Duane HorveyCurtis RidgwayEldon ForrestKarrie Buxton

Industry Overview

• The certified organic industry is a fast growing industry with a lot of interest from many people.

• Much of the interest in organic food is coming from the more health conscience people. Who may be worried about hormones and antibiotics in their meat.

• As of now there isn’t many people into marketing organic beef in the prairies, and it could be a major opportunity for Organic Beef.

Operations Plan

• It is a co-operative made up of over 30 members.

• The thirty members are mostly producers who supply the company with cattle.

• The thirty members elect a board of directors. Who help make decisions to keep the company moving forward.

Organizational Structure30+ member co-operative

Board of Directors

President

Administrator Marketer

Organizational Structure

• The board of directors are mostly made up of producers involved in the co-op.

• The board will make most of the major decisions so that they can keep the co-op happy.

• President will be in charge of the two employees keeping them informed and on task at the duties that need to be performed.

• The administrator and marketer will take care of the daily activities that need to happen to keep the company running smoothly.

Flow of Work

• The producers load cattle and deliver to XL Foods plant.

• At the XL plant the animals are to be slaughtered and processed.

Flow of Work

• Then the meat is transported to TML meats in Melfort.

• At TML the meat is hung for 14 days to tenderize. It is then processed into 3 different cuts of meat.

• Processed into steaks, roasts, and ground beef.

Flow of work

• Aero Delivery then takes the meat from TML to Calgary.

• Once in Calgary the meat is then transported to East West Delivery who delivers the meat to retail co-op stores in Calgary.

Average Business Month

• In average business month you would see the marketer and administrator watching over the days activities.

• They would be making sure everything ran smoothly from the producers all the way to the retail stores.

Capital Budget

Capital Budget

Total Capital Budget -

Working Capital

Cash (606,592)

Accounts Receivable 33,440

Accounts Payable (88,002)

Total Net Working Capital (661,154)

Capital Budget

Operating Expenses

Beef Cost 842,400

XL Beef 67,500

TML Meats 90,558

Aero Delivery 10,135

East West 3,285

Packaging 6,669

Labelling 3,538

Total Operating Expenses 1,024,086

Human Resources

• Sol will be will employ one administrator and one part time marketer.

• Both the marketer and the administrator will be paid by salary.

Human Resources

• The Administrator will be hired to do the daily jobs consisting of communications.

• They look after which producer is sending in cattle and at what stage the beef is at.

• They will also look after the payment of all the producers for their cattle, and receiving payments from the co-op for their cattle.

• Will report to the board of directors.

Human Resources

• The marketer will deal with marketing of the final product.

• They will also have to make the product desirable to the consumer.

• Responsible for public relations with retailers.

• Some overlap with the administrator.

Marketing Plan

• 4 P’s– will be marketing three different products.

Steaks, Roasts, and Ground Beef.– will be getting a premium over the

conventional beef prices.– Promotion will be done mainly through word of

mouth and through website.– will be placing their products in the Calgary

Co-op retail centres.

Segmentation

• The two segments SOL is looking to market to are:

– The health conscience people looking for a lean healthy beef product.

– The upper-class society looking for a high quality beef product.

Targeting

• SOL plans to target the two area where the two segments of people coincide. This is where they will get the most interest in their product, and it will also be the people who will buy most of their product.

Positioning

• SOL will be branded a high quality beef product that is health friendly.

• It will be positioned as a environmentally friendly product, because the use of hormones and antibiotics are not being used.

SWOT

• Strengths– is made up of organic producers who have

knowledge about raising organic beef.– Low capital costs means not much money

invested into the company.

• Weaknesses– Rely on other companies to get the job done,

which means less control over the product.– Possible limited demand because of the

premium charged for organic beef.

SWOT

• Opportunities– Fast growing industry– People are looking for a healthy alternative to

traditional meats.

• Threats– Higher prices demanded for organic products.– Consumer knowledge.

Market Analysis

• Past Performance– In the past there

hasn’t been much of an organic beef market on the prairies.

– Seize market share.

Market Analysis

• Market– Small right now– Growing market for organic meat– Looking to get no less than a half of a

percentage of the Calgary population to purchase the certified organic beef

Market Analysis

• Competition– The main competition

will be coming from non organic beef.

– Competition will also be coming from other organic meats like poultry and fish.

Market Analysis

• Customers

– will be marketing their product to rich young and health conscience people.

– Aging population (baby boomers).

Marketing Strategy

• Sales and Profit Objectives– SOL is going to market 45 head a month or

540 head per year at a 10% increase per year

– SOL will be selling in the first year 17,550lbs roasts, 32,994lbs steaks, and 89,856lbs ground beef.

Marketing Strategy

• Channels of Distribution– Distribution of product

will be done through retail Co-op stores in Calgary.

– Transported via trucking.

Marketing Strategy

• Pricing – Sol will be pricing their products by taking the

price of conventional beef and charging a 40% premium for it. Then multiply by 45% to subtract the mark-up and find what Sol gets from the Calgary co-op.

Marketing Strategy

• Select Markets/Products/Services mix– Establishing an early market in Calgary.– Looking to grow with the growth of the organic

industry.– Offers the assurance of a high quality

products and not just another meat.– Consumers will be more likely to become loyal

to this product, because of its healthy connotations.

Marketing Strategy

• Selling and Advertising– will rely on the Calgary Co-ops to market their

product.– will also market through the use of their

website.– Word of mouth from satisfied consumers is a

way that their products will be advertised and sold.

Marketing Strategy

• Market Plan Budget

Brand Consulting 5,000.00

Label Certification 4,050.00

Dies and Plates 3,525.00

Total 12,575.00

Accounting/Financial Plan

• Revenue– Revenue is generated from 3 different

products steaks, roasts, and ground beef.– In year one Sol should be getting $4.25

dollars wholesale for steaks, $3.41 for roasts, and $2.30 for ground beef.

– This is expected to increase by two percent each year to cover inflation costs.

Accounting/Financial Plan

• Risk Analysis– Few risks affect.

– Prices paid to producers affect profit.

– Prices received for product affects profit.

Base Case

• will be paying the producers $2.40/lb based on hot hanging weight which is 650 lbs per animal.

• The price it is getting for their products are $2.30 for ground beef, $3.41 for roasts, and $4.25 for steaks.

• Net income for year one is $-673,592.

Questions?