Beauty & Go · PDF file · 2016-01-07Our recommendation 3 Feed Your Skin (JV) ... Mass Retailers (TESCO, etc) ! ... class Beauty & Go is a lifestyle product, not a grocery product

Beauty & Go

A global expansion strategy to ensure Feed Your Skin maximizes B&G’s potential

“From the Tree to the Glass”

Antonio Munoz (AMC Group)

Joaquin Serra (Natura Bisse)

Nina Storms (DANKU)

Barcelona, Spain

6 January, 2016

HASKAYNE CONSULTING H C

Alex Walkey, Andrea Mamchur, Rishabh Gandhi, Kendra Scurfield


2 Why are we here?

Feed Your Skin (JV) needs the best expansion plan possible

Beauty & Go is a strong product that has massive global potential.

Are we a beauty product or a food product?

What is the best way to take that forward?


3 Our recommendation


´ Be a beauty product, not a food product

´ Continue to expand geographically: Western Europe, Asia & USA

´ Begin online sales with a subscription model


4 Executive Summary

FOCUS AREA STRATEGY

Distribution Channels

High-End Beauty -Department stores (Nordstrom, Selfridges, Galleria, etc)

Online -Subscription service -Access to potentially massive international market

Geographies Europe -Initial focus on high income, health-conscious Western Europe (FR, Scandinavia, etc)

North America -Initially in US -Tie in with AMC Fresh Locations (production and warehousing) -Control own logistics (no distribution partners)

Asia -Continue Strategic Alliance Strategy (Asia is a less-known market) -Draw intel and learn from the experience

Revenue of EUR30.3M by 2020


5 Alternatives you might consider

´ Mass Retailers (TESCO, etc)

´ Sell this promising product (e.g. to Coke or Pepsico)

´ Enter US with partners / other Joint Ventures

DO NOT DO THESE!!!







Andrea Peels the Orange (Except she won’t because the peel has Macromolecular Antioxidants!)


8 The Right Ingredients




Beauty & Go has the right ingredients to be a global health and beauty brand


9 Beauty & Go’s Customer

Beauty & Go’s

Customer

Female

Heath conscious

Urban

Cosmopolitan

Image conscious

Mid to upper class

Beauty & Go is a lifestyle product, not a grocery product. You need to sell in the proper channels.


10 Retail Channels

´ Sell in high end department stores and beauty stores

´ Do not sell in grocery stores ´ Skin care is not part of the weekly grocery list

´ Margins are too low to justify the cost of marketing

´ Need a mode to educate customers on the beauty benefits

´ No room for price increases to cover the costs of marketing

Sell in high end department stores, not grocery stores


11 Europe ´ Continue to expand in Western Europe

´ UK, Spain, France, Nordic Countries

´ Fashion forward

´ Close to production

´ Established supply chain

´ High end department stores and beauty stores ´ Marks and Spencer in UK, Galleria in Paris, Sephora

´  Increase prices to €5 ´ Price yourself out of Tesco over the next year.

Western European expansion


12 Asia

´ Continue to expand with distribution partners ´ The Asian market is more difficult to analyze and distribution partners decrease

their risk

´ Ensure they sell through high end department stores to maintain an image as a luxury Western brand

´  Increase information sharing to determine which products are selling and which markets to enter next ´ Cosmopolitan, urban centers with expats

Continue to partner with distributors in Asia


13 USA

´ Now is the time to enter: juice market is growing ´ Cold pressed juice, cleanses

´ Health conscious, active

´ Danku gives Beauty & Go an advantage over the competitors in the US by extending the shelf life of cold pressed juice to 21 days

´ Sell through high end retailers such as Nordstrom and beauty stores like Sephora

´ Partner with a logistics company for distribution

Now is the time to enter the USA.


14 Online

´ An online presence is essential and gives Beauty & Go an instant global presence

´ Your customer is busy

´ Subscription model ´ Weekly delivery of juice: convenience

´ Consistent revenue stream

´ Allow customers to pick their flavors

´ Also allow individual deliveries

Develop a subscription model for online sales


15 You are what you eat: Product adaptation

´ Customers in different geographies have different health and beauty concerns

´ They are also missing different nutrients in their diet

´ Adaption of flavor and nutrients will be critical to penetrating new markets

The product line will have to be adapted for new markets.


16 Product Development

´ Develop a health water using the same macromolecule antioxidants

´ Lower price point

´ Would allow you to stay in grocery outlets if needed and reach a broader market, including males

´ Prioritize after geographic expansion and online presence

“Molecule” water solution will help us reach a larger market

From the inside out The numbers


18 Revenue breakdown

Revenue from Retail distribution to go down to just 22%

40.97%

31.50%

27.37% 25.19%

22.50%

27.93%

32.00% 32.54% 33.23% 31.96%

23.20%

26.32% 23.96%

21.39% 20.59%

7.90% 10.19%

16.14%

20.18%

24.95%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

2016 2017 2018 2019 2020

Revenue by Different Channel

Retail Distribution Health & Beauty International Distribution Online-Internet


19 Margins by Channel

16.4% 17.2%

11.3%

5.8%

12.6%

19.7%

13.4%

7.5%

11.0%

20.0%

12.3% 11.8%

10.1%

20.5%

10.8%

14.9%

9.0%

19.7%

10.4%

18.4%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Retail Distribution Health & Beauty International Distribution On line-Internet

Margins by Channel

2016 2017 2018 2019 2020

Retail Distribution margins expected to go down by 45%


20 Revenue Projections

5.79

13.05

19.18

24.00

30.37

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

2016 2017 2018 2019 2020

Projected Revenues

Health & Beauty International Distribution Online-Internet Total


21 Pretty Assumptions

´ Price increase by 20%

´  International expansion increase by 20%

´ Online sales to increase by 45%


22 Costs- Promotions

´ Estimated allocations for next 2 years

´ Europe – 40% of total budget

´ US – 40% of total budget

´ Asia- 20% of total budget

´ Point of sales estimated cost : 2% of the revenues








24 Ugly Alternatives: Tesco or large mass retailers

´ Position does not match the Beauty & Go image

´ Low margins

´ Expected sales from this channel will fall by 56%

STOP


25 Ugly Alternative: Do Not Enter with a JV

´ Do not enter US with a JV

´ Reduces profitability

´ Existing access to market exist in AMC companies

´ Barriers to entry are low

STOP


26 Ugly Alternative: Do Not Sell to Coke

´ Great product

´ Have capacity

´ Valuation can be improved further

´ Have passion for the product

STOP

Beauty is Building a Legacy


28 Future Beauty

These are some fresh ideas that we are not recommending right now, but could be worth looking into further:

´ Customizable Beauty Mix’s for subscription customers

´ Launch a private label division for beauty retailers

´ Launch Beauty Meals


29 The Customer

32 year old Female

Educated Savvy Active High

Disposable Income

To become a legacy brand, Beauty & Go needs to focus on being a beauty company not a food company. We recommend doing this by focusing on geographic expansion, and launching an innovative online presence.

Beauty Online

Beauty & Go

Website Subscription Mobile Product Extension

Launch with BirchBox


32 Beauty Goes Viral

´ Beauty & Go needs to focus on pushing resources into an online and mobile platform. Recommend working with the Apple, Facebook, etc for easy payment.

´ Have cookies, use cookies to identify markets

´ Work with DHL, or such service for delivery

´ Product offering


33 Beauty and Go to the US

Now:

USE AMC fresh US offices and warehouse in the US. Find retail partners in the US.

Build US/NA website Develop US/NA social media channels.

Develop larger bottle size for NA.

Next 2 Months

Secure Retail Partners. Start Brand activations at high visibility events.

Host pop-up shops at Nordstroms. Partner with Birchbox for beauty. Find brand ambassadors, bloggers, fitness personalities, Instagram users, real people

4 to 6 Months

Launch Platform online, simultaneously with US retail launch.


34 US Domination: Next 3 Years

1 POS at all Nordstrom’s across US

Sephora

2. Expand product line

(beauty water, powders, fruit snacks)

Whole food

3. Open Flagship Store

(Expand product line)


35 Pretty Across Europe:

´ Focus on the online and mobile presence

´ You have a strong network of distribution in Europe. ´ Use it


36 Asia:

´ Stick with the distribution model

´ Add one country at a time to insure that the right distribution partners are chosen and that you can maintain strict control of how Beauty and Go is presented in Asia.

´ Enter China carefully, and if China requires product IP refuse.


37 Beauty and the Brand

´ Use the logo to brand each of the unique drinks, have a logo for Detox, Radiance, Vitality, and Skin Renew.

´ This will assist in online purchasing

´ Beauty & Go, can read as Beauty 2 Go in English, sell the 2 go aspect.

´ Develop a refrigerated POS

´ Differentiate the logo a little more, at present looks like a cross between the sweet factory and Burt’s Bees.

´ Use Nature for brand inspiration, the most beautiful things in the world are found in Nature.


38 You asked:

´ How to prioritize markets: ´ Europe and US and online need to be strong focus. More energy is needed to

own the US. Then Asia.

´ Where to Focus: ´ High end product, Even pricing, Social and event media (spend 1.5 million-

2million)

´ Why Tesco Failed: ´ High end brand is not trusted by the end user in Tesco.

´ Exit Tesco as soon as possible, if you need to stay develop a Beauty & Go water to fill the shelf space.


39 Risk and Mitigations: Risk Mitigation Likelihood Impact

GMO Communicate the benefit of the product, and focus on the beauty proposition

L L

Competition Focus on being first mover, and build on the value of first mover

M – L'Oréal, and cold press juice shops

L (potential for more)

Cyber Security Will need secure script M L

IP Patent filing and R&D M L

Marketing Claims Show results M M

Legal Shareholder agreement

M M

Succession Clear SHA L H

Building a Beautiful Legacy


41 Prioritized Channels

1.  Health & Beauty

2.  Internet & International

3.  Premium Health Food Stores & Food Stores

4.  Spa, Gym, Hotels, Beauty Salon

5.  Flagship Stores

Focus on H&B and internet / international








43 Executive Summary

FOCUS AREA STRATEGY

Distribution Channels

High-End Beauty -Department stores (Nordstrom, Selfridges, Galleria, etc)

Online -Subscription service -Access to potentially massive international market

Geographies Europe -Initial focus on high income, health-conscious Western Europe (FR, Scandinavia, etc)

North America -Initially in US -Tie in with AMC Fresh Locations (production and warehousing) -Control own logistics (no distribution partners)

Asia -Continue Strategic Alliance Strategy (Asia is a less-known market) -Draw intel and learn from the experience

Revenue of EUR30.3M by 2020

Documents

Beauty & Go · PDF file · 2016-01-07Our recommendation 3 Feed Your Skin (JV) ... Mass Retailers (TESCO, etc) ! ... class Beauty & Go is a lifestyle product, not a grocery product