Sanaía Applesauce
DEAL
EPISODE SUMMARY
🕓 Air Date: October 14, 2018
Investor:
Mark Cuban
Deal:
$0 for 25%
PRODUCT SUMMARY
Sanaía Applesauce offers a sophisticated take on traditional applesauce, targeting adults with six island-inspired flavors, including baked apple wedges in each jar.
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Background Story
Sanaía Applesauce, the brainchild of Keisha Jeremie, introduces a sophisticated twist to the conventional applesauce market. As the global head of HR for News Corporation, Keisha brings over six years of experience in a corporate leadership role to the table. The inception of Sanaía Applesauce was spurred by Keisha’s keen observation of a significant gap in the applesauce industry, one that largely ignored the adult demographic. The market, she noted, predominantly catered to children and seniors, leaving a lucrative segment untapped. Keisha, a self-proclaimed grown woman with a discerning taste, decided to take matters into her own hands.
Driven by a desire to elevate the applesauce experience for adults, Keisha curated six island-inspired flavors using organic green apples. Her innovation didn’t stop there; she introduced a distinctive element by including baked apple wedges in each jar, enhancing both flavor and texture. This attention to detail aimed to break away from the conventional offerings characterized by baby food flavors, consistency, and the now-common pouch packaging.
The journey of Sanaía Applesauce officially began with a six-month direct-to-consumer test pilot, launched in July. Keisha’s strategic approach involved participating in the IDDBA trade show, where the company garnered significant interest from major retailers, including Starbucks, Whole Foods, Sam’s Club, BJ’s, and Kroger. Keisha’s venture reflects not only her entrepreneurial spirit but also her dedication to reshaping an industry to meet the preferences of an overlooked consumer segment.
The Product
Sanaía Applesauce presents a refined take on the traditional snack, targeting adults with a range of six island-inspired flavors crafted from organic green apples. What sets this product apart is the inclusion of baked apple wedges in each jar, adding a unique texture and taste experience. The flavors, such as guava and unsweetened variations, cater to a more discerning palate, moving away from the standard baby food options dominating the market.
Available in glass jars, the product can be conveniently purchased as a four-pack on Amazon Prime. Priced at $3.99 per jar with a cost of $4.12, Sanaía Applesauce positions itself as a premium offering, distinguishing it from traditional brands. The glass jar packaging not only reflects a commitment to sustainability but also enhances the overall product presentation.
Consumers seeking a plant-based and vegan snack option can benefit from Sanaía Applesauce, especially those looking to transition away from dairy. The product’s versatility extends beyond being a standalone snack; it can also be used in baking as a vegan alternative to eggs. With a focus on elevating flavors, textures, and packaging, Sanaía Applesauce aims to redefine the applesauce category for adults, drawing parallels to the transformative success of Chobani in the yogurt industry.
How It Went
The company’s position before Shark Tank
Sanaía Applesauce, at the time of the “Shark Tank” pitch, showcased a promising trajectory in terms of market interest and partnerships. The company had successfully completed a six-month test pilot, amassing $40,000 in sales and validating its product in the direct-to-consumer market. During this period, Sanaía Applesauce had strategically participated in the IDDBA trade show, generating substantial interest from major players in the retail industry.
Potential partners included renowned entities like Starbucks, Whole Foods, Sam’s Club, BJ’s, and Kroger, all expressing interest and recognizing the unique positioning of the product in the applesauce category. Although firm orders were not secured at the time of the pitch, the founder, Keisha Jeremie, conveyed confirmed interest from these key retailers, suggesting a positive outlook for future collaborations. Keisha disclosed a commitment from Whole Foods for a test in one of their stores, indicating a step towards retail penetration. Furthermore, her emphasis on gaining interest from major buyers at the IDDBA trade show highlighted the potential for significant revenue growth. The founder, however, mentioned being in the early stages of securing firm orders from these partners.
In terms of funding, Keisha revealed that the company was currently self-funded, with an investment of $250,000 from her own resources. This demonstrated a high level of personal commitment and belief in the market potential of Sanaía Applesauce. The self-funding approach reflected Keisha’s dedication to the venture, even while working as the global head of HR for News Corporation. The company’s financial health and specific profit and loss figures were not explicitly disclosed during the pitch. However, Keisha shared that she had set aside close to $500,000 for the business, indicating a considerable investment and available capital to support ongoing operations. The exact structure of the company was not detailed, but Keisha mentioned having a Chief Operating Officer (COO) who oversaw the production plant, showcasing a commitment to building a capable team.
The Negotiations:
The negotiations for Sanaía Applesauce on “Shark Tank” unfolded with an initial ask of $150,000 for 15% equity from founder Keisha Jeremie. The pitch garnered interest, particularly from Mark Cuban, who made the sole offer. Cuban proposed an investment of $150,000 but sought a larger equity stake of 25%, emphasizing the perceived risk associated with the venture. Despite the high equity demand, Keisha accepted Cuban’s offer, expressing her gratitude and enthusiasm for securing a deal.
Before the deal was sealed, other Sharks shared their concerns and reasons for opting out. Barbara Corcoran expressed interest in the gourmet applesauce but demanded a substantial equity stake. Other Sharks, including Kevin O’Leary, Robert Herjavec, and Lori Greiner, cited reservations about the business model, market potential, or the founder’s commitment, leading them to decline participation. Throughout the negotiation, Cuban’s offer stood out as the sole lifeline for Sanaía Applesauce. Keisha’s willingness to accept a higher equity share reflected her recognition of the value that Mark Cuban’s involvement could bring to the table, considering his extensive business experience and connections.
The negotiation also delved into Keisha’s part-time involvement in the venture and her decision to maintain her position as the global head of HR for News Corporation. Mark Cuban raised concerns about her commitment, highlighting that entrepreneurs who succeed often dive in full-time. However, Keisha explained that she had built a dedicated team to manage day-to-day operations, mitigating some of the risks associated with her part-time involvement. The emotional climax of the negotiation occurred when Keisha became visibly moved and teary-eyed. She revealed that Sanaía Applesauce represented the first thing she had ever done for herself, underscoring the personal significance of the venture. This moment seemed to resonate with the Sharks, adding a human element to the negotiation.
