Three Jerks Jerky
DEAL
EPISODE SUMMARY
🕓 Air Date: October 23, 2015
Asking For:
$100,000 for 15%
Investor:
Daymond John
Deal:
$100,000 for 15% + option to buy another 15% equity for $100,000 later
PRODUCT SUMMARY
Three Jerks Jerky offers a premium version of beef jerky made from 100% filet mignon for a tender and flavorful experience.
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Background Story
Barrocas, based in Miami, and Fogelson, from Los Angeles, combined their entrepreneurial spirit and love for quality food to establish Three Jerks Jerky. The name humorously reflects the initial trio of founders, each symbolized by an animal in their logo – a bear, a donkey, and a chicken. Unfortunately, the third founder, represented by the chicken, didn’t make it through the journey, adding a unique and memorable twist to their founding story.
Three Jerks Jerky founders, Jordan Barrocas and Daniel Fogelson, started their business with the aim of revolutionizing the beef jerky market. Frustrated with tough and chemically processed jerkies, they decided to create a high-quality product using only the finest meat, 100% filet mignon. The idea was born out of a desire to offer a premium, tender, and flavorful jerky alternative to the market.
The Product
Three Jerks Jerky distinguishes itself by using 100% filet mignon, the most tender and flavorful cut of beef, in crafting their premium jerky. Unlike traditional jerkies made from tougher cuts, Three Jerks Jerky offers a buttery and succulent experience that puts them in a league of their own.
The jerky comes in three distinct flavors: Original, Memphis Barbecue with a kick, and Chipotle Adobo. Priced at $11.99 per package, their product is positioned as a premium offering, catering to consumers seeking a top-tier jerky experience. The founders emphasized the quality of their jerky, defending the higher price point by highlighting the superior taste and tenderness resulting from using filet mignon.
Three Jerks Jerky sources their meat from a tenderloin, ensuring the leanest and most succulent beef without compromising on flavor. They take pride in not using artificial preservatives or nitrates, making their jerky a healthier alternative. Additionally, their product is gluten-free, catering to a broader audience with dietary preferences.
How It Went
The company’s position before Shark Tank
Over the past 12 months, Three Jerks Jerky reported $350,000 in sales, demonstrating a demand for their premium product. The company’s pricing strategy, with packages selling for $11.99 and even $17 at their best store, positions them as a premium player in the jerky market. The company currently operates with a small team, consisting of the two founders handling all aspects of the business. While this lean structure has allowed them to maintain control, it also presents challenges as they aim to expand nationally.
Three Jerks Jerky is looking to break into national chains and increase their market presence. Their current co-packer has the capacity to quadruple production to 50,000 units per week, showcasing scalability. Three Jerks Jerky’s commitment to quality, with a focus on using filet mignon and avoiding artificial additives, has set them apart in the market. The founders expressed a desire to separate themselves from the competition by maintaining their premium positioning.
The Negotiations:
Kevin O’Leary and Mark Cuban expressed skepticism about the pricing strategy, suggesting that lowering the price might be a viable option to increase sales volume. The founders, however, were resistant to this idea, emphasizing the need to differentiate themselves in the market through quality. Several sharks presented offers with varying equity stakes and amounts. While Kevin proposed $150,000 for a 33% stake, Lori and Robert offered $100,000 for 20%.
Daymond John made an offer of $100,000 for a 15% stake, with an option for another 15% at $100,000. A unique turn in the negotiation occurred when the founders suggested Daymond partnering with Lori Greiner to provide the founders with two Sharks. But, Daymond declined. This prompted Robert to join Lori’s offer, creating a combined offer of $100,000 for 15%, with an option for another 15% at $100,000. Ultimately, the founders accepted Daymond’s offer, seeing it as an opportunity for growth and acceleration for their business.
