Oatmeals Before Shark Tank
Oatmeal is one of the most popular and healthy meals on the planet. Sam Stephens grew up eating it and wanted to share it with the rest of the world because of the joys she and others experience when eating oatmeal. Oatmeal reminds us of the comforts of being a child, being home, and makes people feel good overall.
Sam Stephens started the Oatmeals Cafe where people could create their own delicious oatmeal dishes using the ingredients that she provided. At the cafe, people could get steel-cut hot oatmeal with over 81 toppings. Parmesan Cheese, truffle oil, poached eggs, and bacon are some of the wonderful toppings you would get when you pay a visit to the Oatmeal Cafe.
Sam also provided 30 bowls of different oatmeal and this is what made her cafe stand out. Customers could get anything from sweet to savory oatmeal at her cafe. Before she started her place, Sam worked as an executive assistant for many years. She wanted to fulfill her dream and so she started her cafe Oatmeals as she took culinary classes.
The Oatmeal Cafe successfully ran for 6 years in downtown New York and Sam wanted it to expand and have cafes all across the city. Unfortunately, its profit margins were too low for it to expand and so she applied to be on Shark Tank to get an investor who could help her grow. Her application went through and she was invited to be on the 7th episode of the 10th season.
Oatmeals on Shark Tank
When Sam Stephens went onto Shark Tank, she sought $500,000 for 20% of her company giving Oatmeals a valuation of $2,500,000. She started her pitch telling the sharks about the history of oatmeal as a meal. She then showed them the varieties of oatmeal dishes that she made and served the sharks some samples.
The sharks really liked her meals. Daymond said that he was not a fan of oatmeal but her meals were delicious. Kevin then asked for the nutritional values of the Oatmeal servings. Sam said that the oatmeal was served in three sizes; baby bear, mama bear, and papa bear which weighed 8, 12, and 16 ounces respectively. The baby bear plain had 110 calories, the mama bear had 115 calories, and the papa bear had about 180 calories.
Barbara then asked for the prices. Sam said that the baby bear prices started at $4.25, the mama bear prices started at $5.25, and the papa bear prices started at $6.25. These prices included 2 toppings of a customer’s choice. An additional topping would cost 50 cents or 25 cents depending on the type.
Lori praised Sam’s dishes for being so delicious and yet so different. Kevin then asked Sam for her business plan. He thought that Oatmeals was a store that served oatmeal dishes but he was not certain. Sam confirmed that it was and she showed the sharks a picture of her store.
Kevin thought her store was very small and he couldn’t believe that she wanted them to invest in her single, small store. However, Sam said that she wanted to open more stores in New York where she was located. Barbara then asked her how she started.
Sam said that she used to work in investment as an executive assistant. She had a business idea but she didn’t know how to make it happen. She then went to culinary school for 6 years to make it happen. Barbara then asked if the Oatmeals Cafe had been profitable in the time it had been in operation.
Sam said that in the 6 years that it had been in operation it had made $2,500,000. Kevin then asked her how much she had made that year and she said that she was going to make $500,000 that year. Kevin then asked her how big her store was. Sam said that the store was 380 square feet. Barbara then asked Sam what her profits had been for the previous year.
Sam said that her revenue in the past year had been $470,000. Her net profit that year was $45,000 and that was after she paid herself. Barbara then asked her how much she had paid herself. Sam said that she had paid herself around $40,000 that year.
Barbara asked Sam how she was sustaining herself in New York earning only $40,000. Sam said that oatmeal was the only thing that she could eat. Sam then said that she was approached by Pepsi Quaker, which makes Quaker Oats, to be their spokesperson which she accepted. This made her a spokesperson for Quaker Oats.
Sam said that she got a lot of press organically just from being a spokesperson. She then said that she would be paid $60,000 that year from the job which was more than what she would earn in profit. Lori asked Sam if she had considered packing her meals so that they could be sold in frozen food sections in shops. Sam said that she had considered it.
Kevin then left. He said that he didn’t think that people would eat oatmeal 3 times a day so there wasn’t much of a market. Kevin also thought that her revenue was too little for her to ever expand. These problems made him conclude that the company was overvalued and so he withdrew.
Daymond followed suit and left because he thought it would take too long to get his money back. By his estimates, it would take 12 years to get his money back if she was making $500,000 annually in net revenue. After Daymond left, Lori told Sam that Oatmeals had a location problem but she had worked with a food company before and it partnered with Starbucks which made a major difference in its success. She wanted to replicate that model with Sam.
Lori then asked Sam if she was willing to package and sell her meals in retail. Sam said that she was. Lori then offered Sam the $500,000 that she asked for but she wanted 33.3% of the company. She said that the offer was contingent on whether Sam would figure out the packaging or not.
Barbara believed that Sam could have a very successful business if she sold it on a cart. Barbara then offered Sam $500,000 but only if she could get 50% of the cart business she wanted to start. Sam then accepted Lori’s offer.
Sam said that she took Lori’s offer because she had seen the success that Lori had with Bantam bagels. She did not think that she would have any regrets the next day. She had gone onto Shark Tank wanting a deal with Barbara but Lori’s offer was really great.
Oatmeals Now in – 2024 The After Shark Tank Update
The deal with Lori Greiner did not finalize and so Sam had to continue doing business by herself. Oatmeals launched its website that offered online delivery. Oatmeals also opened a second branch on the subway. Oatmeals also partnered with Grubhub, Seamless, Ubereats, Caviar, Doordash, and Mealpass.
Oatmeals started several social media pages which have got a large number of followers. On Facebook, it has more than 7,800 followers. On Instagram, it has more than 23,000 followers. Quaker Oats amassed more than 1,200 followers on Twitter but less than 500 followers on Pinterest.
The Covid-19 pandemic was a major hit for Oatmeals and it had to shut down its retail outlets. It has not opened them since then. It only stocks one item on its website and that is its signature granola. All signs indicate that the decrease in production is permanent.
Although Sam (Samantha) had a very high sales volume, she was making very little profit from her business. A low profit margin during good times would have meant that when Covid-19 hit the area she did not have enough capital to sustain the business. Problems such as paying rent while the business is still closed would have consumed all her capital and made it impossible for her to reopen.
Hopefully, Oatmeals’ go-slow is only temporary and she will restart the business sometime in the future.