The Basics
- Company: Grease Bags
- Owner: LaTangela Newsome
- Product: Compostable bags for disposing of kitchen grease
- Asking Price: $75,000 for 25% equity
- Final Deal: $75,000 for 50% equity
- Shark Who Took The Bait: Barbara Corcoran (aka Barb Shark)
- Season/Episode: Season 8, Episode 13
Grease Bags Before Shark Tank
LaTangela Newsome – a sassy, sharp-dressed entrepreneur from Allen, Texas – auditioned for Shark Tank on a spontaneous impulse, after she heard that Shark Tank was doing a casting call near her town. At the time of her audition, she hadn’t sold any of her Grease Bags (compostable bags for disposing of kitchen grease), but she had confidence and drive.
“I wasn’t ready [for the show], but I was like, ‘If I don’t make it, I’ll try again,'” she says. “I went out there and stood for hours and hours and hours, but it was worth it.”
She eventually landed on Season 8, Episode 13 of Shark Tank, to pitch her innovative kitchen waste disposal product and hopefully get a sizeable investment from one of the sharks.
Grease Bags On Shark Tank: A Quick Recap
Newsome takes center stage in a crisp white suit and heels and introduces herself with trademark Texan charm. Her accent is thick, her hair is curly, and her smile is enormous. She’s here in front of the sharks today seeking $75,000 for a 25% equity in her company, Grease Bags. She’s a woman of many talents, most notably her home cooking. When it’s time to clean up, what to do with all that grease? Cities are wasting hundreds of thousands of dollars on pipeline replacements due to fats, oils and grease. Grease clogs from people who pour their unused kitchen grease down the sink can result in costly damages and repairs to home kitchens. Surely, Newsome thinks, there must be a better way.
Enter Newsome’s product: convenient, disposable bags for safe cooking oil disposal. Even the packaging, Newsome points out, is compostable. She demonstrates the product by pouring a frying pan of liquid grease into one of her grease bags. “I am now the only person with an eco-friendly product for at-home grease disposal,” she says. A bold claim, and one that captures the sharks’ attention.
Newsome hands out samples of chicken wings along with her prototype bags so the Sharks can test the product first-hand. Barb Shark wants to know what happened to the grease when she poured it in the demo bag. “We have a blend of all-natural oil-absorbing ingredients,” she says.
She then demonstrates the impressive oil-absorbing power of the bag’s ingredients. In a glass of oil and water, she pours the proprietary blend into the glass and watches as it absorbs the oil. She then pours the water into another glass, and the water pours clear – the oil has been completely absorbed by the blend. “Oh, wow,” says Cuban. “Good for you.” It’s clear from the reactions off-camera that the sharks are impressed.
Running the Numbers
Barb Shark is first to ask about financial details. “I need to know the price,” she says – and Newsome is happy to oblige.
- Retail price: $12.99 for set of 3 bags
- Cost of production: $2.34 for 3 bags
- Profit margin: 82%
- Sales-to-date: none yet (still in production/prototype phase)
Newsome is careful to mention that she’s not entirely sure what all of her costs will be yet, once she starts selling the product. So she’s tried to ratchet the retail price up enough to cover anticipated costs.
The Bidding
Lori is first to drop out, saying that (surprise, surprise) she’s never fried anything in her life and has zero knowledge about this industry. Fair point.
It’s here that Barb Shark interjects with a critical question – can she pour hot grease directly into the bag? “As of now, the bag isn’t heat-tempered,” she says. “That’s a huge problem,” says Kevin. And it’s true. Having to wait to let your grease cool, instead of pouring it directly into the bag, is a major drawback that definitely hurts the product’s marketability.
Mark Cuban asks if the heat-tempering can be fixed. Newsome assures him that it can, but that doing so would make the bag non-compostable. So there’s an inherent conflict and a tradeoff happening here – she can make the bag heat-tempered and capture the hot grease market, but in doing so, she would lose the ecofriendly marketing angle and forfeit her environmentally-conscious customers.
Mark Cuban is insightful in pointing out that the eco-friendly, environmentally conscious demographic typically aren’t doing as much frying in the first place – so her main marketing demographic may not actually exist. For that reason, Cuban is out.
“I give you an 8.62 out of 10 for presentation,” says Kevin, “but I would never actually use this product. I cook bacon, so this solves nothing for me. I’m out.”
“I give you a 10 for presentation, amazing job,” says Robert. “But this is a tough one.” She tries to sell him again and Kevin urges her to lay off for a minute while he makes up his mind. “There’s just too much unknown with the product,” says Robert, after a moment. “I’m out.”
With all the sharks out, Newsome looks heartbroken. “So is that everybody?” she says.
“I went out so fast earlier…let’s pretend it didn’t happen,” says Barb Shark. All heads swivel in shock toward Barb. Barb runs the numbers with Newsome one more time and then asks if there’s any way she could bring the retail price down from $12.99 to $6.99 – cutting the price (and her profit margin) in half. Each bag is only $0.78 cents to make, though, so Newsome agrees it’s doable. “I’ll give you the money on that contingency, that you lower the price down to $6.99 – but I want half the company,” says Barb. Instead of Newsome’s original offer of 25% equity, Barb Shark is demanding 50%. Newsome takes a moment to mull it over, and then happily agrees to Barb’s offer.
“I can’t believe it,” says Newsome in the segment’s final moments. Through happy tears, she confesses how much she appreciates the offer and the fact that Barbara believes in her. “I think she’s going to be an awesome partner,” says Newsome.
Final Deal: %75,000 for 50% equity in Grease Bags
Grease Bags After Shark Tank
Even though Newsome and Barb Shark reached a deal on air, the deal ultimately fell through. It turned out that Newsome’s cost of materials was just too high to sustain the $6.99 price cut. In anticipation of the notorious boost in sales that all businesses receive after appearing on the show, Newsome tried to prepare for a jump in orders. She paid out of her own pocket for materials — then didn’t have the money to get her customers’ preordered purchases shipped on time. Understandably, some of those customers weren’t thrilled, and her customer service suffered. But she quickly regained stability and kept the business afloat.
The product now sells for $8.99 – a convenient middle ground between her original retail price and the price Barb Shark suggested.
All in all, Newsome is grateful for her appearance on the show and the struggles that pushed her to streamline her business. “I think if I hadn’t gone on Shark Tank it would have been one of those things where when the going got tough, we wouldn’t have pushed ourselves.”
The Grease Bags are available for purchase online, and the Grease Bags site is still up and running as of July 2020.
Disclaimer: The information provided in this article is strictly informational; INSIGNIA SEO is not affiliated with Grease Bags, SharkTank, or any of its subsidiaries.