SOBE 400% GROWTH RECIPE:
HERBS AND EDGY MARKETING
Entertainment, health and cachet with each swig. Herbal revolution meets hip, edgy marketing strategy, and there you have it - the recipe for 400 percent annual growth.
Producing and marketing under the brand name SoBe, South Beach Beverage Company is the privately held leader in the “healthy refreshment beverage” category - the fastest-growing segment of the $12 billion “new age” or “all natural” beverage market. SoBe is a line of ready-to-drink, non-carbonated juice blends and teas . . . all fortified with herbs, minerals, vitamins and other nutrient-enhancers and targeted cross-generationally to people with active lifestyles.
SALES UP FROM $13 MILLION TO $67 MILLION IN A YEAR
Norwalk, Connecticut-based South Beach sold 1.1 million cases of product in 1997 and 5.4 million cases in 1998 - its second year of distribution - an increase of 400 percent that positioned it among the top 25 beverage companies in the United States. SoBe dollar sales jumped from $13 million to $67 million, making it one of the fastest-growing brands in the industry. The “all natural” beverage market represents more than 18 percent of the $65 billion soft drink industry, which is growing at 10 percent per year, with the “healthy refreshment” segment growing at a significantly greater rate.
Nearly 70 percent of all Americans take some form of supplements, reflected by research conducted by New Hope Natural Media of Boulder, Colorado. Along with the desire to maintain the benefits of a well-established healthy lifestyle, disillusionment and irritation with the US medical care system and HMOs contribute to the growth of the market.
Established in 1995 by an experienced group of sports marketers and beverage marketers (backed by 10 investors) and competing with such brands as Snapple and Arizona, South Beach Beverage Company now has added another enhanced ingredient to its recipe for explosive growth performance: eBPCS from SSA.
With anticipated 1999 sales of $200 million, SoBe is implementing the SSA Portfolio and core product eBPCS on the AS/400 platform as a complete enterprise application integration (EAI) system with consultative professional services and expanded partnerships. The solution objectives: to power growth; to optimize communications between the company and its suppliers, distributors and partners; and to maximize its manufacturing and marketing opportunities.
WISDOM AT THE GYM AND ENERGY AT THE GAS PUMP
Do you know SoBe? It’s the lizard-embossed bottles in the refrigerated section at your deli, gym, convenience store and supermarket. It’s called Wisdom and Energy and Power and Eros, 3G Teas, 3C Elixers, Lizard Blizzard, Zen Blend, Lizard Fuel and - brand-new on the market - SoBe Lean. The whole product line tastes fruity, refreshing, soothing, uplifting - a satisfying health secret. And the lizard thing is very cool, too.
As a “virtual manufacturer,” South Beach subcontracts the production and shipment of its beverages through 11 co-packers located throughout the US and Canada and markets and sells its beverage line through independent distributors, with retail focus on the single-serve/cold-bottle channel of trade. Distribution is provided by a network of 300 independent distributors operating in all 50 states, Canada, Bermuda, South Africa and throughout the Caribbean.
With widespread, outsourced production and distribution operations, electronic communication with suppliers, distributors (customers) and co-packers is a major issue, and “we require far more system control than if these functions - raw materials, yields, output and so forth - were captive,” said Norman S. Snyder Jr., South Beach CFO. “We needed the whole thing, soup to nuts: supply chain management, manufacturing, sales, financial pieces, promotional pieces . . .
“We were operating with very antiquated, disparate systems that didn’t work together. That was particularly apparent in the face of our astronomical growth,” Snyder said. “We needed to be more efficient, with greater precision, with a system that fits the way our organization works. We needed to come right into the 21st century, and determined that SSA and eBPCS would take us there. SSA fit our industry and fit our company - it was obviously an organization that would work with us.”
‘IT WAS THE PEOPLE WHO WON THE DEAL’
“We like the people at SSA. They have the confidence and faith and technology we need to be successful going forward. SSA was a fairly unanimous choice - we did a lot of interviewing, a lot of referencing, we visited companies in our industry that are using BPCS,” said Snyder. “You can’t really test-drive a system - you need to be able to ask the right questions . . . will this meet my needs tomorrow and after that - show me. The demo showed the functionality of the software product, and that got SSA on the short list. But it was the people who won the deal. We knew they were a fit with SoBe. It was Bill Stuek and the strategic direction that convinced us this is what SoBe needed.
“The migration is pretty smooth and swift, and we’re right on schedule for an August go-live,” Snyder said. “This is the closest implementation-to-plan I’ve ever seen.”
Packaging is SoBe’s key marketing differentiator on store shelves. Bottle labels feature the dual-lizard logo reflecting the yin and yang of life (and implying an Oriental and exotic aura associated with herbal healing). An embossed, sinuous lizard - the brand’s icon and mascot - is on the neck of each bottle. All of SoBe’s advertising and marketing, including an independent Lizard Gear apparel-merchandising program, is based on the lizard motif.
SERIOUS, SAVVY AND IRREVERENT ALL AT ONCE
“SoBe’s consumer franchise,” said John Bello, South Beach CEO and founder, “includes both heavy-using teenagers who love SoBe Power and Energy, and ingredients-savvy Baby Boomers who drink SoBe Green Tea with ginseng, ginkgo, guarana and echinacea as a healthy alternative to traditional colas. While we take health and refreshment very seriously, our brand attitude is somewhat irreverent, which helps us stand out from our competitors and makes SoBe fun to drink.”
Billy Bishop, SoBe’s 28-year-old Vice President of Marketing who personally approves every flavor before it goes into production, explained the duality of SoBe’s niche markets: “Lizard Blizzard became one of our best sellers as soon as the teens and college kids saw our snowboarding lizard on the label. We don’t take ourselves too seriously, and young people can really relate to that.” At the same time, “SoBe Essentials is perfect for men and women who want a beverage with higher herbal content. You’ll be seeing it in health food stores and supermarkets that feature organically grown foods in addition to our traditional channels.”
SoBe staffers walk the walk. There are clues in the way they define their corporate culture: upbeat and unconventional; like to have fun, but serious about our work; harmonious; on a mission; young; camaraderie; craziness; out-of-the-box; shorts and no ties!!!!!; responsible, adult environment where you’re trusted to do the job and achieve the end result the way you want to; you need to feel the fit, or you wouldn’t want to work here.
Then there’s the SoBe/Headshok Mountain Bike Racing Team. SoBe not only partners with premier bicycle manufacturer Cannondale as the title sponsor for the 80-biker amateur team, which competes in more than 500 races around the US, but also supports distributors and retailers in race markets. Sampling, sales, promotions and publicity are an integral aspect of the sponsorship. Hats, T-shirts, jerseys and shorts (available even in bike stores) are sold right along with the drinks.
WE HAVE MET THE TARGET MARKET, AND WE ARE IT
“At SoBe, we’re all consumers,” Bishop said. “We’re all young and active and have a lot of fun. We’re out there. We formulate products that we would want to use. We really participate in the events we’re involved in, and we’re right in there sampling the participants. The Cannondale thing is a cool example - we have several people working here who are intense bikers, and that sponsorship was a perfect partnership for us. We have huge enthusiasm for the program, and there’s no end to what we can do with it.”
SoBe conducts all marketing and promotions in cooperation with distributors and retailers. Consumer communication is primarily through packaging and point-of-sale material integrated with promotional tie-ins and radio time. Sampling at grassroots, high-impact events in key markets coast-to-coast - with product distributed by sales reps from six high-profile SoBe Lizard Vans and two customized vintage ’70s school buses known as the SoBe Lizard Love Buses - is a primary market focus, along with the Lizard Line (1-800-588-0548) and SoBe’s Website (www.sobebev.com).
SSA’S ‘HIGHLY APPLICABLE VERTICAL INDUSTRY EXPERIENCE’
As it expanded operations throughout each region of the US, SoBe needed to focus on one enterprise solution to gain efficiencies across the full supply chain and tighten its production and communication capabilities. SoBe will be able to meet its current and future growth schedule through eBPCS’ seamless interoperability with industry-leading SSA Portfolio partner applications.
South Beach has clear ideas of where it wants SSA to take it. “We have invested $500,000 in SSA’s EAI package to manage our manufacturing process, as well as address new opportunities as a result of our explosive growth,” said CFO Snyder. “SoBe selected SSA based on their highly applicable vertical industry experience. Plainly put, they understood our enterprise needs. The breadth and extendibility of eBPCS enables us to effectively meet the needs of our growing business. We’re looking at double-digit growth for the next five years.”
Growth plans include market penetration with its new sugar-free metabolic enhancer SoBe Lean, and another three or four new products that are in the final stages of development. Expansion into Canada and the Caribbean is on the immediate agenda, with international expansion under discussion. Independent extension of the Lizard Gear line - the next exploding thing? - appears likely. “We’re finding the lizards look really cool on clothing, so we’re doing more of that,” Bishop said. “We’ll have a Lizard Gear catalog out soon.”
GLOBALIZATION IS A MATTER OF PREPARATION
Snyder looks at globalization as a distinct possibility, but only after SoBe has refined its domestic operations and saturated the North American market. “The SSA Portfolio and eBPCS will give us data that we didn’t have before, and that will help prepare us for globalization,” he said.
William M. Stuek, SSA Chairman and CEO: “With eBPCS and our portfolio strategy, we are able to provide the right solution to the right market at the right time. As partner in SoBe’s market momentum, we are able to leverage our extensive industry expertise with a progressive strategy that can deliver individualized solutions based on our customer’s specialized industry needs.”
Intellectual property is what SoBe really is all about, said CFO Snyder. “All our conceptualizing and marketing is done internally - that’s who we are. We don’t own bricks and mortar - we own ideas. The Cannondale sponsorship is typical of our thing - looking for alternate, inexpensive ways to get the SoBe message out.”
“The healthy refreshment beverage category has an unlimited amount of upside given the major cultural shifts that are driving it,” Bello said. With an eye to expected millennium consumer issues of wellness, health and personal well-being (read it: smarter, healthier, slimmer and sexier), “we’re committed to building SoBe’s leadership position through more innovative products, marketing programs that involve the consumer and availability wherever beverages are sold . . . It’s about consumers. It’s about fulfilling their needs . . . you create excitement and then go where the action is.”
CGE&Y SIGNS $350 MILLION AGREEMENT
TO PROVIDE FULL IT OUTSOURCING
FOR CONTINUUM HEALTH PARTNERS
Commitment to NY-Based Hospital Network
is One of Firm's Biggest Healthcare ContractsNew York - January 30, 2001 - Global management and IT consulting company Cap Gemini Ernst & Young U.S. LLC and Continuum Health Partners, Inc. today announced a seven-year, $350 million agreement, through which Cap Gemini Ernst & Young will provide full information technology outsourcing services for three member hospitals of New York-based Continuum Health Partners.
The agreement is one of the largest such contracts in Cap Gemini Ernst & Young's growing healthcare business unit since Cap Gemini acquired Ernst & Young LLP's consulting group last May. The scope of services reflects Cap Gemini Ernst & Young's strong commitment to healthcare – one of its largest industries – and will support Continuum's performance improvement strategy.
Through the agreement, Cap Gemini Ernst & Young will provide infrastructure operations (data center) services; network management; end-user support, including helpdesk support; applications development; and applications management to Beth Israel Medical Center, St. Luke's Roosevelt Hospital Center, and Long Island College Hospital. Services will be provided from Continuum's hospital-based facilities, as well as its Secaucus, New Jersey, data center. Continuum will transfer 275 personnel to the project.
"Our outsourcing agreement with Cap Gemini Ernst & Young caps a 20-year relationship with the consulting side of the firm," said Peter A. Kelly, president and CEO of Continuum Health Partners. "Cap Gemini Ernst & Young's deep knowledge and experience in the healthcare and IT industries will help us – as it has in the past – to deliver the highest level of healthcare services to our patients."
The agreement is part of Cap Gemini Ernst & Young's growing Global Operate business. A significant aspect of the agreement with the three member hospitals of Continuum is applications management service delivery, which includes development, maintenance and support.
"Cap Gemini Ernst & Young is the industry leader for applications management," said Paul Ruflin, vice president of Cap Gemini Ernst & Young's Health and Managed Care unit. "Given our commitment and leadership position in the healthcare industry, it is fitting that our relationship with Continuum Health Partners marks one of our company's largest outsourcing agreements to date. We welcome Continuum Health Partners to our roster of well-served Global Operate and applications management clients worldwide."
Among other recent client relationships, Cap Gemini Ernst & Young announced in November, 2000, its 10-year, billion-dollar outsourcing agreement to launch a joint venture that will deliver full information technology services to Ontario Power Generation - one of North America's largest energy utilities.
"Like most healthcare providers, Continuum has been challenged by industry changes," said Richard P. McGrail, vice president, Information Systems, for Continuum. "While some of the challenge derives from an overall tough business environment that puts pressure on operating margins, the big pressures loom in the information technology arena: limited resources for investment in IT projects; difficulties in recruiting and retaining IT talent; no value-enhancing benefits from increases in IT spending; and – thus far – very little standardization in IT delivery across hospital systems."
"Our goal for Continuum Health Partners as well as for our other clients worldwide, is to create a distinctly different model for services by combining our strengths in outsourcing with those of our consulting business," said Geoff Unwin, Cap Gemini Ernst & Young CEO. "The result is long-term, outcome-focused relationships driven by creativity, deep industry knowledge and strong process capabilities."
About Cap Gemini Ernst & Young
Cap Gemini Ernst & Young is one of the largest management and IT consulting firms in the world. The company offers management and IT consulting services, systems integration, and technology development, design and outsourcing capabilities on a global scale to help traditional businesses and "dot companies" continue to implement growth strategies and leverage technology in the new economy. The organization employs more than 58,000 people worldwide and reports global revenues of about 7.7 billion euros (1999 pro forma).
With more than 3,000 dedicated consultants and strong alliance partners engaged in healthcare projects across Europe, North America and Asia Pacific, Cap Gemini Ernst & Young has the ability to service specialized healthcare industry issues, such as HIPAA, and serves the business consulting and information technology needs of many of the world's largest players in the industry. More information about individual service lines, offices and research is available at www.cgey.com. About Continuum Health Partners, Inc.
Continuum Health Partners, Inc., was formed in January, 1997, as a partnership of two venerable health care providers, Beth Israel Medical Center and St. Luke's-Roosevelt Hospital Center. Building upon the strengths of both institutions, the partners soon established a broad-based, integrated health services network extending throughout the New York metropolitan region. In May, 1998, the partnership was joined by a third distinguished institution, Long Island College Hospital, located in the Brooklyn Heights/Cobble Hill section of Brooklyn. Continuum continued to grow in June, 1999, with the addition of another outstanding institution with a 100-year tradition of excellent specialty care, the New York Eye and Ear Infirmary.
With an annual operating budget of $1.7 billion, Continuum delivers inpatient care through nearly 3,100 certified beds located in seven major hospital facilities in Manhattan and Brooklyn. Continuum providers also see patients in group and private practice settings and ambulatory centers in the five boroughs of New York and Westchester County.
All four Continuum partner institutions were established more than a century ago by civic-minded individuals with a shared commitment to improving health, and health care, in their communities. Today, participation in the Continuum partnership enables each member institution to better fulfill its traditional mission by making available an impressive array of resources for the provision of state-of-the-art and compassionate care. Continuum is superbly equipped to identify and respond to the health-related needs of the populations served, in a patient- and physician-friendly environment. For more information, visit www.wehealny.org.
[Client feature]HELLMANN'S, SKIPPY, BOBOLI, KNORR . . .
BESTFOODS IS A CITIZEN OF THE WORLD
Bestfoods is all over the map. Dublin. Bucharest. Haifa. Denver. Johannesburg. Little Rock. Oconomowoc. Morocco. Santo Domingo. Burton-on-Trent. Casablanca. Greenwich. Wittengen. Miami. Barrancas. Beijing. Sanguinetto. Aguascalientes.
With annual sales of $9.8 billion, Bestfoods - maker of such household consumer foods brands as Hellmann’s, Skippy, Knorr, Mazola, Mueller’s, Entenmann’s, Thomas and Boboli - is a US-based leading international food company, with 45,000 employees running 115 plants in 60 countries worldwide. Bestfoods’ products are sold in 110 countries, and it is one of the most global of US food companies in terms of percentage of sales and earnings - nearly 60 percent - coming from outside North America.
Bestfoods markets a broad array of leading consumer foods brands, including these brands with more than $100 million in sales each: Knorr soups, sauces, bouillons and related products; Hellmann’s and Best Foods dressings; Mazola corn and canola oils; Skippy peanut butter; Entenmann’s sweet baked goods; Thomas’ English muffins; Oroweat, Arnold and Freihofer’s breads; Mueller’s pasta products; Maizena corn starches; Boboli Italian pizza crusts; Alsa desserts; Pfanni potato products; and Pot Noodle instant hot snacks.
Also the largest fresh premium baker in the US, the company markets its products through retail outlets and its strong worldwide foodservice business, which operates under the name Caterplan outside the US.
BESTFOODS NORDIC ON v6.0.04; UK SET FOR eBPCS GO-LIVEBestfoods relies on BPCS and eBPCS for unified, consistent business practices throughout its widespread operations. Bestfoods International, Bestfoods Nordic, Bestfoods Benelux BV, Bestfoods Hong Kong, Bestfoods Taiwan, Bestfoods Thailand, Bestfoods Malaysia, Bestfoods Beijing, Bestfoods Italia SPA, Foods - Ireland, Refinagoes de Milho - CPC, Bestfoods Hellas, Bestfoods Rathan Ltd., CPC Amino S.A., and Bestfoods France - all are live on eBPCS or BPCS, an accomplishment that took little more than three years.
Now Bestfoods Nordic has just gone live with BPCS v6.0.04 on IBM’s AS/400 at its sites in Kristianstad, Sweden, and Skovlunde, Denmark. And, utilizing the SSA Portfolio solutions strategy, Bestfoods UK is scheduled to go live on eBPCS with Supply Chain Management (SCM) and Configurable Enterprise Financials (CEA) in October, with Multi-Mode Manufacturing (MMM) being implemented at seven UK manufacturing sites beginning in April, 2000.
Supporting 170 users at three factories, two distribution centers and two main offices, the Sweden and Denmark implementations included SSA’s CEA, MMM and SCM modules. A rollout is planned for two more Bestfoods sites in the Nordic next year.
“SSA offered much better scalability, it was easier to implement, less expensive, and it was also easier to adapt and change after the initial implementation,” said Bestfoods Europe’s Senior Director of Finance, Willem Nijman. “We now have BPCS running alongside Hyperion for financial reporting and consolidation, Cognos for data warehouse querying and report writing, Oracle for financial analysis, and Microsoft Office for office automation.
“The most promising aspect,” Nijman said, “is the fact that SSA has been listening to its customers all over the world and is willing to react to their needs and wishes, because that will no doubt have a direct impact on SSA’s product and service quality as a whole.”BENELUX ESTABLISHES A 'SNEAKING STANDARD' FOR ERP: BPCS
Bestfoods’ Benelux operations are the main driver of the SSA-BPCS groundswell taking hold at Bestfoods worldwide. Bestfoods Europe (also responsible for Africa and the Middle East) is headquartered in Brussels, Belgium - covering 31 countries with $3.5 billion in revenue from 61 manufacturing plants, two of them located in The Netherlands. Apart from the international operations in Brussels, there is also a Belgian marketing and sales division in Antwerp. All in all, Bestfoods’ operations in Benelux employ 800.
“Actually, although Ireland had already expressed its preference for SSA’s BPCS in the late ’80s,” said Nijman, “it was in the Benelux in the early ’90s that we started looking at ERP and supply chain programs for our European affiliates, most of which ran on IBM AS/400 computers. It soon became clear that System Software Associates was the most obvious choice, because of their knowledge of this platform and their support. And quite quickly, the other countries followed the same path - it was as if we had created some sort of ‘sneaking standard.’ ”
Then, in 1996, Bestfoods initiated a strategic effort to harmonize all of its policies and programs, and ERP got another close look. The US, Germany and a handful of other countries were running a different ERP system at the time, while BPCS was being used in operations in 10 European countries, Latin America and Asia. Worldwide Bestfoods management made the decision to develop a core BPCS system for those three regions, because they all had similar information needs.
A global contract was signed with SSA, and an international project team - 40 staff plus a number of external consultants and local support teams - went on to develop a core model for Bestfoods. At the end of 1998, the development group was split into two teams, one for the Scandinavian countries and one for the UK.
[Press Release]CAP GEMINI ERNST & YOUNG DELIVERS
ON $1 BILLION OUTSOURCING PROJECT
FOR MAJOR NA ENERGY GENERATOR
New Horizon: CGE&Y-Ontario Power Generation
JV Provides Full Information Technology Services
Toronto – February 20, 2001 – New Horizon System Services, a joint venture between global management and IT consulting company Cap Gemini Ernst & Young and North American energy generator Ontario Power Generation (OPG), today began delivery of full information technology services to one of North America’s largest utilities.
New Horizon represents the largest outsourcing deal in Cap Gemini Ernst & Young’s energy and utility business unit. The depth of services represents Cap Gemini Ernst & Young’s extensive knowledge in the energy sector and will support the challenges that OPG faces in the new economy and deregulated energy environment.
This joint venture is owned 51 percent by Cap Gemini Ernst & Young Canada (through its subsidiary BTS) and 49 percent by OPG. The company has a team of 700 full-time and contract staff that will perform infrastructure management, application development, application support and maintenance, network management, data center operations and help desk support in areas such as commercial systems, work management, finance, human resources and supply chain.
“Information systems are key to competing in the newly deregulated North American energy market,” said John Mather, president and CEO, New Horizon System Services. “Advanced commercial trading systems, on-line maintenance and real-time plant information systems are more important than ever to ensure safe, reliable and clean plant operations. We know the energy business, so – with the launch of this IT service delivery relationship with Cap Gemini Ernst & Young – we’re very well positioned for growth in the future.”
The company will provide cost-effective information technology services to energy companies operating in North America. This will enable companies to focus on their core function and benefit from superior information systems and technology support.
Ron Osborne, president and CEO of Ontario Power Generation, said moving its IT function to a separate company will provide the generator with a number of benefits. “Cost-effective and highly reliable information technology services will be critical to the competitiveness of OPG as we move toward deregulation and support today’s energy needs. Cap Gemini Ernst & Young and OPG share a 16-year history, and I believe the success of New Horizon will be based on our complementary skills and styles.”
The agreement is part of Cap Gemini Ernst & Young’s growing Global Operate business. A significant aspect of the agreement is long-term applications management service delivery, which includes development, as well as ongoing maintenance and support.
“Cap Gemini Ernst & Young is a leader both in the energy sector and in the area of technology management,” said Ron Buckle, vice president, Cap Gemini Ernst & Young Energy & Utility services. “New Horizon marks an important step in our ongoing commitment to providing leading services to the energy industry. It is especially significant given our long history with OPG.”
About Cap Gemini Ernst & Young
Cap Gemini Ernst & Young is one of the largest management and IT consulting firms in the world. The company offers management and IT consulting services, systems integration, and technology development, design and outsourcing capabilities on a global scale to help traditional businesses and “dot companies” continue to implement growth strategies and leverage technology in the new economy. The organization employs more than 59,000 people worldwide and reports global revenues of about 8.5 billion euros (2000 pro forma). Visit www.cgey.com for additional information about individual service lines, offices and research.
About Ontario Power Generation
OPG is one of the largest power producers in North America, operating 80 generating stations with a total installed capacity in excess of 30,000 megawatts. The company’s goal is to expand into new electricity markets while operating in a safe, open and environmentally responsible manner, maximizing both customer and shareholder value. OPG currently supplies about 85% of all electricity consumed in Ontario. More information can be obtained by visiting OPG’s website at www.ontariopowergeneration.com.