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Expanding Our Market to Organic Foods

Expanding Our Market to Organic Foods . Why Green Giant should merge Amy’s Kitchen . About Us . With over 100 years of experience, we still have fourth generation farmers picking each crop at the peak of perfection and freezing it fast to lock in freshness [1] .

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Expanding Our Market to Organic Foods

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  1. Expanding Our Market to Organic Foods Why Green Giant should merge Amy’s Kitchen

  2. About Us • With over 100 years of experience, we still have fourth generation farmers picking each crop at the peak of perfection and freezing it fast to lock in freshness[1]. • We make our vegetables unforgettable [1]. • Our products [2]. • Boxed frozen vegetables • Canned vegetables • Tortilla chip snacks

  3. The Wellness Food Sector • Def: Foods that are perceived as having a beneficial impact on consumer’s health and wellbeing • Produced without conventional pesticides and fertilizers • Niche market few years ago that is now trending across the U.S. • Natural and organic foods retailing is fastest growing segment in U.S. grocery business [3] • 78% of U.S. families buy organic foods because of health benefits [4] • Currently, we do not have organic food products- because so many households buy organic food, we need to enter this food sector

  4. Categories of Organic Food • In terms of organic food, there are many tiers of being USDA certified. We should strive to include a project under one of these three categories. • 2002 National Organic Standards set product labeling standards for organic food in 3 categories: 1.) 100% organic: products made with 100% organic ingredients [5] 2.) Organic: products made with at least 95% organic ingredients with restrictions on remaining 5% (no GMOs) [5] 3.) Made with organic ingredients: minimum of 70% organic ingredients with restrictions on remaining 30% (no GMOs) [5]

  5. Organic Food Growth in U.S.

  6. Why Organic Foods? • Organic food sales have… • Quintupled since 1997 [10] • More than doubled in past seven years from $11 billion to $25 billion [11] • A Continuous growth rate at 9% per year [12] • US Federal Government is putting emphasis on organic farming with… • Healthy initiatives including: Farm to School, Healthier School Day , HealthierUS School Challenge [13] • Expenditure to transition to organic farming- $5.5 billion spent [14]

  7. Why buy now? • Demand is larger than supply- must merge with an organic supplier now before competitor does [10] • Won’t effect future organic food production- Organic Valley Cooperative (CROPPS) have initiative to increase supply

  8. Other Companies have had Success… • General Mills - acquired Small Planet Foods • 19% net sales increase in sector [6] • Kellogg’s- acquired Kashi • revenue increase of $600 million in one year • Kellogg stocks rose 21% last year [7] • Danone– acquired Happy Family • Happy Family revenue increased from $13.3 million in 2010 to $60 million in 2013 [8]

  9. About Amy’s Kitchen • Leader in natural frozen foods • Line of vegetarian food products for busy families • 88 frozen meals, soups, beans, chili, pasta sauces, salsa • Packages organic food • Healthier than typical convenient, frozen, packaged foods • Currently independent, family run business • Made of organic ingredients [9]

  10. Amy’s Kitchen Sales Potential • Amy’s Kitchen current sales revenue is $350 million [15] • Growth has increased 10% annually [15] • We have more extensive supply chain and market presence • We can enter more markets than currently exist for Amy’s • Mutually beneficial if merge

  11. Conclusion • The organic food industry is a huge trend right now • If we don’t enter now, we may lose our chance in extreme profitability • Hard to create our own line of organic food because lack of farming supply and costly to create new product line • Other companies have had success when acquiring/merging other organic food companies • Leads to higher sales than the organic food company alone and industrial manufacturing company alone • Amy’s Kitchen has same product offering of frozen foods • We have the supply channels to make merger transition smoothly

  12. References 1 • [1] Green Giant (n.p) Our Story. Green Giant: http://www.greengiant.com/our-story • [2]Green Giant (n.p) Our Products. Green Giant: http://www.greengiant.com/pages/ProductsSnacks.aspx • [3] United States Department of Agriculture (2002, April) Organic Food Standards and Labels: The Facts: www.ams.usda.gov/nop/Consumers/brochure.html • [4] Haumann, Barbara. (2011). U.S. Families' Organic Attitudes and Beliefs Study. The Organic Trade Association: http://www.organicnewsroom.com/2011/11/seventyeight_percent_of_us_fam.html • [5] The Hale Group (2003, November). The Natural and Organic Foodservice Marketplace Report, Spins / The Hale Group • [6] General Mills Annual Report (2011) • [7] Clothier, Mark (2010, Feb). Kellogg Says Kashi May Grow to $1 Billion in 5 Years. Bloomberg: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aCkra8wAv6CQ • [8] Krasny, Jill (2013, May). Danone Acquires Happy Family. Inc.com: http://www.inc.com/jill-krasny/happy-family-danone-acquisition.html • [9] Amy’s Kitchen (n.p.) Amy’s Kitchen: http://www.amys.com/

  13. References 2 • [10] B., McBride, W., Oberholtzer, L., & Smith, T. (2009, June). Emerging Issues in the U.S. Organic Industry. Retrieved July 20, 2013, from Economic Research Services, USDA : http://www.ers.usda.gov/publications/eib-economic-information-bulletin/eib55.aspx#.UerW8I3FWAg • [11] Greene, C., Dimitri, C. (2009, November). Recent Growth Patterns in the U.S Organic Foods Market. Economic Research Services, USDA: http://www.ers.usda.gov/publications/aib-agricultural-information-bulletin/aib777.aspx#.UerWEo3FWAi • [12] Laux, Marsha. (2013). “Organic Food Trends Profile” Agricultural Marketing Resource Center: http://www.agmrc.org/markets__industries/food/organic-food-trends-profile/ • [13] United States Department of Agriculture. (n.p.) Child Nutrition Programs. The United States Department of Agriculture: http://www.fns.usda.gov/child-nutrition-programs • [14] Osteen, C., Gottlieb, J., Vasavada, U., (2012, August). Agricultural Resources and Environmental Indicators, 2012 Edition. Economic Research Services, USDA: http://www.ers.usda.gov/media/874175/eib98.pdf • [15]Cyrpress Realty Advisors (n.p.) Case Study: Amy’s Kitchen, 2002 – Present. Cypress Realty Advisors: http://cypressrea.com/casestudy/amyskitchen-2002

  14. Context Memo • In business organizations regardless of the industry, a large part of communication is done through presentations. Ideas, proposals, and updates are presented in a meeting format. Through my co-op experience, I learned the importance of PowerPoint and presenting materials effectively. • This PowerPoint is a theoretical situation of how a business proposal would be presented in a meeting. For this presentation, I portrayed the role of an employee for the frozen vegetable manufacturer Green Giant. My proposal is for the organization to merge with the existing organic food company, Amy’s Kitchen because both companies focus on selling lines of frozen and boxed foods. Green Giant is not an organic manufacturer and Amy’s Kitchen is. By merging the two companies, they would be expanding their product line to appeal to a larger target audience. • This presentation targets to persuade the audience of the benefits of entering to organic food industry as well as presenting other situations where acquiring a small organic foods company was successful. The language is clear, concise, and includes professional business language that would be presented in an actual presentation.

  15. Reflective Note • The audience members of this PowerPoint presentation are executives of Green Giant. I designed a scenario where Green Giant is looking for ways to increase revenue. As an employee of Green Giant, my suggestion is to merge with Amy’s Kitchen because the existing line is currently successful and not aligned with a larger industrialized food manufacturer. • This document is the most effective way to present the business proposal because it is clear, concise, and uses various slides to suggests reasons why acquiring this company would be beneficial. • This sort of document would be presented in a meeting with an audience to explain the benefits and answer any questions the audience might have. Often times, with presentations loaded with information such as this one, the PowerPoint deck would then be emailed to those members of the organization to whom it is relevant. • This sort of presentation is for internal use only. If a competitor got a hold of this information, they may attempt to merge with Amy’s Kitchen before we have the opportunity.

  16. Word Count 849

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