Shark Tank fail leaves sour note for The Moo
IN THE end, it was all over for The Moo.
Appearing on Tuesday night's Shark Tank on Channel 10, Alex Houseman initially impressed the judges with his dairy-free ice cream brand Over The Moo - but then in a controversial move, the 28-year-old entrepreneur walked away.
"I actually received three offers, one from Janine, one from Steve and one from Glen," he said. "Things took a bit of a sour turn when they learned that I share the IP for the recipes with the manufacturer."
That stumbling block, which Boost Juice founder Janine Allis said was a common problem with contestants this season, caused internet pioneer Steve Baxter to withdraw his offer. Dr Glen Richards, founder of pet-care company Greencross, was "happy to overlook the IP issues and he was interested in working with me".
But according to Mr Houseman, who got his business off the ground literally going door to door trying to convince supermarkets to stock his product, the episode filming took place just before Over The Moo began appearing on Woolworths shelves.
"Unfortunately the pitch was right before we ranged into Woolies, so they refused to include that in their valuation of the business," he said. "I thought I was getting the short end of the stick, so I walked away."
He said in the 10 months since filming, the business has tripled its revenue to cross $1 million, gross profit had grown by 690 per cent, and Over The Moo was now stocked in just under 1000 supermarkets, including 500 Woolworths stores, plus IGA, FoodWorks, Friendly Grocer and a number of independent and health stores.
"It's a real shame," Mr Houseman said. "We're positioned to double that [growth] again. It's David vs. Goliath here, they could have been with the David. But I suppose I'm biased - they were obviously trying to manage their own risks."
The pitch also gave him a "kick up the bum" to "remove all the ambiguity" in the relationship with his manufacturer and take full control of his IP. "If I could do it all again, absolutely I would have sat down beforehand and sorted all this out," Mr Houseman said.
Shark Tank was the "first place" he looked for funding, and while he didn't get the cash, he said it was good practice. "It was really bootstrapped," he said. "I moved home with my parents, I was working part time just to make ends meet.
"Demand was so strong that I could actually go straight in pretty early. Once Woolworths came along I had to find funding elsewhere. Ultimately through family friends and contacts I cobbled together enough money to buy stock to meet demand for Woolworths, and that's how we scaled.
"We're really looking to double or triple that again within the next one to two years with new flavours. In five years it will be five or six times larger, just by being in this market.
"There were other dairy-free ice creams [when we started], but were very expensive by a factor of four or five times, and they really sacrifice flavour - they tasted weird, like cardboard. I wanted an indulgent experience."
The former management consultant and food marketer, who now employs six people, said he would be "lying" if he said he wasn't open to being acquired by a larger company. "I have a vision of this business breaking $50 million in the next five years," he said.
"In order to do that, [we might need to] jump on board with a larger trade partner who already has all the infrastructure. $50 million in five years sounds a bit crazy, but you've got to be ambitious."