Zipz Single Serving Wine
DEAL
EPISODE SUMMARY
🕓 Air Date: December 5, 2014
Asking For:
$2,500,000 for 10%
Investor:
Kevin O'Leary
Deal:
$2,500,000 for 10%
PRODUCT SUMMARY
Zipz Inc. has created a unique single-serve wine glass with a patented design, offering a durable glass that can be easily opened and resealed. The product focuses on innovative packaging and licensing in the wine industry.
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Background Story
Zipz Incorporated, headquartered in Scarsdale, New York, was founded by Andrew McMurray, an entrepreneur with a vision to transform the single-serve wine market. With a background rooted in innovation, McMurray embarked on the Zipz journey in 2008, determined to create a product that would redefine how people consume wine on the go. Andrew McMurray’s inspiration for Zipz emerged from a critical evaluation of existing single-serve options prevalent in the market, particularly the small plastic cups and bottles commonly found on airplanes. Recognizing the need for a more sophisticated and durable solution, McMurray set out to design a single-serve wine glass that stood out in terms of both packaging and functionality.
The core philosophy behind Zipz is centered around the importance of packaging and licensing in the wine industry. McMurray’s belief in the significance of these elements led to the creation of a patented glass design that not only offers a novel and durable structure but also introduces a sealing mechanism to preserve the wine’s shelf life. The innovative approach extends to the entire user experience, from unzipping the outer wrap to unscrewing the lid and peeling open the glass.
Hailing from Scarsdale, New York, McMurray’s entrepreneurial journey has been characterized by a commitment to pushing boundaries and challenging traditional norms in the wine industry. With a team of investors, including retired Goldman Sachs partners and Wall Street professionals, Zipz Incorporated has secured significant funding, enabling them to make strides in licensing and partnerships. The company’s strategic approach involves working with major brands like Yellowtail, positioning Zipz as a pioneer in the evolution of single-serve wine packaging.
The Product
Zipz Incorporated has introduced a groundbreaking single-serve wine glass designed to revolutionize on-the-go wine consumption. This innovative product boasts a patented glass structure that distinguishes itself from conventional options in the market. The glass is not only durable but also sealed with a recyclable outer wrap, serving as a UV protectant to enhance the shelf life of the wine.
The functionality of the Zipz glass is user-friendly and unique. To open the glass, consumers simply unzip the outer cling wrap, which also acts as a protective layer against UV rays. The glass is then unscrewed from the lid, creating a secure seal. What sets Zipz apart is the strength of its glass – sturdy enough for McMurray to stand on, emphasizing its durability and reliability.
One of the standout features is the resealing capability. After opening, the lid can be reattached, allowing the glass to be tilted without spilling any wine. This design ensures a convenient and mess-free experience for consumers.
The company envisions expanding its market presence, with a particular focus on potential partnerships with major retailers like Costco. The competitive pricing, coupled with the unique packaging and licensing strategy, positions Zipz as a game-changer in the wine industry, offering both functionality and a novel way to enjoy wine on various occasions.
How It Went
The company’s position before Shark Tank
Zipz Incorporated, as of its latest update, exhibits a promising trajectory in the single-serve wine market. The company’s health and position are marked by strategic partnerships, ongoing licensing agreements, and a focus on expanding its market reach. Zipz has successfully forged partnerships with significant players in the wine industry, notably securing licensing deals with major brands such as Fetzter Winery and Yellowtail. These partnerships not only contribute to the company’s revenue through licensing fees but also serve as endorsements of the viability of Zipz’s innovative packaging.
In terms of distribution, Zipz has positioned its products in notable retail outlets, with plans to expand further. While the product is not yet available in Costco, negotiations are underway, indicating a potential avenue for increased sales and market penetration. Funding for Zipz has been robust, with a reported investment of $8.5 million from a group of investors, including six retired Goldman Sachs partners and other Wall Street professionals. This capital injection has allowed the company to navigate the competitive wine industry, invest in product development, and explore new market opportunities.
The company views its current financial standing as a reinvestment back into the business. This approach aligns with their strategy of opening a new category in the market. Zipz’s current structure involves a team led by founder Andrew McMurray, supported by a group of investors. The company’s strategic direction is underscored by licensing agreements and a commitment to challenging traditional norms in the wine industry. The focus on innovative packaging, coupled with a robust funding base, positions Zipz for continued growth and potential expansion into new markets.
The Negotiations:
The negotiations for Zipz Incorporated on Shark Tank unfolded as a dynamic exchange, with the sharks expressing both skepticism and interest in the innovative single-serve wine glass. Founder Andrew McMurray entered seeking a $2.5 million investment for a 10% equity stake in the company. Initial concerns centered around the competitive pricing of Zipz’s product, especially given the prevalent consumer behavior of purchasing wine at lower price points. Several sharks, including Kevin O’Leary, highlighted the potential challenge in convincing consumers to pay $2.99 for a single glass when alternatives offered more volume for a similar price.
Despite encountering rejection from several sharks who deemed the product too risky or overpriced, Kevin O’Leary saw an opportunity. He made a unique offer, proposing a $2.5 million investment for 10%, with an additional option to invest another $2.5 million at a $25 million valuation in the event of an exit. The condition was tied to successfully launching the product in Costco, leveraging O’Leary’s expertise and connections in the wine industry.
While the other sharks expressed reservations about the deal, citing concerns over the business model and pricing strategy, McMurray ultimately accepted O’Leary’s offer. The negotiation showcased the delicate balance between perceived product value, market dynamics, and the potential impact of securing a deal with a key player like Costco. O’Leary’s strategic offer not only provided funding but also a pathway to a major retailer, setting the stage for Zipz to make a significant impact in the single-serve wine market.
