Augment and employ effective supply chain management to develop cost-effective, prompt, reliable production, inventory, location, transportation, and information strategies to promote GIVESCENT’s profitable presence in the wellness industry as an organic and natural personal care business focusing on fragrance and body scrub products while remaining a responsible community partner.
2
ABOUT THE COMPANY, CSR, PRODUCTS
INVENTORY MANAGEMENT
CORE COMPETENCY COMPETITIVE ADVANTAGES
SOURCING AND SELECTED SUPPLIER (BODY SCRUB)
WELLNESS INDUSTRY AND ORGANIC AND NATURAL PERSONAL CARE MARKET PENETRATION
QUALITY MANAGEMENT
COMPETITIVE LANDSCAPE
INFORMATION TECH-PACK
CUSTOMER PERSONA
SUPPLIER PURCHASE ORDER
OMNICHANNEL SELLING
SELECTED RETAILERS AND PO
EXTERNAL ANALYSIS (PESTS)
DC, WAREHOUSING, DISTRIBUTION AND TRANSPORTATION STRATEGY
COSTING PRODUCTION PLANNING AND DEMAND FORECASTING
PACKAGING AND LABELING
RETURNS MANAGEMENT EXPANSION PLAN AND GOALS
3
ESTABLISHED IN 2011 NEW YORK ROOTS; LOS ANGELES OPERATIONS WOMEN-OWNED NATURAL FRAGRANCE AND SKINCARE BUSINESS COMPANY CULTURE: WELLTHY LIVING AND A GIVING SPIRIT GLOBAL CUSTOMERS $1 MILLION ANNUAL REVENUE FROM FRAGRANCE SALES 4
Charities that support women worldwide ● ● ● ● ●
EMPOWERMENT CRISIS AND POVERTY STABILITY AND SELF-SUFFICIENCY $2.45 PER BOTTLE 429,000 WOMEN
5
Manufacturing of naturally derived products reduces pollution by decreasing reliance on petroleum-based products Avoid obsolescence of natural raw material through real-time demand replenishment and accurate forecasting Select eco-friendly full supplier No animal testing Recycled packaging Recyclable components/consumer partnership Ground transportation safety and fuel efficiency (reduce emissions) Monitoring compliance with federal and state labor laws Enforce GS Compliance Policy and conduct midline and pre-production final quality inspections
6
Experts in minimal essential, organic and natural oil combinations Almost identical raw materials in both fragrance and body scrub products â—? supplier core competency consistency â—? opportunity for future supply chain consolidation A part of growing wellness industry Strong CSR that connects to target customers
7
FRAGRANCE (5 ml/.017 oz.; .17 ml/.005 oz.)
BODY SCRUB (8 oz./335 g.; 3 oz./85 g.)
Essential Oils: ● Bergamot ● Mint ● Lemon ● Orange ● Amber ● Vanilla
Organic Raw Sugar Various Essential Oils Organic Fractionated Coconut Oil or Natural Sweet Almond oil Parfum Oil
Organic Fractionated Coconut Oil or Natural Sweet Almond oil Parfum oil GIVESCENT is free of alcohol, formaldehyde, parabens, phthalates and sulfates.
8
GIVESCENT - .00025%
Trillion Dollar Industry Beauty and Anti-Aging - $999b GIVESCENT NET WORTH - $2.5m Healthy Eating - $648b Fitness, Mind-Body - $542b Spa - $99b
9
The global organic personal care market is expected to reach $25.11 billion by 2025; 8-10% per year growth Approval by the USDA and FDA for the use of organic products in various personal care products is fueling the industry growth Technological innovations have created cost-effective product lines Fragmented industry with numerous players; small companies in North America and Europe are competitive particularly domestically North America and Europe top markets in revenue for organic personal care; e-commerce is a strong channel Globally, skin care will be the no. 1 personal care category between 2014-2025; cosmetics no. 4 Body scrub is a top 5 category in skin care; fragrances are 10% of cosmetics
Millennials are the largest demographic for skin care spend
10
11
100% PURE
AradĂŠ Beauty
Herbivore Botanicals
Organic & Natural Skincare All-Natural, toxin-free, paraben-free, sulfate-free Eco-Friendly Recyclable and reusable packaging Ethical Vegan, cruelty-free, made in USA
Organic & Natural Skincare 96% natural ingredients, soap-free, paraben-free, sulfate-free Eco-Friendly Socially sustainable, follow social, ethical, and scientific guidelines Ethical Cruelty-free
Organic & Natural Skincare All-natural, non-toxic, paraben-free, sulfate-free, organic Eco-Friendly GMO-free soy wax, recyclable & reusable packaging, food grade Ethical Cruelty-free, made in small batches in USA
Price Range | $35 - $70
Price Range | $16 - $88
Fragrance: No Body Scrub: Yes Oils: Yes
Fragrance: No Body Scrub: No (face scrub: yes) Oils: Yes (Elixers) 12
Price Range | $15 - $55 Fragrance: No Body Scrub: Yes Oils: No
Indie Lee
Little Barn Apothecary
True Botanical
Natural & Organic All-natural, non-toxic, paraben-free, sulfate-free, organic Eco-Friendly Sustainably sourced & produced Ethical Cruelty-free
Natural & Organic Skincare All-natural, Certified Organic Eco-Friendly Certified Organic, wild harvested Ethical Cruelty-free, made in small batches in USA
Natural & Organic Skincare All-natural, paraben-free Eco-Friendly Organic Ethical Cruelty-free, made in California
Price Range | $28 - $130
Price Range | $16 - $78
Fragrance: No Body Scrub: Yes Oils: Yes
Fragrance: No Body Scrub: No Oils: Yes
Fragrance: No Body Scrub: Yes Oils: Yes
Price Range | $40 - $375
13
SHE IS A MILLENNIAL WHO SPENDS APPROX. 50% OF HHI ON LUXURIES BUT IS NOT OVERLY IMPRESSED WITH HIGH PROFILE LABELS SHE IS AN INFORMED CONSUMER SHE FINDS HAPPINESS IN NATURAL AROMAS SHE READS FITNESS and SHAPE MAGAZINES SHE ENJOYS PURE BARRE CLASSES SHE MAINTAINS REGULAR SPA APPOINTMENTS SHE PRACTICES YOGA AND MEDITATION SHE EATS CLEAN AND ORGANIC FOODS SHE IS COMMITTED TO WOMEN’S CAUSES AND ENVIRONMENTAL SUSTAINABILITY 14
Company Website 75% of Total Product Limited Edition Product Gift Sets
Wholesale to Retailers 25% of Total Product Fitness and Yoga Studios* Resorts and Spas* Apparel Boutiques Cosmetic Stores General Retail Boutiques 15
U.S. MACRO-ENVIRONMENTAL ANALYSIS POLITICAL T-TIP - European market, relations with Mexico, NAFTA - export to Mexico and Canada; trade negotiations with U.K.; instability of U.S. Executive Branch
SOCIAL
SUSTAINABILITY
Rise in demand for STEM employment and labor; growing interest in wellness culture
ECONOMIC Low inflation rate, fairly steady employment rate, highly industrialized country, agriculture country, tax origin and destination states; weakening $
Millennials interest in sustainability; federal and state workplace regulations; federal emission standard; repeal of federal pro-environmental policies
TECHNOLOGY Silicon Valley prominence; innovations for e-commerce sales; innovation in production of personal care products; full eco-friendly personal care suppliers
16
$125k max. total growth investment based on estimated net worth of $2.5m $10-$15 per unit cost including: ● ● ● ● ● ●
Raw Materials (Natural and Organic) Primary Packaging and 3 in. Tbsp. Spoon Tool Adhesive Labels, Seals, Shrink Wrap Secondary Recycled Paper Packaging Packout Components, Tissue, Bubble Wrap Customized Formula Development ● ● ● ● ● ● ● ● ●
Inbound Logistics from Supplier Outbound Logistics for Distribution Labor Amortized DC Buildout Insurance Inventory Technology (VMI, EDI) Outsourcing Demand Forecasting Storage Facility Inspection Travel and Other Admin. 17 Costs
SIGNATURE SCENT
SIGNATURE SCENT
19
Eight (8) general scrub assortments with 8 SKUs (8 oz./3 oz.) ● Signature, Green, Orange, Azure ● 8 oz. - $42 ● 3 oz. - $29
Approx. nine (9) months for custom formula; generally, six (6) to eight (8) week lead time; execute exclusive formula agreement
Four (4) assortments of limited edition heart with 4 SKUs (8 oz.) ● Signature, Green, Orange, Azure ● $50
Twelve (12) gift set assortments with 12 SKUs ● Signature, Green, Orange, Azure ● Fragrance 5 ml, 8 oz. scrub and 3 oz. scrub $115 ● Fragrance 5 ml and 8 oz. scrub - $85 ● Fragrance 5 ml and 3 oz. scrub - $75
Fragrance production will replenish in accordance with current inventory management strategy for the approx. $20k units sold at $49 per unit annually but with the 20 increase needed for gift set assortment demand
Outsourcing initial demand forecasting General peak selling seasons for fragrance - winter holidays, Valentine’s Day, Mother’s Day (also daily product for most fragrance consumers) General peak selling seasons for 8 oz. body scrub - winter holidays, Valentine’s Day, Mother’s Day, late Spring and Summer to exfoliate dry winter skin Peak selling season for 3 oz. scrub - late Fall and late Spring for North American and European holiday travel seasons Replenishment based on real time sales from VMI With weekly usage, the 8 oz. body scrub is expected to last approximately four (4) months
21
Selected Scrub Supplier: Essential Wholesale Labs (MRP and JIT) ● Focus on establishing consistency and stability Maintain current fragrance supplier(s) ● Proven record Total Initial Scrub Order: 8746 units for individual unit sales and gift sets MOQ Retailer: 108 units Safety Inventory Level (monthly): 625 units (3 oz.) | 625 units (8 oz.) NetSuite Cloud VMI implementation and outsource EDI to manage multiple suppliers and global omnichannel selling ● Automatic, rapid replenishment is the goal First First Launch Plan: ● Supplier negotiations and formula customization late Fall 2017 ● Supplier order early to mid-Spring 2018 ● Retail orders starting late Winter/early Spring 2018 ● Product will be available for distribution late Spring 2018 ● Lower volume of replenishment inventory anticipated for Fall 2018 distribution Higher inventory levels necessary for rapid response to demand in peak seasons
22
S
15-18 units per scrub assortment per container box Six (6) to Eight (8) week lead time
Retailers
Units per Location
Total Units
West Coast
3
125
375
East Coast
6
125
750
Southwest
1
125
125
Total
10
1250
23
Size
Direct to Consumer
Tube (3 oz.)
3,375
Jar (8 oz.)
3,371
Heartshaped (8 oz.)
750 7496
24
GIVESCENT distribution center and storage Los Angeles, CA
Essentials Wholesales & Labs Portland, OR
25
Portland, Oregon
2000
No minimum order
$8.7M Annual Rev.
Custom formulation
0% sales tax rate Low D&B Risk
Essential oil core competency
Available Package Assortment Naturally derived and organic custom solutions
FDA Registered > 40,000 sq. ft. facility including storage Sustainability CSR
26
Assurance Policy Providing body scrubs composed of organic and naturally scented essential oils and raw sugar while maintaining business, and encouraging consumer, eco-friendly practices
Hard QM (work with supplier) Testing: ● Toxicology ● Micro ● Stability - 24 mo./12 mo. ● Safety ● Performance Quality Inspections (midline and pre-production final) and Compliance Inspections ● Recyclable Material (CSR) ● Anti-Cruelty (CSR) ● USDA, FDA, FTC Compliance (CSR) Keep test results and inspection reports Use third-party verifiers (dermatology)
Soft QM (work with marketing) Assess and Respond to Customer Reviews ● Ex.: Dry skin; difficulty recycling; wood spoons kill trees; packaging layers not eco-friendly ● Create feedback portal on website (clear ethical transparency) ● Analyze social media comments at different temporal intervals
27
Composition: ● Raw sugar; essential oils; fractionated coconut oil (or sweet almond oil); parfum oil. ● No alcohol, formaldehyde, parabens, phthalates and sulfates. ● Cruelty free. Distributed by GIVESCENT and Made in the U.S.A. Directions: Apply to skin lightly with spoon; rub and rinse away exfoliated skin. Protect skin from sun after use. First use in small area to test for reaction. Best when used within 12 months once opened. Wash the spoon in warm soapy water fairly quickly after use and pat with towel and air dry without soaking. Warnings: Avoid use in sensitive areas and near eyes. If contact with sensitive areas or eyes occurs, wash thoroughly with water. Keep out of reach of children. Seek immediate medical attention and/or contact local poison control if swallowed and for adverse skin reactions. Website: www.givescent.com
T 28
$42
Distributed by GIVESCENT
$50 Jar Bottom - Standard
Top View of Lid
Manufactured for GIVESCENT
Jar Bottom - Heart Lid 29
Composition: bergamot, lemon and mint essential oils; raw sugar; fractionated coconut oil; parfum oil. No alcohol, formaldehyde, parabens, phthalates and sulfates. Cruelty free. Directions: Apply to skin lightly with spoon; rub and rinse away exfoliated skin. Protect skin from sun after use. Best used within 12 months once opened. First use in small area to test for reaction. Best when used within 12 months once opened. Wash the spoon in warm soapy water fairly quickly after use and pat with towel and air dry without soaking. Caution: Avoid use in sensitive areas and near eyes. If contact with sensitive areas or eyes occurs, wash thoroughly with water. Keep out of reach of children. Seek immediate medical attention and/or contact local poison control if swallowed and for adverse skin reactions. www.givescent.com | Made in the U.S.A. | Recycle
30
Internal seal to prevent contamination and leakage Plastic primary container (recyclable if clean) Shrink wrap primary packaging Secondary external recycled paper box packaging with inspirational message (CSR) Secondary packaging wrapped in light blue tissue paper and held together with a GIVESCENT sticker 3/4= 7,496 units Direct to Consumer warning
1/4= 1,250 units split among Retailers 31
32
Tissue paper wrapping with sticker closure on outside of secondary packaging boxes in addition to eco-friendly bubble wrap made from recycled polythene Secondary Packaging Size ● 8 oz. Box - 4 x 4 x 2.5 in. ● 3 oz. Box - 3 x 2 x 2 in. Container Packaging Size ● 8 x 8 x 8 in. Container Package - Retailer Order 32 units in a box at 11 lbs ea. ● 16 units - 3 oz. | 3 lbs. ● 16 units - 8 oz. | 8 lbs.
GS Container Size & Weight 8 x 8 x 8 in. | 11 lbs. 33
SIGNATURE SCENT 144
143
145
134
34
SIGNATURE SCENT
143 Top
142
144
TOPICS: Respect of Government and the Law Respect in the Workplace Respect in the Global Marketplace Respect in Society and Communities Sustainable Development and GIVESCENT
36
Supplier Ordering Process ●
● ● ● ● ●
Entire initial order of 8746k from a single supplier (Essential Wholesale Labs) ○ Product Consistency ○ No Minimal Order Payment Option: Credit Card or Wire Transfer Expect to make advance deposit to supplier (50%) Expect to pay balance 30 days after purchase date (Net 30) Includes 1200 units for safety inventory Compliance Policy is an addendum
37
Larger distribution to fitness and spa retailers; more intuitive add-on purchases Financially stable retailers Long-standing partnerships with GS Strong sales performance of GS fragrance; knowledgeable wellness and personal care salesforce
Kula Yoga, YC
Retailers that do not carry product directly competitive with GS fragrances and body scrub Locations with strong demand for GS product
Spa, So. Cal.
38
Retail Ordering Process ● ● ● ● ●
●
●
Payment Options - Wire Transfer or Open Account Minimize Financial Risk - Net 30 Deposit may be required PO execution initiates payment transaction PO receipt with GS acceptance signature sent to retailer upon payment transaction NDA re body scrub required as part of the order process (no disclosure before launch) Train retailers about GS products 39
Production: 125 Units Lead Time: 1 - 2 weeks DC Delivery Time: 2-3 weeks
Activity
Minimum Days
Maximum Days
Production Time 37.5 Labor Hrs
5
7
Package Order
1
2
Processing
1
2
Shipment to DC
1
2
DC to LA Wholesaler
2
4
Delivery Time
10 days
17 days
40
Amortized DC office/lab build out for admin. functions and limited QM Receive shipments from fragrance and body scrub supplier Minimal raw materials and components Package and ship gift sets Five (5) employees and growing
41
WAREHOUSING AND DC RENOVATION
Temperature control storage for preservation Security Enhancements GS insurance to cover finished products and other assets Distance between warehouse and distribution center: 2.1 miles and fuel used per trip: $0.38 42
Inbound logistics to GS from Supplier and Outbound logistics from GS or Supplier to West Coast Retailers Modes: ● Union Pacific Railway ● Less-than-truckload (LTL) Trucking Distance from Essentials Wholesales to GS Los Angeles DC and Warehouse: ● 965 miles ● Rail: 2-3 days Los Angeles DC to Monterrey, Mexico (industrial city) ● Rail: LA - Laredo, TX ● LTL: 143 miles ● Cost of Fuel and Driver - $110.59
43
U.S.’s largest delivery networks Responsive for small business e-commerce GS gets fragrance to U.S. customers within 3 days of order Shipping consolidation - DHL, FedEx Free shipping kits Pickups can be scheduled Boxes can be ordered Labels can be printed Requires low number of GS employees
44
Retailer Location ●
Southwest: Texas
●
Northeast: Massachusetts, New York Ground LTL
Rail ● ●
Union Pacific - Chicago, Fort Worth CSX Rail - Chicago, New York
● ● ●
Water Transport LCL - Europe ● ●
45
1-2 days after rail | $17-$58 8in. x 8in. x 8in. Rail Alternative: ○ Chicago LTL - $437.29
21-29 days after rail $19.6-$30.18 per box 8in. x 8in. x 8in.
Will occur after Essential Wholesale Labs’ results are consistent and up to GS quality standards Direct, faster delivery to retailers and ultimate consumers Sales tax benefit for tax destination state customers Decreased carrying costs especially for larger volume orders
46
Local LA universal waste recycle supplier to handle returns to decrease carrying costs and improper handling of potentially contaminated product Goal: Disposal that meets compliance standards, is cost effective and will offer liability protection
47
Request and obtain authorization for 5% of $2.5m net worth for expansion activities = $125,000 (expected need $110,000) Integrate supply chain for fragrance and body scrub product assortments Install and utilize VMI and EDI to develop automatic replenishment system for body scrub and fragrances Maximize capacity of DC office/lab buildout and storage facility Establish reliable partnerships with all suppliers - fragrance, body scrub and returns management Assess return on investment of scrub assortments including limited edition product as well as gift sets Rise as the premiere natural, organic fragrance and body scrub company - growth by $1.5m in annual revenue from body scrub and fragrance sales within 2 to 4 years
48
Addendum 8 oz. Full Costing
49
Addendum 3 oz. Full Costing
50
51
givescent.com/the-story https://www.forbes.com/sites/barbarathau/2015/01/08/experts-predict-7-big-retail-trends-that-will-s hape-how-you-shop-this-year/#31d393ae2d39 www.nytimes.com/2013/03/28/fashion/at-whole-body-shops-natural-beauty-products.html?ref=fashion&_ r=0 www.wellandgood.com/good-looks/9-amazing-all-natural-perfumes/slide/13/ thechalkboardmag.com/fragrant-offering-the-give-scent www.fitnessmagazine.com/blogs/beauty/2013/02/20/yogi-elena-brower-launches-new-givescent-fragranc e-that-you-guessed-it-gives-back/ www.womensmarketing.com/blog/2014/10/health-and-wellness-marketing/ http://eluxemagazine.com/beauty/most-harmful-chemicals-in-makeup http://www.grandviewresearch.com/press-release/global-organic-personal-care-market https://formulabotanica.com/global-organic-beauty-market-22bn-2024/ https://www.globalwellnessinstitute.org/press-room/statistics-and-facts/ https://www.scentbird.com/blog/age-appropriate-perfumes/
52
http://www.telegraph.co.uk/business/2017/06/20/us-uk-start-trade-talks-next-month-ensure-deal-s oon-brexit/ https://www.usnews.com/opinion/economic-intelligence/articles/2017-08-22/under-trump-the-dollar -is-weakening-when-it-should-be-strong https://www.bea.gov/regional/bearfacts/pdf.cfm?fips=41000&areatype=STATE&geotype=3 https://www.nytimes.com/2017/10/06/business/economy/jobs-report-unemployment.html https://www.marketwatch.com/story/low-income-families-spend-40-of-their-money-on-luxuries-2017 -06-28?mg=prod/accounts-mw "Essential Wholesale & Labs - Buy Wholesale & Bulk Natural Cosmetics." Essential Wholesale & Labs - Buy Wholesale & Bulk Natural Cosmetics. Accessed October 15, 2017.www.essentialwholesale.com/. Euromonitor. “Skincare in the US.� Accessed October 15, 2017. Hall, Suzanne. "GIVE Scent: Elena Brower's Natural Perfume For Charity." The Chalkboard. September 19, 2012. Accessed October 18, 2017.thechalkboardmag.com/fragrant-offering-the-give-scent Horwitz, Yarden and Olivier Zimmer. "Google Unmasks the Skin Care Trends of 2017." Think with Google. September 06, 2017. Accessed October 15, 2017.www.thinkwithgoogle.com/consumer-insights/skin-care-trends-2017-beauty-marketing/.
53
"How Much Have Package Delivery Companies Improved Their Fleets' Fuel Efficiency?" Scientific American. Accessed October 18, 2017. https://www.scientificamerican.com/article/greening-package-delivery-fleets/. "Sensible Organics is currently the first and only USDA certified facility manufacturing organic personal care products." Sensible Organics | The first name in certified organic personal care. Accessed October 15, 2017.sensibleorganics.us/. Susannah Snyder. “The 25 Best Jobs of 2017.� U.S. News and World Report. January 11, 2017. Accessed October 17, 2017. money.usnews.com/money/careers/slideshows/the-25-best-jobs-of-20 www.wm.com/thinkgreen/what-can-i-recycle.jsp www.geraldinepierreskincare.com/posts/qa-what-is-a-puffery-claim www.intelex.com/products/quality www.glamour.com/story/the-right-way-to-test-a-new-skin-care-produc Euromonitor. (2017). Skin Care in the US. Country Report. Euromonitor (2012). April Beauty Innovation Round-Up. http://ediacademy.com/blog/edi-outsourcing-cost-calculation/
54
https://www.getapp.com/operations-management-software/a/netsuite-inventory-management/pricing/ www.fda.gov/Cosmetics/ScienceResearch/ProductTesting/default.htm www.fda.gov/Cosmetics/ResourcesForYou/Industry/ucm388736.htm#7 Passport. (2017). Competitive Strategies in Beauty and Personal Care. www.bulkapothecary.com/ chemistscorner.com/cosmetic-tests-you-must-run-before-launching-your-product/ www.containerandpackaging.com/item/L252 www.containerandpackaging.com/item/J049?source=googlepla&gclid=CjwKCAjwssvPBRBBEiwASFoVd39njCGKE6HEJ3Kw asq72jWKZC24Km9H0zF6_KIxqRzaJinoRgtOWBoCzHMQAvD_BwE www.wm.com/thinkgreen/what-can-i-recycle.jsp www.qai-inc.com/media/docs/faq_what_organic.pdf www.customkraftbox.com/checkout.php www.bluelinelabels.com/short-run-screen-printing-pricelist/ www.thecarycompany.com/containers/closures/shrink-bands?color=286 http://greenliving.lovetoknow.com/Biodegradable_and_Recyclable_Packaging_Material
55