Jimbo, looks like we are following some of the same companies. ie; put some AVBC in an TCBG pouch and serve it at the movie Speedway Junkie. LOL.
Someone asked what came out of the TCBG/Kraft lawsuit. I believe one of the things to come out was TCBG can not use the foil like on the Capri drink pouches.
Peter mentioned that margins are "razor thin" and he is absolutely right. Grocery retail is based on volume, volume, volume. I think the possibilities of TCBG look extremely bright but I do have concerns about meeting volume. In order for TCBG to continue to land the BIG accounts they need to be able to produce BIG volume. A retailer is not going to dedicate shelf space, which is dog eat dog for vendors, only to have it sit empty because the vendor can't supply the demand.
Here's a hypothetical example. Assuming you are providing the TCBG flavors, and private label in the rip it sip it pouch, for Orange, Cranberry and Apple juices. If you sold 10 units TCBG and 30 units of each of the private label juices a day (conservative #s) that would be 100 units a day per store. If you have 1000 stores that would equal 36,500,000 units a year. Looking back over the press releases, as I understand it, 1 volpack machine will produce 30,000,000 units a year, correct me if I'm wrong. BTW this is considered slow. The obvious solution would be to keep adding machines to meet demand. This would be a nice problem to have, kind of like having to pay capital gains tax, but does anyone know if this is the plan? is it even possible to just keep adding volpak machines?
Earl, if your there, one line of questioning for the conference call might be, how much does a volpak machine cost vs a standard pouch filler machine? How many pouches have to be produced before payback is realized vs the standard machine? If a volpak can do 30Mil a year but a competitor can do 200mil a year this effects the margin. This could lend some insight to the margins vs competitors margins at least for the packaging. After all it is the packaging that initially sells a product, quality brings them back.
Sorry for the long post, but I'm on trial and I only get 3.
Have an up day! |
