Earth Log – Eco-Friendly Fire Log
DEAL
EPISODE SUMMARY
🕓 Air Date: November 21, 2014
Asking For:
$160,000 for 20%
Investor:
Lori Greiner
Deal:
$160,000 for 35%
PRODUCT SUMMARY
Earth-Log Fire Products offers 100% recycled fire logs that burn hotter, produce less smoke, and come in various scents.
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Background Story
Earth-Log Fire Products, based in Huntington Beach, California, was conceived by founder Tom Sanetti, a visionary entrepreneur with a passion for creating eco-friendly alternatives for everyday needs. The inception of Earth-Log was not a calculated business move but rather a serendipitous journey that unfolded in Tom’s own kitchen. Originally from Huntington Beach, Tom had a background that wasn’t necessarily rooted in the fire product industry. However, his keen interest in sustainable living and a desire to make a positive environmental impact led him to experiment with creating a better alternative to traditional fire logs.
As he developed the Earth-Logs, Tom discovered a unique formula using 100% recycled resources, setting his product apart from the competition. The idea for Earth-Log Fire Products came to fruition when Tom noticed the environmental issues associated with traditional fire logs, such as excessive smoke and the use of non-sustainable materials. Determined to provide a solution, Tom set out to create a fire log that not only burned hotter but also emitted significantly less smoke while incorporating pleasant scents.
The accidental success of Earth-Logs in his local market prompted Tom to consider the broader market potential. However, faced with challenges in marketing and distribution, Tom sought the expertise and investment of the Sharks on “Shark Tank” to propel Earth-Log Fire Products into a nationally recognized brand. Tom’s journey reflects the spirit of entrepreneurship driven by a commitment to sustainability and innovation, turning a personal project into a fast-growing business.
The Product
Earth-Log Fire Products offers a revolutionary line of fire logs designed to transform the traditional fireplace experience. These logs, crafted by founder Tom Sanetti, are manufactured using a proprietary process that sets them apart from conventional options.
The Earth-Logs are composed of 100% recycled resources, a commitment to sustainability that resonates with environmentally conscious consumers. Their unique composition allows them to burn up to three times hotter than traditional wood logs, providing an enhanced and more efficient source of heat. Additionally, Earth-Logs produce a remarkable 80% less smoke compared to their counterparts, creating a cleaner and more enjoyable ambiance around the fire.
Available in various scents, including the popular Citronella variant, Earth-Logs introduce an aromatic element to the traditional fireplace experience. The product lineup includes the original Earth-Log Fire Log, a Citronella Fire Log, and an Instant Bonfire Block.
Consumers can purchase these eco-friendly fire logs through various channels, with potential distribution through major retailers such as Costco and other national grocery chains. The competitive pricing, coupled with the product’s superior performance and environmentally friendly features, positions Earth-Log Fire Products as a compelling choice for those seeking a cleaner, hotter, and more fragrant fire experience.
How It Went
The company’s position before Shark Tank
Earth-Log Fire Products, while demonstrating promise, faces challenges reflected in its current performance and strategic positioning. Founded by Tom Sanetti in Huntington Beach, California, the company has seen approximately $200,000 in sales over a four-year period. However, the recent drop to $50,000 in the last year is attributed to Southern California’s unusually warm winter, indicating a vulnerability to seasonal demand fluctuations. As for partnerships, Earth-Log has secured a letter of intent from Albertsons, one of the largest grocery store chains in the country, expressing interest in a national rollout.
Additionally, the company mentions a previous offer from Costco for a four-store deal, demonstrating interest from major retailers. However, Earth-Log currently faces limited distribution, a factor that contributes to its performance challenges. In terms of funding, Earth-Log has been seeking investment to overcome scalability issues and implement automation in production. The founder, Tom Sanetti, is on the lookout for a strategic partner or investor to provide the necessary capital for building machines that would enable full automation. Currently, the company relies on traditional manufacturing methods and has acknowledged the need for a distribution strategy to expand its market presence.
The company’s financial performance seems to be affected by both external factors, such as weather conditions, and internal challenges related to distribution and manufacturing capabilities. The company’s structure is not extensively detailed, but Tom Sanetti operates as the founder seeking investment. With a focus on sustainability and innovation, Earth-Log Fire Products is at a pivotal stage, poised for growth with the right strategic guidance and financial backing.
The Negotiations:
The negotiations for Earth-Log Fire Products on “Shark Tank” were marked by a mix of enthusiasm, skepticism, and ultimately, a successful deal. Tom Sanetti, the founder, entered the Tank seeking $160,000 in exchange for a 20% stake in his eco-friendly fire log business. Kevin O’Leary, a customer of Earth-Logs, expressed concern about the differentiation of the product and the need for effective marketing. The Sharks questioned Earth-Log’s limited distribution and its ability to communicate its unique selling points to consumers.
Lori Greiner, recognizing the potential and expressing genuine interest in the product, made an offer that ultimately sealed the deal. She proposed a $160,000 investment but requested a 35% equity stake, highlighting her ability to secure placements in major retailers like Bed Bath & Beyond and Home Depot. The negotiation was relatively brief, with Tom accepting Lori’s offer without engaging in extensive counteroffers. Interestingly, Mark Cuban and Barbara Corcoran bowed out of the deal, expressing concerns about the amount of work required to build the organization and brand around Earth-Log.
Mark Cuban, drawing on his own entrepreneurial experiences, advised Tom to find a strategic partner akin to his own “Mike Perik” to navigate the challenges ahead. In the end, Tom enthusiastically accepted Lori Greiner’s offer, expressing gratitude for the opportunity. The negotiation showcased the Sharks’ different perspectives, with Lori providing a realistic offer based on her understanding of the industry and her confidence in Earth-Log’s potential success. This partnership not only brought funding to Earth-Log but also the strategic guidance and retail connections needed for the brand to flourish on a national scale.
