2. 2
Introduction
Awareness by American consumers of the importance of “going green” has become a conscious
way of life, presenting a unique opportunity to create a model of natural food convenience
stores to provide earth-friendly edible food and other goods. Today’s busy lifestyle in which
there is not enough time in the day means that convenience truly matters, leading to the
unique concept of an all-natural convenience store.
The organic and natural food industry is a large and popular one that continues to grow with
every passing day. In the organic industry, the range of competitors includes chain and
independent supermarkets; mass merchandisers and super centers; wholesale clubs;
restaurants and fast food chains; natural food stores; local farmers’ markets, and internet
grocers. Global growth of organic agriculture has gained much popularity, which continues to
accumulate attention. The reason for that is simple: this industry can be a profitable,
sustainable business for those producers interested in going through the certification process
necessary to enter this market. Organics have grown at a rate of nearly 20 percent per year for
the last seven years, and industry experts are forecasting continued growth. One study,
undertaken by the Organic Trade Association, surveyed industry leaders about the trends in
organics and where they saw the next 20 years taking them. They forecasted that the everyday
use of organic products of all kinds will be both accepted and routine by the year 2025. (1)
Market growth is expected to continue to be strong; currently in the U.S. it is a $32 billion
industry subset of the $450 billion conventional food industry. Without question, the organic
food industry is experiencing hasty consolidation but it still faces immense competition in these
upcoming years from supermarkets that are falling into the organic trend.
(2)
Lenard Kritchman, the founder of Kanpassion Corporation, has the knowledge and experience
in marketing and product selection within the natural foods industry, finding and developing
the right locations and generating profits.
Lenard owned and operated a natural food store and café in Hawaii from 1998 to 2008,
increasing revenues from $600,000 to $6 million. He built from the ground up a second store
and café, reaching annual sales of $3 million by 2005. The two stores in Kapa’a and Hanalei,
Kauai’, Hawaii are indications of the potential of Quick n’ Green a Natural Convenience Store.
See (http://papayasnaturalfoods.com/.)
Over many years in the industry, Lenny has seen a dramatic increase in sales of the many and
varied product lines that make up the natural products industry and thus the change in the
product offerings in traditional grocery stores. He has also seen the grocery and natural food
store conglomerates, through mergers and acquisitions, move from being local to being global.
3. 3
With the intention to “shrink” a natural foods supermarket to 2000 square feet or less and only
offer the top selling items by department (grocery, refrigerated, frozen, organic wine and beer,
non-foods, snack foods, prepared foods, health and beauty aids), while educating the consumer
about the “green” lifestyle and its benefits to the overall well-being of the individual, across
the country Quick n’ Green will become the neighborhood/community convenience store with
a conscience.
Lenard lives the natural life and deeply cares about our world and its people. As the business
grows, a percentage of net profits shall be invested in each store’s community.
Executive Summary
Kanpassion Corporation is developing Quick n’ Green convenience stores to be the 7-11’ of
natural foods. Quick n’ Green stores will create and fill the niche for highly convenient
in-and-out natural food stores. Quick n’ Green will carry only the top selling items in grocery,
refrigerated, frozen, organic wine and beer, non-foods, snack foods, prepared foods, and HABA
(health and beauty aids) chosen as to specific area demographics. No highly perishable items, a
minimum of employees. Stores will be kept to 2000 square feet or less. Not to mention Lotto,
News Papers and anything else you would expect to find in a convenience store.
What will make the Quick n’ Green shopping experience so gratifying will be the convenience of
the location, paired with the ability of the consumer to purchase natural or organic core items
such as bread, milk, butter and eggs. In today’s world, convenience truly matters.
The natural food industry has enjoyed explosive growth for over a decade. Whole Foods and
Wild Oats, the giants in the industry, merged in August 2007 to become what some have called
a monopoly. Many medium-sized independent natural food stores have been unable to
compete and have closed. What has not happened is the emergence of smaller, more
convenient stores. This is the natural progression of the industry and Quick n’ Green
convenience stores will be the first, the leader of this new movement. People do not want the
stress and frustration associated with the superstore. An alternative to this is a more
personalized and condensed shopping experience. Quick n’ Green can offer this.
With the popularity of organic food rising, it is only a matter of time before neighborhood
markets and other food retailers start stocking up on organic products. However it will still be
awhile before supermarkets start fully to engage in stocking entire sections of organic food.
Currently most supermarket has at most an aisle or two of organic and natural foods. The
selection in supermarkets is very limited providing fully organic retailer’s advantage in this area.
As private label and/or intense price competition arrive in the natural food industry market
place, costs will decrease-a positive for Quick n’ Green, as more and more people accept and
embrace the natural lifestyle-another positive for Quick n’ Green, however, the desire for
convenience will continue unabated. Competition is good for Quick n’ Green, a simple but
very unique concept. Quick n’ Green is not trying to beat all of its competitors on price but
4. 4
when it comes to convenience they will be unstoppable. In a world where there is not enough
time in the day, convenience matters!
Quick n’ Green will be the convenience store with a conscience. This specialized industry
requires a strong commitment to a “green” lifestyle that incorporates a desire to educate the
consumer about the personal benefits realized through a green consciousness. Once educated,
consumers understand that they can truly make a difference in their lives by what they eat and
they can positively affect the environment by the products they use.
Quick n’ Green will start in Manhattan, New York on a city block that has a very large amount of
foot traffic. Quick n’ Green will be small, clean, friendly and efficient. Through promotional
events in the local community including live music, giving samples of our products away and
educational booths by our natural/organic vendors; personal, educated assistance will be a
hallmark of Quick n’ Green. Every segment of the population is a targeted customer; green
consciousness does not differentiate according to age, race, or religion.
No doubt the Quick n’ Green customer will have to go to the supermarket for its large shopping
requirements but for the other numerous times a month that just the basic core items are
needed Quick n’ Green will have everything at hand.
A directive from the White House is making funds available to small businesses that provide
healthy alternatives to consumers. On Tuesday, October 26, 2010, President Obama announced
an initiative to spur growth, bolster hiring and free up credit for small businesses: a new $30
billion “small business lending fund” created from bank bailout money. The far-reaching
nationwide campaign titled “Let’s Move” calls for a myriad of initiatives that target what the
First Lady calls the four pillars: Getting parents more informed about nutrition and exercise,
improving the quality of food in schools, making healthy foods more affordable and accessible
for families, and focusing more on physical education.
InvestmentCapital
Quick n’ Green is seeking to raise a minimum of $500,000.00. These funds will be used to
establish 2 Quick n’ Green locations within one year’s time. There are multiple ways to enter
the natural convenience store marketplace and these are the top three strategies used for rapid
growth. The first is to purchase a business that is up and running. The benefit to this approach
is that we are producing a profit from the get-go and because of this; it will be used for our
initial entrance point. The second way is to rent a closed down convenient/grocery store
location, and the third way is to rent a vacant location. Although there are three different and
5. 5
unique paths for Quick n’ Green’s rapid growth, location, location, location will be the deciding
factor. Proceeds from the Quick n’ Green stores will be used to find more locations to expand.
Strategies and Objectives
Quick n’ Green’s main objective is to establish a reputation of convenience. We will always
provide the most popular, natural and healthy core items. These high quality items such as milk,
eggs, cheese, coffee and toilet paper, as well as fresh breakfast, lunch and dinner meals to go
will be available at all times. We will promote a healthy, “green” lifestyle. We will use
e-commerce as well as traditional marketing tools to attract the local community. Quick n’
Green’s core management team consists of three individuals whose experience and past
successes in the natural food industry and retail business can establish trusted relationships
with top-notch quality vendors to provide these core items. Their ability to get a business up
and running quickly, and educate and fulfill customer’s needs, will lead to a strong, trusted and
continuing relationship within the community. Quick n’ Green’s plans for products like quality
organic bulk and fresh brewed coffee will help us stand out. Our plans for signature, top quality
and tasty tofu hot dogs, veggie burgers and tempeh sausages will be found at no other stores in
the business. Management’s anticipation of trends and creative marketing ideas coupled with
their ideas for Quick n’ Green signature products will help lead to quick potential growth and
market recognition.
Quick n’ Green will create, update and maintain employee training manuals ensuring the
people we hire will be trained properly so they can provide, fast, friendly and a consistently
educated shopping experience to our customers. They will be able to provide information,
when necessary, on the benefits of living a “green” lifestyle.
In a nutshell, the “green” lifestyle is one that is educated about eating healthy, organic foods
and is active in caring for the environment and community at large. Quick n’ Green will be the
convenience store with a heart and will eventually be more active in the local communities we
do business in by giving back through fun promotional events, young entrepreneur mentoring
programs at Quick n’ Green stores as well as our support and involvement in local youth sport
and exercise activities.
Through successful growth and growing market share Quick n’ Green plans to continue to open
new stores in appropriate locations in each community on city blocks, free standing buildings,
strip malls and eventually gas stations. Quick n’ Green’s efficient and fast start up ability will
make it ideal for numerous locations and opportunities.
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Plan of Operation
Quick n’ Green stores will be open 7 days a week from 6:00 am to 10:00pm.
Quick n’ Green will serve organic coffee and breakfast foods, lunch and dinner offerings with
snacks, all of our foods organic and/ or natural all the time.
For ease of operation there will be one main distributor – United Natural Foods, Inc. or “UNFI.”
UNFI’s story parallels the story of the natural and organic product industry in the United States.
It begins back in the 1970’s when consumer interest in natural foods began to blossom.
Across the United States, small regional distributors sprang up to meet the needs of the
growing market. These pioneers operated on a vision, entrepreneurial spirit and a shoestring
budget. Over the years these smaller distributors grew into larger distributors. Business
expanded as the need to meet demand for natural products increased. In 1996, two regional
distributors combined forces to form United Natural Foods, Inc. Mountain People’s Warehouse
based in Northern California and Cornucopia Natural Foods based in New England were the first
two members of the UNFI family.
Eventually, Quick n’ Green will have one centralized kitchen that will make all organic products
and prepared foods for its stores. The company will change the way people view fast food,
serving organic and natural breakfast, lunch and dinner foods. All prepared to go, saving the
customer time and providing convenience for their busy lifestyle.
Quick n’ Green will initially contract with a supplier of organic products and prepared foods. To
provide our daily fast and natural food selection we will use the services of The Whole Earth
Bakery and Kitchen located at 130 St. Marks Place in New York City, New York. We are in talks
with them regarding our signature products. (www.wholeearthbakery.com)
Food offerings shall include apricot fruit bars, berry blast bars (no gluten), poppy seed strudel,
sticky cinnamon raisin buns. Vegan soups, broccoli cashew cream, carrot coconut, corn
chowder, green split pea. More substantial entrees to include eggplant parmesan, seitan
stroganoff, lentil stew, vegetarian chili. Sandwiches (tofu, tempeh, avocado), fakin’ bacon
(vegetarian), lettuce and tomato, burritos made with beans, rice, tofu, tempeh and seitan.
There will also be organic brown rice and steamed vegetables as a staple, condiments
consisting of nutritional yeast, Braggs and Spike.
Twice a week there will be deliveries from the primary distributor and everyday deliveries from
the prepared foods supplier.
There shall be one cashier on duty at all times and one store manager.
7. 7
Quick n’ Green stores will have bulk coffee bins, gondola shelving for groceries, eight doors of
refrigerated and frozen merchandise and a peanut butter machine and an almond butter
machine. Each store will sell organic flowers when available.
Quick n’ Green stores will have all products at all times on the POS system enabling the tracking
of sales and inventory and to monitor theft. This systemwill generate many different reports
that yield statistics on every product from top selling items to products that need not be
ordered again.
Each store will also have Internet cameras with recorded twenty-four hour cycles and an alarm
system.
Each store shall have stained dirt colored concrete floors to exemplify the mother earth,
wooden gondola shelving, and a wooden checkout counter.
Quick n’ Green stores will open with a street fair of vendors giving free samples and educating
the consumer. These vendors shall include Imagine Foods, Newman’s Organics, Knudsen soda
and juices, White Wave tofu, Rainbow Light Vitamins, Toms of Maine, Food for Life and
Sunridge Farms. Quick n’ Green stores will always be educating and helping the community. A
community bulletin board will also help communicate the green consciousness by publicizing
“green” events happening within the community. Quick n’ Green will be the 7-11 of natural
foods with a heart.
Daily operations include one bank drop, accepting, stocking and rotating inventory, making
coffee, and setting out snack and prepared foods. Each store will have kiosk with a touch screen
computer screen connected through the Internet to a company named Aisle7
(www.2.aisle7.com) that will provide the most up to date health and lifestyle information.
The most important aspect of Quick n’ Green stores are the company core values and culture.
Our Customers:
Consumers are at the heart of the company’s business. The company is committed to listening
to them and acting responsibly in their interests. A Marketing Code of Practice shall ensure that
the company continues to meet its responsibilities to consumers through four guiding
principles:
1. Accurate and truthful
2. Attentive to local sensitivities
3. Supporting sensible consumption and a healthy, balanced lifestyle
8. 8
4. Protecting children
Our employees:
Each store shall employ one manager and 4 cashiers/stockers. Two cashiers will split Monday
through Friday and two will split the Saturday and Sunday shifts. Managers shall earn between
$60k to $80k per year and other employees an hourly rate of between $9.00-$12.00 depending
on skills and amount of time employed by Quick n’ Green. Revenues and Expenses are
detailed in the financial projections. Initially, all employees are to be trained by Mr. Kritchman.
He will create an employee handbook that outlines what is expected and also create an
operational manual for all jobs.
Competitive Edge
The convenience of being able to stop, pick up those natural food/non-food core items, get the
early edition of the newspaper, bet the lotto and be back in one’s car in five minutes is a very
strong selling point. Quick n’ Green will be saving valuable time for today’s busy consumer.
Quick n’ Green will be involved in the day-to-day happenings of the local community. The
company’s philosophy is to think and act locally, not globally. Every Quick n’ Green store will be
staffed by personnel educated on the benefits of a natural lifestyle.
Weekly inventory will consist of the most popular core items in each natural foods department,
Quick n’ Green will also provide the other reasons to stop at a convenience store like picking up
a newspaper, magazine, lottery ticket, coffee and/or prepared “to go” breakfast, lunch and
dinner foods and drink. Offerings will include organic wine and beer, toilet paper, diapers,
acidophilus, Echinacea, toothpaste and deodorant.
Mission Statement
The mission is to go where no Health Food Store/ Convenience Store/Coffee Roasting
Businesses have gone before. This Retail Hybrid breaches 3 separate industries, each generating
hundreds of billions of dollars. Quick N Green’s intention is to bring these 3 Industries into one
store. Quick N Green will carry “ONLY” the top-selling natural foods products coupled with our
own proprietary food and coffee. QnG also falls under The First Ladies Initiative “Let’s Move”
and with the government - “By transferring, through legislation, $30 billion to a new program
that would be distinct from TARP, the Administration’s proposal would encourage broader
participation by banks, as they would not face TARP restrictions.” Anyone who wants to own a
‘Green” Business will have the opportunity. {Franchise}
Management
9. 9
LenardKritchman
Lenard Kritchman, the company founder, will manage Quick n’ Green on a day-to-day basis. He
brings years of experience in the retail natural foods industry to this business venture.
The retail grocery industry is in Lenard’s blood. He grew up in the business working in his
father’s grocery locations in the Bronx, Harlem, Queens and Port Chester, New York. Lenard
worked with his father in these stores from the age of eight to 15 when the stores were sold.
Graduating from Rollins College with a major in psychology and a minor in business, Lenard
moved to Martha’s Vineyard and took a job as Social Recreation Director of The Martha’s
Vineyard Boys and Girls Club. A year into the job, Lenards’s wife Jessica got island fever and
the couple moved to Vermont.
It was in Vermont just north of Burlington that Lenard truly began living the natural lifestyle. He
rented a small organic farm that was off the grid and tried his hand at farming. The
vegetables were given away to local food banks. Just before their first child was born, the
Kritchmans moved back to the New York metropolitan area. Mr. Kritchman took a job
managing the largest salt and fresh water aquarium in White Plains, New York. He worked
there for three years until the company changed hands.
Lenard reentered the retail grocery industry as manager of Rosita’s Meat Market in Lake Park,
Florida in February 1994. He helped to turn this venture into a very busy and profitable
operation. Lenard worked there with his brother and father until he saved enough money to
again follow his heart. Being a vegetarian yearning for a more earth-friendly occupation, it
seemed the right progression to go into the natural food business.
Lenard moved to Kauai’, Hawaii and purchased Papaya's Natural Foods and Cafe in Kapa’a,
Hawai’i. The store was grossing $600,000 a year. After two years under leadership the store
was grossing over $6 million a year. This was achieved by changing the pricing structure,
advertising, creating departmental managers, implementing a POS system, writing an employee
handbook and operational manual and hiring the correct employees needed for rapid growth.
Lenard built and opened a second store in Hanalei, Hawai’i in June of 2003. After three years
this store was grossing over $3 million a year. The Kapa’a store is 6,700 square feet and has
over 50 employees. The Hanalei store is 3,400 square feet and has over 30 employees. Lenard
was the sole owner and operator of these two stores.
These impressive numbers resulted from focus and diligence, developing product mix and new
product lines, and restructuring the pricing index. Hands-on management played a very
important part in properly serving the public and aided with the expansion of the business.
Lenny truly believes in the natural lifestyle, a belief, which has helped him to be centered,
directed and adept at developing the simple but unique concept behind Quick n’ Green.
10. 10
Lenard’s key skill is to get a store up and running quickly with minimal investment and to make
a profit from the beginning.
He also has the ability to manage people in a way that makes them feel good about themselves
and in return they are more productive and want to educate and be educated.
Jayme Kritchman
A seasoned team-spirited, and results driven individual, Lenny’s brother, Jayme Kritchman has
an uninterrupted career record of more than 15 years in the retail grocery business. He has
expertise in increasing revenues, market share and bottom line performance. He studied at
West Virginia Wesleyan with a major in business with an emphasis on business administration.
It was in college that Jayme gained proficiency with many different computer applications,
including Microsoft Word, Excel and QuickBooks. He is also well versed in POS systems and
has full knowledge of what it takes to bring a store’s different products on line. When a
store’s entire inventory is entered into the POS system, the store is considered to be on-line.
Jayme directed and orchestrated the successful startup and growth of Oxtails & More
(www.oxtails.com), a retail meat and fish market in West Palm Beach, Florida. The store now
generates over $5 million in annual revenue. Jayme manages this store and is well versed in
purchasing, hiring, training and scheduling. His skills also include impulse sales, OSHA training,
safety, sanitation, liability and worker’s compensation law. Jayme also designed and
implemented a comprehensive security system, including video cameras to reduce and help to
eliminate theft and pilferage. He is a team player who has the experience and ability to
manage multiple store locations. Jayme will be Quick N Green’s CFO and be responsible for all
accounting applications including payroll, check writing, daily totals, taxes, price changes and
maintaining Quick N Green’s POS system. He will also be reporting directly to investors.
MatthewDelaney
Matt brings a lifetime of forward thinking, successful business acumen, environmentalism and a
commitment to healthy living to Quick N Green. From his days as Vice-President of sales at
Knutsen coffees, a pioneering green coffee importer/exporter, to owning his own specialty
coffee roasting business, Matt has dedicated his business practices towards bringing innovative
organic, fresh and convenient products to customers.
While growing up in New England Matt was influenced at an early age towards
environmentalism by an uncle who had dedicated his life to preserving the environment.
After majoring in environmental sciences at Rollins College, Matt moved to Berkeley, California
to pursue a music career. He lived with his brother, a pioneer in life extension through calorie
restriction. Like many working musicians, trying to make ends meet, he found himself holding
down a number of jobs including a position at seminal Berkeley pizza joint, Blondie’s. It was
here that he learned all aspects of the restaurant business soon rising to store manager, and
then general manager of a new Blondie’s in Concord, CA.
11. 11
Two years later Matt moved to the Big Island of Hawaii where he worked as a hand-line Yellow
Fin tuna fisherman, papaya packer and held two positions as field laborer on an organic ginger
farm and organic banana plantation, later becoming a sale representative for the later.
In 1996 he moved back to San Francisco and through a family friend found work at Knutsen
Coffees, Ltd. It was at this job that Matt found a true passion and natural talent towards
discovering, identifying and roasting great coffees.
He was fortunate to train under Erna Knutsen herself, the first female coffee broker in the
United States and the woman who coined the term “specialty coffee.” Matt started from filling
samples for customers to Vice-President of Sales within 3 years. It was at Knutsen’s that Matt
learned what truly specialty coffee is all about. He spent countless hours after closing roasting
and cupping (tasting), learning to distinguish each countries’ and regions profiles developing
and refining his palate. This labor of love resulted in Matt being designated as a Master
Cupper by the Specialty Coffee Association of America.
During Matt’s 7 years at Knutsen’s he increased the company’s organic offerings from three
origins to twelve. He had yearly sales in the millions and continued a course in educating his
customers on the intrinsic value and benefits of organic, fair trade coffees.
He eventually successfully managed over two hundred accounts, controlled warehouse
inventory and travelled throughout Central and South America searching out fine coffees.
Later Matt went on to own Coast to Coast roasters, an on line specialty coffee company and
also put out several records of roots rock music. Through a lifetime of dedication towards
professionalismand customer service Matt has been able to be successful at all his personal
and business endeavors. He believes Quick N Green will be the culmination of a life
committed to healthy living, public education and community service.
12. 12
Market Analysis
The practices associated with organic agriculture and organic gardening has been around in one
form or another since the point in history when people stopped hunting and gathering and took
up farming as a means of subsistence.
The production of organic food and the utilization of organic agricultural and organic gardening
practices ultimately became overtaken by the industrial approach to crop cultivation and
farming. The industrial style advocated the utilization of synthetic or chemical herbicides,
insecticides and fertilizers for the production of crops. By the 1950s, the industrial agricultural
scheme gained predominance in many countries the world over, including the countries of
North America and Europe. The belief was that the use of chemical treatments in the process of
cultivating crops and growing animals for consumption was efficient and a proper course to
enhance agricultural production. However, in the early 1970s, some agricultural experts came
to realize that the chemicals that were being used in the treatment and production of food
products were having a seriously negative effect on both the environment and on people’s
health. At that point in time, according to the documented history of organic food/agriculture,
a sound movement began whereby an ever-growing number of people the world over began to
recognize the benefits of eating organic food.
Initially, a small number of people took up organic gardening for their own purposes. In time,
small-scale organic farms began operation. Today, there are some large-scale organic food
enterprises producing all types of organic food and related products in many countries around
the world.
In contemplating the future of organic food/agriculture, most industry analysts believe that
organic agriculture is destined for significant expansion over the course of the coming 20 years.
Observers believe that more and more people in different points the world over will come to
understand the benefits of organic food, including higher nutritional value than many
traditionally grown, raised or produced food items, better taste and improved appearance.
Organically grown foods contain significantly lower levels (ideally, none whatsoever) of
chemical toxins commonly found in traditionally grown, raised or produced food items.
The retail market for organically produced food is growing at a rate of 20% annually. Increased
concern about the link between chemical food treatments and a number of health problems
has been largely responsible for this rapid growth. While organic food producers are certainly
ecstatic about the growth of the industry, increased consumer demand for organic food creates
somewhat of a dissonance between the small-scale farming ideals of the original organic
farmers and the large-scale production needs of modern organic farmers. As consumers
continue to demand the more healthful food products of organic agriculture, only time will tell
how the organic farming movement will respond. In the end, organic farming will likely succeed
only if it stays true to its founders’ original ideals of healthy soil, healthy animals, and healthy
food. (3)
13. 13
U.S. sales of organic food and beverages have grown from $1 billion in 1990 to $24.8 billion in
2009. Sales in 2009 represented 5.1 percent growth over 2008 sales. Experiencing the highest
growth in sales during 2009 were organic fruits and vegetables, up 11.4 percent over 2008
sales. (4)
Organic food and beverage sales represented approximately 3.7 percent of overall food and
beverage sales in 2009. Leading were organic fruits and vegetables, now representing 11.4
percent of all U.S. fruit and vegetable sales. (5)
Organic non-food sales grew 9.1 percent in 2009, to reach $1.8 billion. (6)
Total U.S. organic sales, including food and non-food products, were $26.6 billion in 2009, up
5.3 percent from 2008. (7)
Mass-market retailers (mainstream supermarkets, club/warehouse stores, and mass
merchandisers) in 2009 sold 54 percent of organic food. Natural retailers were next, selling 38
percent of total organic food sales. In 2008, mass-market retailers represented 45 percent of
sales, while natural food channels represented 43 percent of sales. Other sales occur via export,
the Internet, farmers’ markets/ Community Supported Agriculture, mail order, and boutique
and specialty stores. (8)
Certified organic acreage in the United States reached more than 4.8 million acres in 2008,
according to updated data posted by USDA. U.S. total organic cropland reached 2,655,382 acres
in 2008, while land devoted to organic pasture totaled 2,160,577 acres. California leads with
the most certified organic cropland, with over 430,000 acres, largely used for fruit and
vegetable production. Other states with the most certified organic cropland include Wisconsin,
North Dakota, Minnesota and Montana. Forty-five states also had some certified organic
rangeland and pasture in 2008; of those, 13 states had more than 100,000 acres each, reflecting
the growth in the U.S. organic dairy sector between 2005 and 2008. Certified organic cropland
acreage between 2002 and 2008 averaged 15 percent annual growth. However, it still only
represented about 0.7 percent of all U.S. cropland, while certified organic pasture only
represented 0.5 percent of all U.S. pasture in 2008. Overall, certified organic cropland and
pasture accounted for about 0.6 percent of U.S. total farmland in 2008. Although a small
percentage of major U.S. field crops are grown organically, organic carrots represented 25
percent of total U.S. carrot acreage, while organic lettuce represented 8 percent of all lettuce
acreage. Fresh produce is still the top-selling organic category in retail sales. Meanwhile, the
organic livestock sector has seen growth, with 2.7 percent of U.S. dairy cows and 1.5 percent of
layer hens managed under certified organic systems. (9)
Acreage managed organically in 2008 in the world totaled 35 million hectares farmed by almost
1.4 million producers in 154 countries, according to data from The World of Organic Agriculture
2010. Organic agricultural land area increased in all regions, and was up nearly three million
hectares, or nine percent, compared to 2007 data. Of the total area managed organically, 22
million hectares were grassland. In addition, 8.2 million hectares were used for cropland. The
regions with the largest area of organically managed land are Oceania (12.1 million hectares in
14. 14
Australia, New Zealand, and surrounding island states), Europe (8.2 million hectares), and Latin
America (8.1 million hectares), according to statistics in a chapter by Dr. Helga Willer. The
report also recorded 31 million hectares that are organic wild collection areas and land for bee
keeping. The majority of this land is in developing countries. (10)
Meanwhile, according to Organic Monitor estimates, global organic sales reached $50.9 billion
in 2008, double the $25 billion recorded in 2003. (11)
For a food to qualify as organic it must meet the standards of the USDA’s National Organic
Program standards, first implemented on October 21, 2002. Organic food is defined by the
production practices that cannot be used. According to the USDA, organic foods are produced
without using most conventional pesticides, synthetic fertilizers, or sewage sludge, and they are
processed without using ionizing radiation. Production of organic foods must also be free from
genetically modified organisms. Organic poultry, eggs, meat, and dairy products must come
from animals that were given no antibiotics or growth hormones.
In addition, a public or private organization must verify whether a certified organic grower or
processor meets or exceeds the defined organic standards. These standards include:
1. Prior to certification, the land must be free of prohibited substances for three years.
2. A certifying agency annually inspects farm/processor operations.
3. Farmers and processors must keep detailed records of organic practices.
4. All farmers and handlers are required to maintain a written organic management plan.
When farmers have complied with these standards, they can label their products as
having met organic standards by using the Quality Certification Services Label.
THE QUICK N GREEN LIFESTYLE IN A CONVENIENCE STORE CONCEPT
The U.S. convenience store industry has 144,000-plus stores that account for more than $624
billion in sales.
Convenience Stores Offer More Convenience: Convenience stores offer speed of service to
time-starved consumers who want to get in and out of the store quickly. These shoppers
recognize this channel of trade for its convenient locations, extended hours of operation,
one-stop shopping, and grab-and-go foodservice, variety of merchandise and fast transactions.
US Convenience Store Count: The number of convenience stores is 144,541 as of December
31, 2009, a decrease 0.2 percent. This is the second straight year the count has declined and
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only the fourth time in the last 15 years that the industry’s store count has declined. The count
also declined in 1994, 2003 and 2008.
Foodservice at Convenience Stores: While convenience stores have offered fresh, prepared
foods for years, it is only over the last decade that the trend has accelerated. The result is that
stores have continued to evolve from gas stations that happen to sell food to restaurants that
happen to sell gas.
Beer Sales: Nearly 80 percent of convenience stores sell beer, accounting for nearly one-third
of all beer purchased in the United States, about 93 percent of which is sold cold. In fact, the
U.S. convenience store industry sells more than 2 billion gallons of beer a year – roughly
one-third of all the beer purchased in the Unites States.
Candy Sales: Candy is a high-impulse item in convenience stores. In fact, many shoppers (49
percent) report that their candy purchases were unplanned, according to global research firm
Envirosell.
Coffee Sales: More than three out of four adult Americans say that they drink coffee either
daily or regularly, according to the National Coffee Association, and convenience stores are one
of the preferred destinations for coffee drinkers. Consumers stop to buy coffee more than they
fill up their cars, providing convenience stores with a great opportunity to build loyalty and
repeat sales.
Technology: The integration of technology into convenience stores continues at a fast pace.
Over the past decade, the convenience store industry has gone from being a technology laggard
to a technology leader in using new technologies to deliver convenience.
The natural/organic industry is growing year after year at a double digit pace.
The consumer is realizing the life benefits of eating and using natural products for all parts of
their daily lives.
The “not enough time in the day”-convenience truly matters and has become a way of life.
Combining the above into a unique concept for merchandising not only natural products but
educating the consumer and giving back and helping people within the local community means
a win-win to the bottom line, a win-win to sustaining the environment and a win-win by helping
people and a win-win to expanding an overall healthy lifestyle. (12)
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Summary
Phase 1
Find two proper locations to begin
Finalize contracts for the properties
Renovate the location to specifications to house the different core natural products
Anticipated Completion Date: June, 2011
Phase 2
Hire, educate and train employees
Develop marketing plan for the local community
Start advertising
Develop e-commerce opportunities
Anticipated Completion Date: September, 2011
Phase 3
Begin marketing campaign through media outlets, magazines and targeted
publications to each specific client group
Market through web commerce (Google, Facebook, etc.)
Develop relationships and key contacts with the many companies in the
surrounding community
Opening day discounts and other “get to know me” offers
Open for operations
Anticipated Completion Date: November, 2011
Phase 4
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Develop and implement new marketing strategy to capture new business and
exceed goals outlined in the initial business plan
Consider expansion and franchising opportunities
Anticipated Completion Date: On-going
Competitive Landscape
Price is the dominant factor of this industry. The cost of organic food is the basis of its
competition because there is no substitution for organic food. It either is or it isn’t. With that
being said, the following are estimates of percentages of sales at retail:
Natural foods retailers — 37%: Super naturals — 10%: Supermarkets — 28%: Multi-level
marketers — 16%: Other (practitioners, mail order, etc.) — 8%”.
Clearly organic food retailers are on top right now but supermarkets are slowly closing in, as the
organic trends grow stronger in U.S. society. Better than 75% of current natural food consumers
purchase their natural products at conventional supermarkets. Supermarkets offer relatively
lower prices than those organic food retailers and so consumers base their purchase on price.
With supermarkets offering organic foods they develop their own store brand natural foods
thus once again giving consumers low prices for basically the same product. An example of
what is being stated is as follows:
The larger and more mature supermarket players have natural product private label for
commoditized packaged product. Kroger’s private label organic aseptic soymilk has retailed for
as low as 99¢ in the Cincinnati marketplace. In the Northeast, Trader Joe’s has sold private label
and branded aseptic soymilk for $1.49 to $1.69, and Whole Foods sells its private label at $1.45
and branded starting at $1.79.
Because there is no ‘difference’ in organic food, price is all consumers really look for when
buying their products. In a way, the organic food industry is a game of price and who can attract
the most consumers with the best competitive price. This will become more and more of
problem for the organic industry as these supermarkets begin putting more organic products
on their shelves.
With food and other items that are free of pesticides, preservatives, sweeteners, and cruelty,
Whole Foods Market knows more about guiltless eating and shopping than most retailers. The
world's #1 natural foods chain by far now that it has digested its main rival Wild Oats Markets --
the company operates about 295 stores in 38 US states, as well as in Canada and the UK. The
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stores emphasize perishable products, which account for about two-thirds of sales. Whole
Foods Market offers more than 2,400 items in four lines of private-label products (such as the
premium Whole Foods line). Founded in Austin, Texas, in 1980, Whole Foods Market pioneered
the supermarket concept in natural and organic foods retailing.
The natural and organic food industry is one that is seeing growth and will obviously continue
to see more growth as the years go by. This growth is, like mentioned earlier, bringing about a
lot of new competition, but none (besides Whole Foods) has that large of a market power base.
Thus far Whole Foods is the largest organic food retailer and has done a remarkable job of
staying on top. Whole Foods relies on buying out its competition: so far, Bread & Circus, Fresh
Fields, Merchant of Vino, Mrs. Gooch’s, Bread of Life, and Wellspring Markets have been
absorbed. The only competitors that remain are dozens of small natural food co-ops — which
have been able to parry Whole Foods’ advances by emphasizing their community ownership
and because they can survive on smaller margins.
Threats of new entrants are a major concern for the natural and organic food industry. If
regular stores and supermarkets start picking up on organic food, the organic food industry will
see a struggle. After all, if a popular store like Walmart completely picks up on offering organic
food, then Whole Foods will definitely see a decline. Walmart is able to offer lower prices and is
already a large retailer so it would have no problem stealing organic food consumers from
Whole Foods.
The threat of substitute products is not something that the organic food industry needs to be
entirely too worried about until the point where supermarkets will carry full lines of organic
products. Essentially there is no other food substitute for organic and natural food so the only
thing this industry has to worry about is organic brand substitution.
The main cause of substitute threat would be the lower costs being offered by other brands. If
stores like Walmart and Shoprite start to offer organic products under store brand names then
that will definitely take some consumers away from solely organic food retailers, like Whole
Foods. What does this mean for Quick N Green, a Natural Convenience Store? Additional
market entrants mean more opportunities for Quick N Green.
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Footnote
(1) Source: Organic Food Trends 2010
(2) Source: National/Organic Industry Outlook 2010 by George Southworth
(3-6) Source: Organic TradeAssociation’s 2010 Organic Industry Survey
(7) Source: U.S. Department of Agriculture’s Economic Research Service
(8-11) Source: The World of Organic Agriculture:Statistics & Emerging Trends 2010
(12) Source: National Association of Convenience Stores: Industry Resources 2010