The Basics
- Company: Veggie Mama
- Owners: Teresa and Robert Fraijo
- Asking Price: $75,000 for 15% equity
- Final Deal: $75,000 for 20% equity
- Shark Who Took The Bait: Mark Cuban
- Season/Episode: Season 5, Episode 5
Veggie Mama Before Shark Tank
Teresa and Robert Fraijo are a married couple with two young children. They’re heading to the Shark Tank from Laguna Niguel California, and hoping the sharks will bite at their healthy alternative to frozen dessert pops.
Like most parents, the couple has had a hard time getting their kids to eat a healthy, balanced diet – their kids do not like vegetables. Teresa found that if she could sneak vegetables into fruit smoothies, the kids would drink them up and be none the wiser. Experimenting further, she turned the smoothies into frozen pops and had her “aha” moment when she realized she could turn that idea into a business.
Her husband agreed, and he quit law school to help with the project. The Fraios were so invested in this new enterprise that they liquidated almost all of their assets – Teresa even sold the diamond from her wedding ring – and borrowed the rest from friends and family.
Veggie Mama On Shark Tank
Teresa and Robert approached the stage, introduced themselves, and began to pitch their solution for dealing with picky eaters – kids and husbands. Teresa told the sharks she had figured out a way to sneak nutrients into fun and tasty frozen pops that were gluten-free, dairy-free, vegan-friendly and had no artificial flavors, colors, or preservatives. The pops were sweetened with all-natural agave nectar. Their ask was $75,000 in exchange for 15% equity in their business.
The Fraijos passed the pops to the sharks, and all of the sharks seemed surprised that they tasted so good. The flavors included Carrot Berry, Citrus Cucumber, and Sweet Potato Pie.
Kevin wondered how costly the pops were to make since agave nectar is rather expensive, and Robert Herjavec wanted to know how much the wholesalers pay for it. Robert Fraijo answered that each package of 6 pops cost $1.10 to make and they sold it to the wholesalers and distributors for $2.25 per package.
Kevin asked about their sales numbers and Robert Fraijo said they had made $30,000, and most of that had been within the last few weeks. Teresa chimed in, reporting that they had distribution at Whole Foods and had recently been picked up by Sprouts Farmers Markets – in all 160 of their locations.
Robert Herjavec was interested in their backgrounds and how the product came to be. Teresa said that her husband had been a law student and she was a stay-at-home-mom. When she figured out how to get the kids to eat healthy, all of the other moms wanted to know her secret. She told the moms she gave her kids homemade green smoothies, but a lot of the moms thought that seemed like too much work. Teresa decided that she wanted to make it easy and convenient for moms to feed their kids healthy treats, and with her husband, developed a plan to bring their pops to market. Robert, her husband, was more interested in starting a business than going to law school, so he dropped out, although he was still working outside the home.
Robert Herjavec asked about production. How was the product made? What was the capacity? How much more could be made? Teresa told him they have room for more production since they have rented a facility in southern California.
Mark wanted to know how much they had invested so far. Teresa told him they had invested $30,000 of their own money and had borrowed $110,000 from family and friends. So, $140,000 total.
Robert Herjavec wondered who was running the machinery. The Fraijos said they were. Then Kevin directed a question to Robert Fraijo. “How much are you making in your job right now?” Robert Fraijo told him $67,000. Kevin asked if he could buy him as an employee for $67,000 and Robert Fraijo said, “Absolutely.”
Mark interjected. He hated the frozen food business, and thought it would be very expensive to take their product nationwide. He didn’t think the Fraijos were ready to take that challenge on, and he certainly didn’t think he was ready to take it on. He was out.
Barbara spoke up next. She told the couple that they are the complete opposite of other food business partners she works with. While the Fraijos had $140,000 cash invested and $30,000 in sales, her partners had roughly the reverse of that. Their numbers scared her, so she dropped out, as well.
Kevin was ready to make a deal. He would give the Fraijos $75,000 but would require that he be paid a royalty of 50 cents for each unit sold until he makes his initial investment back. Then the royalty would drop to 25 cents per unit. He said this is the way he has structured other food deals and he’s been very successful using this approach.
Robert Herjavec said, “You want half of everything they make?” Kevin said it would be temporary – probably only a few months. But Robert was ready to make his offer. He said there was no other product like theirs but that $75,000 would likely not be enough to get it going. He offered $75,000 for 25% equity, and then committed to pay another $75,000 if Robert Fraijo agreed to work for the business full-time in the next 6-12 months. So, altogether, he was offering $150,000 for 25%.
But then Lori wanted in, too. She really loved the product and would offer $75,000 for 20% – and she would provide even more cash if needed when things got up and running. With her connections, she could get their product into the best stores.
What happened next started a bidding war with the sharks. Kevin came back and said he wanted to modify his offer based on getting Robert Fraijo in the business full time. He would match Robert Herjavec’s offer of $150,000 but wouldn’t be asking for any equity in the company. All he needed was 50 cents per unit until he made his $150,000 back, and then the royalty would drop to 25 cents per unit. But while Kevin was talking, Lori was making a side deal with Robert Herjavec.
Lori admitted that since Kevin wanted to spice things up, she wanted to do the same. Robert Herjavec and Lori would partner up, offer the Fraijos an initial $75,000 and then another $75,000 when Robert Fraijo was ready to come back full-time. They would receive 20% in equity and a royalty of 20 cents per unit because the Fraijos were getting the benefit of two sharks rather than only one. Kevin immediately snapped back saying, “Now you have to give up royalties and equity.”
That’s when Mark jumped in. He basically told the Fraijos they were suckers for not accepting a deal earlier when royalties weren’t involved. Barbara also had some things to say. She told the Fraijos they had two offers and were now in a good negotiating position. They should take some time to think it over and come back.
After the Fraijos left the stage to talk, the other sharks were not happy that Barbara butted in. But she felt like they were taking advantage of the couple with talk of royalties.
When the Fraijos returned, they admitted they didn’t like the idea of the 20-cent royalty. Their counter was $75,000 now, another $75,000 when Robert returned to the business, and 20% equity. No royalties. But Robert Herjavec insisted that the royalty remain part of the deal because the Fraijos would have the benefit of working with two sharks.
Barbara jumped in and said, “The 20-cent royalty going forward is 10% of everything they sell.” Robert Herjavec seemed annoyed with Barbara. He asked if she was coming back in and Barbara said she just might because she was getting so annoyed. Robert Herjavec then told the Fraijos they shouldn’t take advice from someone who’s not even making an offer, but while he was talking, Barbara was trying to get Mark to partner with her and make a deal. Mark said he wasn’t interested in doing the work, but Barbara said she would do it. Mark agreed and made the Fraijos an offer of $75,000 for 20% equity. No royalties. The Fraijos agreed and the deal was done.
Final Deal: $75,000 for 20% equity
Veggie Mama After Shark Tank
The Fraijos made their appearance on Shark Tank in 2005. Since that time a lot has changed for the company.
Veggie Mama Garden Pops are no longer in stores, the company has updated its logo, and the product lineup has been completely transformed. The company is selling supplements and cleansing products that bring “the same health ideals and values we have pleaded to provide when we originally launched Veggie Mama.”
Their supplement is powdered and plant-based. You can add a scoop to your smoothie or incorporate it into recipes they share on their site. The powdered supplement, called Garden Power, is available in two flavors and is promoted as delivering three goals: energy, digestion, and immunity. The company claims its product can help you to lose weight, detoxify, and transform both your mind and body. There aren’t any testimonials on the website.
Veggie Mama also sells cleanses – 3-day, 10-day, and 21-day. And for anyone who misses the original Garden Pops, they offer a recipe on their site so you can make it at home.
The nutritional supplement market is very crowded. It’s admirable that the Fraijos are still in business, but they certainly are not doing much to promote the brand. Their Instagram following is relatively small – about 2,200 followers and the last post was made in July 2018. The company has even fewer Twitter followers and no presence on Facebook. It’s difficult to see how they can sustain their business amidst the fierce competition in the nutritional supplement sector. It’s clear they are no longer supported by the sharks who shook hands in the deal.
Disclaimer: The information provided in this article is strictly informational; INSIGNIA SEO is not affiliated with Veggie Mama, SharkTank, or any of its subsidiaries.