Dollop Gourmet – Vegan Frosting
DEAL
EPISODE SUMMARY
🕓 Air Date: May 6, 2016
Asking For:
$75,000 for 20%
Investor:
Barbara Corcoran
Deal:
$75,000 for 25%
PRODUCT SUMMARY
Dollop Gourmet offers a healthier and tastier alternative to traditional frosting, being non-GMO, gluten-free, vegan, and 100% all-natural with half as much sugar.
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Background Story
Heather Saffer, the founder of Dollop Gourmet, hails from Rochester, New York. Her journey into the food industry began in 2009 when working at a car dealership and inspired by the rising popularity of cupcakes, she decided to start her own bakery. However, the first venture ended in failure, leading to the loss of her life savings.
Undeterred, she borrowed $4,000 from her parents, opened a new bakery, and achieved success, winning Food Network’s “Cupcake Wars.” Facing challenges, she rebranded and launched Dollop Gourmet, focusing on creating a healthier alternative to traditional frosting. The product gained traction, securing shelf space in major retailers like Wegmans, Meijer, Whole Foods, and HEB. Despite initial setbacks, Heather’s resilience and self-taught baking skills led her to create a product that stood out in the market.
The Product
Dollop Gourmet frosting distinguishes itself by being a healthier option, free from GMOs, gluten, and animal products, with reduced sugar content. The frosting comes in various flavors, such as vanilla, peanut butter cookie dough, sea-salted caramel, and hot chocolate.
Made with high-quality ingredients like pure Madagascar bourbon vanilla and organic sustainable palm oil, Dollop Gourmet prioritizes taste without compromising health. Heather highlighted that the frosting has a shelf life of one year when unopened.
The product is manufactured in Wisconsin by a co-packer, with a production cost of $2.30 per jar. Dollop Gourmet is currently available in retail stores, including Wegmans, and is priced at $6.99 per jar. Additionally, it is sold on Amazon at a higher price of $12.99.
How It Went
The company’s position before Shark Tank
Dollop Gourmet has achieved significant retail distribution, with a presence in 85 Wegmans locations, 215 Meijer stores in the Midwest, and upcoming launches in Whole Foods regions and HEB stores. Since its launch less than a year ago, the company has generated $170,000 in sales, and Heather projects an additional $50,000 for the current year.
The product’s profit margin is 40%. Despite the higher price point compared to some competitors, Dollop Gourmet has successfully positioned itself in the market, justifying the premium with its high-quality and allergen-friendly ingredients. The founder has demonstrated business acumen by securing partnerships with major retailers, strategically expanding distribution channels, and maintaining a healthy profit margin.
The Negotiations:
In the Shark Tank, Heather initially sought $75,000 for 20% equity. Barbara Corcoran and Kevin O’Leary expressed interest in making offers. Kevin proposed $75,000 for 33.3%, with plans to incorporate Dollop Gourmet into his existing cupcake business. Barbara, later joined by Lori Greiner, countered with an offer of $75,000 for 30%, highlighting her experience in developing similar businesses. The negotiation took an interesting turn when Kevin insisted on 33.3% due to his plan to incentivize partners in the deal.
Barbara eventually agreed to the same equity percentage, making the competition between Kevin and Barbara. Lori, however, opted out, citing concerns about the product’s fit for QVC. In the end, Heather chose Barbara’s offer of $75,000 for 25%, giving Dollop Gourmet the opportunity to leverage Barbara’s expertise and connections. Despite the intense negotiation, Heather expressed excitement about the possibilities and potential success with Barbara as her new partner.
