Bionic Tonic by benbenzhou


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									Stock Price            $0.003B $.004 A      Bionic Products, Inc. has developed and tested a new
Shares Outstanding     496,000,000          category of functional energy drinks that appeal to a
Est. Float              95,000,000          broader consumer target than the traditional 18-24 year
Fiscal Year                 12/31           old males that consume the current energy drinks
                                            marketed today. Bionic Tonic TM builds upon the
       conventional energy drink nutraceutical base with a unique proprietary formulation that
       enhances human potential by boosting energy and mental wellness while suppressing the
       compulsive appetite for food. Various nutraceutical ingredients contained in the proprietary
       formula have properties that; aide in digestion, weight loss, stimulates circulation to the brain
       and enhances memory and learning ability. These elements will add a new dimension to the
       energy drink market that will appeal to women who are watching their weight and
       professionals in high stress jobs where decision making, mental acuity and motivation are
       key elements of success.

                           The Energy Drink Market
Alternative beverages, including energy drinks, are the fastest segment of the beverage
category. According to Market Research Group, the energy drink category has grown 440%
since 2002 to an estimated $6.6 billion in 2007. The report further estimated that the market will
grow to $9.0 billion by 2011. The growth has not gone unnoticed by the multinational companies
specifically, Coke and Pepsi. Pepsi has seen unprecedented growth in its non-soda category
while carbonated beverages have shown little or no growth over the last 5 years. To catch up,
Coke has gone on an acquisition binge culminating in the purchase of            Energy Brands
Inc. for $4.1 billion. Energy Brands is commonly known as in                       vitamin water
and had 2006 sales of $355.0 million. Coke paid 12x 2006 sales for the company!

Currently, the major brands in the marketplace are Red Bull, Rockstar and Monster. Hansen
Natural Corp. (NASDAQ: HANS) owns the Monster® brand and has experienced dynamic
growth over the last few years. As of December 20, 2007, Hansen’s stock price was $46.86
with a market cap of $4.32 billion. Trading at an almost 37 PE the stock is certainly reflecting an
expectation of robust growth the the alternative beverage market. With revenue of $809.17
million the company trades at over 5x sales.


                                        Millions of Gallons      Growth       Share of Volume

 Segments                                   2005         2006    2005/2006      2005        2006
 CSDs                                      15,396       15,284     -0.7%       52.9%       50.9%
 Bottled Water                              7,539        8,253      9.5%       26.1%       27.8%
 Fruit Beverages                            4,119        4,020     -2.4%       14.3%       13.5%
 Sports Drinks                              1,207        1,348     11.7%       4.2%        4.5%
 RTD Tea                                      555          701     26.2%       1.9%        2.4%
 Energy Drinks                                152          227     49.1%       0.5%        0.8%
 RTD Coffee                                    38           43     10.4%       0.1%        0.1%
 TOTAL                                     29,009       29,879      2.9%       100%        100%

    Any new regional brand must be differentiated from these top brands to succeed.

Bionic Tonic (BT) is such a brand. The “screaming green” packaging is differentiated from the
packaging currently available from these top national brands. This packaging will appeal to a broader
and more sophisticated M/F 18 – 40 year old consumer.

Additionally, BT’s proprietary blend of green tea, maca root, yerba mate, gota kola and other vitamin
infused ingredients cannot be found in these leading competitor’s products today. This unique
formulation addresses functional benefits beyond energy, as these ingredients are commonly used to
aid digestion, increase metabolism, assist weight loss, stimulate circulation to the brain, and improve

BT will appeal to consumers who previously tried and rejected energy drinks based on taste, sugar
content or efficacy, as BT contains no carbohydrates or calories, no medicinal or “nutraceutical” after-
taste, and provides sustained quality energy – not just a short burst of sugar and caffeine fueled
nervous energy followed by a “crash.” BT’s broader positioning as a truly functional energy drink will
appeal to consumers who are interested in food and beverage brands that offer health and wellness
benefits. These consumers are driving double-digit category growth in select beverage categories
such as energy, bottled water, ready-to-drink tea, ready-to-drink coffee and sports drinks.

With its unique blend of ingredients, BT is well positioned to appeal to consumers and retailers alike
with a brand positioning that goes beyond energy. Retailers respond favorably to brands that do not
simply steal share from within a category, but expand the category by bringing in new users through
added functional benefits or product/packaging innovation. BT will expand the energy drink category
by appealing to emerging M/F category users that are slightly older (18-40) and more sophisticated
through differentiated packaging and delivery of unique functional benefits beyond a strong dose of
BIONIC TONIC            TM

Bionic Tonic TM
                is an premium functional beverage with a unique blend of ingredients
addressing energy, health and mental awareness. The following are some of the unique

            Green Tea Extract – Green Tea is rich in catechin polyphenols, a powerful
            antioxidant which is credited with inhibiting the growth of cancer cells,
            lowering LDL cholesterol levels, and inhibiting the abnormal formation of
            blood clots. Green Tea is believed to aid digestion, increase metabolism and
            suppress appetite, which all contribute to proper weight management. Green
            tea is also a good source of vitamin C and fluoride to prevent cavities.1

            Maca Root - The nutritional value of dried maca root is high, similar to cereal
            grains such as rice and wheat. It contains 60% carbohydrates, 10% protein,
            8.5% dietary fiber, and 2.2% fats.. Maca is rich in essential minerals,
            especially selenium, calcium, magnesium, and iron, and includes fatty acids
            including linolenic acid, palmitic acid, and oleic acids, and 19 amino acids, as
            well as polysaccharides..2

            Yerba Mate - Mate contains xanthines, which are alkaloids in the same family
            as caffeine, theophylline, and theobromine, well-known stimulants also found
            in coffee and chocolate. Mate also contains elements such as potassium,
            magnesium and manganese.. It is commonly used as a “caffeine free”
            stimulant and lacks the negative side effects commonly associated with
            caffeine such as jitteriness, heart palpitations, diarrhea, and anxiety.3

            Gota Kola – Is referred to as the “memory herb” as it is believed to stimulate
            circulation to the brain and increase learning ability.
BT’s target market intersects energy and health lifestyle drinks at the premium level. Analog or
comparable products include bottled water, sports drinks, energy drinks, and ready-to-drink
(RTD) coffees and teas. Their respective markets and the overall liquid refreshment beverage
(LRB) market underline BT’s market potential. Indeed, these sectors embody the energy,
functionality, and fun that BT represents, and display robust growth trends that bode well for BT.

                                   BT Target
                                   Liquid Refreshment Beverages


                         Energy                                    Sports
                         Drinks               Bionic

                                  Specialty               Ready-
                                  Coffees                   to-
                                   Drink                   Drink
                                  Coffees                  Teas

         Functional Beverages: BT benefits through “Health Halo”

BT will enjoy a “health halo” sales benefit through strong consumer communication of its added
physical and mental functionalities in addition to its energy attributes. BT will be merchandised
adjacent to or with other fast growing functional beverages at retail locations. U.S. liquid refreshment
beverage market grew by 2.9 percent in 2006 due to strong growth from bottled water, RTD teas,
sports and energy drinks. These beverages are considered functional and are growing at a faster
rate than carbonated soft drinks (CSD). Although CSDs accounted for more than half of total liquid
refreshment volume, its share is decreasing and beverages with a health halo or functional benefits
are growing at a faster rate. Energy drinks, led by Red Bull and Monster brands, continue to chart
astronomical growth, although somewhat lower than previous years.
The energy drink category launched in the U.S. with the introduction of Red Bull in 1997. Less than
10 years later, the energy drink category is $3.4B in retail dollars and growing more than 53%
annually, making it the fastest growing segment in the beverage industry.1

The $3.4B energy drink categoryi continues to be the fastest growing segment in the beverage
industry, +53% in retail dollar volume versus year agoii... The category is dominated by three top
brands with national distribution: Red Bull, Monster and Rock Star, and numerous regional and start-
up brands. In this highly competitive category, a brand must be strongly differentiated from the
market leaders while maintaining a laser focus position targeting the core consumer... BT’s physical
and mental benefits, in addition to quality energy, will the drive desirable results.

                                    Energy Drinks – Retail $ Volume ($ Millions)








         Source: IRI period ending July 17, 2006 (Excludes Wal-Mart, Gas & Convenience and On-Premise channels)

Energy drinks also continue to be the strongest growth driver of the U.S. liquid refreshment beverage
market, reaching a volume of 227.4 million gallons in 2006. The category experienced a 109.8-
percent volume growth in 2001 as category leader Red Bull took off. Growth then slowed slightly
before jumping back up again, reaching almost 80 percent growth in 2005, perhaps spurred on by all
the new energy drink introductions in the market.

                         ENERGY DRINK VOLUME GROWTH
                                2000/2001       109.8%
                                2001/2002        52.9%
                                2002/2003        54.9%
                                2003/2004        64.0%
                                2004/2005        79.2%
                                2005/2006        49.1%
                               Key Success/Growth Factors
The success of analog/comparable products underlines various key success factors that can be
applied to BT.

Product Innovation

Brands have differentiated themselves by type (e.g., the bottled water market includes enhanced,
spring, and purified water products), functionality (ranging from energy to mental acuteness to athletic
performance), flavor, and low calorie/carb count.

Packaging Innovation

Innovative packaging helps to match products with various consumer lifestyles and preferences:
sizes and shapes ranging from 8 oz. to 1L PET, multi-packs of 6, 12, 24 and 36 units, closeable sport
caps, wide mouth bottles, slim “designer”/premium cans and label design create consumer appeal for
an otherwise commodity product.

Distribution and Merchandising

BT’s analog/comparable LRB products are popular and profitable. Some, like bottled water, are
“destination driver” in retail channels. Grocery chains feature bottled water sales on the front page of
home-mailers to drive foot traffic. High consumer demand for these products has led to increased
retail shelf sets and expansion into drug, mass and club retail channels. Most gas and convenience
retailers now stock full doors of these analog/comparable LRB products. Conventional grocers stock
multi-packs on warm shelves and full doors in cold boxes. Just five years ago retail distribution
channels rarely carried these analog/comparable products. Now, however, these energy/functional
items are regularly stocked and are merchandised together with sports drinks, bottled/enhanced
water, and RTD teas and coffees.

BT will target specialty retail channels (GNC, Vitamin Shoppe), gas and convenience stores,
fitness & health clubs, drug stores, conventional grocery stores, club stores and mass outlets.

BT will be distributed by independent food & beverage distributors who provide direct-store-
delivery (DSD) service to their retail customers. BT will also be supplied directly to retail chains
through their central warehouses.


BT’s analog/comparable products are generally impulse purchases, with the exception of bottled
water purchased for regular home consumption. For example, the fastest growing LRB segment,
energy drinks, have been impulse purchase items consumed immediately after purchase. This is still
the dominant purchase pattern for the category, as the gas & convenience channel accounts for 67%
of total category retail volume. Conventional grocery is the second largest channel for energy drinks,
accounting for 26% of retail volume.
Sales Promotion

The Company will provide sales-based incentives for brokers, distributors and sales representatives.
Brokers will be rewarded on a percentage of sales for securing retail chain distribution. Distributor’s
sales reps will be eligible for $/case spiffs based on minimum case thresholds sold into retail stores.
BT sales personnel are eligible for performance based financial rewards based on: securing
distribution contracts, closing retail chain sales agreements, and meeting merchandising standards.

                                      Marketing Strategy
It is critical BT reaches out to and appeals to core category users. There are two key strategic
priorities for the BT marketing platform:

Targeted Conventional and Grassroots Marketing:

           1. Establishing a strong brand presence near urban centers with a large daytime
              workforce, student populations, health-oriented/active adults (18-40 year old bracket):

                   a. Explore targeted billboard, transit shelter and kiosk media presence in high
                      traffic corridors

                   b. Penetrate 3rd party distributors specializing in “up-and-down-the-street” retail
                      outlets in metropolitan centers: bodegas, independent grocers, gas and

                   c. Penetrate distributors who handle “Business & Industry” accounts:           offer
                      product to professionals in their place of business

                   d. Target specialty retail: gyms, spas, nutrition

           2. On-Premise Activation:

                   a. Bar and nightclub awareness: target appropriate venues frequented by peer
                      influencers with sampling and promotional material

                   b. Develop bartender/manager incentive programs to promote “brand advocate”
                      behavior, i.e. sales contests based on cases sold

                   c. Sponsor BT nights with free samples and cocktail-recipe contests

           3. Off-Premise Activation:

                   a. Participate in strong in-store retail programs for conventional grocery, drug
                      and mass channels: feature ads, display programs, electronic marketing
                      (club card activation)

                   b. Cross-category promotion:       align with like-minded consumer product
                      companies with similar consumer demographics, including but not limited to
                      diet bars, energy bars, workout gear and urban spas.
                    c. Develop distributor incentive programs to promote top-flight merchandising
                       efforts from distributor sales and merchandising teams

            4. On-Campus and Near-Campus Activation

                    a. Hire student brand advocates at key college and university campuses to
                       represent the brand on campus: establish public relations efforts with school
                       media, organize sponsored events during Rush Week, Spring Break, and
                       home football game events

                    b. Establish distribution at on-campus and/or near-campus retail establishments
                       (both on-premise and off-premise)

            5. Strong on-line presence featuring downloadable BT artwork and user-friendly website

            6. Informative and educational website that clearly communicates the efficacy of BT

            7. Comprehensive Pay-per-Click (PPC) campaign and search engine optimization to
               drive website traffic

Top flight merchandising:

            1. Leverage the strong graphic branding of BT with window posters, static clings,
               suction racks, side-stack displays and shipper units.

            2. Penetrate alternative distribution channels and supplement retailers

            3.   Provide strong performance-based incentives to distributors and merchandisers to
                 maximize in-store presence.

Key marketing drivers include:


Product sampling is the foundation of BT consumer marketing platform. Sampling teams will target
both retail and event venues. Product samplers will be comprised of the target-audience peer group
and will be attired in appropriate BT sampling apparel. Sampling teams will distribute product and
will be well versed in the brand story, able to communicate consumer information and handouts
appropriate for the venue.


BT is available in a 16 oz can with graphics and brand messaging that distinguish on the shelf.
Consumers will immediately understand that BT is a lifestyle drink that transcends energy drinks by
offering extraordinary functional benefits.

Energy Plus

BT will go beyond energy drinks by offering quality, sustained energy combined with general health
and active lifestyle functionality, under a premium brand.
Public Relations (PR)

The BT PR team will fully exploit the innovative, revolutionary nature of the product by targeting
appropriate online, print and broadcast media vehicles with a comprehensive brand launch package.
The PR effort will focus on reaching publications and online sites covering the following industries:
food & beverage, active lifestyle, and health & wellness...


BT will be competitively priced with like premium-positioned 16 oz analog/comparable products from
$1.99 to $2.49. BT will provide distributors and retailers price promotion incentives at rollout and
once per quarter thereafter. BT’s pricing architecture ensures industry-standard margin expectations
are met throughout the supply chain while achieving the target retail price.

                                      Management Team
JD Pulver (President, J. Douglas Group, Inc.) Consultant/ VP/Director & Treasurer

Bionic Products, Inc. Trading Symbol: BNPD

Darin Ezra (Power Brands, LLC.) brings over a decade of experience in the Consumer Packaged
Goods (CPG) industry. Darin founded SunWorld International (SunWorld), a company that
specialized in the import and distribution of CPG brands. SunWorld acquired the import and
distribution rights for top selling U.S. brands in Southern Africa, including Celestial Seasonings, Ice
Drops and Energy Now (a top selling energy tablet in the U.S.). After two years of operating and
growing the company, Darin sold his interest in SunWorld to IS Distributors (IS), the agent for The
Dial Soap Company and Freeman Cosmetics, in order to relocate his business to the U.S. Darin
formed Big Brands, which manufactured and distributed CPG brands in 30 states and abroad.
Darin’s responsibilities included all design, development, packaging, marketing, and operations of the
business. Big Brands successfully launched Mad Bull Energy Drink in the U.S., then developed and
launched the popular Wild Buzz Energy Drink. After selling his interest in Big Brands, Darin launched
several successful beverage brands, including Go Girl Energy Drink and Kabbalah Energy Drink, and
is a sought after consultant in the beverage industry.

Martin Molina (Power Brands, LLC.) manages all strategic marketing efforts for Power Brands...
Martin brings over 12 years of food & beverage marketing experience with industry powerhouses
such as Nestle U.S.A and Pepsi. Martin began his CPG career as a research analyst with A.C.
Nielsen before joining Nestle U.S.A and progressing through brand management ranks on brands
including Nestle Sweet Success, Nestle Carnation Baby Formula and Nestle Carnation Baby Cereal.
Martin’s beverage experience includes over four years of channel marketing experience within the
Pepsi Cola system. Most recently, Martin led the strategic marketing efforts for Light Force Water
Source, a start-up incubator for new energy drink brands.

                                      Company News

        •   Bionic Products, Inc. Shareholder Update and Progress Report for 4th Quarter 2007

            Marketwire (Mon, Nov 26)
All statistics from IRI, Beverage Marketing Corporation, or Lexis Nexis, unless otherwise noted.

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