Bruw
Bruw is a company from Detroit, MI, presented by an eighteen year-old entrepreneur who loves coffee and wants to help people cold brew their coffee easier.
The entrepreneur stated that he fell in love with coffee at fifteen and had discovered the wonders of cold brew coffee.[1] However, all of the systems he found for making cold brew coffee involved hundreds of dollars of equipment in order to get started. There was also an alternative method with involved spooning the coffee into a mason jar and filtering out the grounds later but that always proved frustrating and not always perfect.
In order to allow people to be able to use the cheaper mason jar method but also to help people better filter the grounds from the result, the entrepreneur invented a device that can attach two mason jars to. One has the water and coffee added to it and then the device. Then a second mason jar is screwed on top. After the coffee has steeped for the necessary amount of time, the whole contraption can just be flipped over and the coffee will filter through the device, leaving the grounds in the original jar and the sweet, sweet coffee in the other one.
When questioned by Mr. Wonderful about the need for this product, the entrepreneur said that the need stems from the fact that coffee shops will regularly sell cold brew for $2-3 more than traditional coffee.[2] Additionally, cold brew equipment can sell for anywhere between $50-200.[3]
The entrepreneur says that he made the original prototype with screen material from a screen door, a hot glue gun, and two mason jar lids. He received a patent on the device five days before appearing in the episode and that he received it through the pro bono work of a law firm in Detroit.
The current version of the filter costs $4 per unit to manufacture and retails for $20. However, the entrepreneur says that, at scale, the costs can be reduced to just $1.50 per unit which would allow him to lower the retail price to sell as an impulse buy at the register.
In the previous year Bruw grossed $50,000 and the entrepreneur predicts grossing $100,000 by the end of the current year.
The entrepreneur wants a shark to come on board because he would like to move the product into retail and big box stores.
This deal aired on Episode 10.09.
Making A Deal
Robert said that he was impressed with the young entrepreneur and that 50% of the entrepreneurs who approached him outside of the show are kids who are inspired by watching it.
Daymond expressed an interest in the business. He stated he had a good experience with Bombas which is now valued at $150,000,000. He also said that he was interested in licensing the product to either Pete's or Starbucks.
It was Mark, however, who came in and closed the deal. He offered the $50,000 that the entrepreneur was looking for in exchange for 30% equity in the business. While this represented a $33,333 bite from the original value of the business, he clearly seemed to be who the entrepreneur wanted to work with and the deal was made.
Analysis
Your humble Stats Shark perked up when he heard that the entrepreneur in this deal wanted to pitch something related to cold brew coffee. The Stats Shark makes cold brew coffee two to three times a week and is the only type of coffee he usually drinks.
However, there already exists a much more simple and cost effective way to brew cold brew and it doesn't require and new or novel devices. Write Cory Doctorow detailed it years ago as well as in his book Homeland and can be found here. It involves, simply, a Rubbermaid pitcher, and a "milk nut bag", essentially an extra-large re-useable tea bag.
Pour your coffee into the bag, put the bag into the pitcher. Run cold water over the coffee until the pitcher is full, zip closed the bag, put it in a fridge, and then wait over night for some tasty goodness.
What concerns your Stats Shark is not the idea of selling someone a device that makes cold brewing coffee simple and easy. It's the idea that anyone interested enough to figure out how to make cold brew has probably seen methods like the one described above because it can be found with a quick Google search. Which means that selling this product online makes a lot of sense as it can easily compete with these other methods on price but does not make so much sense to sell in a retail environment where it's possible people may not have the rest of the system much less any idea how cold brew differs from making traditional coffee.
Essentially, there is a knowledge gap involved that can't be easily solved at the retail level without massive amounts of education (read: marketing) first. This is a specialty item that the online market is perfect for.
Notes
- ↑ Cold brew coffee is the process of brewing coffee without adding any heat to it as one would with the traditional percolator or drip coffee makers. Instead, the coffee is put into cold water and stored for at least twelve hours (usually overnight) in a cold environment (usually a fridge) so that it infuses the water with the coffee. The process is the same as making iced tea. The result is a sweet, cold coffee with zero bitterness because heat was never applied. It is, of course, intended also to be consumed cold.
- ↑ This is true. A cup of regular hot coffee at Starbuck will typically go for about $2.50 while a similarly sized cup of cold brew will sell for as much as $5. This is a major reason why the Stats Shark makes his own cold brew (see the Analysis section above).
- ↑ While there is little doubt that this is true, much cheaper methods are also available (see the Analysis section above).