Kreyol Essence – Natural Beauty Products
DEAL
EPISODE SUMMARY
🕓 Air Date: January 12, 2020
Asking For:
$400,000 for 10%
Investor:
Kevin O'Leary
Deal:
$400,000 for 5% + $0.25 cents/unit royalty
PRODUCT SUMMARY
Kreyol Essence offers Haitian castor oil-based skincare products that promote hair growth, moisturize hair, skin, and body, and contribute to poverty alleviation in Haiti.
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Background Story
Founded by Yve-Car Momperousse and Stephane Jean-Baptiste in sunny Miami, Florida, Kreyol Essence brings the beauty secret of the Caribbean, Haitian castor oil, to the forefront of the skincare industry. Yve-Car and Stephane present themselves as a passionate and dynamic duo, emphasizing their commitment to not only creating high-quality products but also making a positive impact on the community.
The idea for Kreyol Essence originated from the unique composition of Haitian castor oil, known as “lwil maskriti.” The founders highlight the meticulous process of harvesting, selecting, and processing castor seeds by women artisans, resulting in pure and raw Haitian castor oil. The mission of Kreyol Essence extends beyond skincare, aiming to create employment opportunities for over 300 farmers and women producers in Haiti.
The Product
Kreyol Essence’s flagship product is Haitian castor oil, which serves as the foundation for a range of skincare products. The oil is produced through a labor-intensive process, ensuring its purity and effectiveness.
The castor oil is touted for its unique composition, particularly ricinoleic acid, allowing it to penetrate the skin deeply, making it ideal for conditions like eczema and psoriasis. The product line includes various skincare items such as body creams, body washes, and hair products, with scents like mango papaya rum punch.
The founders showcase the sensory experience of their products during the pitch, highlighting the natural and appealing fragrances. The pricing strategy is disclosed, with retail prices around $22 for scented products and $16 for the original castor oil, costing $2.50 to produce.
The differentiation of Haitian castor oil from regular castor oil lies in its natural processing, avoiding the use of hexene, bleach, and other additives. The founders stress the authenticity and quality of their products, emphasizing the potential benefits for hair growth, skin moisturization, and overall well-being.
How It Went
The company’s position before Shark Tank
Kreyol Essence’s journey began in 2014, with initial sales of $135,000. The business faced challenges in 2016 when a major client walked away, prompting a pivot to direct-to-consumer sales. In 2017, sales surged to $327,000, and in 2018, the company achieved $1 million in sales. The founders project closing at $2 million in the current year, attributing this growth to a contract secured with Ulta, the largest beauty retailer in the country.
The founders discuss their supply chain, highlighting their 12-hectare farm in Haiti and partnerships with farmers and cooperatives. The commitment to paying farmers above-market prices is underlined as a key ethical aspect of their business model. The recent partnership with Ulta is a significant milestone, with plans to launch Kreyol Essence products in all 1,200 Ulta stores.
While the company is profitable, it carries $300,000 in debt. The pitch provides insight into the company’s resilience, having faced challenges and successfully pivoted to achieve substantial growth in recent years. The founders share their dedication to a social impact mission, aligning with contemporary consumer values.
The Negotiations:
The pitch engages the Sharks with a demonstration of Kreyol Essence products, showcasing their fragrances and qualities. The founders seek $400,000 for 10% equity, emphasizing the uniqueness of Haitian castor oil and its potential benefits. Kevin is the sole Shark to make an offer, proposing $400,000 for 37% equity.
The negotiation reveals the emotional backstory of the founders, recounting the challenging period in 2016 when the business almost closed, and the impact it had on their relationship and sense of identity. The emotional connection adds a compelling layer to the negotiation, influencing Kevin’s decision to offer a royalty deal.
The negotiation takes an unexpected turn as the founders counter Kevin’s offer with a request for a royalty deal only. Kevin, known as “Mr. Wonderful,” surprises the entrepreneurs by accepting the royalty deal, offering 25 cents per unit sold in perpetuity and 5% equity. The founders accept this final offer, securing a deal with Kevin. Ultimately, a deal is struck, marking a significant moment in the pitch and highlighting the passion and resilience of the founders.
