Chocomize – Custom Chocolate Bars
NO DEAL
EPISODE SUMMARY
🕓 Air Date: November 22, 2013
Asking For:
$500,000 for 20%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
Chocomize offers customizable chocolate bars for various occasions, allowing customers to choose shapes, chocolate types, and toppings, including personalized messages and logos.
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Background Story
Chocomize, a Massachusetts-based company, was founded with a vision to revolutionize the traditional chocolate bar market by offering personalized and customizable options for consumers. The brainchild of Fabian, originally from Germany, and later joined by Joe Dauenhauer, whose background in finance complemented Fabian’s entrepreneurial spirit, the company was born out of a desire to inject innovation into an industry that had seen little change for years.
Fabian’s roots in Germany likely contributed to his appreciation for quality chocolate, as Germany is renowned for its rich chocolate-making tradition. Joe Dauenhauer’s financial expertise provided a solid foundation for the business side of Chocomize, ensuring strategic planning and financial viability. The idea for Chocomize emerged from recognizing a gap in the market: while traditional chocolate bars were widely available, they lacked personalization and customization options. The founders saw an opportunity to tap into consumers’ desire for unique and tailored products, especially in an age where personalization and customization are highly valued.
With a mission to offer customers the ability to create their dream chocolate bars online, Chocomize set out to provide a platform where individuals could choose not only the type of chocolate and toppings but also add special messages, logos, or images to their bars. This level of customization made Chocomize stand out in a crowded market, attracting customers looking for personalized gifts, corporate event favors, and unique treats for special occasions. Through dedication, innovation, and a passion for chocolate, Chocomize has carved out a niche in the confectionery industry, bringing joy to chocolate lovers with every customized creation.
The Product
Chocomize offers a unique and customizable chocolate experience, allowing customers to create personalized chocolate bars tailored to their preferences. The process begins with selecting a shape for the chocolate bar, followed by choosing from three types of Belgian-based chocolate: milk, dark, or white. Customers can then add up to five toppings from a diverse selection of over 100 options, ranging from nuts and fruits to candies and spices.
One of the standout features of Chocomize is its ability to incorporate special edible messages, corporate logos, or pictures directly onto the chocolate bars, making them ideal for various occasions such as birthdays, weddings, corporate events, or as personalized gifts. The benefits of Chocomize include the ability to create truly unique and memorable chocolate treats, tailored to individual tastes and preferences.
The platform offers a convenient and user-friendly interface for designing and ordering customized chocolate bars online. Chocomize bars are priced at an average of $6 to $6.50 each, depending on the selected toppings and customization options. Customers can easily purchase their personalized chocolate bars through the company’s website, where they can explore the available customization options, preview their creations, and place their orders with ease.
How It Went
The company’s position before Shark Tank
Chocomize has demonstrated steady growth and a strong market position within the customized chocolate industry. With reported sales of $440,000 last year and significant partnerships established, such as with a prominent car company in the United States, the company has established itself as a leader in personalized chocolate offerings. The recent relocation to a larger 5,000-square-foot facility signifies expansion and investment in production capabilities to meet growing demand. The company’s primary customers include individuals seeking personalized gifts for special occasions, as well as corporations looking for unique promotional items or event favors.
Chocomize’s ability to incorporate special messages, logos, or images onto chocolate bars caters to a diverse customer base, from individuals celebrating birthdays or weddings to businesses hosting corporate events. Chocomize’s funding primarily comes from internal sources, with the founders initially investing their own capital to start the business. While specific details about their current funding arrangements are not provided in the transcript, the company may seek additional capital through investors or loans to support further expansion and growth initiatives.
In terms of profitability, Chocomize operates with a healthy profit margin, with each chocolate bar priced at an average of $6 to $6.50 and costing approximately $2 to produce. However, the company experienced a slight dip in sales attributed to the relocation of their production facility, highlighting potential challenges associated with scaling operations. The company’s structure likely includes the founders, Fabian and Joe Dauenhauer, as key decision-makers and shareholders, along with additional stakeholders and shareholders mentioned during the pitch. Chocomize’s strategic focus on corporate partnerships and online sales channels positions them for continued success and growth within the competitive chocolate industry landscape.
The Negotiations:
During the negotiations on Shark Tank, Joe Dauenhauer sought a $500,000 investment in exchange for a 20% equity stake in Chocomize. Despite presenting a compelling pitch and demonstrating the company’s potential for growth, the Sharks raised concerns about the niche market, competition, and profitability outlook. Mr. Wonderful (Kevin O’Leary) made an offer of $500,000 for a 25% equity stake, along with the opportunity for Dauenhauer to work for him and use his Boston offices.
However, Dauenhauer declined the offer, expressing confidence in Chocomize’s brand name and market position. Ultimately, none of the Sharks were willing to invest in Chocomize. Mark Cuban and Lori Greiner cited concerns about differentiation and market size, while Barbara Corcoran questioned the business’s profitability and packaging. Daymond John, known for his preference for scalable businesses, also declined to invest.
Despite the lack of a deal, Dauenhauer remained optimistic about Chocomize’s future, expressing a desire to compete directly with Mr. Wonderful’s chocolate company. While the negotiations did not result in an investment, they provided valuable feedback and insights for Chocomize to consider as it continues to grow and evolve in the customized chocolate market.
