Gunther Grant Inc (GNGR)

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New Website Update 06/02/15

Tuesday June 2, 2015

I will give a brief post here about what GNGR will be doing moving forward. Many already know GNGR has decided to focus on fudge for only the holidays between October thru January in a previous post.

During my trip to Florida which was a combination visit to my brothers 50th birthday and also to meet with some marketing people who handle rights and licensing for various movie and TV shows for products to be made and merchandised under those themed entities (game of thrones, walking dead, shameless and many others).

I had brought with me the Zombie fudge and also created a small mini chocolate brain that is wrapped in red foil that would come in a Zombie brain designed box with a retail of about $1.99. During the meeting a lot of attention was given to the brain but not for its chocolate idea but rather the ability GNGR has for mold creation.

My entire motto over the years has been "anyone can make chocolates but who ever makes the best mold gets the orders" This ability to make molds better than anyone in the confection industry has proven itself year after year and has kept GNGR alive (barley but still alive). During the meeting two of the people I met left the room to show the chocolate foiled mini brain to another person who came in the room and asked me if I can make other items using our mold making ability and not just for chocolate. Of course I said yes as we have done with soap and candle molds as well in the past.

The chocolate idea looked great but the interest in our mold making and production of other items was of more interest to them. I was given a task to use the same similar mold to make the mini chocolate foiled brain and apply that to a piece of jewelry with the same theme. When I returned home I quickly and quite easily turned out a few various sized samples of sterling silver brain pendants with a few other requests being worked on this week.

The outcome was a sterling 925 silver brain pendant jewelry piece that (like our great looking chocolates for the ad specialty market) seem to have no rival. (I included images to show this process for the samples requested).

These finished samples are now being tested on ebay, etsy and also a well know TV show about Zombies website to members only to get a marketing test and review before any licensing agreement is decided upon. I did however start selling them myself and have since sold 28 in the past 10 days just by wearing one and showing it to people and those who complimented me on the item.

What was even more exciting about seeing people and a marketing group take interest in this new item we now are making under the GNGR company as a new product, is easy to make and even easier to sell based on the market for items such as these with the Zombie craze so popular I can easily see how these items I'm creating could be more poplar than chocolate.

The best part is the numbers.

In any given day if we were to make for example a small run of 100 one pound fudges and sold them at retail full price for $14.99 with a cost of about $3.00 we gross $11.99 which is not bad. With the need for a commercial kitchen and health approved location which many know or don't realize cost GNGR about $600,000 in just rents over the past 10 years and with out raising any significant capital after going public, we managed to stay alive even with those tremendous costs and overhead.

To produce 200 sterling silver brains in the same day takes about the same time to make 100 fudges, the difference is a Net profit on 200 sterling silver brain pendants is $30 each (silver 1/2 ounce costs $7, and 8% royalty will be $4 plus labor for only two people not 4-5 like fudge) Plus NO expensive commercial kitchen or health compliance costs. This does not mean GNGR will not make fudge this fall using the commercial rental kitchen, but this does open the doors to a new way to use our mold making ability which may in fact be the key to what GNGR does moving forward and to enter into new market with yet another new item that is marketed to a larger fan base than chocolate and the vortex. Again both chocolates and the vortex are not off the table just on hold till the fall.

100 fudges per day - 4 employees, expensive kitchen, net profit for each unit $10.00 (total $1000).
With out a constant flow of 100 per day in orders the overhead kept applying to what we did make causing the costs to rise per unit reducing our net which fluctuated often.

200 Silver brains cast and polished and shipped in the same day with only 2 people and a cheap studio or even a portion of a warehouse for about $400 vs.. $5000 a month for a commercial kitchen for confections is far less overhead.

The net on 200 silver brains (at $30 each) would be $6000 per day.
If there was any down time the overhead would be manageable in the event we did not produce for 3 or 4 months like with chocolates during the summer.

Also these new creations are not limited to a specific target market like the Vortex which is limited to cooks, confectioners and crafters like soap makers. Producing these items requires no health compliance, now expensive kitchen, no warranty and they cant be damaged or melt or be limited to certain months of the year like chocolate. I am working on 12 more designs to show the marketing people as per their request which will be released on their say so but I wanted to at least show the Zombie brains sterling silver pendant to shareholders.

It has been quite a journey having gone public in 2008 which puts us still as a relatively new public company and in these past 7 short years a lot has been learned and proven and what has failed. GNGR managed to stay alive and we are still alive and things will be settled and finalized as we move forward to become current.

Over the next few weeks a new line using our mold making skills and production ability to bring to market what we have been asked to do by professionals in their field. They LOVED the chocolate but they said if GNGR wants to make larger sales to a larger market we need to seriously look at that advice.

I have spent about $1200 total to set up the jewelry casting equipment. (kiln, spin caster and molding supplies) the cost to increase production is also far less than confections as well as the space needed.

These next few months will also have GNGR decide will it be better to make the new line of licensed jewelry and other items in the works (non chocolate) during October thru January or to do fudge? I am thinking bigger now and preparing for that decision around September. I cannot show the other items I'm working on for legal reasons and until the licensing deal is signed, but here is the brain from creation to finished products that IS SELLING at this time with completed sales already.

So far every CEO and public companies articles say they never made it on their first items with out great changes and failures. We never had a failure that hurt GNGR we just never had the capital to fulfill the big orders we had. Our deficiency was lack of capital that is all. I have been also purchasing sterling silver scrap from 15 suppliers who take in sterling flatware, coins, bars, bowls and other items made from Sterling Silver and purchasing it to melt down so silver is always available and with a silver cost of 12% of the retail price similar to chocolate but with a much higher selling price $60 vs. $15. We also have stores waiting for wholesale prices who are excited to start selling our line to their customers.

Many may not like GNGRs changes but as they say, change can be good and no matter who says what about GNGR, GNGR will still survive and find a way to use our mold making, production ability to continue to lead not follow, we just need to find that ONE winning path and this is looking very positive.

Some (even me) have jokingly said GNGR chocolate is the new gold. Well guess what? You were right.

Thank you all (see below images) very similar to making chocolate master molds but the finished product is Sterling and Gold

Grant