LBIX MONTHLY NEWSLETTERThrough this series of newsletters we hope to facilitate a more frequent flow of information to our shareholders. Our goal is to publish regularly, on the first business day of each month. They will only be available on our corporate website at www.lbix.com.
We’ll simply focus on the events and developments of the prior month. These will not be ‘forward looking’ documents. They will not substitute for news releases of material events or facts. We hope you find these newsletters to be of interest.
This time of year the focus of conversation around beverage companies quickly turns to the weather. From all reports, temperatures in the East and mid-West remained seasonally colder and that has a direct impact on sales. As this is our first spring in these US markets, we have no historical point of comparison and it is impossible for us to gauge the impact on potential sales. Suffice it to say, it must have had an impact. Towards the end of June we started to see temperatures spike up. We are crossing our fingers, hoping for a hot July and August.
The weather has certainly not dampened our enthusiasm or efforts. We remain focused on expanding the distribution and listing base of our new products in the US. May was a breakthrough month, as Leading Brands of America reached profitability. An unexpectedly pleasant surprise has been the success of our Mad Croc™ launch at 7-Eleven, where we have had an exceptional introductory promotion of the brand. We will be expanding distribution of the ‘Croc to other retail sectors in August.
Two TREK® trucks are on route to Manhattan to reinvigorate our distribution efforts there. We have also further expanded our Pez® 100% Juice™ line into several other US convenience chains this month.
June in our Vancouver plant saw us start commissioning of our new high-speed carbonated line. You can see pictures of the installation in the ‘What’s New’ section of our corporate website and we will get some new ones up shortly. Commissioning a line of this magnitude takes some time, although we are pressing to increase speeds and efficiencies.
Our Edmonton plant has been working overtime to accommodate several line modifications and a major new product. We have experienced record volumes there and the hard work and diligence of our staff and management is to be commended in handling the myriad of changes and increased volume. There is still work that needs to be done to improve operations; things that can get overlooked under the pressure to deliver volume.
Another pleasant surprise has been the improved fortunes of our Canadian distribution system. It took us more than a year to effectively adjust and transition from the loss of the SoBe® distribution rights. Our Integrated Distribution System (IDS) had previously been primarily focused on DSD (Direct Store Distribution). By April 2000 we had changed to more of a hybrid system, with our focus on leaning towards direct dealings with retail chains and delivery of product through other DSD and wholesale distribution systems. The introduction of TREK® into Canada was a good test of that new model and we had success in gaining quick distribution of that brand across the country. Another new product that has caught fire for us in Canada is the Monster™ Energy Drink from our friends at Hansen Natural Corp.
Our US operation is modeled on our successful experience in Canada.
On the ‘water front’, we are presently making plans to increase the ultimate flow and storage reserves at our Mount Woodside Spring near Vancouver. We are also focused on diversifying our customer base there.
In sum, I am exceptionally pleased with the progress of our distribution business, both in Canada and the US. Our plants need to be whipped back into top shape to accommodate the new volumes and we are putting the full court press on that.
Pray for Sun, and look for another edition next month. Thank you for your continued support.
LEADING BRANDS, INC.
Ralph D. McRae
Chairman & CEO
We Build Brands