As we are often fond of suggesting, investing in smaller companies means doing some basic research. One of the most basic of the basics is the area of demand. Does anyone want what the company is proposing to produce and market? If that answer is elusive, one might be better off “moving along”. But in the case of Rudy Nutrition Inc, this is one area where we can be quite assured that the demand side of the equation is not an issue.
Rudy Nutrition (trading under the symbol RUNU) “is focused on creating and distributing sports drinks that offer great taste and healthy alternative choices for parents, kids, athletes, and active people looking for something special,” as their web site defines them. They achieve this “something special” by offering beverages that exceed the current sports drinks in areas such as electrolytes, vitamins, minerals, lower calories and maybe most importantly, great taste.
One might question whether great tasting nutritional drinks, while sounding splendid, can be considered a high demand item. Nothing could be more certain, and it’s been borne on the heels of the single greatest trend setting segment of our society…the baby boomers. The baby boomers shaped the current fads of the last 30 years, and as they are aging, they are constantly striving to retain their virility, their looks, their energy, and their youthfulness. In their zeal to remain as healthy as possible into their later years, they’ve stated their case with their most important asset: Their Money.
In virtually every area of the health sector, we see growth in the grass roots approach towards healthier living. From exercising more, to eating less fats, to cosmetic procedures, the age group that’s spending the single most amount of money is the 50 to 70 year old segment. This has been most evident in the abandonment of high calorie sugar soda’s in favor of the myriad of bottled waters we now see marketed by the likes of such giant corporations as Coca Cola, Pepsi bottling, and Schweppes.
In their quest to remain as fit as possible, for as long as possible, the consumer ideals have changed toward a much healthier lifestyle, and products such as Rudy’s sports drinks are a natural “fit” for the demand. Estimates vary, but according to experts in Sports Medicine, the area of sports nutritional beverages is growing at the rate of 18 to 24% per year. When you look at the size of the demographics involved, the numbers become mind boggling. This business is now being measured in the tens of billions of dollars that are being spent globally.
The demand is there, and that’s one of our most basic requirements for an investing opportunity. With a truly global marketplace, and tens of billions of dollars being spent, one doesn’t need to worry that the company is operating in a confined market. The only constraint in this area is the company’s ability to deliver a great product, and Rudy’s nutritional beverages have done just that. Along with the better blends of vitamins, minerals, natural sweeteners, body replenishing electrolytes and less calories, Rudy’s drinks have outscored the “major names” in blind taste tests by margins as high as 2 to 1.
Huge levels of demand, combined with a product that tastes great and delivers on the nutrients? There’s the basics of a truly winning combination, and that makes Rudy Nutrition an interesting opportunity for those looking to get involved with a growth story.
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