The Central Region’s Fiery-Passion Start-up: A Homegrown Delicacy that Faced Shark Tank Rejections, but Ended with a Bang with Shark Thai

Sachi’s CEO and founder, Nguyen Huu Vinh, along with a shareholder, recently appeared on Shark Tank Vietnam to present their unique product—a type of Vietnamese rice cracker called “bánh tráng.” According to Mr. Vinh, the entire production process and machinery design was self-researched and created by the founder himself.

In the past, their product faced rejection from customers due to issues with the crackers being too brittle and unattractive packaging. However, Sachi has since improved their recipe by incorporating rice and coconut in their crackers. Additionally, they have constructed a 20,000-square-meter factory that meets all export standards. Currently, Sachi’s rice crackers are being developed to attain the prestigious OCOP 5-star certification.

Sachi has already received export orders from the United States, Canada, and Taiwan, and their products are available in restaurants across seven provinces in Central Vietnam. Regarding their financial plans, Sachi reported a revenue of 15 billion VND in 2022, which increased to 24 billion VND in 2023. They project this number to reach 50 billion VND this year and 70 billion VND next year.

By 2029, Sachi aims to achieve a revenue of 250 billion VND. Currently, they value their factory at 50 billion VND, triple the book value, with an EBITDA of 3.3 billion VND per year.

Therefore, Sachi approached the Sharks seeking an investment of 10 billion VND for a 10% stake in their company.

To penetrate international markets, Sachi is working with a Vietnamese company to export their products to the US and Canada.

Upon visiting Sachi’s online store, Shark Minh noticed that many items were out of stock and inquired about their supply chain management, as 40-50% of their products seemed unavailable. In response, the founder explained that Sachi plans to collaborate with distributors and online sales partners to jointly promote their products and achieve profitability.

However, Shark Binh asserted that Sachi has not actively promoted online sales channels. Their website also seems to serve the purpose of gauging interest in their products, which indicates a lack of investment in this area. The founder clarified that online sales currently account for only 5% of their revenue, hence the limited focus on this channel.

In terms of distribution, Sachi handles 60% of their product distribution through the GT (traditional distribution) channel, with the remaining going through agents and dealers in Central Vietnam.

Despite achieving a revenue of 24 billion VND in June, with a post-tax profit of 16%, the CEO of Sachi anticipated a decrease in profits this year due to the initial costs of establishing the new factory. Shark Minh argued that this reasoning is illogical, as a new factory should increase productivity and efficiency, leading to reduced production costs or, at the very least, costs equivalent to the current level.

“Impossible, it’s too difficult,” Shark Hung exclaimed in response to the 16% post-tax profit figure.

After analyzing the cost structure, with a product cost of 60% (including all expenses except selling expenses), and 25% allocated to management and marketing expenses, Shark Binh concluded that the startup’s profit margin is too thin.

Shark Hung observed that Sachi’s lack of clear positioning as either a manufacturer or a product developer makes it challenging to achieve a breakthrough. As a result, Shark Hung declined to invest.

Shark Minh acknowledged the delicious taste and local character of the product but pointed out that reaching a mass market would require more than what they currently have, as their product is easily replicable.

Shark Minh commended the team’s efforts in scaling their family business into a large factory, recognizing the challenges they must have faced along the way. While wishing them courage and faith for their journey, Shark Minh also declined to invest.

Sharing a similar sentiment, Shark Binh stated, “I think if Sachi shifts its strategic focus from traditional distribution to D2C (Direct-to-Consumer) channels, which is my core strength, I could help them transform. However, I also decline the deal.”

Shark Phi Van suggested that the startup should first build a strong foundation in sales and marketing to thrive in the Vietnamese market before considering exports. “Focus on D2C channels, as your distribution is quite localized in Central Vietnam. D2C channels have great potential, but you lack the capacity to fully utilize them. That’s where your focus should be right now,” Shark Van advised as she also declined the deal but offered contacts to help them enter the market.

Inspired by Shark Hung’s charitable act of building a bridge in Hoai Nhon, Binh Dinh province, and Shark Minh’s song “Vietnam Oi,” the CEO of Sachi expressed his ambition to process all Sachi products using Vietnamese rice and contribute to the country’s agricultural industry.

Despite rejections from four out of five Sharks, Shark Thai offered a deal of 15 billion VND, including 5 billion VND for a 10% stake (equal to the book value) and an additional 10 billion VND in loans with a term of 1-2 years.

After deliberating, the founder of Sachi declined Shark Thai’s offer, stating their determination to continue striving toward their goal of developing and promoting their hometown’s products.