@ Gotta Have S'more

S’muffin Crazy 

By: Kirk Helferich, Marketing Instructor, Grand Rapids, MI

Carmin Linder doesn’t enjoy camping, but that didn’t stop her from creating a company that put a twist on the delicious dessert, known to seasoned campers as the S’more. Linder created the S’muffin, essentially a S’more made into a mini muffin, and entered the Shark Tank hoping for a little S’more money to expand her business. 

As a seasonal camper myself, and one who enjoys a messy S’more cooked over a toasty fire, I found myself wondering how the S’muffin could possibly take the place of not only the S’more, but more so, the outdoor environment that is essential to the creation and enjoyment of a quality S’more.

Willing to part with 25% equity and asking for an investment of $75,000 seemed like a fair request given sales over the past 2 ½ years of $250,000. The product is sold primarily in the Los Angeles market with 75% of sales coming direct or online, and a small percentage being sold in specialty stores. Wanting to share her treats with a much larger population seemed logical, but as the discussion progressed, the extremely high shipping costs associated with the strategy of going nationwide became a major investment hurdle.

With a cost of $9.34 per dozen to produce, and a selling price of $29.95 for that same dozen, it just didn’t seem possible that cost to ship was averaging $54 alone. Using a quote from Mr. Wonderful provided a great, although somewhat sarcastic lesson on Opportunity Cost. “You FedEx these across the Country or you send your kids to college!” Perhaps this was our hint at the domino effect to come, as one by one the Sharks considered the investment potential and choose to keep their money safely in their pocket.

When looked at from an investment standpoint, I think you have to consider that it has been successful in the large market of Los Angeles, and although I’m not one of them, there is a small but healthy market of affluent consumers that will certainly pay to indulge in high quality desserts for special occasions. A browse through the company website: http://gottahavesmore.com is worth your time, as Carmin Linder has a great story which details her efforts to appear before the Sharks. Details which start with eight hours in line with the hope of producers hearing her one minute pitch. 

While the story Carmin tells concludes in her hope that we will one day see her updated success story on an episode of Shark Tank, I am left with a bit of a different conclusion. I thought it might be worthwhile to see what it would cost to have a dozen S’muffins waiting on my doorstep this weekend. With pickup eliminated as an option, given my location in Michigan, I was left with only one choice, and that was 2nd day air at a cost of $35. So with shipping costs higher than the cost of the product, I abandoned my cart, and concluded that my next S’more would be produced and consumed in the same manner as it always has been, on the shores of Lake Michigan with family and friends at my favorite campsite. Overall Performance: 6
Jeff HopkinsComment