Grinds Chewing Tobacco Alternative Update | Season 4
Baseball buddies and entrepreneurs Pat Pezet and Matt Canepa invented a healthier alternative to chewing tobacco. Their product uses coffee grinds instead of health hazardous tobacco. Will they hit a deal out of the park on
Shark Tank Grinds Update
- Entrepreneurs: Pat Pezet and Matt Canepa
- Business: Flavored coffee pouches for chewing
- Ask: $75,000 for 10% equity
- Result: $75,000 for 15% equity
- Sharks: Daymond John and Robert Herjavec
Pat and Matt conceived of Grinds when playing baseball, noticing the prevalence of chewing tobacco, and deciding to create a safer alternative to this unhealthy habit. Since they were known to chew on coffee grinds in college for a quick zing of energy, the two designed a prototype that would harness the energizing power of coffee but in a format similar to chewing tobacco. Before long, they created the first prototypes of their product and began testing them on the field with other players.
NICOTINE-FREE: There is no tobacco or nicotine in Grinds Coffee Pouches. We’re proud to call ourselves a healthy alternative to chewing tobacco. The active ingredient in Grinds is coffee, which gives you a boost of energy from caffeine, not tobacco.
Pat and Matt passed out samples, which seemed polarizing. Kevin O’Leary spoke up when the mint chocolate flavor of his pouch started hitting him, while Barbara Corcoran seemed to be disgusted with the product.
Robert Herjavec asked how much caffeine was in each pouch, and Pat and Matt answered that one pouch was equivalent to a quarter cup of coffee. This surprised Robert, as he felt like it was more potent based on what he was experiencing.
Robert asked about the sales. The two baseball buds said they sold $3,500 in 2010. At this juncture, they planned to hang up their Grinds jerseys and look for a standard 9-to-5 when they received a call from Bruce Bochy, the then manager of the World Series-winning San Francisco Giants. Bruce told Pat and Matt that their product ostensibly saved his life, giving him an alternative to tobacco, and that the team loved it.
Pat and Matt used this as a sign and went all in on Grinds. In 2011, they sold $135,000. In 2012, the year the episode filmed, they projected they would sell $300,000. The numbers seemed good, but Mark Cuban wanted to know more about possible cost issues.
Pat and Matt said that their product retailed for $3.99 and would need to stay in that area since chewing tobacco retailed between $3.50 and $7. Kevin asked what it cost to make a tin, and the two shared that it had gone down to $1.24 per tin, versus $1.30 in 2011. They wanted to get it down to $1.10, but it had not yet happened for them.
Barbara jumped in here to excuse herself, stating that she loved their energy and enthusiasm but it wasn’t a product she could relate to. For that reason, she was out.
Kevin, on the other hand, was licking his chops at the opportunity. He said that they needed more money than they were asking for, mostly because he felt that the massive coffee companies would eventually take notice of Grinds and squash them for invading their space.
To roll Grinds out faster, Kevin offered $100,000 in exchange for no equity. Instead, Mr. Wonderful wanted a $0.25 royalty on each unit sold. It was a classic move from the Mr. Wonderful playbook.
Robert chimed in here and admitted that he knew nothing about this market, but he could see that Pat and Matt were poised to hit a home run. He offered $75,000 for 15% equity, but said he would want Daymond to join him in the deal since distribution is Daymond’s specialty. Daymond agreed and accepted the terms.
Pat and Matt, with two offers on the table, turned their heads to Mark and asked if he had anything to add. Mark said that, in business, you could either “play small” or “go big” and, in the case of Grinds, they were in the middle with a modest market for tobacco replacement products. He didn’t see how he would get a return on his time investment, which is Mark’s usual concern, and, for that reason, he was out.
Pat and Matt asked if Daymond and Robert would consider investing $100,000 for the 15% equity, but the sharks declined. Both said they valued their time too highly to throw more money into the deal, and Daymond said the two were “stepping over the dollar for pennies” with a counter like that.
Meanwhile, Kevin kept trying to sway the entrepreneurs back to his side, asking them why they would want to give up equity in the first place. He urged them to consider his deal since he personally felt it was the better deal.
Unfortunately for Mr. Wonderful, Pat and Matt accepted the deal with Daymond and Robert. How did things fare after the pitch? Did Daymond and Robert help roll out Grinds into retail stores nationwide? Keep reading our Grinds update to find out!
We have good news to share in our Grinds update! While the deal never finalized after the show, they continued selling online and sales continued to steadily climb. By 2019, Pat and Matt spent $6.7 million to relocate their production, fulfillment, and distribution center to Westfield, Indiana. In 2023, Grinds remains in business with an estimated annual revenue of $5 million. Want to try the product? Pick some up on the Grinds website, or on Amazon!
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Jennifer is an avid Shark Tank fan that has been watching the show for years. She serves as Senior Editor at Shark Tank Recap and ensures that all our information is accurate and that our posts are up to date. Her favorite Shark Tank products are Le-Glue and Ring!