There was a packed crowd at Cordova's Powder House restaurant for the airing of ABC's "Shark Tank." The show featured a yet-to-be-aired segment with local fisherman and entrepreneur Lauren Padawer, who was pitching a $100,000 investment in her business, Alaska Glacial Mud Co.
With Padawer as guest of honor, friends and fans gathered at the Powder House looked liked professional athletes with Alaska Glacial mud streaked on their faces like eye black. Padawer was under contractual obligation not to speak about the show prior to airing and the room was buzzing with anticipation and discussion of whether or not any of the celebrity Sharks had blessed Padawer's investment opportunity.
There were shouts, whistles and cheers from locals as images of Padawer in her commercial fishing boat flashed across the screen. And then the room went silent as Padawer's pitch began.
But before any of the Sharks could take the bait or not, Padawer was already realizing her goals for participating in the show.
"I knew going in the exposure to an audience of 6 to 8 million viewers was worth more than the $100K investment I was asking for," said Padawer earlier this week. "So it was a win-win situation as long as I did not come off a fool."
Inquiries pour in
As millions of television viewers across the country watched the show, they responded immediately, going online to Alaska Glacial Mud Co. and temporarily crashing Padawer's website. Within hours, her social media audience tripled, reaching more than 30,000 people. And before the night was over, online retailers started emailing Padawer to say they were experiencing a dramatic spike in orders and needed resupply. In the 24-hour period following the show, Padawer received approximately 100 inquiries via email and telephone from companies wanting to wholesale her products and even individuals expressing an interest in investment opportunities. Padawer received two emails from knowledgeable strangers with constructive advice regarding her website as well as sales and marketing.
"The ripple effect from 'Shark Tank' was immediately apparent," said Padawer. "It was everything from sales to supportive calls from people who don't know me but just wanted to cheer me on. There were people unaware of Alaska time, calling me in the middle of the night, but I was happy to speak with them. The story of Alaska Glacial Mud inspired them."
Asking how Padawer prepared for the aftermath of "Shark Tank," she said it was it was a calculated risk.
"I considered that about 6 million people watched the show, and that getting a response from 1 percent, or 60,000 people, would be the top end of what I might expect. Then I thought about how much product I could afford to produce and I was prepared for up to 10,000 orders," said Padawer. "My goal was to generate enough sales from "Shark Tank" to expand the product line and so far, I've gotten pretty close to making that possible. And part of my business model is to generate charitable donations through product sales, so this will help me do that."
Padawer says while she has been talking with fans and filling orders, the real work is just beginning as she sifts through the inquiries.
Expanding glacier mud product line
"There is a lot of interest that with careful cultivation will help Alaska Glacial Mud reach a wider audience," said Padawer. "By the end of 2014, I want to have expanded my product line, from just mud to things like products utilizing glacial minerals. I want to offer things for people to take good care of their skin on a daily basis, and so my spa clients can offer an entire treatment."
As to the feedback from the Sharks, who declined investment in the company, Padawer said she heard two things.
"My sales numbers just weren't at the point where it was going to interest them, even though my sales for the year were closer to $50K than the $35K at the time of the show," said Padawer. "There were two takeaways from the Sharks.
• "First, that I should shift my marketing from Alaska to the Copper River.
• "Secondly this issue of spa versus retail. But the feedback that I got from the public following the show was to go retail and to stick with the Alaska branding of my products.
"The Copper River brand is very important to my commercial fishing business, but the Alaska brand has a certain cache that is more appropriate and recognizable for my Alaska Glacial products, and that is what the public response was. It's about purity and big wilderness, versus a premium fish product."
For those who watched the show and listened to some of Padawer's numbers, the businesswoman says a few details merit further discussion.
"First of all, the figures having to do with my commercial fishing business were gross figures. By the time you take out debt from new engines, fuel, storage, insurance and all of the other business costs, my income is significantly less than my gross, less than half," said Padawer.
"And while a jar of Alaska Glacial Mud retails for $34, by the time I account for wholesalers and distributors, my actual price, is significantly less, less than half. Out of that comes the cost of goods, plus rent, marketing, inventory, order fulfillment, telephone and website, and so on. One trade show can cost $5,000. Up to this point in my company, I have been happy to end the year with a $5,000 profit that can be reinvested in building the company."
That gets back to the opportunity Padawer saw with "Shark Tank."
"The benefit comes in volume and 'Shark Tank' offered me unprecedented exposure," said Padawer. "From the outside it looks simple, but from the inside, there is a lot to consider. As I said on the show, I am going to keep building my brand, but my model is to tap into the interest that people have in where their products come from and how they are processed, and to harmonize commerce with social impact."
Jennifer Gibbins is editor of The Cordova Times. Reach her at email@example.com
Alaska Dispatch Publishing