Cherry Production

1. Cherry Production Ag Ec 495 Business Plan Nick Petruic Jason Fehr Kyle Jordet

2. Overview • Introduction • Operations • Marketing • Financials • Conclusion • References

4. Introduction • Produce a variety of orchard and garden products • Processing Division • Creation of value added products • Sour Cherry Syrup

5. Operations Plan • Processing • Buys raw, cleaned cherries from Grindstone Farm • Processed into Cherry Syrup

6. Flow of Work

7. Church Kitchen

8. Cost of Goods Manufactured

9. Capital Budget • Grindstone Processing • Very minimal • 2 Steamer Juicers • Valued at $200 each • All other equipment is supplied with rental

10. Working Capital Planning & Management

11. General Expenses

12. AR/AP/CCC • Accounts Receivable • N/A to production • Accounts Payable • 30 day payment period • Grindstone Farms • Cash Conversion Cycle CCC= Average Days Inventory + Average Collection Period – Average Days Payables CCC = 150 + 30 – 0 = 180 days

13. Human Resources • Technical Skills • Mixing of ingredients • Sterilization • Product Pourer • Sealing and Labelling • All training is on the job • Direct supervision from president

14. Human Resources cont. • Wages: • Kate Martens $2,400/yr • Employees $4,080/yr • Total Deductions $542.40/yr • Total Yearly Wages $7,022.40

15. Marketing “If you consider food as a way to express your inner creativity and enjoy new and exciting experiences, then Cherry Syrup is a way to add a fresh stimulating new flavor to your favorite dishes.”

16. The Four P’s • Products and Services • “ Cherry Syrup” is a branded name for their sour cherry syrup • This syrup is a versatile meal additive • Price • Processing will sell their syrup for $4.50 per bottle • Competitive pricing strategy

17. The Four P’s cont. • Promotion • Appearances on the Prairie Farm Report • Visually appealing booth at Farmer Markets • Websites • Place • Saskmade Marketplace • Farmer Markets

18. Store

19. Segmentation, Marketing, & Positioning • Segmentation • Food additive market • 35 + age female • Primary purchaser of food • More adept to try new things

20. Segmentation, Marketing, & Positioning • Marketing • Approximately 1510 women over the age of 35 • 66% of the women • One of the only sour cherry syrups currently on the market • Sask Made Marketplace will help further the market • 55 785 women in the age bracket in Saskatoon alone • Website will also help to further the market to more exotic places

21. Segmentation, Marketing, & Positioning • Positioning • processing will market its product as specialty syrup and as a food additive • room for sour cherry syrup in the current market • Consumers will recognize our product as a truly unique and flavorful experience

22. SWOT Analysis Strengths: Human resources Training is on the job Direct supervision from manager Manager is ambitious and dedicated Low cost for wages Low labor intensity Hours are flexible The workers have been together for many years Workers get along well Small chain of command Small family oriented business Weaknesses: Human Resources Availability of skilled workers Work can be dangerous Work is not constant Work area is small Requires constant manager supervision

23. SWOT Analysis Physical Resources Church rent is $10/day Church is HACCP certified Close proximity Ample supply of cherries to process Cherry supply is close to processing plant (9 km) • Physical Resources • Roads for transport are mostly gravel • -possible threat in winter months • Dependent on outside source for processing • Weak product image • Narrow product line

24. SWOT Analysis Financial Resources No accounts receivables No long term debt Financial Resources High CCC Accounts payable every 30 days Profits are dependent on sales alone

25. SWOT Analysis Opportunities: Sour cherry industry is new Lots of potential It’s a versatile product -can be used on a variety of food products -can be used at multiple meal times Potential in catering industry Threats: Other Sask. made fruit products Weather; drought and frost Health conscious consumers, ie: no desserts Cherry supply is surrounded by forest -potential threat of fire Thousands of cherry acres soon to enter production

26. Competition

27. Product Features Cherry Syrup from Sask Carmine Jewel Cherries Locally produced Food Additive One of the first of its kind

28. Sale Objectives

29. Channels of Distribution Ridsdale Transportation ltd. To Saskmade Marketplace 1 Trip/month Company Van Farmers markets

30. Marketing Budget

31. Pricing Policy Market Based Large Margin Lots of room to move Can sell cheaper to distributors

32. Financials

33. Financials

34. Unit Cost Breakdown

35. Critical Variables

36. Break Even Analysis

37. Scenario Analysis

38. Conclusion • Suggestions • Market outside Saskatchewan • Small market place • Use a distributor • Opens a world of possibilities….

39. References • APLUS Kitchen Equipment [Online]. Available at http://apluskitchenequipment.com (Verified October 10, 2007) • Cowboy Orientated Web Sites [Online [. Available at http://www.thecattle.net . Verified on November 3, 2007 • Net Grocer [Online]. Available at http://shop.netgrocer.com (Verified October 9, 2007) • Richards Packaging [Online]. Available at http://richardspackaging.com (Verified October 11, 2007) • Risdale Transport [Online]. Availabe at http://www.ridsdale.ca/thirdpagr.htm. Verified on November 3, 2007 • Saskatchewan Governmental Insurance [Online]. http://sgi.sk.ca (verified October 12, 2007) • Saskatchewan Made Marketplace [Online]. Available at http://www.saskmade.ca . Verified on November 4, 2007 • SaskPower [Online]. Available at http://saskpower.com (Verified October 10, 2007) • Shop Sobeys [Online]. Available at http://www.shopsobeys.com . Verified on November 4, 2007 • Town of Nipawin [Online]. Available at http://nipawin.com (Verified October 11, 2007)