Sweet Ballz Gourmet Cake Balls
DEAL
EPISODE SUMMARY
🕓 Air Date: September 20, 2013
Asking For:
$250,000 for 10%
Investor:
Barbara Corcoran, Mark Cuban (50/50)
Deal:
$250,000 for 25%
PRODUCT SUMMARY
Sweet Ballz offers a unique twist on cake pops, providing cake balls without sticks, sold in convenient 4-packs, featuring flavors like red velvet, chocolate, and cookies n' cream, at a fraction of the cost of bakery alternatives.
WATCH HERE
IN A RUSH?
Click these to jump to the section you want to read.
Background Story
Sweet Ballz, based in Dallas, Texas, was founded by Cole Egger and James McDonald, two entrepreneurs with a shared passion for innovation in the dessert industry. Cole, with a background in sports marketing, and James, a seasoned serial entrepreneur, joined forces to bring their vision of accessible and indulgent desserts to life. The idea for Sweet Ballz emerged from a desire to reimagine the traditional cake pop, making it more convenient and appealing to a wider audience. Recognizing the popularity of cake balls but acknowledging the time-consuming process of creating them, Cole and James saw an opportunity to innovate.
By removing the stick and packaging the cake balls in convenient 4-packs, they aimed to offer consumers a hassle-free yet indulgent treat at an affordable price point. Drawing from their experiences in retail and entrepreneurship, Cole and James leveraged their knowledge to develop a product that would disrupt the dessert market. With a focus on quality ingredients and enticing flavors, they set out to create Sweet Ballz, a brand that would redefine the way people enjoy cake balls.
Located in the bustling city of Dallas, Sweet Ballz quickly gained traction, securing a lucrative deal with 7-Eleven, the largest convenience store chain in the United States. This partnership propelled Sweet Ballz to rapid success, achieving $700,000 in sales over the past 90 days. Cole and James’ entrepreneurial journey reflects their determination to innovate and disrupt traditional markets. With Sweet Ballz, they aim to continue revolutionizing the dessert industry, offering consumers convenient and delicious treats that satisfy their sweet cravings without sacrificing quality or affordability.
The Product
Sweet Ballz revolutionizes the concept of cake pops by offering delectable cake balls without the hassle of sticks, available in enticing flavors like red velvet, chocolate, and cookies n’ cream. Each pack contains four indulgent cake balls, expertly coated in decadent icing, providing a convenient and mess-free treat for consumers.
The product’s appeal lies in its convenience, affordability, and irresistible taste. With a 45-day shelf life, Sweet Ballz offer a longer-lasting option compared to traditional bakery treats. Priced competitively at $1.99 to $2.49 per 4-pack, Sweet Ballz cater to a wide range of consumers seeking an affordable yet indulgent dessert option.
Consumers can easily purchase Sweet Ballz at their nearest 7-Eleven location, where the product has gained significant popularity, accounting for 95% of sales. The convenient packaging makes it ideal for on-the-go snacking or as a sweet treat to enjoy at home. Whether enjoyed alone or shared with friends and family, Sweet Ballz provide a satisfying and enjoyable dessert experience for all occasions.
How It Went
The company’s position before Shark Tank
Sweet Ballz has demonstrated impressive performance since its inception, with a strong market position and robust sales figures. The company’s primary partner is 7-Eleven, the largest convenience store chain in the United States, where Sweet Ballz products have gained significant traction, contributing to 95% of their sales. This strategic partnership has propelled Sweet Ballz to rapid success, with $700,000 in sales over the past 90 days.
As for wholesalers, Sweet Ballz has established relationships with distributors to expand its retail presence beyond 7-Eleven. However, the company remains heavily reliant on this key retailer for the majority of its revenue. Sweet Ballz’s customer base comprises a diverse range of dessert lovers seeking convenient and indulgent treats at an affordable price point. The product’s appeal lies in its convenience, quality ingredients, and irresistible flavors, making it a popular choice among consumers looking for a satisfying dessert option.
In terms of funding, Sweet Ballz has primarily relied on internal capital generated from sales revenue to fuel its growth. With $95,000 in profits to date, the company has managed to sustain its operations and invest in inventory management and expansion initiatives. The company’s current structure likely consists of key personnel handling various aspects of operations, including production, distribution, marketing, and finance. While the focus remains on scaling the business and diversifying distribution channels, Sweet Ballz faces challenges associated with overreliance on a single retailer and the need to manage inventory effectively to meet growing demand.
The Negotiations:
The negotiations for Sweet Ballz on Shark Tank showcased the sharks’ keen interest in the company’s impressive sales performance and growth potential. Cole Egger and James McDonald initially sought $250,000 in exchange for a 10% equity stake in their business. However, the sharks expressed skepticism about the valuation and raised concerns about the company’s heavy reliance on 7-Eleven for sales.
Barbara Corcoran and Lori Greiner both made offers, with Barbara proposing $250,000 for 40% equity and Lori offering $250,000 for 30% equity. Robert Herjavec also presented an offer of $250,000 for 30% equity, with the added benefit of his expertise in retail and distribution. Kevin O’Leary proposed a unique offer of $250,000 for 30% equity, with the condition that he receives a distribution of profits equal to what Cole and James receive. He emphasized his experience in commercial kitchen logistics and the potential for Sweet Ballz to thrive in his portfolio.
Ultimately, Mark Cuban expressed interest in partnering with Barbara, offering $250,000 for 25% equity. However, confusion ensued regarding the agreed-upon terms, leading to tension during the negotiation process. In the end, Cole and James decided to accept Mark and Barbara’s offer, despite the sharks’ efforts to sway them with alternative proposals. The negotiation showcased the sharks’ competing offers and highlighted the importance of strategic partnerships in Sweet Ballz’s growth journey.
