The Cookie Kahuna
NO DEAL
EPISODE SUMMARY
🕓 Air Date: October 7, 2016
Asking For:
$50,000 for 20%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
The Cookie Kahuna, founded by Wally Amos, offers light and crunchy cookies that aim to bring happiness to consumers.
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Background Story
Wally Amos, recognized as the “Cookie Man” and founder of the renowned Famous Amos brand, takes center stage on Shark Tank to introduce his latest venture, The Cookie Kahuna. Hailing from Honolulu, Hawaii, Wally has been a prominent figure in the cookie industry for four decades. His journey into the world of cookies began in 1970 when, after a successful career as the first African-American agent at William Morris, where he booked acts like Simon & Garfunkel and the Supremes, Wally decided to indulge his passion for cookies.
Famous Amos became a global sensation, but the success was not without its challenges. Wally, a skilled promoter but not a business-focused individual, faced a series of ownership changes that resulted in the dilution of his equity and control over the iconic brand. Despite these setbacks, Wally’s love for cookies remained unwavering. In the episode, Wally shares his belief that he isn’t just selling cookies but happiness. At 80 years old, he exudes enthusiasm and resilience, aiming to replicate the success of Famous Amos with his new venture, The Cookie Kahuna. The company, based in Hawaii, focuses on delivering light and crunchy cookies that aim to bring joy to consumers.
Wally’s background in show business and his dedication to sharing the simple pleasure of cookies have shaped his entrepreneurial journey. His decision to start The Cookie Kahuna, distinct from Famous Amos, reflects not only his passion for cookies but also his determination to build a successful business once again. The Shark Tank pitch becomes a testament to Wally’s enduring spirit and commitment to making The Cookie Kahuna more famous than its predecessor.
The Product
The flagship product of The Cookie Kahuna is a line of light and crunchy cookies that promise to deliver not just a treat but a dose of happiness to consumers. These cookies, crafted by Wally Amos, the legendary founder, are the result of his four decades of experience in the cookie business. Available in one-pound bags, these delectable treats are priced at $7.89.
The Cookie Kahuna’s cookies boast a distinctive texture—light and crunchy—that sets them apart in the competitive market. Wally Amos, leveraging his expertise and passion for cookies, has curated a product that aims to recreate the joy and satisfaction associated with his famous Famous Amos cookies.
Currently, customers can purchase these cookies through The Cookie Kahuna’s official website and exclusively at Costco locations in Hawaii. The online platform provides a convenient way for consumers to access these delightful treats. However, despite the recognizable brand associated with Wally Amos, the company faces challenges with distribution, limiting availability primarily to the Hawaiian market.
Priced at $7.89 per one-pound bag, the cookies come with a production cost of $5.25. The company’s focus on providing a quality product aligns with Wally’s belief that he is not merely selling cookies but a unique and uplifting experience. The price point reflects the commitment to maintaining a balance between quality and affordability, although challenges with costs and distribution are acknowledged during the Shark Tank pitch.
How It Went
The company’s position before Shark Tank
The Shark Tank episode provides a glimpse into The Cookie Kahuna’s current performance and position in the market. Wally Amos shares that The Cookie Kahuna has been in operation for a little over a year and a half. The company primarily operates online, selling its cookies through its official website. Additionally, the cookies are exclusively available at Costco stores in Hawaii.
The limited distribution strategy might be a deliberate approach to test the market or manage operational challenges. During the pitch, Wally reveals that the cookies are sold to Costco for $7.89 per one-pound bag, with a production cost of $5.25. The sales for the last year are disclosed as $36,215.97.
Wally acknowledge a margin of less than 20%, highlighting concerns about the high costs associated with packaging and shipping, which account for over 40% of the total cost. Wally’s focus on building The Cookie Kahuna as an online venture and limiting distribution to Costco in Hawaii raises questions about the company’s current market penetration and expansion strategies.
The Negotiations:
The negotiations for The Cookie Kahuna in the Shark Tank episode unfold with a mix of admiration for Wally Amos’s legendary status and concerns about the business’s viability. Wally seeks a $50,000 investment in exchange for a 20% equity stake in his new venture. However, despite the emotional connection to the brand and Wally’s iconic status, none of the sharks make an offer.
Lori Greiner, a seasoned product entrepreneur, expresses her respect for Wally but advises him to consider other opportunities given the challenges faced in the cookie business. Recognizing Wally’s passion, she gracefully bows out of the deal. Barbara Corcoran, with a similar experience in her own business, emphasizes the value of selling not just the name but the entrepreneur’s personality. While expressing respect for Wally, she decides to pass on the investment.
Mark Cuban, already in the cookie business, declares a conflict of interest, stating that investing in The Cookie Kahuna would be a conflict for him. Despite expressing admiration for Wally’s story, Cuban opts out of the deal. Kevin O’Leary, known as Mr. Wonderful, provides valuable business insights, highlighting the challenges associated with the company’s margin and advising Wally to focus on reducing costs. Despite the advice, O’Leary also decides not to invest. The negotiations conclude with a respectful decline from all sharks. Wally leaves with gratitude and optimism for the future of The Cookie Kahuna, despite not securing a deal in the Tank.
