AMDP Investment Proposal

 TO: Clark Hansen, CEO, AMDP 

FROM: Cynthia Aceves, R&D, AMDP

DATE: 9/30/2020

SUBJECT: Recommendation to Invest in GT's Living Foods

As a member of the Research and Development Department, this week I would like to recommend investing in GT's Living Foods, a company whose driving purpose is to spread a message and philosophy that food is medicine through always raw, unpasteurized, and fully fermented offerings. After thorough research, I have determined GT's Living Foods' business conduct aligns with Anima Mundi's worldview and shows promising growth in its industry. 

AMDP Investment Standards 

Investment opportunities at AMDP comply with the following standards which represent socially responsible and sustainable business conduct: 

Triple Bottom Line (TBL)

An accounting framework that uses the power of three - people, planet, and profit - to evaluate the performance of businesses by combining the standard metrics of financial success with environmental impact and social justice (Rudowski). 

• Profit: A company's income after all expenses and have been deducted from revenues is the traditional measurement of a company's success and the original "bottom line" ("Triple Bottom Line").  
• Planet: Indicates a business is committed to mitigating its ecological footprint by leveraging logistics to mindfully manage resources and reduce waste. Eco-conscious businesses also invest in renewable energy sources ("Triple Bottom Line"). 
• People: Refers to the way in which a business carries out operations with individuals in society such as employees, customers, suppliers, and local communities (Rudowski). 

Corporate Social Responsibility (CSR)

Efforts demonstrated by a corporation to contribute to social and environmental goals in their business operations and meeting the expectations of shareholders. CSR can be a strategic management concept that addresses issues such as responsible sourcing, anti-corruption measures, and social equity ("What is CSR"). 

Social Enterprise

A cause-driven business that aims to obtain sustainable revenues for the purpose of maximizing benefits to society and the environment for the common good. The priority of a social enterprise is to reinvest profits into their social objectives (Barone)

Carbon Footprint 

The total greenhouse gas emissions released into the atmosphere caused directly and indirectly by a business. Carbon footprint is measured as tons of carbon dioxide emitted per year, this measurement also takes into account all other noxious greenhouse gasses such as methane and nitrous oxide (Osmanski). It is critical for a company to make initiatives to reduce its carbon footprint because greenhouse gas emissions exacerbate the harmful effects of climate change. Businesses can reduce their carbon footprint by investing in renewable energy, reduce business travel emissions, and implementing waste-reduction strategies (Wood). 

The Story of GT’s Living Foods

What started as a passion project in George Thomas (GT) Dave's home kitchen in 1995 has become the #1 best-selling and most-loved Kombucha brand in the world. Dave was a Southern California kid raised by parents practicing Eastern philosophy and in the early '90s they were gifted Himalayan Mother SCOBY (Symbiotic Culture of Bacteria and Yeast), used to make kombucha. In ancient Eastern cultures, kombucha was called the “Tea of Immortality.” Authentically fermented kombucha naturally produces living probiotics, active enzymes, and electrolytes known to support gut health and boost the immune system. (“GT’s Living Foods: FAQ). Intrigued by kombucha's ancient healing properties, the Dave family began brewing their personal batches of the pungent, fizzy tea at home.

In 1994, GT's mother was diagnosed with a highly aggressive form of breast cancer and drank homemade kombucha throughout her recovery process. Her doctors were astounded by her miraculous healing process which she credited to GT's kombucha. Inspired by his mother's experience, Dave made it his mission to make kombucha accessible for everyone. At the age of just 15, Dave began bottling the fermented tea in his home kitchen and became the first to put kombucha on shelves in the US, awarding him the prestigious title of the “Kombucha King.”

Community Healing and Wellness

As a company, GT's Living Foods' driving mission is to serve the wellness of its community. Dave started crafting kombucha from his kitchen not to become a billionaire, but because he truly believes in his product and has a passion to support the wellness of others which persists as the company's intention. The billionaire entrepreneur explains "

Profit and integrity don't coexist well. The creative process in making a high integrity product in a way that our consumers connect with is the most fulfilling aspect of what we do" (Bronner). In previous years, Dave has partnered with non-profit organizations such as Lady Gaga’s Born This Way Foundation to collaborate their efforts towards supporting the physical and mental wellness of young people (Dobos). Every bottle of GT’s Enlightened Kombucha features an uplifting quote from its community of fans. As an entrepreneur, GT Dave understands it’s the little things that truly allow for a brand to connect with its community and deliver its central message about healing and wellness.

The Kombucha King’s Profit

GT’s Living Foods is an independent, family-owned, and operated company worth over $900 million. GT's fermented products can be found in over 55,000 retailers across North America and Europe ("EY Announces..."). Dave has declined numerous acquisition offers for the sake of preserving the integrity of his company's mission. Being the first to put the drink on US shelves, Dave is currently still the largest kombucha manufacturer, owning 40% of the US kombucha market (Sorvino). GT's Living Foods shows great future growth potential as the company dominates the kombucha market which is projected the be a multi-billion-dollar category by 2025, with expected growth at an annual rate of 17.5% from 2018-2023 (Bronner). 

Understanding the impact of COVID-19 on current markets is essential for new investments. Although the pandemic continues to transform the growth of various industries, the direct impact of COVID-19 on the kombucha market is positive and is expected to continue growing (“Research Report: Kombucha Market”).

Mother Nature is the Inspirer

GT's Living Foods holds strong commitments to being conscious of its environmental impact concerning ingredient sourcing, waste production, and packaging. All the ingredients are sourced from certified organic farms within the US, Central, and South America. The company’s explosive growth has never daunted Dave into changing its authentic, small-batch brewing process for enhanced productivity. Small-batch brewing preserves the integrity of the product and also keeps the company mindful of its waste production (“GT’s Living Foods: FAQ”). GT's Living Foods is proudly partnered with Owen-Illinois Inc. for packaging its kombucha and other fermented goods in pure, recycled glass. (“GT's Glass Journey”). Owen-Illinois Inc. upholds demanding sustainability practices and future goals, such as striving to increase the global average of post-consumer recycled products to 50% by 2025, for reference, the 2017 baseline was 38% (“O-I’s Sustainability Goals”).

Recommendation

I recommend investing in GT’s Living Foods because the company dominates the global kombucha industry which shows substantial future growth. The impact of COVID-19 has been positive in the kombucha market, which I believe is a crucial investment standard during these unprecedented times. GT’s Living Foods has trailblazed the market of wellness beverages and intends to preserve the integrity of the sacred, healing beverage. In addition to its commitment to the authenticity of its product, GT’s Living Foods aims to serve and connect with its community, and also exercise sustainable production practices. Dave wishes to express to consumers that Mother Nature is the world's greatest healer through its products and business conduct, which I believe is a great philosophy for AMDP to support.

Works Cited

Barone, Adam. "Social Enterprise" Investopedia, 3 February
2020. https://www.investopedia.com/terms/s/social-enterprise.asp

Bronner, Stephen J. “The Creator of the Kombucha Category Says the Term ‘Serial Entrepreneur’ Makes Him Sick to His Stomach.” Entrepreneur, 14 January 2019.

Dobos, Elizabeth. “GT’s Living Foods Launches Bloom for Spring.” Worldtea News, 23 April 2018. https://worldteanews.com/tea-industry-news-and-features/budding-products-

kombucha-launches-from-small-batch-to-big-box

“EY Announces GT Dave of GT’s Living Foods as Entrepreneur of the Year® 2020 Semifinalist

in Greater Los Angeles.” Precision Newswire, 09 July 2020. https://www.prnewswire.com/news-releases/ey-announces-gt-dave-of-gts-living-foods- as-entrepreneur-of-the-year-2020-semifinalist-in-greater-los-angeles-301091053.html

“GT’s Glass Journey: GT’s Kombucha.” Youtube, uploaded by GT’s Kombucha, 06 May 2019, https://www.youtube.com/watch?v=j3yQyRMrYXc&feature=youtu.be

“GT’s Living Foods: FAQ” GT’s Living Foods, https://gtslivingfoods.com/faq/raw-kombucha/ “O-I’s Sustainability Goals.” Owens-Illinois Inc. https://www.o-i.com/sustainability/ Osmanski, Stephanie. "How is Your Carbon Footprint Measured" Green Matters, 29 December

2019. https://www.greenmatters.com/p/how-is-carbon-footprint-measured
“Research Report: Kombucha Market (2020-2024) Health Benefits of Kombucha to Boost the

Market Growth” Business Insider. https://www.businesswire.com/news/home/20200904005102/en/Research-Report- Kombucha-Market-2020-2024-Health-Benefits-Of-Kombucha-to-Boost-the-Market- Growth-Technavio

Rudowski, Evan. "Tripple Bottom Lines: What are they, how to implement them, and ... should

you?" Medium: Firm Ethics, 12 December 2018. https://medium.com/firm-ethics/triple- bottom-lines-what-are-they-how-to-implement-them-and-should-you-d083dc9186e3

Sorvino, Chloe. “Tempest in a Tea Bottle: Billionaire GT Dave Brewed a Fortune (And Plenty of

Bitterness) From Kombucha.” Forbes, 09 May 2019. https://www.forbes.com/sites/chloesorvino/2019/05/09/gt-dave- kombucha/#4c5fc36c55b5

"Triple Bottom Line - A Simple Explanation" University of the People: The Education Revolution. https://www.uopeople.edu/blog/triple-bottom-line/

"What is CSR" United Nations: Industrial Development Organization (UNIDO).

https://www.unido.org/our-focus/advancing-economic-competitiveness/competitive-

trade-capacities-and-corporate-responsibility/corporate-social-responsibility-market- integration/what-csr

Wood, Michael. "4 Ways to Reduce Your Businesses' Carbon Footprint" Business, 22 November 2019. https://www.business.com/articles/reduce-business-carbon-footprint/