MobCraft Beer
NO DEAL
EPISODE SUMMARY
🕓 Air Date: March 11, 2016
Asking For:
$400,000 for 16%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
MobCraft Beer is the world's first crowdsourced brewery, allowing customers to submit and vote on beer ideas, creating a unique and direct connection with consumers.
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Background Story
Henry Schwartz, the founder of MobCraft Beer, hails from Madison, Wisconsin. His journey into the beer industry began in college when he and his friends started brewing their own beer. The positive response from friends and family led them to partner with a local brewery, eventually establishing MobCraft Beer as a craft beer company.
Recognizing the growing demand for craft beer and the desire to support local and independent producers, Schwartz embraced the idea of crowdsourcing and founded MobCraft Beer in 2013. The company’s innovative approach involves allowing customers to submit beer ideas and vote on the next brew, creating a strong emotional connection and brand loyalty.Â
The Product
MobCraft Beer operates as a crowdsourced brewery, leveraging 21st-century technology to involve customers in the beer creation process. Customers can submit beer ideas, which are then vetted by the brewmaster to create viable recipes.
The selected ideas go to a monthly vote, and customers rally support for their preferred brew. With an investment, MobCraft Beer aims to build its brewery facility, expanding its capacity to cater to the growing demand for their unique craft beers across the United States.
The company’s portfolio includes a variety of beers, such as a coconut and chocolate wheat beer, a Hop Gose with grapefruit, a coffee beer named Bat… Crazy, a Vanilla Wafer Porter, and two sour beers—a Belgian double and a sour red ale. MobCraft Beer differentiates itself through its commitment to quality and the direct involvement of customers in the beer creation process. To purchase the beers, customers can pre-order through the MobCraft website, with a $25 pre-order for four 22-ounce bombers.
How It Went
The company’s position before Shark Tank
MobCraft Beer has sold approximately $350,000 worth of beer, with $280,000 of that revenue generated within the last 12 months. The company anticipates reaching nearly half a million dollars in revenues for the current year. Despite projecting a $28,000 loss due to building a new facility, MobCraft Beer has established itself in the craft beer market. The founders initially invested $33,000 in the company, and they secured an SBA 504 loan of $150,000 to purchase the equipment for their brewery.
The company collaborates with online liquor stores, negotiating volume sales with them to reduce traditional retail percentages. MobCraft Beer currently operates in Madison, Wisconsin, selling its products in 75 liquor stores and approximately 65 bars. The founders have successfully navigated legal challenges related to shipping beer directly to consumers and have built partnerships to facilitate distribution.
The Negotiations:
In the “Shark Tank” episode, Henry Schwartz sought a $400,000 investment in exchange for a 16% stake in MobCraft Beer. However, none of the sharks made an offer. The sharks expressed concerns about the need to own brewing equipment and build facilities, suggesting that outsourcing manufacturing could be a more efficient approach. Despite the sharks’ advice, Schwartz was determined to maintain control over the brewing process to ensure quality and a unique identity for MobCraft Beer. Kevin O’Leary was the last potential investor, but he also decided not to make a deal, expressing disappointment in Schwartz’s decision not to outsource manufacturing.
Schwartz remained committed to the company’s vision and expressed gratitude for the opportunity. He emphasized the importance of having a distinct identity in the craft beer world and stated that MobCraft Beer would proceed with building its brewery facility. In the end, MobCraft Beer left the “Shark Tank” without a deal but with a strong belief in its crowdsourced brewing model and a commitment to expanding its brewery to continue producing high-quality, unique craft beers.
