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NuVimŽ managements thirty years of experience building consumer
beverage brands, their relationships with major supermarkets and retailers is beginning to
payoff in sales and recognition for their immune, muscle flexibility enhancement dietary
supplement beverages
Consumer Goods
Dairy Products
(NUVM. BB)
NuVim, Inc.
12 North State Route 17
Paramus, NJ 07652
Phone: 201-556-1013
Richard P. Kundrat
Chairman and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
September 8, 2005
BIO:
Richard P. Kundrat
Chairman and CEO
Mr. Kundrat has served since our inception as a director and our Chief Executive Officer.
He was elected as our Chairman of the Board in March 2000. He has more than 30 years
experience in the beverage industry, including a total of 27 years in various positions at
Thomas J. Lipton, Inc., the Lipton subsidiary of Unilever NV, Englewood Cliffs, New Jersey
("Unilever/Lipton") from which he retired in June 1996. Upon his retirement form
Unilever/Lipton, he founded the business management firm, Kundrat Associates, Mahwah, New
Jersey, which he operated full-time until he joined NuVim in September 1999. From November
1991 to June 1996, Mr. Kundrat was the General Manager of the Unilever/Lipton and
Pepsi-Cola partnership. From June 1987 to November 1991, he was the Vice President/General
Manager of the Foodservice, Bottler, Dairy Division at Unilever/Lipton. Mr. Kundrat
received his B.A. degree from the University of Scranton. He currently is a director of
Dialog Group, Inc
Company Profile:
We produce, distribute and market NuVim dietary supplements beverages, which contain
proprietary micronutrients derived from cow's milk known as MunePro and Accuflex. These
two micronutrients, in their patented formulation, have been shown in independent clinical
studies to help strengthen the immune system, support muscle flexibility and sturdy joints
when consumed over time in certain minimum quantities. NuVim dietary supplement beverages
are non-dairy, virtually lactose-free, fat free, caffeine free, gluten free and
cholesterol free. In addition to the immune, muscle flexibility,sturdy joint enhancement
NuVim contains in eight ounces 100% of the daily requirements of vitamins C, E, B12, Zinc,
30% vitamin A, 10% calcium and 6% protein with all 9 amino acids. It is the only beverage
on the market that provides all these benefits. This great tasting refrigerated beverage
is currently sold in most major supermarket refrigerated juice section on the Eastern
seaboard. The consumer selection is in three varieties; Orange Tangerine,
Strawberry Vanilla and Fruit Symphony. The 16 ounce size in plastic bottles is being
introduced to the away from home markets such as schools, business cafeterias,
hospitals and small stores and delis. We have a powder version that contains
all the same benefits as the refrigerated and will be introduced in the fourth
quarter of 2005. There are three varieties; Chocolate, Vanilla and
Strawberry. The consumer can just mix it with water or any juice, milk, yogurt and
even into their children's cereal.
Our goal is to become a leading provider of good
tasting dietary supplement beverages and beverage products that help consumers lead a
long-term quality of life by helping them maintain a healthy immune system and help build
muscle flexibility and sturdy joints. Managed by a Fortune 100 management team and a
renown strong active Board of Directors, we plan to build the NuVim brand into a
household name that stands for helping people stay healthy in all stages of life.
CEOCFO: Mr. Kundrat,
what is your vision for the company?
Mr. Kundrat: “The vision of the company is to provide
innovative beverages that the consumers recognizes as having a long-term health benefit in
terms of improving their long-term quality of life. We do that through our beverage that
has two exclusive micronutrients, MunePro™ and AccuFlex™, which are two
exclusive micronutrients help to build the immune system, flexibility and sturdy joints.”
CEOCFO: Will you tell us
more about the micronutrients?
Mr. Kundrat: “The two micronutrients that came from cow’s
milk are licensed to us on an exclusive basis worldwide with the exception of Asia and Australia,
by a company called Stolle Milk Biologics, Inc. (“SMBI”). There are
approximately 30,000 cows in New Zealand that through an immunization process produce a
milk with higher levels of immune, muscle flexibility enhancement properties. The lactose
and fat is taken out of the milk; and the milk is dehydrated and sent to us in powder
form, and we reconstitute it into the beverage. The process took about 35 years at a cost
of about $50 million. It encompassed about 150 biologists over that 35-year period and was
started by Ralph Stolle, who was an inventor and a dairy farmer. Ralph invented the way to
shine aluminum and he invented the way to manufacture the pull-tab lids of soda and beer
cans. Accumulating a fair amount of independent wealth, his promise was that he could make
a better milk. That is a sense of what he did over that 35 years, and 150 biologists and
$50 million.”
CEOCFO: What is your
flagship product?
Mr. Kundrat: “Our flagship product is NuVim™ ready
to drink beverages sold in 64-ounce cartons in the supermarket juice section along with
Tropicana, Minute Maid, and other juice beverages. It is in approximately 2500 major
supermarkets from southern Connecticut to Miami. These supermarkets include Shopright,
Pathmark Stores, Inc., Publix, Foodtown, Acme Stores, etc. It is sold in most of the
Wal-Mart Super Centers in the state of Florida.”
CEOCFO: Is it a test
program for Wal-Mart or is it done state-by-state?
Mr. Kundrat: “Our Wal-Mart test program started in
September of 2004. It started in one distribution center, which serviced about 40 stores
in Florida. Three weeks ago, we added a second distribution center and last week we added
a third. In total we are in the three Wal-Mart distribution centers that service most of
the Super Centers in Florida except the Panhandle, as well as portions of Georgia, and South
Carolina.”
CEOCFO: Who is your
typical user?
Mr. Kundrat: “We target women over 35; they are
purchasing 75-85% of the products that end up in the home refrigerator. They are the
easiest group to attract. At the age of 35 or 40, you begin to feel those aches and pains,
and you realize your body isn’t what it was when you were 25. It is time to recognize
that you should start doing some good things for your body. Although, the purchasers are
typically women over 35, the consumers include everyone in the family.”
CEOCFO: How do you reach
your potential user?
Mr. Kundrat: “We have used television and radio
commercials. We have done direct mail and account specific programs such as with Shopright
and Pathmark. We do sampling both in stores and in venues where we can find our target
audience. We sample with the major charities of the country and venues such as concerts
and sporting events.”
CEOCFO: Do you have
different plans for the future?
Mr. Kundrat: “We do. We are now testing promotional and
advertising programs that are more account specific and relying less on broad television
and radio commercials. There are several tests that we are conducting including direct
mail, e-commerce, sampling in-store and print advertising.”
CEOCFO: Where is the manufacturing of the product done?
Mr. Kundrat: “The manufacturing is done through a
co-packer dairy operation to ensure the highest quality products at the lowest cost. We
have a contractual agreement with the dairy. After manufacturing, we transport the product
into a common public refrigerated warehouse. The product is then shipped from that
warehouse with common carriers to the supermarket warehouse, and then the supermarket
warehouse distributes to the individual stores. With an eighty-three day shelf life from
production to consumption this allows NuVim to complete the manufacturing, warehouse and
distribution process with no direct capital employed against hard assets.”
CEOCFO: Will you tell us
about the financial picture?
Mr. Kundrat: “We started the company in late 2000; we
were able to obtain private equity funding and then we added some loans to that as we went
along. About mid- 2002, we had used all of the funding to begin to build a brand with the
anticipation that private funding would be available to us in the latter part of 2002, and
2003 and 2004. The financial picture changed immensely with private funding. We actually
went from mid 2002 until the early part of 2005, with virtually no money. The management
team did not take a salary during that time. The fantastic thing about this business is
that we maintained the distribution during that three-year period even though we did
virtually no marketing. In the consumer goods business, when you are a marketing company
and you have no marketing dollars, you lose distribution; particularly in major
supermarkets. That did not happen for the most part; we maintained the distribution. The
volume did fall, so we went from a company of about $3.5 million in revenue in 2002, to a
run-rate of about 5 or $6 million, to a company last year that did a million four. The IPO
that we consummated in June this year provided us some funding to stabilize the business
and begin to grow it again. We were able to accomplish a re-capitalization of the company,
both in terms of reducing debt and in the number of shares outstanding, but we will need
additional funding to accomplish our goals. Currently there are 4.7 million shares
outstanding. About half of those 4.7 million are locked up for six months to a year from
the date of the IPO.”
CEOCFO: Your goal is to
become “the leading provider of good tasting dietary supplement beverages and
beverage products.” How do you become a leading provider?
Mr. Kundrat: “There are six initiatives that we are
focusing on; the first is to expand the business at Wal-Mart and we have done that. In the
last two months, we have gone from one distribution center to two and now three. Wal-Mart
is the biggest retailer in the country; they have about 2,000 Super Centers and we are in
120 of them. The second is to align ourselves with other large retailers in the country.
The third initiative is to extend the brand with NuVim in a powder version. It has
everything that the ready-to-drink form has including, MunePro and AccuFlex, which help
build the immune system and muscle flexibility. The powder version will come in chocolate,
vanilla and strawberry varieties. You mix it with your favorite beverage; it makes skim
milk taste great and it only adds ten calories. It is good in kids’ cereal or added
to yogurt. This is a higher margin product than the refrigerated product. It will be sold
through infomercials and the website initially. From there, we plan to move NuVim powder
into the vitamin shops, general nutrition shops and drug stores.
The fourth initiative is to address food-service operations with our ready-to-drink
16-ounce in plastic bottles. There are about 700,000 away-from-home distribution points
available to us; we are in two or three hundred right. This includes distribution to
delis, cafeterias, schools, colleges, hospitals etc.
The fifth initiative on which we have just begun to
work is the military. There are about 170 commissaries in the country. Our plan will be to
start with the commissaries and move to being able to supply NuVim to troops both on base
and on the field.
The last initiative is to work on mergers and joint
ventures. NuVim is run by a fortune 100 management team and we all have extensive
experience in the beverage industry. Collectively we have probably taken about 250
products national in our careers. There are companies out there to potentially merge with
or joint venture with that need the management team, need the NuVim brand; it is a great
brand in the nutritional industry. We are seeking those partnerships.
Eventually, the exit strategy is to sell the company.
Like the consumer who is seeking to put better beverages and foods into their bodies, the
major beverage/food companies are seeking better - for - you products to make available to
their consumer base.”
CEOCFO: In closing, why
should potential investors be interested and what should they know that perhaps they do
not realize when they first look at the company?
Mr. Kundrat: “The reason investors should find an
interest in NuVim is that we have the right products at the right time in the right place.
We provide consumers with long-term health benefits to help them live a long-term quality
of life. We do this through our innovative beverages that contain two exclusive
micronutrients MunePro and AccuFlex, which help build the immune system, muscle
flexibility and sturdy joints. These beverages are protected with 89 world patents on the
ingredients and a patent on the process. We believe that the management team and Board of
Directors are comparable to many Fortune 500 companies. Our initiatives going forward
combined with the base of business we have established on the Eastern seaboard potentially
will make NuVim beverages consumer top of mind when they think about living a long-term
quality of life.”
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