GPO Plus is a product development, manufacturing and distribution company which offers a diverse portfolio of high-quality innovative products sold directly to consumers and retailers. The company says its goal is to expand its product line and distribution reach to meet market demand and the needs of its customers.
The company had a very successful year, hitting some major milestones. As of the end of April, GPO Plus hit $1 million per month in revenue. This was largely driven by a new “white glove” approach that has grown sales per store from $500 per month to $2200 per month.
The company had a very successful year, hitting some major milestones. As of the end of April, GPO Plus hit $1 million per month in revenue. This was largely driven by a new “white glove” approach that has grown sales per store from $500 per month to $2200 per month.
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NewsTranscript
00:00 (upbeat music)
00:02 - Welcome, it's Michael Murray with Benzinga.
00:04 Joined here today by Brett Pujonas, the CEO of GPO+.
00:07 Brett, great to have you with us as always.
00:09 How are you doing?
00:10 - I'm doing excellent.
00:11 Thanks for having me on, Michael.
00:12 I appreciate it.
00:13 - Great to have you here, Brett.
00:14 Happy as always to be joined by you and the GPO+ team.
00:17 Congratulations, first and foremost,
00:19 to you and the whole team
00:20 on finishing out your April 30th year end.
00:23 Really exciting stuff that you guys have
00:25 from your side here.
00:25 So let's go ahead and kick things off.
00:27 For anybody that's new to the company
00:28 and learning about you guys,
00:30 tell us a little bit about GPO+ and what you guys do.
00:33 - Yeah, thanks, Michael.
00:34 We're excited.
00:34 We killed it this year, so we're really excited.
00:37 So yeah, let's talk about GPO+.
00:39 We are a product manufacturing and distribution company
00:42 for specialty retailers.
00:43 And your specialty retailers are convenience stores,
00:45 gas stations, bodegas, smoke shops, vape shops.
00:48 And our business model is to find products
00:50 that are best suited for those specialty retailers.
00:53 And then we either manufacture them
00:54 or we enter into licensing deals,
00:56 or we find the best in class, best in breed products
01:00 that we then distribute.
01:01 What we're really excited about with the GPO+ model
01:03 is our DSD model, which stands for direct to store delivery.
01:06 Let me explain that.
01:07 Most distribution companies,
01:09 they'll just drop off a pallet to a convenience store
01:11 and then they leave it up.
01:11 And the onus is on the store manager and the store employees
01:14 to then take it apart, correctly put it into inventory,
01:17 then restock the shelves.
01:18 And then hopefully when they're low, they reorder.
01:21 Well, our model is much different.
01:22 What we do is we actually send our drivers into the stores.
01:25 They look at all the different products.
01:27 They take an inventory.
01:28 They take before pictures, after pictures,
01:31 and they make sure that everything is in the right spot.
01:33 So a lot of our products are located
01:35 right next to the cash register in a lot of these stores.
01:38 Then they do the inventory and then the general manager,
01:40 all they have to do is literally sign off on the tablet
01:42 saying that the inventory is correct and we move on.
01:45 And what the store owners,
01:47 and of course the different specialty retailers,
01:49 they love this approach
01:51 because they barely have to lift a finger
01:53 other than to sign a signature on it.
01:54 And we do all the heavy lifting.
01:56 And what's also important about that
01:57 is we don't have to worry about them putting in reorders
01:59 'cause we take care of all of that.
02:01 Right then and there, we have the inventory
02:03 in the trucks and in the vans.
02:05 So it's a very unique model
02:06 and it's been very well received.
02:08 - Outstanding.
02:09 So Brett, now that we understand a little bit more
02:11 about what GPO+ is and what you guys do,
02:13 talk to us a little bit about what led you
02:15 to such a successful year
02:16 by the end of your year in April 30th.
02:19 - Sure.
02:20 To answer that, I kinda wanna go back to April of last year
02:22 when we decided that we were gonna get back
02:24 to our core competencies and launch Distro+.
02:26 So when we launched Distro+,
02:28 we basically had three main things
02:30 that we wanted to set out to do.
02:31 Three main goals.
02:32 One, is we wanted to increase
02:34 the number of customers that we had.
02:35 Two, we wanted to increase our product offering
02:37 and have a more robust product catalog
02:40 to offer to the specialty retailers that we go after.
02:42 And three, was to do an acquisitive growth strategy.
02:45 So I'm happy to announce,
02:46 not only did we accomplish all of that,
02:48 we over exceeded what we initially thought we were gonna do.
02:51 So kinda how we got here
02:53 is fourth quarter of last year
02:54 was all about the acquisitive growth strategy.
02:57 We acquired a couple of different products,
02:58 we acquired a couple of different product lines,
03:00 we acquired a distribution company.
03:02 First quarter of this year
03:03 was putting everything together that we just acquired.
03:06 And then second quarter of this year
03:07 was all about execution.
03:08 And so what we found is when we moved to that DSD model,
03:12 the direct to store delivery model, two things happened.
03:15 One, is we saw a huge increase in sales per store globally
03:20 whenever we offered that service.
03:23 So that was a big win for us.
03:25 And then also having a more robust
03:27 and more diverse product offering has helped us out a lot.
03:30 There's new product categories
03:31 that we weren't even contemplating when we started
03:34 that have been doing very well
03:35 and been performing very well for the company.
03:37 So I think that that's a big aspect of it,
03:40 but also the other thing that we did
03:42 is we moved our distribution company
03:43 from more of a traditional into a hub and spoke model.
03:47 And what that means is we go out
03:48 and we have a regional distribution hub
03:51 and the regional distribution hub
03:53 supports all of these mini hubs.
03:55 And so today we've launched,
03:58 initially we're in Lubbock, Texas.
03:59 That's our first regional hub.
04:00 We've launched Des Moines, Iowa.
04:01 So we've launched Kansas.
04:03 We're getting ready to launch, we launched Dallas this week.
04:04 We already launched that one.
04:06 We have Austin on deck and we have Albuquerque.
04:08 So we're expanding our reach
04:10 and we're getting much more efficient,
04:11 which is bringing down our costs
04:13 and increasing our level of service
04:14 with all the specialty retailers.
04:16 On top of all that, by having the new products,
04:19 we're introducing new product categories
04:20 to our specialty retailers based on their information
04:23 that they're giving us.
04:24 And so we're able to move very quickly.
04:26 We're very nimble.
04:27 And then we can not only go out
04:29 and help these specialty retailers
04:31 with the products that they currently have,
04:32 but also introduce products that they didn't know
04:34 that they wanted and they can't live without.
04:36 So that's where we're at right now.
04:37 And that's probably the biggest aspect of our growth.
04:40 - Outstanding.
04:41 So I wanna walk through the numbers a little bit
04:42 here with you too, as we go through this story.
04:45 So sprinting to 470 stores, achieving 2,200 a month in sales
04:49 that's over a million dollars a month.
04:51 What challenges do you see?
04:53 'Cause these are amazing numbers
04:54 that you guys are working on here,
04:55 but what challenges do you see
04:56 in getting to those numbers moving forward?
04:58 - That's a great question.
04:59 And if I can, so when I mentioned,
05:01 we had a huge increase.
05:02 So before we did the direct to store delivery,
05:04 the DSD model, we're averaging about $580 per month,
05:08 per store.
05:09 After we introduced the DSD model,
05:11 we went from 580 on average to over 2,100 per month,
05:16 per store on average.
05:17 And that's a huge, you know, 4X jump.
05:18 So we're really excited about that.
05:20 So the biggest challenges that we have right now
05:22 are just making sure that we have the best employees
05:24 with the best training.
05:26 And then ongoing, you know,
05:27 I think the biggest issues that we're gonna have is,
05:30 you know, just really understanding the landscape
05:31 and finding out what products are gonna be, you know,
05:34 the best product category killers
05:36 and making sure that we always have that available
05:38 for our specialty retailers and all of our customers.
05:41 - Fantastic.
05:42 Very concise there, really helps us see
05:44 how the numbers are gonna play out as you move forward.
05:46 You're talking about new products, Stu, increasing margin.
05:49 Can you tell us about some of the new products
05:51 that are coming down the line here?
05:52 - So as far as our products,
05:53 our products are organized
05:54 into three different product categories.
05:56 So the first one is our GPOX brands.
05:57 Those are our house brands.
05:59 They could be value brands,
06:00 and they could also be premium brands.
06:01 But those are brands that we own,
06:02 and obviously we're always gonna achieve
06:04 the highest margins with brands that we own and manufacture.
06:07 The second product category is licensed brands.
06:09 Best example would be Yingling's Ice Cream.
06:11 We entered into a deal with Yingling's Ice Cream
06:12 to create a whole line based on the iconic ice cream,
06:15 Yingling's Ice Cream flavors for recreational hemp lines.
06:18 So we have Delta 8 gummies, HHC gummies.
06:21 They're all coming online fourth quarter of this year.
06:24 And then the last category we have is vendor
06:26 or partner brands, which are products that we go out
06:28 and we find the best in class,
06:29 best in breed vendors out there.
06:32 We sort through that,
06:33 and we do kind of the curated product mix
06:35 so that the specialty retailers
06:38 and our customers don't have to.
06:39 We do all the heavy lifting.
06:40 So those are the three product categories.
06:41 But to your point, by introducing the GPOX brands,
06:44 like we have a new brand coming out called HiCloud,
06:46 which is a intoxicating recreational hemp gummy.
06:50 We're introducing that in about two weeks.
06:51 When we get our products out there,
06:53 we're obviously experiencing and realizing higher margins
06:55 than a vendor product.
06:57 So as we continue to roll out and increase our product mix,
07:01 we're gonna be introducing more products that we own
07:04 or that we license so that we have those higher margins.
07:07 - Terrific.
07:08 Brad, we've gotten this far as we close things out.
07:10 Give us a larger scale view of what's next for GPO+.
07:13 What can we expect coming up here
07:14 from the company in the future?
07:15 - So I think that the biggest thing
07:17 is gonna be continuing to roll out the mini hubs
07:20 in the regional hub model.
07:21 I mean, our goal is,
07:22 there's a big whole vast world out there.
07:24 And right now we're in the Midwest
07:25 and we are expanding very, very rapidly.
07:27 And we expect that growth to continue.
07:30 Just to give you some unaudited numbers real quick,
07:33 with one of our main accounts,
07:35 we're averaging about $77,000 a week in sales.
07:38 When we started, we were less than 30.
07:40 That's a big jump.
07:41 Now that we have the DSD rolled out
07:43 to five different markets
07:44 and we have three more on the horizon,
07:46 we anticipate that number to literally double
07:49 by the end of October.
07:51 I think that one of the biggest things
07:52 we're gonna be working on is,
07:54 how do we improve our margins?
07:56 And that's gonna be an ongoing challenge for us
08:00 as we continue moving forward.
08:01 But I think that we have a very, very bright future
08:04 because once we get the infrastructure in place,
08:07 bringing on other customers or big chain,
08:09 whether it's like, I don't have any of these deals,
08:11 I'm just gonna say something
08:12 so you and your viewers recognize it,
08:14 but like a 7-Eleven or a Circle K,
08:16 when we bring them on
08:17 and we already have the infrastructure in place,
08:19 we don't have additional costs
08:21 to service additional specialty retailers.
08:24 The other thing that we're doing
08:25 that I think is gonna be very unique
08:26 is instead of just going after the specialty retailer chains,
08:29 we're also hiring a bunch
08:31 and we've already started deploying
08:32 a whole outside sales team.
08:34 And the outside sales team
08:35 are all surrounded around mini hubs and regional hubs.
08:38 And they go to all the other gas stations,
08:40 convenience stores, smoke shops, vape shops.
08:42 And the more customers we get,
08:44 obviously the more revenue we get,
08:45 and that helps us out overall with margins
08:47 just due to volume.
08:48 So I think that over the next really two, three quarters,
08:51 we're gonna continue staying laser focused
08:53 on the hub and spoke DSD model.
08:55 We've got the outside sales team.
08:57 And then of course, we're working diligently
08:59 on our direct to consumer sales,
09:00 which is something that we haven't really done yet.
09:02 And the direct to consumer sales are really exciting
09:05 and your investors and the investment community
09:07 should be really excited about this
09:08 'cause that's where we experienced the highest margins.
09:11 So I think as we continue on,
09:12 we're gonna stay the course and just keep growing
09:15 and keep getting more efficient.
09:16 - Terrific.
09:17 And Brett, as always, I wanna close by saying
09:19 how impressed we are with your journey.
09:20 Very happy for you guys and all the success you had
09:22 leading up to your year end, April 30.
09:25 Wonderful job to you and the team.
09:26 Congratulations on all the success so far.
09:28 Brett Pagione, CEO of GPO Plus.
09:30 Can't wait to see what comes next.
09:32 - Thanks, Michael.
09:33 And I appreciate being here.
09:34 And one thing, I wanna direct all of your viewers
09:36 to please go to gpoplus.com/ir
09:39 and please sign up for our IR portal,
09:42 sign up for our newsletter,
09:43 sign up for our press releases and our SEC filings
09:47 so you can stay abreast as to our progress.
09:49 - Fantastic.
09:50 And Brett, we once again wanna thank you
09:51 for giving everybody the place to go
09:53 and the place to be to learn more
09:54 about what you're doing at GPO Plus.
09:55 We'll see you next time.
09:56 - Thanks, Michael.
09:57 (upbeat music)
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