A Spoonful of Comfort Soup Delivery
NO DEAL
EPISODE SUMMARY
đź•“ Air Date: September 23, 2016
Asking For:
$400,000 for 10%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
poonful of Comfort offers care packages containing a family-sized jar of hand-crafted soup, half a dozen bakery rolls, and cookies, delivering comfort to loved ones, especially when they are sick or hurting.
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Background Story
Spoonful of Comfort, founded by Marti Wymer and Scott Gustafson, emerged from a poignant personal experience and a desire to offer solace during challenging times. The company’s roots trace back to October 2007 when Marti received the devastating news of her mother’s lung cancer diagnosis. Compounded by the geographical distance between them, Marti felt a profound sense of helplessness. In an attempt to express comfort and care from afar, Marti embarked on a search for a suitable gift online, only to find that the available options failed to capture the sentiment she wished to convey.
Frustrated by the limitations of conventional gifts like flowers, candy, or fruit, Marti instinctively thought of the age-old remedy—chicken soup, a comforting gesture familiar to many. However, she encountered a significant challenge: finding a convenient way to send this heartfelt offering across the miles. Tragically, Marti lost her mother merely six weeks later.Out of this emotionally charged and challenging experience, the idea for Spoonful of Comfort was born.
Marti, joined by Scott Gustafson, set out to create a company that would provide a thoughtful and practical solution for people facing similar circumstances—wanting to offer comfort to loved ones who were physically distant. The founders’ backgrounds contribute to the company’s vision, with Marti having a personal connection to the motivation behind the business, and Scott, with a background in business and having invested $500,000 initially, providing the strategic and financial support needed to bring the concept to fruition.
The Product
Spoonful of Comfort’s flagship product is a carefully curated care package designed to deliver warmth, nourishment, and comfort during challenging times. Priced at $69.99, each thoughtfully assembled package includes a generous family-sized jar of hand-crafted soup, half a dozen bakery-fresh rolls, and a selection of cookies. The product aims to provide a heartfelt alternative to traditional gifts like flowers, especially when loved ones are facing illness or hardship.
The process is simple for customers: they can purchase these comforting care packages directly from Spoonful of Comfort’s website. The contents are elegantly packaged and ready for delivery, eliminating the need for recipients to prepare a meal during trying times. The variety of soup flavors caters to different tastes, offering a personal touch to the gift. Notably, the cost of $69.99 is positioned as equal to or less than a traditional bouquet of flowers.
The product’s key features include the convenience of a ready-to-go meal, the emotional resonance of a comforting soup, and the additional touch of bakery-fresh rolls and cookies. The company acknowledges the limitations of traditional options like flowers, recognizing the healing power of a shared meal. Despite the challenges presented during the Shark Tank pitch, the founders remain committed to refining and growing their business.
How It Went
The company’s position before Shark Tank
As of the Shark Tank pitch, Spoonful of Comfort faced challenges in its financial health and operational strategy. The company had a turbulent financial history, having partnered with a national daily deal site that led to significant losses due to the popularity of their discounted deals. This strategy, while boosting visibility, resulted in a cost structure where the company was losing money on each deal, attributing it to the “cost of customer acquisition.”
Marti Wymer and Scott Gustafson, the founders, had invested a substantial amount in the business, with initial contributions totaling $500,000 and additional loans amounting to approximately $800,000. The total commitment from the founders stood at an impressive $1.3 million. Despite this significant investment, the company struggled with profitability, with the most recent 12-month sales reported at $1.08 million.
The business model had faced scrutiny from the Sharks, who questioned the high cost of customer acquisition, the pricing strategy, and the overall complexity of the operation. The company’s reliance on a daily deal site partnership contributed to a lack of customer loyalty, making it challenging to recover costs. The pitch revealed a struggle to balance the desire for growth with the need for a sustainable and profitable business model. While the company demonstrated resilience, the Sharks expressed concerns about its long-term viability, prompting them to decline investment offers.
The Negotiations:
The negotiations between Spoonful of Comfort and the Sharks on Shark Tank were characterized by a mix of appreciation for the concept and critical concerns about the company’s financial health and business model. Marti Wymer and Scott Gustafson entered the Tank seeking $400,000 for a 10% equity stake in their business. Despite showcasing a product that resonated with several Sharks, offering comfort through soup during challenging times, the financial intricacies of the company raised red flags.
The Sharks delved into the specifics of the business, questioning the cost structure, pricing strategy, and the high customer acquisition costs, which stood at $18 per customer. The founders revealed that the company’s recent 12-month sales were $1.08 million, but concerns were raised about the sustainability of the model given the historical losses. The offers from the Sharks reflected the reservations about the business. Kevin O’Leary was quick to express his skepticism, suggesting that the business might not be viable and recommending the founders “take it out behind the barn and shoot it.” Other Sharks echoed concerns about the complexity of the business and its long-term potential.
Despite positive remarks about the quality of the product, the Sharks were hesitant to invest due to the challenges Spoonful of Comfort faced. Ultimately, none of the Sharks extended an offer, leading to a heartfelt acknowledgment from the founders about their commitment to building a legacy in the name of Marti’s mother, even without securing a deal. The negotiation underscored the importance of a solid business model and financial viability in securing investments on Shark Tank.
