Here's What Happened To Luma Soda After Shark Tank
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Unless you possess the genius ability to create viral content in an instant, selling a new product usually isn't easy. To achieve worthwhile commercial returns for a new business, you need a credible business plan, impactful advertising, and plenty of easily deployable capital. That's where the wealthy investors on "Shark Tank" come in.
Jim Otteson created Luma Soda in January 2017. After being a big diet soda drinker, Otteson noticed his drink of choice was fairly unhealthy, so he set out to create a soda that didn't contain chemicals or sugar. In fact, Luma Soda beverages had zero sugar — their sweet taste was from a mixture of monk fruit sweetener and honey — and were also without artificial colors, were caffeine-free, and contained no aspartame, which could be bad for your health. Otteson sold 12-packs of four flavors — cola, cherry cola, blood orange, and lemon lime — for $19.99. Per Palo Alto Online, Otteson said quitting his job and investing in Luma Soda was "scary," however, he added, "We've gotten a lot of great feedback. People are really excited about it. I think it's a great product."
Otteson headed into the "Shark Tank" on Season 10 of the hit show — the episode aired in 2019 — looking for the Sharks' help in getting his soda into major supermarkets and grocery stores. So, did the business rise like the tide or crash like a wave?
Did Luma Soda get a bite on 'Shark Tank'?
Luma Soda founder Jim Otteson went on the show asking the Sharks for a $500,000 investment for 20% equity in his company. At the time of his appearance on the show, he had invested $1.75 million of his own money and had just $30,000 remaining in the bank. What's more, he only had $180,000 in sales. As he made his pitch, the Sharks began to wrinkle their brows with worried looks on their faces.
Despite their concern, Barbara Corcoran seemed interested at first, stating she would give $250,000 to Otteson and Luma Soda, but only if beverage expert Shark Rohan Oza would partner with her. "I know less about the soda business than certainly you do, but I know a good guy when I see it ... he's a rock solid guy," Corcoran said to Oza about Otteson, trying to convince Oza to invest with her (via YouTube). Oza, however, felt "there is a concern when you spend that much money to generate this little revenue." He decided to bow out, and, thus, so did Corcoran. Otteson left the show without a deal.
Luma Soda failed to float after Shark Tank
Even though he was not able to secure a deal with the Sharks on "Shark Tank," Luma Soda's founder Jim Otteson continued to push the business agenda of his healthy soda company immediately after appearing on the show, but his efforts quickly proved futile. It appears that there were no changes to the product, no expansion of merchandise, and no new investors in the company.
Otteson pledged to keep Luma Soda alive even if the effort proved difficult. He overhauled Luma Soda's Amazon store and conducted several online promotions. But all of it wasn't enough to keep the business afloat. He was never able to get his product into any stores, which may have been a major barrier to garnering sales. Given all of this, it's not surprising that the business shut down — just as Shark Kevin O'Leary had predicted on the show.
What went wrong with Luma Soda?
Despite a desire to shake up the diet soda industry, Otteson's company Luma Soda is out of business. Its Facebook account has been inactive since September 2018. One user looking for the product in 2020 commented, "Are you still in business?" but never got a reply. The Luma Soda website is now defunct.
Perhaps it's not surprising that Luma Soda failed to succeed in the cutthroat nonalcoholic beverage sector without financing from "Shark Tank" industry heavyweights. After all, Shark Tank Tales notes that "the Sharks have mentioned numerous times [that] the beverage industry is one of the most competitive and toughest to break into." Luma was up against multiple popular soda brands including Coca-Cola, Nestlé, and PepsiCo. Also, there is one competitor that may have proved problematic for Luma Soda: Poppi Sparkling Prebiotic Soda, which not only contains healthy prebiotics and apple cider vinegar but is sweetened with fruit juice.
What's next for Luma Soda founder Jim Otteson?
LinkedIn lists Luma Soda's Jim Otteson's ending date as founder and CEO of the company as January 2019. Otteson had been an attorney for 26 years before quitting to develop Luma Soda, and Luma Soda's final Facebook post was published on September 23, 2018, eight days before Otteson took up the role of senior counsel at Dechert LLP, according to his Facebook profile. Per LinkedIn, he then went on to found Otteson Law. Otteson is now listed as a managing director at Major, Lindsey, and Africa, a recruitment company for legal professionals. He said he was "thrilled to join" the "world class team," noting he would use his entrepreneurial drive to "leverage [his] own unique experience to help both candidates and law firms reach their professional and personal objectives" (via Lawdragon).
As of this time, there are notably no mentions of any more business experiments from Otteson, particularly ones related to craft sodas, but we'll stay tuned to see if he develops anything new in the near future.