Admit it, you love pasta. But unfortunately, pasta comes with a lot of calories, sugar, and gluten – things that people nowadays are trying to avoid for health reasons. Wouldn’t it be great if you can have pasta without worrying about the carbs?
In comes Palmini, an amazing plant-based pasta substitute that reeled in a big investment from Sharks Mark Cuban and Lori Greiner when it appeared in Season 9 of the Shark Tank TV show.
What is Palmini?
Palmini is a pasta substitute made from 100% hearts of palm. The heart of palm is the edible core of a palm tree. It is natural, chemical-free, and high in fiber.
The plant-based pasta substitute comes ready to eat in a can or pouch. Just rinse, heat it up, add your pasta sauce of choice end enjoy.
It’s a great substitute for pasta because it has a neutral flavor and has the same texture as pasta. It is gluten-free, non-GMO and is low in calories. It is also keto-friendly because it is sugar-free and is 90% water.
How did Palmini start?
Palmini is a product of OA Foods, which was founded by Alfonso Tejada. OA Foods sells Palmini and imported quinoa from Bolivia where Tejada is from. After graduating from business school in the University of Florida, he went back to Bolivia to work in their family business. There he realized he had access to quinoa and started OA Foods in 2012.
Tejada noticed the demand for healthy pasta alternatives and thought about using the heart of palm as a replacement for pasta, just like zucchini. He consulted a cousin who had a heart of palm factory in Bolivia. He and his cousin spent two years developing a machine that could process hearts of palm into pasta-like noodles.
Finally, in 2017, OA Foods launched Palmini as a low-carb pasta alternative.
Palmini on Shark Tank
OA Foods owner and Palmini founder, Alfonso Tejada walked up to the Sharks with an ask of $300,000 in exchange for 10% equity in the company.
Tejada kicked off his lively presentation with Palmini beating the ‘bad guys’ in pasta.
After, he let the Sharks taste three different recipes that used Palmini. Shark Lori Greiner said she loved it and that she eats hearts of palm regularly.
Guest Shark Bethenny Frankel also liked the texture and the fact that it is low carb. In contrast, Sharks Mark Cuban, Robert Herjavec and Daymond John were not so thrilled about the taste.
Herjavec expressed his disappointment that Palmini did not taste like pasta. Both Greiner and Cuban countered him saying it’s a vegetable and that there are a lot of benefits in consuming the plant-based pasta alternative.
What were the Sharks’ offers for Palmini?
All the Sharks were impressed by Tejada’s passion for the product and his company.
When asked about sales, Tejada revealed that as of 2017, OA Foods sold $400,000 in quinoa. However, for Palmini, it only sold 2,000 units in 3 months, equivalent to $50,000 in sales. This troubled the Sharks.
Frenkel told Tejada that she is worried about competitors copying Tejada’s patented machine since the product is essentially shredded vegetable. And with that, she was out. John also followed suit saying the company valuation is too high.
Tejada specified that his offer included the quinoa brand from OA Foods company, not just the Palmini product. Herjavec admitted that he did not believe in a vegetable being a substitute for pasta, so he too was out.
Greiner and Cuban took their chance to express their interest in Palmini, saying it’s a genius product but the packaging needs work. They both wanted in and offered $300,000 but for 30% equity since there would be two Sharks in the deal.
Did Palmini get a deal on Shark Tank?
The Palmini founder was able to close a deal with Greiner and Cuban on Season 9 of Shark Tank.
After three Sharks bowed out of any possible deal with Palmini, only two Sharks were left who offered to team up together to make an offer. Greiner and Cuban’s offer cut Tejada’s valuation to a third.
Tejada made a counter offer of $300,000 for 18% equity, then later raised it to 20%. Greiner responded that the lowest she and Cuban were willing to go was 25%.
After a moment of consideration, the Palmini founder accepted the offer from Greiner and Cuban of $300,000 for 25% equity in the company. This included not just Palmini, but also OA Foods’ quinoa line.
What happened to Palmini after Shark Tank?
As with most of the brands that appeared on Shark Tank, appearing on the show led to a huge boost in sales.
Within 24 hours of airing, all of Palmini’s inventory sold out on Amazon and on their website, the company revealed.
And four months after the Shark Tank episode was aired, Palmini also became available in select branches of Whole Foods, Albertsons, and Kroger stores, thanks to the backing of Greiner and Cuban. Big supermarkets such as Walmart and Wegmans also reached out after Palmini appeared in the TV show.
Is Palmini still in business today?
Palmini is definitely thriving in the rise of the Keto diet and the Paleo diet, which made plant-based pasta alternatives more popular. Low-carb diets have become much more popular since Palmini appeared on Shark Tank in 2017.
This 2020, Palmini remains one of the best-selling brands in the pasta category of Amazon. It is also being sold in Walmart, Whole Foods and Kroger stores.
How much is Palmini worth now?
The Palmini founder pitched in the Shark Tank with a business worth of $3 million. With Greiner and Cuban’s offer of $300,000 for 30% equity stake, Palmini’s valuation has been reduced to $1 million.
But by the end of 2019, Palmini sales are said to have reached $4.6 million!
Although the actual net worth of the company is yet to be revealed, Palmini’s valuation is likely to have breached $1 million already, thanks to their presence in more distribution channels in the United States.
The high demand for keto-friendly food is also another factor, as more people jumped into the keto lifestyle.
Lessons from Palmini on Shark Tank
Alfonso Tejada started his company with products that he readily had access to that nobody was selling yet, but he saw the potential in them. He exported quinoa out of Bolivia even before it became an overnight sensation in the U.S.
Then he had the genius idea to market hearts of palm as a pasta alternative which nobody had done before. Being early in the market does have its advantage.
He did the right thing to get the patent for the machinery that he and his cousin designed to make Palmini. He may not be able to stop bigger companies from copying his idea, but having the patent would mean having the option to sell the license later on.
Despite Herjavec expressing his disagreement that Palmini would become what Splenda is to sugar, Tejada was not intimidated. He held his ground and said he believed in the potential of Palmini. Good thing for Tejada, Cuban and Greiner believed in Palmini too.