Frescos Naturales – Sparkling Water
DEAL
EPISODE SUMMARY
🕓 Air Date: January 20, 2023
Asking For:
$130,000 for 8%
Investor:
Daniel Lubetzky
Deal:
$130,000 for 25%
PRODUCT SUMMARY
Frescos Naturales offers a line of sparkling agua frescas made with high-quality fruits and flowers, providing a healthier alternative to traditional Latin American drinks.
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Background Story
Juan Ignacio Stewart, the founder of Frescos Naturales, originally hails from Guatemala and now resides in Boulder, Colorado. He drew inspiration from the homemade agua frescas he enjoyed in his homeland and decided to bring this tradition to a broader market in the United States.
The idea for Frescos Naturales was sparked by his son, Joaquin, who suggested bottling the refreshing drinks that were beloved in their family. Juan has prior experience in the food industry, having previously run a hot sauce company called Green Belly Foods, which is already distributed across Colorado.
The Product
Frescos Naturales offers a line of sparkling agua frescas in various flavors, including Maracuyá (passion fruit), Rosa de Jamaica (hibiscus), and Guayaba (guava).
These drinks are crafted using authentic recipes and feature only three key ingredients: water, high-quality fruits and flowers, and a touch of sugar for a balanced taste.
These beverages are designed to be a healthier and natural alternative to high-fructose corn syrup-laden or artificially flavored sodas. They provide a taste of Latin American culture and refreshment, and they are low in calories, typically around 60 per can, with minimal added sugar.
Frescos Naturales is striving to offer consumers an authentic, healthier, and more flavorful option, making it an attractive choice for those seeking a more natural and culturally inspired beverage.
How It Went
The company’s position before Shark Tank
Frescos Naturales has made significant progress since its inception. It has already gained acceptance into Kroger, one of the largest supermarket chains in the United States, with plans to be available in multiple major retailers, including King Soopers and Ralphs. Juan reported $182,000 in sales during the first year, and in the current year, the company has achieved approximately $100,000 in sales within the first six months, with an expected year-end sales goal of $330,000 to $350,000.
However, the valuation seemed high compared to the current sales, which prompted questions from the sharks about the company’s financials and profitability. The product costs 88 cents per can to produce and is sold at a wholesale price of $2.10 per can. Retail prices vary depending on the location, but they generally range from $2.99 to $4.50 per can.
Competitors in the beverage industry include kombucha and sparkling water, which are generally cheaper but may not offer the same authentic flavor and cultural appeal. Frescos Naturales is seeking additional financing for production, and its future plans involve expanding to Mexico and Central America, where there is already a demand for these traditional beverages.
The Negotiations:
Four out of the five Sharks initially opted out, with some expressing concerns about the challenges in the beverage industry. However, Daniel Lubetzky expresses interest due to Juan’s presentation and the cultural niche Frescos Naturales fills. He offers $130,000 for 25% equity and suggests possible financing help.
Kevin O’Leary then jumps back in, proposing a deal at the same terms as Daniel but with a higher equity stake of 30%. Juan briefly considers Kevin’s offer but ultimately chooses to accept Daniel Lubetzky’s offer of $130,000 for 25% equity in the company. The negotiations conclude on these terms.
