Erica Barrett is cooking up some breakfast, southern comfort style, when she pitches Southern Culture Foods in Shark Tank episode 520 on February 21. Erica loves cooking. She found her love for it as a child and it continued into adulthood when she entered and won a cooking contest on The Food Network.
She didn't like what she saw for pancake breakfast offerings in her local market, so she started mixing up pancakes with flavors like Vanilla, Bourbon Salted Pecan and Banana Pudding. Her friends and family loved them and in April 2012 she opened for business as Southern Culture Foods.
After a local sampling event, she went to America’s Mart, a food trade show held in Atlanta. She left with over $80K in orders! Erica kept her day job while assembling her pancake mixes at night in a local commercial kitchen and finally went full-time in January 2013.
Now, Southern Culture Foods has a dozen different “Short Stack” pancake and waffle mix flavors, syrups, BACON rub, and gift boxes. The products are available in over 100 gourmet food shops nationwide and on Amazon. This year, she's done a little over half a million dollars in sales! Erica probably wants the Sharks to help her with cash flow and distribution in national chains.
Southern Culture Foods Shark Tank Recap
Erica brings her pancake mixes to the Sharks, seeking a $100,000 investment in return for 25% of the company. She passes out samples of the pancakes in various flavors, impressing the Sharks with the flavor. Can she impress them with her sales, though?
Within the first year, Erica reveals, she sold $100,000, with profits of $62,000. She's gotten into Nordstrom and TJMaxx. She's gotten into Whole Foods as well and has re-orders on the table. The cost is $.99-$1.50, and they sell for $7.99.
Kevin O'Leary doesn't believe there's a permanent listing in any of the stores. She's been into Whole Foods for a year, and she's pursuing a national roll out with them. She's looking for the investment because QVC wants her to appear, and she'll need the money to create inventory to manage it.
Barbara Corcoran expresses concern about the slim profits on QVC. She says that the way to make money in the food business is to get into the big box stores, and that “boutique” businesses like Southern Culture Foods aren't typically sold there. Erica has an offer from Target to put it in 50-100 stores.
Mark Cuban “isn't in the gourmet food business.” He's out.
Robert Herjavec says that “the food business is a really tough business. I see this as a high-end niche product, but not as a scalable business.” He's out.
Kevin O'Leary wants to make an offer, but he has “contingencies.” First, he insists she'll need to work with a co-packer to reduce costs. Next, he wants $1 per unit until the $100,000 investment is repaid, then his royalty would drop to $.50 a unit.
The other Sharks poke fun at Mr. Wonderful's royalty offer, but neither Robert Herjavec nor Daymond John want to make offers. Barbara Corcoran, however, isn't willing to let O'Leary swallow Erica without an attempt to intervene. She makes an offer: $100,000 in return for 40% of the company.
Having heard the offers, Daymond John goes out.
Erica offers Barbara a counter, asking if she'll go to 30% for $100,000. Barbara holds firm, but finally comes down to 38%. Erica leaves the Shark Tank with a deal.
Southern Culture Foods Shark Tank Update
Erica's appearance on Shark Tank marked her second try. She was rejected when she first applied to the show, since her sales weren't high enough to interest the Sharks. On her second attempt, however, she was in, and she walked away with a deal.
She's come a long way from offering tastes of her pancakes and specialty bacon rubs at tradeshow tables. Her products are in 3,000 stores nationwide, and by the end of 2015, she expects to have Southern Culture Foods in over 4,000 stores. She continues to expand into new products, including “stone ground grits,” and other traditional favorites, given a new twist with flavors like truffle and sea salt. She's also putting together a fried chicken mix for the future.
Barbara Corcoran has made a tasty investment in Erica's ongoing success.