Slate Milk
NO DEAL
EPISODE SUMMARY
🕓 Air Date: May 13, 2020
Asking For:
$400,000 for 10%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
Slate Chocolate Milk offers the first lower-sugar, higher-protein line of lactose-free chocolate milks for adults using a unique ultra-filtration process.
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Background Story
Slate Chocolate Milk, pitched by Manny and Josh, aimed to revolutionize chocolate milk for adults. The founders presented themselves as modern milkmen encouraging people to embrace what makes them happy. The idea stemmed from their commitment to a healthier chocolate milk alternative that retains the taste of childhood favorites but with 75% less sugar.
The Product
Slate uses ultra-filtration to remove natural lactose sugars from milk, resulting in creamy, lactose-free chocolate milk. The addition of a popular latte canning process makes the product shelf-stable and suitable for shipping.
The chocolate milk comes in classic and dark chocolate flavors, with the former aiming to evoke memories of childhood chocolate milk. They claim to have 75% less sugar than competing products, targeting consumers seeking lower-calorie options with increased protein content.
Each can contain 130 calories and 9 grams of sugar, emphasizing a focus on healthier alternatives. The product is produced for 85 cents and sold to distributors at $1.77, with a retail price of $2.99.
How It Went
The company’s position before Shark Tank
The pitch revealed that the company had conducted a pilot run and raised $200,000 at an initial valuation of $400,000 about a year ago. The founders highlighted their third partner, a seasoned food broker with a successful track record in growing businesses, as a key asset.
They claimed to have secured meetings with major retailers due to his connections. However, the sharks were skeptical of the $4 million valuation, especially given the lack of sales and profits. The company had raised $200,000 at a $400,000 valuation, selling 15% of the company.
The Negotiations:
The negotiation phase took a turn when the sharks expressed disbelief in the $4 million valuation, criticizing the founders for lacking sales and profits. Despite the founders emphasizing the value brought by their experienced partner and the relationships they had developed, the sharks were not convinced. Kevin O’Leary was particularly critical, calling the valuation absurd. The founders defended their valuation, but the sharks were unanimous in their decision not to invest.
The sharks raised concerns about the early stage of the business, the lack of sales, and the need for further product development. In the end, no deal was made, and the founders left the tank empty-handed. The sharks offered advice to work on the product and prove its market viability before seeking such a high valuation. The founders acknowledged the learning experience and left the tank determined to refine their approach in the future.
