Beatbox Beverages
DEAL
EPISODE SUMMARY
🕓 Air Date: October 24, 2014
Asking For:
$200,000 for 10%
Investor:
Mark Cuban
Deal:
$1,000,000 for 33%
PRODUCT SUMMARY
BeatBox Beverages offers a unique twist on boxed wine, providing innovative flavors like Cranberry Limeade and Blue-Raspberry Lemonade, packaged in a distinctive BeatBox.
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Background Story
BeatBox Beverages, the brainchild of entrepreneurs Justin Fenchel, Brad Schultz, and Aimy Steadman, emerged from the vibrant city of Austin, Texas. United by a shared vision to redefine the conventional perception of boxed wine, the trio embarked on a journey to create a beverage for a new generation. Justin Fenchel, with his keen understanding of the wine industry, recognized the potential for innovation in the boxed wine market. Brad Schultz brought his business acumen to the table, complementing Fenchel’s expertise. Aimy Steadman, completing the dynamic team, infused creativity and a fresh perspective into the venture.
The founders shared a common frustration with the lackluster offerings within the boxed wine category and were determined to bring excitement and flavor to the scene. Their inspiration led them to the creation of BeatBox Beverages, a brand that transcends the traditional boundaries of boxed wine. Rejecting the dull and mundane, they introduced a unique orange wine base, blurring the lines between wine and spirits. This innovative approach not only set them apart but also allowed for the development of mixed drinks that resonated with their target audience. Initially, the founders faced challenges with self-distribution, limiting their ability to scale the business effectively.
Recognizing the need for strategic partnerships, they transitioned to outsourcing manufacturing, collaborating with a co-packer in Dallas, and securing a major distributor. This shift marked a turning point, enabling BeatBox Beverages to focus on marketing and growth. BeatBox Beverages embodies the spirit of a party in every box, a testament to the founders’ commitment to creating a product that goes beyond expectations. The success of their venture lies in the fusion of industry knowledge, business acumen, and a creative spark that has redefined the landscape of boxed wine, making them a noteworthy player in the beverage market.
The Product
BeatBox Beverages offers a refreshing departure from conventional boxed wine, introducing a unique and innovative approach to the beverage market. At the core of their product is the orange wine base, a departure from traditional red or white wines, lending a spirit-like quality to the drink. Packed with almost seven bottles of wine in each box, BeatBox Beverages is not just a beverage; it’s a party experience.
The product boasts an array of vibrant and exciting flavors, including Cranberry Limeade and Blue-Raspberry Lemonade, each contributing to the brand’s energetic and fun image. BeatBox is not just consumed; it’s a social catalyst, turning any gathering into an instant celebration.
One of the standout features of BeatBox Beverages is its versatility. The orange wine base allows for the creation of mixed drinks, offering consumers a unique and dynamic drinking experience. With an alcohol content of 11.1%, each box provides a spirited kick while maintaining a modest 120 calories per serving, appealing to those mindful of their intake.
Available for purchase through various outlets, BeatBox Beverages started with self-distribution as a Texas winery before strategically transitioning to a co-packer in Dallas and securing a major distributor. This expansion has made the product more accessible to consumers nationwide.
With a commitment to affordability, convenience, and an unrivaled party experience, BeatBox Beverages is positioned as a game-changer in the beverage industry, resonating with a new generation of consumers seeking excitement and innovation in their drinking choices.
How It Went
The company’s position before Shark Tank
BeatBox Beverages has demonstrated impressive performance, navigating the competitive beverage market and establishing a solid position within a short timeframe. The company’s health and position are robust, with $235,000 in sales within the first 14 months, and a projected $120,000 in the current quarter alone, showcasing consistent and rapid growth. Strategically, the founders transitioned from self-distribution as a Texas winery to collaborating with a co-packer in Dallas. This shift allowed them to focus on marketing and growth while leveraging the production expertise of their partner. Additionally, they secured a major distributor, broadening their reach and making BeatBox Beverages more accessible to consumers nationwide.
Key partners include the Dallas-based co-packer, essential for manufacturing and packaging, and the major distributor responsible for expanding the product’s market presence. This distribution partnership has played a pivotal role in the company’s accelerated growth, tapping into a wider consumer base. BeatBox Beverages has resonated well with consumers seeking an affordable, convenient, and fun drinking experience. Their target audience comprises individuals who appreciate the energetic and innovative approach to boxed wine, making them a popular choice for partygoers and those looking to spice up their social gatherings. In terms of funding, the founders initially self-funded with $55,000 and later took on $100,000 in family and friends’ debt.
This strategic use of capital, coupled with their innovative business model, has contributed to the company’s success. With a valuation of $3 million after securing a deal with Mark Cuban on Shark Tank, BeatBox Beverages has positioned itself as a promising player in the beverage industry. As for the company’s structure, the transition from self-distribution to partnering with a co-packer and major distributor indicates a flexible and scalable business model. The founders have adeptly adapted to the demands of the market, demonstrating a keen understanding of the industry and an ability to strategically position BeatBox Beverages for continued success.
The Negotiations:
The negotiations for BeatBox Beverages on Shark Tank were lively and resulted in a successful deal with Mark Cuban. The founders, Justin Fenchel, Brad Schultz, and Aimy Steadman, entered the tank seeking $200,000 for a 10% equity stake in their company. The Sharks immediately expressed interest, intrigued by the unique concept of BeatBox, which aimed to redefine boxed wine and inject fun into the market. Kevin O’Leary, known for his expertise in the wine industry, engaged with the founders, expressing his appreciation for the product and its potential.
Barbara Corcoran, recognizing the opportunity in the booming boxed wine market, made the first offer—$400,000 for a 20% stake. However, Mark Cuban, sensing the potential for explosive growth, countered with a bold offer of $1 million for a 33% stake, valuing the company at $3 million. Barbara and Kevin then adjusted their offers in response to Mark’s aggressive bid. Barbara maintained her offer, while Kevin reduced his to $200,000 for a 20% stake, cutting Barbara’s offer in half.
The negotiation reached a pivotal moment when Lori Greiner and Robert Herjavec expressed their interest in making an offer as well. However, Mark Cuban’s offer stood out as the most compelling. Ultimately, the founders accepted Mark Cuban’s offer of $1 million for a 33% stake, marking a significant milestone for BeatBox Beverages. The deal not only brought substantial capital to the company but also aligned them with Mark Cuban’s business acumen and strategic guidance, providing an invaluable partnership to propel the brand to new heights.
