The Cinnamon Kitchen: A Shark Tank Pitch Analysis

The Cinnamon Kitchen, a brand founded by Yash Sakhlecha, Rij Eappen, and Dishant Sanghvi, recently featured on Shark Tank India Season 3, aiming to secure investment for their world's first social currency powered payments card VISA payments bank. This analysis delves into the details of The Cinnamon Kitchen, encompassing its establishment, ownership structure, business model, products, and the Sharks' decisions regarding their pitch.

Company Details

The Cinnamon Kitchen is part of a bootstrapped company, namely TCKI Plant Foods Private Limited with a company incorporation date on June 14, 2022. This company is registered in East Delhi, Delhi, India. Their 2500 square feet manufacturing unit is in Noida Sector 63 with around 45 SKUs (Stock Keeping Units). Their distribution channels include some retail stores, Amazon, Blinkit, and their website.

Ownership

The Cinnamon Kitchen is owned by Priyasha Saluja & Alka Saluja, with 99% and 1% share respectively. The journey started when Priyasha was diagnosed with PCOS as a young teenager. Later on, when she moved from Delhi to Bombay, she had access to kitchen space and ended up doing countless trials for healthy snacks. Before starting with The Cinnamon Kitchen, she was working in Dentsu Aegis in the Advertising sector where she worked with brands such as Parle, Switzerland Tourism, Wildcraft, etc.

Business Model

The Cinnamon Kitchen operates with a B2C business model, manufacturing plant-based baked products that are 100% gluten-free, PCOS friendly, made with natural sweeteners, preservative-free, and with no refined flour and sugar. Their distribution channel includes some retail stores, Amazon, Blinkit, and their very own website. They operate in two segments: Fresh Cakes & Bakery and Packaged Items.

Products and Services

The Cinnamon Kitchen offers a variety of products including Chocolate Fudge, Methi Millet Crackers, Flourless Almond Butter Cookies, Spicy Vegan Cheese Chips, and many more. In total, they have 45 SKUs (Stock Keeping Units). A detailed list along with the prices of their products can be found at: https://cinnamon.kitchen/collections/all.

Shark Tank Pitch and Decisions

The Cinnamon Kitchen presented their pitch in Shark Tank India seeking an investment of ₹60lacs for 2% equity & valuation of ₹30Cr.

1. Aman Gupta: Aman was impressed by the credit score (838) and initially extended an offer of a combination of equity and debt (₹10lacs for 2% equity+₹50lacs debt at 12% interest for two years). But looking for guidance and help, Priyasha tried to negotiate only for the equity and eventually grabbed the offer of ₹60lacs for 5% equity with a valuation of ₹12Cr.
2. Namita Thapar: Namita appreciated the efforts that Priyasha has put in in the initial phase of her bootstrapped company (initial investment ₹50000), but since it’s a smaller market, even if it’s a growing one with some competitive and aspirational players, she didn’t invest into the company.
3. Vineeta: Vineeta was impressed by Priyasha. She liked Priyasha’s spirit and her “Never Say Die” attitude and hence she extended the deal of ₹60lacs for 10% equity (valuation ₹6Cr.). She even mentioned that she has never had so much fun during Shark Tank. She enjoyed Priyasha’s pitch a lot.
4. Deepinder Goyal: Deepinder wanted to invest but didn’t because of the conflict of interest. He can’t invest in B2C brands, bakeries, etc. But he would always help her as a mentor, a valuable guide. Even when a negotiation was going on between Aman and Priyasha, he provided her the direction to get through the deal.
5. Anupam Mittal: He pointed out the labeling of the products because the written contents were neither clear nor properly readable. He believed in the brand and its products because the market for such gluten-free products is going to expand in the future. He decided to join Vineeta in the deal with the same amount share and valuation, i.e., ₹60lacs for 10% equity (valuation ₹6Cr.).

Analysis of Shark’s Decisions

The Sharks' decisions reflect several key considerations for The Cinnamon Kitchen:

• Packaging concerns: The Cinnamon Kitchen has a variety of packaged products but the labeling on those products (especially jar and container products) was poor. It was not printed correctly and hence the ingredients and other contents were not readable.
• Niche market (but in a growing phase): The market for healthy snacking is a niche market (15%) but it has 20% of year-on-year growth.
• Competitive players: Big brands such as Nutri Choice etc. are some already established big players in this market segment. This might obstruct selling while competing with them.

Some key strengths and weaknesses of The Cinnamon Kitchen:

Strengths:

• Growing market: The Indian Snacking Market currently is at ₹70000Cr. with a 10% year-on-year growth. But the Healthy Snacking Market forms 15% out of this ₹70000Cr. and surprisingly, with 20% year-on-year growth. Hence, the target market of The Cinnamon Kitchen is growing and will explode in the future.
• Unique Recipes: The Cinnamon Kitchen has its own USP for its unique recipes. These recipes are 100% gluten-free and provide a healthy alternative for people suffering from PCOS.
• Founder's spirit: There is nothing better when a person is self-motivated to do the work, and this is the case with the founder of “The Cinnamon Kitchen”. Priyasha has a high spirit and is dedicated to her business. Her “Never Say Die” attitude and aspirations are evident from the growth and increasing sales of her company.

Weaknesses:

• Big competition: The Indian Snacking Market is currently occupied by some big brands, such as Nutri Choice which pretends to be a healthier alternative to normal cookies. In this scenario, the growth of The Cinnamon Kitchen might be a difficult task.
• Poor packaging: The packaged foods in jars and containers had poor packaging as labels and contents were not clear.

Future of The Cinnamon Kitchen

The future of The Cinnamon Kitchen can be projected in terms of growth in sales and production capacity. The projected sales for the years 2023-2024 were ₹6Cr. and the market for Healthy Indian Snacking has a 20% year-on-year growth. Hence, the future of the brand looks vibrant and successful.

Conclusion

The Cinnamon Kitchen's appearance in Shark Tank Season 3 highlighted how countless efforts and dedication can result in unique recipes and ultimately make a business opportunity from those recipes. The founder's insights on her story and her hard work paid off when she got a deal from 3 sharks and ultimately converted it into Aman's deal. Her efforts are evident from her unique and tasty recipes complemented with a justified price. Their business has growth potential in the future.

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