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, the CEO of Green PolkaDot Holdings. The company trades over-the-counter ticker symbol GPDB. Thanks for joining us today there Rod.
Rod Smith: Juan, thank you. I’m glad to be with you this morning.
WSA: Yeah, good to have you back on. Well, for some of our listeners that didn’t catch our last interview can you give us a history and overview of GPDB?
Rod Smith: Yeah, we started operations essentially in 2012, so we are a little over three and half years in operations. Our mission is to build the largest buying collective for organic and non-GMO foods, which we call clean foods. We started out growing at a very brisk pace, but about 18 months ago I came up with another concept called Health Merchant and we’re really poised now to expand our distributions in a very significant way. For those who are listening for the first time; we are an online operation, we’ve been essentially a business to consumer operations until now we’re adding a second segment or division, which is a B to B division, which in turn markets directly to consumers and we can talk about our Health Merchant Program in more detail in a minutes; but we’re about to see a very dramatic increase in sales.
WSA: Certainly and yeah, can you go over some of your activities since the last time we spoke there at Green PolkaDot Box?
Rod Smith: Well, we recognized fundamentally that we could grow a lot faster if we worked in partnership with other influencers in the market. People that already had a customer base for example. I’ll give you some examples of what I’m talking about. There are organizations like Natural News, Organic Consumers Association, March Against Monsanto, Moms Across America and many others that already have hundreds of thousands to millions of consumers that are very interested and focused on the clean food revolution that want to buy organic and non-GMO foods. We are relatively speaking a newcomer to the marketplace. So, it’s difficult for us to establish the street credibility with consumers that don’t know anything about us.
So, recognizing that these existing players in the market already have a very extensive reach to our target customer; I’ve created a program called Health Merchant, which essentially allows them to work on our platform, but with their own storefront. So, we provide a turnkey solution for Health Merchants across the United States that have their own collection of consumers. They have the credibility. So, with their own storefront they can market a complete line of frozen and refrigerated foods along with shelf-stable dry goods. We are talking about thousands of clean food products at the lowest prices guaranteed and we are backend fulfillment partner. We handle the order processing, the pick and pack operations, all fulfillment, shipping, tracking, customer service and even online marketing.
So, we become their partner for all logistics and fulfillment, all the infrastructure that’s necessary for them. They on the other hand can use their influence to reach their customers, provide the lowest prices guaranteed and then earn a 10% profit on all sales that are generated. Now, since we’ve started building this program and we are still in prelaunch, but we’ve already signed over 217 Health Merchants and we have a reach to over seven million customers through those Health Merchants. So, in comparison; today as I’m talking to you on the phone right now we market to about; oh, I would say 13,500 customers across the United States, which is relatively a small number; but next month on October 01st when we launch our Health Merchant Program we instantly start to reach over seven million customers and that’s significant because today we get about 7% monthly participation in orders from our 13,500 customers averaging about a $128 in order.
Next month when we launch we don’t know what the numbers are going to be, but we do know that these Health Merchants have a very strong influence over those that follow them or they patronize them, they have very active constituents and if we see even a 7% response rate through the Health Merchant offerings then we’re going to see a very, very dramatic increase in sales and in growth. But, we’re not stopping there our goal is 2000 Health Merchants before the end of the year, so that’s what’s new. We continued to expand our product line and we’re expanding our distribution facilities and we’re going to see tremendous growth through this new Health Merchant launch.
WSA: Right, what key trends are you focusing on right now in the sector?
Rod Smith: Well, we’re seeing an ever-increasing interest and demand in clean foods and again by clean foods I’m talking about foods that don’t have any contaminants like synthetics, toxins, herbicides, pesticides and of course genetically modified organisms, so the public sector is becoming increasingly aware. I would say right now roughly 7% of the adult population will consume organic and non-GMO foods on an occasional or sometimes frequent basis. The price has been the number one roadblock to participation and there are over 45 million adults who are self-described as health-minded, but can’t participate because of either high prices or lack of access to clean foods. So, we’re addressing that trend and providing solutions for that problem and I expect to see over the next 10 years through our program a dramatic shift where adult consumers will find simple easy access to clean foods at lowering prices with free home delivery and so that’s where we are positioned though in front of these very significant trends.
WSA: Certainly and what makes the company unique from some of the other players in the sector?
Rod Smith: Well, we’re unique in several ways. First of all we’re unique in our mission. If you compare us to all general retailers online, including online and Bricks and Mortar stores we’re quite different in that we have a mission to educate all people about the links between diet and disease, you know we have a healthcare crisis in America and 90% of the chronic illness and diseases related to the foods that we consume this is well documented. So, that’s one way that we’re very different.
Second, is we’re determined to block and interrupt the distribution of GMO foods and completely eradicate it if possible. So, that’s a very important part of our mission as a company and then the third, our goal is to drive prices down to build the largest buying collective of consumers, unite the purchasing power of millions of consumers through our Health Merchant Network to be able to increase the supply from traditional distributors, get them to convert over to organic and non-GMO food production and then be able to provide those foods up to lowest prices including free home delivery. So, we have a threefold mission. Educate and inform the public about the links between diet and disease, eradicate the distribution of GMO and to make clean foods available and affordable to all consumers no matter where they live. That’s our mission and that sets us apart from any other players in the market.
WSA: And what are the key goals and milestones are you are hoping to accomplish over the course of the next year?
Rod Smith: Over the course of the next year as I’ve already mentioned our goal is to establish 2000 Health Merchants and we want to be reaching a minimum of 200,000 consumers who are shopping and spending up to $200 a month through our Health Merchants. So, our financial target over the next 12 months is to reach a run rate of about a half a billion dollars in annual sales; but in addition to that we’re preparing right now to become a fully reporting company and uplist to the Bulletin Board by November 15th. However, after that our plans are to complete all of our audit work and uplist to a major exchange in early 2016.
In addition to that we plan to expand our distribution footprint, so that we can expedite delivery and lower inbound and outbound shipping cost to our distribution centers, which will have a net effect of dropping our prices an additional 10 to 15% for consumers and on top of that we want to be able to develop our first living produce growing center here in Utah by the end of the year. So, these are primary initiatives and of course we’ll be positioning the company for expansion of living produce growing centers and distribution points into 2016.
WSA: What are some of the key value drivers that you wish investors better understood about the company?
Rod Smith: Well, the value driver of our company is that nobody likes to pay retail, you know it’s already proven that membership clubs like Costco, Sam’s Club, BJ’s they attract millions of consumers because they are a high value provider, meaning that they provide quality service with great pricing and consumers walk to those type of offerings. There is over a 100 million members in these types of clubs. So, it’s not unusual that consumers don’t like to pay retail that’s already proven; but nobody has been the market leader in value for clean foods, organic and non-GMO foods and it’s interesting because price is the number one roadblock to consumer participation.
So, the key driver for us is to become as efficient as possible in our operations and build a consumer buying collective to drive prices downward and attract thereby inspiring or promoting more consumer purchasing loyalty, more word-of-mouth advertising. I think that when we hit the tipping point of about a half billion sales in sales annually our pricing will be significantly below any would be competitors and we’ll start to see an amazing Costco effect of word-of-mouth advertising where our buying collective will grow from 200,000 to 2 million to 20 million relatively quickly. As our prices continue to fall they’ll be more like a magnet to health-minded consumers who haven’t been able to participate and buy clean foods because of price.
WSA: Certainly, so once again joining us today is Rod Smith, CEO of Green PolkaDot Box Incorporated, trading over-the-counter GPDB at 50 cents a share. Before we conclude here Rod for some of our listeners once again that didn’t catch our last interview why do you believe the company represents a good investment opportunity today?
Rod Smith: Well because of the proverbial hockey stick growth potential that we have I’ve already mentioned that we are going from 13,000 consumers to over seven million consumers in October, that’s a pretty dramatic increase in sales. If we get even 1% participation we’ll be doing close to $10 million a month in sales. So, that’s a dramatic increase over last month’s revenue at a $137,000. So, investors have an opportunity to get involved with us at a very good point and time and enjoy the ride because we have a very bright future ahead of us.
WSA: Well, we certainly look forward to continue to track the company’s growth and report on your upcoming progress. We would like to thank you for taking the time to join us today Rod and update our investor audience on Green PolkaDot Box. It’s always great to have you on.
Rod Smith: Thank you Juan. I appreciate being with you.