Danny Grossfeld pitches the Sharks on HotShot, a hot drink in an aluminum can. The pitch is featured in episode 704.
Grossfeld founded HotShot, the nation’s first ready-to-drink hot beverage company, after visiting Japan in 2009, where he discovered hot coffee in a can.
HotShot is aiming to emulate the $14 billion in revenue generated by canned hot beverages in Japan.
The HotShot coffee cans maintain a temperature of 140 degrees using a “HotBox,” a “heated refrigerator,” and an insulating label. Mr. Grossfeld owns HotBoxes for use both at home and at work.
The coffee itself is prepared from Arabica beans that have been perfectly roasted, providing consumers with the taste of freshly roasted coffee right out of the can. French Vanilla, Espresso, Caramel, and Hot Chocolate are among the flavors available.
Grossfeld tried unsuccessfully to raise $100,000 on Kickstarter last spring based on claims that he had invested a million dollars into HotShot. There are no products for purchase at the time of this episode’s first broadcast.
Grossfeld is probably looking for a Shark to assist in production and distribution. Is a Shark willing to take a shot at bottled hot coffee?
What is HotShot?
HotShot is a canned hot coffee beverage. Caramel, Chocolate, Black, Espresso, and French Vanilla are the five flavors available.
The coffee is brewed to a temperature of 140 degrees and, because of the innovative technology used, the coffee remains hot. Additionally, the user can hold the coffee without it becoming scorched.
|Product||Hot coffee ready to drink|
|Investment Seeking||$300,000 for 10% equity in HotShot|
|Final Deal||No Deal|
|Business Status||In Business|
Who is the Founder of HotShot?
HotShot USA was founded by Danny Grossfeld. He was already a successful entrepreneur before founding HotShot USA. Danny now serves as the President of HotShot USA.
HotShot USA originated from an inspiration that struck at any time, and this statement is apt for how we formed our company.
Danny went out for coffee early one morning in Japan, before a business meeting. He was ‘unable to locate a cup of hot coffee.
He went to what appeared to be a ‘cold coffee refrigerator’ after giving up. However, it was not a refrigerator; instead, it was a can of hot coffee.
The success of Japanese canned coffee was the impetus for the establishment of HotShot USA when he returned to the US.
Danny worked for six years to perfect his invention. He had spent nearly two million dollars over the previous six years.
However, after spending that sum, HotShot had not generated any revenue. All he received were inquiries, but none of them resulted in purchases.
Danny was determined to continue developing despite the obstacles. The inventor of HotShot beverages also created the HotBox, an insulated container that keeps nine cans of coffee warm for up to three months.
The Shark Tank judges praised him for his tenacity and ingenuity.
HotShot Before Shark Tank
Danny Grossfeld found himself in need of a coffee at 5 a.m. during a business trip to Tokyo, Japan, in 2008.
The native of New York visited several stores searching for his caffeine fix but was surprised to discover that none of them appeared to have any hot coffee available.
He eventually abandoned the notion and walked to a cooler in the back of a store to get a soda but was pleasantly delighted to discover that what he had assumed was a cooler was a heated unit for ready-to-drink coffee cans.
Danny had discovered the Japanese market for hot beverages in cans and was so taken with the concept that he began researching the industry’s size upon his return to the United States.
He quickly realized that the canned coffee business was a multibillion-dollar industry in Japan, ranking third in the world in terms of average coffee consumption, behind only the United States and Germany.
The entrepreneur began experimenting with his version of the beverage and devised a practical heating method.
After thousands of modifications to his formula, he mastered it. Also, he invented the Hotbox, a heating machine capable of maintaining liquids at a constant 140 degrees for up to three months.
Danny funded the production process and costly molds with his own money, as well as additional assistance from family and friends.
He finally invested more than two million dollars in his goal. By early 2015, everything appeared to be going swimmingly, as a test run of 1,000 cans received an overwhelmingly good response from testers.
Danny pursued a production run of 4,000 hotbox units and raised funds using the crowd-funding website Kickstarter.
Danny was able to advertise his Kickstarter campaign when the Los Angeles Times covered the Hotshot firm, but sadly, not many others shared his vision, and the campaign, which had a goal of $80,000, raised less than $10,000.
However, the LA Times piece had another, more beneficial effect.
Danny was called by Shark Tank producers because they admired his passion and ambition and the persistence he demonstrated during years of product development.
They urged him to compete on the show, and he eventually entered the tank in October 2015.
How Was The Shark Tank Pitch Of HotShot?
Danny came to the tank seeking to secure a $300,000 investment in exchange for a 10% stake in his business.
He began his presentation by informing the sharks that he had invented the greatest convenience in hot coffee, ideal for busy coffee lovers who were constantly on the go in the mornings.
They may get a hot beverage from a hotbox and never have to brew a cup or wait in line again.
Hotshot was America’s first ‘grab-and-go, ready-to-drink in a can coffee product,’ and he asked which of them was willing to join the coffee revolution and become a Hotshot.
‘You’ve got to try it,’ Robert Herjavec stated, and Danny was prepared with some samples. He distributed drinks to the sharks, and Lori Greiner commented on the can’s warmth.
The American investor Mark Cuban pointed out that 140 degrees are typically regarded as pretty hot.
Danny used the opportunity to highlight the insulating label, which absorbed 50% of the heat and kept the cup gently warm rather than too hot to grasp.
The Sharks enjoyed the coffee; several commented on its nice taste, and Danny disclosed that he tweaked the recipe over 1,500 times over six years of development to achieve a product that tasted wonderful yet could be heated continuously for up to three months.
Robert Herjavec inquired as to where Danny got the idea. Danny discussed his journey to Japan and the canned coffee he discovered there.
Robert inquired how many sales he had made thus far, and Danny stated that the product had taken six years and $2 million to develop.
Chris Sacca was perplexed; he inquired whether Danny had sold $2 million worth of merchandise, but this was not the case.
Danny revealed that he had spent a total of $2 million developing the product over six years but had not yet sold anything.
Kevin O’Leary smiled as he tapped his fingers. However, he did not attack immediately.
Danny was still in the tank, so Chris Sacca asked, “I’m not sure if you’re pitching or asking for therapy. However, his look indicated therapy was more likely.
Kevin expressed his conviction that all business techniques stem from Greek philosophy.
‘Oh No,’ Lori observed, knowing that it is never a good sign for a shark tank applicant when Kevin begins discussing philosophy. Mark Cuban burst out laughing.
As Kevin related, Sisyphus was a mythological monarch compelled to roll a massive rock up a mountain for eternity, only to discover that it rolled back down when he reached the summit!
Kevin explained to Danny that he was the cursed man, tasked with the impossible task of pushing the Hotshot business up a mountain, but he had never made any sales. He was compelled to repeat his pointless efforts when they ultimately failed.
After spending years developing his product, Danny defended himself by stating that he was launching the firm today.
Robert enquired as to the purpose of the $2 million previously invested in the business.
Danny said that he had finally invented a product that tasted fantastic even after months of continual heating, a process that had cost him a million dollars.
He informed the sharks that the market in Japan was worth $15 billion and was the third-largest beverage industry globally, although no such items were available in America.
Robert inquired as to whether Danny had gotten any convenience stores to stock his items yet.
Danny stated that while he had had a lot of interest’ in the Hotshot business from several retailers, he had yet to clinch any agreements. Still, he argued that his product would almost sell itself with a shark’s assistance in meeting merchants.
Kevin O’Leary was not going to be Danny’s sidekick. He advised the entrepreneur that after six years of no sales, he might consider changing careers.
Kevin believed that if a business failed to generate profit after 36 months, it was a hobby, not a business, and it was time to ‘take it into the barn and shoot it.’ Kevin was now gone.
Robert Herjavec was likewise unimpressed with the Hotshot concept, although he pointed out the contrast between the American and Asian markets.
He argued that American consumers had a lot bigger variety of coffee shops to pick from and that transitioning to hot coffee in cans would be much more difficult in an already highly competitive market. Robert wished Danny the best of luck in the future, but he, too, was out.
Chris Sacca disclosed that he previously invested in high-end coffee shop Blue Bottle Coffee, garnered $70 million in 2014 from several prominent technology investors.
He believed that the Hotshot firm would be in direct competition with Blue Bottle, and as a result, he was also withdrawing.
Danny received both good and terrible news from Mark Cuban. The Texan shark declared that he despised the business but admired the concept, as well as Danny.
The Landmark CEO indicated to Danny that he would try hotshot coffee once the company started shipping orders, although he would not invest in the company.
‘How about the stadium as well?’ suggested Danny, but Mark was less enthusiastic. ‘That boulder is going to fall and squash you,’ he warned, smiling at Danny’s boundless enthusiasm.
‘Well, you’ve got a customer,’ Robert replied, and Danny seemed happy, but he quickly shifted his focus to Lori Greiner, the tank’s final shark and his last shot at a transaction.
Unfortunately, Lori was not willing to extend a last-minute lifeline to the entrepreneur.
She explained to Danny that after investing so much money in the product and seeing no comparable return on investment, she had a gut sense the firm would never succeed.
She believed that a sixth person should reject the business in this scenario, and that person should be Danny himself.
She informed him that the Hotshot firm was, in her judgment, going to collapse, and she advised Danny to abandon it as well to ‘Stop the bleeding.’
‘I can’t stop now; I’m launching this fall,’ Danny remarked, beaming, but the impact of Lori’s speech had dimmed his cheerful outlook slightly.
Is HotShot Still In Business?
HotShot has teamed with Amazon less than three years after the episode aired. Amazon will begin fulfilling HotShot hot coffee and hot chocolate subscriptions beginning July 1, 2018.
HotShot has also worked with supermarkets, resorts, movie theaters, and sporting stadiums, including Madison Square Garden.
HotShot is available in five flavors in the United States: French Vanilla, Caramel, Espresso, Hot Chocolate, and Black. A six-pack of 8 fl. oz. Cans are available for $26.99 on the HotShot website. A 12-pack with a HotBox is available for $69.99.
What Happened To HotShot After Shark Tank?
Danny expressed disappointment following the show that the sharks had not seen the potential of the Hotshot business and expressed amazement that they had shown little interest in such a profitable billion-dollar sector.
He said people had been telling him for a long time that the idea would never work, and their objections only strengthened his will to succeed.
In the months following the show, Danny remained optimistic about the future, saying in December 2015 that three movie theater chains had agreed to test Hotshot coffee during the first three months of 2016. However, I could find no indication that the tests had occurred.
Since the Hotshot segment first aired, the company’s website has promised that Hotshot products will be available for pre-order soon.
However, in March 2016, the company announced that pre-orders would no longer be accepted and that all pre-order payments would be refunded due to ‘Production Issues.’
Whatever those production challenges are, it appears as though the Hotshot business has slowed, as has Danny’s once unbridled excitement for it.
Since the exhibition, the Hotshot social media accounts have been entirely silent. The company’s Facebook page has received only a few inquiries from potential buyers inquiring when to purchase Hotshot products for themselves. None of the questions have received a response.
Lori Greiner offered Danny advice, and he chose to cut his losses and pursue a new endeavor, or maybe he’s still out there, resting before pushing the Hotshot rock up a mountain, unable to let go now that he’s so close to the top.