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Non-Tech : The Children's Beverage Group (TCBG) -- Ignore unavailable to you. Want to Upgrade?

To: Earl Falwell who wrote (1000)	7/16/1998 1:32:00 AM
From: LemonHead	Read Replies (2) \| Respond to of 2452

TCBG 07/15/98 Conference Call - some of my notes, thoughts and interpretations. Please do not try to read anything into this, I am just throwing out for discussion. I am sure that some of what I post is not correct, but as a group we can nail down. I missed the first few minutes. ú The Price: $1.99 per pack of 10 to the consumer. 25% more margin to the seller. If you remember my purchase (post #433) at the local independent, I paid $3.15 for a pack of 10 6.75 FL OZ pack of Capri Sun Orange. TCBG is providing substantial savings to the end user based on what we know. Now remember that Grandma said the ultimate decision lies with the price and has nothing to do with the internal straw (gotta wash those T-shirts anyway). So lets dig further. Jon mentioned that another potential benefit to the product is the "Head Space", this being air for what ever reason. The best I could tell from web page they were planning to market in box of six, today he stated 10. If same amount of liquid per pouch, then the TCBG package would appear to contain more because of larger size do to head space for internal straw. I think this is well thought out marketing ploy, the competition might have to retool to match. Don't underestimate the competition, if awaken price will meet and the major retailers will take advantage because all brands are represented on their shelves. Overall I believe that TCBG has this covered from many angles for near future. ú The Package: Horizontal form and fill, laser notch where you tear. The best I can tell the issue that got Kraft to barking was more of image than anything. You can put it a pouch as long as it doesn't directly resemble ours. The primary differences appear to be the internal straw, no visible reflective foil (can not show foil on package) and a house shaped design. I gathered that this package design had to have Kraft's approval which seems very odd to me. And I also felt that this design has been in evolution since the initial settlement with Kraft. When I view the pictures on the Web page and look at a Capri Sun, I can't make the image distinction. But maybe with in coming samples this will clear up. Overall I think that the TCBG packing is appealing and feel that the private label business will equal or top. ú The Patent: For self contained fluid dispensing system (utility). I think that Jon was stating that Volpack came up with the internal straw design, but for what ever reason did not go after the patent. By his own industry vision, he realized that this patent (along with Kraft settlement) could in fact hold off other potential entry's into this very promising industry. This patent most likely will be approved in the next 18 to 24 months and Volpak (or mother co.) is entitled to receive some type of royalty thereafter. I think Utility is a real key here, could this replace the oil can for your oil change? ú The Program: To sell packaging with the most efficient production (to make as much product as we can at a profit). Partnering up with retailers and building a structure for service (the foremost obstacle). Producing 100 pouch's per minute per machine based upon 50 minute hours. Strategically placing Volpak's across the country to minimize shipping cost (initially this expense has a lot of salt and pepper from Toronto). With more potential in the private label arena, less required advertising for "Brain Slush and Brain Forrest". I assume that these are aimed at the smaller chains that can't afford the private label. Again I think this is well thought out marketing. ú The Problem's: Volpak's first right of refusal thru March of 2000. Possibly some competition from the Volpak's in South America (this is the world economy). What about the one in Canada that can't be retrofitted and currently violates the Kraft agreement (what if it can be redesigned)? Who own these Volpak's and what are they bringing to market? Sweet ripe royalties on pouch (can someone help me on this)? Fully audited financials by Aug 30th? Maybe but I don't think so especially when we are moving to a new firm. Qualify for NASDAQ in the next 120 days? I will bet the North Lake on the farm on that one! But, I do believe both items will come to pass