Beyond Sushi: This Plant-Based Alternative Goes Above and Beyond

Authored by: Ian Gyan

In America, the foods that we love aren’t always the healthiest options. However, that’s slowly changing as people become increasingly aware of their diets.  

Still, finding a balance between food that’s good for you and food that tastes good has always been difficult. Fortunately, Guy Vaknin’s company, Beyond Sushi, presents a solution tastier than you can imagine.

On Episode 3 of Season 10, Guy calmly requested $1.5 million to help grow his New York-based company in Los Angeles, offering 25% of his west coast profits and 5% of his already established east coast profits.

His hefty ask drew a few odd looks from the Sharks, so Guy kept his puns to a minimum and delivered his pitch without much flair. A smart choice, as the Sharks grew less apprehensive as he went through his talking points.

Beyond Sushi is a multi-unit vegan restaurant chain. It makes use of veggies, fruits, and whole grains to create unique flavors, all without the use of artificial meat. The “extensive” menu includes salads, wraps, dumplings, and (sushi) rolls.

This modern approach to traditional food manages to maintain that delicate balance between flavor and nutrition. It’s what distinguishes Beyond Sushi as one of the “pioneers” of the vegan movement and shows its commitment to creating more sustainable ways of eating.

Thanks to Guy’s best-selling “Mighty Mushroom” and “Sunny-Side Up” rolls, the Sharks could clearly see that… or taste it, rather. His “amazing” sample platter included sushi made with robust ingredients like braised fennel, micro arugula, truffle shiitake sauce, 4-grain rice, and sun-dried tomatoes.

Despite the good food, these Sharks would only be satisfied with profitable numbers, and in that regard, Guy did not disappoint. It only costs Guy $1.50 to make one 280 calorie roll (8 pieces), which he then sells for $7.50. Guest Shark, Matt Higgins, absolutely loved the sound of an 80% margin but that wasn’t Guy’s only advantage, there was also his scale of operations.

Guy opened his first restaurant using the last $70K from his life savings in July 2012. Back then he only had 12 seats and 1 employee. Since then, he opened 6 locations throughout New York City.

So, how does one man handle so many restaurants?

It’s because Beyond Sushi is a commissary-based business, meaning all the food is cooked by a single distributor. This is a perfect example of working smart instead of working hard. Having one entity produce the food keeps his margin stable, cuts the hassle of keeping ingredients in stock, and allows him to focus on the macro aspects of expanding a business.

Guy owned restaurants ranging from as small as 180 sq. ft. to as large as 2,500 sq. ft., but regardless of size, each location pulled its weight. He confidently reported that last year, his east coast operations grossed $4 million in sales!

“Mr. Wonderful” leered suspiciously, as the other Sharks nodded in approval, he sensed the devil hiding in the details

Before Guy announced his sales, he revealed his resourceful partnership with Sandy Beall, the founder of Ruby Tuesday. Together, they planned to change Beyond Sushi’s grab-n-go structure to a more open-seated arrangement using Guy’s largest restaurant. When Kevin asked how much he netted out of last year’s $4 million gross, he sadly revealed that he was down $272K. Evidently, his expansion placed a lot of pressure on the entrepreneur to keep his business afloat. He assured the Sharks that this was not the norm and mentioned that the year before his deficit, he pocketed $600K out of his $2.4 million gross.

At Guy’s current pace, Beyond Sushi’s projected sales rested comfortably at $5.6 million, but to Mr. O’ Leary’s disappointment, he only expected to net $300K next year. Although, this letdown didn’t weigh too heavily on the other Sharks.

Being the food aficionado of the tank, Matt began asking about his unit economics, specifically Guy’s QSR (Quick Service Restaurant) percentage. He answered questions as quickly as Matt asked them but this eventually wore down the interest of some of the other Sharks.

Daymond cut into their conversation simply because he couldn’t understand any of the food industry-specific jargon. Since he also wasn’t familiar with the back-end of the restaurant industry, he decided that it was best for him to back out.  Daymond’s loss of appetite was echoed by a few others. Kevin also took the chance to expand on his issues with the business. Since Guy only expected to net $300K out of his projected $5.6 million in sales next year, fronting the requested $1.5 million for 25% of an expansion that hadn’t begun yet would be akin to him paying twenty times Guy’s pre-tax earnings. A valuation like that was “insane” according to Kevin, so he backed out as well.

Things didn’t get better from there, Mark correctly pointed out the already immense workload that Guy’s east coast operations placed on him. Given that Beyond Sushi wasn’t the only restaurant selling plant-based foods, Mark decided to go with his “gut” on the matter and pulled his hand away from the table. Perhaps Mark thought Guy wouldn’t be able to handle the financial burden of expanding again so soon.

This was more than likely a reaction to the entrepreneur's last year of sales. His expenses sank him so low into the red that he had to invest $160K in personal funds just to stay in business. For a seasoned money maker like Mark Cuban, a fluctuation like that raises a big red flag.

With 3 Sharks now out of the water, Guy’s eyes were left wide and nervous. At the same time, Matt and the ever-patient Lori Greiner settled in for a deal, but not before making Guy sweat a little...

“Here’s what I don’t like,” Matt said, explaining that he didn’t like that Guy’s offer would have him paying $1.5 million for 25% of operations that hadn’t begun yet, but only gave him 5% of his east coast operations, which were already profitable. Considering his losses, Guy’s initial offer now looked more like an investment to be made on faith alone.

However, these Sharks don’t deal in faith, they deal in fact. And the fact was that between east and west coast operations, the potential for a “misalignment of interests” between them was too great to ignore. With how hard he worked to counteract his deficit, it was very possible for Guy to end up too focused on east coast maintenance instead of west coast expansion like Matt wanted.

So, Matt requested more east coast equity as an incentive to ensure that guaranteed profits would come his way. Even though Guy looked terrified at the thought of giving up equity, he still offered to raise the east coast stake up to 10%. Clearly, it wasn’t enough because during the time it took Guy to respond, Lori had whispered what seemed like a fruitful agreement into Matt’s ear. They both turned their mischievous eyes back onto the now silent entrepreneur.

Matt announced that he and Lori were coming into the deal together, as Beyond Sushi was also right up her alley. Lori believed that the company would do better on the west coast, as the health-conscious movement over there was very strong. Their plan was to cross-market, get Guy into major airports and stadiums and change his life. And at first, the entrepreneur smiled, only to stop once he heard their new offer of $1.5 million for 30% of west coast operations & 15% of east coast operations.

At this point, Guy could only say “yes”, “no”, or make a counteroffer.

He chose to counter with a similar offer of $1.5 million for 30% of the west and 12% of the east. But that wasn’t enough, Lori and Matt’s offer was final. So, Guy looked to the ceiling as he pondered the deal, as though saying a prayer, and finally said, “ok, let’s do it.”

Lori and Matt sprang from their seats, rushing to congratulate him. The other Sharks congratulated him too, although Kevin didn’t hide his disapproval. He just scowled and shook his head. Maybe he saw the signs of a bad deal, but based on the way both he and Daymond started clearing out the rest of the sushi samples, Beyond Sushi would be just fine.

Ultimately, giving up equity was the best move, as it would translate to faster growth. With two Sharks worth of resources behind it, Beyond Sushi would start growing practically at "lightspeed."

The Applesauce Queen gets her American Dream

Authored by: Quinn Donaldson

There are many of us who believe they don’t have enough time to pursue their ideas and create their own American Dream. These people usually cite work, family, school, bills, and/or a host of other obligations as reasons for never investing in themselves. If you are one of those people, I’d like you to meet Keisha Jeremie.

As the Global Head of PR at News Corp. (at the time of taping), Jeremie invested a great deal of free time and sleepless weekends into Sanaía – a new approach to applesauce designed to give adults a more suitable option outside of brands that target children or the elderly. Jeremie created this organic, vegan-friendly product to attack the applesauce market the same way Chobani took on yogurt; find an underrepresented consumer segment in an existing market and tailor your entire product & marketing campaign around that group.

With poise and confidence, Jeremie initially attracts the Sharks with her plan to attack hot food trends, a tasty and well-branded product, and healthy top-line margins. Being the only player in a potentially large niche market is like blood in the water to these Sharks. Furthermore, having a tasty product that can accommodate various diets helps make Sanaía attractive to many adult consumers.

However, Jeremie runs into trouble when discussing her distribution strategy and future sales. The Sharks are turned off by her idea to sell glass jars of applesauce on Amazon Prime, citing increased shipping costs that could be avoided by her lighter weight grab-n-go style product. Furthermore, she states that she has $35 million in potential sales from many popular companies such as Starbucks, Whole Foods, and Kroger. However, in realty, she only has one Whole Foods store in Harlem, NY that’s committed to testing the grab-n-go product.

Her inability to accurately define real sales interest in her product combined with risk associated with her distribution strategy and a lack of predictable market size causes Herjavec, Greiner, and O'Leary to pass on Sanaía. Also, O’Leary, Corcoran, and Cuban all have questions about her commitment given that she has a full-time job on top of running Sanaía. With all of that in mind, Barbara counters Jeremie’s initial $150k for 15% equity offer with an offer of $150k for a 75% equity stake in the company. Jeremie quickly denies, so Barbara quickly passes.

Jeremie initially cited valid reasons and remained poised when questioned about her decision to not go full-time with Sanaía. However, she becomes emotional when O’Leary and Cuban continue to question and debate over her commitment to the company. When asked about her tears, she whole-heartedly explains how she financially supports multiple family members and that Sanaía is “the first thing she’s done for herself.” That, and the fact that she has invested half of the $500k she set aside to get Sanaía off the ground was enough proof for Cuban to offer $150k for a 25% equity stake. Jeremie immediately accepts, leaving us with a satisfying storybook ending.


Analysis & Performance Score Total: 79/100

Presentation: 45/50 
To gain the Sharks’ attention in the Tank, you need a focused, well-organized, and engaging presentation to draw them in. Jeremie did just that; she staged a problem, open market opportunity, and solution that gave the Sharks and viewers a vivid image of what the future could look like with Sanaía. Her poise and natural energy captured the Sharks’ attention and respect. However, I don’t believe anyone was truly bought the multi-billion dollar/next Chobani picture that Jeremie drew of Sanaía. And worse, she didn’t include the arguably better variation of her product in the grab-n-go cup until later. Nonetheless, her initial presentation was nothing short of excellent.

Product: 22/25 
The product itself had everything the Sharks were looking for; a tangible market, proven sales, and virtually no direct competitors. From a food perspective, Sanaía is one-of-a-kind (apple wedges inside applesauce), accommodates multiple dietary restrictions, and comes in various tasty flavors. She touts impressive gross margins on both the glass jars and grab-n-go cups of ~75% and ~50% respectively. My only criticism – the grab-n-go cups were not the focal point (see Strategy).

Strategy: 12/25
Jeremie’s direct-to-consumer strategy is decent at best. Her initial plan is to sell 4-packs of glass jars on Amazon Prime, which Cuban and O’Leary immediately hate. The shipping costs from shipping heavy glass jars would cut into her margins tremendously. Also, even after hearing from potential buyers that they like grab-n-go cups over the glass jars, her initial strategy of glass jars on Amazon Prime remained unchanged. Key point – listen to your customer.

Also, the grab-n-go cups may be a better option as far as visibility is concerned. Having these cups at every Starbucks register or at eye-level in every refrigerator unit in Whole Foods would grab millions of eyes per day. I believe the dietary accommodations combined with the $2/cup price tag would be enough for many adults to try Sanaía at least once. If consumers like the $2 cup, they may be more inclined to buy a 4-pack later. That versus buying a 4-pack of something no one has ever tasted on Amazon is a much better sell to an investor.

Finally, she confused interest from big buyers for potential sales/orders for her product, which turned off some Sharks. Also, she mentioned that those big buyers referred her to other buyers, which she took as “wow I’m getting Whole Foods AND their friends!”. Personally, I viewed it as “Your product has promise, but try it with these buyers first before Whole Foods gets involved.” If you’re going to mention that you have $35 million in potential sales, it is imperative that you have the orders to back it up. By throwing that number out, she dug herself a deep hole that she almost didn’t recover from.

@ Kitchen Safe - Controlling Bad Habits

Ryan and David, owners of Kitchen Safe, approached the Sharks requesting $100,000 for a 5% stake in their company. David came across like a used car salesman yelling the words KITCHEN SAFE over and over. One would have expected the Sharks to be annoyed, but interestingly enough they found it humorous. We couldn't be sure if they were laughing at or with David and Ryan but based on the offers made it certainly appears like the Sharks enjoyed the commercial approach to selling this bizarre product.

The Kitchen Safe is a plastic container with a lid that locks on to the container with a timed mechanism that does not allow the lid to be opened until the countdown timer reaches zero. Its intended use is for people to lock away their junk food so that they are not able to yield to their temptation to snack on the junk food at will. Instead, they will be frustrated by not being able to open the container where they themselves stored the junk food and set the timer at a point during the day when their temptations were not as strong.

David tells us that the Kitchen Safe functions as what psychologists term a commitment device. His claim is that this is a scientifically proven method to fight temptation. The idea is that you create a larger obstacle to the temptation in order to increase the cost of yielding to the temptation. As there are no overrides that would allow the device to be opened the only way to bypass the commitment device is to break it. And the cost for doing so is a whopping $49.00 which is the retail price for the container.

But, therein lies the dilemma. On the one hand, all of the sharks agreed that the device (which according to Kevin O’Leary is a piece of crap) is way overpriced at $49.00. Of course it is when you are looking at it as a kitchen container. However, if the price were significantly reduced, then the question would be whether it would still function well as a commitment device.


[TV Note: After calling the item a piece of crap, David is brought to tears and tells of his own prior challenges of trying to resist junk food and being overweight. A chord is struck and David is brought to tears soliciting Kevin to profer: “Don’t start crying, be a man”. David is on a roll and tells Kevin off after which Lori chimes in and tells Kevin to shut up. Great TV!]

So, what about the financials? In the 11 months since the product has been available on line, they have sold 300,000 units. The cost to manufacture these containers is $14.50 and as mentioned the retail cost is $49.00. If those numbers are accurate that would mean that Kitchen Safe has had a gross profit of over $10 million. One has to assume that these entrepreneurs were not on the show to ask for money. They wanted a Shark (or Sharks) to join their team and propel them to the next level.

Several offers were placed on the table, and Mark Cuban was never even able to make his own offer before Daymond John forced everyone's hand and asked for a decision to be made. At that point two offers were available: The first was from Daymond who offered $100,000 for a 20% stake in the company. The second was a joint offer from Lori and Nick Woodman (the Guest-Shark) for the same $1000,000 for a 20% stake. There were two differences though in the offers being made. David and Ryan already had a deal with HSN to sell their products. But Lori and Nick's offer came with the contingency that the deal with HSN needed to be dropped and that a deal with QVC would be put in its place. This did not sit well with David and Ryan as they appear to be men of integrity.

But, business is business, and what the men really wanted was to partner with a Shark. And given the choice of partnering with one Shark (Daymond) vs two Sharks (Lori and Nick), the choice was easy. Goodbye HSN and hello QVC!

Congratulations to Ryan and David on a job well done. There is no doubt that thousands of people in middle America will be purchasing this 'piece of crap', and even Mr. Wonderful would be willing to sell this 'piece of crap' to make money.

Cinnaholic: Feed the Sharks, or They will Feed on You

By: Darci Phillips, 
Writer & Entrepreneur

On last week’s episode of Shark Tank, the luck seemed to be with the entrepreneurs as three of the four of them made deals with the Sharks. It is interesting to note that two of those three deals were for food and drink products, which can be a very tricky and temperamental market.

The Radke’s waded into the tank with their custom cinnamon roll business, Cinnaholic. The moment they entered the Tank, many of us watching fully expected these two to go the way of so many others with food offerings that have appeared on the show – out the door with no deal. But it turns out they knew that to avoid being eaten alive, they had to give the Sharks something else to satiate their vicious hunger.