Wholesale Food Manufacturer Business Plan

Jean's Tofu Delight has been a successful product brand in the city of Richmond for seven years. The company's tofu pate has grown in sales by 15% each year, for the past three years, and is now available in over 100 store outlets in the greater Richmond area. Jean's Tofu Delight will gross $580,000 in sales this year. This was generated from a initial investment of $100,000.
Jean's Tofu Delight is planning to expand its operation to include distribution to stores within the northwest region.  Owner funding and internally generated cash flow will enable most of the expansion plan.   The company will also secure a $100,000 short-term loan.  Sales projections for the next three years are based on current sales success with the target customer base in Richmond.  Initial contacts have been made with retail outlets throughout the state and the potential target markets have been identified.
This plan will result in sales revenues growing to $1.1 million by the end of Year 2.

1.1 Mission

Jean's Tofu Delight's Mission is as follows:

• Quality: Our tofu pate products are the highest quality, most nutritious food products...because we will accept nothing less.

• Innovative: Our products have always been in the forefront of the health and nutrition wave. Innovative products, state of the art manufacturing, quality assurance and industry expertise are the bases for our past and future successes.

• Integrity: Our customers depend on the quality of our tofu products. Our commitment to the highest standard is the foundation of our customers trust in Jean's Tofu Delight. Delivering freshly made tofu pate to consumers depends on extensive cooperation and mutual reliance between supplier and retailer. We stand behind our products, our service and our word.

1.2 Objectives

The objective of Jean's Tofu Delight is the following:

• Create a regional sales staff.
• Establish strong sales in the region's five metro areas in Year 2.
• Maintain tight control of cost and operation during expansion.

Produce Farm Business Plan

Mixed Greens Salad Gardens (MGSG) is an exciting new company that meets an unsatiated need for quality salad greens. The close proximity to Eugene ensures a steady flow of customers. MGSG is a start-up grower and distributor of exotic salad greens for restaurants and individual consumers. MGSG is located in Blue River, Oregon and serves the southern Willamette Valley. MGSG's objectives are to develop a product-based company whose goal is to exceed customer's expectations, increase production efficiency by 10% a year, and lastly, and develop a sustainable farm business, able to survive off their cash flow.
Products
MGSG will sell a spring mix of salad field greens. These greens will include but are not limited to: red leaf, arugula, radicchio, mustard greens, endive, and chicory. These greens are grown for use in salad mixtures, purchased by the end consumer as well as by restaurants who then serve it to their patrons.
The Market
MGSG has decided to target two distinct market segments, individual customers and restaurants. The individual customers will purchase greens from MGSG at the Tuesday and Saturday Farmer's Market. This segment is growing at 12% and has 12,000 potential customers. The second segment is local restaurants. This market is smaller at only 28 potential customers, but is more consistent in demand throughout the year.
Competitive Edge
MGSG has two competitive edges that will help them maintain strong growth rates, increasing their market penetration. The first edge is quality. MGSG prides themselves on the high quality of exotic salad greens. Greens that do not meet MGSG high standards of quality are rejected as imperfects and go to a not-for-profit food bank. MGSG's second competitive edge is their flexibility. The entire farm has been set up to allow them to change crops or scale existing crops to meet demand. This is highly unusual as most farms are unable to change crops mid year.
Management
MGSG is led by Heidi Ponic. Heidi initially got her start in growing while working at a greenhouse. After college, Heidi went to work for a large grass seed company. This experience is what solidified Heidi's desire to continue working in an agricultural capacity. Soon after her experience at the Willamette Seed Company she decided to enroll in Oregon State University's Master of Horticulture Program. Heidi's Masters provided her with requisite detail and skills to develop her own farm business.

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1.1 Objectives

The objectives for the first three years of operation include:

1. To create a product-based company whose goal is to exceed customers' expectations.
2. The utilization of Mixed Greens' lettuce products in at least 20% of the top restaurants in Eugene as listed in local paper's restaurant reviews.
3. To increase the efficiency of our production by 10% a year.
4. To develop a sustainable farm, surviving off its own cash flow.

1.2 Mission

Mixed Greens Salad Gardens' mission is to provide the highest-quality salad greens. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall in to place. Our services will exceed the expectations of our customers.

Coffee Export Business Plan

Executive Summary

Silvera & Sons prepares green Arabica coffee beans grown in Brazil for exportation to American specialty roasters and sells to wholesalers on the Brazilian market. We will expand production capacity from 72,000/60kg bags per year to 120-160,000/60kg per year. Our coffee stands out from that of the competition. We prepare the top five percent, in terms of quality standards, of all Arabica beans on the market. Our customers seek this product as it provides them with a point of differentiation to specialty roasters. In the past six years, demand for our coffee has exceeded the amount we are able to supply and we have been forced to refuse requests for larger shipments.
We predict growth of thirty percent in the first year with sales exceeding ($BRL) expectations. In year three the plant will run at maximum capacity and based on the current price of coffee we expect excellent profits ($BRL). We have positive indicators from current importers that the additional amount of beans will be sold.
Our keys to success are:

1. Establishing and maintaining working relationships and contractual agreements with American importers and Brazilian coffee brokers and wholesalers.
2. Bringing the new facility to maximum production within three years of operation.
3. Increasing our profit margin with the use of improved technology in the new facility.
4. Effectively communicating to current and potential customers, through targeted efforts, our position as a differentiated provider of the highest quality Arabica beans in the world.

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1.1 Objectives

The objectives of Silvera & Sons:

• Increase production and sale from 78,000/60kg bags per year to approximately 100,000/60kg bags per year in the first year of operation at the proposed facility and reach maximum capacity of 120,000/60kg bags per year by year three.
• Increase sales substantially in the first full year of operation.
• Establish strategic relationships with 10-15 American importers in Los Angeles, San Francisco, & Seattle.
• Increase gross margins in the next three years.

1.2 Mission

Silvera & Sons Ltda seeks to serve coffee importers and enthusiasts by exceeding minimum acceptable quality standards and by providing the highest quality product at the lowest possible price. We value our relationships with current and future customers and hope to communicate our appreciation to them through our outstanding, guaranteed product quality, personal service, and efficient delivery. Our commitment to our customers and the country of Brazil will be reflected through honest and responsible business.

1.3 Keys to Success

The keys to success for Silvera & Sons are:

• Establishing and maintaining working relationships and contractual agreements with American importers and Brazilian coffee brokers and wholesalers.
• Bringing the new facility to maximum production within three years of operation.
• Increasing our profit margin with the use of improved technology in the new facility.
• Effectively communicating, to current and potential customers, our position as a differentiated provider of the highest quality Arabica beans in the world.

Salsa Manufacturer Business Plan

Salvador's is a manufacturer of authentic Hispanic foods including salsa and chips. Their products are positioned at the high end of the market in terms of both quality and price. Salvador's has been in business now for three years and has grown in popularity. What was once a business targeting solely the Hispanic community has grown into a business that has far broader appeal.
Salvador's has several objectives that they will achieve within the next three years. The first is an increase in sales reaching two million dollars by Year 5. Salvador's also would like gross margins to be above 55%. Salvador's also hopes to have 40 different outlets that will distribute their product. Lastly, they aim to become known as the premier authentic Hispanic food producer in the area with an ever-expanding geographic distribution area.
Currently, Salvador's has two main line of products. Their flagship product is their salsa, renowned for its freshness, uniqueness, and quality ingredients. Originally introduced in one temperature, hot, the market demand has asked for milder temperatures and Salvador's has responded with both a medium and mild version. To compliment their salsa, Salvador's offers fresh chips in both yellow and blue corn.
Salvador's has targeted three main customer groups to sell their products to. The first group is grocery stores. The grocery stores will be then sell directly to the end consumer. This segment is growing at 75% and there currently are 53 potential customers. The second group is wholesale distributors. This segment has a 100% growth rate with 5 potential distributors. The last customer segment is restaurants which have a 45% growth rate. There are 18 potential restaurant customers. As mentioned before, Salvador's originally targeted the Hispanic community. The market has indicated that their products have broader appeal and Salvador's has recognized this and acted accordingly. The Hispanic community was initially targeted because of its exciting growth rate. The community has been growing at 22% a year, almost double the average of the overall US population.
While there are many competitors at the mid price point, both regional and national, there are few direct competitors at Salvador's high price point. This is quite advantageous for Salvador's, providing them with additional breathing room to establish themselves as the premier brand of authentic Hispanic food.
Salvador's strong management team of Ricardo and Pat Torres will ensure sustainable growth for Salvador's. Pat is the President and has 12 years of food industry experience. The previous five years was as manager of a four store Tex-Mex restaurant chain. This provided Pat with incredible insight and industry knowledge that reinforced the idea to start a business from scratch. Ricardo brings Salvador's over six years of financial control experience that was gained as a CPA with Arthur Andersen. Salvador's management team, due to its seasoned strength will help Salvador's achieve the dream of being the premier Hispanic food manufacturer.
Salvador's has begun to reach profitability and forecasts a modest net profit in three years. The commensurate modest profit margin will be achieved from sales. The financials within the plan further reinforce the exciting nature of this business.

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1.1 Objectives

1. Increase sales significantly over the next three years.
2. Improve gross margin % over the current product line and maintain that level.
3. Add products and services to meet market demand, again at high gross margin.
4. Improve inventory turnover, reduce the cost of goods sold while maintaining the high quality of the products.
5. To provide jobs to the Hispanic community that are rewarding and fulfilling.

1.2 Mission

Salvador's was built on offering the highest quality and value in its authentic hot salsa, filled with the history of the Hispanic community. Time honored family recipes have been passed down through the generations, rich with ethnic heritage. Knowledgeable consumers were looking for authentic products, filled with the best ingredients. The consumer was crying out for a change! They wanted real down home Hispanic salsa.
Salvador's answered this call, first with its hot salsa, then adding mild and extra hot salsa, followed by yellow and blue corn chips. Constantly striving to supply what the consumer is asking for, we continually review what is available in the marketplace, and what isn't. Improving on what is available and providing new products and services to the areas of need will assure our success in a market driven by consumer demand.

1.3 Keys to Success

1. Delivering high quality products that set themselves apart from the others in taste and value.
2. Providing service, support, and a better than average margin to our dealers.
3. Increase gross margin %.
4. Bring new products into the mix to increase sales volume

Packaging Design and the "Brand"

Brand Evolution - Brands grow, evolve, and change over time; and product packaging will evolve as well.  Packaging is used to connect with the consumer, and as the brand evolves, so should its packaging to accurately reflect and convey meaning to the consumer.

The owner of this honey business, specifically chose
this unique container (brand identity) for her product to
differentiate it from the competition and to convey the
image of quality to consumers (brand promise).  

Brand Identity - The brand identity consists of the visual, tangible aspects of the brand used to "create an emotional connection with the consumer."  In relation to packaging, brand identity is created through the use of color, symbols, typography, package material, etc.  This aspect of packaging is something that I will continue to explore in future blog posts (so keep coming back!).

Brand Promise - When consumers purchase a product, they are believing that they are getting certain things - a certain level of quality, functionality, contents, etc.  The brand promise is conveyed to consumers through the brand identity.

Brand Equity - Brand equity is the good will and trust that is built up with consumers over time.  Packaging, serving as the image of the brand, conveys the "values, qualities, features, and attributes" of the brand; things that trust is built upon.

Brand Loyalty - The trust that is built with consumers, representing brand equity on the side of the business, hopefully converts to brand loyalty by those consumers.  When brands deliver on their promises and consumers develop loyalty, they are more willing to go to greater lengths to seek out a product, pay more it, or convey that loyalty by sharing it with others - perhaps by "liking" the brand on Facebook, wearing a t-shirt with the brand logo, etc. 

Brand Repositioning - Sometimes a brand has to reposition itself to compete more effectively in the marketplace with its competitors.  When repositioning, a brand has to be cognizant of its existing equity with consumers and carefully consider how any changes to packaging design could impact that equity.

Brand Extension -Brand extension occurs when new products are introduced to the product line or when the brand decides to enter a whole new product category.  Businesses will often try to take advantage of the brand equity that has been built up; one way of doing this is to extend aspects of the packaging design to these new products.

Packaging design plays an integral role in the "brand" and is something that business owners should work to ensure gives them an advantage in the marketplace.  Market research, specifically, understanding how the aspects of brand identity relates and influences the target market is key.

Educating Consumers and Employees on New Meat Names

The National Pork Board and Beef Checkoff Program recently announced new names for some of their meat products in an effort to help customers find and prepare beef and pork.  As you can see by the graphics below, some of the names have changed significantly (for example, pork loin rib chop to ribeye chop and beef chuck eye edge pot roast, boneless to Denver roast).  

Figure 1.  Pork loin name changes. 

Figure 2.  Beef chuck name changes.

Figure 3.  Beef sirloin name changes.

All graphics from USAtoday.com

The new names are meant to help bring clarity to the many different cuts available, but how will this affect you, the business owner?  Both employees and consumers will need to be educated on the new names.  Simply labeling meat with the new name will not be sufficient in identifying these changes.  Graphics (like those above) that show what part of the animal each piece of meat comes from should help as well as listing the old name versus the new.  Employees will also need to be trained in distinguishing the new names and then also passing the knowledge onto the customer.  As an ag business owner, you will probably want your employees to spend more time with customers to identify what kind of meal they want to prepare and what cut would work best.  Read more about the new names at USAtoday.com.

Obviously, this is going to require more work for you, but it may also open up an opportunity to connect with customers.  Talking directly to customers as they enter the meat department is an obvious opportunity, but you can also hold classes, provide samples, and recipes.  

As an ag business owner, how do you feel about these new names?  Do you think customers will embrace the change?  Do you envision an increase or decrease in sales?  How are you planning to educate customers?

As a customer, did you find the old names to be confusing?  Will these new names help you to better chose the most appropriate meat for your recipes?  Do you think you will buy more or less beef and pork because of this?

Special Considerations for Urban Ag Practitioners

Starting a seed is the same no matter where that see will be planted.  For urban growers, there can be several considerations to take into account during the development of a production area.  In early July 2013, over twenty faculty, staff, and members of Northeast Sustainable Agriculture Research and Education (NE SARE) traveled to Pittsburgh, PA to learn about some challenges urban growers face.  Land acquisition, zoning constraints, soil contaminants and social justice issues are often incorporated into the business and growing plan, along with traditional concerns such as pests, diseases and too much or too little rain.  Additionally, urban agriculture is one place where new farmers first learn the business of farming, as well as how to grow and manage crops, soil fertility, pests, and pathogens.

There are over a dozen urban farms in Pittsburgh.  The growers use agriculture and social concerns to re-purpose vacant land, in some cases with condemned buildings, into economically viable small scale farms with a split distribution model.  This model typically involves selling specialty crops to high end restaurants at above market prices, with a portion of the harvest used to supply fresh food to neighborhoods classified as a food desert, that is, a neighborhood without a grocery store of farmers' market, and a high percentage of the population living at or below the poverty line.

PSU and NE SARE staff visit Garfield Farms, an urban farm
featuring hugelculture, a food forest, high tunnels,
hope garden, cob oven, and an almost complete bioshelter.

Four of these farms were highlighted for the tour: Garden Dreams Urban Farm and Garfield Community Farm, as well as Grow Pittsburgh who as urban farms at multiple locations, including the Shiloh Peace Garden and Braddock Farms.   These farms have shown that urban farms, done correctly, can have long-lasting positive impacts on low-access communities.


Here are a few points for urban agriculturalists to consider:

• First, what is the soil quality? These environmental factors come with the territory of living in an urban area, especially one with such a long history of industry.  How good is the soil itself?  Most spaces used for farms were once the site of old buildings or factories, which can mean contamination and low fertility.  The quality of the air also plays a role.  In extreme cases of poor air quality, traces of dangerous residue can appear on the surface of produce.



Braddock Farms offerss a low cost SNAP benefit market,
and a teen internship program, as well as selling through
Penns Corner Farm Alliance.

• Second, what zoning and political considerations must be taken into account?  Is the land publicly or privately owned?  Is there a tax lien?  For urban farmers, operating on vacant land or abandoned land may make the most sense.  Securing the title to the land is important to ensure a farm's longevity.  Occasionally, urban farms acting as a land steward instead of land owner have been lost to developers who are drawn to a neighborhood improved by agricultural activities.

Four Best Practices of Urban Farms

1. Create flexible space.  Urban agriculture is limited by the space that is available.  Because most plots of land are small, it is important to utilize the space effectively.  Keep in mind how the farm will need to operate depending on the weather, time of year, and stage of production (seedlings to harvest).
2. Create partnerships with other local businesses or groups.  Large-scale farms have the capacity to be self-sufficient, but this is not always the case for small-scale urban agricultural businesses.  There are many organizations that complement each other in both goals and services.  In all cases, reciprocity is the key to successful partnerships.
3. Identify the key issue.  Poor food access is usually accompanied by a secondary problem.  Many families struggling with food access may not know what to do with the fresh produce once it becomes available.  Consider addressing this problem by providing cooking lessons or recipe cards when selling produce.
4. Keep in mind the sustainability of your project.  If your operation is funded mainly through foundations and grants, what happens if these funds become unavailable?  Because of this, many urban farms have two customer bases: local restaurant and neighborhood residents.  Finding a good balance between selling to local businesses for profit and serving the nearby residents is critical.