How Pipsnacks Survived the ‘Shark Tank’
Shark Tank Appearance: Nov. 14, 2014
Investor: Barbara Corcoran
Deal: $200,000 for 10 percent of the company plus 10 percent of distribution proceeds.
Results: Pipcorn sales really popped, increasing from under $200,000 a year to well over $3 million in 2015.
Jeff Martin was in grade school when he started selling kid-friendly items like turkey sandwiches and microwavable french fries, his first food enterprise. It was a pretty savvy business model: He pilfered ingredients from the family fridge and then peddled the meals to his brothers and sisters. When his younger sister Jen went crying to Mom, she put a stop to his shenanigans. “If you want to make food for your siblings, that’s great,” she scolded. “But you cannot ask them to pay you.”
Some 20 years later, their feud long over, Jeff and Jen launched a food business together: Pipsnacks, with its initial product, Pipcorn—about half the size of traditional popcorn—that’s cooked in olive oil and available in flavors such as rosemary and truffle. Made from an unusual variety of corn grown by an Indiana farmer, Pipcorn has a delicate hull that doesn’t get stuck between teeth.
The Brooklyn siblings began selling Pipcorn in local farmers markets in April 2012 and immediately found an influential fan, Oprah Winfrey. She named the vegan, gluten-free snack one of her “favorite things” in 2012 and 2013. Still, when a casting director for ABC’s Emmy-winning business reality show Shark Tank approached the entrepreneurs in 2013 about appearing on the show, they demurred. “Jen and I decided that the timing wasn’t right,” Jeff Martin says. “We didn’t have enough production capacity.”
Fast-forward to 2014 and a second call from the show’s casting director. This time the Martin siblings said yes. “We were in a way different place,” Jeff Martin says, “a year older and more than a year smarter.” When the two took the stage in November 2014, they told the Sharks that they had annual sales of about $200,000 and were in 18 Whole Foods stores. Anticipating big growth, they valued their company, Pipsnacks, at $2 million and asked for $200,000 for a 10 percent stake.
While Kevin O’Leary scoffed, “You’re not worth it. There’s nothing proprietary about the seeds,” both Barbara Corcoran and Robert Herjavec offered to meet their price. The siblings chose Corcoran, in large part because she’d turned the online bakery Daisy Cakes into one of the biggest successes in Shark Tank history.
Although they had expected a post-Shark Tank sales spike, the Martins weren’t prepared for the volume. “We matched our entire 2013 sales in 24 hours,” Jeff says. A dedicated team of employees, family and friends popped and packed the snacks in the company’s East Harlem warehouse, working after midnight for two months to catch up on back orders. Corcoran was understanding but firm, telling the 20-something entrepreneurs, “This is a learning experience. Make the necessary changes and don’t let it happen again.”
It hasn’t. With Corcoran’s investment and a savvy new chief operating officer, Pipsnacks has implemented systems that turn out popcorn five times faster than before. Sales are carefully tracked so the Martins know how much to prepack before a rerun of their Shark Tank episode or other media opportunities, like appearances on The Dr. Oz Show and Good Morning America, that Corcoran has brought their way.
Along with that exposure, Corcoran has also helped Pipcorn enter new markets. Today Pipcorn can be found at 150 Whole Foods stores as well as on the shelves of Bed Bath & Beyond and the grocery chains Wegmans, Safeway and The Fresh Market. In what Jeff describes as “a big relief,” Pipsnacks has signed an exclusivity contract with the family farm that provides its kernels.
Corcoran’s office is just 20 blocks south of Pipsnacks’ headquarters, making it easy for the mentor to meet with her protégées at least once a month, with frequent phone calls in between. “We have learned an unbelievable amount from Barbara,” Jeff says. “She’s smarter and quicker than anyone else in the room, and she’s taught us to stay one step ahead. Of course, people take us seriously now, which they didn’t always do in the past.”
Corcoran says the two “perfect partners” deserve that respect. “Jen is a master marketer and salesperson with extra charm,” she says, “and Jeff is a really smart operator and numbers guy with great common sense. They dream big and always deliver.”
The Martins now dream about new flavors, products and collaborations. They’ve also been devoting many evenings to sharing what they’ve learned about launching a food business with other small food startups.
“This whole experience has been very humbling, and it’s made us better people,” Jeff Martin says. “When our backs were against the wall, there were so many people who helped us succeed. Now we want to do whatever we can to build a community and offer that same kind of support to other entrepreneurs.”