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 8 th Street

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

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

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

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 Type of MeatTotal # of organic animals consumed per week % of market share the Market hopes to capture # of organic animals ordered per week # of organic animals ordered per year Beef6.5830%2104 Pork25.8415%4208 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 Saskatchewan Organic Meat Market Direct Competitors BusinessStrengthsWeaknesses Steep Hill Co-op 730 Broadway Ave.  Existing clientele base  Location  high income consumer base as well as some student consumers  Very little organic meat selection  Co-op structure difficult to understand,  staff consists of members which may lack in knowledge of organic products Boryski’s Butcher Block 2210 Miller Ave. & Broadway Ave.  Specialized meat production  knowledgeable experienced staff  good location  small variety of organic products  Natural meat – grass fed beef coming from 4 different farmer which may alter consistency

27. Indirect Competition Saskatchewan Organic Meat Market Indirect Competition BusinessStrengthsWeaknesses Prairie Meats 2326 Miller Ave. & 8 th St  Specialized in meat production  Higher prices for a traditional product M&M Meat Shops 3322 8 th St E & Lawson Heights Mall  Diversified products  prepared products  variety of location  Don’t do their own processing Costco 115 Marquis Dr.  High quality meats  large quantities for cheaper  No personal service IGA, Safeway, etc. Located throughout Saskatoon  Convenience - everyone has to go to the grocery store  Limited traceability of the products

28. Marketing Budget Promotional Activity:Estimated Expense: Paper & Printing$1000 Publications & Magazines$2000 Website$1500 Trade Show  Trade Show Booth  Trade Show Supplies & Expenses $500 $3000 Radio Spots$1500 Taste Tests & Demos$500 Total Marketing Expenses$10000

29. Financial Results 20042006200820102012 Total Revenue $ 475,863 $ 514,533 $ 556,576 $ 602,296 $ 652,024 Cost of Goods Sold $ 367,382 $ 487,293 $ 502,129 $ 521,151 $ 543,155 Gross Margin $ 108,481 $ 27,241 $ 54,447 $ 81,144 $ 108,870 Total Expenses $ 15,952 $ 15,978 $ 15,945 $ 15,839 $ 15,646 Income Before Taxes $ 92,529 $ 11,262 $ 38,502 $ 65,305 $ 93,223 Income Taxes $ 3,655 $ - Net Income (Loss) $ 85,941 $ 10,962 $ 35,761 $ 60,655 $ 86,586 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 WorstBaseBest Average Revenue 75%100%150% Average Materials Purchase Price 120%100%75% Average Revenue $ 428,647$ 571,530$ 857,295 Average Materials Purchase Price $ 384,248$320,207$240,155

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?