OatMeals – Oatmeal Cafe
DEAL
EPISODE SUMMARY
đź•“ Air Date: December 2, 2018
Asking For:
$500,000 for 20%
Investor:
Lori Greiner
Deal:
$500,000 for 33,30%
PRODUCT SUMMARY
OatMeals is a build-your-own oatmeal café that serves steel-cut, hot oatmeal with a variety of toppings, offering modern twists on an old-fashioned favorite.
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Background Story
OatMeals, situated in Greenwich Village on West 3rd Street in Downtown New York City, is the brainchild of founder Sam Stephens. Sam’s journey to OatMeals started in the world of investment banking, where she worked as an executive assistant for several years. Despite her successful career, she harbored a deep passion for culinary arts, particularly a childhood connection to oatmeal, a comfort food that reminded her of the warmth of home. The pivotal moment came when Sam decided to pursue her culinary dream, attending culinary school while balancing a full-time job.
Armed with the necessary credentials, she transitioned from her career in finance to become a chef. With a vision to reimagine oatmeal and introduce it to a broader audience, Sam opened OatMeals in the heart of Greenwich Village. The concept behind OatMeals is to provide a unique and contemporary twist to the classic oatmeal experience. Sam’s inspiration comes not only from the nostalgia associated with oatmeal but also from the desire to make it a versatile and gourmet dish.
Recognizing the health benefits of oatmeal, Sam created a menu that goes beyond traditional toppings, offering nearly 80 choices, including unconventional options like truffle oil, Parmesan cheese, and bacon. OatMeals is not just a cafĂ©; it’s a manifestation of Sam’s culinary passion and her commitment to transforming a simple childhood staple into a gourmet delight. The cozy 380-square-foot space in Greenwich Village serves as the canvas for Sam’s culinary creativity, attracting attention not only for its delicious offerings but also for Sam’s unique journey from the world of finance to the culinary realm.
The Product
OatMeals offers a delightful and customizable oatmeal experience, allowing customers to craft their perfect bowl in a build-your-own oatmeal café setting. The heart of the menu is the steel-cut, hot oatmeal, served in three size options: baby bear (8 ounces), mama bear (12 ounces), and papa bear (16 ounces). Each bowl is a canvas for personalization, with customers choosing from a staggering array of nearly 80 toppings.
The menu boasts around 30 signature bowls curated by founder Sam Stephens, ranging from healthy to sweet and even savory options. Noteworthy combinations include the truffle risotto, featuring shaved Parmesan cheese, truffle oil, bacon, sea salt, and pepper, and the hot date, comprising bananas, pecans, dates, honey, house granola, and peanut butter. The offerings showcase a creative blend of flavors, appealing to diverse taste preferences.
OatMeals’ pricing structure is based on bowl size, starting at $4.25 for the baby bear, $5.25 for the mama bear, and $6.25 for the papa bear, which includes two toppings of the customer’s choice. Additional toppings can be added for either 50 or 25 cents each, allowing for a personalized and budget-friendly experience.
How It Went
The company’s position before Shark Tank
OatMeals has demonstrated commendable performance over its six years of operation, carving a niche in the competitive culinary landscape. The company’s financial health is robust, with a cumulative revenue of $2.5 million over this period. However, a closer look at the profit margins reveals a net profit of $45,000 in the previous year, prompting scrutiny and concern among potential investors. Sam Stephens, the founder, has managed to secure a significant partnership with Quaker Oats, positioning herself as a spokesperson for the brand.
This collaboration adds an additional revenue stream, with Sam earning $60,000 annually from this endorsement deal. Such partnerships not only contribute to the company’s financial stability but also enhance its brand recognition. In terms of customer demographics, OatMeals caters to a diverse audience drawn to the unique and customizable oatmeal offerings. The cafe’s location in Greenwich Village, a vibrant and culturally rich neighborhood, has played a pivotal role in attracting a mix of locals, tourists, and food enthusiasts seeking a novel culinary experience.
OatMeals has primarily been self-funded, with Sam’s dedication and passion driving the initial investment. However, the company’s current financial structure may benefit from additional capital injection, as evidenced by Sam’s seeking a $500,000 investment on Shark Tank. The profitability of the venture has been modest, with a net profit of $45,000 last year, and Sam’s personal income from the business is similarly constrained, indicating potential challenges in sustaining the business in an expensive city like New York. The company’s structure centers around the Greenwich Village store, a 380-square-foot space. Sam envisions expanding OatMeals across America, with a focus on potential locations in Midtown Manhattan.
The Negotiations:
The negotiations for OatMeals on Shark Tank showcased a mix of enthusiasm, strategic thinking, and a divergence in the Sharks’ visions for the company’s future. Sam Stephens entered the Tank seeking a $500,000 investment for a 20% stake in her oatmeal cafĂ© business. Lori Greiner and Barbara Corcoran were the main Sharks who expressed interest and presented competing offers. Lori, impressed by the potential of OatMeals, offered $500,000 for a slightly higher equity stake of 33.3%. Her proposal was contingent on OatMeals expanding into retail and packaging, aiming to bring the unique oatmeal experience to a broader market.
This offer reflected Lori’s success with Bantam Bagels, emphasizing her ability to secure lucrative distribution deals, and her business acumen. Barbara, on the other hand, proposed a different avenue for growth. She envisioned a partnership focused on a cart business that would bring OatMeals to various locations, similar to her success with Cousins Maine Lobster. Barbara sought 50% equity for a $500,000 investment, emphasizing the potential for significant growth and citing her ability to think differently about businesses.
Ultimately, Sam chose to accept Lori’s offer, viewing it as a safer and more aligned path for OatMeals. The tension between Lori and Barbara escalated post-decision, with Barbara expressing dissatisfaction with Lori’s perceived advantage. The negotiations revealed the Sharks’ diverse perspectives on the potential trajectory of OatMeals, emphasizing the importance of aligning visions and strategies in securing a deal on Shark Tank.
