Since pitching to a group of investors on the hit ABC-TV show “Shark Tank” last month and getting two bites, Madison entrepreneur Kate Field has seen a huge spike in sales of her kombucha-making kits.
“It has been crazy,” said Field, 31, who started her company, The Kombucha Shop, four years ago when she was 26. She said she was prepared for a jump in sales of her kits, which allow people to make the fermented tea beverage at home. But it didn’t happen the way she expected.
She said she prepared for an onslaught the night of the show, Nov. 18, but that night she got fewer than 700 orders. Initially, she was disappointed.
“But then it just kept coming every single day, every day, hundreds and hundreds of orders,” Field said. “It hasn’t stopped.”
She and her 10 employees haven’t slowed down since the show aired, Field said. “We’ve been working 24/7 essentially.”
Field got what she asked of the sharks. She went in looking for $350,000 in exchange for 10 percent equity in The Kombucha Shop.
Shark Barbara Corcoran bit first with $200,000 cash and a $150,000 line of credit. Guest shark Sara Blakely, the founder of Spanx, joined in on the deal. In the end, each woman agreed to get 5 percent equity.
Field turned down shark Kevin O’Leary, who offered the full $350,000 for a 20 percent equity in the business.
The paperwork is still being done, said Field, who hopes to close on the deal early next year. “Their team of lawyers is still doing the due diligence and they’ll be putting together an offer probably in the next couple of weeks I’d imagine,” she said.
Field said if she accepts the $350,00 deal for 10 percent of her company’s worth, it will mean that The Kombucha Shop will be valued at $3.5 million. “I know, it’s pretty nuts,” she said.
The business made about $1.2 million in sales last year, and now sells the kits on its website for $45, or $75 for the deluxe version. The kit includes a kombucha culture, tea, sugar and brewing equipment.
In the weeks leading up to the show’s taping, Field was valuing the company at $2 million. Then, her friend Clare Stoner Fehsenfeld, a co-owner of Quince & Apple, the Madison company known for its preserves, jams and syrups, told Field she was undervaluing her business.
She decided to trust Stoner Fehsenfeld even though she knew the sharks routinely tear people apart for overvaluing.
Field told the judges that kombucha in stores can run $3 to $5, but made at home it can amount to 25 cents per bottle.
That the sharks were interested in investing after acting as if they hated the kombucha samples she served them — some even spit it out — makes Field laugh.
“It was so silly,” she said. “They made such a dramatic show of it. And the producers knew they would.”
At first, Corcoran said it tasted like medicine and was putting hair on her chest. What got edited out was Corcoran and Blakely, the two eventual investors, finishing their kombucha and enjoying it, Field said.
Kombucha has a sour, tart flavor that’s an acquired taste, Field said. It’s been the fastest growing beverage for the last five years because people acquire a taste for it, “and it really sticks,” she said.