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Business Analysis of Comestibles Aldor S.A.

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Executive Summary

It is not common when a company like Comestibles Aldor S.A. opens itself to investors. Aldor is an extremely liquid company that is extremely successful and ambitious, but wants something more. It is the type of company that looks for something else, someone that is willing to put more than money into a company, an individual that feels they are part of the organization. This type investor will not only invest money, but themselves. They will immerse themselves in a product they believe in and keep the company's vision of bringing joy to the world.

At Aldor we believe that if an individual has a stake in something, they will work as if it was theirs, but if they like the product, it will be part of their life. The company has managed to go into over 60 countries but it is going to try a new approach, something that is innovative like the rest of the company; something unprecedented. We want to present to the world the joy of life and we are looking for someone to help us do so in another country, Canada.

As in every new market, Canada poses new challenges, challenges for which we need an investor from the country itself to launch the product. At Aldor we believe that having someone from within the country that knows the market, how it operates and more importantly, how people think, is only a recipe for success. It is the essence of what we believe in and it is the essence of what you will too.

We are presenting to you Videns Joy, a product that keeps the company's vision of bringing joy to the world and a profit that few companies are able to offer. It is in a recession like the one we are in that we are able too see a hole in the market, a gap that has yet to be filled.

Fortunately we have an answer, the product we are about to present will not only satisfy this gap but will give you the opportunity to be part of it. Videns Joy will consist of a new chewing gum that will not only enhance the way people live, but it will become part of their life.

Videns will present the consumer a less expensive, more nutritious and more convenient way of being healthy while giving them a natural boost. It is this chewing gum that will set the benchmark of health products and the way they are ingested.

One hand cannot clap by itself, it needs another one, we want this other hand to be you.

To launch a one-year campaign in Canada and produce Videns Joy, we will need to expand the factory and buy new machinery. At a cost of 1.4 million, will be able to do so with some of the best machinery in the confectionary industry.

To advertise the product for one year we will also invest 1.4 million on advertisements ranging from TV ads to billboards and pamphlets.

The cost of raw materials for one year with a production of 30 tons per month will be 4.5 million for the entire year. For a total of 7.3 million we will be able to bring this product to the country with an aggressive marketing campaign.

This cost will be divided in two; we will pay 3.65 million as well as the investing party. A return on investment of 10.5 million is expected by the end of the year. To be divided equally among Aldor and the investor. 25% royalties of the net profit from the subsequent years will be given to you, the investing party.

INTRODUCTION

The Company

Comestibles Aldor S.A. was founded in 1991 by Raif Aljure; the company produces candy which it sells in over sixty countries around the world. Aldor manufactures candy for other companies and has a competitive advantage that is virtually impossible to beat. Manufacturing over 200 billion pieces of candy, it is the biggest candy company by quantity and volume in the world. Specializing in products that range in cost from $.01 cent to $.25 , it appeals mostly to the bigger part of the population in the world, those that have limited resources. The company has expanded at a such rapid rate that it has outpaced its current market. The plant currently runs at full capacity and produces over 300 tons of candy per day. At this point, the market for its products is saturated, and with the development of the new chewing gum Videns Joy, the company is now expanding its market segment. Currently the most expensive product the company manufactures, Videns has a cost to the consumer of approximately one quarter of a dollar. It is a phenomenon similar to the case of Walmart at a lesser degree. The market for low-cost candy is saturated and the biggest consumer, children between the ages of 8 to 17 years old is already familiar and consuming the product in the countries the company sells. With a monopoly in the majority of Africa, Aldor has reached its peak with the current products it sells.

Our people

“With More than 2000 skilled and experienced employees committed to working as a team . While keeping an open mind towards a changing world.

Through its research and development, Aldor is constantly searching for new ideas and products, which keep it one step ahead of the competitors.

Aldor has a professional team devoted to standard control, thereby assuring high quality products.”

Agility and flexibility

“Aldor is agile and flexible, it adapts to the consumers and clients needs, taking into account different cultures, beliefs, demands and international commerce dynamics resulting form globalization”

Mission

“Our main promise and commitment: Research, create, and develop innovative and fun products for our customers.

We are a dynamic, innovative and flexible company with an international vision. We will continue to grow, open up new markets and bring fun and joy to life.”

Vision

“Since the very beginning, Aldor has opened up markets in different countries, offering innovative products to people of different cultures. Its marketing division is constantly looking for new opportunities, studying the worldwide consumer, needs and preferences.

Aldors international vision enables it to position itself with its products in more than 60 countries throughout the five continents”

The Plant

“Colombia is recognized as the second most productive land for sugar cane plantation in addition, it is recognized for the purity of its sugar.

With one of the most modern plants of America, inaugurated in June of 2004, and under a 280,000 sm. We produce 300 tons per day of sugar confectionery: lollypops with different fillings, hard and soft caramels.

Today we produce more than 2 hundred billions of lollypops a year, demonstrating growth in a global market that changes constantly. We have extended our products through the development of international brands maintaining a global thought with local performance.

Our quality management system is certificate by SGS. de Colombia S.A. in fulfillment of the requirements of ISO 9001: 2.000 since February 20 of 2,004 and initially certified since January 21 of 2002 with ISO 9001: 1.994.”

Why we will be successful?

After commenting our idea with numerous individuals that have influence over many people and have established companies that are now in the billions of dollars, we have received an unanimous opinion, one that has success written all over it. Now, opinions have in reality no real monetary value, no matter if the individual is the wealthiest in the world or a worker at a fast food restaurant, but they are important. On a recent trip to Colombia, one of our team members José F. Del Corral conducted numerous survey and studies on the idea we are offering. The results were exorbitant and expected.

PRODUCTS

Since its very beginning in 1991, Aldor has been characterized as having a dynamic production infrastructure that is pivotal to both a productive and efficient confectionery manufacturing process. Today, our company is viewed as one of the best candy production plants in the world. Our products range from filled and chewy candies to a variety of lollipops that have been distinguished because of the addition of different fillings and extracts, all manufactured in plants and facilities that are internally owned and managed.

Aldor's major products are lollipops with several varieties including chewy centered, gum centered and solids. The gums filled lollipops are made with different fruit flavors including watermelon, cherry, blackberry, mango and wild fruit with both juicy and sour features.

Lollipops that were first launched by Aldor include the Yoguetas. This is a variation of lollipops that are very unique to the industry. Not only do these lollipops have gum-filled centers, they also include fruit flavored and chewy centers along with assorted yogurt-filled middles.

Products that include gum contain forty percent of gum base and composed of PVAC to sometime include synthetic or derivative wax. In addition, gum also contains polyols that results from the hydrogenation of sugar with the major one being Xylitol. Xylitol is a sugar alcohol that aids in preventing cavities and help to whiten teeth by neutralizing the PH level in the mouth. In rare cases when Xylitol is unavailable, other sugars or derivatives of sugar namely sorbitol and manithol are sometimes used in bubble gum manufacturing primarily because of its very long molecular strength.

PRODUCT INTRODUCTION

In keeping with the company's history of innovation, Aldor intends to introduce a line of candy products that aims to satisfy the healthy trends of our current lifestyles by promoting the inclusion of not only cavity-fighting but health-conscious alternatives to the regular candy offerings.

According to investigations made by different agencies the percentage of people suffering from health troubles due to eating disorders and bad consumption of food keeps growing every day. As a result, many people have chosen to consume products with very little or no preservatives compare to what they previously consumed. This has revolutionized the food market and has lead to the evolution of new restaurants serving only organic food. Other existing ones have managed to change their menu to include more natural choices. Today, the choice of natural products is a trend that continues to increase and consumers are open to try foods that are consistent with their every day diet.

In keeping with this revelation, we have chosen to produce candies with botanical extracts and infusions that have the potential to become an integral part of the daily diet of our consumers.

Such approach to market will not only have a significant impact on the kids market but also the adult market as well. With this innovative idea, we plan on giving customers the pleasure of enjoying a hundred percent natural candy alternative that will at the same time will give them a sensation that will be consistent with that of maintaining a healthy lifestyle along with the ultimate comfort and relaxation at the same time.

We have focused our research and developments around finding botanical extracts that will fit into the lifestyles of potential customers within our target market. We have decided to include the following extracts into our product offerings.

Green Tea Extract

Dental techniques have improved greatly in the past few years, but once teeth have been damaged by cavities they can never be restored to their original condition. It is of the highest priority, therefore, to prevent cavities from developing in the first place. By the end of the 19th century, it had been determined that cartes are caused by cariogenic bacteria. Cavity production begins when the cariogenic bacteria first produce non-watersoluble glucan from sugar or other foods, and this glucan adheres to the tooth enamel as hard plaque. They then feed on sugar to generate acids such as lactic acid in the plaque then these acids dissolve the tooth enamel. In order to prevent cavities it is necessary to keep plaque off the teeth by brushing. However, experiments have shown that green tea catechin can suppress the process by which cariogenic bacteria create glucan. Experiments have also shown that that green tea catechin can destroy cariogenic bacteria, making it antibacterial. Green tea catechin then not only suppresses the formation of plaque by the cariogenic bacteria but also kills the bacteria themselves.
It has also been known for some time now that small amounts of fluorine can strengthen teeth and help prevent cavities. As a result, many cities across the world have added fluorine to their drinking water. Green tea extract, however, contains natural fluorine that is thought to help prevent cavities. Various reports have shown a reduction in cavities among grade school children who drank green tea after lunch. We strongly feel that kids will have a natural gravitation toward candy with green tea extract while parents will have the peace of mind while giving candy to their kids.

Halitosis or bad breath is caused by a number of bacteria that flourish in the mouth. Green tea is also known to kill other oral bacteria besides those causing cartes and therefore as a result, possess the ability to prevent bad breath by destroying the cause of bad breath. It is also reported that the consumption of green tea is often recommended as a good treatment for diarrhea. Research has also shown that catechin is a powerful sterilizing agent for many types of bacteria that cause food poisoning. Green tea extract contains caffeine which, when taken in the proper quantity, simulates every organ in the body. It has a particularly strong effect on the central nervous system, the heart, and liver. This reaction is even more pronounced when one is sleepy or tired. The consumption of green tea will help clear a dull mind after rising in the morning or after a prolonged period without sleep. The power to stimulate and awaken the mind comes from caffeine. It is also said that the amount of caffeine contained in normal servings of green tea can stimulate the skeletal muscles and facilitate muscular contraction. As a result, it is quite helpful and recommended to consume green tea in the middle of the work day in order to refresh the mind and restore the body. The caffeine in green tea is mostly extracted in the first infusion of the leaves, but the quantities in subsequent infusions will still be greater than coffee. And since green tea caffeine combines with catechin in the brewing water, its action is said to be rather milder than other caffeine-containing beverages. Green tea is known for its rich source of anti oxidants and having a high extract is also said to help repair the effects of aging from environmental factors

Kava Kava

Kava is sedating and is primarily consumed to relax without disrupting mental clarity. The kava extract has been known to be a herbal medicine against stress, insomnia, and anxiety. Research has shown that kava may be effective in treating ovarian cancer and leukemia. Study shows that kava compounds inhibited the activation of a nuclear factor that led to the growth of cancer cells. The Aberdeen University researchers published in the journal The South Pacific Journal of Natural Science that kava methanol extracts had been shown to kill leukemia and ovarian cancer cells in test tubes. Kava has been known to relax aching muscles, calm nerves, create a general feeling of well-being, induces a feeling of peace, relaxation and contentment, enhances mental alertness and concentration, reduces inhibitions, and has historical use as an herbal aphrodisiac.

Kava has an effect on the nerve centre's, at first stimulating and then depressing, ending with paralysis of the respiratory centre. The irritant action and insolubility of the resin has lessened its use as a local anesthetic, but for over 125 years kava root has been found valuable in the treatment of gonorrhea both acute and chronic, vaginitis, leucorrhoea, nocturnal incontinence and other ailments of the genitourinary tract. Being a local anesthetic it relieves pain and has an aphrodisiac effect. As kava is a strong diuretic it is useful for gout, rheumatism, bronchial and other ailments, resulting from heart troubles. Kava is an essential and integral part of life in the Pacific Islands often thought of as one of the most precious gifts from the Earth. Not only is it a pleasant drink that can be a safe alternative for alcohol. Kava Root was actually becoming more popular than Prozac in Europe. Some scientist and herb researchers feel as though kava'sinfringement on pharmaceutical sales deeply concerned the drugcompanies. In turn, they became determined to do their best to tarnish the spotless reputation of kava. It once an ancient, safe and effective herbal supplement. Kava has not been shown to be physically addictive. It has been used safely for over 3,000 years, without any reported withdrawal symptoms whatsoever. Kava gum will be marketing to the age group ranging from 40 years and up. It will be targeting Canadian citizens that may suffer from arthritis of the joints and may be hesitant to use costly and addictive pharmaceutical pain relievers that must be prescribed from a physician. Individuals that may have suffered from a minor sprain or bruise, who do not have the time for an appointment with their primary physician and are looking for quick and effective relief with a delightful taste. Kava gum will also induce a feeling of peace, relaxation and contentment. Also enhancing mental alertness and concentration, Kava Gum would seem to be extremely useful to consumers with anxiety and social barriers. Kava could be given to patients of therapist and physiologist to help cope with social problems and cut down the supply of addictive and dangerous psychiatric and anxiety drugs. “We won't go over the details here, but a study was conducted in Germany that did a great job of making the world think that Kava caused liver damage, when in reality, this highly-publicized “study” seemed to be aimed at only doing whatever it could to damage the 3,000 year-old reputation of Kava. This alone shows the fear that pharmaceutical companies have over kava” . They refused to let a cheap yet highly effective herb surpass the production of the variety of additive and costly drugs. Aldor is certain that if kava is given a chance to prove itself on a wide based scale, that the gum will help people out with multiple ailments and will not tarnish the Canadian population with another drug for younger generations to tarnish themselves with.

Acai Berry

The health benefits of the Acai berry is widely known and is now backed by scientific research into the fruits properties. Acai is a rich source of anthocyanins and other phenolics and phyto-nutrients and are amongst the most nutritious foods of the Amazon. Acai berries are rich in B vitamins, minerals, fiber, protein and omega-3 fatty acids. Acai also contains oleic acid (omega-9), a beneficial fatty acid. Potassium is the mineral most abundant in the Acai berry that is also rich in copper and unusually high in manganese. Only a small portion of berries supply far more than the body needs of this ultra-trace mineral. Anthocyanins are compounds that have potent antioxidant activity, allowing for the neutralization of potentially harmful free radicals. The famous research regarding the "French Paradox" attributes anthocyanins as being the antioxidant that protects the French from heart disease. The French are known to consume large amounts of coffee, nicotine, sugar, white flour, cheese and saturated fats, yet they have a very low rate of heart disease compared to neighboring countries like the UK and Denmark. The red wine grape, due to its anthocyanins is what is believed to be responsible for the very low incidence of heart disease. While red wine has good quantities of anthocyanins, the Acai berry has been shown to contain many times more than the anthocyanins levels of red wine. By neutralizing these free radicals, anthocyanins from the Acai berry may actually serve to maintain the healthy function of numerous systems and organs. Some of the anthocyanins that have been found in Acai include cyanidin-3-glucoside and cyanidin-3-glucoside-coumarate. Other phenolics include catechin and epi-catechin (the same compounds in green tea), quercetin derivatives and other flavonoids. It is likely that the synergistic effects of these compounds, as present in Acai fruit are responsible for its potent antioxidant activities.

In Brazilian herbal medicine, the oil of the Acai fruit is used to treat diarrhea; an infusion of the grated fruit rind is used as a topical wash for skin ulcers; and, the fruit seeds are crushed and prepared in an infusion for fevers. In the Peruvian Amazon, an infusion of the toasted crushed seeds is used for fever. In Colombia, where the trees grow along the Pacific coast line, it is called naidí and the fruit is turned into a common and popular drink.

The Oxygen Radical Absorption Capacity (ORAC) assay, a test developed for the USDA by scientists at Tufts University to measure the antioxidant speed and power of foods and supplements measures the total antioxidant activity of a biological sample. The ORAC scale is used in human, agricultural, food and pharmaceutical products, as well as food ingredients and is quickly becoming the accepted standard for comparing antioxidant potential in foods and supplements. For the average person to cope with all the reactive oxygen and free radicals they will encounter on a daily basis, foods and beverages totaling an ORAC value of at least 2000 units per day are needed. It's been estimated that eighty to ninety percent of the world's population fails to consume even half of this level. Acai is reputed to be extremely high on the ORAC scale and provides levels multiple times that of many anthocyanin-rich fruits and vegetables, such as cherries, cranberries and mulberries.

Easily the most common use of the Acai fruit by Amazonians is the dark purple juice. This juice is extracted from the small round fruit by soaking the seeds in water to soften the thin outer shell and then squeezing and straining them to produce a very tasty, dense purple liquid. Acai liquid is typically served fresh and ice cold with (or sometimes without) sugar and tapioca flour. It is a nourishing and refreshing drink that is also used to produce ice cream, liquor, mousses and sweets in general. Consumption of up to two liters per day of this highly nutritious juice has been recorded amongst indigenous populations. The Acai juice has been and remains an extremely important part of northern native South American diets and has become very popular throughout all socio- economic levels.

Acai gum is designed to act as an antioxidant and remover of toxic substances left over in the human system from smoking, alcohol, drugs, and foods with many preservatives. With the help of the acai palm, which is a species of palm tree in the genus Euterpe cultivated for their fruit and superior hearts of palms. Global demand for the fruit has increased dramatically over the past several years. Acai is now cultivated as an antioxidant primarily. Eight species are native to Central and South America, from Belize southward to Brazil and Peru, growing mainly in swamps and floodplains. Acai palms are tall, slender palms growing to 15-30 meters. The overall marketing goal of the antioxidant remover is to eventually offer the gum in Canadian health and fitness centers and spas. This goal may only be achieved after success has been demonstrated in the all-natural supermarket aisles. Health conscious individuals understand the importance of having a cleansed system, which in return greatly raises the ability to produce muscle and cut fat. Many people enjoy chewing gum while they work out because they are able to keep their mouths moist. Also if the gum can cleanse the body and encourage muscle growth then most gym goers would be interested in spending a dollar per pack. Another option is to offer the product to supplement stores such as GNC, Vitamin world, and any other health stores looking to offer there customer a relief from awful tasting body cleansing drinks that cost over $50 for every bottle. Our gum cost only cost 15 cents to have in Canada and is being sold for 50 cents to the retail stores. One could buy fifty packages of our product to compare cost, then having over a years supply to help assist the customer to live a healthier life.

Rhodiola rosea

Rhodiola rosea is a popular plant in traditional medical systems in Eastern Europe and Asia with a reputation for stimulating the nervous system, decreasing depression, enhancing work performance, eliminating fatigue, and preventing high altitude sickness. Rhodiola rosea has been categorized as an adaptogen by Russian researchers due to its observed ability to increase resistance to a variety of chemical, biological, and physical stressors. It's claimed benefits include antidepressant, anticancer, cardioprotective, and central nervous system enhancement. Research also indicates great utility in asthenic conditions (decline in work performance, sleep difficulties, poor appetite, irritability, hypertension, headaches, and fatigue) developing subsequent to intense physical or intellectual strain. The adaptogenic, cardiopulmonary protective, and central nervous system activities of Rhodiola rosea have been attributed primarily to its ability to influence levels and activity of monoamines and opioid peptides such as beta-endorphins. Rhodiola rosea, also known as golden root, is a member of the Crassulaceae family and grows across the Arctic, the mountains of Central Asia, the Rockies, the Alps, the Pyrenees, the Carpathian Mountains, Scandinavia, Iceland, Great Britain and Ireland. It is believed that it could also be a natural elixir. Rhodiola rosea may also be effective for improving mood and alleviating depression and early stage studies on people have shown some efficacy in improving physical and mental performance, alleviating fatigue, and reducing high-altitude sickness. A possible mode of action involves what could be described as “optimizing serotonin and dopamine levels”. It is said that this apparently happens by inhibition of the enzyme monoamine oxidase, which supposedly ties in with an effect on endorphins, the body's natural opiates.

The chemical composition and physiological properties of Rhodiola species are to a degree species-dependent, although some overlap in constituents and physiological properties does exist in many Rhodiola species.

Twenty-eight compounds have been isolated from the roots and above-ground parts of Rhodiola rosea, including twelve novel compounds. The roots contain a range of biologically active substances including organic acids, flavonoids, tannins, and phenolic glycosides. The stimulating and adaptogenic properties of Rhodiola rosea were originally attributed to two compounds isolated from its roots, identified as p-tyrosol and the phenolic glycoside rhodioloside. Rhodioloside was later determined to be structurally similar to the known glycoside salidroside found in several other plant species. Salidroside, rhodioloside, and occasionally rhodosin are used to describe this compound and are considered to be synonyms. Additional glycoside compounds isolated from the root include rhodioniside, rhodiolin, rosin, rosavin, rosarin, and rosiridin. These glycoside compounds are also thought to be critical for the plant's observed adaptogenic properties.

The adaptogenic properties, cardio-pulmonary protective effects, and central nervous system activities of Rhodiola rosea have been attributed primarily to its ability to influence levels and activity of monoamines and opioid peptides such as beta-endorphins.

Rhodiola rosea has also been shown to moderate against stress-induced damage and dysfunction in cardiovascular tissue. Treatment with Rhodiola rosea extract prevents the decrease in cardiac contractile force secondary to environmental stress in the form of acute cooling and contributes to stable contractility.

The new product is named Energize and is primarily made of the herb Rhodiola rosea. Rhodiola rosea is a plant known as the "golden root", member of the Crassulaceae family that grows in cold regions of the world, the perennial plants grows in areas up to 2280 meters elevation. Rhodiola may help induce weight loss by activating the body's store of adipose lipase, a key enzyme that helps burn its fat stores. A Russian study found that participants who consumed Rhodiola rosea lost 20 pounds in three months, compared to just 7 pounds in those who took placebos. Rhodiola rosea also strengthens the immune system by reducing the effect of stress, which is known to weaken the body's ability to defend against illness. Studies have shown that Rhodiola may be of special benefit to athletes; it appears to help normalize heart rate after intense exercise, and increases protein synthesis and blood flow throughout the body. It may also lower blood pressure and decrease stress-induced arrhythmia. There have been no toxic side effects associated with this substance to date, and no tolerable upper limit has been established. Energize gum has the benefit of being a credited weight loss tool; it contains none of the sometimes deadly drugs that are the main ingredient of the major weight loss scam programs. All they contain is harmful drugs like Ephedra, Chitosan, and hoodia. Many deaths have been reported in past five to ten years ever since the skinny craze started as a result of these weights loss drugs. If there is a perfect weight loss/stress-relieving herb this could be it. In Energize we've managed to formulate the two essential elements needed by most people to lose weight and truly feel great. Not only does it have the ability to lift the stress that causes your body to crave foods of comfort and store more fat. It also has the power in of itself to make you cut weight in fewer than three to six months. All one must do is chew this gum before and after a workout routine or a run around the neighborhood with your dog, then you will be on your way to losing some serious weight while enjoying the refreshing taste and teeth whiting effect of our newest product. We plan to offer this product to Canada in the main supermarkets and herb + vitamin stores. We hope to carry the product along side all the powerful and unhealthy weight loss pills that are sold throughout the country. Aldor is confident the Energize gum will make its consumers feel significantly better daily and have the same result if not superior to its competitors.

St John's wort

St. John's wort is a long-living plant with yellow flowers whose medicinal uses were first recorded in ancient Greece. It contains many chemical compounds. Some are believed to be the active ingredients that produce the herb's effects, including the compounds hypericin and hyperforin.

Preliminary studies suggest that St. John's wort might work by preventing nerve cells in the brain from reabsorbing the chemical messenger serotonin, or by reducing levels of a protein involved in the body's immune system functioning. St. John's wort has been used over the centuries for mental conditions, nerve pain, and a wide variety of other health conditions.

Today, St. John's wort is used for anxiety, mild to moderate depression, and sleep disorders. In Europe, St. John's wort is widely prescribed for depression. In the United States and Canada, there is public interest in St. John's wort as a treatment for depression, but it is not a prescription medicine.

In the United States and Canada, St. John's wort products are sold mainly as capsules, tablets, teas, and liquid extracts where specific types of chemicals are removed from the herb, leaving the desired chemicals in a concentrated form.

Scientific evidence co-funded by the National Center for Complementary and Alternative Medicine (NCCAM) and two other components of the National Institutes of Health (NIH), the National Institute of Mental Health and the Office of Dietary Supplements regarding the effectiveness of St. John's wort for depression is inconsistent. An analysis of the results of thirty-seven clinical trials concluded that St. John's wort may have only minimal beneficial effects on major depression. However, the analysis also found that St. John's wort may benefit people with minor depression but these benefits may be similar to those from standard antidepressants. Overall, St. John's wort appeared to produce fewer side effects than some standard antidepressants.

St John's Wort will be used as a Mood Booster. St. John's wort is an herbal preparation most commonly used for the treatment of mild depression or simply as a mood elevator. It is also used in the treatment of anxiety, stomach upset, insomnia, fluid retention, and hemorrhoids. Studies have shown that the plant (botanical name hypericum) is very effective in treating mood disorders and that too with lesser adverse effects. Double-blind trials on patients with mild or moderate depression found that hypericin (the main ingredient from the St. John's Wort) yields excellent results. Most of the patients began reporting effects within the first two weeks of first dose, and maximum benefits reported peaking up after six to eight weeks of use. The recommended dose is 300 mg three times daily. This herb has become so popular that it can be found on the shelves of most of the drug stores and through the online stores too. Researchers are investigating exactly how St. John's Wort works. One focus of interest has been hypericin; a plant compound that scientists believe may regulate brain chemicals, such as serotonin and monoamine oxidase (MAO), that are critical to mood. Possible side effects include abdominal pain, bloating, constipation, dizziness, dry mouth, nausea and fatigue. Pregnant and lactating women are advised to avoid St. John's Wort. VidensJoy has unlimited potential to sell in mass quantities, since St. Johns Wort is fairly new and has had such beneficial results for its users. Popularity for the herb has been increasing steadily and upon more developed research; we feel that our Mood Boosting gum may be revolutionary when treating minor depression. The new product targets a younger age group (18-35) than our other types of herb gum, based upon that generally depression has become a bigger problem for people of younger ages. Our goal is to offer our product to customers mainly is pharmacies but also most stores that supply an all-natural herb and botanical aisle or display.

As noted in the description for each ingredient, there are various components that aid, promote, or contribute to the healthy lifestyle choices being demanded by our customers in one way or another. Our product innovations and introduction into new markets continue to keep in mind the fact that today's society is continuously displaying a tendency to toward natural product alternatives when compared to the existing substances currently in pills and supplements more often in their everyday routine in order to promote longer and healthier lives. We pride ourselves on taking the initiative to be an industry leader through the innovation of enjoying a product that has always had a negative reputation associated with it and making it into a healthy alternative while allowing consumers to continue to enjoy the same pleasures as before.

The company is also aware of a possible compromise on taste due to the introduction of a variety of flavors. However, our testing has proved that even with a new variety and taste consumers would not experience any compromise on taste because of the flavor component.

Based on the studies performed, the company would still be able to maintain its affordable pricing structure and still remain competitive within the industry. Cost is expected to remain at fifteen cents and while the initial selling price is expected to be twenty-five cents per unit. Subsequent fluctuation in price would be determined, if necessary by market conditions.

The company has already secured the necessary raw materials and extracts at costs that are consistent with our pricing structure.

Initial distribution will be through an intermediary supplier already in place through previous alliances.

Consistent with our new product offerings and the fact that the new market has the potential for both anticipated and new challenges and opportunities, the company intends to launch its “Not Just Candy” campaign with a series of radio and television advertising slots in selected market areas. The company will also seek to identify and employ local personalities and celebrities for its various advertising campaigns.

The Market

The confectionery industry is divided into four segments, cereal bars, chocolate, sugar confectionery, and gum. While chocolate is the largest sector, sugar confectionery accounts for the majority of sales, with a share of fifty-one percent. The confectionery market in regions such as Western Europe, Canada, and North America remains fairly mature with consumption levels remaining largely static in recent years. In contrast though, growth has been stronger in developing regions, notably Central and Eastern Europe, India and parts of the Far East such as China. Although per capita consumption of confectionery in most of the developed countries is considered to be average, the Canadian market continues to be one of the world's largest confectionery markets where over 15% of the world's confectionery is consumed. Per capita consumption of chocolate confectionery tends to be higher in northern European countries, while the Scandinavian markets command higher per capita rates for sugar confectionery. The market is valued according to retail selling price (RSP) and includes any applicable taxes. The market for confectionery in the Canada increased between the years 2001-2006, growing at an average annual rate of 2.4%. The leading company in the market in 2006 was Hershey Foods Corporation. The second-largest player was Mars, Inc. with Wm. Wrigley Jr. Company in third place. These market features and industry positions present a significant global challenge but nonetheless a very viable opportunity for Aldor. Below is the current U.S. market capitalization for the confectionery industry with only the top five companies displayed.

Market Capitalization

 
   

Company Name

Market Cap

   

CADBURY PLC [CBY]

$68.8 B

THE HERSHEY COMPANY [HSY]

$8.6 B

COSAN LIMITED CL A [CZZ]

$2.1 B

TOOTSIE ROLL IND [TR]

$1.4 B

Imperial Sugar Company [IPSU]

$182.4 M

Major industry products are chocolates and candy made from purchased chocolate and non-chocolate candy. Candy made from purchased chocolate accounts for about half of the industry revenue, non-chocolate candy accounts for about thirty percent, and chocolate for twenty percent. Non-chocolate candies include a wide variety of products, for example jelly beans, chewing bubble gum, marshmallows, mints, and hard candies.

Chocolate is made from dried beans of the cacao tree. The beans are roasted and the inner meat is ground and refined to produce warm non-alcoholic cacao liquor, from which cacao butter, powder, and chocolate can be made, depending on the quality of the liquor. Further mechanical processing, such as conching and tempering, affect the chocolate's texture. The type of chocolate made depends on the various amounts of cacao butter, high-quality cacao liquor, and other ingredients. Sugar, other sweeteners, flavorings, nuts, fruits, and potassium carbonate may be added before the chocolate is poured into molds, cooled, and packaged. "Cacao" and "cocoa" are often used interchangeably in the industry.

Candy made from purchased chocolate, such as candy bars, typically use chocolate as an outer layer over a variety of ingredients like nuts, fruits, sugars, flavorings, and various stabilizers that may be ground, mixed, cooked, or baked together. Production lines are typically made up of individual machines that specialize in a particular step, along with tanks for ingredients and packaging machinery.

Non-chocolate confectionery products are made in various ways. Jelly beans use two steps: the centers are molded from cooked sugar and corn syrup, and then the outer shell is added in a rotating drum, or engrossing pan. Chewing and bubble gums are made from natural or synthetic gums that are ground, cooked, mixed with various flavorings, then rolled, cut, and packaged. Hard candies are mixtures of sugars and flavorings, boiled and poured into molds to harden.

The worldwide confectionery market is highly competitive and fragmented in most parts of the world but also saturated in some parts of the world. With an astounding market share in excess of thirty-five percent, Aldor has been able to produce in excess of two trillion pieces of candy every year while still maintaining an average cost of two cents per unit. This has resulted in its high quality products being currently enjoyed in over forty countries and five continents around the world, including Africa. Even with this understanding, the Aldor Company has managed to create and maintain a niche market strategy as one of its competitive advantages primarily through exclusive ownership of a sugar cane farm, a packaging company, a refinery, and a candy factory. The company specializes in making lollipops with different fillings, including liquid, creamy, chewing gum and soft caramel, all of which are manufactured on their state-of-the-art highly technical production lines. In addition, the company boasts a labor force of more than eight hundred skilled and experienced employees that are committed to working as a team in order to fulfill both large and small production orders. Management is constantly keeping an open mind towards a changing world and is poised to adapt to the latest cutting edge operating techniques whenever necessary. The company also displays its competitive advantage through its research and development approach and capabilities. Aldor is committed in its constant search for new ideas to both innovate and enhance its product lines and offerings, keeping one step ahead of its competitors. The company has entrusted its future in a professional quality control team dedicated and devoted to standard control as its means of assuring the output of high quality products. Its quality management system was initially and has been certified since January 21 of 2002 with ISO 9001: 1.994 and continues to be certified by SGS. de Colombia S.A. in fulfillment of the requirements of ISO 9001: 2.000 since February 20 of 2004. Most importantly, the Company has its competitive advantage embedded in its international vision that enables it to position itself with a product offering to more than forty countries throughout the world. It has continued its efforts of extending its products through the development of international brands while maintaining a global thought with local performance. The Company's ability to adapt to its consumers' and clients' needs, taking into account the different cultures, beliefs, demands and international commerce dynamics being driven by globalization is another example of its competitive advantage displayed here through its agility and flexibility.

The National Confectioners Association in the United States, an organization charged with the protection and promotion of the industry since 1884 has reported that trends through 2014 include a chocolate explosion, products touting increased health benefits, flavor fusions throughout the category along with international influences. Their 2009 Trend Report “reveals that confectionery makers are experimenting with flavors, flexibility and variety, and thinking outside the bar to provide consumers with chocolate and candy innovation.” The future trend in confections will include healthier options with the leading influence being eco-friendly manufacturing efforts, to include recyclable packaging. Health related influences will continue to be the driving force for portion-controlled, calorie-controlled, reduced-fat, sugar-free and fortified products. Portion-controlled products are expected to be the lead influencer with fortified products with added vitamins, minerals, and protein will follow. In the non-edible cocoa products category skin care products, including soap, shampoos, lotions and anti-aging products will provide the next big market expansion. Oral health care, supported by dental professionals with the backing of the American Dental Association will drive the chewing gum category with sugar-free options becoming increasingly common. Chocolate will emerge as the largest growth driver in the industry with chocolate and cocoa becoming key ingredients in main courses alongside salmon, chicken and steak. Flavor infusions that combine chocolate and spices, salts, herbs and floral flavors will become increasing popular as consumers embrace pairings. Sweet and savory chocolate duos, like chocolate and bacon, and even chocolate and cheese combos will be popular in stores and on menus. It is expected that these sweet and savory duos will provide the most surprising flavor combinations. Chocolate is expected to drive the organic market, while product education will explode with consumers becoming more knowledgeable about the global origin of the chocolate they enjoy. Education will continue to be a focus with the potential health benefits of chocolate continually being evidenced. More research into the potential health benefits of milk and dark chocolate is expected to be seen, while the continued exploration of naturally occurring cocoa compounds and the positive effects it has on mood and blood pressure levels is expected to be highlighted. Limited edition candies are poised to make an impact on trends within the marketplace with new flavors of classic favorites being part of large scale experimentation. Intense flavors and interactive innovations are also expected to be major influences on new kids' candy creations as the more attention-grabbing, fun and entertaining products that kids like takes to the market.

Internationally, the CANADA trend of acceptance towards dark chocolate is expected to influence the world's consumption while conversely, international spices and ethnic flavors like mango, watermelon, cinnamon, and wintergreen will play a large part in influencing new CANADA products and flavors. While officially Europe has been recognized as the birthplace of international confectionery trends both now and in the coming years, both Asian and Latin flavors will have the largest influence on U.S. confections with Japan emerging as the leading influencer in the global candy industry.

Aldor's main local and now international competition is from the local Colombina Company, located in Cali, Colombia which boasts an online candy shop that specializes in bringing quality candy and other candy-related merchandise to consumers at low prices. The company offers a full line of hundreds of quality name brand candy items including chocolates, lollipops, bubble gum, and taffy. The Colombina Company is the leading confectioner in Colombia with over thirty years of knowledge and experience in the candy distribution business with exports to over forty-five countries including North America. In addition to its hundreds of offerings, Colombina offers consumers the opportunity to shop by categories with themes ranging from birth announcements to weddings. In addition to local competitors Aldor will have to overcome the presence of Cadbury, the world leader in the both the chocolate and gum segments. Additionally, Aldor also faces competition from Canadian manufacturers and industry leaders Hershey and Kraft Foods who are both in a battle to acquire Cadbury in order to increase their stronghold on the market. Direct competition from any of the companies noted above is not expected to be fully realized because neither company has significant operations in the hard or filled candy niche market or has indicated an intention to enter that segment.

Customers of these companies range from moderate to high income individuals with the product offering being more sophisticated and theme-based as the income level increases. Studies of customers in the confectionery industry have shown that most sales occur within the chocolate segment.

The Canadian candy production includes about one thousand six hundred companies with mutual yearly profits of seventeen billion. Major companies for example Mars, Nestle, Cadbury and the Hershey Company. The largest fifty companies hold less than thirty percent of the market. However consolidation is taking place and each major market has leading companies for instance Hershey and Mars in chocolates, bubble gum, and jelly beans. The business has three main segments companies that make chocolate from beans, buy chocolate to make candy and companies that make candy without using chocolate.

The U.S. Census Bureau conducts an economic census of the nation's industries that profiles U.S. national and local economies once every five years. The economic census provides a detailed portrait of the United States' economy from the national to the local level.

The latest recorded census, the 2007 Economic Census covers most of the U.S. economy in its basic collection of establishment statistics. There also are several related programs, including statistics on minority and women-owned businesses. Censuses of agriculture and governments are conducted at the same time. The North American Industry Classification System (NAICS) is a system of grouping establishments into industries based on the similarity of their production processes. For the United States, there are 20 sectors and 1,175 industries in the 2007 NAICS.

NAICS is used by the Census Bureau to facilitate:

  • the collection, tabulation, presentation and analysis of data relating to establishments and
  • the uniformity and comparability in the presentation of statistical data describing the U.S. economy.

According to latest official confectionery industry census data published by the U.S. Census Bureau, "U.S. Confectionery Sales 2005." in Manufacturing Confectioner, Vol. 86, No. 1 (January 2006), p. 15-18, 20, 22.. Provides data obtained from the market research company, Information Resources Inc., for the grocery, chain drugstores and mass merchandising segments of the retail industry. The data obtained from the mass merchandisers does not include sales at Wal-Mart but include tables with category sales for the fifty-two weeks ending October 2, 2005. Sales by brand and company are provided in the following categories: chocolate candy box/bag greater than 3.5 oz., chocolate candy bar less than 3.5 oz, chocolate candy snack/fun size, gift box candies, sugar free/sugarless chocolate candy, sugar free/sugarless candy, hard sugar candy, non-chocolate chewy candy, novelty non-chocolate candy, licorice box/bag greater than 3.5 oz, specialty nut/coconut candy, cough drops/squares, breath fresheners, plain mints, regular gum, sugar free/sugarless gum, nutritional health bars, granola bars, breakfast/cereal/snack bars, and fruit snacks. The latest documented census statistics is listed below along with the prior year's data for comparative purposes.

2005 Confectionery Statistics

(Sales for the fifty-two weeks ending October 2, 2005)

All Chocolate Candy

$3347921740

All Non-chocolate Candy

$1945153030

Fruit Snacks

$535904500

Marshmallows

$130508200

Cough Drops/Squares

$392595100

Ready-to-eat Popcorn/Caramel Corn

$188646300

Portable Oral Care

$16565470

Total Snack Bars (breakfast/cereal bars, granola bars, nutritional health bars, rice snack bars, and other snack bars)

$1806941630

All Gum (regular and sugar free/sugarless gum)

$1044724400

Source: The Manufacturing Confectioner, January 2006, p.15
data provided by Information Resources Inc. from grocery, chain stores and mass merchandisers (excluding Wal-Mart)

In comparison, "U.S. Confectionery Sales 2004." in Manufacturing Confectioner, Vol. 85, No.4 (April 2005), p. 23-30 provides data obtained from the market research company Information Resources Inc., for the grocery, chain drugstores and mass merchandising segments of the retail industry. The data obtained from the mass merchandisers does not include sales at Wal-Mart butinclude tables with category sales for the fifty-two weeks ending December 26, 2004. Sales by brand and company are provided in the following categories: chocolate candy non-seasonal, chocolate candy seasonal, non-chocolate candy non-seasonal, chocolate candy box/bag greater than 3.5 oz, chocolate candy bar greater than 3.5 oz, chocolate candy snack/fun size, gift box candies, hard sugar candy, sugar free/sugarless candy, non-chocolate chewy candy, novelty non-chocolate candy, licorice box/bag greater than 3.5 oz, specialty nut/coconut candy, breath fresheners, plain mints, cough drops/squares, regular gum, sugar free/sugarless gum, nutritional health bars, granola bars, breakfast/cereal/snack bars, fruit snacks, ready-to-eat popcorn/caramel corn, marshmallows, chocolate-covered salted snack, chocolate Christmas candy, chocolate Easter candy, chocolate Halloween candy, chocolate Valentine's candy, caramel/taffy apples/kits/dips, non-chocolate Christmas candy, non-chocolate Easter candy, non-chocolate Halloween candy, non-chocolate Valentines candy, and novelty chocolate candy.

2004 Confectionery Statistics

(Sales for the fifty-two weeks ending December 26, 2004)

Product Category

Sales

Chocolate Candy Non-seasonal

$3145211420

Chocolate Candy Seasonal

$1099966633

Non-chocolate Candy Non-seasonal

$2052467148

Non-chocolate Candy Seasonal

$349222465

Fruit Snacks

$555481728

Marshmallows

$127115128

Cough Drops/Squares

$252748576

Ready to Eat Popcorn/Caramel Corn

$183895600

Snack Bars (includes breakfast/cereal bars, granola bars, nutritional health bars and all other snack bars)

$1816073422

Gum (regular and sugar free/sugarless gum)

$1008465248

Source: The Manufacturing Confectioner, April 2005, p.28
data provided by Information Resources Inc. from grocery, chain stores and mass merchandisers (excluding Wal-Mart)

The top factors profiled in its Candy Business publication that will affect the candy industry in the near future years are obesity issues along with pricing and the continued consolidation of companies within the industry. Other factors to consider will be the Radio-frequency Identification System (RFID) requirements mandated by Wal-Mart and complying with the requirements of the Public Health and Bioterrorism Act of 2002. Radio-frequency identification is the use of an object, generally referred to as an RFID tag, applied to or incorporated into a product, animal, or person for the purpose of identification and tracking using radio waves. Some tags can be read from several meters away and beyond the line of sight of the reader. Most RFID tags contain at least two parts, an integrated circuit for storing and processing information, modulating and demodulating a radio-frequency (RF) signal, and other specialized functions. The second is an antenna for receiving and transmitting the signal.

Consumer expectation is also a top element to consider in the candy industry, consumers do not want to pay more for the same item; however, prices have been increasing due to the rising cost of ingredients. Recent acquisitions in this business sector include Wm. Wrigley Jr. Co's acquisition of Altoids, LifeSavers, Cream Savers and U.S. Trolli brands from Kraft Foods Inc., Tootsie Roll Industries purchase of Concord Confections Inc., based in Toronto, and Impact Confection's purchased several foreign candy brands. The prediction is that the biggest trend will continue to be chocolate items, especially those products that are viewed as "good for you". The health issue will spill over into the popularity of portion-controlled or single serve items with an increased interest in products containing almonds. The demand will therefore be determined through the customer's taste and population growth. The efficiency of individual companies depends on industrialized effectiveness, supply chain effectiveness, and marketing. Smaller businesses like Aldor will be forced to compete by offering premium and specialty products and larger businesses will continue to maintain their industry advantage with economies of scale in production. We feel that we will be able to not only compete by offering a niche product with our entry but also offer a pricing model comparable to the one offered by larger companies through economies of scale because we have a backward integration component to our production processes with the ownership of a sugar cane farm, packaging company, and refinery.

Important raw materials like sugar and corn syrup are readily available from many sources. Cacao beans may be bought through import brokers or on commodity exchanges like the New York Board of Trade. The quality, availability, and price of cacao beans vary according to conditions in the major growing countries of West Africa and South America. Although we cannot guarantee the price stability of the major ingredients used in our production process, we do feel that we are positioned to have an impact on the price of sugar, the key ingredient primarily due to our sugar farm ownership. Due to the fact that energy is also an important input for most candy manufacturers, required for roasting, liquefying, or cooking companies try to minimize the impact of price fluctuations in raw materials and energy costs by forward purchasing and hedging. We will also consider the same options whenever it is deemed necessary.

Information Technology is used extensively throughout the industry and is considered a critical component within any supply chain management system. A comprehensive information system, aided by cutting edge technology helps candy manufacturers to synchronize their plans between customers and suppliers. Good supply chain management also helps to improve forecasting, reduce inventory, and increase overall efficiencies. Aldor will remain on the cutting edge of technology as the company has always done over the years, with its state-of-the-art information system while implementing a supply chain management system with six sigma features in order to facilitate a continuous improvement process.

Prices of key raw materials such as cocoa beans, dairy products, and sugar, or sugar substitute, can change without warning, Canadian candy imports grew by over twenty percent in the last four years, an increase to twenty percent of the world's consumption market. Aldor hopes to take advantage of this trend that, according to industry analysts will continue to increase in future years.

Latin flavors seem to be where confectionery products are making consumers' hearts skip a beat. With the growing Hispanic population in the United States, coupled with the fact that many U.S. companies have moved to Mexico and South America, confectionery companies have received more exposure to Latino markets and products. Aldor, also being a Latin American Company will benefit tremendously from this trend.

“Things that were obscure, and maybe found only in ethnic grocery stores are becoming more mainstream,” says Robert Barrera, director of technical services for flavors at Bell Flavors & Fragrances in Northbrook, Ill. “Candies from fruit pulp, nut pastes or tamarind are three examples.”

Flavors of North America, a company dedicated to the development of flavors for confection, bakery, snack, savory, beverage, dairy, and nutraceutical products has developed “Sensation Flavors” that cool, heat, tingle or trigger salivation, which address the Latino trend but also branch out into other confectionery needs. Sequential Release Combination Flavors, also new from the company, combine distinct flavors and then release them in an identifiable sequential order. Beverage-inspired flavors, such as tea and tea and fruit combinations, are also new on the horizon. The candy industry still has a tendency to adopt flavor ideas from the beverage industry by mimicking popular and trendy beverages. While most major producers tend to remain faithful to the successful flavor types that are popular with consumers, Wild Flavors as in berries, particularly mixed types, blueberry, and raspberry has seen some interesting activity.

Candy makes a potentially sour situation…sweet! Though faced with a largely mature U.S. market, rising manufacturing costs, and consumer health and obesity concerns, the non-chocolate candy market has managed to drive innovation and sales. Healthier non-chocolates are gaining ground, particularly those based on diet benefits, such as sugar-free candies, which have surged in sales, and functional and fortified candies, which are seeing increased product introductions. If anything is an indicator of the nation's increased health awareness, it is the consistent growth of single-serving in non-chocolate candy.

Market growth was particularly robust in 2006 with a 7% gain over 2005 retail sales of $8.3 billion, driven by the integration of health benefits into new product launches, and aided by cross-category innovation and sales through non-traditional retailers. The question is what can sustain this growth for the future? Organics. For the first time, Packaged Facts, a leading provider of market research in consumer goods, food and beverage, pet services, financial services and personal care markets has devoted an entire chapter to the role of organics in the non-chocolate candy market.

Packaged Facts' new report, The U.S. Market for Non-Chocolate Candy, analyzes sales and growth potential for hard and chewy non-chocolates, kids' novelty and interactive candies, mints other than breath fresheners, fruit- and mint-flavored candies, non-chocolate nut candies, licorice and gummies, diet candies, and seasonal offerings. The report surveys marketing and new product trends and dissects consumer demographics for non-chocolate candy overall, fruit/mint non-chocolates, caramel/nut non-chocolates, and leading brands. The report also tracks variations in food- and health-related attitudes among adult consumers of non-chocolate candy, presenting comparisons with chocolate candy, as well as detailed brand preference data for teens age 12-17, and children age 6-ll as prime consumers. Colorful confections in flavorful profiles and fun bite-size pieces attract young consumers, while added-value innovations such as games, stickers, reusable containers and other functional takeaways give kids something to e


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