Nui Low Sugar Diet Cookies
DEAL
EPISODE SUMMARY
🕓 Air Date: November 18, 2018
Asking For:
$300,000 for 10%
Investor:
Alex Rodriguez
Deal:
$300,000 for 25%
PRODUCT SUMMARY
Nui offers a low-carb, keto-friendly cookie with only one gram of sugar per serving, made from a blend of almonds, coconut oil, and grass-fed butter.
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Background Story
Nui, founded by Kristoffer and Victor, has its roots in the founders’ personal health journey and entrepreneurial spirit. The duo embraced a low-carb ketogenic diet that yielded remarkable results, with Victor shedding over 40 pounds and Kristoffer experiencing increased energy. However, the challenge arose when confronted with persistent sugar cravings in a world saturated with sugary treats. Founded in Kristoffer’s mom’s kitchen, Nui emerged as a response to these cravings. Despite lacking any prior baking experience, the duo set out to create a solution that would allow individuals to indulge in the pleasure of cookies without compromising on their commitment to a low-sugar lifestyle.
The result was Nui, a brand dedicated to making saying “no” to sugar not only easy but also delicious and fun. Kristoffer’s background reflects a lifelong entrepreneurial spirit. The son of Mexican immigrants, he engaged in entrepreneurial endeavors from an early age, from selling individual candy pieces door-to-door in kindergarten to starting a lawn-mowing company in junior high. As the first person in his family to graduate from college, Kristoffer’s journey embodies resilience and determination.
Victor’s background is similarly rooted in hard work and perseverance. His parents, immigrants from the Philippines, instilled in him the value of hard work, with his father working multiple jobs to provide for the family. These shared immigrant backgrounds fostered a deep appreciation for the opportunities afforded by their adopted country, ultimately fueling their drive to create a product that aligns with a healthy lifestyle. The birth of Nui reflects not only the founders’ commitment to health but also their shared immigrant experiences and entrepreneurial drive. Through their unique backgrounds and dedication, Kristoffer and Victor crafted Nui as a testament to the belief that a tasty and nutritious cookie can coexist with a low-carb, keto-friendly lifestyle.
The Product
Nui’s flagship product is a low-carb, keto-friendly cookie that redefines indulgence for health-conscious consumers. Crafted from a harmonious blend of almonds, coconut oil, and grass-fed butter, the Nui cookie stands out for its delicious taste and nutritional benefits. With a commitment to making saying “no” to sugar easy and enjoyable, each Nui cookie contains only one gram of sugar, making it an ideal treat for those adhering to a low-carb lifestyle.
The proprietary blend of natural sweeteners, including monk fruit and erythritol, imparts a sweet flavor without the guilt associated with traditional sugar consumption. Beyond the delightful taste, Nui cookies are designed to be a nutritious snack, boasting six grams of protein per serving. This makes them a satisfying and guilt-free option for those seeking a tasty treat without compromising their dietary goals.
Nui cookies were available for purchase through their website, providing a convenient and direct-to-consumer model. Each box, priced at $29.95, contains 20 cookies, offering a cost-effective option for customers dedicated to a low-carb lifestyle. Additionally, the founders have plans to expand their reach by launching on Amazon, anticipating a further boost in sales and accessibility. With a commitment to achieving a 75% gross margin, Nui aims to make its delectable cookies not just a treat but a staple for health-conscious consumers seeking a flavorful and wholesome alternative to traditional sugary snacks.
How It Went
The company’s position before Shark Tank
Over the last 12 months, Nui has demonstrated robust performance and growth, establishing itself as a prominent player in the low-carb, keto-friendly snack market. The company has achieved substantial sales, boasting a remarkable $1.1 million in revenue through their direct-to-consumer website. This impressive figure underscores the strong demand for their unique product offering. Nui’s strategic decision to transition to a co-packer reflects a commitment to scalability and meeting the increasing demand for their cookies. This move, while addressing operational challenges, also positions the company for future expansion and efficiency in production.
The founders have indicated that their sales strategy primarily relies on social media outreach, targeting influencers in the burgeoning ketogenic space, a strategy that has contributed to their rapid growth. The forthcoming launch on Amazon is expected to be a pivotal move in broadening Nui’s market reach, potentially doubling or tripling their sales volume. While their current sales are exclusively through their website, this expansion to a popular online marketplace aligns with their goal of reaching a wider audience.
As for the financials, Nui has achieved a commendable profit, reporting $35,000 in net earnings over the last 12 months. The company sells its cookies at $29.95 per box, with each box containing 20 cookies. Production costs, depending on the flavor, range between $11 and $13 per box. The founders aim to enhance profitability by striving for a 75% gross margin, a goal that involves hiring operational staff to strengthen relationships with supply and manufacturing partners. In terms of funding, Nui’s current capital structure and sources are not explicitly outlined in the provided transcript. However, the founders acknowledged the challenge of maintaining sufficient cash flow to meet inventory demands and reduce production costs.
The Negotiations:
The negotiations for Nui on Shark Tank were dynamic, featuring offers and counteroffers from multiple sharks, each vying for a stake in the burgeoning low-carb, keto-friendly cookie business. The initial pitch by Kristoffer and Victor sought $300,000 for a 10% equity stake. The negotiations kicked off with interest from three sharks: Kevin O’Leary, Barbara Corcoran, and Alex Rodriguez. Kevin proposed a $300,000 investment for a 2.5% equity stake with a royalty structure. Barbara offered a $150,000 investment plus a $150,000 line of credit for 15% equity, along with a royalty. Alex Rodriguez put forth a $300,000 offer for a substantial 25% equity stake.
As negotiations unfolded, Kevin O’Leary refined his offer, suggesting a dollar royalty per sale until he recouped his $300,000 investment, at which point it would reduce to 45 cents in perpetuity. Barbara maintained her offer, while Alex Rodriguez persisted with his $300,000 offer for 25% equity. Mark Cuban and Lori Greiner opted out early in the negotiations, citing either valuation concerns or strategic misalignment.
A pivotal moment emerged when Lori and Mark dropped out, leaving the decision between Kevin, Barbara, and Alex. Despite tempting offers from Kevin and Barbara, the founders were swayed by Alex Rodriguez’s connection to their story and vision for growth. In the end, they accepted Rodriguez’s offer of $300,000 for a 25% equity stake, marking a successful negotiation that aligned with the founders’ goals and the strategic vision of the former professional baseball player. The negotiation showcased the delicate balance between equity, capital infusion, and strategic partnerships as Nui secured a deal that promised not only financial support but also the potential for significant growth and exposure in the health-conscious snack market.
