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Saskatchewan Organic Meat Market

Saskatchewan Organic Meat Market. Kim Minogue Kim Mclean Kristin Nemeth Kari Henderson. Project Set up . Proposed by Simon Weseen M.Sc. and Gary G. Storey P. Ag. who currently work in the Department of Agricultural Economics

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Saskatchewan Organic Meat Market

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  1. Saskatchewan Organic Meat Market Kim Minogue Kim Mclean Kristin Nemeth Kari Henderson

  2. Project Set up • Proposed by Simon Weseen M.Sc. and Gary G. Storey P. Ag. who currently work in the Department of Agricultural Economics • Research the possibility of setting up a strictly Saskatchewan organic meat market

  3. Mission Statement “The Saskatchewan Organic Meat Market will provide a healthy, fresh, safe, chemical free, and traceable meat product that originates from one Saskatchewan organic livestock location”

  4. Goals & Objectives • Promote Saskatchewan organic livestock industry • Establish reliable clientele • Provide a quality, well-recognized product • Become know to all organic consumers

  5. Project Benefits • Provide a market for SK organic livestock producer’s products • Provide high quality, safe and traceable product • Provide information for benefits of organic products

  6. Location - #1- 3414 8th Street

  7. Spacious area for workers and equipment Adequate retail area Flow of carcasses Floor Lay Out

  8. Pine View Farms - Osler, SK Butcher Fresh Meat Cooler Frozen Cuts Consumers Consumers Flow of Work

  9. Organic Slaughtering and Processing Guidelines • Slaughter facility must be certified by organic certifying agency (OCIA) • Facilities inspected annually by an auditor to ensure up-to-date documents (Storage, cleaning and transporting records, etc.) • Cleaning must not leave residues on equipment. • Cleaners approved by OCIA • Water must be tested to meet standards • It is imperative that the meat stays free from contamination

  10. Capital Budget • Equipment $159,000 • Net Working Capital $ 76,281 - Cash, inventories • Total Capital Required $234,987

  11. Shareholders Executive Directors 3 Organic Industry Rep’s Manager / Meat Specialist Butcher Part-Time Customer Personnel Organizational Structure

  12. Organizational Structure • Run as a corporation • Shareholders appoint board of directors • Manager will be selected by the board of directors • Manager will then be in charge of a full-time butcher and one part-time customer personnel

  13. Job Descriptions • Manager • Hiring and overseeing employees • Ordering proper amounts of meat • Ensuring smooth operation • Maintain positive employee and customer relations • Butcher • Cutting appropriate quantities and types of meat • Assisting with customer relations • Part-time personnel • Provide customer service • Promote organic products

  14. Employees • Employee wages • Manager $45,000 • Butcher $40,000 • Part-time $7.50/hour • The salaries will increase 2% yearly with a $0.25/hr yearly raise for the part time employee • Benefits include EI, CPP, and workers compensation (holiday pay for part-time wage) • Will be hired based on experience and the butcher will be responsible for providing any additional training

  15. Direct Labor & Benefits

  16. Market Overview • Growing demand for organic meat • Saskatchewan has potential to meet this demand • Incentive to become registered organic livestock producers • The need for federally inspected organic slaughtering and processing plants

  17. SWOT Analysis • Strengths • Only exclusively organic meat market in Saskatchewan • Provide a high quality product at a convenient location • Educated staff available to answer all questions and provide you with the benefits of consuming organic meat • Able to educate the public about organic products • Weaknesses • Organic meat is sold at a premium • Limited profitability for by-products (bone carcass) • Limited consumer demand

  18. SWOT Analysis • Opportunities • Meat is provided at a convenient location • Organic meat frees consumers of food safety and healthy lifestyle concerns • Products produced by Pine View Farms provide a consumer product with traceability and reassurance • The market has the potential to expand into other organic products • Eligible for grants and funding (CARDS and Agriculture development fund)

  19. SWOT Analysis • Threats • People who do consume organic meat purchase it from reliable and trust worthy producer • Natural producers have a quality product at a lower price • Limited number of consumers in Saskatoon and surrounding area

  20. Marketing Mix • Product • Organically raised and processed beef and pork • Animals consume feed free of pesticides, chemical fertilizers, and GMO’s • Organic livestock is verified and inspected by an accredited certifying body

  21. Marketing Mix • Service • Gives consumers the peace of mind regarding the meat they are consuming • Location is more convenient compared to the farm gate • Butcher will cut meat according to customer specifications • The market will educate consumers on the benefits of organic products

  22. Marketing Mix • Target Market • Consumers that can afford to buy and those who make it a priority to buy • High income households in Saskatoon • Adults responsible for making purchasing decisions for themselves and their children

  23. Estimated Market Share & Meat Consumption • Canadian meat consumer rates per capita and applied to Saskatoon • Organic consumer percentage to derive the above numbers

  24. Marketing Mix • Pricing • The Saskatchewan Organic Meat Market is a price maker • The premium meat will be marked up 30% from natural prices • Beef (prices per pound) – Ground $3.42 - Roast $8.40 - Steak $12.00 • Pork (prices per pound) – Chops $5.10 - Ham $4.37 - Roast $3.54

  25. Marketing Mix • Promotion • Two Types – inform organic consumers about store - convince current traditional meat consumers to change to organic meat • External promotion – trade shows, websites, radio ads, magazine and publications all dealing with healthy living and/or organic products • Internal promotion – cooking demos, taste tests, in-store brochures and displays

  26. Direct Competition

  27. Indirect Competition

  28. Marketing Budget

  29. Financial Results • Internal Rate of Return – 39%

  30. Sensitivity Analysis • Conducted for quantity purchased, selling and purchasing price • Most sensitive variable • Quantity of beef purchased • Selling prices of all pork cuts • Purchase price of beef

  31. Best/Worst Case Analysis

  32. Conclusions • Feasibility will depend on consumer support • Could be a viable enterprise in larger centers with a higher number of organic consumers

  33. Questions and Comments?

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