Start-ups

Flatlining sales to 6 figures: How Mark Cuban helped pivot this vegan deli meat company for the pandemic

Mark Cuban invests $250,000 in Unreal Deli on season 11 of ABC's "Shark Tank."
ABC

Self-made billionaire Mark Cuban has built an investment portfolio full of vegan and plant-based food companies from ABC's "Shark Tank," including plant-based deli meat company Unreal Deli.

On season 11 of the show in 2019, Cuban made a deal with Unreal Deli to invest $250,000 in exchange for 20% of the company. He was impressed with the product and the company's founder, Jenny Goldfarb.

After his investment, the company was thriving, Goldfarb said during an appearance on Friday's episode of "Shark Tank." But "when Covid-19 reached our shores, everything changed. Restaurants were hit hard."

With lockdowns mandated across the country, many small businesses were forced to close. According to Yelp's Economic Impact Report released in September, over 32,000 restaurants had closed, as of Aug. 31, and about 61% of those closures were permanent, according to Yelp's survey.

Since Unreal Deli's plant-based meat was exclusively sold in 175 deli and restaurant locations in the U.S., "our sales were flatlining," Goldfarb said.

"We were plummeting to zero," Cuban added. "It was a disaster in the making there for a minute."

While her business struggled, Goldfarb also experienced the impact of Covid-19 in her personal life, as her father tested positive and spent 28 days on a ventilator before recovering, she said.

But Cuban, who Goldfarb said offered "unwavering support and guidance" throughout, realized the company needed to pivot into the retail space to survive.

Unreal Deli initially only offered vegan, plant-based corned beef made from beets, chickpeas, tomatoes and spice, but for the pivot, the company created a turkey option as well to package and sell in retail stores.

"We went deep into research and development to create our second product, Unreal turkey, and now we can proudly state 300 grocery stores out of the gate, with at least another 300 to come," she said.

One pound of sliced Unreal corned beef or of sliced Unreal turkey is sold for $26, according to the company's website. A $250 grocery pack includes 25 five-ounce packages of Unreal corned beef and 25 packages of Unreal turkey. Unreal products range in price from $26 to $430.

This pivot into retail "saved the business," Goldfarb said, "and made this whole nightmare story into something really wonderful."

Goldfarb pitched Cuban in 2019 with only $10,000 in revenue, she said. "In just over half a year, we reached over $300,000 in sales," she said.

"What this has all meant for me is we have to use each day we're here to make our mark, help save animals, help the earth and help folks eat much better, healthier, delicious food," Goldfarb said. "Really take advantage of these days, because we don't know if tomorrow will come."

"When your back is against the wall, that's when the best entrepreneurs do their best work," Cuban said.

Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank."

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