The American reality show Shark Tank features business owners making investment pitches to a group of “shark” investors.The “sharks” on the show are actual wealthy investors, and the show’s premise reveals the steps used to bring a business idea to fruition. Entrepreneurs pitch their goods and services, lay out their plans for growth, and present their financial predictions to a panel of investors known as “the sharks,” who then ask probing questions and attempt to negotiate deals. The show offers both a fascinating peek into the world of startups and investing and a rare chance for entrepreneurs to gain cash and guidance from “sharks.”Among the many Amazon products featured on Shark Tank, Nature Wild Berry was a runaway hit. However, does it continue to be this way after the program’s end? We aim to find out in this article! But first, some background.
Nature’s Wild Berry: Origins
Hank Watt’s health problem inspired the creation of Nature’s Wild Berry, which masks bitter tastes. He was obese, on the verge of developing diabetes, and dependent on sugary foods in 2013. His friend Juliano, a chef, was experimenting with miracle berries at the time in his restaurant.
Although Juliano’s green drinks had been helping Hank lose weight, the bitter taste had left him yearning for something sweet. Juliano experimented with sweetening Hank’s drinks by mixing in the berry concentrate, and the results were fantastic. Hank lost 80 pounds because he switched from disliking the juice to drinking a liter of it every day. They started their company in 2016 believing that the miraculous berry may assist other people just like it had helped Hank.
Glycoprotein, the secret ingredient in the miracle fruit, modifies the taste receptors in the tongue to make sour, acidic, or tart flavors more palatable. Sugar replacement, weight management, and type 2 diabetes control are just some of the benefits of Nature’s Wild Berry, the company touts. Chemotherapy patients, who may experience a metallic aftertaste that the berries may help alleviate, are specifically targeted by the company.
The Shark Tank Recap
While Hank chewed on a lemon and declared it tasted like candy, Juliano introduced the company and its products to the “Shark Tank” investors. They claimed that their substance would neutralize sour flavors. After being given cranberry juice, pickles, and lemons to chew on, the sharks were given instructions to first taste the berries and then the other things. Lori Greiner called it “crazy,” while Barbara Corcoran called it a “parlor trick” that berries might make pickles taste sweet.
Hank used his $120,000 in savings and Juliano put in another $20,000 to start the business. For that year, projections called for $34,000 in sales and a profit of $50,000. They proposed a 15% ownership for $80,000 in investment money.
For $80,000, Kevin O’Leary would take a 33 percent share and a $5 royalty on each unit until his investment was doubled. The next to make an offer was Daymond John, who proposed $80,000 in exchange for a 30% stake and no royalties. As a counteroffer, Kevin proposed $80,000 plus royalties but just 20% equity. In contrast, Lori’s $3 royalty offer made a bigger sensation. Lori then proposed that Mark Cuban and the other shark take the same offer and partner up. Hank announced they had a deal before Mark could even consent.
Is Nature’s Wild Berry Legit?
One of the most obvious advantages of Nature’s Wild Berry is that it may make otherwise unappealing yet healthy foods taste much better. The account of how the berry helped Hank lose a lot of weight by making nutritious meals taste great is illustrative of its effects.
However, the berry’s usefulness is not limited to just one use.
According to Hank and Juliano, the fruit is like a mystical key that allows you to experience a world of flavors you never knew existed. It does more than just improve the flavor of things that you wouldn’t normally eat by making them appetizing. Think of the delight you would feel if you bit into a raspberry or pomegranate and discovered flavors you had never experienced before. Your favorite foods take on a new dimension of flavor, overflowing with sensations both familiar and surprising.
In addition, preliminary research suggests that the magic berry may help people who can’t otherwise enjoy meals to do so. Juliano related encouraging anecdotes about how the fruit helped chemotherapy patients regain their sense of taste and how it helped people with ALS tolerate the bitter taste of their medication.
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The Aftermath: Selling Out
The “Shark Tank” effect hit Mark and Juliano like a tsunami, and they weren’t ready for it. The two had released a new product after filming but before the episode aired, and it was a huge success. They had predicted that Nature’s Wild Berry being on Shark Tank would bring them some moderate publicity. They had no idea how drastically different the actual result would be from their predictions.
Within 10 minutes of the show airing, all of Nature’s Wild Berry’s inventory had been purchased, creating a 30-day backorder. Because of this increase in demand, the two of them had to work extremely hard for a while to keep up with sales and keep their inventory levels stable. It took them more than a month of hard work to emerge from hiding and set up a reliable supply of their prized fruit.
While any increase in revenue is welcome, this one should not be taken lightly. It presents a new set of difficulties that call for careful forethought and thorough preparation. Therefore, the “Shark Tank” impact acts as a warning to would-be business owners that, while appearing on the show can provide their company a huge boost, they must be ready to handle the flurry of activity that inevitably follows.
Why selling out isn’t always good news
As soon as Nature’s Wild Berry appeared on Shark’s Tank, it sold out. Obviously, they had no idea daily sales would climb from 40 to 1,700 pieces per day (or 40 times as fast). They are currently processing orders on behalf of merchants; this can take anywhere from 4 weeks to 6 months.
Within a few days of the episode showing, Nature’s Wild Berry had sold out of all of its products, losing the company perhaps hundreds of thousands of dollars in sales.
Nature’s Wild Berry was still on track to sell over a thousand copies per day of just their bagged version three days following the showing. It’s likely that demand would have remained high for at least a few days after the episode aired, at which point they could have sold an extra 5,000 to 10,000 units ($175,000 to $350,000) if they had been available.
Many of these consumers bought competing items once Nature’s Wild Berry ran out of stock, which is good news for Nature’s Wild Berry’s competitors but could be terrible news for Nature’s Wild Berry.
Understanding Why Nature’s Wild Berry is Losing Money
Earnings of $340,000 were reported by Nature’s Wild Berry. But they only reported a profit of $50,000, or 14.7 percent. Despite charging $25 to $45 for their product, they claimed a cost of goods sold of only $2.46.
The net profit they’re claiming for the bagged “miracle berry” is only 14.7%, while in reality, it should be closer to 55%. Business owners almost never underestimate profits (unless maybe on Shark Tank). So, it is likely that these figures are correct.
Nature’s Wild Berry may be losing money in ways that weren’t discussed on Shark Tank, including the following.
- Their Total Advertising Cost of Sale (TACoS) is far more than the 10% considered to be optimal for an Amazon brand. The TACoS of Miracle Berry is probably much higher than this, maybe around 15%.
- Manufacturing Expenses Not addressed in the show is the fact that Nature’s Wild Berry appears to own at least some of the machinery used and the property on which the berries are grown. There is no way to tell if their profits account for expenses like these because they are typically excluded from standard methods of computing net income.
- Marketing expenses outside Amazon advertising may include hiring a brand agency for packaging, attending trade exhibitions, etc.
Like many other Amazon firms, their excessive advertising expenses are probably to blame for their lack of profitability.
Will They Survive?
Nature’s Wild Berry offers promising prospects. They have terrible product photos on Amazon, and they exclusively sell there, not any of Amazon’s other marketplaces or even sites like Walmart. They may have a competitive advantage over rivals, particularly low-cost foreign manufacturers, depending on how much of the manufacturing process they control.
As PPC expenditures on Amazon as a whole continue to rise, their implicit TACoS is a growing cause for concern. The second is that while the market is currently relatively uncontested, as interest in “miracle berries” grows, competition is expected to increase.
Nature’s Wild Berry’s absence of a varied product catalog, however, is its main flaw. There aren’t many clear avenues for growth, and they just offer one product.
And one of the main things you need to grow your business is capital. Not everyone can afford to win at Shark Tank, but PIRS Capital offers a nice backup! Our loans are easy and fair, so reach out to us today and give yourself the business edge you need!
I work with companies that sell products on platforms such as Amazon, Shopify, Walmart, Ebay, Etsy, etc. I understand that every business is unique and thats why I form genuine relationships with owners so I can help them reach their goals and find success through our working capital solutions.
