Atlas Monroe – Plant-Based Cuisine
NO DEAL
EPISODE SUMMARY
🕓 Air Date: October 6, 2019
Asking For:
$500,000 for 10%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
Atlas Monroe offers a plant-based, vegan alternative to traditional fried chicken, boasting an extra-crispy texture and organic, non-GMO ingredients.
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Background Story
Deborah and Jonathan Torres, hailing from San Jose, California, presented their company, Atlas Monroe, on Shark Tank. They sought $500,000 for 10% of their business, showcasing a surprising twist – their signature product, extra-crispy fried chicken, was entirely plant-based and vegan. The founders invited the Sharks to taste their chicken, emphasizing its taste and texture. The revelation that it was not real chicken but 100% vegan piqued the Sharks’ interest.
The Torres family transitioned to a raw, vegan, and organic diet for 90 days due to Deborah’s father’s type 2 diabetes diagnosis. The family, craving more satisfying options, experimented in the kitchen and developed a range of plant-based dishes, including the now-famous Atlas Monroe vegan fried chicken. The success of their culinary creations, particularly the vegan fried chicken, led to the formation of Atlas Monroe.
The founders expressed a commitment to organic, plant-based, and natural ingredients. Despite facing challenges, including the father’s health condition, the family’s dedication to a healthier lifestyle and love for delicious food fueled the creation of Atlas Monroe.
The Product
Atlas Monroe specializes in crafting 100% vegan fried chicken using a proprietary recipe that includes organic wheat as the base for the batter. The founders, Deborah and Jonathan Torres, personally cook the entire product from start to finish. During the pitch, they highlighted the crispy texture and enticing taste of their vegan fried chicken.
The product is positioned as a healthier alternative to traditional fried chicken, addressing concerns related to antibiotics and steroids found in meat. While the specific recipe remains proprietary, the Torres family assures that every component, including the batter, is original and not sourced from external suppliers.
The vegan fried chicken has gained popularity, earning recognition at events like the National Fried Chicken Festival, where Atlas Monroe was named Best Fried Chicken by Time magazine’s “Extra Crispy.”
The founders claimed to have influencers and celebrities endorsing their products without any paid promotions. Atlas Monroe’s distribution strategy started with festivals, where they experienced significant demand, leading to the decision to ship their product nationwide.
The product is shipped frozen, and the company has over 20 wholesale customers, primarily restaurants, waiting to carry their vegan fried chicken. The pricing for a six-piece set is $23, and the average shipping cost is $21.
How It Went
The company’s position before Shark Tank
In terms of performance, Atlas Monroe reported $60,000 in total sales for the year, with a net profit of $73,000 and gross revenue of $76,000. The founders explained that a significant portion of the costs was allocated to shipping expenses. The company has managed to achieve a 60% profit margin. The founders acknowledged that they were experiencing challenges in fulfilling orders due to limitations in space and storage.
However, they emphasized that they had a strong following, including celebrities and influencers who endorsed their product. Atlas Monroe claimed to have been the first and only vegan company invited to the National Fried Chicken Festival, where they gained considerable attention and earned the title of Best Fried Chicken by Time magazine’s “Extra Crispy.”
The company also disclosed ongoing discussions with a well-known international fast-food restaurant chain that had expressed interest in their vegan fried chicken. Despite the positive attention and potential opportunities, the founders faced criticism from the Sharks regarding the clarity of their financial presentation, particularly the confusion around sales, net profit, and gross revenue figures.
The Negotiations:
The Sharks were initially intrigued by Atlas Monroe’s vegan fried chicken, with a taste that fooled them into believing it was real chicken. Deborah and Jonathan Torres sought $500,000 for 10% of their business. Kevin O’Leary expressed his love for the product but found the valuation ludicrous, stating that he would need 120% of the company for the investment. Lori Greiner questioned the practicality of the numbers presented, expressing concern about the clarity of the financials.
When asked about the total sales, the founders provided a breakdown, stating $60,000 in product sales and $73,000 net profit after factoring in shipping revenue. The confusion around the figures led to further skepticism from the Sharks. Mark Cuban and Rohan Oza made an initial offer of $1 million for 30% equity. However, they retracted the offer when the founders declined, expressing concerns about the operational setup and the practicality of Atlas Monroe’s numbers.
Mark Cuban and Rohan Oza then returned with a revised offer of $1 million for the entire business, including the recipes. The offer included a 10% royalty on future sales, and Mark and Rohan committed to handling all infrastructure investments. Despite the lucrative offer, the founders declined, expressing a preference for their original offer and their determination to maintain control and ownership of their business. The decision left the Sharks stunned, as the founders walked away from a $1 million deal, confident in their ability to grow the business on their terms.
