Discover True Health
truH2O Business Plan--CONFIDENTIAL
The
Mission
The mission of truH2O is to create greater health in the world through expanded awareness of the benefits of being pH balanced. truH2O contributes to our customers well-being and helps enhance the quality of their life by educating and facilitating a true Alkaline Lifestyle. We provide this through a unique distribution strategy with a dedication to deliver the highest quality products and customer satisfaction.
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The Need The human body needs to stay at a slightly alkaline pH. But if we look at our modern diet and lifestyle (which is notoriously filled with processed foods that are high in sugar and salt), we are exposed to countless influences that acidify that pH. When this happens, our body, as a self defense, will activate that buffering system, which utilizes our mineral reserves, to alkalize back, and as you can imagine, these reserves can be easily depleted, exposing us to decay and disease.
If we do not properly maintain the mineral reserves our bodies will go into
acidosis, which causes symptoms like lethargy, headaches, decreased sexual drive/performance and lack of mental acuity.
As such, all those symptoms contribute to sloth and obesity, which leads to heart disease and diabetes. Even those keen about their health and fitness can find that their bodies don’t perform to their maximum potential.
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The Need How bad are these events? Some researchers have linked them to cancer.
When acidosis gets to the point that the body can’t remove its excess acid, the body must resort to storing the acids within, which is the first step for all degenerative diseases -- including cancer. Acidosis deprives cells of muchneeded oxygen. Healthy cells thrive in an oxygen-rich alkaline environment. Cancer, on the other hand, thrives in oxygen-deprived cells.
It’s not just cancer. Acidosis and a lack of pH balance has been linked with
osteoporosis. When the pH of the bloodstream drops to unhealthy levels, our bodies compensate by taking alkalizing minerals like calcium and magnesium out of our bones to try to balance our blood.
The increased rates of cancer and osteoporosis – in addition to rising obesity and fatigue – can also be traced to acidosis, which, in turn, can be traced to the degradation of the American diet.
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The Need
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The Solution: What is
?
truH2O is a performance water brand that delivers a healthy balance of alkalinity, electrolytes and trace minerals to support overall health and wellbeing.
What does
do for my body?
From the acidic foods that we consume, to loss of electrolytes through daily activity, our bodies are constantly being challenged to remain balanced, perform, and stay hydrated. truH2O provides you with a highly alkalized water product enhanced with electrolyte minerals that is clinically proved to hydrate as well as the leading sports drink with out the sugar, calories, or artificial flavors.
Where does the water come from?
truH2O has the ability to take any clean water source and transform it into our powerful synergy of alkalinity, electrolytes, and trace minerals to fuel balance, performance, and ultimate hydration.
Will there be other
products?
Yes… In addition; we will sell a range of alkaline-based nutrition and fitness products to be used with truH2O water for optimal results. This will include truGreen and truH2O supplements
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Industry Size and Target Markets While there are few companies specifically in this area, the global market for sports and nutrition drinks is estimated to reach $55 billion by 2018, according to research firm Global Industry Analysts. This growth, according to the firm, is “driven by shifting consumer attitude towards health and wellness, rising enrollments at health clubs, fitness centers and gyms, and a surge in demand for healthier refreshment options.”
The U.S. is the largest market, and for good reason. “Favorable demographics, aging baby boomers and a sedentary lifestyle are the major growth promoters of the health & wellness industry in the country,” according to the firm’s research.
truH2O sees its potential client base as a mix of health enthusiasts and those looking to improve their health and fitness situation. We estimate the prime target audience is from ages 25-45 years old of which75% female and 25% male. By starting in Manhattan, we are targeting a wealthier demographic, one that can afford higherpriced gym & spa memberships and higher-ticket products that follow health and wellness.
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Distribution Strategy
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Distribution Strategy Current Distribution For Alkaline Water
Distribution Retail Partners
Digital Platforms • Buy a machine and install at your house. • High out-of-pocket expense
Vending Machines
FiTrue Content Partners
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Distribution:
Vending Machines
Vending Machines: We will place our machines in high-trafficked facilities where water consumption is a priority.
Unique vending machine technology with no competition Self contained water store with virtually no overhead Certified to Food & Beverage Industry Standards Minimal maintenance so operational expenses are reduced and margin increases No inventory so 100% of gross sales is gross profit Remote monitoring system gives real-time data so we can analyze and optimize the location If a machine is not performing, it can be moved to a new location at a nominal cost. A branding and marketing tool that is a revenue stream rather than an expense
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Distribution:
Vending Machines
Phase 1: Start with NYC Apartment Buildings:
truH2O will partner with several management companies to distribute machines to highoccupancy buildings in NYC.
Utilize mass consumption machines that can fill 1 to 5 gallon bottles Building will receive 25% of revenue Unique healthy offering for tenants Gives truH2O instant branding to a targeted audience Co-branded glass bottles
Fitness Facilities:
truH2O will partner with fitness companies to distribute machines at their facilities. High traffic locations with a highly targeted audience Utilize single serve machines that fill from 16 ounces to 1 gallon Facilities will receive 25% of of revenue Unique healthy offering for tenants Gives truH2O instant branding to a targeted audience Co-branded glass bottles
Phase 2: Distribute to other major metro cities such as LA, Chicago & Miami truH2O Business Plan--CONFIDENTIAL
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Distribution:
Retail Partners
Execution Plan: Sold directly through a dedicated sales force and indirectly through 3rd party marketing partners Sales sheets Custom retailer presentations (based on targets)
Develop a go to market strategy based around the unique positioning of truH20 “Point of Sale” development to create brand awareness
Retailer Targets:
National & Regional Grocery Chains Specialty Stores Boutique Hotels Boutique Fitness Facilities Natural Food Stores
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Distribution:
e-Commerce
e-Commerce Platform truH2O’s retail and online-advertising model comes together through a
robust e-commerce strategy, wherein we offer all of our products online through our own platform.
We will market this platform through a targeted online campaign, particularly over our own FiTrue Media Network
truH2O will aggressively pursue partnerships with contextually relevant sites to drive awareness and direct product sales
We will also be able to leverage our product integration within the content to drive online sales
Drive awareness and sales through social media
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Marketing
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Brand & Product Marketing: We are not just a retailer, but also a digital-media company. Our retail strategy will
be supported by marketing our products within contextually relevant health & wellness content across multiple platforms. This form of native advertising will be used to educate, introduce and facilitate the alkaline lifestyle to a broad but targeted audience.
The distribution strategy will start with the first ever YouTube multi-channel
network (MCN) focused on Health & Fitness. We will partner with existing YouTube channels and ones we create to promote the benefits of a pH-balanced lifestyle. We will utilize the MCN to promote our proprietary products, and then sell ads against it for a new revenue stream. No other retailer in this vertical combine a media operation with in-store sales.
Distribution will extend to other platforms with immediate scale such as game
consoles (Xbox, PS, etc), set top boxes (Roku, Boxee, Apple TV, etc), connected TVs and more.
Marketing strategy that is not a COST CENTER but a REVENUE stream
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Brand & Product Marketing: FiTrue Everywhere: Distribute partner content to multiple platforms
Connected TV
VIDEO DISTRIBUTION PLATFORMS
SOCIAL MEDIA
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Brand & Product Marketing
Distribution in target launch markets NY & LA with pricing and promotion programs that drive distributor execution
During full scale launch truH2O will be presented to local, regional and national chain accounts.
Sampling and Temporary Price Reduction (TPR) at retail to drive volume
Local radio and community specific programs to drive awareness
Field Marketing to execute sampling & marketing programs
truH2O will implement the following initiatives in order to cost effectively target & reach our audience:
Grass Root Marketing:
Sampling of product at targeted community events Educational seminars at fitness, facilities, apartment buildings, retail partners and more
Leverage FiTrue partners to distribute truH2O through a branded affiliate program
Social Strategies
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Packaging & Production
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Packaging Carton Packaging is Environmentally Friendly Uses renewable raw materials Over 2/3 of package is made of paperboard Bio-based cap made of sugarcane
The trees used to make our cartons come from certified well managed forests
truH2O cartons are 100% reusable/recyclable which offsets the products entire carbon footprint
Benefits of truH2O Packaging: Product differentiation Unique look & ease of use
Lower shipping costs Percentage of all proceeds will be donated to Alliance for a Healthier Generation* * Founded by The American Heart Association and the Clinton Foundation truH2O Business Plan--CONFIDENTIAL
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Production Costs Cost to bottle, cap, label & fill per unit: 500ml: Production Line Cost: Equipment Cost:
$.19 per unit Included above TK
Freight & Delivery Cost:
TK
Minimum Order:
103,000 units
Cost per Minimum Order: Bottle, cap, label & fill: Set-up costs: Freight & delivery: Distribution:
truH2O Business Plan--CONFIDENTIAL
$19,189 $3,500 TK TK
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Revenue Streams
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Revenue Model: Product Sales At truH2O’s heart is the alkalization of water, but we will also create our own line of proprietary alkalization products that will yield a high margin since health & wellness enthusiasts have low price sensitivity.
minimal.
Alkaline water: By using locally sourced water, our product costs are
Vending Machines: Unit sales are $3 per gallon. so the margin is over 90% on all sales after we recoup the capital costs for the equipment.
Bottled: With an average cost of $1.79 per 500ml unit; truH2O will see a profit margin over 70% on all sales.
truGreen Drink (powder): Create our own blend of alkaline enriched products
working with a 3rd party who will manufacture, bottle, label and ship the product for an estimated cost of $10 per unit. Competitive product sales range between $45 and $65 per unit generating a margin between 80-90%.
Vitamin & Mineral Supplements: Absorbable Calcium & Magnesium, Ionic
Minerals. Cost per unit is $4.50 with a retail sale price of $11.95 representing a margin of
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Revenue Model:
Advertising
FiTrue will have a fully staffed direct sales team, that will aid in generating custom programs around partner content including:
Branded Entertainment
Product Integration
FiTrue will maximize all inventory by filling all unsold advertising utilizing multiple partners including but not limited to: YouTube’s Adsense, ZEFR, etc
FiTrue Revenue Assumptions:
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Growth Cycle Develop Products
• Alkaline water (truH2O) • Green drink (truGreen) • Vitamin & Mineral Supplements
Mone3ze
Create Distribu3on
• Retail revenue through Product sales • AdverCsing across the network • Product integraCon into content to drive e-‐commerce
• Vending machines • Retail outlets • Specialty stores • BouCque hotels • Fitness faciliCes • Digital plaHorms
Target, Engage & Educate
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• Target premium boKled water drinkers • Target health conscious consumers • Engage through a mulC-‐plaHorm approach • Educate the benefits of an alkaline body
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Competition While truH2O’s model is unique, we face indirect competition from a variety of sources:
•
Alkaline Water: For the sales of alkalized water, we will compete with: Three (3) bottled water products:
Essentia – Established in 1998. 5 full-time employees with estimated annual revenue of $15 million
AquaHydrate – Established in 2011 and owned in part by Mark Wahlberg And Sean Combs. Neo Water – Established in 2011. It’s corporate HQ is in Santa Monica, Ca.
•
Home alkalization kits Distributed energy and fitness drinks Distributed supplement powders Other fitness supplements and products
Content Creation and Distribution:
•
For the YouTube Multi-channel Network (MCN), we will compete with other MCNs for ad sales. There are currently no MCNs that are specifically in our category, but we expect to compete with non-health & wellness MCNs for advertising dollars since our expected audience will be of a demographic that is attractive to a range of sponsors.
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Charitable Cause Alliance for a Healthier Generation – INFO TK
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Positive Environmental Impact TK
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Who We Are Bill Shaw, a competitive ultra-marathoner, was most recently Senior Vice President of Maxim Digital. Previously, Shaw was publisher of SmartMoney, managing both print and digital operations. He has worked as an account executive for the ESPN network. He began his career in media at Saatchi & Saatchi as a media buyer in 1991.
Dan Bova: Dan has served as Chief Content Officer of Maxim since
2011. Previously, he was the Editor in Chief of Stuff, a men's general interest and gear magazine and was a segment producer at ABC’s Jimmy Kimmel Live during its launch year. He studied film and television at NYU.
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Who We Are Deepa Shah has extensive experience in the digital advertising and
production space working in digital publishing for over seven years. Currently, Deepa serve as Digital Project Manager for Maxim Magazine where she works with Fortune 500 brands and has helped extend Maxim's video footprint across YouTube, XBOX, Playstation 3, Roku and more. Previously, Deepa served as the Sales & Operations Manager for Russell Simmons' digital venture Global Grind, where she worked with leading brands such as Pepsi, Ford and MoëtHennessy Louis Vuitton among others.
Matt Goldstein is Director of Business Development for Maxim.com and Maxim's digital editions. He oversees audience development and many of Maxim's business partnerships including relationships with YouTube, XBOX, Roku, PS3, etc. Previously, Matt worked in Business Development for Interactive Data Corporation where he was responsible for licensing various web based software applications to financial institutions in the US. truH2O Business Plan--CONFIDENTIAL
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Funding Requirements We are seeking $3,000,000 in startup capital, which we believe will help support a three-year plan
Much of the money will be spent in the first year, with revenue gradually reducing our cash drawdown in years two and three
We do not anticipate additional investor capital after initial funding under this plan
We anticipate operating profitability in year three from launch. This could be accelerated, depending on how aggressively we pursue expanding our product offerings.
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