Bertello Pizza Oven
DEAL
EPISODE SUMMARY
🕓 Air Date: March 13, 2020
Asking For:
$120,000 for 10%
Investor:
Kevin O'Leary
Deal:
$120,000 for 25%
PRODUCT SUMMARY
Bertello offers a wood-fired and gas outdoor pizza oven with multiple fuel options, allowing users to bake authentic Neapolitan-style pizzas at over 900 degrees in their backyard.
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Background Story
The founders, Andy Bert (a licensed structural engineer) and his brother Eric presented Bertello, an outdoor pizza oven, on Shark Tank. Andy’s engineering background and Eric’s finance experience led them to create a versatile pizza oven that could reach over 900 degrees, mimicking the wood-fired pizza experience. The idea originated from their dissatisfaction with the quality of home-baked pizza in conventional ovens.
Their goal was to provide a solution for pizza enthusiasts to enjoy Neapolitan-style pizza at home. Andy’s passion for building things started early, as evidenced by his massive treehouse project that he worked on from age 10 to 23. Eric’s finance background complemented Andy’s engineering skills, forming a strong partnership. The Bertello oven was designed by Andy, showcasing his dedication and engineering expertise.
The Product
Bertello Wood Fire & Gas Outdoor Pizza Oven stands out for its multiple fuel options, allowing users to choose between propane, wood kindling, lump charcoal, and wood pellets. The patent-pending design even enables the simultaneous use of wood and gas.
This versatility provides flexibility and convenience for users who can preheat the oven quickly with propane and then introduce wood for the authentic wood-fired flavor. Priced at $250, the oven boasts a net margin of $33, with a production cost of $84.
The product’s success is evident, with $640,000 in sales on Amazon in the current year, including $400,000 in the last three months. The founders shared that they invested $90,000 into the business, having borrowed $70,000 earlier in the year, which has already been repaid, indicating a healthy financial position.
The Bertello oven is available for purchase on Amazon, catering to a wide customer base. However, the founders emphasized that the product is not recommended for indoor use, similar to a gas grill.
How It Went
The company’s position before Shark Tank
Bertello’s financial performance is robust, with $640,000 in sales on Amazon in the current year, showcasing consistent growth. The founders have invested $90,000 into the business and borrowed $70,000, which has already been paid back, demonstrating financial responsibility. The net margin of $33 per unit highlights the product’s profitability. The company’s sales strategy involves the Amazon platform, providing accessibility to a broad customer base.
The oven’s success is attributed to its unique features, including the ability to use various fuels simultaneously and achieve the high temperatures required for Neapolitan-style pizza. As 80/20 partners, the Bertello founders have managed the business effectively, facing the challenge of keeping up with the demand as their main obstacle. The founders revealed that they fund inventory from current orders, indicating a self-sustaining model.
The Negotiations:
The Bertello founders entered the Shark Tank seeking $120,000 for 10% of their company. After an engaging pizza-making demonstration, the Sharks, while impressed with the product, raised concerns about the market competition and the founders’ energy during the pitch. Mark Cuban opted out early, expressing a lack of interest in the consumer product business. Lori Greiner and Barbara Corcoran were intrigued but ultimately decided not to invest.
Kevin O’Leary and Robert Herjavec, however, saw potential in the product and made offers. Barbara voiced concern about the lack of energy in the pitch, questioning if the founders had recovered from a specific incident during the presentation. Despite the concerns, Kevin O’Leary and Barbara Corcoran both made offers. Barbara proposed $120,000 for 25%, and Kevin suggested $120,000 for 30%. Kevin accepted the founders’ counteroffer of $120,000 for 25%, expressing their excitement and gratitude.
The negotiation highlighted the importance of the Sharks’ belief in the product and their assessment of the founders’ ability to take it to the mass market. Kevin O’Leary’s enthusiasm for the product and willingness to invest in inventory and digital optimization contributed to the founders’ decision to accept his offer over Barbara’s. In the end, the Bertello founders secured a deal with Kevin O’Leary, securing the funding they needed to further grow their successful outdoor pizza oven business.
