Beyond the Tank Episode 208

beyond the tank episode 208Beyond the Tank episode 208 aired Tuesday, April 12, 2016. Three past Shark Tank businesses get an in-depth update segment, highlighting the challenges they've faced since their original appearance. Beyond the Tank episode 208 takes a look at season four's Nuts N More – the protein packed, healthy nut butter business Mark and Robert invested $250K in for 35% of the business. Also featured is Lori Grenier's green paper towel business she invested $200,000 for 10% in season five. Rounding out the episode is Mr. Wonderful's coveted investment in Zipz – a wine by the glass business he invested $2.5 Million for 10% back in season six.

What have these companies been up to since partnering with a Shark? Find out on Beyond the Tank!

Beyond the Tank Episode 208 Featured Sharks


Beyond the Tank Episode 208 Entrepreneurs


Beyond the Tank Episode 208 Recap

Nuts N More

Partners Dennis Iannotti and Peter Ferreira came to the Shark Tank in season four, hoping for an investment of $250,000 in return for 20% of their company. The valuation was high, but based on a major distributor’s interest.

Mark Cuban and Robert Herjavec paired up to offer Nuts N More $250,000 in return for 35%. The partners accept, and get two Sharks in one shell.

Mark remembers, “I invested in Nuts N More because the health food market out there is exploding, and I thought it was a great opportunity for me.”

Robert adds, “They’re deeply passionate about their product.”

In the five months leading up to Shark Tank, Nuts N More had $100,000 in sales. Two years after partnering with Mark and Robert, Nuts N More has cleared $15 million in sales. They’ve moved from a 1,000 square foot facility to a 10,000 foot facility. Now, Nuts N More is moving into the mass retail market, and are feeling a few growing pains. As the purchase orders grow, so do expenses. Nuts N More is facing the same problem many growing businesses encounter- cash flow is growing tight. They’ve changed the formula to include a more expensive, and they think, a better quality, protein. The extra expense has put a strain on the numbers.

Robert and Mark come to LA to meet with Dennis and Peter, to discuss the future. At the meeting, they discuss how the product is now in about 4,500 GNCs, and sales are topping $8 million. Robert points out that they’ve grown in the niche market, but asks if it could grow into a general marketplace.

The partners are enthusiastic about the idea of moving into Kroger, Safeway, Walmart, and other mainstream retailers. Mark and Robert counsel them to discuss the idea with GNC, their main retailer. “Don’t alienate your core customer,” says Robert.

The group then moves on to the cash flow issues. “We don’t know that we’re profitable,” points out Mark. Because of inventory sitting in the warehouse and other overhead expenses, even though Nuts N More is profitable on paper, they don’t have the cash in hand to finance their growing production demands.

Peter responds that they want to learn about finances so they can keep Nuts N More on the right track. “When you’re small, you’re focused on the income statement,” Robert explains. The profit and loss, because the income statement tells the growth of the sales. As you get bigger, you’ve got to start looking at the balance sheet.”

“Quickly growing companies can die,” chimes in Mark. “Because they’re growing so fast, they don’t pay attention to their cash flow, and mistakes start to happen and one little glitch, we face a real risk of not staying in business.”

Mark advises the pair to bring in a CFO, at least temporarily, until they find a full-time financial officer to handle their finances and cash flow. Robert adds that they need to have a conversation with GMC about moving into mass markets.

These are live and die questions,” says Mark. “If they don’t answer them and deal with them the right way, they’re gone. And if they do answer them the right way, they’re huge.”

“Having Nuts N More become a household name is just that next big goal. We’ve got some really good Sharks behind us, and we’re going to take this all the way.”

Bambooee

Irene and Noam Krasniansky came to Shark Tank in season five. Irene was saddened to learn that only 7% of the Brazilian rain forest is still standing. Noam came up with Bambooee as an environmentally friendly alternative to disposable paper towels and napkins. They partnered with a nonprofit that plants a tree for every roll sold. The pair requested $200,000 in return for 10% of the company. Lori Greiner was willing to accept the deal. Noam hesitated, nearly losing the deal with Lori.

Lori was confident in her investment. “I invested in Bambooee because I only invest in products that I think are going to be great,” she recalls. “And Bambooee, I believe in. Noam and Irene are great partners. They’re planting trees, and they’re investing in and caring about our planet.”

Since Shark Tank, Bambooee has made $3 million in sales, and planted 135,000 trees. The product has been on QVC, as well as in Costco through “road shows,” and on their website. QVC has accounted for ¼ of their overall sales. The challenge of breaking into retail markets is the need to educate the customers about how Bambooee works.

The pair come together with Lori to talk about Bambooee’s progress. Lori tells Irene and Noam that the product is selling well, but that some of the QVC presentations have been problematic. Noam is passionate about the product, but he needs to rein in his excitement.

“If you steamroll over the host, or the producer, or even me, they’re not gonna let you on again,” she says. “My fear is that they might say ‘bye bye, Noam.’ I don’t want them to do that.”

Noam recognizes the problem. Lori suggests that he should do the demo, and Lori should do the talking. “QVC is the largest shopping network in the world, and we get prime time in it. I cannot allow myself to screw that up,” he says.

“I understand that Noam’s passion on QVC is because he just gets so excited, but in order for his passion to really be an asset, he needs to control it and use it.”

They move on to Costco. The company wants them to move from 50 locations into Florida, but the move would mean Noam would have to travel to cover multiple new stores. Lori wants Noam to train sales people to take over some of the new Costco road shows, demonstrating the product.

Lori agrees to supervise a training session, to help Noam and Irene zero in on what makes Noam an effective salesperson, so he can pass it on to the sales staff.

“When you watch Noam, that enthusiasm is exuding out of every pore,” explains Lori. “If you genuinely love the product, other people will see that, and it’s infectious. If they can get that passion in them, to convey it to the people watching, they’ll love the product.”

Lori feels the training is on the right track, and that the sales will grow as the new salespeople gain confidence and enthusiasm.

“Our new goal is to plant 1 million trees,” says Noam. “With the team selling more, I believe, truly, we’re going to be the best product in Shark Tank history.”

Zipz

Andrew McMurray brought Zipz to season six of Shark Tank, where he landed a deal with Kevin O’Leary by selling his single-serve wine glass based on packaging and licensing. Kevin offered $2.5 million for 10%, but wanted the option of buying another 10% at $2.5 million, in the event of an exit.

“I invested in Zipz,” says Kevin, “Because I’m the only Shark that understands wine. The rest are ignoramuses. Now, what’s terrific about this is, with this zip technology, I can put the world’s best wine in single-serve, and that’s mine: O’Leary Fine Wines.”

Prior to Shark Tank, sales were steady at around $650,000. Since Shark Tank, Andrew feels he’ll finish the year at between $1.8 and $2 million in sales. With great success, however, come problems. The production line is at full capacity at 400,000 cases a year. Andrew sees the solution of finding a co-packer that can do 10 times the amount of production. Andrew plans to take the problem to Kevin, and get his input into the idea of putting someone else’s wine into the Zipz brand packaging, in order to meet the increasing sales demands.

Kevin isn’t sure Zipz is living up to its full potential. “Things are happening at a snail’s pace at Zipz,” he reports. “But I still believe that this technology is going to take off. I want to be part of it, and that’s why I still believe in Zipz.”

Andrew lays out the numbers for Kevin, explaining that they’ve sold about 100,000 cases of the Zipz wine, with $1.8 million in revenue. The profit, however, has not kept up with the sales.

Kevin needs to see changes. “Years are going by,” he says. “I used to have hair when I started this investment.” He still believes in Zipz.

Currently, Andrew has enough cash flow to stay in business for 18 months. It’s necessary for Andrew to license the technology to a big wine maker in order to take Zipz to the next level. Currently, five of the top 10 wine makers are testing for shelf life, verifying the technology’s feasibility.

Kevin believes the process will take too long. He wants to jumpstart Zipz introduction into the mainstream market by introducing the technology to a major brand already doing business with O’Leary Fine Wines, STK. The chain runs major restaurants with patios and pools, settings that are perfect for Zipz.

“The idea is just to get the spark, just to get one big restaurateur selling it, so that all the wine buyers and the retailers see it,” explains Kevin.

Andrew explains that the current production line can’t keep up with the number of cases needed to fulfill orders on that level. Kevin agrees that a co-packer is needed, to ensure they can meet the demand should Zipz manage to land this major contract.

Kevin sums up the challenge. Andrew needs to convince a major brand to pick up the Zipz technology, break into a big-box market like STK, and find a co-packer that can handle the capacity. All of it needs to happen in 18 months or less, or Zipz will go down the drain.

“Failure’s not an option for me,” says Andrew. He has doubts, but with Kevin  pushing him, he realizes this is his best, and only, option for keeping Zipz alive.

Kevin and Andrew meet with the co-founder and beverage manager for STK. Kevin pitches the Zipz technology, explaining how it meets the need for plastic wine glasses around the pools, on the patios, and rooftop tables. They demonstrate samples containing Kevin’s own brand of wine, one that the STK people are already familiar with. $18 million of the sales STK does are accounted for by single-serving wine sales.

There are concerns about the ability of Zipz to keep up with demand. STK’s upcoming expansion will mean they have seven outdoor venues, plus pop-ups and festivals. Kevin offers a personal guarantee that they will be able to meet STK’s demands, in all 50 states. They will soon be expanding to 32 more restaurants world-wide, so the already-large demand is going to grow. Kevin’s promise puts a lot of strain on Andrew to find the right co-packer. Without the ability to meet the new production demands, Zipz will fail hard, taking some of Kevin’s street cred with one of his largest customers down with it.

Andrew is already speaking with an international co-packer. The STK owner agrees to give them the US business, but insists that demand must be met, or they won’t be able to move forward into the international market.

Andrew recognizes the challenge. “I’ve got to find a co-packer that’s the best in the world,” he says.

“Listen, this wine has my name on it. If you screw this up, I’m going to kill you,” says Kevin. Mr. Wonderful is only half-joking. A lot of his reputation is riding on this deal, and he stands to lose credibility with one of his largest wine customers if Andrew fails.

Andrew, however, is confident. He has chosen an international co-packer that has the capacity to turn out the Zipz in the volume needed. Their line has the ability to turn out 200 glasses per minute, and 2 million cases per year. In addition to joining the co-packer, Andrew has partnered with Arctic Beverage to handle the production and distribution.

“They’re leaving us in the position,” explains Andrew, “where we’re focusing on being the packaging company and collecting a royalty on every glass.”

Kevin is impressed. “You’ve done well, Grasshopper,” he jokes. “You focused on the royalty. I love it.”

Andrew takes Kevin on a brief tour, showing him how the wine is injected into the glass in such a way that no oxygen can get in and spoil the flavor. Kevin is impressed.

“I’m  not going to hide my enthusiasm. This looks really good. I mean, this technology is amazing. Just watching how the glasses are filled, and sealed, and labeled, it’s beautiful. This is so cool.”

“This road’s had its bumps and bruises along the way,” says Andrew, “but you talk about legacy and leaving a mark in what you do. This is going to be my mark in the wine industry.”

Zipz wine has sealed the deal with Kevin, and looks to be an excellent Shark Tank investment.

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