2019 Annual Report Our first steps
Contents 01
Morgan’s note
02 Our successes since 03
Our first storefront
04 Dearest friends 05 Year’s highlights 06 Our product 07 In motion
Morgan Kane
Chief Executive Officer
Our starting line-up
Jana Murphy Chief Operating Officer
Katie Geller
Director of Marketing & Strategy
Josh Kessler Art Director
Morgan’s note Thanks for taking a moment to read our 2019
uncles, and our own siblings. I so appreciate the
Annual Report. As always, it was a busy year for
opportunity to be able to fill this role and watch this
Fruitees and for our customers. It was also a year
company grow.
of change and firsts, both at Fruitees and in the confectionary industry, which is seeing a dramatic
Over the years, I have made friends and allies in
shift in style and taste.
the confectionary industry which I think will greatly benefit Fruitees in the future. Together, we intend
Early in 2016, we came up with the amazing idea
to build something unique – a unique culture of
for this company and announced our arrival at
compassion, collaboration, and commitment. It is
the end of that year. In response, the board put
the secret sauce of Fruitees.
the organization’s succession plan into motion, engaging a search firm to begin a national search
In 2016, LeadingAge began this commitment to
for the next president and CEO of Fruitees. The
caring for our customers and our teams that serve
process lasted six months and was very well-
them. Since then, leading up to our first year, this
managed by our now past board chair Tim Young.
past year, we have worked on securing long-term financing and support from our shareholders
I am very honored to have been selected for
and customers. Our team is fiercely dedicated
this position and to the members of the search
to improving the way that candy consumption is
committee and the board of directors, thank you for
experienced in America.
the opportunity to serve Fruitees in a new capacity. It is an absolute privilege and honor.
I look forward to working with each of you in 2019, hearing your stories, and plotting our future
I have some big shoes to fill, figuratively and literally.
together. We have a strong foundation on which
And hopefully with this past year of business and
we will put all of our assets to work – our members,
the years moving forward I will be able to prove to
state partners, staff, businesses – as well as the
you all that I can help this company move forward.
power of our ideas and our deep expertise.
What I love most about this job and our field is
All our best,
that it is filled with people just like me who CARE deeply and so patiently for our moms and dads, our grandmothers and grandfathers, our aunts and
Morgan Kane
Chief Executive Officer
2019 Annual Report | 1
Our successes since 2018
We excitedly introduced Fruitees to the confectionary marketplace
2016
We started out with a very small idea...
2019
We opened up our first storefront in Garden City, NY
2017
We hired our CEO and the rest of our Executive Leadership Team
2 | 2019 Annual Report
2017
We began to bring our small idea to life through the design
2016
We slowly began to secure financial backing from shareholders and investors
Our first storefront Roosevelt Field Mall, Garden City, N.Y. Located in the heart of one of the busiest and largest shopping malls in the country, we are elated to announce the opening of our first storefront. While we have intentions for at least 5 more in the year to come, we are extremely proud of our accomplishment at our flagship store.
2019 Annual Report | 3
Dearest friends, After years of constructing, building and playing
upcoming year. And under the stewardship of
defense, we have moved squarely to offense,
our Marketing and Strategy Director, Katie Geller,
with some big wins during our first year. And, in
we made critical investments in point-of-sale
the cases where we suffered some setbacks we
technology that promise to unlock a host of omni-
faced those with appropriate self-examination and
channel functions for our brand – including the sale
bias to action. On balance, we ended our frist year
of Fruitees on our website. We did this to enable
embracing our mantra- we believe in ‘our.’
superior customer service, and true Customer Relationship Management capability.
In 2019, on a comparable basis, we grew total sales and adjusted EBITDA signficiantly. Total shareholder
With all the excitement surroudning Fruitees and
return for the year was on the high end for the
its opportunites ahead, we ended our first year
industry at 52 percent.
by asserting that we remain fully committed to delivering value to our shareholders.
Fruitees is now positioned among the industry greats, in just its first year – with a future marked
In all, I am extremely proud of our teams, our
by significant growth and sweet expansion. Beyond
strategy, and our building portfolio, and our
all the excitement metrics, this company has
progress. As we forge into 2020, we will continue to
proven itself to be a stable and loved business.
fully embrace our ‘our’ mantra and work together as
We strengthened our local presence; we achieved
a cohesive team to accomplish all of our goals.
industry-leading digital sales and marketing success; and we, most important, debuted our
Sincerely yours,
company to the world. With all the excitement around this business, nothing is more thrilling than realizing we are only in the early chapters of what promises to be a long and exciting story. Corporately, we opened our first storefront and have intentions to open five more within the
4 | 2019 Annual Report
Jana Murphy
Chief Operations Officer
2019 Annual Report | 5
Year’s highlights Quaterly Revenue (in thousands)
$45
Q1 Q2 Q3 Q4
Flavor Approval Ratings As part of our first year as a company, it was important for us to understand our consumer base and recognize what they liked and disliked. Whenever someone purchased a pack of Fruitees, we asked them to fill out a survey and send it back in, marking on a scale of 1-5 how much they enjoyed each flavor.
These were our findings...
76%
54%
6 | 2019 Annual Report
68%
99%
83%
$95
$127 Our product
$210
Our packaging is... simple, sweet, and fun to look at. This is the first impression that our customers get when they buy our candy, we made sure that the packaging embodied everything that we stand for. Fun for the kids, and friendly for the parents, our packaging is playful, and resealable, with individual Fruitees packets on the inside. 2019 Annual Report | 7
8 | 2019 Annual Report
In motion This year can be summarized in a few words:
day, we are proving ourselves as a new and
In the face of significant challenges, we made
exciting company in the marketplace.
significant progress. I thank you for your continued commitment and all that you do to
The New Year will bring its own mix of
deliver on our purpose – to help customers and
successes and challenges, but our direction
clients seize opportunity at every stage of their
is clear and we know what we must do. Our
consumer needs.
job is to continue to focus intently on what we can control: providing our customers with the
While there is much work to do and there may
best candy and most comprehensive services,
be further challenges ahead, we end 2018
managing our costs, building up our brand,
stronger and better able to serve our customers. and doing our part to keep this newly create We continued throughout the year to simplify
company moving forward. Our long-term value
our company, to build capital, and to manage
will come through and be reflected in our stock
through the exciting and ovewhleming growth.
price over time if we do that.
As a stronger, more straightforward company
I appreciate all of your great work this year; it is
better organized to serve our customers, we can because of you, and because we know we can now build deeper relationships with them, earn
do so much more for customers than anyone
the profits our shareholders expect, and help
else, that I have such great confidence in our
gain confidence and strength to our company.
future. I’m looking forward to seeing where it takes us, as a company, and the Fruitees
There is ample evidence that we are moving
brand.
forward on the course we set two years ago to create our company, some of which is
Your CEO,
highlighted in the progress report included in this report. Our focus and strategy are clear: We want to make everyone’s candy consuming experiences as positive as possible. Day after
Morgan Kane Chief Executive Officer
2019 Annual Report | 9
Copyright Š 2019 by Fruitees Inc. All rights reserved. This book or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the publisher. Book design by Rachel Schwartz Printed in the United States of America