Copper Cow Coffee
DEAL
EPISODE SUMMARY
🕓 Air Date: May 21, 2021
Asking For:
$600,000 for 4%
Investor:
Robert Herjavec
Deal:
$600,000 for 8%
PRODUCT SUMMARY
Copper Cow Coffee offers individual pour-over Vietnamese coffee kits that allow consumers to enjoy gourmet Vietnamese coffee with ease, featuring flavors like classic, churro, and lavender.
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Background Story
Debbie Mullin, the founder of Copper Cow Coffee, grew up in a Vietnamese household despite being born and raised in California. She had a deep love for Vietnamese culture and the sweet, creamy treat of Vietnamese coffee. Inspired by her background and a desire to create a coffee shop experience at home, Debbie founded Copper Cow Coffee.
With a background in finance and supply-chain management, Debbie decided to pursue a more creative and entrepreneurial path. She started Copper Cow Coffee four years ago, initially working on it alongside her job at the World Bank. She began by selling her coffee door-to-door, eventually getting into the first 30 stores, all while manufacturing the product out of her sister’s garage.
The Product
Copper Cow Coffee offers a convenient way to enjoy Vietnamese coffee at home. Their single pour-overs come with premium, dark-roasted Vietnamese coffee grounds, and biodegradable filters.
To make a cup, you simply hang the filter over your cup, add hot water, and watch as the coffee drips directly into the cup. Then, you can add Copper Cow Creamer for a perfect balance of sweetness.
The product is available in various flavors, including classic, black, churro, and lavender. It’s all-natural and free from preservatives and additives. A pack of five servings is priced at $15, with a production cost of $3.10 per pack.
Copper Cow Coffee has gained recognition for its innovative packaging, making it stand out on store shelves. However, the company has found a significant market online, where 80% of their sales take place.
How It Went
The company’s position before Shark Tank
Copper Cow Coffee has shown impressive growth since its inception. In 2017, they made $170,000 in sales, and this figure skyrocketed to $2 million year-to-date in the most recent year. The company has a strong online presence, with 80% of its sales happening online. They have also managed to secure shelf space in retail stores, with a growing number of locations.
The company has been able to achieve a 70% profit margin, thanks to their premium coffee offering. They initially faced losses, losing $1.4 million in 2018, but have since raised $2 million in external investment, with $1.5 million in the bank at the time of the pitch. However, their valuation has increased significantly, with a valuation of $15 million during the pitch, compared to their initial investment. Debbie Mullin still retains 40% ownership of the company, but they have lost some control due to external investment.
The Negotiations:
Debbie Mullin entered the Shark Tank seeking $600,000 for a 4% equity stake in Copper Cow Coffee. She was met with enthusiasm and interest from the Sharks, given the unique nature of her product. The offers rolled in, but Daymond John expressed concerns about the company’s history of losses and suggested that they should focus on making money instead of seeking more investment. He ultimately went out.
Other Sharks, including Mark Cuban and Lori Greiner, voiced their concerns about the company’s financials and valuation, ultimately opting not to make offers. Robert Herjavec, impressed by Debbie and her product, offered $600,000 for 8% equity. Debbie accepted Robert’s offer, valuing the company at $7.5 million. This deal represented a significant reduction in valuation from her initial ask but provided the expertise and guidance that Robert could bring to the business.
The negotiation highlighted the balance between seeking investment and achieving profitability, with different Sharks having varying perspectives on the matter. In the end, Debbie chose to partner with Robert Herjavec to help Copper Cow Coffee continue its growth and navigate the challenges ahead.
