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U.S. Organic and Spa Market

August 16, 2016

About GRIP IDEAS

• Formed in October 2003

• Provide marketing and business development

services

• Focus in wellness & nutrition industry

• Results-orientation mindset

GRIP IDEAS produces WINNERS

• 2014 – Nutritional Outlook – DianaPlantSciences – Best of Ingredient Supplier • 2013 – NBJ Innovation Award – DianaPlantSciences • 2013 – Functional Ingredients, Best Botanical Ingredient – KSM-66® – Editor’s Choice • 2011 – Best New Ingredient Finalist – Meriva® – NutrAward • 2010 – Best New Product, European Outsourcing Awards – Meriva®

• 2010 – Best New Finished Product – VitaPQQ® – NutrAward

GRIP IDEAS Brand Experience

Nutrition Industry

GRIP IDEA Philosophy:

A Framework for the Future

GRIP IDEAS Services

• Business Development

– Business and marketing plan development

– International market expansion

• Marketing Execution

– Internet/Social Media

– Advertising

– Public Relations

U.S. Spa Market Size

• International Spa Association (ISPA) estimates

the U.S. spa market at $16.3 billion – Revenue up 5.0% from 2015

• Spa visits up 2.1% to 179 million visits

• 21,020 estimated spas in the U.S.

• Average revenue per visit is $91

• Projected growth to $24.73 billion by 2020

– 5.6% growth annually

Source: International Spa Association, August 2016,

Technavio “Spa Market in the U.S. 2016-2020”

U.S. & Spa Trends

• Healthy & mindful living

– More Americans are

adopting healthier lifestyles

– Better for you foods, better

skincare, personal retreats

U.S. Spas by Type

Source: American Spa Industry Insider Survey, August 2016

• Primary types are Day Spas (24% of spas) and

Day Spa and Salon (23% of spas)

U.S. Spa Types

• 87% of U.S. spas are a single location

– Owner-operated

– Small business

• 9% of U.S. spas have 2 to 5 locations

• 4% of U.S. spas would be spa chains

Source: American Spa Industry Insider Survey, August 2016

U.S. Spa Types

• 87% of U.S. spas are a single location

– Owner-operated

– Small business

• 9% of U.S. spas have 2 to 5 locations

• 4% of U.S. spas would be spa chains

Source: American Spa Industry Insider Survey, August 2016

U.S. Spa Location Size

• 56% of U.S. spas are less than 2,000 sq. ft.

• 66% of U.S. spas

have 1-4 treatment

rooms

Source: American Spa Industry Insider Survey, August 2016

Top Spa Services

• #1 – Facial/Skincare Services

• #2 – Massage Services

• #3 – Retail Sales

Source: American Spa Industry Insider Survey, August 2016

Spa Revenues

• 48% of spas have revenues of $100,000 or less

• 37% of spas have revenues of $1,000,000 or

less

• 15% of spas have revenues over $1,000,000

– 1% of this has revenues over $10,000,000

Source: American Spa Industry Insider Survey, August 2016

Factors Affecting Revenues

Source: American Spa Industry Insider Survey, August 2016

U.S. Spa Clients

• 80% female

• 39% between the

ages of 31-50

• 69% Caucasian

Source: American Spa Industry Insider Survey, August 2016

U.S. Spa Products Selection

Source: American Spa Industry Insider Survey, August 2016

Use of Technology

Source: American Spa Industry Insider Survey, August 2016

• Spas rank having a web site as the #1

technology for increasing profitability

• Social media sites rank #5

• The top ranking social media sites are:

– Facebook

– Instagram

– Twitter

Top Spa Trends

Source: Spafinder Wellness 365 Trends Report

• Healthy Hotels

• Wired Wellness

Top Spa Trends

Source: Spafinder Wellness 365 Trends Report

• Suspending

Gravity

• Ferocious Fitness

Top Spa Trends

Source: Spafinder Wellness 365 Trends Report

• “Natural” Beauty

Meets Social Media

• Aromatherapy

“Scent with Intent”

Top Spa Trends

Source: Spafinder Wellness 365 Trends Report

• Wellness Retreats

• Spas & Life

Transitions

Spa Associations & Trade Shows

• International Spa Association (ISPA)

• Trade Shows

– ISPA Conference and Expo, Las Vegas, NV – Sep.

13-15

– The International Congress of Esthetics and Spa

• Long Beach, Sep. 11-12

• Miami, Nov. 6-7

• New York City, Mar. 12-14

• Dallas, Apr. 2-3

• Philadelphia, May 21-22

– International Beauty Shows, Las Vegas and NYC

Best Practices

August 16, 2016

Best Practice:

Get to Know the Market

Market Research Resources

• Nutrition Business Journal – Provides quantitative market data for the U.S. nutrition industry www.newhope360.com/nutrition-business-journal

• SPINS – Offers U.S. retail scan sales data for natural health food stores and mass market retail www.spins.com • Euromonitor International – Supplies market size information for the nutrition industry covering a number of country markets www.euromonitor.com • MarketResearch.com – Research reports on a variety of subjects www.marketresearch.com

Best Practice:

Organizing Your

Business

Strategy & Structure

Developing a Plan

A plan should include: • Situation Analysis – Organization description, target market overview, purpose of effort, international marketing objectives

• Product Overview – Product description, key features and benefits, competitive advantages and required adaptation for exporting

• Market Entry Strategy – Target market, competitor overview, distribution & channel strategy, promotional strategies and terms of sale

Developing a Plan

• Regulatory/Legal Requirements – Regulatory approvals, import restrictions, duties and tariffs, intellectual property protection, insurance and trade documentation

• Identification of Risk Factors – Country market risks, credit and currency risks and political risks

• Tactical Plan – Overview of key activities along with measurement and evaluation

• Financial Plan – Funding, operating budget, conservative revenue projections

Getting in the Market

Establish own presence 1

• GLOBAL FOOD COMPANIES

(Nestlé, Coca-Cola, Cadbury, Kellogg’s)

• MULTI-LEVEL MARKETING COMPANIES

(Amway, Nu Skin, Shaklee, Herbalife)

• GLOBAL FOOD INGREDIENT COMPANIES

(DSM, BASF, Indena, Lonza)

Find a local partner (Distribution/License) 2

Process for Finding a Partner

• Identify Partner Candidates - Size of partner - Appropriate channel

• Partner Interviews • Partner Meetings • Follow Up • Partner Agreement

Important Criteria for Selecting a Partner

• Industry Experience - What is the background of the company? - What companies do they currently represent? - What experience do they have with nutritional products? - How successful have they been in growing sales?

• Regulatory Experience/Support - What regulatory staff is in place? - What experience do you have in registering currently products? - What ongoing regulatory support do you provide?

Important Criteria for Selecting a Partner

• Marketing/Sales Support - What sales/marketing staff is in place? - How is your sales organization structured? - How do you support the marketing of a new product? - How would you keep us informed?

• Importation Procedures

- What importation procedures need followed? - What staff is in place to handle importation?

• References

INNOVATION

BRAND DEVELOPMENT

CUSTOMER SERVICE

• Product development • Intellectual property • Invest in science

• Quick response • Sales Team • Technical Support

• Segment-specific marketing

• Brand consistency • Take time to plan

Successful

Brands

Organizing for Success

Reasons International

Businesses Don’t Work • Lack of organizational clarity

– International business has not been a priority

• Lack of planning

– Have responded to needs of current business and plan has not been developed to build new business

• Barriers to entry

– Regulatory barriers have halted efforts

• Lack of resources

– Resources have not been identified and allocated to grow business

• No patience

Best Practice:

Developing a Brand

What makes a product

successful?

• Relevant

• Differentiated

• Believable

What is a Brand?

Brand – A perception or emotion maintained

by the consumer, describing the experience

related to doing business with an organization

offering a product or service.

Branding Fundamental

In order to have a BIG brand, you must have a

BIG category

In order to grow the category, you must promote the

category.

If you assume leadership of the category, people will

follow your leadership and buy your brands.

Assume B to B category leadership.

What is a Category?

• A “category” is a group of products that perform the

same essential function

• The Law of Category − It is better to be first, than it

is to be better.

• Category descriptors allow your target audience

– To quickly grasp what the product is and does

– Relate your product to competitive offerings and the

functional role each product will play

Growing a Category

• Categories grow out of the intersection of discovery,

entrepreneurship and human need

• To build a category

– Developing and communicating a core category

vocabulary

– Developing and communicating a core benefit that

responds to a need inadequately served by existing

products or services

– Providing a product that distinctively serves

the language of the new category

Elements of Branding

• Brand Identity

– Name, logo

– Messaging

• Brand Architecture

– Brands within an organization and their relationship

among each other

• Brand Development

Brand Development

Develop a set of rules and stick with it.

What do Brands do?

• Encapsulate actual, experienced value

• Own a particular behavior

• Based on consumer preferences

• Respond to real needs

What’s Important for Brands?

• Consistency

• Cohesiveness

• Continuity

Communicating the same message throughout

everything you do over time.

Great Brands Have Consistency

“The one way to make your brand

stand for anything is to be consistent

with message, image and even

trademark.”

- Al Ries

Why is Consistency Important?

• Consistency is key to brand equity

• Without consistency of message, graphic look and style,

trust may be broken

Great Brands Get Known for A

Singular Focus

• Nike is about athletic performance

• FedEx is about overnight delivery, an unrelenting

commitment to deliver

• Microsoft is about the digital future

• Marlboro is about the macho cowboy

Brand Identity

Developing A Brand

Brand – A perception or emotion

maintained by the consumer,

describing the experience related

to doing business with an

organization offering a product

or service.

Wellness Brands

Brand Positioning

• Seeks to develop ownership of a concept in the mind of your target audience

• Develops a focus on what the product is about and does

• Differentiates your product from the competition

• Establishes why your target audience should believe you

Brand Positioning Model

• Frame of Reference: The association between your brand

and the target audience that makes your product relevant. Establishes the "category". • Differentiating Benefit: The differentiating benefit and value proposition must be unique to your product. • Reasons to Believe: Proof that your value proposition is true. For example, scientific studies, patents, trademarks, etc.

For target audience, brand name is the frame

of reference that provides differentiating benefit

because of reasons to believe.

Brand Development

Brand Development

• Meaningful brands accomplish • Push to the industry

• Pull from the consumer

• Become self aware • Measure and adjust

• Built in years, not in months

Great Brand Development Is

• Disciplined • Deliberate

• Determined

• Die Hard

“You don’t merely want

to be considered the best of the best.

You want to be considered the only

ones who do what you do.”

Jerry Garcia

Best Practice:

Packaging & Labeling

Packaging & Labeling

• First impressions are important

• Regulatory compliance

• Less is more

- Clean label trend

- Fewer ingredients

- More white space

Clean Label: White Space

Best Practice:

Get “In Market” Support

Get “In Market” Support

• Find a distributor that matches your company culture, mission, vision & values

• Hire the right consultants

– Regulatory

– Marketing, public relations

– Industry expertise

• Manage & Support

Best Practice:

Exhibiting & Trade Shows

Exhibiting & Trade Shows

• Select the right shows

• Determine level of involvement

– Attendance

– Exhibiting

– Exhibiting & Sponsorship

• Develop clear goals & objectives

Exhibiting & Trade Shows

• Develop “talking points” for your sales pitch

– 3-5 compelling reasons to do business with your company

• Booth design & development

– Less is more

– Focus on “what you do” & “what makes you unique”

– Simple, elegant design draws more attention

• Sales follow up

THOUGHT INTO ACTION