Headquartered in Bala Cynwyd, PA, and operating in the rapidly evolving enhanced water/sports drink/beverage industry (which has seen such spectacular successes as Snapple and Arizona Iced Tea), Skinny Nutritional Corporation’s business model revolves around Skinny Water®.
This proprietary, water-based product, which contains no sugar, sodium, or preservatives, is augmented with key electrolytes, antioxidants, and vitamins. Offered in nine unique flavor medleys based on 100-percent natural flavors, the Skinny Water line includes: Acai Grape Blueberry, Peach Mango, Mandarin, Raspberry Pomegranate, Orange Cranberry Tangerine, Lemonade Passionfruit, and – as part of its line of Sport’s drinks – Blue Raspberry, Pink Berry Citrus, Goji Black Cherry and Kiwi Lime. The Raspberry Pomegranate flavor features the clinically tested weight-loss ingredient, Super CitriMax (hydroxycitric acid or HCA), plus a healthful blend of calcium and potassium.
In addition to its line of beverages, the company also owns a number of Skinny-related trademarks in both the Snacks & Meals category and the Advertising Slogans niche. In this latter, use of the word “Skinny” targets a very specific segment of consumers, namely those who are health conscious and want to lose or maintain an ideal weight. This market is comprised of five segments, according to a 2010 Nielsen study based on National Marketing Institute data. These five include Magic Bullets (24 percent), or consumers who believe that supplements, Rx, and pills will help them reach fitness goals, and the Eat, Drink & Be Merries (22 percent) – a segment that measures younger shoppers looking for intense natural flavors on a budget. According to a 2009 Euromonitor estimate, by 2012 the global health and wellness market is expected to be valued at more than $550 billion, with the healthy beverage industry turning away from carbonated soft drinks to products like juices and sports (energy) drinks.
The company’s business strategy aims to take advantage of this trend by developing a variety of healthy weight-loss foods and beverages capitalizing on the Skinny trademarks: Skinny Water ®, Skinny Tea®, Skinny Shakes®, Skinny Java®, Skinny Smoothies™, Skinny Bar™, Skinny Snacks™, SkinnyTinis™, and others. Management is also looking at the development of new products, including new Skinny Water flavors and pure water with balanced pH+ electrolytes, as well as Teas, Shakes, Smoothies, and Javas.
Utilizing its chain of about 50 United States distributors and three international vendors, the company is able to place its product on shelves in approximately 15,000 stores, providing a market driver in brand recognition that will yield a significant footprint in the expanding new age beverage operation. This network of retailers includes: 7-Eleven, Ahold, CVS, Harris Teeter, select Walgreens stores, Shop Rite, SuperValu, Target, and Wegmans.
Another distribution network focuses on direct-store-delivery (DSD) beverage distributors, such as Canada Dry Bottling Company of New York, Canada Dry Delaware Valley, Canada Dry Potomac, Hensley Corp, Polar Beverage,7Up Reno, 7Up Modesto, and many others throughout the continental U.S.
Finally, the company’s focus on health, fitness and community, coupled with a quality product that appeals directly to a core consumer market looking for a healthful drink without a lot of gimmicks, empty calories, or exotic and potentially harmful ingredients, is sure to appeal to shareholders looking for an equally valuable, non-gimmicky investment.
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