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The Year of the Dealer! A New Years day address to Shareholders and Believers of Hangover Joe's HJOE fom CEO Matt Veal.
Happy New Year 2017 to our many believers! We are excited to discuss our upcoming plans for the coming year. 2016 was yet another year of major change for our Company and no doubt 2017 will be the same. While there are many things about 2016 we could discuss, such as the wildly successful launch of our jerky program, what we want to discuss first and foremost is our dealer program. Turning this program around and into the success we planned on is one of our biggest goals for the upcoming year.
The potential of the dealer program is incredible. There is a proven demand in the market for people to have their own businesses where they build on the brand that has been established. The way our program is constructed, each dealer is their own business that has outsourced the product development, branding and manufacturing to an intermediary that we have a contract with. We supply the intermediary. At times this approach has had challenges, and in 2016, we made an effort to make some improvements to the arrangement but were unable to make any changes of any kind to it despite significant efforts on our part. In the process we did find an attorney with significant talent and experience in the field and look forward to his counsel in this area in the upcoming year.
Notwithstanding where we are at the moment, we see, perhaps with a different approach, where we can find a way to better take advantage of the many people looking to build their own businesses through our dealer program and help our dealers improve. Fundamental to this is to find a way to communicate how crucial these “road warriors” are both to us, and in the big picture, to our nation’s economy as well. Our dealers provide a service to the stores they serve by warehousing, restocking product, communicating best practices, and turning a function that is often treated as routine by the big supply houses into a help for the business involved.
How do we know this? Because we’ve lived it, having used the big supply houses over the years. Those types of distributors serve a function, but in today’s world, some of the big brands they serve are declining in percentage terms for several reasons, but certainly the process of minimizing time in the stores by these houses, while profitable in the short run, does not serve the store or the brand particularly well in our experience.
Beyond communicating appreciation, we look forward to much better training, better exchange of ideas, better opportunities, and a much greater energy level in general for our dealers in 2017. Before we can do this we need to find a better way than the current model, a way to make a few changes in the program that are being worked on in-house.
A well run dealer program gives the stores a better insight into the new brands that are coming on the scene, without sending an overworked store owner or manager to a convention that is also bombarded with the big brands attempt to squeeze out the new products. So the opportunity for the dealer is proven. The talents of the dealer are underappreciated, not only for the marketing and distribution functions we have described, but as “new collar workers”, they combine the blue collar distribution roles, with the white collar marketing, computer administration roles, plus the social media functions that have taken the place of advertising in the new economy on into the fine points of running a business. It’s not easy, and takes a ton of patience. We understand this, but we must admit our contract with the intermediary may have a “perverse incentive” that results in the dealers not being supported in the way we’d like. As indicated above, we’ve brought in some help to guide us through what can be done to help our dealers, which helps us in turn.
Beyond the financial aspects of dealership, the chance to develop a brand is a very strong, almost emotional aspect of what our dealers, our other stakeholders, and our shareholders do that is unique. Opportunities with big brands are rare, and lucrative opportunities even more so. It is hard to develop a personal attachment in those cases, and if so, any such attachment is not a strong association in the mind of others. Hangover Joes does give that emotional pull, and at the same time, as the brand is still early stage enough that a memorable impression in the mind of others is available to all of us involved, no matter what role. This is not to be underestimated, whether logical or not few of us are immune for the power of a brand, a sports team, a group or the like. To harness this for gain is something few of
us get but it can be a source of great satisfaction and also very appealing to people we are seeking to bring aboard.
Inversely, our brand has a strong counterreaction to it that adds to its power. Hangovers, let’s face it, do have a negative connotation. And for all of the efforts throughout American history, including recent history, to reduce alcohol consumption, according to the Bureau of Labor Statistics, Americans still spend $500 a year on alcohol, adjusted for inflation, substantially the same as in 1974. This is sort of a “dirty little secret” that no one wants to talk about, but then along comes Hangover Joes, like that long lost relative, showing up to tell family stories some don’t want retold! Suffice it to say our brand has a much stronger emotional reaction both positively and negatively than most. Few brands in fact are willing to challenge things like we do, most avoid controversy altogether. We feel being bold is absolutely necessary to build this Company.
At times this aspect of the brand is a challenge, to deal with, and consistent with the times we get plenty of pushback, be it from buyers of major retailers who have been reluctant to allow our product in their chains, ignoring positive sales data, and of course hedge fund types that short our stock and use bashers to emotionally affect shareholders. Of course the shorters made a lot of money in the stock market off of this, which in turn caused other problems for us and our shareholders. However, this counterreaction to the brand is ultimately a huge opportunity for us. Once we successfully overcome it, and we will, it will add jet fuel to our success. But between now and then, the resistance we face acts like a weight training exercise for us, but it’s still stressful.
One change that we believe will be positive for our brand is that the world is changing and we think improving. Elections throughout the world are throwing out a somewhat socialist status quo that has believed it could perfect people by edict or threatened edict to a more freewheeling world that views its working classes as an asset rather than something to be looked down on. While we have customers of all types, we are proud of the working class view of the world we’ve always had. With this change we believe there should be less backlash than some of what we have experienced in recent years. Our product is healthy and practical and in no way are we encouraging people to misbehave, but some have mistakenly took that view and we are confident the buyers for retail outlets throughout the country will realize this instead of the fearful approach we see too often.
At a deeper psychological level, we believe sometimes some of us look for something to focus negativity upon, in hopes of clearing the decks for other positive things. That type of thinking can limit people from new opportunities they may have missed. We see a millennial generation moving into adulthood who are restructuring the world their way and we plan to do a better job of making our arguments to them and we are confident they will respond. They have a lot to do with a world that has huge changes coming with artificial intelligence, quantum chips to replace integrated circuits, and other massive improvements they are well underway in making their new world work, and we are going to make them a priority by proving we can be a useful friend to the things they have to do. They have communicated a clear desire for authenticity and this is fundamental to our way of doing things.
As idealistic as that sounds, their work has barely begun. Many people in today’s environment have an approach to business and life in general that is not authentic, choosing to misdirect their true intentions instead. We’ve seen that and where necessary will fight it. Sometimes we find our position in the world similar to that of the character Lando Calrissian in the Star Wars movies, not always able to overpower others, sometimes having to improvise on the fly, but with plenty to contribute towards a long term victory.
One place where we look forward to progressing is being able to return to full reporting and trading for our shareholders. The process to do that is a major goal for the company, and we still plan to do just that. The priorities for that plan are in the successful expansion of our jerky program, which has had a tremendous start, and can sustain the costs of resolving controversies from the past, refiling with the Securities and Exchange Commission, and return to trading status with a successful comeback that will please our investors.
The Year of the Dealer! A New Years day address to Shareholders and Believers of Hangover Joe's HJOE fom CEO Matt Veal.
Happy New Year 2017 to our many believers! We are excited to discuss our upcoming plans for the coming year. 2016 was yet another year of major change for our Company and no doubt 2017 will be the same. While there are many things about 2016 we could discuss, such as the wildly successful launch of our jerky program, what we want to discuss first and foremost is our dealer program. Turning this program around and into the success we planned on is one of our biggest goals for the upcoming year.
The potential of the dealer program is incredible. There is a proven demand in the market for people to have their own businesses where they build on the brand that has been established. The way our program is constructed, each dealer is their own business that has outsourced the product development, branding and manufacturing to an intermediary that we have a contract with. We supply the intermediary. At times this approach has had challenges, and in 2016, we made an effort to make some improvements to the arrangement but were unable to make any changes of any kind to it despite significant efforts on our part. In the process we did find an attorney with significant talent and experience in the field and look forward to his counsel in this area in the upcoming year.
Notwithstanding where we are at the moment, we see, perhaps with a different approach, where we can find a way to better take advantage of the many people looking to build their own businesses through our dealer program and help our dealers improve. Fundamental to this is to find a way to communicate how crucial these “road warriors” are both to us, and in the big picture, to our nation’s economy as well. Our dealers provide a service to the stores they serve by warehousing, restocking product, communicating best practices, and turning a function that is often treated as routine by the big supply houses into a help for the business involved.
How do we know this? Because we’ve lived it, having used the big supply houses over the years. Those types of distributors serve a function, but in today’s world, some of the big brands they serve are declining in percentage terms for several reasons, but certainly the process of minimizing time in the stores by these houses, while profitable in the short run, does not serve the store or the brand particularly well in our experience.
Beyond communicating appreciation, we look forward to much better training, better exchange of ideas, better opportunities, and a much greater energy level in general for our dealers in 2017. Before we can do this we need to find a better way than the current model, a way to make a few changes in the program that are being worked on in-house.
A well run dealer program gives the stores a better insight into the new brands that are coming on the scene, without sending an overworked store owner or manager to a convention that is also bombarded with the big brands attempt to squeeze out the new products. So the opportunity for the dealer is proven. The talents of the dealer are underappreciated, not only for the marketing and distribution functions we have described, but as “new collar workers”, they combine the blue collar distribution roles, with the white collar marketing, computer administration roles, plus the social media functions that have taken the place of advertising in the new economy on into the fine points of running a business. It’s not easy, and takes a ton of patience. We understand this, but we must admit our contract with the intermediary may have a “perverse incentive” that results in the dealers not being supported in the way we’d like. As indicated above, we’ve brought in some help to guide us through what can be done to help our dealers, which helps us in turn.
Beyond the financial aspects of dealership, the chance to develop a brand is a very strong, almost emotional aspect of what our dealers, our other stakeholders, and our shareholders do that is unique. Opportunities with big brands are rare, and lucrative opportunities even more so. It is hard to develop a personal attachment in those cases, and if so, any such attachment is not a strong association in the mind of others. Hangover Joes does give that emotional pull, and at the same time, as the brand is still early stage enough that a memorable impression in the mind of others is available to all of us involved, no matter what role. This is not to be underestimated, whether logical or not few of us are immune for the power of a brand, a sports team, a group or the like. To harness this for gain is something few of
us get but it can be a source of great satisfaction and also very appealing to people we are seeking to bring aboard.
Inversely, our brand has a strong counterreaction to it that adds to its power. Hangovers, let’s face it, do have a negative connotation. And for all of the efforts throughout American history, including recent history, to reduce alcohol consumption, according to the Bureau of Labor Statistics, Americans still spend $500 a year on alcohol, adjusted for inflation, substantially the same as in 1974. This is sort of a “dirty little secret” that no one wants to talk about, but then along comes Hangover Joes, like that long lost relative, showing up to tell family stories some don’t want retold! Suffice it to say our brand has a much stronger emotional reaction both positively and negatively than most. Few brands in fact are willing to challenge things like we do, most avoid controversy altogether. We feel being bold is absolutely necessary to build this Company.
At times this aspect of the brand is a challenge, to deal with, and consistent with the times we get plenty of pushback, be it from buyers of major retailers who have been reluctant to allow our product in their chains, ignoring positive sales data, and of course hedge fund types that short our stock and use bashers to emotionally affect shareholders. Of course the shorters made a lot of money in the stock market off of this, which in turn caused other problems for us and our shareholders. However, this counterreaction to the brand is ultimately a huge opportunity for us. Once we successfully overcome it, and we will, it will add jet fuel to our success. But between now and then, the resistance we face acts like a weight training exercise for us, but it’s still stressful.
One change that we believe will be positive for our brand is that the world is changing and we think improving. Elections throughout the world are throwing out a somewhat socialist status quo that has believed it could perfect people by edict or threatened edict to a more freewheeling world that views its working classes as an asset rather than something to be looked down on. While we have customers of all types, we are proud of the working class view of the world we’ve always had. With this change we believe there should be less backlash than some of what we have experienced in recent years. Our product is healthy and practical and in no way are we encouraging people to misbehave, but some have mistakenly took that view and we are confident the buyers for retail outlets throughout the country will realize this instead of the fearful approach we see too often.
At a deeper psychological level, we believe sometimes some of us look for something to focus negativity upon, in hopes of clearing the decks for other positive things. That type of thinking can limit people from new opportunities they may have missed. We see a millennial generation moving into adulthood who are restructuring the world their way and we plan to do a better job of making our arguments to them and we are confident they will respond. They have a lot to do with a world that has huge changes coming with artificial intelligence, quantum chips to replace integrated circuits, and other massive improvements they are well underway in making their new world work, and we are going to make them a priority by proving we can be a useful friend to the things they have to do. They have communicated a clear desire for authenticity and this is fundamental to our way of doing things.
As idealistic as that sounds, their work has barely begun. Many people in today’s environment have an approach to business and life in general that is not authentic, choosing to misdirect their true intentions instead. We’ve seen that and where necessary will fight it. Sometimes we find our position in the world similar to that of the character Lando Calrissian in the Star Wars movies, not always able to overpower others, sometimes having to improvise on the fly, but with plenty to contribute towards a long term victory.
One place where we look forward to progressing is being able to return to full reporting and trading for our shareholders. The process to do that is a major goal for the company, and we still plan to do just that. The priorities for that plan are in the successful expansion of our jerky program, which has had a tremendous start, and can sustain the costs of resolving controversies from the past, refiling with the Securities and Exchange Commission, and return to trading status with a successful comeback that will please our investors.
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