Chill Systems Beverage Cooler
NO DEAL
EPISODE SUMMARY
🕓 Air Date: March 12, 2021
Asking For:
$150,000 for 15%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
Chill Systems presented the Chiller, a portable beverage cooler with freezing gel built in that can chill various types of cans and bottles.
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Background Story
Chase and Brian, the visionary founders of Chill Systems, embarked on their entrepreneurial journey after experiencing dissatisfaction in their corporate careers at tech giants Google and Apple. Driven by a shared passion for environmental sustainability and a desire to tackle the excessive waste produced by conventional coolers, they embarked on a mission to revolutionize the beverage cooling industry. Their inspiration stemmed from the realization that traditional coolers relied heavily on ice, resulting in substantial water waste and the pervasive use of single-use plastics.
Recognizing the urgent need for a more eco-friendly alternative, Chase and Brian set out to create the Chiller, a portable beverage cooler with a unique freezing gel mechanism. For over two years, while still holding down their demanding day jobs, they dedicated their nights and weekends to developing the Chiller. Their unwavering commitment to their vision led them to quit their high-paying positions and fully devote themselves to their entrepreneurial endeavor. This transition marked a significant turning point, signifying their deep belief in their mission to effect positive change for both consumers and the environment.
Chase and Brian’s journey exemplifies their passion for learning and building something meaningful. Their background in technology and finance provided a solid foundation for their innovative venture, and their determination to reduce plastic waste and promote clean water projects globally served as a driving force behind the creation of the Chiller. With their unique blend of expertise and commitment to sustainability, they embarked on a path to reshape the future of portable beverage cooling.
The Product
The Chiller is a portable beverage cooler that eliminates the need for ice. Users simply place it in their freezer overnight to activate the freezing gel inside. It can chill a variety of cans and bottles, including large champagne bottles.
The Chiller can hold three cans at a time, and it keeps drinks cold for up to six hours. It’s designed to be versatile, allowing users to switch between cans and bottles. The founders emphasized the product’s sustainability, as it reduces the use of plastic bags and is made from recyclable materials.
They also mentioned that a portion of every purchase goes towards supporting clean water projects globally. At the time of the pitch, they were selling the Chiller at a retail price of $30, even though the cost to produce it was initially $37 but had since been reduced to $18.
How It Went
The company’s position before Shark Tank
Chill Systems embarked on its entrepreneurial journey with a mission-driven spirit but faced a challenging financial landscape. Over the past two years, they managed to achieve $111,000 in sales, a notable achievement for a startup. Their journey began with a Kickstarter campaign that successfully raised $51,000, showcasing early interest and support from backers. The cost to produce their innovative product, the Chiller, initially stood at $37 per unit.
However, the founders, Chase and Brian, demonstrated resourcefulness and managed to significantly reduce this cost to $18 per unit. This cost-saving measure was crucial as they strategically priced the Chiller at $30 for retail, even though it meant operating at a loss. This decision aimed to establish a strong market presence and gain traction among consumers. Chill Systems actively pursued partnerships, and although the episode did not delve into specifics, they had secured agreements to sell their product in retail stores. The show did not provide details regarding wholesalers or their current funding sources.
Despite their impressive dedication to their mission, Chase and Brian admitted that the company had not yet reached profitability, and they had not taken salaries for two years. This underscored their unwavering commitment to their environmental mission. The episode did not disclose the company’s current capital availability or detailed information about its corporate structure. Nevertheless, Chill Systems demonstrated resilience and a commitment to both sustainability and innovation as they navigated their way through the competitive market landscape.
The Negotiations:
The negotiations in the “Shark Tank” episode for Chill Systems were marked by passion, skepticism, and ultimately, no deal made. The founders initially sought $150,000 for a 15% equity stake in their company. Kevin O’Leary, famously known as Mr. Wonderful, made an offer of $160,000 for the same 15% equity share, which would have increased their initial ask. However, the founders declined this offer, emphasizing that their mission went beyond mere profit and they believed deeply in their cause.
Mark Cuban, a tech billionaire with a keen eye for investments, expressed skepticism about the product and the competitive landscape it faced. His concerns led him to bow out of the deal early on. Lori Greiner, the “Queen of QVC,” recognized the potential of the Chiller but advised the founders to work on reducing production costs to enhance its appeal to customers. Despite her interest, she ultimately declined to invest.
Daniel Lubetzky, the founder of KIND Snacks, appreciated the founders’ passion and mission but did not view it as a substantial business opportunity for him. As a result, he also opted out of making an offer. In the end, none of the Sharks decided to invest in Chill Systems, leaving the founders to continue their mission without a financial partnership.
Despite the disappointment of not securing a deal on the show, Chase and Brian left the “Shark Tank” with their heads held high. They expressed confidence in their product’s potential success through retail partnerships and remained steadfast in their commitment to their mission of environmental sustainability. Their resilience and belief in their cause shone through in the face of the Sharks’ skepticism.
