The three largest manufacturers of coffee capsules in Australia have criticised Network Ten after Shark Tank Australia’s Andrew Banks made a $2.5 million dollar investment in rival iCapsulate.
Citing “the seeming lack of due diligence conducted by Shark Tank Australia”, they say that “in our opinion, Andrew Banks was taken hook, line and sinker.”
In a joint open letter, (which they say came together through a desire to “ensure that our industry is represented in the most professional way”) the directors of Mad Coffee Caps, PodPac and CoffeeCaps warn that Banks may have “bitten off more than he can chew” with the largest ‘deal’ made in the TV show’s history.
“Our industry is small here in Australia, with only four manufacturers of significant size; Mad Coffee Capsules, CoffeeCaps, Podpac and iCapsulate. All four of us have made significant capital investments in the millions of dollars, but only three of us have been successful in winning significant contracts.”
According to them, “The odd one out is Kane Bodiam of iCapsulate.”
“We think that Kane made some highly questionable statements during Episode 3, and Andrew Banks, Shark Tank Australia and Network Ten deserve to know the facts. Most importantly, Kane stated that he has “contracts with Australia and New Zealand’s largest coffee companies”. Naomi Simson asked “all the big coffee brands that we would know?” to which Kane replied “yes”.
As reported by News.com.au, the company claims to produce tens of millions of coffee capsules each year for some of the biggest brands in Australia.
However, the directors argue argue that this claim by Kane is misleading.
They say that, in reality, none of the major coffee pods stocked in both Woolworths and Coles are manufactured by iCapsulate.
Origins of Coffee Pods stocked in Coles and Woolworths
“In fact, we are not aware of a single major retail store in Australia from which a customer can purchase coffee capsules packed by iCapsulate.”
The trio say that Shark Tank Australia judge Steve Baxter “was right to question Kane on his comments regarding more expensive “inferior coffee pods”.
The letter also touches on Kane’s claim that he roasts his coffee in-house, saving GST and road costs in order to offer a better product than more-expensive and “inferior” coffee pods.
“However, Mad Coffee Capsules and Podpac also roast in-house, so it is difficult for us to see how this actually gives iCapsulate a competitive advantage.”
They say “iCapsulate made a late entry into the market and we don’t think it has been successful in securing major coffee capsule contracts in Australia. As a result, it seems to us that Kane has resorted to needlessly defaming our various brands and products on social media in posts and videos.”
“Additionally, in 2015, Kane Bodiam was found by the Supreme Court of NSW to have engaged in misleading and deceptive conduct relating to activities within our industry.”
Mad Coffee Capsules, CoffeeCaps and Podpac directors close the letter by saying they “welcome the opportunity to meet with Andrew Banks, Shark Tank Australia and Network Ten if they wish to discuss this matter further.”
Update: Andrew Banks spoke to SmartCompany following publication of our article, confirming that due diligence is still underway for the $2.5 million deal. SmartCompany says that Andrew “will wait for all information needed for due diligence to be completed before signing the final cheque.”
