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BSAS Business Plan

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Brilliant Vodka

 

This is a business plan.  It does not imply an offering of securities

 

 

Brilliant Spirits and Solutions, Inc.

 

September 6, 2002

This document contains confidential and proprietary information

Brilliant Spirits and Solutions, Inc.

 10120 S. Eastern Ave.

Suite #200

Henderson, NV  89052

 United States

Office: 702 492-1233

    Fax: 702-492-1281   

 

www.brilliantvodka.com

wds@brilliantvodka.com

 


TABLE OF CONTENTS

 Executive Summary                                                           3

Company Overview                                                            7

     International Markets                                                                               8

     New Product Development                                                                      9

     Distributor Relationships                                                                        11

Market Analysis                                                               12

     Situation Analysis                                                                                   13

     Sales Strategy                                                                                        14

     Product Offering                                                                                    15

     Target Markets                                                                                      17

     Marketing Use of Proceeds                                                                   19

Vodka Market Analysis                                                    21

Use Of Proceeds                                                               27

Awards & Diplomas                                                         28

Financial Projections                                                        33

 

 

Executive Summary


Company

The North American marketplace for premium vodka has experienced amazing growth over the last several years and shows no indication of decline.  Brilliant Spirits and Solutions Inc. (BSAS) was founded in 2002, for the sole purpose of taking over world wide distribution of BSL products, as well as partnering with the manufacturer BSL to create a strong entity in the global marketplace for distribution of a broad portfolio of spirits as well as a line of flavor concentrates created to meet the needs of the consumers.

As of January 2002, BSAS has appointed 29 major distributors through the importing company WDS. Brilliant Spirits and Solutions, manufacturer of Brilliant Vodka is working in the top major markets worldwide as well as in the USA. New product developments in addition to introduction of existing products under the BS&S portfolio are presently being marketed to the global marketplace.

 BSAS objectives are to propel the company into a prominent market position with the existing product line as well as introducing new products on a timely basis.

 

Capital Requirements

According to the opportunities and requirements for Brilliant Spirits and Solutions, Inc. described in this business plan, and based on what we feel are sound business assumptions; imminent capital requirements are laid out in the use of proceeds and the offering The funding proceeds will be used to expand in the American market as well as purchase 100% of the manufacturing company. This will allow Brilliant Spirits and Solutions jointly with BSL to cut the cost of manufacturing considerably.

 
Management Team

Board of Directors:

            Michael Marleau, CEO

Roger Baer, COO / Vice President Sales

            Igor Trahktenburg, Manufacturing / Cost Control

            Dawn Hutzler, Assistant to the CEO, Secretary / Treasurer

Son Olney, heads up the art department and advertising as well as on premise accounts

 


Management Responsibilities

Michael Marleau, CEO

Develops and maintains the company vision.  Oversees all business functions and company departments.  Approves all financial obligations.  Seeks business opportunities and strategic alliances with other organizations.  Plans, develops and establishes policies and objectives of business organization in accordance with board directives and company charter.  Directs and coordinates financial programs to provide funding for new or continuing operations in order to maximize return on investments and increase productivity.

Mr. Marleau has extensive experience in the public markets in the areas of securities brokerage, tax shelters and mutual funds. From 1989 1995 he lived in Russia and established import-export-trading ventures in spirits, commodities and food products. He maintains a solid network of contacts in the distribution of vodka and has been very instrumental in the conception and formation of Brilliant Spirits and Solutions.

Dawn Hutzler, Assistant to the CEO, Secretary/Treasurer

Ms. Hutzlers duties include licensing and monthly shipment reports to the State/National bodies (B.A.T.F., ABC, etc.) Accounts Receivable/Payable, and light bookkeeping.  Day to day activities include office administration, tracking sales, business banking, as well as many other everyday corporate responsibilities.  She also attends UNLV at night to further her education and is considering graduating with as a Business major in the future.

Roger Baer, COO/Vice President, Sales and Marketing

Manages market planning, advertising, public relations, sales promotion, merchandising, and facilitating staff services.  Identifies new markets and corporate scope.  Oversees market research and analysis as well as evaluation of competition.  Identifies and sets strategy for reaching foreign markets.

Mr. Baer has extensive qualifications as a sale & marketing executive in the U.S. Spirits & Wine industry, at both the importer and distributor levels. His 30 years of direct experience in sales, promotion, development marketing and senior management with several U.S. companies (Seagrams, Age International, Domecq and Somerset Importers) present a tremendous asset to White Diamond Importers and the U.S. launch of Brilliant Vodka.

Igor Trahktenburg, Manufacturing/Cost Control

Graduated from University of Odessa Engineering in 1976.  Worked in the Ministry of Telavive, Israel Civil Engineering and Planning.  Is a founding member of Brilliant Sprit Limited and five years as Chief Executive of Brilliant Spirit Limited. Mr. Trahktenburg is also instrumental in the production process in Scotland as well as new product packaging and development.

Son Olney, Director of Advertising & Marketing

Son Olney has had six years in the liquor industry in which he worked directly in on premise accounts.  After three years of Business management he has acquired the knowledge to help launch Brilliant Vodka, and is gaining more insight everyday.  Currently going to school at night for business finance and computer classes, he is preparing for the exciting development of Brilliant Vodka worldwide.

 

Additional Outside Advisors

Mr. Don Stoecklein, Securities Law Institute

Mr. Walter Hendricks, C.F.A., Financial Consultant

Mr. Bob Maxwell, President, National Association of Beverage Importers

 

 

Company Overview


Foreign Markets

South East Asia & the Pacific Rim

The management team at Brilliant Spirits and Solutions, Inc. has consistently maintained a focus on the entry of our products for global sales and distribution worldwide. Keeping in mind and practice, that the success of our product in North America would allow us the visibility and popularity to have a successful launch into global markets.

Through our ongoing relationship with key people and organizations specialized in the South East Asian Markets we anticipate entrance to these markets in the near future. Opening orders have been submitted by the Philippines and S. Korea. Specific contact is on going in Thailand and China.

China-June 2003 launch, entrance in March presented at the ROC Expedition

Korea-January

Philippines- November launch, shipping product immediately.  One container = 700 cases + assorted sizes.

Thailand- January roll-out

Japan- Preliminary test marketing in the New Year 2003, roll-out July 2003

 

Western Europe

Although most of the ultra premium vodkas, in the North American market are distilled in Europe, Ketel One, Belvedere, Chopin, Grey Goose and even Brilliant Vodka, none have thus far made an appearance in this potential lucrative market. 

The martini, vodka on the rocks, or flavored vodka martini has not as of yet become the call in the upscale or trendy Night Clubs.

It is only a matter of time before this trend will spill over into Europe. Presently Vodka overall is experiencing a major growth period in Western Europe.

Brilliant Spirits and Solutions, Inc. is positioned to penetrate this market with our ultra premium brand Brilliant Vodka as the demand increases.

In the interim BSAS has initiated the licensing and product approval in many countries within the European Community.

Brilliant Spirits and Solutions, Inc. is dedicated to developing a worldwide presence in the spirits industry with Brilliant Vodka as our flagship product and introduction of our complete portfolio, as well as continuing to focus on the development and introduction of new products. The fundamentals for success are laid out in our day-to-day business practice. BSAS believes that Ps & Qs are important. (Price and Quality).

New Product Developments

Portfolio extensions

 

Brilliant Spirits and Solutions, Inc. recently developed and created molds for the production of Brilliant Vodka in a (one) 1-liter and (one point seven five) 1.75 liter package soon to be introduced into the North American market.

Presently Brilliant Spirits and Solutions, Inc. and Brilliant Spirit, LTD. have developed and introduced to international competitions a new ultra premium London Dry Gin under the Brilliant Spirits trademark. The results have been outstanding and Brilliant Spirits and Solutions are pushing for introduction of this product in the 1st quarter of 2003.

Ultimately, the introduction of new sizes will fill a market niche that we did not previously have presence in.

The flavored vodka, mixed martini trend has continued to grow in North America, The consumer is dictating their specific tastes as well as wanting to try new and exciting drinks. Presently there are approximately nine popular flavored Vodka products available to the consumer.

Brilliant Solutions

For the average consumer, looking to offer a variety of popular drinks within his or her home bar they must carry (9) different flavored vodka spirits. The off premise (package store) must also carry an extensive line of flavored vodka as well as the most popular clear natural ultra premium vodka brands.

Brilliant Spirits and Solutions and Brilliant Spirit, LTD. have created the ultimate easy to use and affordable product line.

The concept is to offer the versatility for the average consumer, to have at his disposal the ability to offer guests a multitude of drinks by utilizing only one bottle of ultra premium vodka and an assortment of popular flavors as well as experimenting with his or her own different tastes.

The introduction of concentrated flavors to the general public as well as use in special events, promotions and point of sale value added purchase would contribute to increased sales, high exposure of the brilliant name as well as new revenues for the company.

Brilliant Spirits and Solutions, Inc. will be introducing a line of concentrated flavors to fill the requests of both consumers as well as on premise accounts. The introduction will begin early in 2003 with a menu of 12 distinct and popular flavors.  BSAS will monitor consumer demands as well as popularity to determine any further line extensions in the flavor category.

 

Licenses & Permits

See Due Diligence

 

Government Regulations

Both Federal and State authorities regulate the manufacture and sale of alcohol.  Because BSAS manufactures and distributes alcohol, BSAS maintains a relationship with White Diamond Spirits for the purpose of importing in the USA.  In August 1999, WDS received its basic Import Permit from the U.S. Bureau of Alcohol, Tobacco and Firearms along with state regulatory bodies as was necessary along our path of durance prudence, and as a result is able to import and distribute Brilliant products in all fifty states.  BSAS is presently preparing application to the BATF for a basic permit in the USA.

Brilliant Spirits and Solutions continues to register the brand Brilliant Vodka in all sizes in the 50 States in the USA; requirements have been met to sell in the Canadian marketplace. Presently the product is available in two provinces in Canada. 

 

Distributor Relationships

The following is a list of existing relationships:

 

Organization

State

Organization

State

Franklin Beverage

California

National Distributors

Washington DC

Judge & Dolph

Illinois

State Control

Ohio

Delucca

Nevada

State Control

Alabama

Crown Wholesale

Maryland

State Control

Michigan

Glazer Wholesaler

Arkansas

State Control

Virginia

Delaware Beverage

Delaware

Glazer Distributor

Indiana

General Distributing

Georgia

Midwest Distributor

Colorado

National Distributing

South Carolina

Premier Beverage

Kansas

Glazer Wholesale

Texas

Bell Boy Distributors

Minnesota

Glazer Midwest

Missouri

Royal Wines

New Jersey

State Control

Pennsylvania

State Control

No. Carolina

Select Beverage

Louisiana

Southern Wine & Spirits

Florida (Pending)

Martignetti

New Hampshire

Franklin Beverage

Arizona

State Control

Washington

State Control

Oregon

Best Brands

Tennessee

Royal Wines

New York

 

Strategic Alliance

BSAS has teamed up with the Action Group out of Fort Lauderdale Florida, The Action Group brings to the table years of experience in both off premise, Chain Accounts and on premise Accounts. The Action Group is responsible for delivering Southern Wine & Spirits as our State Wholesaler as well as filling the pipeline with the chain accounts and regular retail outlets. We look forward to a long and mutually beneficial relationship.

Brilliant Spirits and Solutions recently negotiated an agreement with MHW, Ltd. Of Manhasset, NY to assist us in our registration of Brilliant Vodka in the 50 US states as our broker-sales agent.  MHW, Ltd is an 8-year-old company that is licensed as a importer and distributor as well as having experience in compliance with the ABC and BATF government agencies.

 

Market Analysis

Situation Analysis

Brilliant Spirits And Solutions (hereafter will be called BSAS) product offerings focus on providing a quality product to the market which is gearing towards the ultra premium category and flavored vodka. Statistically the demand for ultra premiums has risen over the past few years and BSAS is convinced that a cohesive marketing strategy is required. BSAS currently offers Brilliant Vodka (50ml, 100 ml, 750ml) and is in the process of introducing a 1 liter and 1.75 liter bottle, also a flavored concentrate line and a London Dry Gin to be introduced within this year. Brilliant Vodka's prices are competitively better than the competitions and quality is in a class of its own, as shown with our numerous awards for best tasting vodka. We hope to draw in consumers through quality, pricing and advertising, which will establish Brilliant as the vodka for the 21st century. 

 

Market Analysis

 Sales of ultra premium vodka is experiencing rapid growth due to the education of the consumer for quality products. There are approximately six other ultra premium vodka brands that make up this category. BSAS marketing strategy is; capitalize on this rapid growth of educated consumers and provide them with an award winning quality product, priced well within the range of competition.

Vodka is in the forefront of distilled spirits, popularity and sales. In 2001 vodka accounted for 25% of the total spirits sold in the U.S. (28% in California). With the current Martini craze sweeping across North America, growth indicators favor positive sales increase in the vodka category with the ultra premium brands showing the fastest growth.

Ending 2001, vodka consumption grew nationally 4.2%; however, several brands experienced much larger increases.

          Domestic                                                         Imported

  • Smirnoff                8.8%                                  Grey Goose         218%
  • Skyy                    18.8%                                 Ketel One           20.2%
  • Gordon's              10.2%                                 Vox                       61%
  • McCormick           6.6%                                 Belvedere            94.6%
  • Fleischman           11.4%                                 Chopin                   25%

 

Customer Profile

Due to our marketing strategy, WDS has three distinct customer groups: the distributor, the retailer, and the consumer.  Since each group has slightly different needs, our in depth understanding of each target customer group helps us differentiate our product from the competition and position Brilliant products in the ultra-premium category.

 

Distributor

Our key distributors in the United States are fully engaged in the sales and distribution and follow-up of our product line.  Sales personnel under the management of the wholesalers are all well versed on the merits of our products and are committed to the ongoing growth of the business. 

Retailer

Our retailers on & off sale, including chain stores that have a large customer base which is essential to getting our product out in to the marketplace.  In addition, they are very familiar with the needs of the marketplace and have a desire to build new brands and participate in the profits attached to the ultra premium category.

Consumer

Our target customers are educated consumers and aware of the quality and taste characteristics of premium vodka. These sophisticated customers have a willingness to try new products on the cutting edge.  This consumer group appreciates quality products and will pay for their distinctive taste and unique packaging.

The average consumers of our product are people of the "Boomer Generation." The "Boomer Generation" currently consists of two-thirds of alcoholic beverage consumers and is a considerable source of revenue for the Wine and Spirit Industry. 

The "Generation X er's, with an estimated 43 million people ages 20-29 are also an important key to our success.   This demographic group desires products that are popular and chic.  Our advertising campaign markets our product to fit the needs of this group.

Sales Strategy

Our goal, by year-end 2002 is to penetrate the top markets in the U.S.  In order to accomplish this goal, our overall sales and marketing plan is based on the following fundamentals:

Packaging:                 The exceptional packaging of the "Brilliant" six-sided hexagonal bottle, 3 dimensional label, and J.G. Durand crystal shot glass affixed to the top of each 750ml certainly separate it from other vodka's.  This helps to ensure customer loyalty. Brilliant's unique packaging and taste will compel consumers to view Brilliant as a high quality product.  In addition, Brilliant has received numerous awards at International Trade Shows.  This recognition provides brand awareness and ensures our position as a leader of ultra-premium vodka.

Key Management: BSAS is structured in a very positive growth market within the premium vodka category.  With our many years of expertise from our senior management team, our continued goal is to expand our distribution not only in US but internationally.  We have carefully designed Brilliant Spirits and Solutions with a knowledgeable, motivated board and staff ready to make Brilliant Vodka succeed.

Price:                         Our pricing philosophy is high quality at reasonable prices.  Market analysis on pricing of similar products indicates that Brilliant is well situated to compete with other ultra-premium vodkas. The prices for our products are determined first and foremost against current prices with comparative products in the same ultra-premium vodka category.  Fair and competitive pricing is essential to our market profile.

Strengths

  • Imported from Scotland.
  • Award winning taste and packaging.
  • Competitive pricing.
  • Key management who are highly trained and consumer oriented.
  • Introduction of new products.
  • Willingness to be cutting edge.
  • Visible product placement on shelves of on/off premises accounts.

 

Opportunities

  • Brand recognition as the vodka for the 21st century.
  • The constant growth of the ultra premium and flavor category.
  • Newly formed alliances with distributors.
  • Consumer demand to have a quality product at competitive prices.
  • Worldwide distribution.
  • Forming alliances with other companies through partnerships promoting our products.

 

Product Offering

BSAS currently offers Brilliant Vodka in sizes 750ml, 100ml, and 50ml. The Brilliant line is a ultra premium vodka that is 100% winter wheat and is distilled in the highlands of Scotland. Brilliant Vodka is 5 times distilled and 3 times filtered for an exceptionally smooth taste (most vodkas use 3 times distillation methods). What makes the process even more dynamic is that, during one of the filtration stages, Brilliant Vodka is passed over a screen filled with 'cut diamonds', further enhancing Brilliant Vodka (a well guarded secret). Along with its award winning taste Brilliant Vodka has caused heads to turn with its unique, award winning packaging, featuring a six-sided hexagonal bottle, a 3 dimensional label, and a J.G. Durand crystal shot glass affixed to the top of each bottle. BSAS currently is in the process of producing 1 liter and 1.75 liter bottles that will be introduced to the market within this year. BSAS has structured a price point for the Brilliant line that is competitive. Our pricing philosophy is 'high quality at competitive prices'. Market analysis on pricing of similar products indicates that Brilliant is well situated to compete with other ultra premium vodkas (currently the market has at least six other vodkas, which control the ultra premium category). The prices for our products are determined first and foremost against current prices with comparative products in the same ultra premium category. Fair and competitive pricing is essential to our market profile.

BSAS also is in the process of offering a concentrated flavor line that will be introduced within this year. The flavor concentrate will be packaged in our distinctive 100ml glass bottles and will be available in most grocery outlets as well as local bars and liquor stores. The concept is to offer the versatility for the average consumer, to have at his disposal the ability to offer guests a multitude of drinks by utilizing only one bottle of Brilliant Vodka and an assortment of popular flavors. The introduction of concentrated flavors for sale as well as special events promotions and point of sale value added purchase would contribute to increased revenues for the company. BSAS will monitor consumer demands to determine the initial 12 concentrated flavors to be introduced and to determine new flavors in the future for the flavor category.

BSAS in 2003 will be introducing its Award Winning London Dry Gin. BSAS has developed the London Dry Gin earlier this year and has introduced it to international competitions as a new ultra premium London Dry Gin. The results have been award winning and we are confident that the London Dry Gin will stand up to any other gin currently on the market. 

All these qualities - the special bottle design, the production and bottling of Brilliant Vodka in the beautiful hills of Scotland, the romance of vodka spilling over perfectly cut diamonds during the final process, an award winning taste that is exceptionally smooth, a new concept with concentrated flavors, and a new award winning London Dry Gin - combine to make one of the most exciting, uniquely bottled and great tasting vodkas/gins to be introduced into the marketplace today.

"Truly a Vodka for the 21st Century"

 

Keys to Success

The keys to success are:

  • Advertising.
  • Consistent Value.
  • Repeat customers.
  • Quality.
  • Superior prices.
  • Low overhead and operating cost.
  • Key Management who are knowledgeable about what's going on in the market and are able to set trends.

 

Marketing Strategy

BSAS will continue focusing on promoting Brilliant Vodka as the vodka for the 21st century. Along with that BSAS also will be introducing the new concentrated flavor line and the London Dry Gin. The strategy will be through educating on and off premise accounts, continued support through distributors, acquiring brokerage houses, promotional events, and advertisement. We foresee with mass marketing that BSAS will be able to obtain greater case depletion and to further our company to the next level.

 

Financial Objectives

  • A double-digit growth rate for the next five years.
  • To increase distribution throughout the world.
  • Profitability by the end of year three.

 

 

Target Markets

BSAS is confident we can capture a good share of the market for those who are demanding a vodka that beats the competition in taste and has a outgoing image behind it. We are definitely out to address the needs of the consumer who wants to have a quality product at a competitive price.

  • Tier 1 (21-29) consumers will be targeted through advertisements in both local and national advertisement. The advertisements will raise visibility for Brilliant Vodka through cutting edge ads. BSAS intends to utilize top models to be featured in the print ads and to create a gallery for each model in which the consumer visits the website on a regular basis. We want to establish ourselves as the hippest and coolest vodka out there, because if you're not drinking Brilliant, then you're not having fun. The image that will be portrayed is about being classy and chic and that will appeal to these consumers.
  • Tier 2 (29-44) consumers are definitely the trendsetters and brand makers. This group enjoys going out to restaurants, concerts, and nightclubs. To appeal to this group promotional events are necessary. Events that BSAS is involved with tend to be the movie industry, music industry, or charities. By associating ourselves with high-end events such as the entertainment industry, we can reach out to consumers that would have never known about Brilliant Vodka. These events help educate the consumer and brand us as a classy chic drink for the consumer.
  • One thing not to be forgotten is to target the service industry consumer. These consumers add to our sales force for Brilliant Vodka and to get them excited about a brand only helps us to get recognition. BSAS intends to enhance product knowledge through educational tools. Education of our products will make them feel a part of the whole Brilliant experience. BSAS also offers a gift certificate incentive program to initiate sales and to reward the service industry consumer. Target these consumers and they can help launch the brand to another level. 
  • BSAS also is including the woman consumers, who make up 70% of spirits and wine purchased today. BSAS will produce specific ads that target these women and will be included in such magazine as Bon Appetit, InStyle, Vanity Fair, etc. 

 

Positioning

BSAS has an edge over the competition by offering a ultra premium vodka that is award winning, competitively priced, and a unique story to go with it.

BSAS with its unique and aggressive advertising focuses on the consumers who want to be cutting edge, who are trendsetters, who love to have the image of success and who appreciate a superior vodka.

BSAS meets consumer demand through quality, pricing, new product development, advertising, promotional events, and worldwide distribution.

BSAS proves superior to the competition through its award winning taste that is distinctively smooth, its unique packaging which includes a J.G. Durand crystal shot glass and a three dimensional label.

BSAS will continue surpassing the competition with the introduction of the concentrated flavor line. This revolutionary concept will be the next biggest trend to hit the flavor market. This will prove to be cost effective to both retailer and consumer by offering 12 concentrated flavors and only needing one bottle of Brilliant Vodka to enjoy a variety of mixes.

Another market penetration for BSAS is the London Dry Gin that will be introduced within this year. Having already won 2 gold medals in taste competitions, the London Dry Gin will be packaged with the Brilliant Bottle that will distinctively set it apart from its competitors.

BSAS with its diversified award winning product line will capture the consumers awareness and loyalty and gain greater market share over the next year.

"You Don't Have To Be A Genius To Be Brilliant."

 

Strategies

The single objective of BSAS is to establish Brilliant Vodka and other new product lines as the hottest products to hit the market.  BSAS aims to be recognized worldwide as the top spirit in the ultra premium category.  The marketing strategy will seek to create customer awareness regarding the products offered, develop a consumer bases, and work towards building consumer loyalty and referrals.

BSAS will use advertisements, on and off premise educational programs, incentive programs, promotional events, and direct mailing.  Advertisement will consist of a few national magazines (FHM, Wine & Dine, Smoke) and local magazines in major cities.  On and off premise educational programs will be taught by a BSAS representative; or by a CD ROM disc that will be created and given out to all staff to take home and learn on their computer.  Incentive programs will take place in major accounts that we fill have an image that we want to associate ourselves with.  We would like to try to run 3 incentive programs a month and to reach out to different venues.  Promotional events will be on a monthly basis and we will maintain at least 2 events a month in every major city.  Direct mailing will involve the introduction of Brilliant View magazine in which it will be given out as a free publication.  By implementing these strategies BSAS will increase case depletion and branding Brilliant as the vodka for the 21st century.

Use of Proceeds Next 18 Months -

Industry Association  - $55,000

Merchandising and Roll Out (one time cost) - $600,000 - A cost incurred by which BSAS goes into a key market and construct a major advertising and promotional launch to grasp the attention of the consumers.  The rollouts are established in addition to creating an ongoing momentum in a specific marketplace. 

Chicago                                              Minneapolis-St.Paul

Los Angeles-Long Beach                    Miami                          

New York                                          Las Vegas

Boston-Lawrence-Lowell                    Denver

Philadelphia                                         Nasau-Suffolk   

Detroit                                                 Fort Lauderdale 

Washington, DC                                  Orange County       

Phoenix-Mesa                                     Seattle-Bellevue-Everett

Atlanta                                                 Newark             

Tampa-St.Petersburg                           San Diego   

              

Chain Accounts Roll Out - $250,000 - Initial roll out will consist of shelf talkers, highly visible shelf placement, and insertion in sales ads.

National Magazines

  • $110,000 FHM - 6 issues - Over a million in circulation, Median age 29, HHI $65,000, Hottest magazine to hit American market in 2 years, FHMs demographics fit with BSAS for the trendy drinker.  FHM also has a strong readership base in South East Asia.                                                   
  • $60,000 - INSTINCT - 6 issues - America's #1 gay magazine, Gay community spends over 500 billion dollars each year on products and services, BSAS will be able to build brand loyalty and recognition by utilizing a market that hasn't been tapped.                                                   
  • $4,500 - WINE & DINE  - 3 issues - The entertainers' sourcebook for new products, consumers utilize this information for the newest hot restaurants and drinks, fits in with BSAS demographics for the tier 2 consumers.                                              
  • $4,500 - MILLIONAIRE - 3 issues  - Median age 28-45, HHI $220,000, Fits well with the demographics for the man that exudes an image of being sexy, diamonds and a chic appearance.                                   

Local Magazines - $100,000 - Needed to keep up with the local consumers that can help create a buzz about BSAS' product line. BSAS plans to focus on two major local publications per market. Along with our national advertising, we are able to focus on a direct market, which in turn creates new consumers who are willing to drink our products, and help build brand awareness.  Markets that will be used are Las Vegas, San Francisco, Los Angeles, San Diego, Houston, Dallas, Chicago, New York, Atlanta and South Beach. 

Production Cost - $60,000 + radio and television consideration

Zoom Media -$75,000 - Advertising in restrooms is an effective way to reach the consumer when they go out on the town and use the restroom in their favorite establishment. This advertising is focused on key locations in major markets and lets us reach specific demographics. BSAS will determine the major markets and specific locations in order to reach new consumers. BSAS had huge success using this form of advertising for Brilliant Vodka and we will continue this form of advertising.

Outdoor Advertising -  $100,000 - Only a select few markets will BSAS use outdoor advertising. BSAS feels that as the company grows then outdoor advertising is feasible, but in certain markets it is necessary to create brand awareness. Such markets that will be used are Miami, Chicago and Los Angeles.

Direct Mailing - $60,000 - Direct mailing will consist of a Brilliant View publication that will keep the consumers and shareholders informed of what's going on with BSAS. Brilliant View is a free publication that will consist of newsletters, high fashion, promotional events, recipes and future events to come. This publication will be distributed by either mailing, inserts in magazines, handouts and promotional events. Being able to give our consumers material on BSAS we will help build brand awareness and loyalty by providing entertainment in the form of a publication.

Promotional Events - $100,000 - Consisting of events involving the entertainment industry, fashion shows, music industry and charities. Promotional events are essential for being able to introduce our products to a certain demographics that we feel are essential to build brand awareness and loyalty. Past promotional events were a success and we were able to build brand awareness and to obtain new consumers who are now loyal to the brand. BSAS will also create a special event in major markets that will be something never done by our competitors and BSAS will continue to support events and to obtain new consumers.

Merchandising - $35,000 - In the industry a great marketing tool to build brand awareness. BSAS will utilize merchandising, but we want to take it to a new level in which we will develop Brilliant Wear. A line consisting of trendy wear, which consumers want to be seen in. Along with the Brilliant Wear, we also want to produce merchandise that will capture the consumers attention, such as martini markers, ice buckets, martini glasses and diamonds with pouches. These are a few of the many items BSAS will develop for the consumers.

POS (Point of Sale) - $15,000 - POS materials help build brand awareness. Such items would include folders, posters, kiosk, pour spouts, banners, calendars, bar cards and backlights. These are a few of the POS items to be used for brand awareness.

Incentive Programs - $80,000 - A crucial program that builds brand awareness by giving the personal (wait staff, bartenders) an incentive to introduce BSAS' products to their customers. BSAS over the last year has had huge success in building brand awareness with this program and will continue to support this program.

Educational Programs - $20,000 - Educating the consumer is key in building brand awareness. This is done through staff training and BSAS will continue to maintain these classes. BSAS will also introduce a CD ROM disc that will be given to each staff member to take home to learn about our products. The CD ROM disc will be highly effective and cost effective because these days almost everyone has a computer and BSAS doesn't need to spend on labor cost to educate the staff. A cost effective way to build brand awareness, utilizing technology.

Contingency                                                                            $150,000  

Total Cost                                                    $1,219,000

 

 

The Spirit Industry

Vodka Market Analysis

 

 

PERCENTAGE OF USER CONSUMING VODKA

 

Male 53.7%

Female 46.3%

 

Vodka Todays Coolest Spirit

 

At one time there was a universal belief that vodka was vodka and that they vary, very little and nothing separated one from the next.

The United States definition of vodka neutral spirits that are so distilled or so treated after distillation with charcoal or other materials as to be without distinctive character, aroma, taste or color.

But as we all know today, not all vodkas are created equal.  Contrary to past belief, this neutral spirit can and does have in many cases a very defined taste, character, aroma and texture.

Some vodkas are clearly more pure than others due to the filtration and distillation process.  Some may reflect delicate and very subtle flavors, as well as a noticeable smoothness.

There are definite taste differences between domestic and imported vodkas.  The up-scale brands are distilled three or more times, Brilliant - five times.

Why has vodka been so popular in the past and continues to be today?  Simply because of its universal appeal and marketability enabling the consumer to blend it with almost any other product; it is the perfect base for creating hundreds of mixed drinks.

Vodka, our countrys most popular spirit, outsells brown goods and other spirits year after year.  In California alone, vodka has a 28% share of category leading its nearest competitor brandy - which holds a 10% category share (U.S. share equals 23% of category).

Certain trends in vodka consumption that began several years ago continue even stronger today.  The martini continues to outsell other vodka-based cocktails in many major markets.

Although the growth was a little sluggish overall, the vodka category, premium and super-premium vodkas continue to show incredible growth.

 

Lets Compare Vodka Statistics

From a geographic perspective, the top five volume states are California, New York, New Jersey and Florida.

Ending 2001, vodka consumption grew 4.2% over 2000 case sales, which relates to an estimated 38,000,000, 9-liter cases.  Long-term vodka sales will edge up to 45,000,000 9-liter cases by the year 2003.

In order to get a better insight into the vodka category as a whole, we will look at key category leaders as it relates to imported and domestic markets:

 

COMPETITION

 

Competition for sales of vodka is intense and the market is expanding.  There are at least six other ultra-premium vodka brands, which control the ultra premium category.  WDS' marketing strategy is to compete directly with the ultra-premium vodka brands of which presently there are 6 entrees in this market.  Competition among the vodka brands is driven largely by advertising for brand recognition, as well as pricing.

 

Principal competitors in our target market include the following ultra-premium brands:

 

ChopinVodka         Poland            RetailAverage             $31.50*       Feature

GreyGoose             France            RetailAverage             $29.99         $28.99

Belvedere               Poland            RetailAverage             $29.99         $26.99

Cristall                    Russia             RetailAverage             $28.99        $26.99

StoliGold                Russia             RetailAverage             $28.99 

KetelOne               Holland           Retail Average            $19.95*

BrilliantVodka       Scotland           Retail Average            $19.95

 

*These price examples are averaged from 1999 current pricing in selected states across the U.S.

KETEL ONE Has doubled its 1995 case sales from 100,000 to 200,000 cases in 1996 and continues to grow. Ketel Ones Sales Co. ending case sales 1999 were 605,000 and still growing, Notel Spirits U.S.A. have kept a very low advertising profile yet the brand thrives, it is almost cult-like. They have won in the trenches local promotions thousands of taste-tests, seminars, information packets, mailers, where seminars are held for each staff members - videos are given to all.  By year ending 2001 case sales will exceed 950,000 cases

GREY GOOSE VODKA Sidney Frank Importers entry into the premium vodka category depleted an estimated 70,000 cases in 1997 with 110,000 cases depleted at the end of 1999.  They had an estimated budget in excess of almost $3.5 million dollars for 1999 2000, depleting 275,000 cases by the end of 2001 their estimated depletions were 600,000 cases their budget for advertising for that year was $5,600,000

They continue to ship thousands of martini kits, and held over 4,200 tasting parties.  They also flooded the market with off-premise point of sale material.  In the past two years has introduced orange and citrus flavors, plus 1.75 and 375 ML sizes.  The brand is on fire!

FRIS VODKA  Shaw Ross (owned by Chaplin, family of Southern Wine & Spirit Distributors) does literally no advertising using some of the same ideas from Ketel and a lot of word of mouth.  As stated by their brand manager Who can compete and keep up with the spending of Absolut?  Fris grew to a very respectable 83,000 cases in 1997 but lost business in 1998, 1999 depleting only 60,000 cases (-38%).  This past year they did increase their ad spending from $76,000 to $360,000.

 BELEVEDERE- Introduced in 1996 Belevedere has been giving Absolut and Stoli fits, ending that year with an estimated 25,000 cases.  In 1997 they depleted 60,000 cases coupled with over a $1 million dollar plus advertising and promo budget.  Continuing its growth in 1998 with an estimated depletion of 164,000 cases (157%) growth; their advertising budget also grew accordingly to an estimated 167,000 cases.  In 2000 their budget was $3,867,000 increased to $4,651,000 in 2001 to keep their case sales growing to over 366,000 cases.  A +30.9% growth rate.

 

CHOPIN A similar Polish vodka to Belvedere, but more expensive (potato based), from the same company (Millenium Importers) estimated to do 38,000 cases in 1999 and continues to grow with double-digit depletion figures.  The year ending 2000 Chopin experienced an estimated case depletion over 40,000 cases.  Growth in 2001 was +25%, +10,000 cases finishing with 50,000 for the year.

 VOX Introduced in 2000 by Jim Beam brands depleted an estimated 34,000 cases.  In 2001, its 55,000 cases amounted to a 61% increase over last years.  However, in surveys around the country, the brand is struggling.  Jim Beam had put over $2,800,000 in advertising this past year.  A rate of over $50.00 per case spending.

 


PAST PERFORMANCE ULTRA PREMIUM CATEGORY

Skyy was introduced:

1993-             20,000 cases               1999-            820,000

1994-            190,000 cases              2000-            1,090,000

1995-            396,000 cases              2001-            1,295,000

1996-            500,000 cases

1997-            594,000 cases

1998-            702,000 cases

 

Ketel One was introduced:

1994-             60,000 cases            (already in the U.S.-1990)

1995-            100,000 cases                       

1996-            200,000 cases              2000-            793,000

1997-            300,000 cases              2001-            953,000

1998-            457,000 cases

1999-            605,000 cases

 

Belevedere was introduced:

1996-             25,000 cases               2000-            167,000

1997-             66,000 cases               2001-            325,000

1998-            104,000 cases

1999-            144,000 cases

 

Grey Goose was introduced:

1997-             18,000 cases               2000-            275,000

1998-             50,000 cases               2000-            600,000

1999-            100,000 cases

 

Chopin was introduced:

1997-           18,000 cases               2000-            40,000

1998-           20,000 cases               2001-            50,000

1999-           38,000 cases

 

Vox was introduced:

1999-             5,000 cases

2000-           34,000 cases

2001-           55,000 cases

 

Brilliant was introduced:

2000-            Roll-out

2001-            10,800 cases

 

Total leading brands including Absolut/Stoli  - 8,703,000 cases -  (+8.4%)

 

Brilliant Spirits and Solutions, Inc.

Use of Proceeds

 

Initial Payment to BSL Principals

$ 500,000

Purchase Product: 30,000                                    (approx.)

$ 900,000

Advertising & Promotion                                      (approx.)

$1,219,000

Salaries

$ 480,000

Investor Relations

$ 35,000

Legal & Accounting

$ 150,000

Office and Insurance

$ 134,000

Industry Association

$ 30,000

Travel and Entertainment

$ 150,000

Production of moulds for 1.75 L bottles

$ 75,000

1.0 L and 1.75 L bottles

$ 25,000

Production of printing plates and cutters for 1.0 L bottles cases

$ 5,000

Production of printing plates and cutters for 1.75 L bottles labels

$ 5,000

Production of printing plates and cutters for 1.0 L bottles labels

$ 2,000

Design

$ 25,000

Development of Brilliant Gin

$ 10,000

Introduction Brilliant Gin

$ 25,000

Development of Brilliant flavored vodkas

$ 15,000

Introduction of Brilliant Solutions

$ 75,000

Introduction Asia & Europe

$ 200,000

Payment to WDS

$ 500,000

Cash on Hand

$ 840,000

 

 

                                                                                     TOTAL:

$5,400,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Awards and Diplomas

 

 

 

Financial Projections