BUSINESS PLAN GOOD EARTH FOODS COMPANY
1705 Stubbleton Road
Bismarck, North Dakota 58502
People are smarter about the foods they eat these days, and more consumers have turned to organic food products for personal health and reasons of quality. The Good Earth Foods Company will provide high-quality organic foods and ready-made convenience items for people who are too busy for complex food preparation but who care about what they eat.
Good Earth Foods Company has formed to meet the growing demand for unique, organic, partially prepared, specialty convenience foods.
Good Earth Foods is initially focusing on the development, production, and marketing of dry spice products, which is detailed in this document. Other food product development opportunities will be addressed in future amendments to this business plan that will provide additional profit with expanded market share.
Good Earth Foods has retained legal counsel and has developed a business relationship agreement with a volume food manufacturer to partner with in ongoing business operations. In addition to establishing a relationship with a food production producer, Good Earth Foods has sought out and secured professional services firms to evaluate, validate quality, and longevity of products and product life cycle. These additional professional services will allow Good Earth Foods Company to ensure food quality compliance with state, federal, local, and industry group certifications.
Our line of products will conform to the guidelines established by the California Organic Foods Act of 1994.
The organic and gourmet convenience foods market in the U.S. and Canada is emerging at an accelerating rate.
Organic foods, gourmet convenience products, and partially prepared specialty items, once a novelty, have grown to become an integral part of the overall consumer shopping environment. This serves to indicate a consumer's commitment to personal health, quality food consumption, and intelligent shopping.
Consumer expectations for food convenience and high quality food products is rapidly "pushing" old-line food manufacturers into new exciting food trends and convenience areas.
The consumer food industry is quickly becoming ready for mass market, customized, organic food products.
GEFC is characterized as a developer of unique organic products catering to the discriminating consumer who demands a high degree of creativity, quality, and convenience.
Before the end of the year 2002, GEFC will be recognized as a highly visible company in the customized, gourmet food, dry spice product marketplace. We will have introduced products aimed directly at industry-standard product brands and will become known for high quality, consistent taste, and easy-to-prepare products. Our anticipated revenues will exceed $7,000,000. GEFC will actively seek to develop new products and promote expansion into other additional market opportunities.
Create an essence of high quality premium products through the delivery of high quality merchandise consumer food shoppers can count on time and time again. We will approach the market as a premium manufacturer of premium products with the highest quality organic ingredients. Our reputation will be unmatched in our product segments. We will position ourselves head-to-head with other industry brand leaders while maintaining a degree of perceived "smallness." Our customers demand the very best and we will provide it.
Our sales, merchandising, and distribution strategies will play a linchpin role in the success of our company. Our ability to foster relationships within the retail and distribution value chain will challenge traditional business models.
In order for Good Earth Foods Company to attain its vision as described in our mission statement, the following primary goals need to be achieved in year one of operations.
Our strategy is to focus first on those prospective consumers who understand food, appreciate high quality food products, and earn a high degree of income. These customers will be the basis for working out price points, product development, and expected consumer volumes.
We believe a ready-made market exists for our products and those in the premium, convenience food category.
The demographics of the typical Good Earth Food Company consumer are:
Smith Specialty Foods: Unveiled a new product line with similar characteristics in February 2000. These products included organic certifications. The demonstration of these products was being featured in high-end retail grocery chains. It is not known whether the features of these products include similar ingredient formulas.
Since this company is also a start-up we consider them a direct competitor not only in product, but brand image as well. There has been no information in the marketplace suggesting this company has gained greater market share than us.
Target Gourmet: Unveiled a new line of products with similar characteristics in March 2000. Their product line release included a demonstration of organic products mixed with traditionally processed ingredients. Like the Smith Specialty Foods demonstration, it was not shown that their product line has any significant market share beyond our own.
The Organic Food Market: A 500-person organic product-oriented grocery chain. This company, which has developed its own line of "store brand" products in the past, should be viewed as a partner as well as a tier II competitor. They have stated that they wish to continually develop competitively branded products but will market them as a moderately processed brand. This company will play a major role in our "retail shelf" strategy. This company has expressed interest in our products and is currently evaluating volume commitments from our manufacturing partners.
The importance of industry relationships and participation in consortiums in this marketspace cannot be underestimated. Industry relationships are an absolute requirement for competing. The organic industry and marketplace should be seen as a multi-faceted, multi-layered marketspace. Relationships and industry presence at each of these levels plays a critical role in attaining success in this market.
GEFC currently participates and will continue to participate in food industry consortiums and standards setting/development organizations. This participation will allow GEFC to play a role in establishing industry standards and brand precedence. Participation in industry organizations will also allow GEFC to leverage research and development conducted by other participants and maintain a "pulse" on market trends and the competitive environment. GEFC will be able to use association with these organizations to establish market presence and develop an industry leadership position.
Good Earth Foods Company will take advantage of and leverage all media outlets available. While we feel that, based on market research, our target audience and consumer base is highly fragmented and distributed across regional markets, a highly focused sales and media promotions strategy will, in part, drive short-and long-term brand and sales success. The following list of opportunities will shape our sales promotions plans into a highly targeted marketing communications, sales promotion, and media plan.
Our products will be priced at competitive market rates for premium products. Our products will be presented alongside competitive products and priced at a slightly higher "sticker" price resulting in a higher profit margin.
This also will promote a higher degree of cost basis/profit benefit to our retailers and increase brand perceptions among targeted consumers. Our products are expected to drive a 5-7 percent margin rate among our specialty retailers and high-end grocery chains that normally operate on a 3-5 percent profit margin basis. This pricing strategy dovetails with stated marketing strategies to result in greater retail attractiveness, thus resulting in enhanced market share for GEFC.
According to the opportunities and requirements for Good Earth Foods Company described in this business plan, and based on what we feel are sound business assumptions, our initial total capital requirements total $13,000,000. This sum of initial "seed" capital will enable Good Earth Foods Company to develop a high-energy, high-quality start-up company specializing in desirable food products. Investment monies will be used primarily for brand development, food packaging, manufacturing and distribution, and ongoing operations. Based on percentage of investment contributions, Good Earth Foods Company is willing to entertain option share ownership arrangements with the investor community.
|• Initial product development||05/2000|
|• Initial packaging design completed||06/2000|
|• Initial product and packaging testing with target market consumers||06/2001|
As founder of the Good Earth Foods Company, Mr. Langolf is responsible for all marketing, sales, and business development activities, as well as customer delivery and service and product concept/development.
Mr. Langolf has helped many clients achieve communications success in a wide range of capacities ranging from providing day-to-day sales tools and graphics systems consulting, to establishing and maintaining direct-mail promotional plans and corporate identity.
After beginning his career with Kraft Foods as a food packaging engineer in May 1990, Mr. Langolf progressed through a series of management and executive positions, playing an active role for many high-level product line development efforts and product rollouts.
In October 1998, John moved to Sacramento, California, to establish and head the global product development team for Sunshine Organic Foods. While in that position, John was recognized as an outstanding achiever by an outside consulting firm performing a food industry best practices audit. Sunshine Organic included customers like Safeway Stores, Albertson's Inc, and Organic Brands.
Mr. Langolf is a graduate of the University of California, in Berkeley, California, with a B.S. degree in agricultural engineering. While completing his master's work at the University of Oregon, in Eugene, Oregon, Mr. Langolf was distinguished with numerous agricultural industry awards for leadership in research and organic food processing methods.
John and his wife, Susan, and their two children reside in Bismarck, North Dakota.
Mr. Langolf enjoys, golf, kayaking, and wildlife photography in his leisure time.
Expense/Investment Line Items
|Executive Business Operations||$150,000||$175,000||$200,000||$250,000|
|Day-to-Day Operational Leadership||$120,000||$120,000||$130,000||$140,000|
|Functional Operations Leadership|
|Legal & Industry Counselors||$250,000||$200,000||$200,000||$150,000|
|Sales & Marketing||$200,000||$250,000||$300,000||$350,000|
|Marketing/PR (budget includes salary)||$200,000||$225,000||$250,000||$275,000|
|Administration and Human Resources Support||$75,000||$77,000||$79,000||$81,000|
|Food Prep, Test, Kitchen Staff||$200,000||$200,000||$250,000||$300,000|
|Technology and Systems Requirements|
Desktop and office automation
(software and hardware)
External Package Design and
|Website (Concept, design, and production)||$75,000||$100,000||$75,000||$75,000|
|Communications (Voice and Data)||$25,000||$30,000||$36,000||$36,000|
|Specialized Kitchen and Test Equipment||$100,000||$120,000||$80,000||$60,000|
|Product Development Operations||$75,000||$100,000||$125,000||$150,000|