lunch in a fashionable way while remaining practical.

What was the first product launched by Modern Picnic, and what features did it offer?

Modern Picnic launched with the 'luncher,' a fashionable, insulated vegan leather lunch box. It was designed to be chic, functional, and clean, with an easily wipeable interior to protect against everyday spills.

What other products has Modern Picnic developed since its launch?

Since launching the luncher, Modern Picnic has expanded its range to include different shapes and sizes of lunchboxes, such as the 'toad' and 'backpack' for larger meal prep needs, the 'snacker' for smaller portions, and newly launched food containers designed to fit inside the lunchboxes.

What is Modern Picnic's target market, and how do they approach marketing their products?

Modern Picnic targets professionals looking for stylish, functional lunch solutions. The company uses a diversified marketing mix that includes affiliate marketing, TikTok, email, SMS, and an optimized website to acquire customers.

How has Modern Picnic performed in terms of sales and growth?

Modern Picnic has achieved just under $6 million in cumulative sales, with over 40,000 units sold. The company is projected to make just over $2 million in sales this year, although it is expected to lose under $100,000 in profit.

What percentage of Modern Picnic's revenue comes from online sales, and what other sales channels have they explored?

Currently, 70% of Modern Picnic's revenue comes from e-commerce, with the remaining 30% from wholesale. The company started selling through wholesale in 2023 and is now present in retailers like Saks, The Container Store, and Bloomingdale's.

Why are the company's marketing expenses a point of concern for the investors?

Investors are concerned about Modern Picnic's high marketing expenses, which account for around 50% of the company's revenue. Despite good margins, the company's heavy spending on customer acquisition is causing a lack of profitability.

How much funding has Modern Picnic raised so far, and what challenges did Ali Kinety face in raising capital?

Ali Kinety raised $900,000 in seed funding after cold outreaching to 1,300 investors. She then raised an additional $900,000 for a second seed round, which allowed the company to scale despite having no prior experience or connections.

What advice did the investors give Ali Kinety about the future of Modern Picnic?

The investors advised Ali Kinety to reduce her spending on brand and digital marketing and focus on building a profitable business model. They also suggested she prioritize profitability over aggressive growth and be more disciplined in her spending.