Checking up on the buzzing non-alcoholic beverage industry
Two years ago, we connected with a fledgling company making non-alcoholic mocktails called Little Saints. At the time, we were talking about how the growing booze-free beverages market was really starting to take off.
Here, in 2024, that expansion has only continued, as people reevaluate their relationship with alcohol. Wider health trends are part of this. But also, these non-alcoholic drinks are just flat-out tasting better and better.
“Marketplace Morning Report” host David Brancaccio caught up with the founder of Little Saints, Megan Klein, fresh off an appearance on the show “Shark Tank.” The following is an edited transcript of their conversation.
David Brancaccio: Remind me, your product is for people who are looking for tasty things to drink but don’t like super sweet candy taste and may not want to have a buzz.
Megan Klein: Yeah, exactly. I created Little Saints because I was sick of having to compromise between my health and going out and having a good time, and I really wanted as close to the alcoholic cocktail experience as possible. And so Little Saints are non-alcoholic cocktails and spirits powered by mushrooms like lion’s mane and reishi.
Brancaccio: Alright, so with the TV show, how does it work? Did you apply to “Shark Tank?” Or do they find you? What’s the deal?
Klein: I definitely applied, and it is not a joke of an application process.
Brancaccio: This discussion here needs a spoiler warning. But with the spoiler warning, stated you were looking for how much and what happened to you, Megan?
Klein: My ask was $500,000 for 5% of the company, which is a $10 million valuation. And I got three offers. I got an offer from Rashaun Williams, who’s the new great guest shark, for $500,000 for 10% of the company, which would’ve been $5 million valuation. And then I got an offer from Kevin [O’Leary] for $500,000 for 15% of the company. And then Rashaun and Kevin came in together at the end, saying that they would give me $500,000 for 10% of the company. The math there is that they were offering me a valuation of $3.5 to $5 million. At the time I filmed the show, I had done $5 million in trailing 12 months like actual received revenue, and so I wasn’t going to take a valuation that was one or less times our revenue number.
Brancaccio: So you said, no?!
Klein: Listen, I went in really wanting to make a deal. I really wanted to make a deal with Mark Cuban, just because all the, you know, great stuff he’s done in the wellness space. And I was surprised he couldn’t, or wouldn’t invest in the category. And so I got the two offers from Rashaun and Kevin, and I, you know, I was negotiating with them, but I wasn’t going to take anything less than what I know the company’s worth. And, you know, what my team and I have worked so hard to achieve. It wasn’t a hard decision once I saw the offers on the table.
Brancaccio: What do you think Megan, lessons of your experience for others seeking investors to get their businesses to really blow up in a good way?
Klein: Absolutely. I would just say, like, go in there and know your strengths and know your worth, and don’t settle for less than what you know that like you have achieved and that you can achieve with the money that they’re going to give you.