final marketing plan.docx

7/30/2019 FINAL MARKETING PLAN.docx

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HolowormThe Future of Food Safety Technology

A Marketing Strategy

Prepared by: Maxwell Chalkin, Kevin Fender, Cherag Kapadia,

Peter Nakitare, Sumant Shendye

Prepared for: ELS 105 Entrepreneurial Sales and Marketing

Professor Gavin Finn


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Table of Contents

Introduction 3

The Business Lifecycle of Holoworm 3

The Challenge of Determining an Application 4

Market Analysis 6

Market Trends 6

Competitive Analysis 7

Competing Companies 7

Case Studies 9

FDA 10

Why FDA Approval? 11

What is a Food Contact Substance? 11

What is Safe? 12

Food Contact Notification 13

Food Contact Notification Process 14

Holoworm FCN Recommendations 15

Marketing and Sales 16

Why Licensing? 16

The Licensing-Based Strategy 17

While Waiting for FDA Approval 18

After FDA Approval 19

Long-term Vision 20


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Several years ago, professor Fiorenzo Omenetto started exploring the possibilities of

using optics to etch holographic images and embed information, at the scale of the

micron, onto a specific preparation of silk. Since then, Omenetto has developed this

silk-based technology. Thus, the Holoworm project was born.

The silk technology that is the centerpiece of the Holoworm project is remarkably

unique and innovative. The sensing silk, as it has been called internally, is

programmable and intelligent in numerous ways. Firstly, and arguably most

importantly, the silk is entirely safe and consumable. Moreover, when programmed

taking into account constant conditions, the silk is customizable in almost any way

imaginable. It can react in visible or invisible ways to temperature, specific

contaminants, and expiration dates. Even more astounding is its ability to storeinformation. Much in the way a compact disk stores music, photos or documents,

the sensing silk can be embedded with pertinent information relative to its

application.

The Business Lifecycle of Holoworm

As it stands, Holoworm is an infant company with huge growth potential. The

companys youth is a crucial aspect moving forward: understanding the risks,

restrictions and benefits of its youth will dictate the appropriate course of action for

Omenetto and Holoworm.

Considering Holoworms stage in the business lifecycle, we, the marketing team,

were faced with recommending Holoworm remain strictly a technology to be

developed and then licensed or sold, or suggesting that Holoworm become a

vertically integrated company with the eventual capability to produce finished

products of different iterations for different applications of the silk-based

technology. Naturally, both strategies have the potential to capitalize on Holoworms

value proposition. However, we believe the action plan detailed in the following

documenta licensing-based, middle-ground between companyand technology


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harnesses both the simple value of Holoworms innovation without diverting limited

resources to be put towards a cumbersome mass-production chain or application-

specific research and development.

Furthermore, we have determined that a barrier to market entry will be approval by

the Food and Drug Administration (FDA). While it undertakes this approval

process, the nature of which is set out in this paper, Holoworm will simultaneously

have to establish its credibility through a multi-faceted, yet cohesive marketing

strategy.

The Challenge of Determining an Application

As one would expect, the applications for a technology as versatile as Holoworms

sensing silk are abundant. Because of its unique ability to be harmlessly consumed,

we limited ourselves to thinking about consumable applications, namely

pharmaceuticals and foods.

In pharmaceuticals alone, the possibilities appear endless. Capsules wrapped in

Holoworm silk could theoretically be encoded with prescription information and

customized dosing instructions. Our teams reluctance to recommend an entry in

the pharmaceuticals market comes from the nature of the market and not any sort

of deficiency in the capabilities or preparedness of the technology. It is well known

that giant, well-established corporations dominate the pharmaceutical industry.

These companies monopolize the process of developing and implementing new

pharmaceutical technology. Between their lobbying groups and political clout,

bureaucratic procedures and spending power, clandestine incentives and richresources, there are simply too many barriers to entry for a small, yet promising

technology.

When determining what market segment to pursue within the food products

industry, our team focused on consumer-packaged foods for several reasons. At


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first, it seemed that the obvious place to enter the market was meat, however, due to

a number of challenges, the team decided that consumer-packaged foods represents

more opportunity for Holoworm. In terms of market size, the meat industry has

fewer major players who could become potential customers for Holoworm.

Additionally, consumers do not seem to have strong brand allegiances to meat

products. We conducted a small, informal survey of awareness of meat brands

among meat consumers, and found that very few respondents could identify more

than one or two brands. The survey also indicated that consumers were hesitant to

accept the idea of silk coming into direct contact with their meat. Furthermore, our

team could not easily determine supply chain integration for Holoworms silk

technology without further understanding of individual manufacturer processes.

Another potential market our team had looked at early in the development of the

marketing strategy included candies and packaged sweets. Although applying the

silk technologys benefits to these food products could have been interesting and

novel, the team decided that this type of application would not capitalize on the silk

technologys many other features. Professor Omenetto agreed that creating and

identifying viable candy products would be quite difficult; the focus would have to

shift away from food safety, which we had determined would be the best market-

entry point for Holoworm.

Instead, our team decided to pursue packaged foods. Most notably, there are many

well-established and noteworthy manufacturers for Holoworm to target. The

packaged foods industry constitutes a much larger market than the meat industry.

Any single grocery store aisle represents a multitude of manufacturers and potential

clients. Furthermore, many packaged foods have high brand capital relative to meat;

consumers need to trust a company or manufacturer when it introduces a newtechnology or product line, and the brand-allegiance already established in the

consumer-packaged foods industry will render the comfort needed with the

introduction of Holoworms technology. The technology would be marketed as part

of an established brand concept in which Holoworm would be adding a new feature,

rather than introducing a stand-alone technology.


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Market Analysis

Market Trends

According to the United States government, 76 million people are sickened and

hundreds of thousands are hospitalized due to food borne illnesses every year. Yet

even more alarming is the fact that approximately 5,000 of these individuals die

from these illnesses and complications annually. Back in 1997, leading organizations

estimated the financial burden on the health care system at only $35 billion. Since

then, this figure has skyrocketed: costs from food-borne illnesses through pathogens

such as E. coli and salmonella now account for $152 billion in health care resources

each year. This rise in costs exceeded projections by a considerable margin. It is

becoming clear that food contamination and safety is a far more costly and pressingissue than predicted. By providing a technology that allows manufacturers, retailers,

and end consumers to easily and visibly verify the safety of their food products,

Holoworm delivers significant value and security along with peace of mind.

Currently, the United States government is in the process of incorporating more

stringent protocols in the manufacturing and testing of food products. The Senate is

considering legislation that would require additional government inspections.

Additionally, thanks to new legislation, the Food and Drug Administration will be

given further authority in issues such as ordering recalls. Retailers are also

becoming increasingly concerned with the safety of the food products they sell in

their stores. Since 2000, stores such as Walmart and Trader Joes have adopted the

Belgian Global Food Safety Initiative (GFSI). The GFSI established additional food

safety and certification requirements to enhance the quality of products on store

shelves. Such enhancements include establishing key requirements for management

systems and manufacturing, agricultural, and distribution processes. The fact that

major United States retailers have adopted these stringent international guidelines

as their official policy seems to be indicative of a general trend towards enhanced

food security.


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The market for food safety testing equipment has been resistant to the 2007-2009

recession. Sales of food testing equipment have continued to grow at 8-12% each

year, specifically in the areas of food toxin and pathogen testing. The market for

these products and technologies is giganticalmost $2 billion per year

domestically. In addition, the market for food safety testing is relatively young and

represents new business opportunities at every turn. It is also worth noting that a

knowledgeable consumer population has begun to demand enhanced safety and

peace of mind, largely due to recent food recall events. Every time an outbreak of

food borne illnesses strikes, general consensus appears to place more importance

on having a reliable means of determining the safety and security of food. Given the

financial and public relations fallouts associated with food recalls, many

manufacturers and retailers also desire a faster, more reliable method to determine

food safety and presence of contamination.

Competitive Analysis

A current analysis of the food safety testing industry indicates that Holoworm faces

competition from several companies. Although many of these companies focus on

food safety and testing, no company possesses the immediate benefits of

Holoworms silk technology. The competitor companies vary in size and focus, and

their competing products are extremely varied. None of the competing products

employ silk as a substrate, or posses comparable features such as the programmable

biodegradability, instantaneous results, or visible detection, while avoiding the need

for any special equipment. Additionally, Holoworms silk technology offers the

distinct advantage of being able to be consumed, making it safe to incorporate

directly into food packaging.

Competing CompaniesThermoFisher Scientific

Large global life sciences supply company founded in 2006 through themerger between Thermo Electron and Fisher Scientific

Provides analytical and laboratory services


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34,000 employees worldwide, based in Waltham, Massachusetts $9.75 billion 2007 revenue 46% sales in life sciences, 20% health care, 34% in industrial/environmental

and safety

We are seeing a global wave of investment in food testing equipment

Agilent Technologies

Major player in food chemical analysis market Designs and manufactures instruments and equipment for measurement and

evaluation

18,750 employees worldwide, based in Palo Alto, California

$5.77 billion 2008 revenue

Idaho Technology

Polymerase chain reaction (PCR) technology identifies E. coli, salmonella,and listeria contaminants in one day or less

Privately held biotechnology company located in Salt Lake City, Utah Revolutionized the detection of anthrax, and kits to detect the pathogen In addition to food and water safety, manufactures and develops biological

weapons detection systems, freeze-dried reagents and sample preparation

kits

Dionex

Manufactures a high performance liquid chromatography system that can beused by manufactures to detect contamination of food and beverages on

production lines

Very expensive $100,000 instruments can be integrated into the supply chain Reasonably fast results


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PAI Partners/Applied Analytics

Applies on-line near infrared and Raman spectroscopy instruments tomonitor food safety

Currently used to monitor petrochemicalsCase Studies

February 2007: Earth's Best recalled Organic 2 Apple Peach BarleyWholesome Breakfast baby food due to botulism.

June 2007: Robert's American Gourmet recalled its Veggie Booty snack foodbecause of an outbreak of salmonellosis. Many of those who fell ill fromVeggie Booty were toddlers.

October 2007: Topps Meat Company of Elizabeth, New Jersey recalled itsground beef products.

o As of 2007, this was the second-largest beef recall in United Stateshistory.

Summer of 2008: United States salmonellosis outbreako Outbreak was tied primarily to tainted tomatoes and Jalapeo

peppers from Mexico.

o From April 10, 2008 to July 31, 2008, a rare form of Salmonellacausedat least 1329 cases of salmonellosis food poisoning in 43 states.

o Largest reported salmonellosis outbreak in the United States since1985.

August 2008: Maple Leaf Foods voluntarily recalled a number of meat anddeli products after an outbreak of listeriosis.

o Four elderly people died as a result. Affected restaurants includedMcDonald's and Mr. Sub.


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January 2009 - Peanut Corporation of America recalled its bulk peanutbutter and peanut paste products for salmonella contamination.

o Due to the myriad consumer items PCAs bulk products went into,the Food and Drug Administration eventually recalled 3,913 different

products from at least 361 companies. This was one of the most

extensive food recalls in US history.

o Estimates were that farmers and small businesses lost at least onebillion dollars in lost production and sales.

March 2009 - Setton Pistachio of Terra Bella, California recalled its entire2008 crop of pistachios due to salmonella contamination.

June 2009 - 300,000 packages ofNestls Toll House cookies were recalleddue to possible E. coli contamination that made several consumers sick, when

the dough was eaten raw.

October 2009: Plum Organics announced a recall of its baby food products.o A baby food recall is serious, as this outbreak could have led to

botulism in infants.

o The baby food recall covered apple and carrot pouch foods made byPlum Organics and sold at Toys R Us and Babies R Us.

FDA

This section works to outline the process necessary to seek approval from the Foodand Drug Administration for a Food Contact Substance. The FDA has stringent

requirements that must be met on a toxicological, microbial and chemical basis for

approval to be granted. While the FDA requires a petition to be submitted as a Food-

Contact Substance at least 120 days before the product goes to market, according to

Section 409 of the Food & Cosmetic Act it is legally required for an entity to apply


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for approval, presenting a comprehensive and convincing argument for the safety of

the product.

Why FDA approval?

Holoworms business strategy of licensing its silk technology to companies, to be

used as a method of testing for food contaminants and simplifying food safety

protocols, will only succeed if proper federal approval is granted. Food & Cosmetic

Act Section 409 requires that the FDA approve any food additives before they can be

used in food. The silk substrate falls under the umbrella of a food additive and is

more specifically defined as a Food Contact Substance by the FDA. The Food and

Drug Administration has a specific approval process that a food additive must go

through before allowing it to enter the market. Without this approval from a

governing regulatory body it would be difficult to market the silk technology to food

companies, as they themselves would need to seek FDA approval before using the

technology in their products. Therefore, it is paramount that FDA approval is

realized before the silk technology can enter any food production chain.

What is a Food Contact Substance?

Holoworm will be seeking approval for its silk-based product, under the category of

a Food-Contact Substance (FCS). The FCS designation, defined in Section 409(h)(6)

of the Federal Food, Drug and Cosmetic Act, is granted to a product that is intended

for use as a component of materials used in manufacturing, packing, packaging,

transporting, or holding food if such use is not intended to have any technical effect

in such food. This designation fits the silk product produced by Holoworm as the

product does not affect the food itself. FDA approval is needed because substances

in contact with food are reasonably expected to migrate to food due to their contactwith the food.

Holoworm technology tests for contaminants through the bonding of a reagent in

the silk substrate to the contaminant. This reaction creates a change in the passage

of light through the substrate, altering the color. Thus, there is no technical


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altercation of the food itself, and the silk product is classified as a FCS. This

classification allows the Food Contact Notification (FCN) to be used to seek approval

from the FDA. The notification must fulfill the safety requirements set forth by the

FDA in Food Contact Safety regulation.

What is Safe?

The term safe is defined by the FDA as possessing reasonable certainty in the

minds of competent scientists that a substance is not harmful under the intended

conditions of use. This requires a comprehensive FCN report to be submitted that

states the case for the safety of the substance and provides detailed toxicological,

chemical and environmental information about the FCS and its impurities. Thus the

FCN for a product must be presented in a way that illustrates the hazards of the

substance, while simultaneously presenting an argument for the safety of the

substance. However, the FCN may be deemed inappropriate by the FDA if the

dietary exposure levels fall above 3,000 micrograms per person per day (g/p/d).

Instead it will require a petition; it is worth noting that we do not anticipate the silk

product will having exposure levels above 3,000 g/p/d.

Another avenue for seeking FDA approval is to do so through a Generally

Recognized as Safe (GRAS) petition. GRAS substances are not subject to premarket

approval by the FDA. There may be substantial costs associated with creating an

acceptable FCN. However, if the chemicals, toxins and impurities fall under GRAS

levels, then further research need not be conducted to support the safety of the

product, thus reducing Holoworms research costs. The GRAS petition process is as

follows, as detailed in the Federal Register, Volume 62 Issue 74:

GRAS affirmation involves the resource-intensive rulemaking process,including: (1) Publishing a filing notice in the Federal Register; (2)

requesting comment on the petitioned request; (3) conducting a

comprehensive review of the petition's data and information and

comments received to the filing notice to determine whether the

evidence establishes that the petitioned use of the substance is GRAS; (4)


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drafting a detailed explanation of why the use is GRAS (as opposed to

simply being safe); and (5) publishing that explanation in the Federal

Register.

Food Contact Notification

The FDA uses the Food Contact Notification (FCN) as a means of evaluating data in

order to adequately assure the safety of a product. The FCN is submitted for

approval through the Office of Food Additive Safety in the FDAs Center for Food

Safety and Applied Nutrition (CFSAN). This program was established to accelerate

the approval process, it allows the entity to seek approval by submitting its own

comprehensive report of their product, and the report includes detailed

toxicological, chemical and environmental information about the FCS and its

impurities. The report includes both a comprehensive toxicology profile and is also

a narrative presenting the basis of the safety determination. The amount and extent

of the data required to support the safety of the product is dependent on the

estimated daily intake of the FCS and its impurities. The extent of data usually is

determined by the following intake levels:

1.5 g/p/d: toxicity studies are not ordinarily recommended 1.5 g/p/d to 150 g/p/d: FDA recommends short-term genetic

toxicity tests (assays) designed to assess the carcinogenic potential

of the chemical. Notably testing for gene mutations using the Ames

Test and using the mouse lymphoma assay to test for mammalian

mutation.

150 g/p/d to 3,000 g/p/d: aforementioned genotoxicity assaysand extensive in vivo testing.

Above 3,000 g/p/d: Specific discussing with the FDA concerningappropriate data and testing.


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It should be noted that the FCN only applies to manufacturing of the product under

the same specified conditions as the product in the report was developed under.

That is to say that manufacturing processes must remain consistent in order to

preserve the safety levels that were presented in the original FCN. This is important

for Holoworm because it implies that Holoworm would require companies to which

it licenses the technology to follow Holoworms FDA FCN approved manufacturing

process. This could potentially place the burden on increasing efficiency of the

process on Holoworm itself.

Food Contact Notification Process

The process Holoworm must undertake to receive approval from the FDA for a food

contact substance requires that it pass through a two-phase approval process. The

submission of the FCN must be received 120 days before the product goes to market

and allow for the Office of Food Additive Safety to have a comprehensive safety

assessment. The two stages of the FCN process require that Holoworm be prepared

to provide additional evidence and support for the safety of the product to the

reviewing entity. The initial notification requires the following information:

Safety Summary and Comprehensive Toxicological Profile (CTP). Safety Test Recommendations for FCS and their Constituents. Evaluation of Structural Similarities to Known Toxicants.

The first stage of the review process is conducted as follows. After the initial Food

Contact Notification is submitted to the Office of Food Additive Safety, the FCN is

logged as a submission and is assigned a notification number. The submission is

then assigned to a review team for assessment; this team is made up of a consumer

safety officer, a chemist, a toxicologist and an environmental scientist. Within the

first three weeks of reviewing process the notifier (Holoworm) is contacted to

arrange a meeting. This meeting ensures that the basic data and informational

elements required by the reviewing team is present and that the submission meets

the FDA regulatory requirements.


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If the submission completely meets the requirements, the FDA sends an

acknowledgement letter to the notifier. This letter establishes the recipient date of

the FCS notification. In addition, this acknowledgement letter allows the notifier the

opportunity to comment and amend the FDAs understanding of the identity and

intended use of the FCS in the notification. Once this is complete, the second phase

of the review process begins. If this stage concludes without any safety concerns

regarding the FCS, then a final letter is sent to the notifier from the FDA confirming

the FCN effective date and the notification is added to the Inventory of Effective

Premarket Notifications for Food Contact Substances. Thus, the FCS is confirmed as

a marketable product as approved by the FDA.

If there emerge safety concerns for the FCN during the second phase, the notifier hasthe option to withdraw the submission without prejudice for future submissions. If

the notifier chooses to not withdraw the submission then the FCN objection letter is

sent to the notifier. Safety concerns may arise for many reasons and the FDA may

issue a non-acceptance letter on the following bases:

FCSs use has a cumulative estimated daily intake to a level greaterthan 3 milligrams per person per day (for a non-biocidal substance).

A bioassay exists on the FCS but the FDA has not reviewed thebioassay, and the bioassay is not clearly negative for carcinogenic

effects.

Holoworm FCN Recommendations

Holoworm requires approval for its Food Contact Notification for its silk-based

contaminant-testing product. Approval must be granted or it cannot be marketed as

a food testing technology. Therefore, all necessary steps must be taken to ensure

approval is granted.

The main hurdles in seeking approval for Holoworm are the extensive burdens of

creating a comprehensive Food Contact Notification. Furthermore, as the amounts

of toxins and impurities increase, so do the costs associated with creating a


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comprehensive argument for the safety of the product. Hence, it is recommended

that Holoworm take the steps necessary to reduce the amounts of chemicals and

impurities released from the product or, at least, scientifically prove that the

degradation of the silk substrate into food is harmless for human consumption.

Moreover, the first testing that should be conducted are those to see if the product

meets the minimal requirements for exemption from a FCN. These include the

product being:

An approved indirect food additive used in compliance with 21 CFRParts 174-179.

GRAS for use in or on contact with food. Used in contact with food according to prior sanction issue by FDA

or USDA before 1958.

Used under a threshold of regulator exemption by FDA. Subject of an effective FCN since October 1999.

In addition, if outsourcing the testing becomes necessary, it would increase the costs

of creating a FCN. Thus, in order to decrease costs, as much testing as possible

should be conducted, in-house, by Holoworm. To lend testing credibility, seeking

peer review would be helpful where possible.

Marketing and Sales

Why Licensing?

Holoworm should endeavor to preserve its value proposition without weakening itsbusiness profile. If Holoworm were to begin expanding into a vertically integrated

company, the results could be dangerous. As the exhaustive market analysis above

proved, Holoworms competitors are, by and large, technology companies that

manufacture and sell expensive products that test for food safety. Each of these


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companies manufactures a piece of machinery that is assembled by the company

from the ground up.

The competition companies are considered competition because of the ultimate

service they provide: a means to test for food safety. This overlap in capability

represents where the similarities between Holoworm and its competitors end. The

competition companies are bogged down by a cumbersome manufacturing chain

creating corporate glut (specifically, an expensive production infrastructure and

significant administrative bureaucracy). A licensing-based business strategy will

allow Holoworm the potential to exploit its obvious technological advantage while

limiting resource allocation towards laggardly, conventional wisdom business

practices. If the goal is to enter the market in a way that results in the least possiblecompetition, Holoworm should not mimic the business structure of the companies

that provide competitive services. By embracing a licensing-based strategy,

Holoworm will likely enjoy less direct competition, wider profit margins, less

bureaucracy, and a more agile and versatile lifespan.

The Licensing-Based Strategy

Pending FDA approval, there are no foreseeable obstructions to the sensing silk

being prepared to enter the market in a packaged food capacity. Naturally, the

application of the sensing silk to a specific food packaging would require a bit of

collaboration among the manufacturers of the food, the foods packaging, and

Holoworm. Presumably, Holoworm and the food manufacturer would come to an

agreement about the specific use and application of the technology and together

work to solve the logistical challenges of inserting the technology into the package

in a way that does not compromise the efficiency of the foods production chain and

renders the Holoworm technology most effective. The length of the licensing period

would be agreed upon prior to any release of the technology to the food

manufacturer. The food manufacturer would be responsible for determining the

best way to integrate the licensed technology into its production chain and

Holoworm would be available to provide ongoing technical support.


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From a marketing standpoint, we suggest that Holoworm provide dedicated, on-site

technical and logistical personnel to each customer. Given the nature of the

technology, the public relations risk of a single mishandled contract, and the extent

to which Holoworm hopes packaged food companies will rely on its technology in

their food safety testing protocols, we recommend that Holoworm walk before it

run, perhaps taking on only one to two licensing contracts a year following the

approval of its technology by the FDA.

While Waiting for FDA Approval

First of all, Holoworm must incorporate itself as a Limited Liability Corporation or

other legal business entity before it gets any further in the business lifecycle. If

Holoworm will be selling licensing rights in the near-term future, it must first be a

legal business.

Moreover, there is a slew of lead-generation marketing that Holoworm should

undertake to begin to spur interest within the related industries. The strategy

should commence by objectively gauging interest. More targeted market research

must be done. Specifically, conversation should be encouraged between industry

representatives and Holoworm through the avenues of cold calling, surveys, direct

e-mail communication, and attendance at conventions, conferences, and

symposiums in all related industries and sectors. These sectors include

biochemical, food safety, governmental and regulatory, and business-to-customer

companies events such as those involving supermarket chains, especially those

health- and food safety-conscious chains.

We suggest that white papers and guest articles be authored by industry experts

and published in industry publications acknowledging the need for a faster turn-around time in food safety testing and suggesting a Holoworm-like technology as an

appropriate solution. Press releases must be written to be distributed to media

outlets, hailing Holoworms silk technology as the future of food safety testing.


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Furthermore, Holoworm needs a website. The site should be clearly organized and

basic, explaining the basics of the technology and touting its potential applications

and the specific market problems that Holoworm addresses.

After FDA Approval

After FDA approval is granted, Holoworm needs to make the case to the leads it

generated that buying licensing rights to Holoworm technology is a sound business

decision.

There is a strong case to be made that Holoworms sensing silk technology can save

packaged food companies resources and money in the long term. Holoworms silk

technology brings myriad benefits to food product manufacturers. One of thetechnologys key advantages is the ability to provide an easily visible fail-safe

throughout a products lifespan. The technology can verify food integrity by

detecting contamination at the manufacturing location. Once the product leaves the

manufacturing site, retailers can also quickly identify contamination and remove

tainted products from their inventories. This is far superior to conventional random

quality control testing methods, because the silk technology is faster, simpler, and

cheaper to utilize. In the event of contamination, the technology enables the

manufacturer and retailers to easily trace the source and type of contamination.

Finally, the technology provides peace of mind to end consumers, and helps to

further build brand capital.

Holoworm technology can also save consumer-packaged food companies costs.

Primarily, the silk technology can help avoid lost production costs in the event of

outbreak or contamination. Holoworm enables facilitated product tracking that

assists in a faster recovery effort in the event of a recall and identifies commoncontaminants without extensive testing or expensive equipment. By adopting

Holoworms technology, customers can also prevent the costs related to a public

relations fallout, which could damage precious brand capital. It is expensive and

resource intensive to rebuild brand loyalty, and lost consumer trust often affects


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sales both in the short and long term. In a few cases, some food manufacturers have

even been driven out of business due to the repercussions of an outbreak.

Seminars and webinars tailored for representatives from the various implicated

industries could also help transform leads into customers. Additionally, we

recommend that Holoworm consider offering companies that are strongly

considering becoming Holoworm customers a trial licensing period. We are

confident that once consumer-packaged food companies experience Holoworm,

they will not be able to part with it.

Of course, all the lead generation marketing strategies that we recommended for the

pre-FDA approval phase should be continued and adopted to the post-FDA approval

stage.

Long-term Vision

Ultimately, we envision Holoworm being the most effective, accepted and pervasive

means of food safety quality control. Following a licensing-based strategy,

Holoworm should be able to quickly reproduce its early success on a much larger

and more widespread scale. Once Holoworm has been accepted as the quality

assurance standard, and after having been used for a number of years by early

adopters, we predict the sensing silk technology will be a sought-after method of

quality assurance by the market majority. Hence, we envision Holoworm needing to

adjust to the growing demand of versatile applications. Furthermore, after the first

few years of use in a given production chain or application, we anticipate Holoworm

to have less time-consuming involvement with that particular client. A long-term

goal will be to streamline the entire process of heightened involvementfrom the

sale of the licensing rights to complete integration into the production chainto ayear or less.

We see a reasonably near-term future in which Holoworm has an international

reach and a client portfolio extending throughout all segments of the food industry.

Beyond the near-term, and only after Holoworms sensing silk has been established


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as the market standard of quality control throughout all segments of the food

industrythen, and only then, we recommend entering the pharmaceutical

industry via a similar licensing rights strategy as was suggested for entrance into

the consumer-packaged foods market.

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