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FlyWithWine

Ryan Neergaard and Ron Scharman hope to pack up a deal for FlyWithWine, their line of  luggage designed to safely transport wine and spirits, in Shark Tank episode 1509. The company was founded in 2016 by Scharman and Neergaard. Scharman spent 20 years in the wine business in a variety of roles and Neergaard brings experience as a sommelier and a tourism marketer to the table.

Together, they grew the business from nothing to an international success with distribution in Canada, Europe, the U.K., Australia, and Brazil. Their suitcases carry wine and spirits in a safe, insulated way so the bottles won’t break or spill. It’s the perfect item for the traveler who enjoys collecting wine.

They sell on their website and Amazon. Their products are also in sveral dozen specialty wine shops across the USA. A suitcase that holds 12 bottles costs $379. They also sell an 8 and 5 bottle size for $339 and $289 respectively. In addition to suitcases, the company sells wine storage solutions, glassware, backpacks, personal wine carriers and accessories. They likely want a Shark’s help expanding their retail presence.

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Fly With Wine: A Journey from Napa Valley to Global Cheers

FlyWithWine Shark Tank Recap

Ryan and Ron enter the Shark Tank seeking $500,000 for an 8% stake in their company. Even though he lives in Napa Valley, Ron says he likes to travel to places where they make some of the world’s greatest wines. That place is Bordeaux, France. He likes to bring home some of the expensive wine when he visits, but it isn’t easy transporting his “wine babies” back home. Most people have very expensive and limited options when traveling with wine. Some people wrap their wine in dirty underwear when they fly! Then they goes to the airport and have the  fear of baggage handlers tossing their wine around.

The solution is Fly With Wine and the Vinguard Valise. It’s a wine suitcase that lets you check your wine on the airplane. It comes in 3 colors and 3 sizes: 12 bottle, 8 bottle and 5 bottle. Next, they introduce the Vin Explorer, their wine and beverage backpack. It comes with a 1.5 litre bladder so you can take your favorite beverages on the go with you. It’s a “party on your back.” FlyWithWine products are made by wine afficianadoes for wine afficianadoes, but you don’t need to be a wine afficianado to enjoy their products. All the insulation and bladders can be removed and they can be used as everyday luggage too. They ask who wants to “ship and sip their way to great returns.”

Samples and Questions

They direct the Sharks to inspect the Vinguard Valise. The Sharks have The Piccolo – the 5 bottle size luggage. Ryan says “the suitcase wil get you to Hawaii and the backpack will get you to the beach.” Each Shark has a backpack with their favorite drink in it. The Sharks do their famous toast and shout “Chevalier du tastevin!”  Robert tells the guys that after 15 years, people know if you give the Sharks alcohol, the pitch goes better.

Kevin wants them to justify their $6.5 million valuation. Ron says they have $19 million in lifetime sales. They started in 2016. Last year (2022), they did $5.4 million in sales and lost $7,000. This year they are at $2.3 million and down $100,000 because they spend a lot on advertising. Last year they spent $400,000  on advertising. They aren’t making money because they continue to re-invest in the business and they both take salaries of $150,000. Covid also caused them to have a lot of non-recurring expenses they won’t have any more. This year’s losses are attributed to attending 13 trade shows which is expensive.

Let’s Talk Numbers

They currently have $1.5 million in inventory. Ron tells Emma and the other Sharks how he came up with the idea. In 2015, he went on a trip to Burgundy with his wife and went to some great wineries. They bought wine and shipped it home; it took 45 days. After that, he looked for a product that solved this problem. He found a guy in Mexico that had wine suitcases and negotiated a deal that gave him exclusivity in the wine industry. He called Ryan who had worked for him in the past and asked him to come aboard.

They have an investor that’s their manufacturer, importer and supply chain manager. That person bought out the original inventor and owns 20% of the company. The investor owns the patent on the suitcase and they jointly own the patent on the backpack. The agreement with the investor is in place for 10 years and is “evergreen” renewable.

The 12 bottle case is $379.95, the 8 bottle is $339.95 and the 5 bottle is $289.95. Their margins are 60%-62%. The backpack sells for $199,95 and it has a 71% margin. They have product in 400-500 wineries and in the last 12 months they did $3.4 million on Amazon. Direct sales on their website account for 13% of sales and wholesale is 40%.

Who’s In?

Mark thinks it’s a hard business to scale to the level of profitability that makes it worth it to him as an investor; he’s out. Robert clarifies that the investor is the only one who can manufacture their product. Robert calls them value added resellers, which isn’t a bad thing, but he doesn’t think that relationnship will allow them to scale enough to sell the business; he’s out. Emma thinks there’s a disalignment with them and their primary investor; she’s out. Lori thinks that with all the sales they have, they should be profitable. That concerns her; she’s out. Kevin says it’s a difficult deal with a nature analogy. He says successful parasites never kill their host. The manufacturer is the parasite in this analogy. Ron suggests a royalty deal. Kevin says he thought about that, but he doesn’t like being beholden to a parasite. “I’m the parasite!” says Kevin; he’s out.

FlyWithWine Shark Tank Update

The Shark Tank Blog constantly provides updates and follow-ups about entrepreneurs who have appeared on the Shark Tank TV show. After airing, this business saw the “Shark Tank Effect” as sales more than doubled. They also got on the shelves at Macy’s, Neiman Marcus and Williams Sonoma.

The Shark Tank Blog will follow-up on FlyWithWine & Ryan Neergaard and Ron Scharman as more details become available.