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Sweet Success Issues Letter to Shareholders
Monday October 10, 12:16 pm ET

SAN ANTONIO--(BUSINESS WIRE)--Oct. 10, 2005--Sweet Success (OTC:SWTS - News) announced today that it issued the following Letter to Shareholders:

Dear Shareholder,

During the past few weeks Sweet Success Enterprises Inc. has achieved a variety of significant sales and corporate milestones. As many of you are aware, we recently relaunched the Sweet Success brand, made popular by Nestle's, in several key target markets. We have received restocking orders from 40 percent of the retailers that began offering our new products. We are scheduled for a production run later this month to increase our product line and to satisfy a specific request from a well-known national high-end grocery chain. And, we have filed to become a fully reporting company and have made the requisite filings with the Securities and Exchange Commission which are necessary to obtain a listing on the Over-The-Counter Bulletin Board.

We have wanted for some time to address each of you on many of the specific events that have already occurred or are soon expected to, and hope this letter answers many of your questions. We would also encourage you to review our 10-SB filing, the various risks outlined in it, and the accompanying exhibits to get a clear picture of the team behind the company and their incentives to make it succeed (available at There are agreements with two former top Coca-Cola executives experienced in new product strategies, a marketing director who ran major campaigns for Wal-Mart Stores Inc. and there is a conditional employment agreement for a new president and chief operating officer who has led four successful NASDAQ National Market companies.

There are also a variety of promotional agreements, including one anticipating product placement and integration on Mark Burnett's hit reality show productions such as "The Apprentice." Late last month we met with Mr. Burnett and his business strategist in Los Angeles and have targeted filming in the spring for the first of our product placements / integrations (and shipped product to their sets). Details are expected to be forthcoming in the first quarter.

Much of our work these past few weeks has been coordinating the agreements into our growth plans and setting specific targets. By the end of the month we will unveil a redesigned Web site with livelier interactive features for consumers and comprehensive content for investors. Austin, TX. based Conduit Co. ( and Maynard, MA. based ( were retained to build it with our marketing and corporate communications teams.

Marketing Director Alicia Smith Kriese, an 18-year advertising executive with Austin-based GSD&M, has negotiated a multi-format promotion campaign with a national "lifestyles" magazine, and has developed extensive new marketing materials to be unveiled shortly. Two-time NFL Pro Bowl star Jeremy Shockey will be taking an active role in our promotion strategies at the end of the football season.

At the same time, John Blackington and Gordon Hill, former top Coca-Cola executives who helped drive the strategy behind the soda giant's new-beverage marketing, coordinated our controlled retail product rollout into Texas markets, which had generated strong sales for Nestle's, in order to assess consumer awareness of the brand and develop a mass rollout strategy. Over the past month, we stocked a limited number of select retailers in Austin, Dallas, Houston and San Antonio. The products were placed with minimal point of sale marketing devices, without prime exposure and priced at $2.79 per 11 oz container, a top price-point for the industry. Even with no supplemental advertising or promotions, the sales velocity - while sampled in only a very small number of stores - exceeded our expectations. Unit sales at some stores surpassed Slim-Fast and 40 percent of the stores have already reordered our products. John McDade, sales manager at Westway Distributing in Houston, said his accounts indicated repeat customers buying the brand and he ordered an additional pallet (96 cases) of product. We also shipped and distributed 100 cases of Sweet Success Complete Fuel(TM) to shelters and charities in New Orleans after Hurricane Katrina struck.

The indications are that brand awareness remains strong among our target customers. Nestle spent $170 million developing brand equity and averaged over $43 million in annual net revenue from sales of the product between 1997 and 2000, when NutriSystem Inc. (NASDAQ:NTRI - News) purchased it. The brand continued providing NutriSystem positive cash flow but investor interest in dot-coms quickly waned and NutriSystem discontinued funding for it.

We purchased the brand and all properties associated with it in late 2002. We have since enhanced the formula to keep the great taste while providing an all-natural line of portable and practical fuel to meet America's evolving lifestyles and dynamic demands.

We now have warehouse stock of the chocolate and vanilla flavors ready to fill initial campaign-coordinated chain store rollouts, and are in active negotiations to finalize orders with several previously named as target markets. Announcements to that affect are anticipated this quarter.

There is also a production run scheduled for later this month at our Savannah, GA. based packer affiliate. A new flavor, Mocha, will be added to the Sweet Success Complete Fuel(TM) dairy-based line of delicious and nutritious health and meal-replacement shakes, and we expect to run an introductory quantity of our berry juice-based antioxidant Complete Fuel to begin the expansion of the product line.

We have formulated a total of eight beverages for the initial build out of the product line, including a strength, energy and stamina blend (tied to the Shockey promotions), a "supergreens" blend, an immune building line and a health and meal-replacement shake for diabetics. Last week, we finalized new production agreements, reducing our costs by 25 percent and enabling us to offer superior products with competitive price points.

During Q4 2005 and Q1 2006, the company intends to fill out 50 percent of Texas markets where brand identification is highest, and to have e-commerce capabilities on the redesigned Web site. Early next year, we expect to begin introduction of the expanded product line in previous top markets like Miami, Raleigh/Durham, Washington D.C. and Philadelphia. Brand marketing will target college educated, physically active consumers age 18-54 with narrower parameters for product or SKU-specific campaigns. Base marketing concepts employ elements of brand loyalty (logo emphasized) and modern consumer trends (healthy, all-natural, fun and practical).

We are well positioned to meet the current demands of consumers and to deliver practical and delicious products for today's evolving lifestyles. Many of the same people who were buying Sweet Success(TM) meal replacement shakes five years ago are now part of the drive for multifunctional, good-for-you beverages. Today's mass market is less concerned with being thin and more committed than ever to feeling and being well.

Our affiliate venture capital firm Jag Capital has been funding the company's operations, and will continue to do so until we feel that the market is fairly valuing our business prospects and it is beneficial to access outside capital.

It is our belief that the brand equity, teams in place, product quality and upcoming retail accounts will demonstrate the company's inherent strength.

We are focusing on evolving trends with value-added nutritional drinks packed under familiar labels. We are using brand power to squeeze out a strong position in the most rapidly growing segments of the beverage market.

Sweet Success(TM) is poised to play a dominant role in the explosive "good for you" beverage segment as other producers continue working on brand awareness or breaking away from an unhealthy brand image. While the health and meal replacement product market is competitive, we believe that the strong brand recognition, highly focused experienced management team and strong early response from consumers bode well for the company's future success.


Bill Gallagher,

Chairman and Chief Executive Officer of Sweet Success Enterprises Inc.

The Private Securities Litigation Reform Act of 1995 (the "Act") provides a safe harbor for forward-looking statements made by the Company or on its behalf. All statements which address actual results could differ materially from those expressed or implied in forward-looking statements. Important factors that could cause the actual results of operations or financial condition of the Company to differ include, but are not necessarily limited to, the Company's operating performance, events, or developments that the Company expects or anticipates may occur in the future are forward-looking statements. These statements are made on the basis of management's views and assumptions. As a result, there can be no assurance that management's expectations will necessarily come to pass. Management cautions that the ability to attract clients and generate business; a decline in the Company's financial ratings; the competitive environment; the Company's ability to raise sufficient capital to meet the collateral requirements associated with its current business and to fund the Company's continuing operations; and changes in market conditions.

Sweet Success
Micheraie Canales, 210-824-2496
CEOcast, Inc.
Ed Lewis, 212-732-4300


Posts: 2 | From: Rochester, NY | Registered: Sep 2005  |  IP: Logged | Report this post to a Moderator

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