Table 87 Frozen Before Shark Tank
A classic Brooklyn pizzeria may not be the most common workplace of a Shark Tank entrepreneur, but it’s what Thomas Cucco calls home. Cucco opened the first Table 87 Pizza in 2012, and since then, he’s had enough success to open a second store. With rave reviews for his authentic coal oven style, Cucco wanted to get his pizzas into every home in America. His plans to expand into the frozen pizza business were ambitious, but they would take cash. Prior to his Shark Tank appearance, production took place in his brick and mortar stores, so any investment would go towards an independent kitchen for the frozen line. This guy looked like the real deal, but let’s see what the sharks think.
Table 87 Frozen During Shark Tank
Cucco entered the shark tank and got right down to brass tacks. For two hundred thousand dollars, he was offering ten percent equity in Table 87 Frozen, a two million dollar valuation. Cucco’s assistant performed some pizza dough acrobatics to lend the presentation a little flair, while Cucco explained his pizzas’ fresh and authentic ingredients. Table 87 Frozen was the only coal oven player in the frozen game, so Cucco expected his individual slices and whole pies to fly off the shelves. He couldn’t seem to get enough of his own product and finished things off with an Italian finger kiss. Bellissimo! He enticed the sharks with some samples, individual slices from Table 87’s twenty-inch pie.
They all agreed that the taste was excellent, but Kevin had some concerns. He saw cooking and flash-freezing pizza, then selling it in the frozen food section as a tough sell. There are hundreds of players in the frozen pizza business, so Cucco would have to differentiate Table 87 Frozen enough to compete against the DiGiornos and the Red Barons out there. He answered that his superior quality would do the legwork. Kevin wanted to get down to numbers. Each individual slice sold for five dollars, of which Cucco saw three. Each pie sold for ten dollars, of which Cucco saw six-fifty. Margins tend to be lower in the food business, so they would need to be covered by volume. When distribution came up, Cucco answered that Table 87 Frozen was in about two hundred fifty stores, including Whole Foods and Fairway Market. Over the frozen line’s first nine months, it had two hundred sixty thousand dollars in sales.
The sharks learned that, like many fledgling businesses, Table 87 Frozen was still a home operation. Cucco was making the market-destined pies in his restaurant locations. This limited production and hurt the potential of his brick and mortar locations. They all agreed that an investment would have to go toward a factory kitchen. However, upon learning that only the frozen side of Table 87’s business was on the bargaining table, they all got a little squeamish. Cucco replied that Table 87 Frozen would need to be a completely independent business in all but name. With separate kitchens, distribution, prices, and employees, Table 87 pizzerias and Table 87 Frozen would simply coexist for brand recognition.
Kevin had dealt with fierce competition from his experience with Softkey, The Learning Company, and related education and software businesses in the late 1990s. Applying this knowledge to the retail food business, Kevin tried to make Cucco see the light. According to him, growth would bring slotting fees that Table 87 Frozen hadn’t encountered as a small business. Outside of anecdotal experience, Cucco didn’t have an answer for Kevin, so Mark took things in a different direction. To him, the heat and serve, on-demand potential of Table 87 Frozen was high. He explored online delivery options with Cucco, praising interest from Amazon Fresh, Good Eggs, and Fresh Direct. According to Mark, the modern consumer is looking for immediate satisfaction. On the other hand, he was no fan of Cucco’s restaurants, which could compete for attention. He also agreed with Kevin on the difficulty of penetrating the frozen food section in physical stores.
Robert jumped in and also expressed his concerns about the competitive frozen pizza market. To him, Table 87 Frozen wasn’t worth the risk, even with the possibility of distribution in bars and stadiums. He left the negotiations in his usual concise style. Kevin jumped back in, offering cautious support but claiming the valuation was too high, especially when considering only Table 87 Frozen. After all, with considerable personal investment in packaging, research, and supplies, Table 87 Frozen only had a quarter million in revenue. The success of the restaurants meant very little here. Taking a line from Mark Cuban, he delayed his decision, wanting to see how things would go.
Emerging from total silence, Barbara spoke up. She praised the quality of the pizza and Cucco himself, calling him authentic and relatable. However, she had some qualms with his business model. To her, splitting the business between restaurants, online delivery, retail distribution, and alternate distribution would spread Table 87 Frozen too thin. She also was concerned with his product diversity and felt like he should focus on the individual slices instead of whole pies. Here, we have an example of a product that has enough potential to weather some confusion. Each shark (and Cucco himself) wanted to take Table 87 Frozen in a different direction. However, their willingness to work with him instead of casting him aside for lack of focus means they believed in the company.
In fact, Barbara did give Cucco his first offer but for much higher equity than he asked. She offered to invest the two hundred thousand dollars for thirty percent of the company. She also asked him to commit to single slices, which she saw as his niche. It’s clear that she saw Cucco as capable but overly ambitious and wanted some more stability from Table 87 Frozen. Looking to muddy the waters, Kevin offered Cucco a loan deal: two hundred thousand dollars in exchange for a twenty-five cent royalty per frozen slice. He would accrue these royalties until he earned six hundred thousand dollars. It was a steep offer, with the benefit of Cucco losing no actual equity in the business. Still, in the food business, even twenty-five cents per unit is a big hit. Barbara called Kevin a loan shark, and Cucco agreed but said he would think about his offer.
Following Kevin’s lackluster proposal, Lori decided to make an ambitious offer – and undercut Barbara. For twenty percent of the company, she would invest two hundred fifty thousand dollars, a larger investment for lower equity. She reasoned that the extra fifty thousand would help him jump-start mass production. In addition, she was willing to give Cucco a greater say in his business. She supported Table 87 Frozen online, in bars, and in stadiums, all of the avenues that Barbara thought would be unsuccessful or distracting. She even offered her strategic connections with natural food companies. Robert wanted to see where the other sharks stood and checked with Mark. Although Mark liked the on-demand functions of the frozen business, he still cautioned against traditional retail. For this reason, he bowed out.
Ignoring Kevin’s loan deal, Cucco now had two more on the table, but Barbara was willing to sweeten her offer to stay competitive. Lori kept Cucco’s attention and negotiated with him on the equity, despite Barbara’s protests. As Barbara repeated “No!” and claimed she had a better deal waiting, Lori accepted eighteen-and-a-half percent equity, down from twenty. For only a slightly higher stake than he originally offered, Cucco walked out of the tank with a larger investment than he expected, a fair deal. In his words he was “Nervous walking in and then joyful walking out. Incredible!” In minutes, he had taken his family-owned pizzeria nationwide.
After Shark Tank: Table 87 Frozen in 2016
Table 87’s Shark Tank episode was a bit of a cliffhanger due to all of the directions the business could go. Would it focus on delivery? Store shelves? Alternate distribution? And would Cucco continue to use his physical restaurants as a laboratory for his frozen line, or would he take a step back from the pizzerias? With the Table 87 episode airing in late 2015, there’s not much news yet. Shark Tank itself hasn’t done a follow-up on the business. However, Lori’s done some work promoting Table 87, along with some other favorite small businesses, on her Twitter feed. There’s no doubt that she’s working behind the scenes as well. In the last few months, Table 87 has found itself in more supermarkets in the New York City area, according to Table 87’s Twitter and Facebook pages. Cucco claims on his LinkedIn profile that he is now in over three hundred supermarkets, an increase of twenty percent.
During Shark Tank, Cucco mentioned that the online store would go live in three weeks, and it appears to be up-and-running. For the time being, Table 87 is handling some of its own distribution, but it’s difficult to ship frozen items cross-country. They need to be packed with dry ice and hand-delivered. Still, for a big fan of the company who wants to buy in bulk, there is a “Shark Tank Special” available. It feeds eight to ten people for about twenty dollars each. Pricey, but potentially worth the cost for fans of the coal oven recipe. Other packages include various assortments of single slices and ten-inch pies.
The question remains, how big can Table 87 Frozen can truly get? It’s slowly gaining popularity in the Brooklyn area, and according to the website, it’s beginning to find its footing in bars, as well. With the popularity of pizza in New York and the sheer number of local customers, maybe being a “big fish in a small pond,” is far enough. However, with Lori’s excitement in the tank, I suspect that she sees Table 87 Frozen as a potential juggernaut. Negotiating with large retailers takes time, so it would be no surprise if several distribution agreements were in the works. Until then, if Table 87’s Yelp reviews are any indication, Cucco is sure to continue captivating locals. Wherever the business takes him, Thomas Cucco is no quitter. Fuhgeddaboudit.