The Atlantic Candy Company is an old, established family business in St. Augustine, Florida. The business is Whetstone Chocolate and it was established by candy industry pioneer Hank Whetstone Jr. Mr. Whetstone holds many patents for candy making machines and produced candy for virtually every major brand at the factory over the years.
Hank’s son, Jared, is in the business and he’s bringing a sweet pitch to the Sharks in episode 803. The Whetstones own a patent for something called the “Awesome Ball.” It’s chocolate, wrapped around a container with a prize inside. Nestle tried to introduce a similar product in the early 2000’s, but the FDA shut it down because it was “unsafe.”
The Whetstones own the patent to the newly designed Awesome Ball and they want to amp up production fourfold at their factory. That’s going to take some serious cash, the kind the Sharks can provide. Machinery is expensive and running a factory is too. Even an established, successful business can experience growing pains, which is probably why Jared is spinning off a sub-company to raise funds without jeopardizing the established business.
My Take on Atlantic Candy
In another life, I had a customer that was a candy company: Squirrel Nut Brands in Cambridge, Massachusetts. I got to see how they made their signature confection, the Squirrel Nut Zipper, first-hand. It was an interesting operation and a serious factory! Sadly, the company got sold in 1997 and they shuttered their Cambridge location in 1999.
I have a sweet tooth, though I rarely eat candy these days. We have a friend who is originally from Germany and whenever she goes to visit, she brings us back some chocolate. I usually indulge in that! One of the things she always brings us is the European version of the Awesome Ball. It’s an egg-shaped plastic container with chocolate on the outside and a little toy inside. Most of the toys are small, plastic figures. We actually had them on display in our home (they’re packed away somewhere now).
She always talked about how they don’t sell the product in the USA. It looks as if Jared wants Atlantic Candy Company to change that. It’s a whimsical product: candy and a toy, but think about how much candy gets sold in the USA each year and the potential profits that could come from selling a product nobody else can sell. Atlantic Candy stands to make tens if not hundreds of millions of dollars. This may be the biggest company to ever pitch in the Tank.
Are Sharks Sweet on Chocolate?
The Sharks will understand that this is a “real business,” not some half-baked entrepreneur trying to figure out how to sell candy. The Whetstone family knows the candy business. The proposition will be key here. I can’t imagine Jared is going to ask for a couple hundred thousand dollars, I think he’ll ask for millions for 5% or so. That may throw the Sharks off for a small business, but for a company that does a hundred million in sales a year, 5% is some serious money.
This will likely be a play for cash for equity, with very little hands-on work required by a Shark. How is Mark, Daymond, Kevin, Lori or Robert going to tell the Whetstones how to make candy? They aren’t. If a Shark gets involved, it will be an arm’s-length deal.
What will likely hurt Atlantic Candy Company’s chances is the “why are you here” factor. A business with a long standing presence in an industry with a factory in place shouldn’t need the Sharks, even if they do want to quadruple production. I think the Sharks ultimately pass because the business is so mature and can scale on its own.
About Rob Merlino
Speak Your Mind