BeatBox Beverages before Shark Tank
BeatBox Beverages is a boxed wine company that was founded in Austin, TX on the belief that boxed wine doesn’t have to be boring. Founding members who include Justin Fenchel, Aimy Steadman, Brad Schultz, Jason Schieck and Daniel Singer saw an opportunity to create a more fun and better tasting, 5-liter bag-in-box beverages for a market of young Millennials.
The BeatBox boxed wines are available in flavors like Blue Razzberry Lemonade, Box
A’Rita ( a margarita flavor) , Cranberry Limeade and Texas Sweet Tea.
BeatBox Beverages on Shark Tank
Members Justin Fenchel (CEO), Aimy Steadman (COO) and Brad Schultz (CXO) went on the show during its sixth season seeking $200k for a 10% stake of their company.
They explained how traditional wine and boxed wine can be boring and showcased their fun brand attitude, explaining that they wanted to change the boxed wine market forever.
They explained that the BeatBox beverages boxed wine was not just a wine, but also an experience.
They used a unique orange wine that was more like a spirit than a wine and allowed them to create mixed drinks that their customers absolutely loved.
They mentioned that every box contains almost seven bottles of wine which made it enough to share with everyone and that it was all packaged in a cardboard box shaped like a BeatBox, to give the experience a fun, party atmosphere.
After passing out samples of the four BeatBox wine flavors, Barbara Corcoran asked what ‘Orange Wine’ was and CEO Justin Fenchel informed her that Orange Wine is a unique, clear wine that resembled a white spirit.
Kevin O’Leary went on to say that he didn’t like the flavor but the other sharks disagreed with him. Lori Greiner said that she loved the blue Razzberry lemonade flavor which reminded her of blue raspberry snow cones.
Mark Cuban asked how much alcohol the beverages contained and Justin Fenchel informed him that they contained 11.1% alcohol. The sharks seemed impressed by that.
They also stated that each serving contained only 121 calories and only 7 grams of sugar, making it a low-cal option.
Kevin O’Leary asked them to explain more about their business, where the wine was manufactured, what their margins were and who among them was actually handling the distribution.
Justin Fenchel told him that the company was self-distributed and that they became a winery in their own right but that it had gotten to the point where they were spending too much time at their facility making and distributing the wine, and that they didn’t have time to market it. Which was why they found a co-packer in Dallas that then went on to make the wine for them.
Robert Herjavec asked Justin what their sales were. He answered him that their sales amounted to $235k in 14 months and that an additional $120k was due to come in that very quarter.
Robert Herjavec asked them how much money they had raised when they started. Jason told him that they had self-funded their company for $55k and had taken on $100k in family and friends debt.
Robert Herjavec then asked him how they expected to go from $235,000 to $5,000,000. Jason answered that their strategy was to identify new stores where they knew their boxed wine would sell well and support each store with at least six tastings.
To that, Robert Herjavec asked him what they needed the money for. Jason told him that it was for opening new stores and supporting them with new tastings that were on average a $100 per tasting.
Sharks Mark Cuban and Barbara Corcoran thought that seemed expensive.
Mark Cuban commented that doing that in the store seemed really good but was also hard to leverage and that because they worked one store at a time, their leverage points weren’t all that great and that in his mind, the strategy was wrong.
He went on to tell them that they needed to take advantage of events and places where there were thousands of people.
Justin then said that he felt that they had already eliminated a lot of the risk associated with a new consumer products company and that they needed someone to help scale their business.
Barbara Corcoran offered them $400k for a 20% stake and Kevin O’Leary halved Barbara’s offer, offering them only $200K for the same 20% stake.
Mark Cuban then addressed them saying that he understood that they weren’t selling wine, but rather that they were selling fun. He told them that he was the best suited among the sharks to create the biggest splash for their company and offered them $600K for 33%.
They countered with asking him for a million dollars for a 33% stake. Mark Cuban agreed and the deal was accepted before Lori and Robert had a chance to make their offer.
The team was very excited and said that they hadn’t imagined that they would walk away with a million dollar deal.
BeatBox Beverages Now in 2018 – The After Shark Tank Update
BeatBox Beverages went from a small company to being featured in 750 stores across 18 states in just one year.
Since going on the show, the company has launched a new 3-liter box and introduced two new flavors to their repertoire.
The company has stated that their brand is made by millennials for millennials and that they aspire to become the RedBull of the alcohol market.
BeatBox Beverages has grown into a successful business with products being distributed by, according to their website: Republic National Distributing Company, Johnson Brothers, Southern Wine and Spirits, and Young’s Market.