DNA Brands Inc (DNAX)

[Ed the Trader]

"DNA Energy Drinks were not a failed product, DNA Energy Drinks was a failed company."

There are ultimately only two types of products.

There are successful products which return a profit, and there are failed products which exit the marketplace.

The "why" of why a product failed does not matter with regard to business. All that matters is results.

We both know that both internal sabotage and incompetent management decisions caused the failure of the business.

We both know that the energy drinks were good products that should have generated good profit.

However, the fact is that there are distributors out there who got stuck with product that they could not move, and that resulted in a loss for them instead of a profit. That makes DNA energy drinks a failed product in the eyes of the beverage industry.

The energy drinks certainly can be rehabilitated in the eyes of the beverage industry, but if you think that competition awards from way back in 2010 and 2012 are going to cause distributors in 2017 to leap at the chance to distribute DNA when distributors lost money because of DNA in 2014, you are badly mistaken.

The beverage industry is a VERY competitive space, and there are shiny new beverages always available for distributors to try, and space on store shelves is limited.

If DNA wants another shot at the marketplace, it will be necessary to start small and prove itself as no longer a failed product, and as a real viable, profit generating competitor. I have no doubt that it is possible, but until Adrian has quantitative proof to offer to prospective distributors, I cannot see why any of those distributors would wish to take a chance on DNA again.

That means sales to independent retail stores where Adrian can talk directly to the store owner/operator are going to be the key to rebuilding the reputation of the energy drinks. It also means that initially, Adrian is likely going to have to offer either consignment types of deals to these small stores, or else offer special pricing to enhance the profit margin available compared to the margin that a shiny new product might offer.