"Going to get crushed" — When Shark Tank star Kevin O'Leary likened Mother Beverage to "cockroaches" against big industry players

Shark Tank season 10 saw Allison and Stephen Ellsworth pitching their product, Mother Beverage, which is a sparkling apple cider vinegar drink. The product pitch took place in episode 8, which aired on December 9, 2018. During the pitch, Kevin O'Leary drew attention with a bold statement, describing the company as,

"beverage cockroaches going to get crushed by big guys who want that shelf space back."

While his comment highlighted the stiff competition in the beverage industry, the duo managed to secure an offer from Rohan Oza despite other Sharks stepping away.

Mother Beverage, designed as a healthier alternative to sugary drinks, is made with organic fruits, herbs, and a tablespoon of apple cider vinegar per bottle. It aims to provide the health benefits of apple cider vinegar without the harsh taste.

The product retails between $2.99 and $3.59 and boasts a low production cost of $0.78 to $0.85 per bottle. With lifetime sales of $500,000 and a projection of $1 million in revenue for that year, the Ellsworths were on a mission to scale up production and expand their reach.

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The Shark Tank pitch: Mother Beverage

Allison and Stephen Ellsworth entered Shark Tank seeking $400,000 for 10% equity in Mother Beverage, while emphasizing its unique position as a low-calorie, sparkling probiotic drink. Allison introduced the idea, saying that she had turned to apple cider vinegar for detoxing and weight loss but struggled with its taste. This led her to develop a flavorful, convenient version.

The Sharks’ reactions were mixed. Kevin O’Leary admitted the drink didn’t taste “as crappy as the shot,” while Lori Greiner noted its similarity to sparkling soda. Despite some interest in the product’s health benefits, several Sharks had reservations about the competitive beverage market.

Rohan Oza highlighted the importance of a strong “functional story” in the beverage industry, while Kevin O'Leary warned of the challenges posed by larger players during the Shark Tank pitch. He also underscored the uphill battle for startups against established brands with greater resources and influence.

The Ellsworths explained their strategy of keeping the product raw and unpasteurized, which required maintaining in-house production to preserve the health benefits of apple cider vinegar. While this approach reduced costs, Sharks like Bethenny Frankel criticized the business model as unsustainable, urging the founders to focus on scaling up and outsourcing manufacturing. She stated,

“I just can't believe you guys. That's a disaster.” She added, "Yeah, but you're in the mud. You're in the weeds.”

Financially, the Ellsworths shared that they had raised $125,000 in funding at a $600,000 valuation and were projecting $1 million in revenue for the year. They had also secured placement in over 200 Albertsons locations and were selling locally at Whole Foods in Dallas-Fort Worth.

However, Kevin O’Leary remained skeptical, calling the valuation “insane” and ultimately declined to invest. He stated,

“Every beverage guy comes in here, and the future's so bright, we've got to wear shades. But you're still vinegar roaches."

Rohan Oza, known for his success with beverage brands, stepped in with an offer of $400,000 for 25% equity. While the valuation was lower than the founders had hoped, the Sharks encouraged them to accept. Kevin O’Leary remarked,

“That is a ridiculously good offer for you. I would have never made it.”

The Ellsworths ultimately accepted Oza’s deal in the Shark Tank, gaining a partner to help navigate the competitive beverage landscape.

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Shark Tank airs every Friday at 8/7c on ABC.