ultimate pet pleasuresultimate pet pleasures products that pamper your petsproducts that pamper your...

Business Plan for

Food Enhancing Microwave ProductJack Smalley, President/CEO

Ultimate Pet PleasuresProducts that Pamper your Pets

Ultimate Pet Pleasures LLC2200 Kraft Drive, Suite 1000Blacksburg, VA 24060www.ultpet.com January 2012 Company Proprietary

http://www.upet.com/

Ultimate Pet Pleasures

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Products that Pamper your Pets Company Proprietary

Ultimate Pet Pleasures, founded in 2011, works with technology developers to create proprietary products that maintain and/or increase the quality of life of dogs & cats who are considered family members by their owners. Products will be sold through specialty pet supply retailers in the U S and Canada.

US Pet Market

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Own Dogs but no Cats; 21.4%

Own Cats but no Dogs; 17.0%

Own Dogs & Cats; 14.7%

Own other pets; 3.0%

Not Pet Owners; 43.9%

Pet Ownership as Percentage of the 114 Million Households in the U S:

Source: AVMA US Pet Ownership & Demographics Sourcebook; US Census Bureau

There are 60 million household in the U S with dogs and/or cats


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The human-animal bond continues to grow in the U S, with most dogs and cats now considered family members by their owners:

Source: AVMA US Pet Ownership & Demographics Sourcebook

Owners Consider Pet to be

Family Member;

51.0%

Owners Consider Pet to be Compan-

ions; 47.5%

Owners Con-sider Pet to be Property; 1.5%

Dogs

Owners Consider Pet to be

Family Member;

46.1%Owners Consider Pet to be Compan-

ions; 52.1%

Owners Con-sider Pet to be Property; 1.8%

Cats

1st Product Market Segment

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The increase in the human-animal bond, along with recent pet food recalls, has resulted in Gourmet Animal Food having a significant market share:

This means there are currently 7.6 million U S householdsserving gourmet animal food to their pets

An additional 80,000 – 100,000 households enter this market annually

Dog Owners Cat Owners

Owners who feed their pets

Gourmet Animal Food in

the U S

8% 18%

Source: The New Gourmand by J Boncy, Pet Business, December 2011

1st Product: UPP Warming Oven

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Dogs & cats like their (wet) food warm, not cold- Shown in dog & cat consumer tests

but:

most people – including pet owners - will not put animal food in their microwave oven

Ultimate Pet Pleasures’ first product will be the UPP Warming Oven:

a 600 watt, <0.5 cu ft cavity countertop microwave oven specifically designed for warming gourmet dog & cat food

http://www.sears.com/shc/s/p_10153_12605_02284493000P?vName=Appliances&cName=Microwaves&sName=View+All

Competitive Advantage

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The UPP Warming Oven is designed to:

Automatically heat the food to 75 C

Evenly heat the food

Maintain the moisture content of the food

The oven uses proprietary - patented technology developed by Gerte Applied Engineering (GAE). GAE has extensive expertise in microwave engineering, PLC controls, software development and computer-aided design. It also has in-house fabrication capabilities and laboratory testing services. The technology used in the UPP Warming Oven is exclusively assigned to Ultimate Pet Pleasures for the pet market.

The product will meet FDA HHS Standard 1030: Performance Standard for Microwave and Radio Frequency Emitting Products

Competitive Products

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Most available microwave ovens have a larger cavity than is needed for heating dog & cat food; none have the features of the UPP Warming Oven

The closest competitive ovens are available from Whirlpool, Sharp and Haier; Sharp’s product is consisted the most competitive:

*Currently sold out

The selling price of the UPP Warming Oven will be $95

Manufacturer

Special Features

Cavity Size Cu Ft

Power Level Watts

Price

Whirlpool 0.5 750 $129

Sharp* Preprogrammed settings 0.5 600 $95

Haier 0.6 600 $45

2nd Product: UPP OrthoMassage Bed for Dogs

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A dog bed that provides a warmed, dry sleeping area and (sonic) vibration massage to combat hip dysplasia and arthritic discomfort

Common in breeds that weigh over 60 lbs

Worst thing for a dog with hip dysplasia is sleeping on a cold, hard floor

(Sonic)vibration treatment is a form of massage therapy that combats muscle atrophy and relieves pain and discomfort

Will partner with companies who have developed proprietary orthopedic bed and sonic vibration technology

Business Model

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Ultimate Pet Pleasures identifies product opportunities through market research; and subcontracts its technology and product development as well as product manufacturing.

Products are built using the company’s proprietary technology.

Product

Identificatio

n

Product Design

Product

Manufacture

Technology Development

Product Development

Product Testing

DistributionSpecialty Pet Supply Stores

Pet Owner

Marketing/Sales

Customer Service


Subcontractors - Partners

Sales Channels

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Products will be sold through specialty pet supply retailers in the U S and Canada, including:

1,200 stores in the U S & Canada > 1,000 stores in the U S

> 350 stores in the U S & Canada > 110 stores in the U S

They may also be sold through infomercial sales channels

The UPP Warming Oven will be sold to retailers for $65; they would sell it for $95, giving them a 45% markup

Source: Hoovers Advanced Company Search

http://www.petsmart.com/

http://www.petco.com/

http://www.petsupermarket.com/default.aspx

Management Team

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Jack Smalley, President/CEO Previously President of Anotec, a developer of

ceramic membrane materials & filtration devices; acquired by Whatman

Market research and product design expertise

Don Brush, Product Development Manager Previously product development engineer at

consumer products company Whirlpool

To be hired in 2012: April: Marketing Manager - candidate identified

with consumer product marketing & sales experience

July: Operations Manager

Timeline

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First Quarter

2012

Second Quarter

2012

Third Quarter

2012

Fourth Quarter

2012

First Quarter

2013

UUP Warm Oven Product Design

Prototype Development & Testing

Sales Partnering Agreements

Identify Manufacturing Subcontractor

Initial Production Run

First Sales: Christmas 2012

UPP OrthoMessage Bed for Dogs Product Design

UPP Warming Oven is to be ready for Christmas 2012 sales:

1st Product Introduction Timeline

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June

2012

July

2012

August

2012

September

2012

October

2012

1st Prototypes Available

Show Prototypes to Retailers

Review Product with Pet Owner Focus Groups

Test Market: Washington Metro Area (75 stores) ;1st Sales

Placement of 1st Christmas Order

Promotional Campaign (with retailers)

Christmas Sales

UPP Warming Oven

Business Development Budget: 2012

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Provided by Management

Team

Funding Required

Product Development $125 $105

Marketing 30 65

Manufacturing 50

General & Administrative 15

Total $155 $235

Estimated ExpensesDevelopment of UPP Warming Oven

Thousands of Dollars

Financial Projections: UPP Warming Oven

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2012 2013 2014 2015 2016

Units Sold 10,000* 100,000 200,000 250,000 275,000

2012 2013 2014 2015 2016 $(2,000,000)

$-

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

Revenues Gross Profit EBITDA

*over 2,500 identified retail outlets

Exit Strategy Options

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1. Continue to develop new products and create company division for each: sell to investors

2. Sell product lines as each matures to existing pet products companies

3. Sell to pet food company: Mars, Purina/Nestle

4. Sell to specialty pet supply retailer chain: Petsmart

Opportunity Summary

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Ultimate Pet Pleasures will work with technology developers to create proprietary products that maintain and/or increase the quality of life of dogs & cats who are considered family members by their owners, subcontract product manufacture, and sell its products through specialty pet supply retailer chains

60 million pet owners in this market

First product revenues are projected to exceed $15 million within five years

Expect to launch a new product line every 2 years

Total initial investment for first product is less than $500,000; projected 5-year NPV is about $9 million

ultimate pet pleasuresultimate pet pleasures products that pamper your petsproducts that pamper your...

Documents

pet business

company proprietary

u s canada

u s households

recent pet food recalls

specialty pet supply

pets gourmet animal

operations manager slide