SAN ANTONIO, Texas, July 15, 2005 (PRIMEZONE) -- Sweet Success Enterprises (Pink Sheets:SWTS) issued the following Letter to Shareholders today:
Dear Shareholder,
We have been looking forward to taking a few moments away from the re-launch of Sweet Success products to fill you in on our team's accomplishments during the past few months, and on our strategy to grow the company and re-establish market share.
To all of you, we appreciate the commitment you have made to this company.
At this moment, the first shipments of our revolutionary Sweet Success Complete Fuel(tm) are either at or about to arrive at a variety of national chain and specialty retail companies. Members of our marketing team have spent much of the past week training distributors about the product and coordinating marketing and promotion plans with its placement on shelves. In fact, Complete Fuel in Bavarian Chocolate Supreme and Creamy Vanilla Supreme is now available in Las Vegas, which we consider to be a strong "secondary" market for our line. Shipments will also be arriving in Florida and Texas, which historically accounted for more than $25 million in Sweet Success brand sales annually. In Texas, our primary market, we expect to target shelves at Whole Foods Markets, HEB gourmet stores and Central Markets, and are seeking initial availability at Wild Oats, Rice Epicurean, and Market Street.
We also have requests for the product from distributors and retailers in other states and are working -- perhaps more rapidly than we initially expected -- to re-establish many of the 57,000 points of distribution and $240 million in annual revenue at retail that the brand enjoyed under Nestle's ownership. And while brand recognition remains high (our surveys indicate that over 91% of the people who consume meal replacements are familiar with the Sweet Success brand, and over 45% of those have tried it) we believe our formula's cutting-edge emphasis on health and wholeness positions us for a new rapidly growing high-margin market. Proudly, our products remain far and away the best tasting in the category!
Getting last month's production run of 8,500 cases (each with 24 11oz Tetra Prisma containers of product) on major retailers' shelves has been a significant milestone, but is just one of several avenues we have been working on. We have signed manufacturing commitments for a minimum of 100,000 cases per year, are increasing our pipeline of products to include new flavors and formulas focusing on longevity, stamina and strength, and are marking up a marketing campaign called "Now You Can Have it All!" Also, we are preparing our web site to host health, diet and nutrition forums, chat rooms, motivational support and to help build excitement behind new product development.
NFL star Jeremy Shockey, tight-end for the New York Giants and two-time Pro Bowl player and a user of our Complete Fuel product, has agreed to join us as a spokesman for the company. We are also in talks with several worldwide celebrities, and major television and sports production companies, for endorsement and product placement deals. We anticipate making announcements in that area soon.
We believe listing our stock on the Pink Sheets over-the-counter trading system has provided a starting point for us to build the company and has allowed us to concentrate mainly on revenue-generating activities up to and through the initial launch. However, we are also well aware of its limitations and the concerns it may cause for prospective investors. Therefore, we intend to soon file with the SEC our Form 10-SB to make Sweet Success a fully reporting company and eligible for listing on the NASDAQ OTCBB. In the Form 10, you will note our accomplishments have been made without incurring any long-term debt and while keeping total outstanding stock to about 12 million shares. Our executive team has drawn no salary to date and has been compensated mainly through equity issuances that we believe to be fair to all shareholders, while reflecting our confidence in the company's future growth. Short-term capital needs have been provided by Jag Capital, a merchant banking company founded by Sweet Success President and CEO Bill Gallagher.
We are proud of the team we have put together for our two primary goals, making Complete Fuel(tm) the most advanced health beverage on the market, and making Sweet Success the leading healthy lifestyle consumable products company in the nation. Mr. Gallagher successfully founded several popular food products and restaurant and grocery chains. Director Graydon Webb was chief operating officer of Diet Centers of America (with over 300 locations) and served as vice president for franchising for Wendy's. Jon Barron is one of the nation's foremost authorities in cutting-edge nutritionals. We recently brought on board two former senior Coca-Cola Co. executives, John Blackington and Gordon Hill. Both have extensive experience in marketing, distribution and infrastructure development, and were key strategists in the launch of a variety of the Coca-Cola Company's brands. We also now have a corporate communications specialist with an extensive background in business and politic strategy, and expect soon to sign on a marketing company with a portfolio that includes campaigns for several Fortune 500 companies.
In the coming months, we plan to produce and market the "classic" Sweet Success diet shakes and meal replacement bars. California's Graystar Products Inc., our licensee for the Sweet Success Complete meal replacement bars, is preparing to produce the product in a configuration to supply to the large club stores. Graystar is a preferred distributor to both Costco and Wal-mart. We also expect to have national distribution of our products in the first half of 2006 with early focus on previous top markets for the brand like Dallas, Miami, Philadelphia, Washington D.C. and Phoenix.
In reintroducing Sweet Success to the market, we plan to build upon the brand's previous name recognition (Nestle spent $170 on marketing Sweet Success) while tapping into the growing demand for good tasting, convenient and nutritious "superfoods." Consumer trends during the past decade have increasingly shifted toward improving and maintaining health. Moreover, we believe consumers have grown more aware of the nutritional content of the foods they eat, which puts our all-natural products and philosophy at an advantage. We believe sales of weight loss and healthy-lifestyle products will continue to grow. Sweet Success historically held an 18 percent share of meal replacement market (number two in the category) and had $240 million in annual brand revenues at retail.
Initial merchandising and marketing efforts are modeled after other successful "new-age" beverage companies. The emphasis will be primarily on selling cold singles, using point-of-sale merchandising vehicles, and secondarily on multi-packs. We plan to make significant investments on in-store promotions and display equipment. We also are developing or already have materials for TV, print and radio publicity and advertising campaigns.
There have been significant developments in science and consumer needs since Sweet Success was last marketed. New products and competitors have emerged like Atkins (carb control), EAS Myoplex (nutrition, fitness) and Odwalla (good tasting, chilled juices). Consumers' needs are also shifting. While 10 years ago physical fitness was a prime consumer concern, today a more 'holistic' well-being approach is also increasingly sought after. Consumers have broadened their definition and perspective of what is good for them, and counting calories is too limiting for today's lifestyles. Consumers are not only concerned about their weight and physical appearance, but about the health of the larger environment. This explains the national 20 percent annual growth of organic and natural products during the past decade. It is now a $14 billion market with plenty of room for new product lines. The specialty beverages category, in which Complete Fuel will compete, has seen 39 percent annual growth over the past two years.
That's where we're headed with Complete Fuel(tm) as our core product. It provides sufficient nutrition to act as a meal substitute with state-of-the-art ingredients like Omega-3 fatty acids, Aktivated Barley(tm), ground flax and guarana. Each 11 oz. serving contains 200 calories with three grams of fat.
All of our efforts have been with an eye toward wholesome, mainstream consumables that can work well as meal replacements and fit into consumer niches, like weight control, energy and fitness. Indeed, "Now You Can Have it All!"
Sincerely, The Sweet Success Team.
The Private Securities Litigation Reform Act of 1995 (the "Act") provides a safe harbor for forward-looking statements made by the Company or on its behalf. All statements which address actual results could differ materially from those expressed or implied in forward-looking statements. Important factors that could cause the actual results of operations or financial condition of the Company to differ include, but are not necessarily limited to, the Company's operating performance, events, or developments that the Company expects or anticipates may occur in the future are forward-looking statements. These statements are made on the basis of management's views and assumptions. As a result, there can be no assurance that management's expectations will necessarily come to pass. Management cautions that the ability to attract clients and generate business; a decline in the Company's financial ratings; the competitive environment; the Company's ability to raise sufficient capital to meet the collateral requirements associated with its current business and to fund the Company's continuing operations; and changes in market conditions.