Southern Culture Artisan Foods Before Shark Tank
Southern Culture Artisan Foods, prior to its appearance on Shark Tank, struggled to stay in business. Despite a yummy product, little marketing or advertising was done for these line of products, and so the only product available by Southern Culture Artisan Foods prior to its Shark Tank appearance was a simple cooking mix meant to be added to pancake or waffle mix.
Southern Culture Artisan Foods on Shark Tank
Erica Barrett is the founder of Southern Culture Artisan Foods, which is a breakfast lifestyle brand. She is seeking $100,000 for a 25% stake in her company. In order to explain the founding of Southern Culture Artisan Foods, Erica launches into a story by saying how one morning, she had to run to the store to find ingredients to make her favorite breakfast, strawberry pancakes. She had to find all the ingredients, but wanted to use all-natural, organic ingredients, but her bill was close to $35. However, she has created Shortstacks to change that. Shortstacks are a mix which can be added to cooking, and are intended to give food that delicious home-cooked taste, and include unique flavors like banana pudding, oatmeal raisin cookie, and bourbon salted pecan. Of course, organic, all natural ingredients are used, and since no dairy is used, these pancakes and waffles are safe for all diets.
As with all food on Shark Tank, Erica has brought a sample for the Sharks, which they taste and enjoy. The sharks question how sales are, which Erica explains that she has earned $100,000 in the first 12 months of opening up, which was sold mostly through Nordstrom and TJ Maxx. Nordstrom has since re-ordered, while Erica is working on getting through with Whole Foods, which is a big retail chain based out west. The product costs around $.99 to $1.49 to make, while it retails for $7.99 and she sells for around $5.00. This makes around 12 pancakes or waffles.
The sharks ask about the uniqueness of it, which Mark defends it as the southern archetype – the gourmet, delicious food. Kevin asks about growing the business and doing a country-wide rollout, which Erica hopes to move to a more regional scale of it. Erica says that she wants to start using Whole Foods as a start, and moving products through Whole Foods and possibly expanding from there. Erica says that she is obsessed with the business and rarely sleeps.
Kevin asks about competitors and why they wouldn’t take to competing with Erica, making their own brand and selling it for cheaper. Erica says that the healthy aspect of the food is changeable, and that since diets change over time, the pancake mix can change over time – she gives vegan and paleo as an example of the most recent fads. Erica also says that she is the only pancake that does not use powdered dairy, while all the other pancakes typically use powdered dairy.
The sharks ask what she needs the money for, to which she replies that she needs to fulfill orders. QBC has sent an order for around 50 to 75,000 units. Barbara then enters, mentioning her experience with QBC and saying that the margins are so slim that she barely even breaks even with orders there. Barbara then says that boutique stores, like Southern Culture Artisan Foods, rarely do reliably take-off and hold their own. Erica then says that Target has approached her and would like to start off with selling her product in 50 to 100 test stores. Barbara asks where the product is manufactured, which Erica replies that it is made in a commercial office. The sharks groan, questioning why she wouldn’t go to a commercial kitchen, since the kitchen can reduce the cost dramatically. Erica says that her product is best made when sold as a unique, quirky product, and should not be put in a box.
Kevin says that still, the cost reduction is worthwhile, offering discounts as high as 30% for her production. Mark then chimes in saying he has done similar deals before, but does not consider himself in the gourmet food business, and folds out on the deal. Robert mentions the food and how much he enjoyed it, but says that throughout learning from his investments, food investments are rarely worth it since they are unstable and hard to predict and folds as well. Kevin now speaks up and says that he has a few contingencies for his investment, saying that he wants Erica to move production out of the office and into a co-packer facility. The second demand he has is that he requires each unit cost a dollar to produce until he recoups his $100,000, then drops to $.50. Robert asks what her production is, which she then says costs $.92 to a $1.00.
Barbara offers a $100,000 for 40%, simply to not see her work with Kevin. She says that she does not think Erica knows what to expect from dealing with stores, and has not properly dealt with QBC. Daymond also speaks up, saying that it his this goal in the current season to add more food to his portfolio. He says that he thinks Kevin is a horrible deal, but Barbara is a great partner, and folds out as well.
Erica asks to barter with Barbara at this point, asking to exchange 35% of equity in exchange for the $100,000. Barbara says she knows how much effort and risk is involved in food business, but the Sharks continue to nag on Barbara to have a heart and deal with her. Eventually, the two settle upon the middle at 38%, which gives Erica a deal for her pancake business at $100,000 for 38% equity.
Southern Culture Artisan Foods Now in 2018- The After Shark Tank Update
Since appearing on Shark Tank, Southern Culture Artisan Food’s product line has greatly expanded to include bacon, syrup, and even sausage. These products are mostly available online, as I was unable to find any stores that carried the products. However, it is assumed that sales for Southern Culture Artisan Foods have been strong since Erica has been able to grow her product line from a simple pancake and waffle business into also selling meats. The website for Southern Culture Artisan Foods also includes a Breakfast Club deal, which allows for a membership to be purchased where the customer will receive a small kit of mixes every month for a lower price than simply purchasing the mixes.