Saturday, January 21, 2023

“Shark Tank”: Kevin’s offer of Frescos Naturales is rejected, drink company strikes deal with Daniel

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LOS ANGELES, CALIFORNIA: On Friday night’s episode of “Shark Tank,” a Boulder, Colorado entrepreneur introduces Frescos Naturales, a fizzy beverage company. Despite being the only entrepreneur to walk away with a deal on the January 20 episode, he ends up offering far more than he bargained for.

Juan Ignacio Stewart came up with the idea for Frescos Naturales Drinks to offer a better, and most importantly, healthier alternative to the existing processed and high-sugar drinks that dominate the beverage segment of the market. He hoped to expand his business by blending the signature taste of fresh water with fresh ingredients and a little sugar. To grow his company, Juan Frescos introduced Naturales Drinks in Season 14 Episode 12. The product in question was vital and refreshing enough to pique the curiosity of Sharks, but selling little or no most bowed.

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Juan went to Tank looking for $130,000 in exchange for an 8% stake in the company. Shark Kevin O’Leary gets straight to the point and asks what Juan’s game plan is and how he plans to attract distributors. Juan said 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 with over 130 stores and Ralphs in Southern California with about 230 stores. It began distributing with just one flavor in early 2021 and generated sales of $182,000 in its first year. He made $100,000 in the first six months of 2022, which he felt was a bit low. Gasthai Daniel Lubetzky inquires about the company calculating a $1.6 million valuation that doesn’t support its sales numbers. Juan estimates that he will make between $330,000 and $350,000 in sales this year (2022). He hopes to make $850,000 in 2023.

When Shark Daymond asks John about the cost and retail price of the product, Juan replies that it costs 88 cents a can, which he then wholesales for $2.10. The selling price varies, sometimes reaching $4.50 while it would have preferred $2.99. The average price of competitors like Kombucha and Sparkling Water is $3.99. Although sparkling water is cheaper than Juan’s product, he claims that nothing beats the taste.

Daymond exits the deal, saying he has no industry experience and would offer little support. Kevin informs him that he’s heard so many sales pitches from beverage companies in 14 seasons, but the cultural niche of Frescos piques his interest. He feels there is a demand for the products, but Juan needs to solve the logistics first. Kevin adds that Juan’s pitch is the best thing he’s ever heard from a beverage company, although he thinks they’re all “cockroaches” but Juan is the cutest of them all. He also withdraws. Shark Mark Cuban likes the presentation but despises the business.

He claims that it is difficult to continue the business as there is limited amount of shelf space and now promotions etc. are required, which drives up investments. That’s why he’s eliminated. Shark Lori Greiner believes the business is extremely difficult, expensive and competitive. For these reasons, she is also outside. After Daniel leaves, Juan tries to convince him that there is a market for a certain type of customer. Daniel informs him that sometimes entrepreneurs are unaware of how difficult the trail can be. Juan tells the sharks that he had to overcome several obstacles during his son’s cancer battle. Daniel claims if he can convince another shark to invest, he will.

After Three Sharks are gone, Kevin decides to join Daniel in making an offer for Juan’s fresco company, but he wants a much bigger cut of the pie than the 8% Juan offered. He demands 30%, with each investor receiving 15%. Kevin adds that he hasn’t done a drink deal in 14 years since he loathed the space, but he likes Juan and would do the deal for 30%. Juan claims it can go up to 20%. Daniel responds by asking Juan if he wants to seal the deal for 25%. Juan says he can go for 25% if he can get production funding. Daniel says he’s willing to take care of the funding, but can’t promise. Mark advises Juan not to take the deal as it reduces the value of his company to half a million dollars. Daniel says that in addition to the money, he’s recruiting qualified personnel to help build the company. Finally, Juan decides on 25%.

Shark Tank season 14 airs every Friday at 8:7c on ABC. Missed an episode? Did you want to catch up? Episodes are also available for next-day viewing on demand and on Hulu. You can also watch old seasons and episodes on Amazon Prime Video and iTunes.

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