Executive Summary
Most food products and drinks today are filled with good and bad components, especially with the global increase in the level of toxins in these products. There is a need for people to look at what they eat or drink and make consumption-decisions based on effects of these products as opposed to their taste. Today, for example, soft drinks are the most consumed type of beverages around the world. However, these drinks are extremely toxic because of the industrial inputs and preservatives used in making them (Nixon et al, 2015). Although it would be easier to give up these soft drinks all together in order to reduce the amount of sugar intake in the body, replacing them with healthier drinks would be an even more viable option because of the habit and tradition that have already been formed around these drinks. This plan proposes the manufacture of solidified beverages such as milk shakes and smoothies that are made using carefully selected fresh agricultural produce. The name of the business will be “Organo Beverages” to signify the identity and components of the products. This company will seek to build a strong market position in Paradise Valley, Arizona due to the mild competitive business environment for this type of product.
Industry Analysis
The demand for non-industrial fresh-farm products is growing higher everyday due to the increasing health concerns and awareness around the world. Most people now prefer authentic and fresh agricultural products as their foods and drinks as opposed to industrially manufactured products. The beverage making industry is, therefore, headed into some real changes that will see significant drops in the demand for sugary soft drinks. The desire from consumers to try new products from sources that were unheard of before has brought about slips in the business operations of the renowned global brands and operators (Plunkett, 2007).
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According to Nixon et al. (2015), Fresh and healthy drinks that are prepared according to the tastes and preferences of the consumers are expected to register an annual growth rate of 38% by 2022. This development will not only be registered in the developed world, but also in the countries. One of the reasons why this drink is going to be popular among consumers is the fact that it gives health benefits to consumers without any adverse after-effects. In the present age of information, consumers are aware of the benefits of taking care of their health and will, therefore, need their beverages to be safe and nutritious as well. As a result, sugary soft drinks and refreshments will be shunned because consumers will be focused on satiety and nourishment from drinks that are prepared without the use of any complex industrial processes or additions.
Organo Beverages Company will distribute its products using one main channel. Here, the company will seek to use the distribution channel of the local mineral water company to sell the finished products to the customers in supermarkets and convenience stores around the target area. This system will, therefore, involve the movement of products from Organo Beverages company to the distributors and then to the retailers. The company will work directly with the farmers and cultivators to ensure that the desired farm products are available in their natural and fresh form. The juice will then be created in the creation site before being packaged for distribution.
The company will have almost 100 stores across Paradise Valley, Arizona, and then build up a presence across the entire state and eventually the whole country. In addition to that, a partnership with wholesalers and shippers will be established to facilitate the transport of the products. Organo Beverages anticipates a global presence within the first five years after the commencement of operations. The anticipated changes in the industry include educational activities to be carried out by Organo Beverages to create awareness on the advantages of drinking organic, natural, and fresh soft drinks made directly from agricultural products without the use of industrial additives or processes. The benefits that will be communicated include leading healthy lifestyles free of toxins and pollutants, as well as helping the earth by increasing the sensitivity to clean environments. In order to reach a wide range of customers within the target market, the company might employ certain competitive measures such as cost reductions to sustainable levels, as well as the usage of popular online platforms such as YouTube, Facebook, Twitter, and WhatsApp.
Competitive Analysis
The leading market contenders for Organo Beverages are the currently existing non-alcoholic drinks such as Coke, Honest Tea, Pepsi, and the like. Currently, these three are the fundamental competitors in the market because they all manufacture and deliver products that are demanded by consumers who are interested in non-alcoholic beverages. Each of these organizations has many years of existence in the market, a global network of operations, as well as significant involvement in the fruit-juice generation business. In comparison, Organo Beverages is a business that is in its infancy stage with little experience of operations in the market. Pepsi and coke, for example, have been in the beverage industry for many decades within which they have amassed a huge number of customers. These consumers identify with their products, hence leading to millions of dollars in profits.
The customers of these companies already have strong bonds and ties with them because of the extended periods of association as well as the loyalty programs laid out over the years. Although other non-alcoholic drink producers can be said to be direct competitors to Organo Beverages, none of them has a presence in the form of production or distribution center in Paradise Valley, AZ, but instead, they only have their products sent into the local retail stores. These competitors do not have a competitive ground as high as the three main competitors mentioned earlier.
Organo Beverages will have various focal points over all these competitors. First, this is a locally-owned company that will be using farm products sourced from Paradise Valley and other neighboring towns and hence will have the advantage of support from the locals. This company will consistently and reliably produce high-quality fresh beverages made through processes of natural extraction of juices from farm products. The production process will not involve any industrial processing or additives, and hence they will have the unique appeal of freshness with plenty of health benefits to boost. In addition to that, this company will offer person-to-person interactions with its customers to rival the mechanized processes and connections that are used by the competitors. The great taste that comes with the ability for customers to customize their orders will also be an added advantage. Whereas the competitor companies charge anywhere between $3.99 and 4.99 for a pack of eight beverages, the beverages from Organo Beverages will be available for 3.49 for a pack of eight and will be available in a range of all-natural flavors. Although this company will offer its products at slightly lower prices than the competitors, the quality of the final products will not be compromised.
For future projections in competition, Organo Beverages will continue to incorporate recent innovations in the industry by spending more on research and development, as well as advertising and exploration. Although the identity of the current three main competitors might not change in the future, other contenders here might be companies such as Red Bull and Snapple. Together, all these competitors will be a big challenge to this company in its quest to establish a global presence.
Target Market
The essential target market for Organo Beverages will be men and women within the range of ten to seventy years old. However, the primary buyers for the products are expected to be teenagers and young people aged below forty years, with a variety of educational levels, ethnicity, and other ways of life. Currently, many people have become sensitive to their health by becoming conscious of the things that they consume. Today, well-being and wholeness are being given unmatched attention, with many people making prominent changes in their nourishment regimes. Although women have been known to be attentive to their dietary patterns and habits, men have also followed suit by appreciating proper nourishment as a factor of high-quality life. Therefore, Organo Beverages, with the slogan: “Eat Healthily, Stay Healthy,” will be the appropriate solution to the Paradise Valley market’s need for considerable healthy and freshly-squeezed beverage.
According to updated population reviews, Paradise Valley, AZ has a population of around 14,200 people which is a small population that makes up the entire count of 246,000 people in Scottsdale as well as the 7,100,000 people in the entire state of Arizona (Rajauria & Tiwari, 2017). The small population in Paradise Valley makes it both easy to hit the target market and difficult for something new to make a big impact. This town is a blend of a wide range of demographics and socioeconomics that support the desire of Organo Beverages to serve people from all walks of life. Paradise Valley is identified as the wealthiest municipality in the state and, therefore, is a befitting location for this company. Here, the relatively high spending power of the locals will ensure that the business has a high turnover of products, and hence a high growth rate in revenues. There are a little over 4,000 families in this town, and they will be served by the local distribution stores that will be set up across the town. The median age around the town is around forty-six, which falls within the target market range, hence cementing the prime town position as the location of choice for Organo Beverages.
Product/Service Overview
Organo Beverages will offer a variety of flavors for freshly-squeezed healthy drinks with a range of components such as healing properties. These beverages will e made from locally-grown and sourced fruits and vegetables and will be guaranteed to be containing quality and healthy ingredients. A distribution center will be established to ensure that all the products that are prepared reach the customers in an organized and timely manner. The center will have the capacity to prepare 200 bottles every hour during business hours, which will be determined by the demand at any one time. However, active production will only happen during the day so that the products are fresh.
Organo Company will use its commitment to quality service as the central pillar for product-penetration into the market. However, the company will eventually use other product-related strategies such as growing the range of products offered here. This will be a successful strategy because the other companies that offer similar products do not have a wide range of products in terms of flavors. Furthermore, Organo Beverages will have the customization option where customers can make personalized orders with specifics of the components that they wish to be used to make their drinks. Therefore, instead of offering products which encounter direct competition from other firms in the market, Organo Beverages will seek to separate its products from the competition through the incorporation of these unique features. All the products from this company will be made using quality and fresh inputs without any unnatural hues. This identity will not only bring along financial benefits but also bode well with environmentally-conscious consumers who are concerned with ecological impressions.
Marketing Strategies
Product sales will begin in Paradise Valley Arizona, which is a vibrant business region with many malls, business centers, and residential complexes. Organo Beverages will target the establishments that have grocery sections as well as fitness centers, with specifics in food markets and whole food retailers. The interest and demand of the consumers are the impetus for the development of market trends in the beverage industry. The constant introduction of new items and categories affects the outlook of the market for the producers. Therefore, there is a need for companies in this line of business to research and find out practical and customized drinks that offer specific health benefits have picked up prominence among customers in the recent past. The traditional outlook that a soft drink is intended for the purpose of quenching thirst has changed, and now more people are looking for something more in a drink (Rezitis & Kalantzi, 2016). For some people, these fresh, healthy drinks have become substitutes for medical supplements and, in other instances, food.
This section if the beverage industry, therefore, serves an extended part of the population. The prominence of these drinks has also been brought about by the fact that numerous entities are involved in research and development to discover the health benefits of various plants and fruits to channel those benefits into the human body (Rajauria & Tiwari, 2017). The pricing strategy discussed in the competition analysis section will also be used to help the company penetrate the market and gain a significant market share. In addition to that, various advertising channels will be used to market products. For example, popular online platforms such as YouTube, Instagram, Twitter, and WhatsApp will be useful in pushing the Organo Beverages’ brand and creating awareness about the availability of the unique products manufactured here.
Human Capital Description
This business organization will have three central management staff. The CEO will operate as the president of the company and will be in charge of all major administrative responsibilities, with another individual being in charge of quality control, and the third taking care of operations in the creative department. The three top executives will guide the lower ranking staff on the operations of the business and give directions on the development targets of the company. The staff will be recruited in a competitive and rigorous process to ensure that they fit the bill on the relevant matters in the firm.
The management structure in this company will be a straight forward one, whereby the three top executives will oversee the rest of the staff to ensure that operations are running smoothly. A performance rewarding scheme will be incorporated to ensure that the most hardworking employee is recognized and feted for their efforts. The establishment of this scheme will also ensure that there is competitiveness in the workplace and hence high productivity without compromising on the quality of the outputs. The company management structure will be organized into three hierarchical components, which are the top management, middle management, and first-line management. The hierarchy under the top management will be thus: president (CEO), vice-president, the board of directors. The middle management will have the general manager and regional managers. The first-line management will have the supervisor, office manager, and the team leader.
Operations Description
Although the company’s operations might not be complicated, they shall be itemized to ensure that critical functions are aligned with the objectives of the firm. There is a need for this company to expand its operations around the world in order to keep up with other competing firms. For this vision to be actualized, operations at the producing firm will need to be expanded to cater for the potential increase in demand for the products. Furthermore, Organo Beverages will have to establish a nationwide and international distribution system, just like the major competitors. The company will also undertake a statistical survey to identify the regions where the demand for these healthy beverages is significantly high. When the company expands its operation to other regions and countries in the future, Paradise Valley, AZ will remain its main operational hub and headquarters. These operational strategies will ensure that the company does not only keep up with the competitors but also rival them in some of these local and international markets.
Financial Analysis
Organo Beverages expects to pool funds from the personal savings of the three top executives, totalling $60,000. In addition to that, the company expects to receive $100,000 from an investor to make up the required amount for the start of business. The expected sales after the first year of operation will amount to $180,500 and $250,000 in the second year. This upward trajectory of revenue for the business is expected to remain so, and hence the company will break even within the first six months of operations. Profit projections are $20,500 in the first year and $90,000 in the second year. Therefore, Organo Beverages does not expect any problems in cash flow. These estimations are for the local market in Paradise Valley, where the company will be operating during its first couple of years in business. Therefore, the revenue from sales will increase in volume once the company expands its operations to other regions of the country, and eventually makes a global presence with international distribution networks.
References
Nixon, L., Mejia, P., Cheyne, A., Wilking, C., Dorfman, L., & Daynard, R. (2015). "We're Part
of the Solution": Evolution of the Food and Beverage Industry's Framing of Obesity Concerns Between 2000 and 2012. American Journal Of Public Health , 105 (11), 2228-2236. doi:10.2105/AJPH.2015.302819
Plunkett, J. W. (2007). Plunkett's Food Industry Almanac 2007: Food Industries Market
Research, Statistics, Trends & Leading Companies . Plunkett Research Ltd. Plunkett Research Ltd, 2007.
Rajauria, G., & Tiwari, B. K. (2017). Fruit juices: Extraction, composition, quality and analysis .
Oxford : Academic Press.
Rezitis, A. N., & Kalantzi, M. A. (2016). Investigating Technical Efficiency and Its
Determinants by Data Envelopment Analysis: An Application in the Greek Food and Beverages Manufacturing Industry. Agribusiness , 32(2), 254-271. doi:10.1002/agr.21432
