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00:03Tonight on Dragon's Den.
00:05Ahoy, dragons!
00:07Ahoy!
00:09I'm a biomedical engineer, and alongside a rocket scientist,
00:13we decided to become farmers.
00:16Okay.
00:16Makes sense.
00:17So the suits, you know, it's like our little fishing mullet,
00:22you know?
00:22You're dressing for the job you want,
00:24which is part fisherman and part business person, right?
00:27Exactly.
00:28You may want to contact your lawyer when this is open.
00:31No, no, no, no, no.
00:32You've got to be careful.
00:33Our lawyers are very good.
00:35Don't worry about it.
00:57First, to bring their business to the den.
01:00So we packed up an entire fishing hut.
01:02We've got lobster traps.
01:04We've got burlap bags of coffee.
01:06We figured we'd show them what we're all about.
01:08I believe that if you're going to do a thing,
01:11you do it with your whole heart.
01:14Ahoy, dragons!
01:15Ahoy!
01:17Whoa!
01:18I'm Laura Richard.
01:19And I'm Brad Rideau.
01:20And we're the founders of Saltwinds Coffee from Fredericton,
01:23New Brunswick.
01:24And we're here today looking for a million dollars
01:26for 10% of our company.
01:28Wow.
01:29That's a lot of coffee.
01:30A million dollars.
01:30That's a lot of beans.
01:32Well, dragons, growing up in the Maritimes,
01:34I heard a story years ago about how when coffee first came
01:38to Canada, it came on wooden sailing ships.
01:40And back then, the warm, salty ocean air would soak
01:43into the beans during the journey.
01:44But I always wondered what that coffee must have tasted like.
01:46That's where I come in.
01:48I'm a scientist with a PhD in chemistry
01:50from the University of Oxford.
01:52Wow.
01:53I developed a method to infuse coffee beans with ocean air
01:56and recreate that historic taste.
01:58Whoa.
01:58Well, that's neat.
01:59We're riding a rising tide of sails
02:02and charting a course to new ports of call.
02:04So, dragons, are you ready to jump aboard with us?
02:07A hundred percent.
02:09You guys brought this from New Brunswick.
02:10We built it and I drove it up from New Brunswick
02:12over the last two days.
02:14How long did it take to get this here?
02:16Two days.
02:17Wow.
02:18That's commitment.
02:19It's a big job.
02:20It's beautiful.
02:22The best way to taste the difference
02:23that ocean air makes in coffee is to try a cup.
02:26Okay.
02:27So, I'm going to make for you here
02:28a coconut-flavoured iced coffee,
02:30while Brad pours out some mugs
02:31of our hot ocean air dark roast.
02:33We can make really amazing cold coffees
02:36because as it cools down, it makes the coffee
02:38smoother, sweeter, and less bitter tasting
02:41than other coffees.
02:42Well, you're about to save the day.
02:44Fastest way to my heart is caffeine.
02:46Awesome.
02:47Yeah.
02:47Can't wait.
02:48My milk for you.
02:49And there's your coconut iced coffee.
02:51This is really less bitter on the aftertaste.
02:55That's actually a traditional dark roast,
02:57but it drinks kind of like a medium or a medium dark
03:00because of the ocean air infusion process.
03:03There's zero bitterness in this.
03:06Like, zero.
03:07This is a really smooth coffee.
03:09It's very, very good.
03:10And I sample a lot of coffee, trust me,
03:12so that's very good.
03:14I didn't get any sense though of salt or ocean flavour.
03:18Am I supposed to?
03:19No.
03:19The effect of our ocean air infusion process
03:21isn't to make the coffee salty,
03:23but to change the chemistry of the coffee.
03:26It takes the bean.
03:26But what's really unique about our process
03:28is it actually improves the quality of the coffee.
03:31So what helps us in this current climate of increasing prices
03:34is that we can take coffees that are less expensive,
03:36but then give them extra flavour and quality
03:39from the consumer's perspective.
03:41Where are your beans coming from?
03:43From Central South America,
03:45so Nicaragua, Guatemala, Colombia.
03:47So you get them from South America, the beans.
03:50And what do you do once you get them?
03:52Now the process itself,
03:54we have several patents pending on this
03:55as well as trademarks to protect what we're doing.
03:58But effectively, instead of beans being on a ship
04:00for months and months,
04:01we can do this in a matter of minutes
04:03in a scalable, repeatable fashion in our own facility.
04:06Minutes.
04:06What does that look like?
04:07You're not simulating waves for the beans?
04:09It's about recreating the conditions that were on the ships.
04:12So Laura, when you were in Oxford,
04:14did you think you were going to be doing this?
04:16No.
04:17But you've got to follow the opportunities
04:19that life puts in front of you, right?
04:21Just walk me through that.
04:22So I want to make sure I'm clear.
04:25So you're buying a lower grade bean.
04:27Yeah.
04:28You're putting it through your process
04:30and then making it more premium as a result of that.
04:33Increased quality.
04:34It also is a great lesson for people who are watching
04:37as entrepreneurs that innovation can happen in any category.
04:41And often it is those older categories like coffee
04:44and other things that don't get innovated in.
04:48How much do you sell these for, for example?
04:50So this would sell for $22.
04:52Oh, yeah.
04:52So you're in a super, super premium pattern.
04:55We're in a premium.
04:56Yep.
04:56You are super premium.
04:57You're not just premium.
04:57You're super premium.
04:58It's pricey.
04:59Yeah.
04:59Yeah.
05:00How much money have you invested in this business so far?
05:04Um, we personally have about $370,000 into this.
05:11Woo!
05:12Wow.
05:13That's a, that's commitment.
05:15And do you have any debt on the business?
05:16Any, any houses got mortgaged or anything like that?
05:19We sold our house.
05:20You sold your house.
05:20We downsized to something smaller, sold the second vehicle.
05:23That's a ton of investment that you put into this.
05:26Like you're all in.
05:27Oh, yeah.
05:28Do you guys have money in the bank right now?
05:30Not like our runway is very, very short, but we're-
05:33How much runway do you have?
05:35Like months.
05:36So I'm, I'm really curious about the sales side of it.
05:40$150,000, uh, first year, about $650,000 the second year.
05:45We just broke a million in gross sales this year.
05:50How much did you make on the $650,000 or lose?
05:52Uh, we lost about $150,000 on that.
05:58Wow.
05:59Yeah.
05:59At the stage we're at, we can't afford to buy in large quantities of anything, right?
06:03So we can't get the economies of scale that start to make this profitable.
06:07So you clearly think your patents are worth a lot of money.
06:11Yeah, well, I mean, I can do some quick math for you on that.
06:14So the coffees we use, if you look at the, the bean pricing this year, they've doubled in price.
06:20Yeah.
06:21So, you know, to a, to a big roastery, the large roasters, they'll roast 300 to 600 million pounds a
06:29year.
06:29So even if it was 10% of that value to them, that's a lot of value for them.
06:35But then would that mean you're, you're taking your technology and licensing it to sell it to someone else?
06:40Well, or a company.
06:42Or their company, yeah.
06:43Right, so.
06:43They'd sell, they'd sell the whole processing thing to someone.
06:45Right, yeah.
06:46So why are you building a brand?
06:48Like, why not sell it to them or license it to them and make money at it?
06:53Yeah, I mean, I mean, I guess it started with the, with the story.
06:57But you're doing like the toughest path to market here.
07:00Right.
07:00Yes.
07:00Yeah.
07:01And, and the toughest path to make money.
07:03Brad and Laura, first of all, a million dollars is a lot of money to invest in any business.
07:09Right.
07:09You know, I think you're going to need a lot more than a million bucks.
07:12And the fact that you're losing money, I'm going to be out.
07:16I can go.
07:17It's one of the smoothest coffees I've ever tasted in my life.
07:20So kudos for what your technology has done.
07:22He's a big coffee drinker.
07:24Yeah.
07:25I, I think you've got some rough seas ahead.
07:27You're in a competitive space.
07:29Where there are literally thousands and thousands of million dollar coffee businesses out there in North America.
07:37And so I'm going to be out.
07:41I don't see a strategic plan to profitable growth.
07:45I'm out.
07:48You've actually figured out something very differentiated in a very competitive space with very good economics around it.
07:58The technology you have is a far simpler play than building a consumer brand in arguably one of the most
08:05competitive spaces.
08:06I'm not the right partner for that on the manufacturing side, so I'm going to be out.
08:10Well, I would, I would make you an offer.
08:17I'd give you a million dollars for the technology.
08:23You'd own the technology.
08:42I'd give you a million dollars for the technology.
08:46Hmm.
08:47But she would own the technology.
08:48Is that what you're saying?
08:49She owns the technology.
08:50You'd own the technology.
08:51I'd own the technology.
08:52I'd let you keep Saltwinds as a brand so you can continue to run that brand using the technology that
08:59you've obviously created.
09:00Um, and you'd have to pay for that technology because it would be done through co-packer.
09:05And do they get anything besides a million dollars for that technology?
09:08Do they get the royalty?
09:08No, they get the million dollars and the coffee.
09:10They get to keep Saltwinds.
09:11Hmm.
09:13Can we have a moment to discuss?
09:15Of course.
09:18So it's a million pound portfolio.
09:21It's not enough.
09:22No, it's worth more than that.
09:23Yeah.
09:24You offered a very fair and interesting.
09:26Yeah.
09:27Creative offer.
09:27I think so.
09:29And we want it as part of the, the other brand too, so.
09:33Yeah.
09:34I hope they take it.
09:36They've lost enough money.
09:37Okay.
09:38Yeah.
09:38Okay.
09:41So Brad and Laura, what'd you guys decide?
09:45Thank you very much, Arlene, for, for the offer.
09:47Mm-hmm.
09:48But we do think the, the technology is, is worth more than that.
09:52But we do appreciate the offer.
09:56Thanks.
09:57Okay.
09:57Bye guys.
09:58Bye.
10:03Well, they believe in the technology.
10:05But they haven't done anything with it.
10:07They've lost a ton of money and they continue to.
10:10That was a big opportunity for them.
10:12That was a big opportunity for them.
10:12The challenge is they're out of money in a couple months.
10:14Agreed.
10:14They're going to have to decide what they're going to focus on,
10:17whether it's the technology or the brand.
10:20There's a lot of value in our company.
10:22It's, it's difficult to, to show all the value sometimes in a, in a forum like this, but.
10:26Yeah.
10:27We think it's worth more and we're going to go out and build that and show them.
10:44Next, let's see if this Montreal entrepreneur can convince the Dragons he's got more than a corner of the grab
10:51and go market.
10:52Snacks.
10:53Candies.
10:54Hi dragons.
10:56My name is Sam.
10:57I'm from Montreal, Quebec, and I'm the CEO and founder of KMR24, the first natural convenience store in Canada.
11:06We're asking for $500,000 in exchange of 5% of the company.
11:11Oh.
11:11Back when I was an engineering student, I used to be a big consumer of junk food, sugar energy drinks.
11:19And so I had the idea to bring all these great products that you find in stores like Whole Foods
11:25markets in a convenient way, accessible around your corner.
11:29We have all the classic categories of that convenience store, but the products we have, like the chips, are not
11:36like.
11:36Everything's natural.
11:37Everything's natural and better for you.
11:38Everything's natural, organic, better for you.
11:40So why don't you come up, like see some of our products, check out some of our products.
11:44Let's go convenience shopping.
11:46And maybe try some coffee.
11:47Yeah.
11:49KMR24 stores can be found in the Montreal area, with more locations opening in Ontario this year.
11:54These guys are all Dragon's Den companies, Awake Chocolate.
11:58Yeah.
11:59Pure Gum.
11:59Pure Gum is a Dragon's Den company.
12:01Yeah.
12:01In addition to prepackaged goods and meals, KMR24 also sells smoothies, coffee, and hot food items.
12:09Sam, do you make all the products, the fresh products in store?
12:12We have an industrial kitchen.
12:13Okay.
12:14That makes all the products themselves.
12:16They ship it to us three times a week, so it's always fresh, seven days shelf life.
12:21How many square feet is your store?
12:22Around 1,000 square feet is the ideal size.
12:25We have one store that's 400 square feet, which is doing over $1,800 per square feet, which is crazy
12:32in the industry.
12:34And what's the other store doing?
12:36That's insane.
12:36The other one's around 1,100.
12:39That's still real, 1,100.
12:40That's very good.
12:41Yes, we're above average.
12:42This is way higher, because your basket sizes are so high, because natural products are more expensive and people buy
12:47more of them.
12:48Yes, but also the traffic, like we have very high traffic per location.
12:50So there's a few things wrong with your business right now.
12:54First of all, you're calling it Kale Mart, which is a knockout from Kmart.
12:59You're also calling it Kale Mart 24.
13:03I have a business called Aisle 24, which is exactly that.
13:07No, it's not exactly that at all.
13:09Well, it's a convenience store.
13:11Yes, but it's not that at all.
13:14That's an automated business.
13:16Okay.
13:16Oh, so you know the business.
13:18I know them very well.
13:19And you chose to knock off the name?
13:21All their franchisees are coming to us.
13:23I don't think that's knocking off the name.
13:24We have employees in our store.
13:26Their business is an automated store.
13:28My business.
13:29Huh?
13:30My business.
13:31That's my business.
13:32That's your business?
13:32Yes.
13:33So look.
13:34Your business.
13:35All 24 is my business.
13:36And that's a knockoff.
13:37This is a knockoff of All 24.
13:39No, it's not a knockoff.
13:40Well, you're coming here asking for money, and the money is going to be to defend a lawsuit.
13:56This is a knockoff of All 24.
13:58No, it's not a knockoff.
14:00What you're carrying, Coca-Cola and Pepsi and Lay's products.
14:03Do you see any Coca-Cola here?
14:05Sorry, because I'm not.
14:06No, come to our store.
14:06No, no, no.
14:07Because I'm not carrying some of your products.
14:09No, sorry.
14:09You're like a coup star without an employee, without any lottery, alcohol, because you're
14:16not allowed to because you don't have an employee.
14:18You have 35% robbery.
14:23Sam.
14:23Look, I know the people there very well.
14:26This is a knockoff of an existing business, even the name.
14:30How is it a knockoff?
14:31It's a knockoff because, first of all, it has 24, and it's convenient.
14:34It's like saying 7-Eleven.
14:35How is it not because it has the word 24?
14:37A lot of people have 24 in their name.
14:38It's not like your business.
14:40Sam, I'm going to give you a little piece of advice, okay?
14:43Like, when you're going so close to something that already exists.
14:47It doesn't exist.
14:48No, I'm sorry.
14:49You've got to be careful.
14:49No, no, no, no.
14:50You've got to be careful with lawsuits, okay?
14:53Okay, go ahead.
14:54I'm telling you.
14:55Go ahead.
14:55You've got to be careful.
14:56You come in here asking for money, and the money is going to be to defend a lawsuit.
15:01Okay, it's fine.
15:02I'm making it very simple.
15:03I am out.
15:04But I can tell you, you may want to contact your lawyer when this is over.
15:08Oh, yeah.
15:09Well, our lawyers are very good.
15:11Don't worry about it.
15:11That's what you're going to be spending the money on.
15:13Okay, let's move past it.
15:14What are you talking about?
15:15Let's move past it.
15:16Your offering is basic.
15:18Sam, Sam.
15:18Like, give the guy a break, right?
15:19Sam, just take a chill pill.
15:22You need to just now realize that you've got one dragon out, and there's four of us that
15:26are still trying to talk to you.
15:27So, can you tell us what your sales were, please?
15:31So, per store, on average, it's a million dollar revenue.
15:35Yeah.
15:35Net profit is 15%.
15:37Gross margin, 45%.
15:40Yeah.
15:40And this year, we're going to do 4.7 million with three corporate stores and one that's
15:44opening soon.
15:46Is that 4.7 million with three stores or four stores?
15:49Because a million per store adds up to three million a year.
15:52How do you get to the 4.7?
15:54It's from franchise fees that we collected.
15:57Okay.
15:58We have already sold nine franchise stores.
16:01What does it cost you to create that franchise opportunity?
16:04That cost us probably $40,000.
16:07That's it?
16:07That's it?
16:08Yes.
16:09Are you sure?
16:10Yes, yes.
16:11That's too cheap.
16:12That's too cheap.
16:13It sounds impossible to franchise a business for $40,000.
16:16Can I show you the books?
16:18I'm kind of doubting some of the, to be honest, the numbers.
16:21Like, they're all just too good to be true.
16:23I've been around enough to know, hmm.
16:26Do you either not know all the numbers?
16:29Or is there something missing here?
16:33I know very well.
16:34What's your filter to decide whether a product makes it in your doors or not?
16:37So, first we look at Nielsen data, if they're performing or not.
16:42If they're performing, we're interested.
16:44But you have standards that are better for you.
16:45You're not going to be selling cigarettes.
16:48We sell classic categories of convenience stores.
16:52You do?
16:53Yes.
16:53You better sell them.
16:54Do you sell vapes?
16:55Yes.
16:56We sell vapes and cigarettes.
16:56Oh yeah, that's a big category.
16:57But let me explain to you.
16:59Let me explain to you.
17:00Now I'm confused.
17:01If you don't have three categories, which are tobacco, alcohol, and lottery, you're not
17:10getting your space.
17:11I thought this was like an ethical version of a 7-Eleven where you'd say we're only carrying
17:17healthy products.
17:18We're not going to do vapes.
17:19Yes.
17:20No.
17:20No.
17:20In terms of food, it's all natural.
17:23Don't tell me that I have friends that go to the gym, that eat only like solids.
17:27They're smoking because they're smokers.
17:29You're doing all the natural stuff and you're doing all the sins because you are in a business
17:34to make money.
17:36So stop pretending that you are something that you are not.
17:38I don't think he pretended at all.
17:42For every other founder, we would say, wow, you looked at the data, you figured out what
17:47was selling, and you built it $1,300 to $18 of sales per square foot.
17:51I understand that.
17:53I don't have a problem with that.
17:54Michelle is right.
17:55With your story, there's no question that you're doing well.
18:00With your approach, there's a concern about you as an entrepreneur.
18:05Not that you're not a good entrepreneur, because I think you're damn smart, but you're also
18:10a little too aggressive with the, you know.
18:12Well, when someone comes and tells me he's going to have a loss.
18:14Sam, Sam, Sam, calm down for a second.
18:16And your franchises are coming to us to save them.
18:17You know, I saved two of your franchisees.
18:20It's too confrontational.
18:22Sam, listen to me.
18:23You're raising money, and the point of raising money is that you have to instill confidence in people.
18:27Okay?
18:28So, if you have an investor, a potential investor that came at you hard, your composure is important.
18:34How you compose yourself is important.
18:36How you answer the question.
18:37I am very composed.
18:38Listen, Sam.
18:39I am very composed.
18:39We all walk into rooms.
18:40But you're coming to me telling me.
18:41Hold on, Sam.
18:42Hold on a second.
18:42Hold on.
18:43Sam.
18:43No, no.
18:44Sorry.
18:44You're not listening.
18:45No, I'm not listening.
18:46I'm sorry.
18:47Okay, so that's the reason why this will never get anywhere, right?
18:51Okay, you'll see.
18:52Because you do not listen.
18:53Okay, great.
18:54Good luck.
18:55You're not listening, Sam.
18:56The number of times people said something terrible about my business, and I just sit there
19:02and very calmly walk them back to center.
19:05Mm-hmm.
19:06You're getting good advice right now, and you're still not listening.
19:09I am listening.
19:10But you're being defensive.
19:11No, you're still being defensive.
19:11You're still being defensive.
19:12No, I'm listening.
19:14You know, like, I'm not here to deal with that.
19:17So, sorry.
19:18But Sam...
19:18Yeah, you are.
19:18Because you're asking us for our money.
19:20You're here to get money.
19:21You are here to deal with that.
19:22You are asking us for our money.
19:23I'll keep it by cool.
19:25Like...
19:25No, you're not.
19:26I think working with you could be challenging.
19:31And so, I'm sorry, but I'm going to be out.
19:36Okay.
19:37Based on how this went today, I think you just got to do a little bit more work as a
19:40founder.
19:41So, I'm out.
19:44I think you missed an opportunity, but hey, I'm the first one to say, have a WTF willing
19:50to fail mentality, right?
19:52There's a lesson in this, and I think you're a scrappy entrepreneur who's negotiated some
19:57great deals.
19:58You've got a business with some amazing numbers.
20:01What I found challenging was building a business is about leadership because you need followers,
20:07especially as franchise owners, to come in and follow your vision and what you see building
20:13in the world.
20:14And I think you've come in and you've sort of kept a little bit of the chip on your shoulder.
20:17And I think that's made you less open to some of the opportunities that we might have ended up seeing.
20:23And for that reason, I'm out.
20:25Okay.
20:29I think maybe the lesson here is that the response is often more important than the pitch.
20:34Yes.
20:34He got thrown off.
20:36I think he reacted completely inappropriately.
20:38He had to recover.
20:39He had to recover.
20:39Business is not personal.
20:41We want to know you're strong enough that you can stick to where your business model is.
20:44Because we're investing in them.
20:44But thoughtful enough that you can say, huh, that's a good point.
20:48Let's think about that.
20:49Yes.
20:50We're deciding if we like the person and believe we could do business with them.
20:54You know, the business is great.
20:56She's doing amazing.
20:57We're going to get to where we want to be.
20:59Yeah.
21:00No hard feelings.
21:01It's fine.
21:02And yeah.
21:03Coming up.
21:05This is something new that we've developed from the medical research sector.
21:08We turn unused barns into smart farms like this.
21:24Think you have an idea for the next billion dollar big brand?
21:28Hello, dragons.
21:30Come on in.
21:31Yes.
21:32Yeah.
21:32Yeah.
21:34Auditions are open.
21:35And we want to see you in the den.
21:37There is a better way.
21:39This is so beautiful.
21:41What have you got to lose?
21:42Wow.
21:43Oh, yeah.
21:44This is our moment to shine.
21:46Yes.
21:46Yes.
21:46Stop dreaming.
21:47Start pitching.
21:48Don't you want a bite of the next big thing?
21:51Yes, we do.
21:52Let's make a deal.
21:52Good luck.
21:54Apply now.
22:01Now, from biochemical engineering to farming, this entrepreneur hopes a little cash can help
22:08grow his farming innovation.
22:10Hello, dragons.
22:11My name is Ishan.
22:12I'm from Surrey, BC.
22:13I'm looking for $500,000 in exchange for 8% of our company, Sky Acres.
22:18I'm a biomedical engineer.
22:20And alongside a rocket scientist, we decided to become farmers.
22:25Okay.
22:26Makes sense.
22:26My friends and my extended family are blueberry farmers in Abbotsford, and they were hit with
22:32the floods a few years ago.
22:34And the only place that wasn't affected were the barns.
22:37There's two and a half billion square feet of unused barn space that this could be used
22:42to generate revenue and diversify their income.
22:45Wow.
22:46So that's what Sky Acres does, is we turn unused barns into smart farms like this.
22:52I have never thought of all the unused square footage in barns.
22:57Oh, that's smart.
22:57Pretty cool.
22:58You can start with three racks just like this, or you can scale up to a thousand.
23:02And this is not hydroponics.
23:05This is something new that we've developed from the medical research sector.
23:07Other vertical farms, they take market share away from the farmers.
23:11Instead, we empower them.
23:13And I'm really proud to announce that most of our customers, they're from the younger
23:17generation, and they're creating a new life for their families' farms.
23:20And you can taste the difference.
23:23So beside you, you'll find some cherry tomatoes, some basil, and the pesto that's on your plate.
23:30So feel free to give it a try.
23:32Sky Acres sells these vertical growing systems to help people grow their own produce.
23:36With a companion app, they also help customers sell their harvest directly to local grocers or restaurants.
23:43We help these farmers grow everything from strawberries to cherry tomatoes, and 60 other varieties.
23:49This literally tastes like it was picked five minutes ago.
23:53These tomatoes were picked not long ago.
23:56So we'll be able to harvest, put it in the packaging, and have it on a grocery store shelf,
24:00so that we really preserve the nutrients, the freshness, and the taste.
24:04Delicious basil.
24:05The issue is growing it isn't really the main issue.
24:08Selling it is a whole other ballgame.
24:10So what we've done is we provide support for that.
24:14So we provide the labeling, we provide the branding, and the packaging.
24:19And not only that, we also provide direct access to grocery stores and restaurants.
24:24These traveled across the country to get here, and they still taste as good.
24:27The crazy thing that we found was cherry tomatoes from our farmers was about 260% higher in nutritional content,
24:35which was a huge eye-opener for us.
24:36Why?
24:37A lot of these Californian farms or farms around the world, they are picking it before it's ripe.
24:42And they're adding what's called ethylene gas in their trucks.
24:45True.
24:46So that it ripens on the way there.
24:48Right.
24:48This doesn't sound healthy.
24:49The pesto was delicious.
24:51Oh, thank you.
24:52You said this is not hydroponics.
24:54This is a technology from the medical sector.
24:56What does that mean exactly?
24:57I wanted to kind of bring a medical device to market, and what that medical device did is it turned
25:03medicine into a mist that lung cancer patients could inhale.
25:07Interesting.
25:08So when the floods happened, something kind of clicked for me that maybe I could repurpose the technology from the
25:13medtech sector into agriculture.
25:15So instead of medicine, we're turning nutrients and water into the mist.
25:19What's the substrate?
25:20The really cool part about this is we don't have any substrate at all.
25:24There's a piece of foam at the top that holds the plant in place.
25:27The rest is suspended in that misted environment.
25:30And what this allows the roots to do is they create this really fluffy structure.
25:35And what this means mathematically is it has six times more surface area.
25:39And this allows us to grow upwards of six times faster than in the soil.
25:43So the roots are going into a water base that you're mixing with nutrients so that the plants can get
25:50what they need to be able to grow.
25:52That's exactly right.
25:53I just put a raised garden at my country house because I want a garden.
25:58Yeah.
25:58But we have a barn.
26:00How much do I have to spend on you to just get that barn going?
26:05One of these systems is only $600.
26:07Is it one of the racks?
26:08Just one?
26:09So all three levels?
26:10With all the lighting, the irrigation, the sensors, they're all just $600.
26:14And you say just $600, giving the impression that that's a lot cheaper than your competitors?
26:19So commercial vertical farming systems start at $200,000, $300,000 for a container farm.
26:24Depends on the size of the farm, right?
26:26If you put this into a large farm and you had $600 per rack, you're going to add up to
26:31tens of thousands of dollars fairly quickly.
26:34So, I mean, the challenge in this space is, and I know a lot about it, is the margins.
26:39It's almost impossible to make money at it.
26:41So we make money three ways.
26:43So number one is selling the equipment.
26:45And we make about 35 to 40% profit margin on that.
26:48And number two is we collect royalty fees.
26:50So we collect 15% on the transactions that happen through our two-sided marketplace, connecting these mostly independent stores
26:56and restaurants to our network of growers.
26:58And lastly, we also sell the packaging itself.
27:01We make anywhere between $10 and $50 per square foot per month in just those royalties and consumables.
27:10And how the farmers make money, they harvest, put it in the package, and the app that we've developed, they
27:15tell them where to deliver it.
27:17The amazing part about this is for something like basil and cherry tomatoes, the profit margin for them after our
27:22fees is actually 47%.
27:24Why is it so much for them?
27:26Because you're connecting direct with that buyer.
27:29Exactly.
27:29So we're cutting out the five or six middlemen.
27:31But how many deliveries have been made to an independent store or restaurant?
27:35So every week, there's at least one delivery per farmer.
27:40Okay.
27:40So we're still very, very much in the trial phase of this.
27:43Very small.
27:43How much have you done in revenue?
27:45Let's talk the numbers.
27:45Yeah.
27:45So we've been in research for the past few years.
27:48So it's been about, I'd say, five months.
27:50And in those five months, we received about $450,000.
27:53So why is this worth $6.25 million today?
27:56We have $3 million already in the pipeline for just equipment purchases.
28:01We see a big potential to scale very quickly.
28:03The more installations we get, the more our recurring revenue compounds.
28:07That's only true if they continue to use the product, right?
28:11And so what happens with a lot of these growing operations is that people lose interest in it.
28:16Arlene has a really good point.
28:18All of us that have had these little vertical farms, you kind of give up because they're a lot of
28:22work.
28:23How much money would I make as a farmer for running this vertical farm?
28:28So just these three shelves will generate $730 in monthly revenue after paying a living wage and after paying our
28:3815% as well.
28:40That's if everything grows and everything sells.
28:43That's right.
28:44And what if the farmer doesn't deliver?
28:47For me, when I hear door-to-door logistics, like that is a full-time business.
28:55For sure.
28:55I don't even think we've picked up on that.
28:57Just building the Uber part of this business is really, really challenging.
29:03I admire that you took technology that was for the medical industry and said,
29:07I can repurpose it and think about it from an ag perspective.
29:11This space has not yet proven a model that truly is scalable and financially viable.
29:18And until that happens, I am going to be out.
29:23I can go. I'm digging what I'm eating here, but I think you're too early for an investment on my
29:27end and I'll be out.
29:30For me, I'm already invested in the vertical farming space.
29:34So I'm going to be out just for that reason.
29:36No worries. Thank you.
29:38I like the green mission and that you're giving farmers a new lease on life and on their property.
29:44But at this point where you're at today, this business is not growing on me. I'm out.
29:51I'm going to buy one of these.
29:53Sure.
29:53I think it's really cool.
29:57And I would love to see how it works at scale.
30:01So again, like you're getting close.
30:04You're just not quite there.
30:05So I'm going to be out for now.
30:07But I think you got the seeds of something good.
30:10Amazing. Thank you so much.
30:11It was a pleasure.
30:11Thanks for coming.
30:11Take care.
30:12All the best.
30:13Bye-bye.
30:14Smart kid.
30:20Coming up, another box of Lujan.
30:23In 20 seasons of the show, this is the biggest deal I have ever done.
30:2920 million dollars.
30:46Hi, I'm Alexa Suter.
30:48I'm the founder and CEO of Hoo-Ha, a women's healthy underwear brand.
30:51And this year we're on track to do over 42 million in sales.
30:55I faced the dragons in 2023.
30:57Hoo-Ha has redefined a category of natural underwear.
31:01What you're seeing there is the green panel lining that has zinc oxide permanently embedded into the fibers during the
31:08spinning stage.
31:09It's really skin soothing.
31:10That's impressive.
31:11Last year our sales were 3.9 million, and this year we're projecting 9 million.
31:16That's amazing.
31:17Good for you.
31:17I don't have a fancy business degree, so I'm really looking and hoping to find mentorship as well.
31:24Okay.
31:27Arlene, I think I'm going to accept your offer.
31:29Oh wow, that's amazing.
31:30Hoo-Ha.
31:35Welcome to our warehouse.
31:37When I was in the den, I got two great pieces of advice.
31:40One was we should stick to what we know best and not get too distracted.
31:45And the other one was innovation is the lifeblood of a company.
31:48So I kind of listened to both.
31:51As we continue pushing the needle on fabric innovation,
31:54we're allowing ourselves to get into new product categories that bring the benefits of our underwear to different areas of
32:01people's wardrobe.
32:02In 2023, we had done 3.9 million.
32:05In 2024, we did over 20 million.
32:08Another box of Hoo-Ha.
32:09And this year, we're on track to do over 42 million in sales.
32:15Now we're at a place in the business where we need to invest more in inventory, more in innovation,
32:22to really bring this thing from 40 million to 100 million and then multiple hundreds of millions in sales.
32:33Hi, big day.
32:35Welcome.
32:35How are you?
32:36Good to see you.
32:37Nice to meet you too.
32:39This is the first print.
32:40It's gonna do really well.
32:41Yeah.
32:41You suggested it.
32:42Yeah.
32:43In 20 seasons of the show, this is the biggest deal I have ever done.
32:51I've been wanting to do an underwear deal for like 17 years.
32:5620 million dollars is a lot of capital, but you know what?
32:59Alexa and her team are going to make sure that they grow this business.
33:01They're gonna scale.
33:02They're gonna be entering into new markets and new product lines.
33:06They're gonna be able to do that because they were able to find the right capital partner and they have
33:10the right plan.
33:10Me too.
33:11I'm so excited and thank you sincerely for the vote of confidence in myself and the team and the brand.
33:19We feel so much stronger to have you in our corner.
33:24Let's make it official.
33:26Are you ready?
33:26Yeah, I'm ready.
33:30Here we go.
33:31It's just really fitting that this is happening on our 20th anniversary of the show.
33:35You know, the thousands of entrepreneurs that have gone through this show.
33:38I think this is a testament to all of them.
33:41High five.
33:42Woo!
33:42I think it shows you what's possible when you dream your dream and you live it out loud and you
33:47push hard to make things possible.
33:49Let me just take that.
33:50Let me just take that.
33:51Please.
34:00And finally...
34:00Wow, they were in suits with fisherman stuff.
34:04Friends from university wading into the den ready to hook a dragon partner.
34:09Hi dragons.
34:10My name is Glen and I'm from Lunenburg County, Nova Scotia.
34:13I'm Javi. I'm from North Vancouver, British Columbia.
34:15And I'm James. I'm from Keswick, Ontario.
34:17And we're here seeking $150,000 in exchange for 20% of our business, Larry's Catch, based in Ontario.
34:25So let's face it, seafood across Canada can be a little fishy.
34:31Now, I'm not talking about Canadian seafood.
34:34I'm talking about the seafood that we eat, which is over 80% imported.
34:39When I moved to Ontario, I went from eating seafood almost every day to never touching it.
34:45Oh.
34:46I would beg my father to start sending seafood from back home.
34:50And it didn't take long for others to start asking if I could send them seafood as well.
34:55This slowly turned into a side hustle.
34:57And around eight months ago, I coerced two of my best buddies to quit our jobs in tech and become
35:04fishmongers.
35:05Oh, I love it.
35:06This sounds a lot like our story.
35:09Yeah, so Larry's Catch sells seafood boxes online.
35:12Our products are sourced from family-owned fishing operations across Canada, including Nineveh, BC, PEI, and Nova Scotia.
35:20Wild caught and sustainably certified.
35:22So dragons, are you ready to hook a company that's making waves?
35:26Oh boy.
35:27Well.
35:28On the table next to you, you actually find a Southwestern for your next fishing adventure.
35:31What's with the suits?
35:33Yeah.
35:33You're dressing for the job you want, which is part fisherman and part business person.
35:38Exactly.
35:40There's real fish in here.
35:42The seafood boxes contain fresh, wild caught fish that are flash frozen for quality assurance.
35:48Available online only, the boxes range in price from $119 to $270.
35:54Half an island.
35:55Nova Scotia.
35:56Oh, that's pretty cool.
35:57Nova Scotia.
35:57Atlantic cattle.
35:59What a great idea.
36:00My biggest question, where's Larry?
36:01Larry.
36:02So, Larry is a fifth generation fishing captain based out of a town called Riverport, just outside of Lunenburg.
36:09And, as you can see, he's also my father.
36:11Yeah.
36:12Larry, in the early 2000s, was diagnosed with primary progressive multiple sclerosis.
36:19Oh.
36:19So, he's now, unfortunately, he's bound to a wheelchair.
36:29Oh.
36:29That's a good one.
36:31Yeah.
36:31So, this is my sort of special way of carrying on the tradition.
36:35Nice.
36:35Well done, Glenn.
36:36Well done.
36:36Yeah.
36:37This is pretty cool that you tell the story of where the fish came from.
36:40It says, you know, the brave fishers travel up to 100 kilometres on the ice in the winter.
36:45Yeah.
36:45So, we offer 17 different products from seven different family-run fisheries from six different communities around Canada.
36:55If I order today, when could I get it?
36:57You get it tomorrow.
36:58Okay.
36:59It's just the three of us waking up five in the morning.
37:01You can imagine us packing orders.
37:03This is exactly how my story started.
37:04Yeah.
37:04There you go.
37:05Yeah.
37:05So, we went to Queens as well, Michelle.
37:07We actually met on day one of university.
37:09We've lived together for the last eight years.
37:12Did you say you still live together?
37:14Yes.
37:14We live together to this day.
37:17I love it.
37:18What were your revenues last year?
37:19Yeah.
37:19So, we only started eight months ago, and we've done $230,000 in sales.
37:24Good for you.
37:25Can you just run through your unit economics quick?
37:28Yeah.
37:28Our average sales price is $160.
37:32Yeah.
37:33Around 47% of that is directly the product cost.
37:38On average, over the last eight months, our margin has been 24%.
37:42What we've really seen is as soon as we went Ontario-wide rather than just the Toronto area, rural areas
37:51lit up.
37:52We actually started sort of targeting East Coasters.
37:56And believe it or not, we actually would go online, look up when East Coast flights were arriving, and stand
38:03at the airport and hand out business cards.
38:05Stop.
38:06That is such good guerilla marketing.
38:09Yeah.
38:09I see guys your age coming here, pumped up like this, selling alcohol.
38:15You guys are pumped up selling fish.
38:18But you're selling Canadian fish, and to me, it's got all the makings of the best kind of brand, which
38:23is there's a story to tell.
38:25Thank you so much, Charlie.
38:26So, Glenn, what is the big picture vision? How big will the revenue be in five years?
38:32We want to expand far beyond Ontario and become the household name.
38:37I want this to be a sustainable industry that is supported within our walls so that we don't have to
38:43depend on other countries to be picking up our stuff.
38:47Is this business actually ready to grow? Do you actually have enough supply?
38:52That's something that takes time. You can't just turn around and all of a sudden have a new supplier.
38:56This year, we're set to do about 800K to a million dollars.
39:00And with our growth rates and with the expertise of a dragon, we know that we can do to 20
39:05million and beyond.
39:08I'll make you guys an offer. I love that you've come in here and rented matching suits to cut costs.
39:15I like you guys. I'm going to give you what you've asked for, 150 for 20%.
39:22Thank you, Brian.
39:23Thank you, Brian.
39:24You know, the fact is you came in here looking for 150,000 for 20% and you get that
39:29offer, you know, from Brian.
39:31He would be a great partner for you guys. So I'm going to be out.
39:33I love you guys' attitudes, your optimism, you're like so Canadian humble.
39:39But for a couple of reasons, this catch isn't for me. I'm out.
39:45You guys are the sustainable food story and food sovereignty is everything.
39:50So I feel very strongly about that.
39:53I would give you the $150,000 for 20% for exactly the same deal that Brian gave you.
40:01So that's my offer.
40:03That's awesome.
40:05Okay.
40:05Michelle.
40:08There are such remarkable similarities in our story.
40:12And they like kind of like all make me like emotional because it takes me like back.
40:18But like being at Queens, meeting my co-founders there, packing boxes, going into the fishing industry.
40:24You know, it's like True Local has probably been one of my biggest success stories from Dragon's Den.
40:29I know just such a disproportionate amount about this space specifically.
40:34I would give you $150,000 for 22.5%.
40:37And that extra 2.5% I think would be worth it.
40:42And, you know, I do definitely see the value of your track record.
40:47Brian, if you don't mind, would you please just share your thoughts in terms of how you can help us?
40:54Yeah.
40:55I know how to build a brand with people.
40:58I've got a passion for seeing people grow and build something special.
41:02And brands that have meaning and stories behind them.
41:06And I want to be a part of that.
41:07So I'm going to put this awesome hat back on.
41:11Here we go.
41:12Awesome.
41:12Well, thank you very much for sharing that.
41:14Do you mind if we just take a moment?
41:16No, go ahead.
41:16Please.
41:16Okay.
41:17They totally remind me of, I think all of us, right?
41:20Like we've been in their shoes and...
41:22Sure have.
41:23Sounds good.
41:24I should.
41:27Fellas, you are three amazing partners.
41:30So which fourth partner do you want to join your group?
41:34I think we're going to ask if Michelle and Arlene, would the two of you be willing to team up
41:41on this
41:42for the amount of equity that Michelle asked for?
41:45So 22 and a half percent.
41:47I would be prepared to go in with Michelle.
41:49Okay.
41:49If she wants a partner.
41:51But if she doesn't, I'm also prepared to do it on my own.
41:54Okay.
41:54Yeah, I have an enormous amount of respect for Arlene.
41:57But I really want to work with the three of you guys directly in doing this.
42:02So I'd like to do it on my own.
42:05Do you mind if we take a moment again?
42:06Not at all.
42:07Okay, sorry about that.
42:08And to be clear, sorry guys, I will do it for the same...
42:11I'll do it for the same 20% that Arlene did.
42:13Oh, wait a minute.
42:14Uh-oh.
42:15Uh-oh.
42:16Okay.
42:16That changed.
42:17Okay, let's talk.
42:20Well, stick to your guns, Michelle.
42:22She just wants to get...
42:23That's fine.
42:24That's fine.
42:25Yeah, for sure.
42:27Sounds good.
42:30Thank you very much, Arlene.
42:31We appreciate it.
42:32Yeah.
42:33Michelle, we would be honored to take the deal.
42:35Woo-hoo.
42:3714-8.
42:37Thank you guys.
42:39Great work.
42:39Oh my gosh, you're so tall.
42:41I grew up on seafood.
42:43Thank you all so much.
42:44Yeah, good luck.
42:44I really, really appreciate it.
42:45Bye.
42:47Well, we didn't get that one, Arlene, but there's other fish in the sea.
42:51Yes.
42:52I am so excited to go home, tell my dad that he's going to be absolutely over the moon.
42:59And I'm honestly kind of getting emotional just thinking about telling him.
43:03Fear.
43:03No fear.
43:04No fear.
43:04Tune in next time.
43:05Yeah!
43:09We feel like if we were coming back here in three months, we don't pay for futures.
43:13You've watched the show before in 20 years, I hope, right?
43:17You are in the top 1% of the 1% of entrepreneurs who take $400 and kind of do
43:22a million dollars
43:23in revenue in their second year.
43:25Yeah.
43:25It's really phenomenal.
43:26I would never have thought an OT like me could be here in front of you.
43:36And we can help millions.
43:57We can help you.
43:58We can help you.
44:01We can help you.
44:09We can help you.
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