In our last part of the interview, we continued speaking with CEO Bob Yates and Exec VP Paddy Shea of The Pulse Beverage Company. Topics we touched on were money funding Hubert's, distribution in major chain stores and possible international deals. If you happened to missed the first part of our interview, you can read it here. Here is the conclusion to our exclusive interview.
NBT: Give us an update on the Pulse brand.
Bob: What we have done on Pulse is we have worked on flavors for a long time. Our final flavors are done. We had to change a couple and as soon as I final samples, I will send them to you. I think if anything we exceeded the flavor profile that we have in Cabana. I mean they are incredible. We have a pomegranate blackcurrant that should be illegal. We have a strawberry grapefruit that tastes like you went to the Farmer's market and bought fresh strawberries and mixed them with the pink grapefruits. The flavor work has been incredible. It was a lot of work to overcome the pharmaceutical properties of the product and the end result has been nothing less than phenomenal. The flavors are in place and we are in the process of cutting the molds for the bottle which will take about four weeks. Zuckerman is doing that for us, and we are pretty well ready to go. I expect to see the first prototypes out in six weeks. We are waiting on only one thing, shelf life. We have to do shelf study which we are doing right now, and that's where they accelerate the life of the product so that we can determine what our shelf life is. I would say that being logical we will be in the marketplace in the Fall with this product, and it will be an exceptional product. We could have been out a couple of months earlier with a good product but we are now coming out with an exceptional product.
NBT: Every higher-end supermarket I go to there is one beverage I have never seen before which has the vitamins in the bottle cap. When you twist the cap off the stuff falls into it, and then you shake it up. It tastes like bad children's aspirin.
Bob: Yes. There are not many good products out there that compete with our Pulse product. What we have to educate the public on, and we hope to have Dr. Peeke to be able to do some interviews for us, and explain it to the people that really understand nutrition is the Nanotechnology that we are using. It was a great marketing concept for VitaminWater to go up and say drink Vitaminwater. People drank it because they thought it had to be better for them because it has vitamins in it. It has 100% amount of Vitamin C. Unfortunately you are not going to get the benefit of the 100% of the Vitamin C. It is in the bottle except that there is nothing to keep it in your system. There is nothing to bind it too. It's going right through you. Our product binds substantial nutrients and vitamins with your system. It's like eating an apple, or eating a carrot, as opposed to drinking carrot juice or apple juice, and our product has fiber that slows down the process of sugar turning into glucose, and that's the way you want it. You want it more evenly distributed. You don’t get into the heart scenario where sugar is rushing to your vital organs, and all of a sudden you are building fat in your arterial areas. It's important, and it’s a product that as time goes on, and as we are able to, and we will continue to improve this product, and people will buy into the concept of this product. Right now it's something that's different than anything on the market. This is really bringing into the mainstream a product that is good for you that's going to do good things for you, and has science behind it to prove it. And that's going to be totally different.
NBT: What you are saying is that the good stuff that's in it is much more bio-available because of the combinations and nanotechnology.
Bob: Yes that's correct.
NBT: More bio-available and therefore more absorbable to the body?
Bob: You are going to have more vitamins and nutrients absorbed through drinking Pulse than you are any other beverage. It’s not inexpensive to develop nanotechnology. They have to spend a lot of money on it, and its extremely important that the vitamins and nutrients that we offer have a way to stay in your system, the way to enhance it. Cabana was our first offering because we knew it would sell easily. We knew it would do a lot of cases, and we knew that it would certainly help us as far as our ability to establish a distribution system quickly and inexpensively to then red carpet Pulse. With Pulse, we expect it to gain a life of its own.
NBT: Pulse’s price point will be?
Paddy: There is a product out called Neuro. I don’t know if you have seen at a restaurant. Neuro is what I'm looking at as a sales manager as our focus point. We have a much better product than Neuro and their price point right now at convenience stores is $2.49. We are going to be somewhere in that territory. Neuro is doing quite well at that price point as well just so you know.
I mean it’s a whole different entity when we get into neutraceuticals and what we call a NutriPurpose product. It costs a bit more to produce and we think the consumers are prepared to pay more for that type of product, so that's really where we are focusing in, and we are going to be going primarily after the Neuro customer, and obviously given them a much higher quality products. Pulse price point will be about $2.49 in the convenience stores and about $2.19 or $2.29 in the grocery chains.
NBT: The Neuro product confuses me. It’s over diversified given the 10 choices that Neuro offers. It seems to me to be confusing, and it’s in a small bottle. I assume you are going to have a little more product on the area per serving or per glass (its 12 ounces).
Bob: We will be 16.9, so we will deliver more product in a glass container which has always been considered the premium product in glass than plastic. The one thing we want to be careful of is we don’t want to price our product too low. When you look at Adena the one John Bellos developed just recently, they have already gone out of business. Their product hit the shelves and they got a little scared because their product wasn't moving so they cut their price, and the consumer of course bought it at a lower price. When they tried to raise their price back the consumer said well, this is only worth $0.99 because that’s what I paid for it before and they perceive it’s been a lower quality product. If your price is too low, the perception of quality is lowered also.
NBT: Pricing strategy is incredibly important in consumer products. No questions. Alright, so how many flavors do we think we are coming out with?
Bob: We are going to have three health platforms and five flavors: for the women's health you have the blueberry, and the white grape cucumber, for the men's health you have the pomegranate blackcurrant, and you have the strawberry grapefruit and the one heart health is going to be the cranberry mango.
NBT: How is the sales team coming?
Bob: We added someone that Paddy and I really wanted to hire last year and we feel we are finally in a position to hire. Tim Brown is a top guy with Hansen's and he's been around quite a long time in the Midwest. He was President of Tradewinds Iced Tea and has extensive knowledge in the beverage business. He didn’t like the direction at Hansen and we were able to hire him for less money than he was making at Hansen's because he just didn’t like where it was going, and so he came on board with us. We also just hired a gentleman to handle the Minnesota, Dakotas, Wisconsin, Illinois area for us. He came very highly recommended and has experience with Red Bull and Fuze. We have a lady that is a district level manager for us who would be handling all of the merchandizing and extension of line at Hy-Vee plus other supermarkets in the Midwest, should be in the Missouri, Nebraska, Iowa, Kansas doing that for us, and she is a very experienced gal in that area.
Paddy: And our next hire would be a district manager in the Northeast.
NBT: 34 states now and you think on target for 50 states by the end of the year.
Bob: That's our target, and that's what we are going to do. We are bringing on a number of states as you know on a weekly basis.