Joe’s Original Seasoned Vinegar MARZ Foods, LLC Executive Summary MARZ Foods, LLC is a manufacturer of 100% all natural seasoned vinegar that is healthy and delicious. The first product we will launch is Joe’s Seasoned Vinegar. The recipe was handed down in the owner’s family for at least four generations, and we are ready to share it with the world. This is the first condiment of its kind and currently it has no competitors. Joe’s has several marketing points. For one, there’s no other product like it. Through the use of a food broker and taste sampling, we are confident our product will be a huge success.
Second, the target market is huge. Nearly every person of grocery-purchasing age will have a reason to try Joe’s Seasoned Vinegar. Whether it is a young person that is interested in great tasting zero calorie foods, a parent that would try anything to get their children to eat vegetables, or an elderly person that needs no-salt condiments, Joe’s Seasoned Vinegar is the product of choice! This yields a local target market of over 75,000 and over 110 million nation wide. It is possible that our seasoned vinegar is really good for you!
Studies show that apple cider vinegar and garlic, two of Joe’s Seasoned Vinegar’s ingredients, help lower high blood pressure, lower cholesterol, prevent blood clots, prevent cancer, and protect against bacterial and fungal infections. Lastly, the product has an incredible lab-tested shelf life of 24 months. This means there is minimal risk for both the retailer or for MARZ Foods, LLC. The owners/operators of MARZ Foods, LLC are Nicole Martin and Barry Muslow. Barry is in the process of being trained by Johnson & Wales as a chef and has owned and operated several successful entrepreneurial ventures.
Nicole has over 8 years in project management experience. Nicole and Barry’s dedication and past experience will ensure sustainable growth for MARZ Foods, LLC’s product line. MARZ Foods, LLC believes we will reach profitability by the end of 2008 and forecasts nearly one million dollars in net profit in just two years. The financials within the plan further reinforce the exciting projected business. 1. Objectives MARZ Foods, LLC has several objectives that they will achieve within the first three years. The first is an increase in sales reaching over one million dollars by the end of 2009.
MARZ Foods, LLC will strive to get gross margins to be above 50%. MARZ Foods, LLC hopes to be selling mass quantities to grocery and wholesale stores through the use of a food broker by the third quarter of 2008. Sales should reach over one million dollars by the end of 2009. 2. Mission MARZ Foods, LLC’s mission is to provide delicious condiments that are 100% all natural, organic, healthy, and delicious. 3. Keys to Success • Delivering high quality 100% natural products at an affordable price. • Producing products with a long shelf life. Providing service, support, and a better than average margin to our retailers. • Increasing net cash flow to over ten million dollars by the end of 2010. 1. The Company MARZ Foods, LLC’s mission is to provide delicious condiments that are 100% all natural, organic, healthy, and delicious. The launch product is an old family recipe that tastes amazing and may have medicinal side effects such as being able to help lower high blood pressure (this claim has not been substantiated by any medical professional or group).
The immediate goals are to produce and sell our product in the local farmers’ markets and specialty stores, then to incorporate selling of the product at in-state festivals, and eventually expanding to grocery chains and wholesale clubs state and nation wide. MARZ Foods, LLC will continue R activities to experiment with new flavors to guarantee the long-term success of the company. 1. Company Ownership MARZ Foods, LLC is a privately held corporation owned in total by its co-founders, Nicole Martin and Barry Muslow. 2. Company History
MARZ Foods, LLC has been hindered only by the lack of working capital it had in its initial stages of setup and operation. Sales are growing steadily. In order to make significant headway in this area, additional capital is needed to pay for a food broker to market our product and the initial production run at the manufacturing plant. According to Net Industry, a food broker is a sales agent that negotiates sales for producers and manufacturers of food and food products. Producers and manufacturers often sell through food brokers rather than directly because it saves the cost of paying a sales staff to market their products.
Coincidentally, since food brokers represent a large number of producers, the wholesalers and retailers also save time and money by dealing with one broker rather than with many manufacturers’ representatives. By utilizing a food broker, demand for our products will dramatically increase and we will need to utilize a manufacturing plant to produce our product. The initial production run will be costly; however the cost will significantly decrease after the first run. 3. Past Performance Past Performance | | | | | |2006 |2007 |2008 | |Sales |$0 |$2,700 |$900 | |Gross Margin |$0 |$1,350 |$450 | |Gross Margin % |0. 00% |200. 00% |200. 0% | |Operating Expenses |$0 |$4,525 |$420 | |Inventory Turnover (per 50 |0 |3 |2 | |cases) | | | | | | | | | |Balance Sheet | | | | | |2006 |2007 |2008 | |Current Assets | | | | |Cash |$0 |$0 |$50 | |Accounts Receivable $0 |$0 |$0 | |Inventory |$0 |$0 |$1,725 | |Other Current Assets |$0 |$0 |$0 | |Total Current Assets |$0 |$0 |$1,775 | | | |Long-term Assets | | | | |Long-term Assets |$0 |$0 |$0 | |Accumulated Depreciation |$0 |$0 |$0 | |Total Long-term Assets |$0 |$0 |$0 | |Total Assets |$0 |$0 |$1,775 | | | |Current Liabilities | |Accounts Payable |$0 |$0 |$0 | |Current Borrowing |$0 |$0 |$0 | |Other Current Liabilities |$0 |$0 |$0 | |(interest free) | | | | |Total Current Liabilities |$0 |$0 |$0 | |Long-term Liabilities |$0 |$0 |$0 | |Total Liabilities |$0 |$0 |$0 | | | |Paid-in Capital |$0 |$0 |$5,000 | |Retained Earnings $0 |$0 |($3,145) | |Earnings |$0 |$0 |$0 | |Total Capital |$0 |$0 |$1,855 | | | |Total Capital and |$0 |$0 |$1,855 | |Liabilities | | | | | | |Other Inputs | | | | |Payment Days |0 |0 |0 | |Sales on Credit |$0 |$0 |$0 | |Receivables Turnover |0 |0 |0 | 4. Company Locations and Facilities Currently we have one location in Melbourne, FL. It includes the production area and warehouse area. We currently pay for only the space we need, and can expand to retain much more product. However, once the food broker has marketed our product in markets nation wide, the demand will increase. When we can get those orders in, we are prepared to subcontract a manufacturer who will produce our product for us at a minor increase of cost.
The subcontractor will require one week’s notice and in that time we will be able to provide the product’s supplies. Both our production practices and that of the subcontractor provide a high quality, healthy, delicious food product. 2. The Product For many years, the food industry was dominated by fast and easy food, regardless of how unhealthy those foods were. With obesity at an all time high, and heart disease being the number one killer of people in the United States (CDC 2008), people are now taking a closer look at the foods and condiments they intake. People are looking for heart-healthy, salt, and fat free condiments to season their food. 1. What is Joe’s Seasoned Vinegar
Joe’s Seasoned Vinegar is a simple blend of apple cider vinegar, garlic, and spices that produces a very complex and interesting flavor. The combination of garlic and spices transforms the taste of the apple cider vinegar in a truly unexplainable way. It’s an old family recipe that has been passed down for at least four generations, and is absolutely delicious. This is a perfect example of the whole product being more than just the sum of its parts. Joe’s Seasoned Vinegar contains no calories or traditional nutritional value. It can be used to marinate meat, fish, poultry, and vegetables. It can be used as a salt-free additive to vegetables, beans, meat, poultry, and fish.
Joe’s Seasoned Vinegar contains no oil, but still makes an excellent salad dressing. 2. Benefits of Joe’s Seasoned Vinegar Joe’s Seasoned Vinegar is a zero calorie food product. Users of Joe’s Seasoned Vinegar do not have to ration the amount of product they use since it contains no calories. There is some evidence to support the idea that Joe’s Seasoned Vinegar may have medicinal qualities. Apple cider vinegar may actually help to lower high blood pressure (hypertension), which is one of the leading causes of heart attacks in the US (CDC, 2008). Some medical studies have shown that garlic can lower cholesterol, prevent blood clots, reduce blood pressure, prevent cancer, and protect against bacterial and fungal infections.
In fact, Joe’s Seasoned Vinegar may be the perfect condiment. 3. Product Comparison Based on extensive market analysis, there are currently no domestic US direct competitors for Joe’s Seasoned Vinegar. There are a few international brands of seasoned vinegar however the products do not have the raw seasonings in the bottle. Instead the international seasoned vinegar products seem to be vinegar that has been infused with herb extracts. This gives MARZ Foods, LLC a huge advantage over future competitors as we will be the first to market. 4. Future Products MARZ Foods, LLC is currently researching the addition of several different flavors of seasoned vinegar.
We are also writing a recipe book with all the different ways to utilize the seasoned vinegar. One of the owners is in the process of being trained by Johnson & Wales and the formal chef training is an incredible asset to finding new recipes and flavors of seasoned vinegar. 3. Marketing Plan MARZ Foods, LLC has been successfully selling Joe’s Seasoned Vinegar to specialty stores, restaurants, and festivals around the Central Florida area at an approximate rate of $450/month. Through the employment of a food broker, we expect our product to be introduced into grocery chains and wholesale markets around the country yielding sales of approximately $25,000 to $50,000 per month very quickly.
The following trends indicate that MARZ Foods, LLC’s Joe’s Seasoned Vinegar is being launched at a very opportune time. 1. Social Trends • Increasing interest in 100% all natural healthy food products; • Increasing perception of physical or health risk in high calorie diets; • Increasing interest in health and the use of homeopathic dietary aides; and • Increasing value of salt free, fat free, cholesterol free, zero calorie delicious food products. 2. Economic Trends • Due to the faltering economy, there is increasing cost consciousness among consumers; and • Increasing trend towards 100% all natural, healthy, green, and organic foods, which are usually much more expensive than their not-as-healthy competitors.
Joe’s Seasoned Vinegar will be able to be sold for a very low price to grocers making it affordable to most consumers. 3. Political, Legal, and Regulatory • Increasing awareness of health and the environment; and • Increasing restrictions by regulatory authorities on the manufacture of items that are wasteful of water and electricity. 4. Present Market Situation Inflation has taken a toll on the food industry as of late. Grocery prices continue to rise. All the while, there is a focus on environmentally friendly, health conscious, 100% natural, organic foods. Joe’s Seasoned Vinegar is all of the above, but is still affordable by most consumers.
Where many food product manufacturers capitalize on buzzwords such as “all natural” and “organic” to charge more for their product, we at MARZ Foods, LLC believe every consumer should have the benefit of low-cost healthy grocery items. 5. Market Overview The consumer markets being targeted towards while marketing Joe’s Seasoned Vinegar will be a grocery-purchasing consumer of any age. Parents will enjoy the benefits of Joe’s Seasoned Vinegar because survey shows that more children will eat vegetables with Joe’s Seasoned Vinegar than without (see survey in Appendix 1). Health-conscious consumers will enjoy Joe’s Seasoned Vinegar’s qualities such as zero-calorie, zero-salt, zero-fat. Consumers that prefer 100% natural and organic will purchase Joe’s Seasoned Vinegar. 6. Market Size
In 2006, the estimated number of households in Melbourne/Palm Bay was 75,000. The estimated number of households in the US in 2006 was 110 million. Assuming there is one grocery purchaser per households, the target market for the Melbourne/Palm Bay area is 75,000 and across the US is projected to be over 110 million. 7. Competiton There are currently no major or minor seasoned vinegar manufacturers in the North American Market. There are some products that claim to be seasoned vinegar in the European market. However, instead of having raw seasonings in the bottle, the European seasoned vinegar is infused with herbal extracts. Joe’s Seasoned Vinegar will be the first of its kind.
Competitor retaliation is expected due to the simple nature of the seasoned vinegar product and its expected success. However, being the first name to market, Joe’s Seasoned Vinegar will remain in consumers’ minds as other brands introduce their own versions of seasoned vinegar. Meanwhile, MARZ Foods, LLC will be introducing their own new flavors of seasoned vinegar and eventually a cook book of recipes that use Joe’s Seasoned Vinegar. MARZ Foods, LLC will always be one step ahead of the competition. 4. Strategy 1. Marketing Strategy Joe’s Seasoned Vinegar is a delicious, healthy, and incredibly versatile food product. MARZ Foods, LLC is focusing on the consumer through grocery stores and include taste-tests whenever possible.
We are also impacting consumers through exposure at restaurants. Festivals are a great way to market our product as well. Consumers trying and tasting Joe’s Seasoned Vinegar is the key to the product’s success. 1. Pricing Strategy We are able to price our seasoned vinegar competitively and economically. Even though we are subject to some impulse buying, we can provide a product to be resold at a generous mark-up for our dealers, while still providing a satisfactory experience for the consumer. At a retail range of $2. 79 to $3. 05 per jar of salsa, we cover the mid-to-upper price range of the salsa market, while providing a 33% margin for the dealers. [pic] 2. Promotion and Distribution Strategy
MARZ Foods, LLC plans to hire a food broker to market, promote, and sell Joe’s Seasoned Vinegar to grocery stores, wholesale markets, specialty stores, and restaurants. This will allow our product to spread throughout the eastern US, and eventually nation wide. We have a registered UPC code and a legal nutritional value label. We are also are in the process of having our label redesigned by a graphic artist, as attractive packaging is essential to product movement. 3. Competition Strategy Joe’s Seasoned Vinegar will be the first product of its kind in the market place. It will enter the market with no competitors. This is the most significant sustainable competitive advantage. Secondly, the base product line is scalable into many different products.
MARZ Foods, LLC is already researching and developing several additional flavors of seasoned vinegar as well as a book of recipes that use with Joe’s Seasoned Vinegar. Lastly, there is nothing in Joe’s Seasoned Vinegar that will make the product spoil or expire. The lab certified shelf life of the product at this time is 24 months. This is a huge advantage because it protects the short-term cash flow of the business. The manufacturer must credit the cost of all product that expires on a store’s shelf back to the store. Stores assume no risk for a product’s expiration because their profit margin is so small. With a product that will not expire, MARZ Foods, LLC is not assuming any risk by distributing a large amount of product to market. 4. Exit Strategy
MARZ Foods, LLC plans to subcontract the manufacturing of their products once product demand reaches a level beyond their ability. MARZ Foods, LLC does not plan to purchase capital equipment or any real estate. Therefore, there are three different product exit strategies. The first strategy is our most profitable, which is to license the production of our product to another food production company. The second is to sell our trade secrets to another food production company. Lastly, should MARZ Foods, LLC decide to end production, we could sell any left over product at any price necessary to remove it from our subcontractor’s warehouse. 5. Organizational Structure 1. Management Summary
MARZ Foods, LLC was founded by Nicole Martin and Barry Muslow and has always operated without the burden of payroll or salary expenses. Barry Muslow, President Barry assists with preparation and production of the seasoned vinegar, maintains inventory of the finished product, is responsible for packing and shipping and/or delivery, and assists with record keeping. Barry is responsible for marketing and promoting Joe’s Seasoned Vinegar locally. Nicole Martin, Vice President Nicole is currently responsible for preparation of the seasoned vinegar including preparing, bottling, labeling the product. She also maintains inventory of and purchases all supplies. Nicole maintains company and financial records. To date, neither owner has collected a paycheck from the company.
However, as orders are processed and goals are met, plans are to subcontract the production to a manufacturer to take production out of our hands. Once sales reach a specific point, we plan to pay each owner as full time employees. We are forecasting this to transpire in the second quarter of 2009. 2. Organizational Structure MARZ Foods, LLC’s planned organization calls for product development, finance, and administration, which will continue to be handled by the owners. Production will be subcontracted out to a manufacturer. A food broker will handle sales and marketing. 6. Financial Plan MARZ Foods, LLC is forecasting very rapid growth for Joe’s Seasoned Vinegar this year.
Although this may seem ambitious based on historic sales, this rate of growth is due to the employment of a food broker. The food broker we have selected has proven sales, references have been researched in full, in major food stores such as Kroger, Roche Brothers, Shaw’s, and B. J. ’s Wholesale Club. 1. Important Assumptions The financial plan depends on important assumptions, most of which are shown in the following table. The key underlying assumptions are: • We assume a slow-growth economy, without major recession. • We assume, of course, that there are no unforeseen changes in the consumer market to make products immediately obsolete or out of favor (or not increasing in popularity). We assume access to equity capital and financing sufficient to maintain our financial plan as shown in the tables, addendum, and additional documentation |General Assumptions | | |2008 |2009 |2010 | |Plan Month |1 |2 |3 | |Current Interest Rate |3. 00% |3. 00% |3. 00% | |Long-term Interest Rate |0. 00% |0. 00% |0. 00% | |Tax Rate |0. 00% |0. 00% |0. 00% | 2. Key Financial Indicators The most important financial factor for MARZ Foods, LLC’s Joe’s Seasoned Vinegar product is the ability to procure financing that will allow us to progress to the next level.
As demand for our product increases, our production cost will decrease due to purchasing supplies at increased volumes. This will lower our product cost and will enable us to pass our savings on to our customers and through to the consumers. 3. Break Even Analysis The break-even analysis shows that MARZ Foods, LLC has a good balance of fixed costs and sufficient sales to remain successful. Purchasing supplies in larger volumes will allow us to further reduce our break-even point and add to our goal of increasing the margin on our product. [pic] 4. Projected Profit and Loss We expect to close out this year with over $160,000 in sales, and to increase our sales to more than $14 Million per year by 2010, with comfortable net profit. Pro Forma Profit and Loss | | |2008 |2009 |2010 | |Sales |$162,000 |$1,671,769 |$14,905,659 | |Direct Costs of Goods |$70,000 |$557,256 |$4,258,759 | |Other |$0 |$0 |$0 | | |———— |———— |———— | |Cost of Goods Sold |$70,000 |$557,256 |$4,258,759 | | | | | | |Gross Margin |$92,000 |$1,114,513 |$10,646,900 | |Gross Margin % |76. 09% |50. 00% |40. 00% | |Expenses | |Payroll $9,600 |$43,500 |$72,800 | |Sales and Marketing and |$6,480 |$50,153 |$298,113 | |Other Expenses | | | | |Utilities |$4,000 |$5,000 |$6,000 | |Insurance |$2,000 |$2,200 |$2,400 | |Rent |$7,680 |$30,720 |$30,720 | |Other |$1,000 |$1,200 |$1,400 | | |———— |———— |———— | |Total Operating Expenses |$30,760 |$132,773 |$411,433 | | | | | | |Profit Before Interest and |$61,240 |$981,740 |$10,235,467 | |Taxes | | | | |EBITDA |$61,240 |$981,740 |$10,235,467 | | | | | | |Net Profit |$61,240 |$981,740 |$10,235,467 | |Net Profit/Sales |37. 0% |58. 72% |68. 67% | 5. Projected Cash Flow We expect to manage cash flow over the next three years with the assistance of a Small Business Administration supported loan of $100,000. This financial assistance is required to provide the working capital to meet the current needs while providing a solid foundation to build the growth of the company and its products. This will allow the company to meet and exceed sales projections, gross margin, and return on investment. As shown by the cash flow in the table, we expect a healthy growth in net worth through the end of the plan period. |Pro Forma Cash Flow | |2008 |2009 |2010 | |Cash Received | | | | |Cash from Operations | | | | |Cash Sales |$162,000 |$1,671,769 |$14,905,659 | |Subtotal Cash from Operations|$162,000 |$1,671,769 |$14,905,659 | |Additional Cash Received | | | | |Sales Tax, VAT, HST/GST |$0 |$0 |$0 | |Received | | | | |New Long-term Liabilities |$100,000 |$0 |$0 | |Sales of Other Current Assets|$0 |$0 |$0 | |New Investment Received |$0 |$0 |$0 | |Subtotal Cash Received |$262,000 |$1,671,769 |$14,905,659 | | | | | | |Expenditures |2008 |2009 |2010 | | | | | | |Expenditures from Operations | | | | |Total Operating Expenses; |$70,000 |$557,256 |$4,258,759 | |Cash Spending and Bill | | | | |Payments | | | | |Subtotal Spent on Operations |$70,000 |$557,256 |$4,258,759 | | | | | | |Additional Cash Spent | | | |Sales Tax, VAT, HST/GST Paid |$0 |$0 |$0 | |Out | | | | |Principal Repayment of |$3,650 |$5,680 |$6,350 | |Current Borrowing | | | | |Other Liabilities Principal |$0 |$0 |$0 | |Repayment | | | | |Long-term Liabilities |$6,500 |$15,850 |$15,850 | |Principal Repayment | | | | |Purchase Other Current Assets|$0 |$0 |$0 | |Purchase Long-term Assets |$0 |$0 |$0 | |Dividends |$0 |$0 |$0 | |Subtotal Cash Spent |$80,150 |$578,786 |$4,280,959 | | | | | | |Net Cash Flow |$181,850 |$1,092,983 |$10,624,700 | |Cash Balance |$181,850 |$1,274,833 |$11,899,533 | Works Cited Thaller, M. (2007) Cool cosmos. Retrieved August 27, 2007, from http://coolcosmos. ipac. caltech. edu/ Barton, Joe (2008) Natural Ways to Lower High Blood Pressure – 5 Secrets to Naturally Cure Hypertension. Retrieved March 15, 2008, from http://ezinearticles. com/? Natural-Ways-to-Lower-High-Blood-Pressure—5-Secrets-to-Naturally-Cure-Hypertension&id=1021462 Census Bureau (1996) Current Population Reports. Retrieved March 15, 2008, from http://www. census. gov/prod/1/pop/p25-1129. pdf Center for Disease Control and Prevention (2008) Heart Disease is The Number One Cause of Death. Retrieved
