This story starts with Zach Crain, an eccentric man from Wilmington, North Carolina, who started knitting as a hobby. He wanted to make sweaters for his friends, but he wasn’t very good at it, so he made “sweaters” for their drinks.
This little gimmick quickly became a viable business opportunity when he realized he could “end moist handshakes across America” with authentic American-made products. With that hearty promise, Zach launched a Kickstarter campaign in 2011. He raised $60,000 with over 2000 backers.
To help increase production, he partnered with a manufacturer who had the machinery for knitting these bottle insulators using recycled knitting. Then it was just a matter of programming in some groovy designs, and ta-da! Freaker USA was born.
Zach and his team spent four months traveling across the USA with a handful of designs and a converted box truck. They hosted free grilled cheese parties and handed out Freakers to the welcoming public.
And just like that, their business grew. Every summer, his box truck still travels across the country to keep the Freaker party going.
What Do They Make?
The Freaker is a one-size-fits-all beverage insulator made of recycled knitting, meant to keep drinks cold and hands dry. It comes in over 30 different patterns, and thanks to its patented yarn knitting technique, it can stretch over almost any kind of beverage bottle or drink can.
Is Freaker USA still active?
Freaker USA is a thriving business. They have a dedicated customer base and sell on their website and their Amazon store. They are also available in over 200 boutique-style stores across America.
How Did Their Pitch Go?
One of the highlights of Season 4 was the whimsical Zach Crain and his pitch. The Sharks were completely unprepared for his unique personality and amusing antics.
In a top hat and shorts, Zach Crain somersaulted into the Shark Tank like a hipster Willy Wonka and didn’t waste a second showing off his quirky personality. With a “boop boop da doop” here and a “whoop whoop” there, they made sure the Sharks knew he wasn’t your run-of-the-mill average Joe.
With a flourish, he pulled out a Freaker, took it to a table lined with various beverages, and turned the Shark Tank into a children’s magic show. “Can I get a whoop whoop?” Zach called out to the Sharks as he easily fit the Freaker over all the beverage bottles.
Then he played his campaign video. It was a 60-second rollercoaster ride of information, a cross between a home movie and a Lady Gaga music video giving the entire backstory of his company. Zach laid it all out from the knitting to the Kickstarter campaigns and grilled cheese sandwich parties.
Finally came the ask: $200,000 for 10% equity.
Barbara was the first to speak, “You are one strange cat.”
Kevin wanted to understand the valuation because his ask valued Freaker USA at $2 million.
Zach told him the company had sold $320,000 of products in the last 11 months. Manufacturing was around $1 per piece, wholesale came in at $4, and retail ranged from $8 – $10. They had a patent for their product and even a Japanese and Canadian distributor.
The numbers were impressive, but Daymond didn’t understand why Freakers were doing so well. He assumed they were like lycra or spandex drink sleeves, but Zach quickly corrected him saying Freakers were made of a stretchable patent-issued yarn pattern.
Despite all this, Kevin believed Freaker USA was only worth $400,000. He liked the concept and clear branding, so he offered to put up $200,000 for 50%.
Zach wasn’t willing to devalue his company and didn’t take his offer. Barbara said, “I love ya, man”, but he was asking too much. She was out. Robert followed her footsteps and was out too.
Daymond wasn’t a fan of the product and didn’t give an offer. On the other hand, Mark liked the margins, admitting they are pretty great, but he couldn’t stand Zach’s personality. He was out too.
And that was that. With a final “beep beep”, Zach backed up out of the tank.
What Happened After Shark Tank?
Undeterred by the Sharks’ response, Zach believed in his company and refused to let it fizzle out. His faith paid off as Freaker USA products are readily available in unique style boutiques and gift shops across the country.
After his Shark Tank appearance, Zach was approached by the owner of Liberty Bottleworks as he used their bottles during his pitch. They made a deal in March 2013 for Freaker USA to make bottle covers for all their bottles.
That deal ended not too long after with accusations of Liberty Bottleworks trying to sell knockoff versions of the Freaker USA bottle cover. Zach was forced to terminate the contract over this scandal.
In 2015, Freaker USA returned to Kickstarter and raised over $250,000 to launch a colorful line of 100% American-made knit socks.
They have expanded further and now offer Slippys, made from recycled coastal plastic. These are smaller versions of the Freakers for cups and mugs.
Our Review of Freaker USA
Freakers are the cutest little sweater you didn’t know your drink needed. Yes, it’s like a koozie, but it is the king of the koozies. Thanks to its super stretchable knit, you no longer need to keep multiple different drink sleeves. They are thick enough to absorb the moisture from the coldest of drinks. Zach kept his promise; there are no wet hands here!
Factoring in their wide selection of designs that range from Americana to pop culture, you are bound to find one you love. They make great gifts and stocking stuffers.
Not to mention, Freaker USA is a homegrown business with all in the manufacturing in the good ol’ USA. They have a very clear identity and are environmentally conscious. What’s not to love?
Pros of Freaker USA
- They are hot and cold drink insulators
- Come in a variety of fun patterns
- One size fits all
- Made in the USA
- Machine washable
Cons of Freaker USA
- Knit fabric can wear out over time and overstretch
- Cheaper non-stretchable drinks sleeves are available on the market.
- It’s a niche market, and the designs won’t appeal to everyone.
Are There Any Alternatives?
Companies like Baxendale and co, Go Cuff and Tropical Life make drink sleeves out of materials like neoprene, lycra and spandex. They come in a variety of designs, but they don’t stretch.
Our Final Thoughts
Freakers USA knows its niche and is making money. Their dedication to their quirky, whimsical style has paid off, evident in their increasing product lines.
The Sharks were too quick to dismiss Zach. Despite his silly antics and funny noises, he clearly understands his brand and knows how to market to his consumer base. Freaker USA isn’t going out of business any time soon.