While there are many energy drinks and specialty beverage suppliers providing product in the market, there is still a great deal of room for new business. Most importantly, there is room for new business that understands the need for high-quality service and sales support - in addition to next generation products at competitive prices. EPIC has clearly defined ourselves by offering total energy drink solutions at largely discounted prices compared to that of leading brands. Our product lines will have prices that are 30-40% less than leading energy brands. Coffee is the second largest commodity market next to oil. The specialty beverage industry, which includes energy drinks, is growing at an equally strong pace, with sales growth projected to grow at rates as high as 40% per year. Along with that, consumers age 18-34 years old prefer energy drinks over coffee; strengthening the fact of continued future growth for the energy drink market.
EPIC Brands, LLC {hereinafter known as EPIC} has been providing energy drinks to consumers throughout the Oklahoma market for the past three years. EPIC currently owns the Oklahoma distribution rights for a premium energy drink, and we are close to launching our own energy brand that will be called EPIC Energy Drink; which is a next generation energy beverage. The principal owners of EPIC are Chris and Trisha Barnes, whose combined experience brings company management, a high level of customer service, and over 20 years in distribution and sales management. At this time, we are seeking additional equity capital to compliment our initial personal investment. We have firm commitments from our existing distribution outlets to distribute several high-quality new age energy products, and have verbal commitments from current independent retailers, restaurants, bars, casinos, and nightclubs throughout the Oklahoma market to carry EPIC products. We plan to distribute our first products within 30-60 days of finalizing financial arrangements. Sales projections for EPIC are estimated to begin at approximately $800,000 the first year, increasing approximately to $1,500,000 in Year 2, and approximately $3,500,000 in Year 3. Our net profit for the Oklahoma market is projected at approximately $400,000 the first year, increasing to $2,500,000 by the end of the third year of operation.
Energy drink growth offers excellent opportunities for new energy drink companies or lines of products to enter the market, and we are excited about the possibilities of what EPIC can accomplish within this growing market. Studies show that Millennials are not brand loyal; which again gives new brands growth potential. As the first generation of energy drinkers begin their early 30’s, and the energy drink segment becoming increasingly aware of ingredients and their effects, EPIC has created energy drink 2.0 and alleviated the trending negative characteristics of first-generation energy beverages. EPIC will offer energy flavors that are not only FDA compliant but also next generation drinks with less sugar, less carbonation, more all-natural sweeteners, and no harmful artificial sweeteners in the sugar free versions.
EPIC has seen over 36 months of profitable business results with the current energy brand we market and distribute. Our gross sales with this brand have topped $300,000 annually with no marketing in place. That being said, we will be replacing this brand with EPIC Energy Drinks and have immediate distribution in over 2,000 on- and off-premise locations as we already have a contract to distribute EPIC Energy Drinks with one of the largest distributors in central Oklahoma. With our high quality, detailed sales training coupled with bonus incentives offered to our distributors' sales staffs, we'll see immediate success in product placement. Those factors combined with our innovative marketing plan make for a largely successful energy brand.
EPIC's current competitors have had a difficult time offering consistent, quality products with a competitive pricing structure. As well, these competitors quickly create a “three-headed monster” they must feed in marketing and distribution efforts. Moreover, the majority of energy beverages on the market have consumer feedback citing multiple issues in regards to their formulation. Those issues range from causing heart palpitation to upset stomach and heart burn along with being overly carbonated, having a vitamin flavor, and bad aftertaste. However, the two biggest negatives consumers have brought to light for most energy beverages are the physical and mental crash from drinking them and the cost of purchasing such drinks. Some energy beverages can cost more than $3 per 16 ounce can. That said, a majority of the energy beverages already on the market have ingredients such as glucuronolactone, inositol, and aspartame; which all have a negative stigma amongst consumers because of the consumer reported side effects.
Our teams, in parallel with our distributors, initially penetrate the bars, nightclubs, and restaurants of a given market through strategically planned promotional events designed to parallel product awareness and branding with product consumption and sales. This technique has proven to succeed in every market we have engaged. Since we are already in these places with our current brand and are keeping with the same flavor profile as that brand, our promotional teams will merely sample the EPIC brand of drinks to those already familiar with us. EPIC offers a total energy drink solution in that we are innovative in our formulation by lessening and replacing the amount of sugar in these drinks with all-natural sweeteners, lowering the carbonation, and getting away from negative characteristics of first generation energy beverages such as artificial sweeteners like aspartame. Lastly, with flavors that are appealing, our pricing is up to 40% lower than other leading brands giving consumers a better product with a better taste at a better price.
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