'Shark Tank': Kevin's offer to Frescos Naturales gets shunned, beverage firm strikes deal with Daniel
LOS ANGELES, CALIFORNIA: On Friday night's episode of 'Shark Tank,' an entrepreneur from Boulder, Colorado, pitches Frescos Naturales, a sparkling beverage firm. Despite being the only entrepreneur to walk away with a deal on the January 20 episode, he ends up offering far more than he had bargained for.
Juan Ignacio Stewart came up with the idea for Frescos Naturales Drinks in an attempt to give a better and, more importantly, healthier alternative to the existing processed and high-on-sugar drinks that dominate the drinks segment of the market. He hoped to expand his company by blending the typical flavor of fresh water with fresh ingredients and a little sugar. As a result, in order to grow his firm, Juan pitched Frescos Naturales Drinks on 'Shark Tank' season 14, episode 12. The product in question was vital and refreshing enough to pique Sharks' curiosity, but with little to no sales, most bowed out.
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Juan walked into Tank looking for $130,000 in exchange for 8% ownership of the company. Shark Kevin O'Leary gets right to business, asking what Juan's game plan is and how he plans to attract distributors. Juan said that he already has distributors because the brand has been accepted by Krogers, which impressed the Sharks. He was offered four major retailers, including King Soopers in Colorado, which has over 130 locations, and Ralphs in Southern California, which has approximately 230 stores. He began distributing in early 2021 with just one flavor and made $182k in sales in his first year. He made $100,000 in the first six months of 2022 which he agrees was a bit low. Guest Shark Daniel Lubetzky inquires about the firm that is calculating a $1.6 million valuation that his sales numbers do not support. Juan estimates that he will make between $330k and $350k in sales this year (2022). He hopes to make $850,000 in 2023.
When Shark Daymond John inquires about the product's cost and sale price, Juan responds that it costs 88 cents a can, which he then sells wholesale for $2.10. The retail price varies, sometimes reaching $4.50, while he would have preferred $2.99. The average price of competitors such as Kombucha and Sparkling Water is $3.99. Even though sparkling water is less expensive than Juan's product, he claims that nothing beats the flavor.
Daymond walks away from the deal, citing the fact that he has no expertise in the industry and would be of little assistance. Kevin informs him that he has heard so many beverage companies pitch over 14 seasons, but Frescos' cultural niche piques his interest. He feels there is a demand for the products, but Juan must solve the logistics first. Kevin adds that Juan's pitch is the greatest he has ever heard from a beverage company, despite the fact that he believes they are all 'cockroaches,' but Juan is the sweetest of them all. He, too, chooses to retract. Shark Mark Cuban likes the presentation but despises the business.
He claims that the business is difficult to continue since there is a limited quantity of shelf space and there is now a need for promotion, etc., which ramps up the investment. That is why he also opts out. Shark Lori Greiner believes the business is exceedingly difficult, expensive, and competitive. She's also out for these reasons. With Daniel left, Juan tries to persuade him that there is a market for a specific type of customer. Daniel informs him that entrepreneurs are sometimes unaware of how difficult the journey may be. Juan tells the Sharks that he had to overcome several obstacles throughout his son's cancer struggle. Daniel claims that if he can persuade one more Shark to invest, he will.
With three sharks gone, Kevin decides to join Daniel in making an offer for Juan's Fresco firm, but he wants a considerably larger share of the pie than the 8% Juan offered. He requests 30%, with each investor receiving 15%. Kevin adds that he hasn't done a beverage deal in 14 years since he despises the space, but he likes Juan and would do the deal for 30%. Juan claims that he can go up to 20%. Daniel responds by asking Juan whether he wants to seal the deal for 25%. Juan says that he can go for 25% if he can receive some production funding. Daniel says he is willing to look into finance but cannot promise it. Mark advises Juan not to accept the deal since it reduces his company's worth to half a million dollars. Daniel says that, in addition to the money, he is gaining skilled staff to assist build the firm. Finally, Juan settles on 25%.
'Shark Tank' Season 14 airs every Friday at 8/7c on ABC. Missed an episode? Been wanting to catch up? Episodes can also be viewed the next day on demand and on Hulu. Not just that, you can also watch old seasons and episodes on Amazon Prime Video and iTunes.
