1. Organic Produce: Valley Growers Julie Clark Chris Doersen Julie Engle Josh Huston Kristin Stahl

2. Agenda Industry analysis Valley Growers overview Primary research results SWOT Goals and Objectives Implementation

3. Industry Analysis Organic  Government classifications No pesticides  Minimal use of off-farm inputs  Methods are used to minimize pollution from air, soil and water. Hydroponic Produce  Grown in controlled environment  No soil  less space required  1/10 the water and less fertilizer  Products Tomatoes, lettuce, cucumbers, herbs

4. Organic Fun Facts Reasons to Go Organic!  Organic products meet stringent standards  Organic production reduces health risks  Organic producers are leaders in innovative research  Organic food tastes great!

5. Company Overview Valley Growers  Located near Dayton, OH  Current production: Lettuce Tomatoes Herbs  “Soil-less, Controlled, Environment” Agriculture

6. Primary Research Groceries  Revenue: $3,200 per month  Volume: 180 cases per month  Generalizations Market-Specific Stores  e.g. – Trader Joe’s and Wild Oats  Promote quality  lower price sensitivity  Larger organic sections High volume stores  e.g. – Kroger  High sales = large account

7. Primary Research Restaurants  Revenue: $600 per month  Volume: 24 cases per month  Generalizations Localized stores  e.g. – Aladdin’s Eatery and Dragonfly Restaurant  Majority use Grade A product  Logistics concerns

8. Primary Research - Implications Groceries present greater opportunity  Require less resources  Greater gains from a single contract  Recognize ‘organic’ and ‘local’ Restaurants  Not concerned with ‘local’  Should not be discounted entirely!  Potential for growth in quality organic products  especially upscale establishments

9. SWOT – Valley Growers Strengths  Local  Consistent food year-round  Minimal waste and minimal prep-time Weaknesses  Lack of experience  No brand recognition  Restricted Logistics

10. SWOT – Valley Growers Opportunities  Demand for organic foods is growing Health trends  Increase brand awareness by joining co-ops and/or organizations Great Lakes Hydroponics Threats  Possibility of market saturation by larger competitors Retailers may choose larger experienced growers  Trend and demand may diminish in the future

11. Goals Determine pricing Develop Networks  Determine high opportunity clientele  Specialty organizations and coops Establish marketing plan

12. Implementation Contacting grocery stores  Focus on market-specific stores Higher-margin sales Easier to maintain longer relationships Promote quality! Provide samples Offer better price to penetrate market if necessary

13. Implementation Do not ignore the restaurants!  Great long-term potential despite: Requires more resources to create a relationship Lower usage volumes Many locations  added logistics capability

14. Objectives Create new relationships:  Groceries: 1 every 3-4 months Approximately $800 per week in revenue $40,000-$50,000 annual revenue per store  Restaurants: 1 every 2 months after first year Approximately $600 per month revenue $4,800 annual revenue per restaurant

15. Objectives Additional positive cash flows:

16. Other Considerations  High-volume stores Large accounts More price pressure Approach carefully and establish credibility  Show present accounts  Provide samples  Be flexible  Be prepared to meet delivery and other logistics demands  Monitor industry trends! Health and competitor trends

17. Questions or comments?