Organic Produce: Valley Growers

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Organic ProduceValley Growers

• Julie Clark
• Chris Doersen
• Julie Engle
• Josh Huston
• Kristin Stahl

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Agenda

• Industry analysis
• Valley Growers overview
• Primary research results
• SWOT
• Goals and Objectives
• Implementation

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Industry Analysis

• Organic
• Government classifications
• No pesticides
• Minimal use of off-farm inputs
• Methods are used to minimize pollution from air,
  soil and water.
• Hydroponic Produce
• Grown in controlled environment
• No soil ? less space required
• 1/10 the water and less fertilizer
• Products
• Tomatoes, lettuce, cucumbers, herbs

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Organic Fun Facts

• Reasons to Go Organic!
• Organic products meet stringent standards
• Organic production reduces health risks
• Organic producers are leaders in innovative
  research
• Organic food tastes great!

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Company Overview

• Valley Growers
• Located near Dayton, OH
• Current production
• Lettuce
• Tomatoes
• Herbs
• Soil-less, Controlled, Environment Agriculture

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Primary Research

• Groceries
• Revenue 3,200 per month
• Volume 180 cases per month
• Generalizations
• Market-Specific Stores
• e.g. Trader Joes and Wild Oats
• Promote quality ? lower price sensitivity
• Larger organic sections
• High volume stores
• e.g. Kroger
• High sales large account

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Primary Research

• Restaurants
• Revenue 600 per month
• Volume 24 cases per month
• Generalizations
• Localized stores
• e.g. Aladdins Eatery and Dragonfly Restaurant
• Majority use Grade A product
• Logistics concerns

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Primary Research - Implications

• Groceries present greater opportunity
• Require less resources
• Greater gains from a single contract
• Recognize organic and local
• Restaurants
• Not concerned with local
• Should not be discounted entirely!
• Potential for growth in quality organic products
  ? especially upscale establishments

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SWOT Valley Growers

• Strengths
• Local
• Consistent food year-round
• Minimal waste and minimal prep-time
• Weaknesses
• Lack of experience
• No brand recognition
• Restricted Logistics

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SWOT Valley Growers

• Opportunities
• Demand for organic foods is growing
• Health trends
• Increase brand awareness by joining co-ops and/or
  organizations
• Great Lakes Hydroponics
• Threats
• Possibility of market saturation by larger
  competitors
• Retailers may choose larger experienced growers
• Trend and demand may diminish in the future

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Goals

• Determine pricing
• Develop Networks
• Determine high opportunity clientele
• Specialty organizations and coops
• Establish marketing plan

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Implementation

• Contacting grocery stores
• Focus on market-specific stores
• Higher-margin sales
• Easier to maintain longer relationships
• Promote quality!
• Provide samples
• Offer better price to penetrate market if
  necessary

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Implementation

• Do not ignore the restaurants!
• Great long-term potential despite
• Requires more resources to create a relationship
• Lower usage volumes
• Many locations ? added logistics capability

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Objectives

• Create new relationships
• Groceries
• 1 every 3-4 months
• Approximately 800 per week in revenue
• 40,000-50,000 annual revenue per store
• Restaurants
• 1 every 2 months after first year
• Approximately 600 per month revenue
• 4,800 annual revenue per restaurant

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Objectives

• Additional positive cash flows

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Other Considerations

• High-volume stores
• Large accounts
• More price pressure
• Approach carefully and establish credibility
• Show present accounts
• Provide samples
• Be flexible
• Be prepared to meet delivery and other logistics
  demands
• Monitor industry trends!
• Health and competitor trends

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Questions or comments?