Noriko Kawaguchi, Jason Shultz, Tyler Whale

1. Noriko Kawaguchi, Jason Shultz, Tyler Whale

2. Agenda • Industry Overview • General Information on Orchard • Products and Services • Marketing • Marketing Strategy • Pricing Strategy • Promotion • Marketing budget • Financial • Risk Analysis • Recommendations • Summary

3. Orchard • Founder: • Established: • Place: • Type of Fruit: Apple and Cherry • Type of Business: U-pick and Apple cider

4. Industry Overview Apple Production World • Main Producer in the World---China, US, Turkey • Increasing Production Canada • Canada produces about 500 mt 2002 • 130 mt is imported in 2005 • Decreasing production for past several years • Main producers in Ontario and BC • Small amount of production in Saskatchewan • Average farm-3.3 acres • 0.5% of Canada’s fruit growing land

5. Industry Overview Apple Consumption World • Stagnant or declining Canada • Apple consumption consists 20% of fruit consumption • Increase in consumption (fresh fruit/processed)

6. Industry Overview Saskatchewan’s Apple Market • 130 mt imported into Canada • 500 million kg produced in Canada(2002) • Saskatchewan’s demand: 17.6 million kg/yr • Petrofka Bridge Orchard’s projected yields 0.6% 0.05%

7. Products and Services Mission of Orchard • Provide customers with high quality, organically and locally grown fresh apples and apple cider • Provide opportunity to pick apples and enjoy the overall experience • Educate customers about apples

8. Products and Services 1. Fresh apples • U-pick • Pre-picked 2.Apple cider • 2-liter jug • 4 liter jug 3. Other products

9. Target Market Target Market • U-pick---residents in Saskatoon and surrounding area, tourists • Apple/Apple cider---Inside Saskatchewan Target niche • Mid- to high income household • Health conscious customer • Customer who supports locally grown product

10. Market Analysis Competitors 1.U-pick • Apple orchard (1) • Berry/Fruit/vegetable farm(9) • The Berry Barn • Moonlake Saskatoon Berry Farm • Open market for apple orchard 2. Fresh apple Many international and national competitors

11. Market Analysis 3.Apple cider • Santa Cruz: Organic, $2.7-3.2/l • Growers: $4.2/l • President’s Choice: $2.0/l • S Select: sparkling cider, $5.4/l • Homestyle beverage: hot cider (concentrated), $1.3/l • Small variety • Relatively low competition • Each product targets specific niche

12. Distribution Channel • Farm gate • Farmer’s market • Local store (Bulk Cheese Warehouse) • Health shop (Steep Hill Foods) • Local restaurant Product sold directly

13. Pricing strategy • Could charge premium for high quality organically and locally grown product • depending on product • Different price for different distribution channels • Penetration strategy for early stages

14. Pricing Strategy

15. Promotion Advertising method • Billboard----road side, within Saskatoon • Brochure---Independent, SFGA, Tourism Saskatchewan • TV/Newspaper--- special interest stories, free paper • Community newsletter ads • Website • Farmers market

16. Marketing Budget Promotion cost

17. Financial Assumptions

18. Financial Expected sales

19. Financial Expected revenue

20. Risk Analysis Factors affecting the business • Price of fresh apples & cider • Quantity of fresh apples & cider • Quantity of sales • Wage • Inflation rate Price and Quantity has the largest effect !!

21. Risk Analysis

22. Risk Analysis Net Present Value and IRR

23. Risk Analysis Breakeven Analysis for 100% Fresh Apple Sales $/kg

24. Risk Analysis Breakeven Analysis for 100% Apple Cider Sales $/2 liter jug

25. Financial Overview

26. Recommendation & Implementation • Focus on marketing • Stress Organically and Locally grown • Maximize fresh apple sales • Expand orchard at 500 trees/year • Be conscious about consumer needs • Maintain quality and positive experience…AND…

27. MAKE SURE YOU HAVE FUN !! Thank you! Any questions?