Pipcorn Mini Popcorn
DEAL
EPISODE SUMMARY
🕓 Air Date: November 14, 2014
Asking For:
$200,000 for 10%
Investor:
Barbara Corcoran
Deal:
$200,000 for 20%
PRODUCT SUMMARY
Pipsnacks offers delicious, all-natural, and mini-sized popcorn varieties, including Sea Salt, Rosemary, Kettle, and White Truffle.
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Background Story
Jen and Jeff, the sibling duo behind Pipsnacks, hail from the vibrant borough of Brooklyn, New York. Their entrepreneurial spirit emerged early in life when, as kids, they chose to sell popcorn instead of the conventional lemonade. Little did they know that this childhood endeavor would lay the foundation for their future business. Fast forward two decades, and their passion for popcorn led them to a remarkable discovery. Jen, working at a health-food store, stumbled upon a special variety of corn that would transform the popcorn game.
This newfound corn variety was unlike anything they had tasted before, revolutionizing their perception of popcorn. The smaller, delicate kernels not only enhanced the taste but also solved the perennial problem of hard pieces getting stuck in teeth. Inspired by this culinary revelation, Jen and Jeff embarked on a journey to share their unique popcorn experience with the world. In 2012, Pipsnacks was born, and the siblings from Brooklyn entered the snack industry with a mission to redefine the popcorn landscape. Their commitment to quality, natural ingredients, and innovative flavors set Pipsnacks apart.
As the brand gained traction, they found themselves catapulted into the limelight after being featured on Oprah’s “Favorite Things.” This endorsement propelled Pipsnacks into a period of rapid growth, prompting the need for external investment to scale their operations and reach a broader audience. It is against this backdrop that they entered the Shark Tank, seeking $200,000 for 10% equity, ultimately securing a deal with Barbara Corcoran and continuing their journey to make Pipsnacks a household name in the world of delicious, mini-sized popcorn.
The Product
Pipsnacks brings a delightful twist to the traditional popcorn experience, offering a unique and flavorful snack that stands out in the market. The magic of Pipsnacks lies in their meticulous attention to detail, from the selection of a special corn variety to the artful popping process.
Pipsnacks’ popcorn is characterized by its miniaturized and delicate kernels, a departure from the typical larger counterparts. This innovation not only enhances the taste but also eliminates the inconvenience of hard pieces getting stuck in one’s teeth. The brand’s commitment to quality is reflected in their use of all-natural ingredients, including organic corn and olive oil for popping.
Available in enticing flavors such as Sea Salt, Rosemary, Kettle, and the ever-popular White Truffle, Pipsnacks caters to a diverse palate. The vegan and gluten-free nature of their popcorn makes it accessible to a broad audience.
Purchasing Pipsnacks is a straightforward experience. The popcorn is priced at $4.99 per bag, making it an affordable and tasty snack option. Consumers can find Pipsnacks in select stores, including the prestigious Whole Foods, where the brand has gained a foothold with its premium, health-conscious offerings.
How It Went
The company’s position before Shark Tank
Pipsnacks has demonstrated robust performance in the snack industry, positioning itself as a notable player with significant growth and strategic partnerships. The company’s health and financial standing reflect a trajectory of success, marked by a commitment to quality and innovation. In terms of distribution, Pipsnacks has successfully penetrated the market and secured placements in prominent retailers, with a notable presence in 18 Whole Foods stores. Their performance metrics showcase a remarkable 125% sales growth since January, reaching $200,000 in sales in the previous year across 40 stores.
This growth is a testament to the increasing popularity of their unique mini-popcorn offerings. Partnerships play a crucial role in Pipsnacks’ success story. The brand has strategically aligned itself with Whole Foods, a reputable and influential player in the health-conscious retail sector. The imminent move to collaborate with a co-packer underscores their dedication to scaling operations, reducing costs, and doubling profit margins. The co-packer collaboration is indicative of a proactive approach to optimizing operational efficiency and financial sustainability.
The company’s structure and financial health seem to be on a solid foundation, with the founders showcasing adaptability and a keen understanding of market dynamics. As Pipsnacks continues to grow, their commitment to providing high-quality, innovative snacks positions them favorably in the competitive snack market, and their collaboration with Barbara Corcoran on Shark Tank adds a valuable strategic partner to their impressive journey.
The Negotiations:
The negotiations for Pipsnacks on Shark Tank were dynamic and engaging, with the sibling founders, Jen and Jeff, seeking a $200,000 investment for a 10% equity stake in their mini-popcorn business. The Sharks, known for their shrewd deal-making, expressed both interest and skepticism as they delved into the details of Pipsnacks’ performance and valuation. Kevin O’Leary, famously known as “Mr. Wonderful,” expressed doubt about the $2 million valuation, stating that Pipsnacks is not worth that amount. He was forthright in conveying that he would not invest $200,000 for 10%.
Barbara Corcoran, recognizing the potential of the brand and the founders’ commitment, made an initial offer of $200,000 for 10%, but with a unique condition—she would take 10% of any distributions made by the company. Robert Herjavec also entered the negotiations, offering $200,000 but for a 20% equity stake. His offer raised concerns about dilution for the founders, prompting a counter from Barbara, who insisted that they stick to their original ask of $200,000 for 10%. In an unexpected turn, Kevin O’Leary made a distinctive offer, proposing a $200,000 investment for 10%, but with the condition that he would take out $900 each week.
This led to a humorous yet tense moment as Barbara voiced her disapproval of the unconventional offer. In the end, despite Kevin’s unconventional terms, the founders chose to accept Barbara Corcoran’s offer of $200,000 for 10%, emphasizing their appreciation for her belief in their brand and vision. The negotiations showcased the delicate balance between securing a favorable deal and choosing a Shark who aligns with the founders’ values and aspirations for Pipsnacks’ future growth.
