The $12m 'vegan-friendly' idea that surprised Shark Tank
IT WASN'T until the supermarket security guard threw him out of the store that Kjetil Hansen knew he was onto a winner.
The 26-year-old, who scored a $300,000 investment from entrepreneur Andrew Banks on Tuesday night's episode of Shark Tank for his bacon-flavoured seasoning, had been handing out samples of his prototype to shoppers.
With each sample, he included a survey asking them to rate how likely they would be to buy the seasoning - which makes "anything taste like bacon", from pasta and popcorn to roasted veggies - if it were available in-store.
"I had a mixer in my kitchen, mixing spices and trying to come up with this bacon seasoning recipe," he told news.com.au.
"During that process, I came up with a sample that tasted really good.
"I handed out surveys at the supermarket until the security guard threw me off the grounds. The average score was 4.9 out of five. That was the final call, when I saw that response, I said, 'Okay, I just have to do this.'"
Mr Hansen, originally from Norway, had been studying for his Masters in Business Management at Melbourne University and spending "too much time watching Shark Tank" while he "should have been going to lectures".
Instead, he dropped out, investing every cent he had into the business - about $30,000 in total. He came onto the episode, which was filmed last year when the business was less than 12 months old, seeking $300,000 for a 25 per cent stake in his company Deliciou, giving it a valuation of $1.2 million.
His confidence - and the bacon-flavoured popcorn - initially impressed the judges, although they baulked at his high valuation off just $60,000 in sales. When he said he could get to $25 million in sales in the following financial year with the investment he was seeking, Boost Juice founder Janine Allis called "bulls***".
"Be careful, don't throw numbers out like that when it's actually just really fanciful," she said.
"When you're talking to investors, you lose all credibility, because there's not a hope in hell that you would be able to achieve what you're talking about in that time frame."
The real sticking point, however, came when he revealed that his manufacturer, not his company, owned the intellectual property for the bacon recipe. "You don't own the IP, your supplier has you by the balls," Ms Allis said.
That caused all of the Sharks to back out except for Mr Banks, who took a liking to the Norwegian and offered to make a deal - on the condition they could negotiate to take back the IP from the manufacturer, and that the seasoning could be classified as "vegetarian" in the US market.
Mr Banks initially made an offer of $300,000 for 45 per cent of the business, before agreeing to knock it down to 44 per cent.
"How funny," he told news.com.au. "You've got this guy from Norway, who lives in Melbourne, who latched onto something that tastes like bacon. Of course there are a lot of things out there that taste like bacon, but the question is, are they vegetable-based and not in any way unhealthy?"
Mr Banks, who lives in Los Angeles, recognised the opportunity, particularly in the US which has a "huge" kosher market. "Even though it may be against your culture to eat pork, everybody loves the taste of bacon," he said.
"I have a very good friend who supplies a huge amount of tomato sauce for the pizza industry. There's a huge opportunity. It's all being tested in the US and we're waiting for the results to confirm that the ingredients are all vegetarian and healthy."
Mr Hansen, who is still in the process of regaining the IP from his manufacturer, said sales had exploded since the episode was filmed. "It's crazy. Last month we did $200,000, this month we're going to do at least $500,000," he said.
"We could potentially do over $1 million this month. It's hard to explain how difficult it is to handle this kind of growth. It's just insane. We did about $650,000 last financial year, and I think we'll be able to do between $7 million and $12 million this year."
The bacon seasoning, which retails for $20 for a single bottle or $39.95 for a four-pack with free shipping, now sells "a lot more to the US and Europe" than in Australia, and the business has grown to five people.
"We've started seeing really good traction in the US market, we see particular interest from vegetarians that missed the taste of meat," he said.
"We also have interest from the kosher market and also the halal market, countries like Dubai and Indonesia.
"We have hundreds of five-star reviews from customers that are losing their minds over it. It's really exciting, we see people coming back and buying more and more."
But Mr Hansen said not many sales were commercial orders. "We're still a very underdog company, so we don't have a lot of commercial clients," he said.
"We don't have any distributors. Most cafes and restaurants buy all their food through distributors, but every time I have contacted a distributor, they think it's a joke. So I've just given up. If they want our product they can come to me."
Mr Hansen described the Shark Tank experience as "terrifying". "I've pitched on stage in front of thousands of people before, but nothing was as scary as that," he said.
Shark Tank returns next Tuesday at 7:30pm on Network Ten