Miami University, Entrepreneurship 201 Pitch Competition (3rd Place)
Semester: Fall 2017
Contributors: Chase Bettner (Marketing) & Kelsey Haus (Entrepreneurship)
"18% of children in the United States are not getting the nutrients they need to flourish, and 50% of produce on farms is being thrown away"
Half of the produce on farms is being wasted, while schools have a lack of nutritious meals for their students. This issue is a worth solving because it benefits the development in the future of America. This problem affects four different key players: Farmers, Schools, Students, and Society.
Aiming to start mending our broken food system, we decided to create Helpfull- a nonprofit food preservation intermediary (or middleman). We will approach local farmers and ask if they would be willing to donate their “ugly” (produce that doesn't make it to market because it has a bruise, looks misshapen, etc.) food to us. We will take this “less desirable” food and transform it non-perishable/sustainable food items. Our facility will repackage these foods which will then be distributed to schools.
We validated this idea by speaking to farmers, schools, and by learning and talking to companies already doing similar things.
Our target customer is schools in need, specifically in areas that have a shortage of nutritious food. Since the Oxford, Ohio area is considered a food desert, we are beginning there with sights of moving to areas like Cincinnati that are struggling as well.
TARGET MARKET SIZE:
When it comes to target market size, we are looking at single school which is around 500 students. Our goal is to obtain at least 3 schools. Which means we would be reaching 1,500 students.
We believe that a strong personal relationship between our customer and our company is what will make us stand out compared to corporate food suppliers. We are initially planning to send an email to our targeted schools to get our foot in the door. Next, to personally follow up, a brand representative will meet with the cafeteria manager, to ensure a trusting relationship between Helpfull and schools in the community.
Our Revenue streams are coming directly from the sales we make. It costs Helpfull $3.49 to produce one 112 ounce container of our applesauce at the operating level. As a result we are getting a return of 51.42% for every container that we sell (for every $ we sell we get 51 cents in return).
COGS $0.3275 = $0.33
Packaging $1.98/10 = .198
Labeling $12.95/100 = .1295
Apples, initially $0, by donation only.
Labor, initially $0, we are planning on working just the three of us/volunteer base.
PROFITABILITY AND BREAKEVEN POINT:
In order for us to be operating in the green (be profitable) we need to sell at least 2,715 units/container of applesauce. Which based upon our calculations, will take approx 2.5 years for us to accomplish. We are assuming that our supply of apples and volunteers will be steady and constant because of the number of orchards in our targeted area and the need for volunteer hours among HS and college students.
CUSTOMER ACQUISITION AND VALUE:
It costs roughly $40 to "acquire" 1 student, and with one 1 school having approx 500 students, we project it will cost us $6,500 to obtain that customer.
With our lifetime value of a customer being around $28,000 over a 3 year time span.
(1 school= 1 customer)
$19,542.20 / 500 kids = $39.08
$19,542.20 / 3 schools = $6,514.07
COMPETITION VS. COLLABORATION:
Our competition is two-sided. On one hand our direct competitors are corporate school lunch companies, such as AraMark, Compass Group, and Sodexo (these are contract food suppliers - top three in the world).
On the other end, any businesses that are trying to solve the food waste epidemic or provide nutritional food at a lower cost as we are, we see as potential future collaborators. Companies like Imperfect that deliver “ugly” produce directly to people, or La Soupe a company here in Cinci that provides meals for families in need from over ordered or again,“ugly” food.
UNIQUE VALUE PROPOSITION:
We believe that there are four pillars to our UVP. The first being that we are able to take unwanted and wasted produce off the hands of farmers at no extra cost to them. The second is that we are offering schools the chance to purchase a healthier lunch option at an economically reasonable price that beats out any corporate food suppliers to date. Thirdly, we are providing students with healthier lunch options so that they have the mental and physical stamina to succeed/flourish. Lastly, we are helping society as a whole by addressing and solving two huge factors in our broken food system.
Down the road, our company would like to branch out from just apples. We would like to obtain other types of “ugly” produce so that we can continue to use methods like canning, drying, freezing, and pickling to bring healthy meals to our schools. Depending on Helpfull’s growth, we would also like to work towards selling not just to schools, but also to establishments like nursing homes and prisons, where the food may be lacking nutritionally.
Helpfull effectively satisfies each component of the triple bottom line- we are socially, environmentally and financially responsible.
"Helpfull" the Food Preservation Intermediary
Above are the product stickers created for the initial flavors Helpfull would be producing, "Original" and "Cinnamon"