The Journey of Misfit Foods on Shark Tank
In season 12, episode 17 of Shark Tank, entrepreneur Phil Wong pitched his innovative venture, Misfit Foods. He aimed to secure a $250,000 investment in exchange for 5% equity in his company, which ingeniously blended vegetables with humanely raised chicken to create unique sausage products. At the time, Misfit Foods reported an impressive $800,000 in sales during its inaugural year, boasting profit margins of 29%.
Initial Reception from the Sharks
The panel of investors had various responses to Wong’s pitch. Lori Greiner remarked on the potential of the product, stating:
“I think good product speaks for itself right, it’s going to sell. I do wonder if people will start knocking you off like crazy. I think it’s so smart that I think you kind of have to race to the market. So I’m going to give you an offer, it’s going to be a little bit sharkier. I’m going to go $250,000 but I’m going to ask for 18 percent.”
Despite Greiner’s intriguing offer, Wong ultimately chose to partner with Mark Cuban and Daniel Lubetzky, although their deal did not finalize. Following the show, the company underwent a rebranding, emerging as Phil’s Finest and expanding its market reach across the country.
Financial Insights and Market Strategy
At the time of his pitch, Wong highlighted Misfit Foods’ efficient financial structure. The company reported production costs of $2.91 per unit, with wholesale prices set at $4.13 and retail price ranges between $5.99 and $7.99. Interestingly, Wong noted that while 20% of their sales came through Whole Foods, a substantial 80% was generated via online sales channels.
Prior to his appearance on Shark Tank, Wong had already established credibility with investors, successfully raising $2 million. Furthermore, the partnership with well-respected, fifth-generation sausage makers ensured a high-quality product.
Diverse Product Offerings and Competitive Landscape
Misfit Foods boasted an appealing product range, including flavors like Kale Chimichurri Sausage and Sweet Potato Andouille Sausage, which were available in bundles of eight for $29.95 on their website. This product diversity aligned well with growing consumer demand for healthier meal options.
Reactions and Offers from the Sharks
While evaluating the company’s market position, Greiner emphasized the potential of the sausages due to their low sodium content, viewing this as a significant competitive edge. However, Kevin O’Leary opted out, citing previous struggles with investments in refrigerated foods. Robert Herjavec also declined, explaining that his vegetarian lifestyle would not support collaboration with the brand.
In a bid to secure a stake in the company, Lubetzky proposed $250,000 for 15% equity, a move that Cuban matched. Wong countered with a request for $300,000 but agreed to the 15% stake. However, despite the discussions, the deal could not be finalized during the due diligence process, as reported by Shark Tank Blog. Wong later admitted that he valued the mentorship gained through the experience, even without a concluded deal.
Transformative Growth and Expansion Post-Show
Following their Shark Tank appearance, Misfit Foods underwent a remarkable transformation. By January 2022, Wong rebranded the company as Phil’s Finest, introducing the tagline “putting the ‘more’ in omnivore.”This strategic move came alongside the launch of new products, including Beet Gochujang and Lao Curry Carrot Ground Beef.
Since rebranding, Phil’s Finest has sold over 2 million sausages and 150,000 patties. The company has successfully penetrated the nationwide market through retailers like Sprouts Farmers Markets, reaching more than 370 stores and enjoying annual revenues of approximately $1.5 million. Their product line now features flavored ground beef options and new varieties of chicken sausages, while retaining the original mission of integrating vegetables with meat.
The brand has also expanded its local presence in cities like Philadelphia and Brooklyn, enhancing availability and connection with customers. Fans of the show can catch the latest episodes of Shark Tank on the ABC Network.