LeanLife Health is riding the Omega-3 fatty acid fitness boom and rolling out Iron Energy drinks

LeanLife Health is riding the Omega-3 fatty acid fitness boom and rolling out Iron Energy drinks

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Has a patented process to isolate Omega-3 fatty acids from flax seeds It is the exclusive distributor of the Iron Energy drink, branded with Mike Tyson Building out Iron Energy to be a product category leader in the energy drink segment What LeanLife Health does: LeanLife Health Inc (CSE:LLP) (OTCQB:LNLHF) (FRA:LL1) delivers a diverse array of quality products, including high concentration Flaxseed Omega-3 oils and Iron Energy drinks endorsed by Mike Tyson. The Vancouver-based company is the exclusive distributor of the Iron Energy drink. The FoodCare Group, the supplier and maker of Iron Energy, is a market leader in Poland’s energy drink market and is a leading brand in the Middle East. LeanLife believes Iron Energy will also appeal to North American consumers. The annual market value of the combined US and Canadian energy drink markets is estimated at more than $14 billion. Separately, the company has developed a patented process to isolate Omega-3 fatty acids from flax (linen) seeds — one of the richest plant sources of this essential fatty acid. The company’s long-term, shelf-stable extractions are available in oil, emulsion and powder forms with purity in excess of 98% and can be used as food additives, or as nutraceuticals. LeanLife is riding a wellness trend as Millennials believe that when it comes to fats, there’s one type you don’t ever want to cut back on: Omega-3. They like to tuck the “wonder fat” into their diet and eat it with impunity in almost anything. As a result, the biggest category of Omega-3 products are not supplements, but Millennial staples such as milk, bread, cereal, noodles, juices, and cheese to which the Omega-3 fatty acids have been added. LeanLife’s products are sold online and have been used as additives by food processors in Europe for making staples from bread to milk products.   Studies have shown that Omega-3 fatty acids keep nerve cells functioning optimally. The wellness molecules are associated with improved mood, healthier hearts, reduced joint pain, lowered triglycerides, and healthier skin. High-fat nuts and seeds, in particular flaxseeds, contain a sort of Omega-3 called alpha-linolenic acid (ALA). How is it doing: In April 2021, LeanLife revealed that the first containers of the Mike Tyson-branded energy drink from the FoodCare Group had cleared customs in Los Angeles and made their way to its distribution facility in Arizona. LeanLife said the Iron Energy drink will be positioned to appeal to a large consumer base. Market share growth is expected. “The broad base of health and sports-oriented consumers will be attracted to this unique product alternative," noted the company. LeanLife said in February that it had ordered an additional ten containers of Iron Energy from the FoodCare Group in anticipation of strong US sales over the next few months. LeanLife plans to have a starting inventory of 1 million cans to put into its retail and online channels as part of an aggressive sales rollout. Given the positive response from major American retailers, LeanLife CEO Stan Lis said the company expected to order a minimum of “140 containers for the American market in 2021.” The company aims to also enter additional markets as the year progresses. In February, LeanLife struck a management consulting agreement with Big Venture Sales Ltd and its CEO Robert Hatch to launch online sales of Iron Energy on its own website and through Amazon. Big Venture will also be responsible for handling distribution and warehousing to facilitate online sales, in addition to brick and mortar. LeanLife is focused on building out Iron Energy to be one of the product category leaders in the energy drink sector. Red Bull is the market leader, followed by Monster and Bang. While Red Bull pursues a premium price strategy, LeanLife has said, Iron Energy will be aggressively priced, and shelf positioned to appeal to a broad consumer base. In January, LeanLife announced a sales agreement with Eclypse LLC, a private US company in the beverage space, to grow Iron Energy. The key principal of Eclypse, Cathal O'Flaherty, spent over 16 years at Constellation Brands, where he helped the company account for more than half of the US total sales of imported beer, the company noted. To incentivize Eclypse, LeanLife said it will provide milestone bonuses when Iron Energy sales reach $10 million and $20 million. In January, LeanLife said that it submitted nine Temporary Market Authorizations (TMA) to the Canadian Food Inspection Agency (CFIA) for Iron Energy. Currently, all caffeinated beverages sold in Canada require a TMA and the applications include all three flavors in all three sizes of the Iron Energy drink. LeanLife noted that the approval process takes many months. The company said it would build on Iron Energy’s American brand awareness to later launch sales in Canada. Separately, LeanLife is gaining traction as its proprietary processing produces stable and high concentration levels of Omega-3, a product resistant to oxidation, a clear advantage for storage. It enjoys a shelf life of more than two years and thermal stability ensures its products can be used in baking and freezing. In April 2020, the company inked a sales agreement to sell products in 18 Asian countries through health food industry veteran Desmon Yau. The deal will bring LeanLife products to China, India, Indonesia, Pakistan, Japan, Philippines, Vietnam, Thailand, South Korea, Malaysia, Singapore, Taiwan and Hong Kong, among others. LeanLife also boosted sales by tapping former Procter & Gamble Co executive Marisa Sanchez to take charge of sales of its products in Mexico. Similarly, LeanLife has struck a 10% commission sales agreement with Rob Hatch, granting him exclusive rights to sell the company’s products in Canada and the US. Elsewhere, ARYZTA, a Zurich bakery with US$4.2 billion in revenues is experimenting with LeanLife products in their bread using funding from the European Union. LeanLife also has an understanding with RD Heritage Group LLC to assist with marketing strategies and the sale of its products. On the production side, LeanLife continues to improve manufacturing processes. In February last year, the firm lifted output, reduced costs, and increased profit margin with the installation of new equipment. With an upgraded reactor for its exclusive extraction process, the company said it can now generate more than 300,000 litres of its unique, Omega-3 flaxseed oil product each year. LeanLife is tapping into latent demand as the global Omega-3 market is expected to reach upwards of US$57 billion by 2025, according to a report by Grand View Research Inc. On the financing front, in November 2020, LeanLife settled debt by issuing 9,800,000 units at a rate of $0.06 each for $588,000 in debt. Each unit consisted of one share and one share purchase warrant to buy an additional share at $0.08 each. Officers and directors took a total of 3.3 million units. Inflection points: Moving an inventory of 1 million cans of Iron Energy through retail and online channels Entering additional markets as the year progresses Tapping synergies that LeanLife’s Omega-3 products could deliver to some of the FoodCare brands What the boss says: “Given the strength of Iron Energy combined with the branding of legendary Mike Tyson, we are confident it will give us the opportunity to emerge as one of the top energy drinks in the North American market,” LeanLife Health CEO Stan Lis said in a recent in a statement.  He added: “It will be competitively positioned against the leading brands like Monster and Red Bull. There will be an opportunity to acquire additional territories around the world after a successful roll-out in North America. My goal for the year is to sell a minimum of 120 containers in the US, and secure additional sales in other countries.” Contact the author Uttara Choudhury at uttara@proactiveinvestors.com Follow her on Twitter: @UttaraProactive

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