Nascent Wine Company Inc. (NCTW.OB) dba Nascent Foodservice Company Inc. recently announced it has an exclusive distribution agreement with Bond Laboratories, Inc. to distribute Bond’s “Fusion 6+ Hour Energy Shot” in Mexico. The distribution agreement will allow Bond’s drink to be available at Nascent’s 240,000 sales points in supermarkets, convenience stores and food service locations throughout Mexico. Nascent is the only national distributor of imported foods and beverages in Mexico, and has established relationships with Wal-Mart, Soriana, Comercial Mexicana, AM/PM, 7-Eleven, OXXO, and CostCo.
Bond Laboratories is a marketer of healthy foods and beverages focused on developing proprietary products. The Bond sales and marketing executives have a history of developing and launching many well-known products.
Bond Laboratories President Eric Schick said, “Our partnership with Nascent expands our reach to the second largest market in North America - Mexico. We see tremendous growth opportunity for our Fusion + Hour Energy Shot within the Mexican marketplace and as the only nationwide distributor of imported products in Mexico, Nascent represents the ideal partner for our expansion.”
Nascent distributes over 2000 national and proprietary-brand food and non-food products, including Miller Beer, Nestle, Mitsuki Asian products, Bonet European products, Nery’s cheese products, and Ferrarelle Water. The company is focused on acquiring well-positioned and profitable distributors in Mexico to efficiently provide its products throughout the country.
“We are very pleased to add Fusion to our expanding beverage product offering. We are excited to make Fusion’s high quality, well-recognized beverage products available to our retail customers. We have a proven record of expanding the market share of leading brands such as Miller Beer, Nestle, Haagen-Dazs and General Mills and we are excited about the opportunity Fusion brings to Nascent. Our partnership with Bond Laboratories demonstrates our strategy of securing exclusive rights to desirable and recognizable products,” stated Sandro Piancone, CEO of Nascent.
Nascent Foodservice, Inc. (NCTW.OB) Employs Winning Strategy of Growth through Acquisition
Nascent Wine Company, Inc. (OTCBB: NCTW) is the only nationwide distributor of imported food products into the Mexican marketplace. Although the company was incorporated in 2002, it experienced minimal business activity until it obtained the right to distribute Miller Beer in Baja California in 2006. In 2007, sales grew from $4.7M to $42.4M due mainly to the acquisitions of Pasani\Eco, Groupo Sur Promociones de Mexico S.A. de C.V., and Targa, S.A. de C.V. While the company employs a three-pronged sales strategy, its focus on acquiring the small Mom-and-Pop stores, then folding them into the current business, is almost completely responsible for its sales increase in 2007.
According to a 2002 study, the Mexican food service market comprises $46B of Mexico’s total $1 Trillion GDP. Large retailers such as WalMart, Costco, and Commercial Mexicana service about 40% of the market, while small Mom and Pop distributors service an incredible 60% of the market. Distributing to this 60%, many of whom are in remote locations, poses challenges that large multinational distributors cannot manage.
Due to the complex nature of importation, the Mexican foodservice industry requires an intermediary for warehousing and delivery. In addition, the roads and infrastructure in Mexico make logistics and large-scale delivery difficult, requiring the use of smaller vehicles and more frequent deliveries. These unique logistical challenges introduce an important barrier to entry for large multinational food service distributors; consequently, independent distributors service almost the entire country.
Nascent believes that although the current logistical situation in Mexico is challenging for non-Mexican food service distributors, multinational distributors, like Sysco, will indeed enter the market in the next decade. In the meantime, the Mexican market is ripe for knowledgeable, “organically grown” distributors like Nascent. Its strategy of growing through acquisition to expand its customer base will also lower its fixed costs, thus helping it entrench its position as the #1 importer in Mexico. Non-Mexican multinational food service distributors wanting to enter the Mexican market may hesitate when they find a knowledgeable, entrenched competitor in Nascent.
Nascent Wine Company Inc. (NCTW.OB) Management Has Got What it Takes
Nascent Wine Company is one of Mexico’s first and fastest-growing foodservice distributors. Nascent has been operating since 2001 through thousands of Mexican convenience stores, independent retail stores, restaurants, hotels and bars. This vast portfolio has been cultivated and maintained by a management partnership with over 45 years of collective foodservice experience.
President Victor Petrone started his career in the industry in 1983, as owner and manager of the Capital Food Corporation, a firm which designed formal dining concepts. His actions at Capital Food Corp. got him noticed by Roma Food Enterprises, where he was commissioned as General Manager of the Western United States and Mexico. Victor was recruited yet again in 2001 by distribution-superpower Sysco Foodservice Corp., as overseer of its Specialty Market Division and international business development. It was here that he attained an annual growth rate of 22 percent.
At the position of CEO, company founder Sandro Piancone boasts 20+ years of pertinent experience. Like Mr. Petrone, he developed his career with Roma Foods, where he acted as VP of Sales and Marketing for Mexico. Sandro applied the knowledge he acquired at that position to found Piancone Group International, Inc., thereby breaking into the foodservice distribution industry.
As a result of the efforts of these two men and many others, Nascent enjoys exclusivity with many major brands across Mexico. With their combined business acumen, they have successfully carved a significant slice from Mexico’s 46 billion dollar foodservice pie.
Nascent Foodservice Inc. (NCTW.OB) Announces Distribution Agreement with ROCKSTAR Inc.
Nascent Wine Company, Inc. (NCTW.OB) announced that it has entered into an agreement with ROCKSTAR Inc., the manufacturer of Rockstar Energy Drink. The agreement will make Rockstar Energy available at Nascent’s 240,000 established points of sale throughout Mexico. Nascent is the only national distributor who provides imported products throughout Mexico via supermarkets, convenience stores, and food service establishments like AM/PM, OXXO, Wal-Mart, Costco, Soriana, and 7-Eleven.
The Rockstar Energy Drinks are created to provide an extra boost of energy for those who lead an active lifestyle. The drinks are lightly carbonated and enhanced with an herbal blend of ginseng, guarana, ginkgo, and milk thistle. The line of drinks consists of Original Rockstar, Sugar Free, Zero Carb, Juiced-Mango, Juiced-Guava, Juiced-Pomegranate, Punched, and Roasted flavors. ROCKSTAR actively markets their brand at music festivals and extreme sporting events, like BMX, off-road racing, motocross, surfing, and volleyball.
“We’re excited to expand our leading beverage offering with Rockstar Energy drink, one of the most recognized brands in the USA and one of the fastest growing energy drinks in the world. We believe our extensive distribution network combined with our marketing expertise will enable us to achieve the same strong growth in the Mexican market as other markets around the world have enjoyed,” stated Sandra Piancone, CEO of Nascent.
The beverage industry is one of Mexico’s fastest-growing segments, with energy drinks playing a tremendous role in the growth of this area. The key consumers of energy drinks are Mexico’s young, who continue to imitate US trends and fashions.
“We have a proven record of expanding the market share of leading brands such as Miller Beer, Nestle, Haagen-Dazs and General Mills and we are excited about the opportunity Rockstar Energy drink brings to Nascent,” concluded Piancone.
Nascent Foodservice Inc. (NCTW.OB) Announces Positive First Quarter 2008 Results
Nascent Wine Company Inc. (NCTW.OB), dba Nascent Foodservice Company Inc., announced its financial results for the period ending March 31, 2008. Sandro Piancone, CEO of Nascent, said, “We made solid progress during the first quarter, as our financial results met plan, we further expanded our platform of leading brands and began to drive leverage in our infrastructure.”
Net Sales for the first quarter 2008 were reported at $16 million. The numbers reflect a 300 percent increase compared to the $5.1 million reported for the first quarter 2007. The company stated the increase was due mainly to the three acquisitions completed in 2007.
Gross profit improved from $1.9 million in the first quarter of 2007 to $2.8 million for the first quarter 2008. The increase of 191 percent is again due primarily to the three acquisitions. The ratio of gross profit to revenue has remained steady at 19 percent in the first quarter 2007 and 18 percent in the first quarter 2008.
Operating expenses were reported at $3.6 million for the first quarter of 2008, or 23 percent of revenue. Contributing factors to the increase in operating expenses are the improved infrastructure Nascent put in place after the three acquisitions were completed in 2007. The company added 17 distribution centers, leased 48 new trucks and distribution equipment, and increased its finance department. For the same period in 2007, the company’s operating expenses were $1.6 million, which was 30 percent of revenue. Even with the additional infrastructure costs, the company was able to decrease expenses by 7 percent compared to the same period last year.
The increased sales and decreased operating expenses contributed to the improvement in the company’s net loss which was reported at $0.3 million, or $0.01 per diluted share. For first quarter 2007, the company reported a net loss of $1.1 million, or $0.02 per diluted shared.
“During the first quarter we entered into two new distribution agreements including Fusion Energy Drink which is under exclusivity, and Rockstar Energy Drink. Our continued focus on securing distribution rights to desirable and recognizable products should enable us to secure increased gross margin dollars and command higher operating margins going forward. In addition, we focused our efforts on increasing efficiencies within our operations by consolidating warehouses, making delivery routes more profitable by eliminating redundant routes and adding more products to our trucks and leveraging our corporate infrastructure. With the majority of our infrastructure investments completed, we expect to further leverage our operating expenses over an expanded revenue base throughout 2008,” commented Piancone.
The company has about $7 million of trade receivable assets and believes that it has sufficient current assets to meet its cash needs for the remainder of the fiscal year. In the event that additional funds are needed, the company is speaking with several lending institutions regarding a working capital credit line and additional financing.
Piancone concluded, “Looking ahead to the remainder of 2008, we will continue to leverage our position as the first nationwide distributor in Mexico to attract additional leading brand names and increase our market share within the highly fragmented Mexican foodservice marketplace.”
$0.16 (05/15/08)
