Echo Valley Meats
DEAL
EPISODE SUMMARY
🕓 Air Date: March 13, 2015
Asking For:
$150,000 for 20%
Investor:
Mark Cuban
Deal:
$150,000 for 25%
PRODUCT SUMMARY
Echo Valley Meats specializes in old-fashioned butcher-shop quality, delivering delicious meats and treats through their website and gift catalog.
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Background Story
Dave Alwan, the founder of Echo Valley Meats, hails from Peoria, Illinois. A passionate entrepreneur, he embarked on the journey of establishing Echo Valley Meats, specializing in delivering top-notch meat products. His initial foray into the business world included a pitch on Shark Tank a year and a half ago, where he faced challenges but used the experience as a catalyst for improvement. Recognizing the need for a refined business plan, Alwan returned to Peoria determined to delve deep into his company. Armed with insights gained from the University, he meticulously calculated customer acquisition costs and focused on developing a robust marketing strategy.
The decision to revisit the tank wasn’t just about seeking investment; it was about showcasing growth and learning from previous setbacks. Echo Valley Meats, headquartered in Peoria, Illinois, distinguishes itself by delivering that old-fashioned butcher-shop quality. The company’s signature offerings, including various meats and delectable treats, are made using Alwan’s personal recipes. The commitment to quality is evident in every product, ensuring a unique and delightful culinary experience for customers.
The concept of Echo Valley Meats revolves around providing customers with convenient access to high-quality meats through their website and gift catalog. Alwan’s son, Jordan, attested to the deliciousness of the products, and the company’s focus on quality resonated with the Sharks and customers alike. The decision to split the mail-order business into its own entity was a strategic move, contributing to the significant growth Echo Valley Meats experienced post-“Shark Tank,” transforming a once challenging experience into a remarkable success story.
The Product
Echo Valley Meats offers a diverse range of high-quality meat products, epitomizing the old-fashioned butcher-shop experience. Customers can conveniently access these premium offerings through the company’s website and gift catalog. The product line includes various meats and delectable treats, with each item crafted using founder Dave Alwan’s personal recipes.
From succulent cuts of meat to specialty items like the renowned cheese garlic spreads, Echo Valley Meats provides a unique and delightful culinary experience. The products are carefully vacuum-packed into their freezer, ensuring freshness and quality preservation. This attention to detail reflects Alwan’s commitment to delivering exceptional taste and satisfaction.
The convenience of online ordering through the company’s website and catalog allows customers to browse and select from the diverse array of offerings. The product range caters to different preferences and occasions, making it suitable for both everyday meals and special events. Prices are competitive, offering customers access to premium-quality meats at reasonable rates.
Echo Valley Meats’ emphasis on delivering outstanding quality and flavor has contributed to its success, evident in the significant growth post-Shark Tank. The company strategically focuses on the mail-order segment for scalability, enabling customers to enjoy these exceptional products with the convenience of doorstep delivery.
How It Went
The company’s position before Shark Tank
Echo Valley Meats has undergone a remarkable transformation, reflecting in its robust performance and strategic positioning. The company’s health is robust, with sales experiencing explosive growth. The decision to split the mail-order business into its own entity proved highly successful, propelling sales from $190,000 to an impressive $1.4 million. Echo Valley Meats strategically focuses on the mail-order segment for scalability, contributing significantly to the company’s overall success.
The company’s partners include Mark Cuban, who invested $150,000 for 25% of the mail-order business and an option to buy 25% of the entire company for the same amount. This strategic partnership not only provides financial support but also opens avenues for collaboration and growth.In terms of wholesalers, Echo Valley Meats has positioned itself as a direct-to-consumer brand, utilizing its website and gift catalog for customer engagement. The decision to split the mail-order business reinforces this direct-to-consumer approach, streamlining operations and enhancing customer relationships.
The customer base of Echo Valley Meats has seen substantial growth, with a retention rate of 35-40%. This indicates a strong customer satisfaction level and loyalty, as evidenced by repeat orders. The online platform has played a crucial role in expanding the customer reach beyond local boundaries, attracting a diverse audience seeking high-quality meat products.The $150,000 investment not only provides essential capital for growth but also brings valuable expertise and connections to the table.
Profits have been substantial, with a net profit of approximately $260,000 from the $1.4 million in sales. The company is projecting further growth, with the mail-order division expected to generate about $1.8 million in the current calendar year. The company’s current structure involves a strategic separation of the mail-order business, highlighting a focused and scalable approach. The company’s commitment to learning from past experiences and adapting its strategy has proven instrumental in its current healthy and thriving position.
The Negotiations:
In the negotiations on “Shark Tank,” Dave Alwan of Echo Valley Meats faced a dynamic exchange of offers from the Sharks. Seeking $150,000 for 20% equity, Alwan received several intriguing proposals. Mark Cuban, expressing admiration for Alwan’s growth and learning from past mistakes, offered $150,000 for 25% of the mail-order business and an option to buy 25% of the entire company for the same amount. This comprehensive deal resonated with Alwan, emphasizing Cuban’s interest in the entire business.
Kevin O’Leary initially proposed $150,000 for 20% but later modified the offer to $150,000 for 17.5%, aligning with Robert Herjavec’s valuation. Herjavec, in turn, presented a substantial offer of $300,000 for 35% of the entire company, showcasing his confidence in Echo Valley Meats’ potential. Lori Greiner and Daymond John, however, refrained from making offers. Cuban further modified his offer to match Herjavec’s valuation, providing $150,000 for 17.5% but still emphasizing his desire to have his Wicked Good Cupcakes featured on Echo Valley Meats’ site.
In a surprising turn, Mark Cuban, demonstrating his keen interest in Echo Valley Meats, expanded his offer, proposing $150,000 for 25% of the entire business and requesting the inclusion of his Wicked Good Cupcakes on the site. This comprehensive offer proved to be the turning point, and Dave Alwan accepted Mark Cuban’s deal. The negotiation showcased Alwan’s strategic approach and the Sharks’ recognition of Echo Valley Meats’ potential for success.
