Crecent Pure

Marketing Strategy

 Natural extension of PBD organic product line

 Two different position strategies
1. Energy drink positioning
2. Sports drink positioning
 Soft launching planned in three western states (Cal, Ore, Wash)  15% of national
demand

Market and disrtribution of US beverage industry; non-alcoholic

 $131B in 2013 and expected to grow to $164B (4% CAGR)
 Distributed markup 25% from purchasing price, retailers 40% markup from distributor
price
 Product retailed at $3.75
o Manufacturer price: $2.14
o Distributor price: $2.67
o Retail price: $3.75

Acquistion rationale
 Consumer demand for organic products rising
o Energy and low-calorie sports drinks were rapidly growing segments
 Leverage manufacturing, suppliers and distributors to expand cescent to states adjacent
to Oregon in 2014, and nationally in 2015
 Capacity: 12,000 cases per month @$2.75 retail price (24 cans per case)
o Variable cost: $1.02
o Manufacturer price: $1.24 (17% margin)
o Distributor price: $1.96 (36% margin)
o Retail price: $2.75 (28% margin)

Market research

Energy drinks Sports drinks

Market size 2013: $8.5B 2012: $6.3B
2018e: $13.5B (9.6% cagr) 2018e: $9.58 (7% CAGR)
Consumer data 32% of +18yo drank 50% of male consumer drank
Males 18-34 yo 33% of female consumer
Highest consumption: hh <$25k per
year
Competition Fragmented market: no clear Consolidated. One player with 73%
market leader. Highest with 34% ms ms
Price range Average price: $2.99 Average price $1.00 to $2.00
 Opportunity Low calorie energy drink demand Diet sports drink segment expected
was growing to grow
Threats Health and safety concerns High sugar content. Banning from
school, potential taxes

2014 Breakeven analysis

Profit Goal: $750,000

Profit per can: $1.24 - $1.02 = $0.22

Cans to reach goal = 750,000 / 0.22 = 3.4M cans / 24 cans per case = 142,045 cases per year or
11,837 per month

Need revenues of $4.22M

 Capture .03% of energy drink market
 Capture .04% of sports drink market

Final recommendation
Go with the energy drink positioning for multiple reasons:
 Larger market and higher expected growth
 Better price point positioning
 Fragmented market with no clear market leader
 High energy, high hydratation Low, nutrition high taste