Market Overview; Needs; Trends; Segmentation; Overview

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Market Overview

VitalMetric is committed to serving the dairy industry through an initial focus on the touch-less monitoring of Vital Signs using SILR. We have acquired a License for this technology from the National Sun Yat-sen University of Taiwan.

Presently Vital Signs are measured manually by placing monitoring devices directly on the animal. This is a labor intensive process that generally requires the costly services of a trained Veterinarian to get quality results. It also results in animal stress and agitation.

The result is that the monitoring of Vital Signs is not done with the frequency necessary to ensure the highest level of herd health.

While our total Market is the beef and dairy markets worldwide our initial efforts will be directed to a Target Market of high milk volume technology users concentrated in small geographical areas.

We will serve other Markets on an opportunistic basis as we develop the internal technical support that will allow us to serve the world.

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22- Cows on rotary milking

Our Priorities

1) Target Market of North America, The EU, and several other countries helping lead the way with dairy automation.

2) Further refined by focusing on geography within the Target Market where 70-80% of milk production is located.

3) Spending 99% of our time focused on the 3 products identified while simultaneously developing a strategy and plan to expand our product offering.

While the entire world dairy herd is 260 million strong, our Target Market has only 35 million lactating cows.  The reason we will focus on the Target Market is not because of the size of the dairy herd but because it represents the technical heart of the market concerning the application of automation to dairy farming.  Our Target Market contains the 4 largest manufacturers of dairy equipment in the world and all of the manufacturers of milking robots.

A large proportion of dairy farmers within the Target Market are consistently applying the latest in automation to the management of their herds and this is where we will find the most immediate acceptance.

Our products are on the leading edge of dairy technology.

Market Trends

There are several fundamental trends taking place in the dairy industry today that impact our Marketing Strategy.

1) Commercial Dairy farms are getting bigger driven by the economics of high volume production.

2) This production strategy requires the automation of the milking process and provides the cash to do so.

3) As a result the number of dairy farms are decreasing in most of the developed world.

4) Milk cows are producing more milk per cow so the number of cows in the herd is not increasing proportionally to the increase in milk production.

5) Therefore the value of each milk cow is increasing.

6) The increased size of the average commercial dairy farm leads to less attention paid to each animal.

7) This leads to increased stress on the animals due to 3 shift milking operations and the decreasing attention to cow health by unskilled labor.

8) This environmental reality results in an increasing mortality rate for lactating cows. In the US the rate has gone from 4% on average 25 years ago to an average of 8-10% today. The US dairy industry by itself is losing close to $2.0 billion per year from this 10% mortality rate.

VitalMetric will benefit from the fact that the use of our equipment to reduce this cow mortality rate is a Moral imperative fully justified by dairy economics.

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12 - Cows in feed alleyway New mexico

Market Needs

Our geographic Target Market is comprised of men and women who own and operate dairy farms. The milk they produce is sold in commodity markets where everyone is selling essentially the same product, differing primarily in the quality of the milk produced. Cow health is essential to producing milk of the highest quality that will demand the highest price.

The dairy farmer is therefore in continuing need of advances in automation & technology that add to the ability to keep dairy cows healthy and producing more milk.

Advances such as our touch-less monitoring of pulse and respiration with real time data feeds into herd management software are a key to cow health in the future and therefore to the profitability of the dairy farm.

What VitalMetric is selling, and the dairy farm owner is demanding, is an increase in herd health through more accurate automatically generated bio-metric data, and a reduction in labor and Veterinarian input leading to an increase in profits.

Market Segmentation

VitalMetric will focus development on the touch-less monitoring of pulse and respiration biometric data within the dairy industry, and geographically prioritize our Target Market as those countries and states/provinces with the highest level of milk production and automation. We will specialize in the following application areas:

  1. Hospital – In commercial dairies with large herds the farmer will have a separate pen for holding milk cows that are ill. Monitoring Vital Signs is critical to returning these cows to production quickly.
  2. Maternity – In the dairy industry a calf is separated from its Dam immediately and providing the farmer real time Vital Signs information on the calf during the first two months of life is very important to ensure the health of the animal. This is also a stressful time for the Dam and often requires additional attention to get her back into production quickly.
  3. Robot – This segment is concentrated in Europe but is now making inroads in North America. With Robot Voluntary Milking it is possible for the farmer to have more time away from the barn and herd. We believe that by having Vital Signs data exceptions sent to his Smart phone or tablet that the farmer will gain additional confidence in the condition of the herd in his absence.
  4. Automated Calf Feeding Systems – In the same manner as the milking robots automated calf feeding systems are presently concentrated in the EU but are now rapidly making their entry to the NA dairy industry. The same reasons to apply our technology to robot milking machines support its use in this segment.
  5. Commercial – In large commercial herds automatically developing a unique health signature for a cow as she is milked three times per day, and reporting exception to the dairyman through the smart phone or tablet, can help compensate for the large, relatively unskilled, workforce that he must use to run his operation. An important requirement for getting large numbers of our product into this segment is reducing the cost.
  6. Show Cows – There are thousands of dairy cows, commonly referred to as Fluffy Tails, which are raised as both breeding and show stock. As with the stud bulls noted below they are genetically at the top of the industry. As such their value leads to a level of care that welcomes innovations such as our touch-less systems.
  7. Stud Bulls – There are perhaps 10,000 stud bulls in our Target Market providing much of the sperm required to inseminate all 35 million lactating cows in the Target Market. The value of this stock is incalculable as it contains 50% of the entire genetic future of the industry. We believe that a majority of these commercial operations will see value in having our system providing automatic monitoring of the animals pulse and respiration.
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