Chocomize Before Shark Tank
Chocolate bars haven’t really been innovated in years – in fact, I think they’ve definitely gotten smaller from when I was a kid. Most chocolate bars aren’t very customizable or fun, they just taste really good. Chocomize serves to change that as a business that allows for users to customize chocolate bars with toppings, and even pictures and messages, all through an easy-to-use interface.
Chocomize on Shark Tank
Joe Dauenhauer has just stepped into the Shark Tank. He is seeking $500,000 in exchange for a 20% equity interest in his market.
The current chocolate bar market hasn’t seen much innovation in its products in a very long time; quite frankly, most chocolate bar are just plain boring. Chocomize solves this problem by allowing customers to create their own chocolate bars online. Joe demonstrates the process; first, the user chooses a shape. Next, they choose the flavor of milk, dark, or white, and the option to add up to five toppings with a selection of 100. Messages can also be put into the chocolate bar, with messages like “happy birthday” or “congratulations.” Chocomize can also put special, edible corporate logos or pictures in the chocolate bar, making it great for corporate events and weddings. Joe has prepared special chocolate bars for the sharks, with each shark’s face printed on the afore-mentioned special picture type edible chocolate.
Barb asks how Joe got into the chocolate business, and Joe says that his partner, Fabien, is from Germany and actually started the company three years ago. A year and a half ago, Joe joined the company with a background from Finance, and they are partners; Fabien owns 50%, and Joe and another shareholder own about 18% and the other 32% is split amongst all Shareholders. Robert asks about numbers, and Joe explains that the last fiscal year, they did $450,000 in sales. The year before, they did $500,000 in sales, which causes the Sharks to become alerted and point out the dip in the sales. Joe explains that they moved facilities and actually built a 500,000 foot facility where they can now produce their own chocolate.
Kevin asks that this business is not just part of a tiny niche that is going to stay tiny, because his customers might only order once, but Joe insists that they do receive repeat orders quite often – once about every six months, actually. Joe also says that they are the largest customizable chocolate manufacturer in the United States, but Mark tries to say that with only $500,000 in sales, no company is a dominant force in any market. Joe says that there is a car company they are paired with and actually do promotional events with, and in the last three months alone they did $125,000 in sales with just that corporate type. Robert steps in and offers his opinion, saying that Chocomize should try to focus on just corporate type structures. He also asks about the price and specifics of each bar, and Joe explains that each bar is sold from, on average, $6 to $6.50, depending on what toppings and customization. It costs about $2 to make.
With the $500,000 Joe receives, Kevin wants to know how he is going to receive his own money back, “his chocolate back.” Joe says that the investment should take 3 to 4 years back, however if things fail, they do have many liquid assets and would be create for a liquidation sale or acquisition target. Mark asks why Joe thinks that Chocomize would be a great acquisition target, who explains that large companies like to mass-produce, but Barb says that companies only like to mass produce because they make money on it. Mark says that there is nothing unique that Chocomize offers and can’t be done by somebody else; if Mark were to take $2 or $2.5 million, he could do the same thing. Joe insists that Mark would have to fund the plant and staff it, and would have to hire in managers; managers much like Joe himself.
Kevin says that Joe is lucky he came into the Shark Tank, and he will be the first to make Joe an offer. Kevin offers $500,000 to start from square one, and a 25% equity in opening “Mr. Wonderful’s Chocolate Company.” Kevin actually wants to start his own chocolate company and have Joe staff as a manager. Joe refuses the offer, saying that he wants to keep the brand name and that this is his baby he has been working for. Kevin says that with his name, and the Shark Tank backing all the potential orders, Mr. Wonderful’s Chocolate Company will do much better than the old Chocomize ever did.
Robert speaks next, saying that he was really turned off by Joe’s valuation of $500,000 being a massive, titanic amount of sales for the chocolate market in the United States; he continues on to say that he is not excited about the idea of Chocomize, and if he cannot get excited about a potential investment, it isn’t something worth pursuing. Robert is out of the deal. He just cannot understand the size of the market.
Mark says that Chocomize is nothing special, and if Joe were to come in with something special, he could excited about the business. However, Chocomize is nothing more than a knick-knack that can be eaten to him, and he does not see the lasting appeal in it for him to recover the investment that Joe is asking for – he is out next.
Barb says that she doesn’t like that Joe admitted to the customization being expensive, and then continues on to say that she doesn’t like the packaging of the Chocomize bars. She thinks they look dated, and that she doesn’t feel like she’s receiving special or expensive anything. Joe says that with the money, he wants to invest into new packaging, but Barb echoes Mark’s sentiments and says that she doesn’t think that Joe will be making a profit for very long, and is not interested either.
Lori says that she likes the name of Chocomize, but she does not see the vision of Chocomize going big and she likes to invest big; Chocomize is more of a niche market. She is out of the deal as well.
Kevin is the last remaining Shark with a deal available of $500,000 and a 25% equity in opening up Mr. Wonderful’s Customizable Chocolate business, which would open in Kevin’s Boston offices and feature a slogan that Kevin loves – “You’re dead to me.” He insists they can sell millions. Joe refuses the offer, and Kevin is out of the deal as well; Joe does not find the investment he came searching for in the Shark Tank.
Chocomize Now in 2018 – The After Shark Tank Update
Chocomize found success after Shark Tank, of course – as with most of the entrants that appear on Shark Tank, the website actually came close to crashing during the airing of the Chocomize segment. Since its appearance, Chocomize has had a lot of success in the corporate business world as an alternative to creating fun, customizable chocolate bars. Chocomize is still in existence today.