Zach & Zoe Honey
DEAL
EPISODE SUMMARY
🕓 Air Date: November 19, 2021
Asking For:
$150,000 for 10%
Investor:
Barbara Corcoran
Deal:
$200,000 for 15%
PRODUCT SUMMARY
Zach & Zoe Sweet Bee Farm produces raw unfiltered honey infused with organic superfoods, such as ginger, matcha, and beetroot, offering a healthy twist on honey.
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Background Story
Zach & Zoe Sweet Bee Farm, a family-owned venture based in Lebanon, New Jersey, was born out of a heartfelt desire to find a solution for their son Zachary’s severe allergies. Frustrated with traditional remedies, the family embarked on a journey to discover natural alternatives. In their exploration, they stumbled upon the remarkable health benefits of raw honey, rich in pollen known to alleviate allergies.
This revelation ignited their passion for beekeeping and set the foundation for their business. Starting with just a few beehives, the family’s dedication and love for their craft led to the establishment of a full-fledged honey production facility, where they personally oversee the care of 50 hives. Central to their mission is the well-being of their bees and the uncompromising quality of their honey.
Notably, Zach & Zoe Sweet Bee Farm sources approximately 80% of their honey from local farms, demonstrating their unwavering commitment to promoting and supporting local beekeeping communities. Their journey showcases the power of passion and family dedication, resulting in a business that not only provides delicious, healthful honey but also contributes to the vitality of local beekeeping traditions.
The Product
Zach & Zoe Sweet Bee Farm offers a distinctive product that stands out in the honey market. Their key selling point is the creation of raw unfiltered honey infused with organic superfoods like ginger, matcha, and beetroot. What sets them apart is their commitment to producing these flavorful blends entirely in-house, without relying on co-packers. This approach grants them unparalleled control over the quality and integrity of their products, ensuring that customers receive a genuinely pure honey free from pesticides and additives.
Their product line caters to various tastes, featuring enticing flavors such as blueberry, ginger, and matcha. These delectable honey blends are conveniently packaged in 16-ounce jars, making them accessible to a wide range of consumers. While the retail price for a 16-ounce jar stands at $20, wholesalers can acquire it for $13.
Remarkably, the cost of producing this product is a mere $6, attesting to their dedication to maintaining affordability without compromising on quality. Zach & Zoe Sweet Bee Farm’s commitment to providing a healthier and flavorful alternative to processed honey reflects their passion for beekeeping and their customers’ well-being.
How It Went
The company’s position before Shark Tank
Zach & Zoe Sweet Bee Farm’s performance in recent years has been nothing short of remarkable, demonstrating their ability to thrive in the competitive honey industry. Their consistent growth trajectory is evident in their sales figures. In 2018, they achieved $62,000 in sales, which increased substantially to $135,000 in 2019. Even amid the challenges posed by the pandemic in 2020, their sales continued to soar, reaching an impressive $401,000.
The company’s adaptability and resilience became evident during the pandemic. Initially relying on Chelsea Market in New York, which accounted for 70% of their business, they successfully pivoted toward direct-to-consumer sales through their website, which now contributes 70% of their revenue. This strategic shift allowed them to maintain their momentum even in uncertain times. Their impressive growth has not gone unnoticed in the retail world. Major retailers such as Macy’s and Bloomingdale’s have recognized the quality and appeal of Zach & Zoe’s products, further validating their market presence.
Their commitment to both quality and sustainability has also garnered media attention, with features in The New York Times highlighting their unique approach. Furthermore, their acceptance into Target’s 2021 incubator program underscores their potential for continued expansion and success. Overall, Zach & Zoe Sweet Bee Farm’s performance reflects not only their dedication to quality but also their ability to adapt and thrive in evolving market conditions.
The Negotiations:
During the negotiation phase on Shark Tank, the Johnson family received multiple offers, highlighting the appeal of their honey business. Barbara Corcoran was the first to extend an offer, proposing $200,000 for a 15% equity stake. Her pitch emphasized her expertise in marketing and brand building, suggesting she could help Zach & Zoe Sweet Bee Farm expand into major retail stores.
Kevin O’Leary, known as Mr. Wonderful, presented a royalty deal. He offered $150,000 for zero equity but with a dollar royalty per jar until he recouped his initial investment, after which it would drop to 25 cents per jar. This approach was aligned with his business philosophy of not taking equity, which he reiterated as a compelling selling point. However, the Johnson family was more inclined towards Barbara’s offer due to her relevant industry experience. They made a counteroffer to Barbara, suggesting $200,000 for 12% equity. After a brief huddle, Barbara accepted their counteroffer, sealing the deal.
While Kevin and Daniel Lubetzky expressed their reservations about the family business’s scalability, Barbara’s experience and enthusiasm resonated with the Johnsons. They believed that her expertise in marketing and brand building would be a valuable asset to help them achieve their growth goals. The negotiation ultimately showcased the family’s desire to find the right partner who could not only provide capital but also contribute industry knowledge and connections to propel their business forward. Barbara’s offer, which blended their equity requirements and her industry insights, proved to be the winning proposition for Zach & Zoe Sweet Bee Farm.
