Shark Tank Update: EnergyBits. Did They Manage to Get a Deal?

EnergyBits is a wellness brand that offers nutrient-packed algae tabs known as superfoods. These tabs are marketed to boost energy and health without artificial additives.

Despite skepticism on “Shark Tank” regarding its market readiness, the brand has seen significant growth, highlighting the expanding interest in natural health products.

Company: EnergyBits

Founder: Catharine Arnston

Season: Appeared on season 8 in the week nine episode

EnergyBits on Shark Tank: A Quick Overview

EnergyBits helps provide a boost of natural energy. Their algae tabs work to eliminate hunger and fatigue without caffeine or harmful chemicals.
According to their website, a bag of 1,000 tabs is priced at $120. Other offerings include RecoveryBits, VitalityBits, and SkinnyBits. Arnston was motivated to create the algae bits from a wish “to have a simpler, quicker way to be healthy and energized” and “to improve the world” by offering healthy, natural options.
When Arnston originally appeared on “Shark Tank,” she came in asking for $500,000 for five percent equity. While some of the sharks liked the taste of the algae tabs, many seemed skeptical of them overall. Kevin O’Leary did not like the valuation and Lori Greiner worried about potentially deceiving customers through the branding. Ultimately, Arnston left without a deal.

Arnston spoke with Business 2 Community about EnergyBits’ experience on the show and what their next steps are. Take a look at the Q&A below:

Q&A with EnergyBits’ Founder Catharine Arnston

What was your strategy for navigating “Shark Tank”?

I wanted to share my knowledge of the health benefits of algae, which the Asians have known about for fifty years and Americans/Canadians are totally unaware of. Algae is a multi-billion dollar industry in Asia and one day it will be even bigger here, once Americans understand that it has more protein than steak, more iron than spinach, more antioxidants than anything and 40 other vitamins and minerals all naturally. That’s why it’s called a “super food”!

Frankly, it is the most nutrient dense food in the world so it’s more than a super food…. it a “super-duper” food. So my strategy on “Shark Tank” was to try and convey the long-term opportunity algae offers, but I think the Sharks are only interested in investing in products that they think consumers will buy millions of now—not in a few years. Frankly, it’s how all investors are, which is why we sought them out. We had to prove the market for algae in the U.S. exists and it’s finally starting to look very promising! And is growing quickly.

How has EnergyBits changed since the episode was first recorded? Since it aired?

Since we aired/taped we have:

1. Designed all-new packaging for our bags of algae tabs that we sell on our website www.energybits.com

2. Designed all-new packaging for our single servings that we are starting to sell at retailers

3. Signed up 50 retailers

4. Started discussions with national distributors in the USA and Canada

5. Doubled our revenue in 2016 over our revenue in 2015

6. Attracted endorsements from Doctors for our purity, safety and nutritional density

7. Started getting recognition in national media like Fast Company and Nutritional Trade publications who declared algae to be one of the biggest 2017 trends in food nutrition. We are the only consumer brand of algae with national recognition and savvy packaging.

Is there anything you would have changed about your time spent in the tank, including your pitch and valuation?

I would have insisted that the Sharks swallow our tabs, not chew them. Unfortunately, when the Sharks chewed our tablets, that’s ALL they could focus on and I was not able to regain my footing, explain our growth and our enormous market opportunity. I would not have changed the valuation—and it is still $10 million because plant-based nutrition like algae is white hot and in the merger/acquisition markets, plant-based nutrition companies are being purchased for 10x their revenue because it’s where all the growth in the food industry is occurring and there are very few plant-based companies who are retail-ready like we are. Our revenue will double again this year so our valuation will continue to go up.

Who’s your favorite shark?

Mark Cuban because he seems to understand entrepreneurs.

Despite not getting a deal, do you think “Shark Tank” was the right move for your business?

Absolutely! It gave us credibility, visibility and was an exciting part of our growth. I look back at the experience with gratitude and amazement that we were selected. Thank you, “Shark Tank”!

What are EnergyBits’ next steps?

We are being contacted every day by large companies who want to work with us, do co-branding, retail our brand and help us grow. We are still being very careful but this year you will see our national footprint at retail grow and in 2018 when the importance of plant-based diets and keto diets and paleo diets become totally mainstream we will blow up (algae fits into ALL these lifestyles because our algae is vegan, paleo, keto, raw).

At the same time, it will become clearer to Americans how deadly sugar is and that it is contributing to metabolic disorders which lead to chronic illness like cancer, diabetes and heart disease. Our algae has no sugar, no chemicals, no caffeine and no gluten. Our tablets are a godsend to anyone who has a food allergy, food sensitivity or a health issue and there are tens of millions of them and the number is growing every day. Our algae is pure and unprocessed and that’s rare.

Where do you see this industry in 5-10 years?

Algae will be a billion dollar industry in the USA in 10 years and all the food research confirms this.

What would you say to people who want to start their own business?

Go for it but be prepared to sacrifice a lot and only start a business that you are passionate about—it has to be something that helps people and your passion will keep you going during the dark days when no one believes you. Also be prepared mentally, emotionally and financially to have your success take 2-3 times longer than you ever expected and never give up.

What advice would you give to entrepreneurs who want to make it on “Shark Tank”?

Go for it! But be aware that the Sharks tend to invest in consumer products that they can sell the next day (not in something that will take years to grow).

Anything else you’d like to add?

Thank you to “Shark Tank” for providing this opportunity to shine the spotlight on entrepreneurs and to help encourage others to pursue entrepreneurship—it’s the best way to make a difference in the world and to express your creativity. And you might get lucky and be financially successful too.

Responses have been lightly edited for clarity and length

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