Green PolkaDot Holdings
CEO Rod Smith
WSA: Good day from Wall Street. This is Juan Costello, Senior Analyst with the Wall Street Analyzer. Joining us today is Rod Smith CEO of Green PolkaDot Holdings. The company trades over the counter, ticker symbol GPDB. Thanks for joining us today, Rod.
Rod Smith: Thank you. Glad to be here.
WSA: Great, anytime. Now, starting off, please give us a history and overview there of the company for some of our listeners that are new to your story.
Rod Smith: Well, Green PolkaDot Box was founded at the end of the 2011. We’ve been operating for approximately three years. We saw a niche opportunity to become an online wholesaler of organic and non-GMO foods in the United States marketplace. It’s currently about — there are about 16 million adult consumers who consider themselves to be health-minded but also consume on an occasional or frequent basis, organic and non-GMO foods. And that market segment is growing at a compounded rate of about 11% per year, but what’s exciting to us is we see a much bigger market potential beyond that where there are actually 65 million adults who claim to be health-minded. Many of them however don’t really understand the health benefits of consuming non-GMO foods in particular organic foods in general.
And so, we’re staking a claim in that market. We believe that over the next ten years, there will be a gigantic market expansion into what we call clean foods. These are foods that do not have any pesticides, or herbicides, toxins, synthetics, and especially genetically-modified organisms. We think that public awareness is growing about the harmful effects of consuming GMO foods and that over time, the vast majority of the US consuming public will make a shift from conventionally grown foods to foods that contain no GMO.
So, the last three years we’ve been developing our business, we’ve been building our foundation, acquiring customers. We’ve attracted over 25,000 customers over the last three years, but we’re really at a point now where our product line is in place. We’ve acquired thousands of products. We are really making great strides and we’re preparing to launch what we call a Health Merchant Program that I can describe in some detail if you’re interested.
WSA: Yeah, that would be great. Can you talk about that and then follow it up by taking about your agreement with LinkTrust that you have through your affiliate program?
Rod Smith: Yes. I will. We have–we’ve essentially as I mentioned perfected our business operations and improved our marketing concept. We have the ability to attract and convert customers. In fact, we’re among the leaders in our segment of online retailers. We are gaining about 274% higher conversion rates on first time visitors and on repeat customer visits than the rest of our competitors in our segment. The reason for that is we’ve become experts at marketing and converting costumers with the product offerings that we do.
So, regarding the Health Merchant Program, we are essentially offering a turnkey business solution to other entrepreneurs and individuals with broad influence in the healthy or health conscious marketplace. In a way, it’s kind of like a franchise opportunity though it’s more purely a licensing right to create a replication of the Green PolkaDots Box store but under their own private label or private brand. And our goal over the next three to five years is to establish 30,000 health merchants who each have the capability to reach anywhere from 1,000 to 5,000 consumers directly within their influence.
So and through the expansion of the Health Merchant Program we anticipate ramping up and selling to millions of customers who have become educated and concerned about eating non-GMO foods. So, this is a very exciting program. We’re still in beta, we’re in prelaunch mode. Our heath merchant stores are going to go live at the end of this month, but we’ve already got health merchants signing up and referring customers. In fact, last month we had one customer or one health merchant along that referred 798 new customers to Green PolkaDot Box, our store, knowing that they would eventually transfer over to his store.
So that’s the microcosm of the greater business models that we have. We think that through the Health Merchant Program, we can expand our reaching influence to millions of customers through trusted sources, individuals that the customer knows and trust. Examples of health merchants would be alternative medicine, healthcare practitioners, osteopath, homeopath, chiropractors, health food store owners, bloggers, and the list goes on and on. There are probably a million potential candidates for Health Merchant Program in the US, and we anticipate our ability to really exploit that opportunity to be the first and only opportunity of its kind empowering many people tens of thousands of people to replicate what we’re doing in the market. And we’re very excited about that.
Our deal with LinkTrust is very comparable to a couple of other affiliate network relationships we’ve established with ShareASale, Performance-Based, LinkShare as well in an effort to promote our brand and make consumers aware of our product offering which by the way we are the only online store in America including retail operations that I’m aware off that has drawn a line and will not carry any products that contains GMO.
And so, we’re utilizing and leveraging our marketing efforts through our partners like LinkShare, and LinkTrust, and the others I mentioned to be able to reach a broader segment of the marketplace. You know, you have to recognize that today, as the percentage of the total food market, health-minded consumers that eat organic or non-GMO foods are relatively a small percentage, approximately 7% of the adult market today.
So through the affiliate program, we are able to reach not just organic and non-GMO consumers but a much broader market, and educate them about the benefits of eating clean food, and also about the links between the diet they currently eat and disease that occurs later in life because of that diet.
So the affiliate program, working with affiliate network partners, developing the health merchant network that I referred to, these are our main marketing strategies in 2015 and we anticipate that we’ll see dramatic gains in both membership and revenue sales this year.
WSA: Great. And what are some of the other factors that you feel make the company unique from some of the other players in the sector?
Rod Smith: Well, I think I mentioned one already that we’re the only non-GMO food supplier and we intend to make hay with that, but another significant difference is our low price guarantee. We are the low price leader in the market for organic and non-GMO foods. So, as customers that don’t like to pay retail tend to migrate towards membership organizations like ours, you know, we’re patterned after the Costco model and Walmart model, Sam’s Club, but in the specific niche of organic and non-GMO foods. So, that’s one differentiator.
We have a very powerful online marketing system and I think another unique feature of our company is our ability to custom pick and pack orders that don’t have case slot minimum or club pack sizes. Somebody can go to our website or our store and they can order one item of this and one item of that, and we custom pack to their ordering and ship to them FedEx.
So giving the consumer a lot of flexibility and telling them what they order, when they order. And also providing that flexibility with a low price guarantee really, really puts us ahead in the marketplace and we think we have a chance to maintain our leadership position and be the dominant player in the online space for organic and non-GMO foods.
WSA: Good. And what are some of the key goals and milestones that you’re hoping to accomplish over the course of the next 6 to 12 months?
Rod Smith: Well, this year — this next 6 to 12 months, we want to establish a minimum of 5,000 health merchants, each doing approximately $1,000 a month in sales minimum. So we believe that product sales in addition to the monthly service fees paid by the health merchants will generate somewhere between $5 and $6 million in monthly sales. So, by the end of the year we expect to be on an 80 to $100 million run rate. We’re currently on about a $5 million run rate, but as I said the Health Merchant Program is just launching and we’re already seeing the fruits of that. We know we’ve got a winning concept here and there are thousands and thousands of people who will embrace the idea and begin co-marketing with us.
So this is something really that’s never been done before and I’m very excited about the potential of it. It’s going to be the way that we educate consumers about the problems associated with GMO foods, which now completely pervade the food marketplace. Over 70% of the items you find in your grocery store contain GMO. The public has been kept in the dark about this vital issue, and we think that through the Health Merchant Program we can establish a grassroots movement or a bottom-up movement to educate and inform the public about GMO–Something that the government is not doing today, and something that the major food companies, and agro businesses, and farmers are not disclosing to the public–They’re not providing labeling information about GMO.
So, we think there’s a big opportunity for a dramatic consumer shift from conventional groceries to non-GMO groceries and we intend to be the leader in that. I think this year, as I said, we expect our growth to increased by tenfold over current levels by year-end.
WSA: Good. So, as far as investors and the financial community are concerned—as you recently had some good sales results in December compared to the previous month–do you believe that your message and story and upside are starting to become better understood by them?
Rod Smith: Yes. I think they’ll be able to watch and see what happens. It will become much more clear what we’re doing in the market with the Health Merchant Program and through affiliate networks. So, I see nothing but upside for us in the days ahead.
WSA: Is there anything that you wish investors better understood about the company?
Rod Smith: Yeah, I do. I wish they understood what’s going to happen in the United States. You know, back in the mid-60s, 50% of the adult population was smoking until the surgeon general came out and required —
WSA: — warning labels that cigarette smoking was hazardous to health. For 20 years prior to that, even the American Medical Association kept their mouth shut about the harmful effects of tobacco. We’re seeing the same thing happen right now, with institutions like our medical institutions or higher education institutions, the FDA, they’re all keeping very hush-hush about GMO because the entire food industry is built on it right now, but it won’t take long. Maybe over the next 10 to 20 years just like with tobacco when the public will recognize that GMO’s are the leading cause for the rapid escalation in so many diseases we’re seeing today.
Autism, for example, has gone from one in 5,000 in 1991 to one in 50 births today, and that correlation corresponds exactly with the introduction and proliferation of Glyphosate or Roundup Ready by Monsanto and all of the genetically engineered foods now that have taken over our food supply.
So, as the public becomes aware of these links between genetically modified foods and GMO and the correlation in escalating disease and the introduction of 35 to 40 new diseases that have become chronic illnesses in America and how they correspond to the increase in genetically modified organisms, the public is going to become more and more concerned about that and we’re going to see a dramatic shift.
So, if I really have my wish list of what I would want, I would want Americans to understand that faster, I’d want investors to realize that there’s going to be a major change in the public’s awareness about these issues and that we’re going to play a leadership role in making that happen.
WSA: Well, good. And so, once again joining us today is Rod Smith CEO of Green PolkaDot Holdings which trades over the counter, ticker symbol GPDB, currently trading at 1.01 a share and market cap is about — is going to 12 million. And before we conclude to recap some of your key points, why do you believe investors should consider the company as a good investment opportunity today?
Rod Smith: Well, anytime you have an opportunity to get in at the early stages of what could potentially be one of the largest markets in the world I think that represents a tremendous upside in investment. And I believe that we’re going to see expansion of the healthy food or clean food marketplace from where it is today approximately 120 billion annually to over $1.5 trillion over the next ten years as consumers shift their purchasing from conventionally grown GMO foods to clean non-GMO foods.
So with that kind of a market expansion you can imagine the potential growth that we will see at Green PolkaDot Box. Even if we got 10% of that market expansion we’d be doing $150 billion annually in sales. So, we have built the foundation. The consumer marketplace is more and more in tune to online purchasing. The convenience of internet shopping with home delivery, you know, we’re positioned in front of these mega trends that I’m mentioning here and we’re the leader in the market right now. We’re the only online provider that has dedicated itself exclusively to the acquisition and delivery of non-GMO foods.
So I think if people looked at the fundamentals of what we’re doing and they see that we’re principle-based and committed to this mission of providing organic and non-GMO foods at the lowest price in the marketplace, to eradicating the distribution of GMOs, to educating and informing people about the links between diet and disease, I think we’re just positioned right in the sweet spot and that makes for a great investment opportunity.
WSA: Well, we certainly look forward to continuing to track the company’s growth and report on your upcoming progress and we like to thank you for taking the time to join us today, Rod, and update our investors on GPDB. It was — it was great to have you on.
Rod Smith: Thank you. We sure appreciate your invitation and welcome your investors to take a look at us.