The first entrepreneurs into the Shark Tank this week presented their business Chirps and were seeking $100k in exchange for 7% of the business. They have developed chips that contain the equivalent of an entire cricket in each chip. They are similar to corn chips, however they contain 30% less fat. They are also rich in protein, non-GMO, and gluten free!
As for their numbers, a small bag retails for $1.99 and costs them $0.48 to make. They also offer a large bag at $3.99. This year they are projected to do $200k in sales and could possibly grow to $1.5Mill in sales next year. They justify that growth based on several potential opportunities and orders they are currently looking at. They also won over $200k from pitch competitions and they still own 100% of the company.
So let’s talk about the elephant in the room for a second. The obvious implication here is that you will be eating crickets! I’m not saying that’s a bad thing, but it could definitely be a turn off for a lot of people. They last time we saw a cricket product on Shark Tank was in Season 5 with Chapul cricket protein bars and they actually did end up getting a deal. Chapul has seemed to do pretty well in the years since their appearance in the Tank, so perhaps the market is primed to take on bug eating at scale!
Something that I initially got excited about was the price point. Foods that are “healthier” generally carry a healthy extra helping of cost to the consumer, but $1.99 is not all that bad. Yes, you can definitely get a small bag of chips in a convenience store for $0.99, but the extra cost on this brand is nowhere near what some other high-end, health conscious brands make you pay. This is actually somewhat surprising considering their lack of competition in the marketplace. It seems like they really want to raise awareness of this protein alternative more than they want to take advantage of that competition free market. They are currently priced so low that it would pretty hard for anyone to come in and undercut them.
Something else from this presentation that is interesting to note is the info they shared on the sustainability of cricket protein. I had no idea that it takes 2000 gallons of water to produce 1 pound of beef. This is compared to only 1 gallon of water to each pound of crickets. That’s pretty phenomenal and definitely more sustainable! I know some business minded people cringe when it comes to the “cause” behind a business, but this one is pretty simple and straight forward. It takes less of one thing to get the same amount of something else. It’s as if I were to walk up to you on a hot day and hold out two fans of equal functionality and quality. I then tell you that one costs $20 and the other costs $0.01. Which one would you purchase?
Anyway, it’s going to be hard to comment on what the Sharks had to say because they did really have the chance to say much! Mark jump in fairly quickly with an offer of $100 for a 20% stake. They countered him at 15% and he accepted. I really do think this partnership will work great for them, because the Shark that Chapul got a deal with back in 2014 was none other than Mr. Cuban! So he definitely has some experience in this space and will be able to connect them with vendors, stores, and brands that have already bought into the edible cricket concept.
Good luck to Chirps! I hope to start seeing your chips on the shelves of my local stores soon! Actually, if you are reading this right now and would like to have a review done on Chirps, send some my way! I would love to try them out!