Brian and Corin Mullins, makers of Holy Crap cereal, have a new high-powered partner – but it’s not the Dragon they were seen shaking hands with in the Den this week.
The Mullins were once again featured on CBC’s Dragons’ Den on Jan. 6, looking for more funding to expand their reach and increase sales of their popular breakfast cereal, packaged in Gibsons.
They were previously featured on the show on Nov. 17, 2010 when they shook hands on a deal with Boston Pizza billionaire Jim Treliving but later found the recognition of being on Dragons’ Den was enough to up their sales without signing on the dotted line.
This time the Mullins were back in the Den looking for $2 million for 49 per cent of shares in Holy Crap (Brian’s shares) to increase the company’s marketing reach and bolster sales.
While the cameras were rolling, three Dragons tried to secure a handshake with the Mullins, and Treliving appeared to be the victor, but once again the handshake in the Den didn’t result in a deal.
Soon after leaving the stage, Corin said Dragon Manjit Minhas motioned her to “call me.”
“In the end what Jim [Treliving] recommended to us was that the Minhas people would be a better fit for us because we were raising the money in order to buy marketing services like video production and Internet capability, graphic design. Minhas has all those inhouse,” Brian said.
Soon the Mullins met with Minhas and signed an off-screen deal with the co-founder and co-owner of Minhas Breweries and Distillery, which produces more than 90 beers, spirits, liqueurs and wines that ship all across Canada and the U.S., as well as overseas to 15 different countries.
“It’s called a marketing and management deal. She’s coming on board as co-CEO. We’ve cut a royalty deal with her, but it’s private,” Brian said.
“What Minhas is looking at is that she wants to get the cereal out to as many people as possible, so that means the price has to come down. And the only way to do that is by private label. Because if you’re paying the distributor 35 per cent and the store 35 per cent to get on the shelf, it affects the price.”
Minhas has much experience working under a private label, selling about two million cases a year of her company’s beer under the Kirkland private label via Costco, for example.
“What I bring to the [Dragons’ Den] panel is the ability to help an entrepreneur bring their concept through manufacturing, through product packaging, through marketing and to the product shelves to retail. To actually get it done and out there at a great price and a great product at the end of the day,” Minhas said in a video on the Dragons’ Den website.
It was those skills precisely that led the Mullins to sign a marketing and management deal with Minhas instead of following through with what was strictly an investment deal with Treliving.
“Minhas will lend their volume buying power to us in order to improve shipping efficiencies, lower ingredient costs and improve packaging quality wherever possible,” Brian said.
The Mullins have already met with Minhas several times to show her the Gibsons-based Holy Crap headquarters and introduce her to the team, although the Mullins were waiting for the Jan. 6 Dragons’ Den show to air before making the partnership public.
“It started Oct. 1. We couldn’t really tell anybody because of the show commitment,” Corin said, noting Minhas and her team “like everybody. It’s really a love-fest.”
Although increased marketing and private label deals are expected to boost Holy Crap sales considerably in 2016, Brian said the Minhas team is also working on expanding the Holy Crap product line.
“They’ve suggested a Holy Crap organic wine, Holy Crap organic beer. They’ve gotten a really good response. People have asked us for the hemp beer already, but it’s going to take a while to formulate that,” Brian said.
The Mullins are excited about the deal with Minhas that will allow them to keep their base of operations in Gibsons and provide an opportunity to sell the company to Minhas in the future, as the Mullins ultimately want to retire.
“We’ve agreed to purchase 100 per cent of the company for $3.6 million,” Minhas said on the show in a follow-up segment.
Brian said he and Corin plan to stay with the company for the next three years, and at any time “Minhas has the right of first refusal on any sale.”
