Former lawyer and reality TV star, Ana Quinoces, wants to grow and expand her signature line of marinades, Skinny Latina, but needs some help from investors to properly grow her customer base. Skinny Latina started when Ana would make her marinades for friends and family. Her line has grown to include four recipes (million-dollar marinade, mango-apricot BBQ sauce, guava-fig BBQ sauce, and hot sauce) that she now manufacturers and packages in their small-batch factory.
While Ana does not have any formal culinary training, she has been featured on the Food Network and has multiple books promoting her recipes. Ana’s line of marinade has wowed distributors that love the taste of her products and have decided to sell them into stores such as Publix, Fresh Market and Whole Foods throughout Florida.
As Marcus tries to understand more about Skinny Latina, he becomes very worried that Ana doesn’t know her financial information and therefore can not make factual decisions for the future of the company. Marcus believes that current sales show that the proof of concept is there for the product line, but there is nothing else to give Marcus or other investors the confidence to invest their time and money into Skinny Latina. With the amount of money that would be necessary to help them really move forward, it would be irresponsible to invest by himself.
— CNBC's The Profit (@TheProfitCNBC) November 20, 2019
He would like to talk to other investors that may be interested in partnering with him and Skinny Latina to mitigate the risk to his bottom line. Ana becomes angry that he isn’t willing to invest in the company upfront. She wants him to do the hard work of moving Skinny Latina forward without needing to put in the work herself.
While discussing possible investment opportunities, Ana shares that she has never talked to others about investing because she doesn’t want opinions from others and would want truly silent partners. As Marcus quickly learns, Ana has a hard time accepting feedback and he is concerned with her ability to make meaningful changes in her business. Every time someone has constructive criticism for Ana about her branding, business or product, she attacks the person’s credibility or character to try to invalidate their feedback.
The first example of this comes when she has a meeting with a local grocery chain who gives her feedback that her packaging doesn’t adequately promote the product or tell the consumer the value of using the product. They feel that Ana’s branding needs to be updated to properly compete with other products in this shelf space. They also want her to reconsider the naming of the product because “Skinny Latina” makes it seem as though it’s low-calorie but there are other brands that have less calories than Skinny Latina.
After visiting the grocery store for feedback, Marcus sets up a focus group that will allow consumers to have a safe place to review the product in its entirety — from packaging to taste testing, they provide valuable insight into honest feedback from a consumer’s point of view. While the focus group really likes the taste of the product, they provide very similar feedback to the grocery chain. They feel that the naming of the product, as well as the carton figure on the label, could easily be confused with Bethenny Frankel’s Skinny Girl brand. They also feel that they need to be better at describing what is in the product so that consumers know if it’s made from whole foods, is gluten-free, low calorie, etc.
As Marcus challenges Ana to be open to accepting feedback, he schedules an appointment with Black Dog Branding Agency to revisit Skinny Latina’s branding. They also agree that her label and branding is too similar to Skinny Girl. They suggest transforming the brand name to Ana Q with Skinny Latina being a product within the brand. She feels that she is losing part of herself and becomes very upset with the changes. They agree to move forward the branding changes as long as they will keep some of the original elements of the product packaging.
With the appropriate branding and marketing changes in the works, Marcus challenges Ana to meet with a group of investors to try to secure additional investment funds. If she can land additional investors, he will also agree to invest in the Ana Q brand of marinades. Marcus is impressed with the set up of the meeting. She has a nice tasting area for the product at the beginning to pique the investors’ interest in her product. Ana walks them through her story and growth plan and Marcus is impressed when she openly accepts feedback without refuting it.
Unfortunately, Ana does not have a proper business forecast or data on her revenue per year, inventory, or capital needs. In order for investors to make an informed decision, they need to know how much she needs and where that money will be going. They need to have a clear idea of how and when they will make back their investment. Although they believe in Ana and they were very impressed with her product, the investors decline to make a financial investment into Ana Q because they don’t fully understand the financial picture and health of the company.
Although Ana was not able to secure additional investors, Marcus wants to meet with her to discuss the possibility of investing in Ana Q. Nick Molina, an investor with a great track record of investing in startups, joins Marcus and Ana for dinner to discuss the future of Ana Q. Marcus and Nick agree to both invest in Ana Q’s Skinny Latina marinade. Marcus will invest up to $125,000 for 25% equity and no less than $75,000 for 15%. This gives him flexibility that if at some point he feels that things are not going well, he can mitigate his risks. Nick will also invest $75,000 for 15% equity as well. They all agree to partner moving forward.
— CNBC's The Profit (@TheProfitCNBC) November 20, 2019
— Marcus Lemonis (@marcuslemonis) November 20, 2019
What did you think of the progress that Ana made throughout this episode? Which change(s) do you feel will make the biggest impact on the bottom line of Ana Q? Do you agree with the branding direction that they are taking the company? Start the conversation in the comments below.