‘Lose 10 kilos in two weeks’
A RAPID weight loss meal plan which can strip 10kg in two weeks sparked a bidding war on Tuesday night's Shark Tank, with the creators laughing all the way to the bank.
Be Fit Food, founded by clinical dietitian Kate Save and bariatric surgeon Dr Geoff Draper, was born out of the pair's frustration with clients using "shake diets" to attempt to lose weight before surgery.
The company sells tailored, prepackaged meals based around the ketogenic diet - high fat, moderate protein, low carbohydrate - which forces the body to rapidly burn fat.
Unlike competitors such as Lean Cuisine and Weight Watchers, Be Fit Foods claims to be the only company in the market that uses a "science-first" approach, starting with the required formula of macronutrients and working backwards to create the recipes.
Be Fit Food's seven-day meal plans, which include breakfast, lunch, dinner and a snack, cost $186.50 plus $20 shipping, at a cost price of about 33 per cent.
Appearing on Shark Tank, the pair initially seek a $300,000 investment for 20 per cent of the company, giving it a valuation of $1.5 million. Admitting their strength is more in the science and product side, they say they want an investor to help with the logistics of scaling the Mornington Peninsula-based business nationally.
The business did $77,000 in revenue in its first year and Ms Save tells the Sharks that in the year-to-date it had already brought in $300,000. Within three years, her projection is $2.8 million revenue with a profit margin of 49 per cent.
Ms Save impresses judges with the high-quality food and her knowledge of the science behind the ketogenic diet. After Greencross founder Dr Glen Richards announces he is seriously considering an offer, Ms Save leaves to bring in her business partner.
Internet entrepreneur Steve Baxter uses the opportunity to snag a bit of extra food, while RedBalloon founder Naomi Simson comments that she's a "fabulous advocate of her product, and she's smart". "And the dress is pretty good, too," Andrew Banks points out, prompting an "oh, shut up" from Ms Simson.
Concerned about the logistical challenges of scaling the business, Ms Simson, Dr Richards and Mr Banks all bow out, but Boost Juice founder Janine Allis makes an offer of $300,000 - broken into $200,000 plus a $100,000 loan - for one third equity.
"I like the business," Ms Allis says. "The valuation I do not like. You've been around for 20 months, so you're definitely not worth $1.5 million. You just can't be because you've got so much more risk to come.
"What you need is a business partner, someone who has the logistical side and the accounting side. But I'm actually buying you because I really love what you're doing and if I can help get this out there, because it is a real problem, then I'd be really happy."
Mr Baxter also comes in, offering the full $300,000 for one third of the business. "I've had a hell of a weight loss journey over the years," he says. "So I am a huge believer in this working, you're exceptionally impressive and you're the clinical verification behind it, so it's a bloody good business pairing."
After a lengthy deliberation, they take Ms Allis' offer, despite Mr Baxter's being a better deal on paper. "Janine was absolutely amazing," Ms Save told news.com.au. "She's on my speed dial, she will take my call 24 hours a day and answer my email within one minute."
Since the episode was filmed, Be Fit Food has averaged 20 per cent growth month-on-month, but that has ramped up significantly over the past three months with between 50-100 per cent growth.
"It was good for us going on the show because it made us look at every aspect of the business and our ability to scale up," she said. "In the past it was our intention, but to have a plan step by step to get there would have taken us a lot longer."
The business now has two shopfronts, has increased from four to 23 staff, upgraded its website and packaging, and has hired a production manager with experience scaling similar businesses in the UK.
"Scaling up involves the actual products, then the storage and distribution," Dr Draper said. "It's all ready to activate once we are satisfied we can manage the quality."
Given the clinical focus, a big part of the business until now has come through Ms Save's hospital clinics and Dr Draper's bariatric patients, but it has also proven popular among bodybuilders and athletes wanting to strip fat.
"I don't normally diet and I'm not fat, I did it for two weeks and lost 10kg," Dr Draper said. "My anaesthetist lost 8kg in one week and he can now beat his son in the pool - he's not a fat dude."
Shark Tank returns next on Tuesday at 7.30pm on Network Ten