1. Fall
10
Final Deliverable
Caribbean Supply Chain
CU Student Team:
Amanda Buss Amanda.Buss@Colorado.edu 720.352.4000
Janaki Douillard Janaki.Douillard@Colorado.edu 303.718.7052
Mileta Gebre-Michael MiletaGM@Gmail.com 303.931.1094
Ellen Hammock Ellen.Hammock@Colorado.edu 620.341.8368
Vail Resorts Client Representatives:
Kevin Snyder KSnyder@VailResorts.com 303.877.7712
Aaron Rubinstein ARubinstein@VailResorts.com 720.218.2953

2. Table of Contents
Executive Summary ............................................................................ 2
Presentation ...................................................................................... 3
Legal & Regulatory Environment ..........................................................19
Summary ............................................................................................... 19
Research Document ................................................................................. 20
Interviews ............................................................................................. 29
As-Is Supply Chain ............................................................................35
Summary ............................................................................................... 35
Research Document ................................................................................. 36
Interviews ............................................................................................. 39
Competitor Analysis ..........................................................................45
Summary ............................................................................................... 45
Research Document ................................................................................. 46
Interviews ............................................................................................. 53
SWOT Analysis ................................................................................55
Cost-Benefit Analysis .........................................................................57
Recommendations .............................................................................58
Roadmap............................................................................................... 58
Supporting Research................................................................................. 61
Lessons Learned................................................................................68
Appendix ........................................................................................71
Appendices ............................................................................................ 71
Meeting Agendas..................................................................................... 74
Meeting Minutes ..................................................................................... 86
Status Reports ...................................................................................... 102
Weekly Task Lists ................................................................................. 128
Email Communication ............................................................................ 136
First Deliverable ................................................................................... 184
1

3. Executive Summary
Research into the current food and beverage supply chain at The Landings St.
Lucia, in combination with the legal and regulatory environment of the region, was
largely successful. However, lack of visibility between the home office and the island
proved problematic in all areas of the project. The Landings St. Lucia is a
RockResort, Vail Resort’s elite resort line. The Landings is unique in that it is
managed by Vail Resort, not fully owned. Lack of a streamlined food and beverage
supply chain at this site can be largely attributed to this fact.
The Landings St. Lucia has extremely volatile seasonality that hugely impacts
standardizing forecasts, as well as formalizing a logistics processes to optimize the
supply chain. Lack of visibility is a byproduct of the absence of formal purchasing
and logistics processes and inadequate communication. The purchasing process is
inefficient due to the want of a well-developed forecast and adequate market
research. Forecasting would include an understanding of food and beverage
demands based on seasonality, storage and occupancy at the resort.
Our research revealed that international logistics are legally complex and time
sensitive, especially for food products. A reliable freight forwarder is vital in
maintaining the quality of food shipments, and a knowledgeable customs broker is
key in providing the correct documentation to move the products seamlessly through
customs. Research also revealed that The Landings only sources goods locally, due
to volume constraints and shipping costs. Though our analysis revealed that The
Landings’ current use of local vendors is the most inexpensive means of procurement
at this time, more research on smaller freight forwarders needs to be conducted to
examine their cost efficiency. The prospects of building on site storage, and the
introduction of a multi-stop ocean route could also prove cost-effective once more
properties are in operation in the region.
2

4. Presentation
Slide 1
Amanda:
I want everyone to imagine yourself on your dream island vacation. You’re relaxing
on the beach, pina colada in hand, without a care in the WORLD! You’re indulging
yourself in the rich local culture and the last thing you’re worried about is where
your food is coming from. That’s what we do.
3

5. Slide 2
Amanda:
Over the past semester we have been working with VailResorts on a food and
beverage supply chain project servicing The Landings St. Lucia.
Introductions
(In order)
4

6. Slide 3
Amanda:
To start out, we will give you a brief breakdown of this presentation. First we will
present an overview of the project purpose. Then provide background that will put
the project in perspective, will detail the big picture of our issues, and how these
issues are interrelated in the dominos effect. Then we will present our findings that
will conclude the roadmap to successfully implementing an efficient food and
beverage supply chain.
5

7. Slide 4
Amanda:
We were tasked to research and document the F&B supply chain at St Lucia,
compare sourcing products on or off island, and gain an understanding of the legal
and regulatory environment for importing to this region.
However this process was impeded by one giant roadblock– LACK of visibility, like
a lighthouse in the fog.
6

8. Slide 5
Amanda:
Some background on The Landings is that it is managed RockResorts, VailResorts
elite 5 star line. A managed property is different from an owned property in that
VailResorts is only responsible for booking occupants, maintaining the facility, and
providing amenities.
Another unique characteristic of The Landings is subject to a drastic difference in
occupancy between its peak and low seasons, due to hurricane seasons and other
climate factors. The fact that St. Lucia is such a remote location with developing
infrastructure, makes communication very challenging at times. Detrimental weather
can also affect communication, much of our research of the as-is supply chain was
delayed for weeks when Hurricane Tomas hit and our island contacts stopped
responding to us.
7

9. Slide 6
Mileta:
Communication, purchasing, legal/regulatory constraints, and logistics constitute
the principal elements of any supply chain. Without all of these components in sync,
the supply chain doesn’t function and directly affects the customer’s experience of a
lifetime.
Each of these dominos will be elaborated on in detail.
8

10. Slide 7
Mileta:
FEAR NOT . . . Through the fog, we glimpsed the 1st ray of light.
We found that as an industry average for property managed sites, communication
channels are strained. We believe that VailResorts can exceed the norm by focusing
on communication as the initial step in a standardized supply chain.
The strained communication from Hurricane Tomas added more run around in
finding figures for market basket reports, volume breakdown by each product
category, and order frequency.
These crucial elements are needed to compile a cost benefit analysis as well as
creating a forecasting method to assist in streamlining the supply chain.
9

11. Slide 8
Mileta:
Forecasting is the first step in planning a streamlined process of purchasing products.
With being able to predict the quantity and quality of desired products, the resort can
go into researching which vendors have the lowest costs for the highest quality
products. Once these are determined, negotiations can be made between vendors.
10

12. Slide 9
Mileta:
KEY STASTICS
Meat: 20-40% of chicken and pork products must be sourced on-island using local
vendors
Seafood: closed season for lobsters
LT 30: all cattle used for beef production cannot be more than 30 months of age, and
imported cuts must be boneless
Produce: citrus fruits cannot be imported
Misc: No honey or Coca-Cola due bottling plant on-island
11

13. Slide 10
Ellen:
The next step in building any supply chain is to standardize the logistics
process. To this end, we investigated where The Landings currently sources
its goods and discovered that they do not import any of their food and
beverage products at this time.
While local venders are the least complicated avenue for procurement, we
wanted to investigate their cost efficiency. We explored two options for
importing goods and leveraging their corporate partnerships with US
Foodservice and FedEx.
The first would be to ship commodities in ocean containers.
The second is to import product via air.
12

14. Slide 11
Ellen:
Our investigation into the local vendors revealed that after meeting quotas,
they were importing the majority of their goods from the US, and passing on
the costs of transportation and customs fees to their clients. This averaged a
30% markup on the cost of goods.
13

15. Slide 12
Ellen:
Delving into importation, we researched utilizing ocean containers for the
shipment of dry goods, operating supplies, and all other goods that do not
require refrigerated packaging. However, this option had one major
flaw…volume.
We analyzed 9 months of The Landings highest volume orders and
discovered they can only fill 25% of a 40-foot ocean container by weight. The
Landings also lacks the on site storage necessary to make this a realistic
option.
Moreover, Vail Resort’s current shipping partners- CH Robinson and FedEx-
do not fully service St. Lucia by sea at this time.
However, more research on smaller local freight forwarders that would be
willing to ship less-than container loads needs to be done before ruling this
option out entirely.
14

16. Slide 13
Ellen:
The second option- using FedEx Express- is illustrated here. We investigated
air shipment due to The Landings low volume orders. We compared the cost
of goods from local vendors (CLICK) to those sourcing internationally from
US Foodservice and FedEx Express (CLICK). As you can see, the cost of
importation is substantially greater than sourcing locally, largely due to
shipping costs.
15

17. Slide 14
Janaki:
This chart depicts the total costs of sourcing goods on island, via ocean, and via air.
These numbers were taken from the volume purchased over a one year period for
their most common dry goods purchases at the Landings.
This shows local vendors are only marginally cheaper than importing via ocean
container, but we’re looking at a full year’s volume which is not realistic because
current storage units can’t even hold a month’s supply of dry goods. Our competitor
analysis revealed that Sandal’s resorts in the Caribbean aim to keep at least 30 days
worth of dry food goods on hand at all times.
There is the possibility that a local freight forwarder would be willing to provide
pricing for partial container loads. This would be the most cost efficient option if
available. But until that research is completed we can only suggest continuing to
purchase through local vendors.
16

18. Slide 15
Janaki: In order to ensure clear skies and a sustainable supply chain
implementation, Vail should focus on these key areas which compose our roadmap
for supply chain success:
• Communication- Create something like a SharePoint that will allow cross-
functional information sharing providing necessary departments with figures
needed to develop a forecasting methodology
• Purchasing- This standard forecasting serves as the groundwork in matching
supply with demand across the seasonality experienced at the Landings. This will
limit weekly purchasing and emergency trips to the local grocery. Forecasting
allows us to find the best quality products at the lowest overall price.
• Legal/Regulatory-There are many restrictions in place that aim to support the
local economy of St. Lucia and if importation becomes feasible it is important
that we hire a customs broker to navigate these regulations.
• Logistics- Research needs to be done on local freight forwarders to determine if
they may be able to ship less than full container loads. This could make
importing the most cost effective method.
Together if all these components are working in harmony we will be able to provide
the experience of a lifetime to our customer’s.
17

19. Slide 16
18

20. Legal & Regulatory Environment
Summary
Understanding the legal and regulatory environment surrounding the importation
of goods into protectionist countries is a tedious and time-consuming exercise. Much of
the duty and tax implications are specific to nearly every individual commodity eligible
for import. It is critical to take advantage of all services provided by a trade network,
specifically customs’ brokerage, in order to smooth over the lack of transparency in the
regulatory environment. A custom’s broker is well versed in legal jargon and can
efficiently provide estimates for the cost implications of import license fees, custom’s
fees, duties, and taxes. Documentation is the major source of bottlenecks in importation,
and ensuring that all required documents are filled out accurately is vital to
implementing a sustainable supply chain.
Despite the fact that specific duty and tax rates are not readily available, many
general restrictions were unveiled. St. Lucia is an extremely protectionist country, which
only grants clearance to imported goods if the quantity produced on island is not
sufficient to meet demand. A consultation with a custom’s broker with experience in the
Caribbean, or extensive research and communication with on-island procurement
contacts, can guarantee that these restrictions are known before a purchase order is even
drafted.
In regard to freight forwarding, there is only one shipping lane to St. Lucia,
making transport by sea fairly homogenous in timing and price. The cost of shipping by
air will vary depending on corporate partnerships with freight forwarders, and may
require coordination with the food distributor for special packaging.
Overall, developing a strong relationship with a trade network will be critical to
the importation of the best product at lowest price, and ensuring adequate product is
always on hand at The Landings St. Lucia.
19

21. Research Document
I. Regulatory/Economic Background
A. Population is about 140,000
B. Independence 1979
C. Land: 616 sq km
1. Ports and terminals: Castries, Cul-de-Sac, Vieux-Fort, Soufriere Bay
a. Natural Harbor: Castries
2. Agricultural island—tropical commodity crops
3. Natural Resources: forests, sandy beaches, minerals (pumice),
mineral springs, geothermal potential
a. Use of land: arable land & permanent Crops = 30%
D. Economy
1. Tourism Main Source of foreign exchange
a. Unemployment high
b. Medium of exchange: East Caribbean Dollar
c. Exchange Rate: $1 USD = $2.7169 ECD (as of 10/4/2010)
E. Mains water: chlorinated- may cause mild abdominal upsets (bottled
water advised for first few weeks of stay)
F. Weather Patterns
1. St. Lucia is on the Atlantic hurricane belt. Hurricane season runs
from June to November
2. High tourist season runs from Mid-December to Mid- April
a. Tourism can peak outside of high season for various holidays
(e.g. Thanksgiving)
II. Products Imported: 2008
1
A. 85% from Brazil
B. 5-7% from US
C. 3-5% other Caribbean Countries
1
CARICOM. CC Regional Statistics Caribbean Community Secretariat. Oct 12, 2010.
http://www.caricomstats.org/Files/Databases/QUARTERLY%20TRADE/20081stQtr/SaintLucia.htm.
20

22. III. Islands of Opportunity
A. Caribbean Region 2
1. 3rd Largest Market for US Exports
2. Caribbean Basin initiative—trade programs to facilitate economic
development and export diversification
3. Caribbean Community (CARICOM)- deep regional integration
through harmonized tariffs and duty free trade
4. Assistance
a. Maria Elena Portorreal
Senior Commercial Specialist
Phone: 809-227-2121 ext. 225
E-mail: maria.portorreal@trade.gov
b. Kent Hippolyte
Consulate General of Saint Lucia
3700 Cocoplum Circle
MIAMI, FL 33063
Phone: (305) 586-3076
Fax: (954) 977-7660
IV. Import Requirements3
A. Eligible Product
1. Fresh/frozen poultry and poultry products, except as restricted in
the Ineligible Product section below.
2. Boneless beef and boneless beef products derived from cattle less
than 30 months of age produced under an approved AMS Export
Verification (EV) Less Than 30 (LT30) months of age program.
**NOTE: See section F Below**
i. Information about the program for St. Lucia and a list of LT30
approved establishments can be obtained from the AMS
(Agricultural Marketing Service) Web site.
ii. If FSIS (Food Safety Inspection Service) inspection personnel
become aware of concerns that an AMS approved LT30
establishment is not properly executing its Quality Control
Program, export certification should not be issued for the
product in question and AMS should be notified at
ARCBranch@usda.gov. Inspection personnel should include
2
“Islands of Opportunity.” U.S. CommercialService. October 5, 2010.
http://www.buyusa.gov/caribbean/en/9.html.
3
“Regulations and Policies.” US Department of Agriculture. October 4, 2010.
http://www.fsis.usda.gov/regulations/st_lucia_requirements/index.asp.
21

23. their immediate supervisor on messages to AMS. The
following information should be included in the message:
• Establishment name, address, and establishment
number.
• Product type, product code, and quantity of product.
• Date of production, lot number, and shift.
• Date and nature of observation.
• Name of country product is intended for export.
• Export certificate number (if applicable).
• Any other information to verify claim.
• Name of inspection official.
3. Veal and veal products are not subject to the LT30 program.
Fresh/frozen pork and pork products are eligible effective July 8,
2009.
4. All federally inspected establishments are eligible to export to St.
Lucia. Beef meat must originate from AMS EV approved
establishments.
B. Ineligible Product
1. Poultry and poultry products raised, processed, or stored in states
where low pathogenic or high pathogenic Avian Influenza has been
reported.
2. Beef offal products.
C. Documentation Requirements
1. St. Lucia Document Requirements
a. First- send list of desired items for import to Ministry of
Agriculture in order to receive import license
b. Invoices
c. Documents of Title (Airway Bill/ Bill of Lading)
d. Shipper’s Export Declaration
e. Packing Lists
f. Certificates of origin (For goods manufactured in another
Caricom country)
g. Phytosanitary certificate
h. Bill of Sight (in the absence of proper Invoices)
i. Determine tariff rate & fees before exporting
2. Certification of fresh or frozen poultry and poultry products -
Obtain FSIS Form 9060-5 (05/06/1999), Meat and Poultry Export
Certificate of Wholesomeness. The following statement must be
typed in the "Remarks" section of FSIS Form 9060-5 or on USDA
22

24. letterhead:
a. "Poultry, poultry meat products, and processed viscera of
poultry, originated from birds which were raised, slaughtered,
processed, and stored in States where no highly pathogenic
avian influenza has been reported or in establishments in
which there has been no evidence of notifiable low pathogenic
avian influenza in the 21 days prior to slaughter, as defined by
the OIE."
3. For boneless beef and boneless beef products. In completing the
FSIS Form 9060-6, Application for Export, the following statement
must be included: "The product meets EV requirements for St.
Lucia." Obtain FSIS Form 9060-5, Meat and Poultry Export
Certificate of Wholesomeness. The following statements must be
included in the "Remarks" section or on a FSIS Letterhead
Certificate:
a. "The United States meets or exceeds the BSE guidance of the
OIE pertaining to meat and meat products."
b. "The United States has prohibited the feeding of ruminants
with ruminant origin meat and bone meal (MBM) and greaves
since 1997, and this prohibition has been effectively enforced."
c. "The meat and meat products should be deboned skeletal
muscle (boneless beef) from cattle less than 30 months of age,
which were not subjected to a stunning process, prior to
slaughter, with a device injecting compressed air or gas into
the cranial cavity, or to a pithing process, and which were
subject to ante-mortem and post-mortem inspections and were
not suspect or confirmed BSE cases."
d. "The meat and meat products were not derived from or
contaminated with mechanically separated meat (MSM) from
the skull or vertebral column, or the following specified risk
materials: tissue from the brain, eye, spinal cord, trigeminal
ganglia, and dorsal root ganglia from cattle 30 months of age
or older, and the tonsils and distal ileum of the small intestine
of any cattle, regardless of age."
4. Please note the title of the letterhead certificate has been modified to
include "veal" because shipments of veal have been detained due to
the fact that it was not included in the title of the letterhead
certificate.
5. All shipments of fresh/frozen pork and pork products must be
23

25. accompanied by FSIS Form 9060-5, Meat and Poultry Export
Certificate of Wholesomeness.
D. Documentation Procedure
A. Under the Customs Control and Management Act No. 23 of 1990
persons importing goods by air are required to submit a customs
entry within seven (7) days of importation of those goods, by sea
this document must be submitted within fourteen (14) days of
importation. Exempt from the above are fresh fish (including shell
fish) caught by St. Lucia fishermen and imported by them in their
vessel, passenger’s accompanied baggage. St. Lucia Customs and
Excise Department reserves the right to refuse to accept any entry of
goods if they are dissatisfied that those goods were imported at the
time of presentation of the customs entry. Where an error is found
on the submitted entry an importer may be granted a period of ten
(10) days to account for it. If after final submission the department
is still dissatisfied with the entry the person will become liable to
penalties under the law.
E. LT30 Program for Beef
1. Requires that any animals involved in the meat production process
are under 30 months of age at time of slaughter (in order to protect
against disease)
a. Limited vendors process meat according to these standards and
suitable options may only be marketed on specific days of the
week
b. US Foodservice may not have product that upholds these
standards and will have to utilize outside vendors
i. Burger orders under these restrictions require a 3 week lead
period to find a suitable vendor and place the order
V. Absolute Constraints4
A. Customs
1. Most common customs-related problems:
a. Misclassification
b. Duties Higher than anticipated
c. Customs Office wont clear the shipment to your
buyer/importer
d. Customs office invoking health, sanitary, or safety issues
4
“Help With Trade Problems.” Export.gov. October 4, 2010. http://export.gov/tradeproblems.
24

26. e. Labeling issues involving a certificate of origin, weight,
ingredients, marks, etc.
f. Inadequate documentation provided by the exporter
g. Issues involving the import or packing regulations of the
receiving country
2. Harmonized system and schedule B numbers
a. Harmonized System (HS) numbers are used to classify products
for customs purposes. By international agreement, most
countries recognize the same first 6 "harmonized" digits.
b. Schedule B System- classify exported products in the US
i. Same as HS numbers as for the importing country’s
classification code
ii. Must know both
• Determine applicable import tariff rates, preferential tariff
under Free Trade Agreement
• Schedule B needed to complete Shipper’s Export
Declaration
• HS # needed when shipping documents
iii. U.S. Census Bureau Foreign Trade Division
• Specialist in Non-Durable Goods 301-763-3484
B. Tariffs
1. A tariff (or duty, the words are used interchangeably) is a tax levied
by governments on the value of imported products. Sales and state
taxes, and in some instances customs fees, will often be levied as
well. The tariff is assessed at the time of importation along with any
other applicable taxes/fees.
a. To get a duty rate, one needs to have the complete product
number (HS number and country-specific suffix) used by the
importing country. Since this is sometimes difficult, companies
can use the Schedule B number to approximate.
C. Import Licenses5
1. Import licenses will be issued for meat on the following conditions:
a. USDA Meat & Poultry certificate of Wholesomeness required
b. Bone-in beef not allowed into St. Lucia (only boneless beef
allowed)
c. Poultry and Pork allowed upon proof that a certain percentage
was sourced locally
5
Clement, William. Corporate Contact- FedEX. Email correspondence. November 24, 2010.
25

27. d. Invoices must be supplied 5 days and USDA certificates 3 days
prior to shipment arrival into St. Lucia
2. Licenses cost EC$55.00 (USD$20.24) per application- which has to
be paid directly to vendor broker by shipper or consignee
D. Seasonality of Fish
a. Lobster is the only seafood with a closed season
E. Protectionist Ideals6 - clearance to import only granted if quantity
produced on island is not sufficient to meet demand
1. No importation of citrus fruit
2. No importation of honey
3. Restrictions on importation of Beer and Coca-Cola products
because there are bottling plants on the island
4. No restrictions on importation of dairy, dry goods or operating
supplies
5. Meat
a. Beef
i. Only boneless beef
ii. Majority of beef comes from United States
iii. Documentation of age of cattle and location of slaughter
required
b. Chicken
i. Must purchase 20-40% from local suppliers
F. Typically local wholesalers provide entire chickens rather than cuts,
which is less desirable for a resort
c. Pork
i. Use local wholesalers to supply cuts that are available on
island
d. Strict restrictions exist because St. Lucia does not have the
infrastructure to control outbreak if meat is contaminated.
VI. Flexible Constraints
A. Freight Forwarder: An international freight forwarder is an agent for
the exporter in moving cargo to an overseas destination. Whether an
exporter is large or small, the weight of the cargo light or heavy, a freight
forwarder can take care of cargo from “dock to door,” thus freeing the
exporter from dealing with many logistics-related details
1. Competitive Advantages
6
Vitalis, Eustace Chinie. Agricultural Economist. Phone interview. November 17, 2010.
26

28. a. Current supply avenues to desired destination
b. Shipment date guarantees
c. High safety standards
d. Volume Pricing
B. Customs Broker: acts as the importer’s agent and ensures that proper
duties, taxes, and documents are filed to satisfy legal requirements to
enter goods into the sovereign stream of commerce.
1. Importer will sign a power of attorney that gives a customs broker
the right to speak for them in legal matters and in the customs
clearing process.
2. If the custom’s broker should commit a fault and such that further
imports are prohibited into a specific country, the ban falls on the
importer and working through a new broker will not nullify the ban
3. Competitive Advantages- alleviates many burdens associated with
clearing customs through their:
a. Knowledge of document requirements
b. Capability to file and send entry documents electronically
c. Knowledge of duties and taxes across countries
d. Network of contacts
Note: Many Freight Forwarders are associated with a customs
brokerage department under the same corporate umbrella, the
combination of services provided forms a trade network. Both
CH Robinson and FedEX provide full trade network service.
VII. Safety Procedures
A. CH Robinson7
1. Temperature Control
a. More food and beverage experience than any other provider
b. Diverse range of customer relationships offers knowledge that
can be applied directly to each individual business
c. A single point of contact for all temperature controlled
truckload and LTL shipments
d. Full visibility to track and trace freight on their customer
website, CHRWonline
e. 24/7 personal commitment to your freight
7
“Temp Controlled.” C.H. Robinson Worldwide, Inc. October 21, 2010.
http://www.chrobinson.com/en/us/Freight%2DServices/Over%2DThe%2DRoad/Temp%2DContr
olled.
27

29. f. Access to one of the largest pools of temperature controlled
capacity in North America and Europe, including the
aggregated equipment of small- to medium-sized refrigerated
carriers, so they can quickly secure the equipment you need
2. Because CH Robinson started out as a produce company, and 50-
60% of there revenue is still derived from the transport of produce,
they hold safety as an utmost priority to ensure that superior food
quality will be maintained.
B. FedEX upholds government and USDA standards.
28

30. Interviews
The following are interviews that pertained most directly to the legal and regulatory
environment of St. Lucia. They are listed in order from earliest to latest since the
timeline of the project helps explain the progression of questions asked to each
interviewee.
Interview - FedEX (Bill Clement)
Date & Time: 10/22/2010 3:00pm
Attendees: Amanda Buss & Janaki Douillard
Questions Answers
1. What is the difference between customs Sometimes they are one in the same. FedEx
broker’s service and freight forwarding? is a closed loop system so they are not
covered under separate authorities. This
closed loop allows for expedited service. A
Freight Forwarder is a 3rd Party that you
signed a power of attorney with and then
they are contacted to assist with warehousing
and distribution.
2. Do you pick up product at distribution Determined when customer is set up and
location or require drop off? contract signed
3. Do you currently have a distribution Yes, by air and sea
channel to St. Lucia? Air and Sea?
4. When do you take ownership of products Determined when customer is set up and
being shipped? contract signed
5. What container size increments do you They provide 20’ or 40’ containers. Extended
provide? At what price? High Q. We need to determine if we can fill a
container by ourselves. Also need to consider
the cost tradeoff between frozen meat
transport and storage as opposed to fresh
overnight meat delivery with less storage
requirements. Also provide refer containers,
but much more expensive.
29

31. 6. How does FedEx stand out among the It is all controlled, and they are licensed and
rest with regards to safety and regulated. FedEx’s standards will be uphold
maintaining the condition of perishable or exceed the government requirements. Bill
items? Clement is going to provide us with a list of
the food products they are capable of
transporting to St. Lucia, both by sea and air.
7. Have you had experiences with rejected Frozen meat because the paperwork was
products? Which products? wrong so then it would take 3-4 days and the
meat could spoil. This is usually due to
incorrect documentation. Rejected products
are the responsibility of the shippers and/or
recipients, as they are the ones responsible for
provided thorough and accurate paperwork.
8. Please provide any knowledge specific to a. Ken, who is the local St. Lucia contact,
St. Lucia tariffs for the above categories would need specific commodities to give
us tariff information
b. Hotels are sometimes entitled to duty-free
concessions, or they could be taxed more
heavily.
c. The tariffs are discovered as a part of the
broker relationship since they sign the
power of attorney they are required to
keep you informed of the changed in the
entire legal/regulatory environment.
When they sign the power of attorney
they have more of a lawyer or retainer
relationship with the client.
9. How do foreign tax structures affect costs Tax is generated by sovereign country and
of importing goods? determined as a percentage of the declared
value of a product. There are differences in
formal entry and informal entry. There will
be an import tax on most food items and if
there are any auxiliary charges they will be
line items. There may be a value added tax.
10. What background information and FedEx trade networks keep clients updated
resources do you use when making the with changes in tax rates and tariffs of
cost estimates related to regulatory costs? sovereign country, utilizing broad network of
people domestically and across nations.
30

32. 11. What common bottlenecks occur in the Sometimes there is are a series of agencies
customs process? that need to check the products and one must
happen before the other which lengthens the
time in customs. Seafood.com has listings of
helpful information. All documentation must
be correct and there must be an original copy
accompanying the shipment. As long as
paperwork is correct, items should clear
within 1 day.
12. Since the USDA inspects products before Clearing foreign customs is entirely
they are shipped, does this expedite the dependent on the documentation that is with
process of clearing foreign customs (St. the shipments, all of the legal matters must be
Lucia)? complete before the process can begin. This is
the shipper’s responsibility and they must be
sure to have accurate Health Certificates and
Sanitation Certificates, etc. Bill Clement told
us that he will provide us with the
information on which certificates are required
for St. Lucia
13. Do you provide tracking capabilities? The record will indicate the date the
container was put on the vessel, an expected
delivery date, and pick up again once the
container reaches receiving port. There is no
visibility once the container has set out on the
ocean. FedEx only guarantees shipment
within a certain timeframe for express air
shipments.
14. In the past, have you coordinated leaving They will need to look at zoning regulations
a container at a location for a period of to see if St. Lucia will allow on-site
time so your customer can use it as a type containers. This set-up has a daily, weekly, or
of temporary storage in high seasons? monthly pricing that Bill Clement will email
How much might something like that to us.
cost?
31

33. Interview - CH Robinson (Brandon Workman and James Dockery-Johnson)
Date & Time: 10/28/2010 3:00pm
Attendees: Amanda Buss
Questions Answers
1. What is the difference between customs a. Freight Forwarder is a third party that
broker’s service and freight forwarding? arranges transportation directly with
asset-based providers
b. A customs Broker acts as the importers
agent, requiring a signed power of
attorney, and ensures that proper duties,
tariffs and documents are filled to satisfy
importers legal requirements to enter
goods into the stream of commerce
2. Which do you provide? Both, would probably take on more of an
advisory role for St. Lucia
3. Do you currently have a distribution a. Yes, but St. Lucia along with all the
channel to St. Lucia? Air and Sea? other OECS (Organization of Eastern
Caribbean States) is a very capacity
constrained region. Each island
normally has only 3-5 providers in most
verticals (ie wholesale, retail, etc)
b. CH Robinson does not have any
contacts on the island of St. Lucia
proper, nor do they currently ship to that
island at this time.
4. When do you take ownership of products Custodial ownership depends on mode and
being shipped? relationship
5. What container size increments do you a. The provide FCL and LCL (Full
provide? At what price? Container loads, less than container
loads: partial or single pallets)
b. Would more than likely be sharing
containers with competitors, which can
impose a new set of problems.
c. Rate is dependent on business
relationship and type. Most customers
have 30 day credit terms.
d. Ocean rates are set pricing lists.
32

34. 6. How does CH Robinson stand out among CH Robinson’s background is in produce, 50-
the rest with regards to safety and 60% of revenue come from moving food and
maintaining the condition of perishable beverage products. They are very sensitive to
items? food safety.
7. Please provide any knowledge specific to a. Tariffs in St. Lucia are between 0-40%
St. Lucia tariffs for the above categories depending on commodity. Fresh meat is
much more regulated than frozen and
will absolutely require a licensed
customs broker to file paperwork
correctly and provide accurate
regulatory information.
b. Customs broker would complete
customs documents, itemized by
commodity and quantity.
8. How do foreign tax structures affect costs Import Taxes are structured like tariffs and
of importing goods? will be higher for products that are readily
available on the island.
9. What background information and Licensed customs brokers have access to hard
resources do you use when making the and soft resources not readily available to the
cost estimates related to regulatory costs? public because of their complexity. This
information requires extensive training to
understand and apply correctly.
10. What common bottlenecks occur in the a. Bottlenecks usually due to
customs process? documentation
b. First step- File Entry: notify that body
(government) that you plan on entering
goods into their country. Important
because there are Caps on certain items
and need approval to even send items.
File entry before the order physically
crosses port waters.
c. Once the file entry goes through, shipper
has 10 days to file customs entry
documents and pay duties and taxes.
Entry documents can only be filed once
order has crossed port waters.
d. Customs brokers can electronically file
all documents
33

35. 11. Since the USDA inspects products before No this is a required step of the process and
they are shipped, does this expedite the each nation has their own set of policies.
process of clearing foreign customs (St. USDA is benchmark, but further inspection
Lucia)? will ensue regardless of passing USDA
standards.
12. Do you provide tracking capabilities? a. Yes, can currently track steam ship and
other modes of transport via separate
systems.
b. In the 2nd year of a 4-year roll-out
process of merging the two systems, so
that complete transport route can be
tracked via one streamline GUI.
13. What is your estimate for number of days a. About 15 days
for transport from Miami to St. Lucia b. There is only one steam ship line that
“dock to door”? services St. Lucia, timing will be the
same across competitors
14. Do you deliver the products to the Both. Will want to find out how the island
physical door? Or picked up at port? works, some trucking companies have a
power over others in many instances and
saving money will not necessarily save time.
15. Does CH Robinson provide its own a. Customs brokerage is a flat rate, all fees
brokerage system? Does this impose are based on transactions
additional fees? b. Volume pricing will be applied to freight
forwarding tasks
16. Can you provide any additional resources a. FTA- look up their relationship with
for our general understanding of the Caribbean nations
regulatory environment related to b. US Customs and Border Control, to
importing F&B products to St. Lucia?
understand variation in policy even
across ports within a developed nation
34

36. As-Is Supply Chain
Summary
Though research into the current food and beverage supply chain for The
Landings St. Lucia was a very long and arduous process, after much toil we gained a
clear picture of the restraints in which the resort operates, in addition to some clarity
into the resort’s own food and beverage supply chain. Research revealed that The
Landings sources all of its goods on island, and does not utilize any of Vail Resort’s
corporate partnerships. Though government regulations restrict numerous products
from importation, the real factor limiting international procurement was The
Landings lack of volume. Stark changes in occupancy at the resort between peak and
low seasons created numerous challenges in forecasting, an essential component
needed in properly calculating international orders. In addition, the resort lacks the
necessary storage capacity to accommodate large product orders.
Further investigation into The Landings five main vendors revealed that after
meeting quota requirements, the companies were importing the majority of the
products from abroad, and passing on the transportation and customs costs to their
clients. Accordingly, research was conducted into the cost of sourcing similar
products to those currently used at the resort from US Foodservice, Vail Resort’s
main food supplier. To adequately compare the costs, we researched two methods of
transporting the goods as well as the customs fees associated with the corresponding
products. Analysis of the costs revealed that international procurement is not
currently a cost-effective option.
35

37. Research Document
I. The Landings St. Lucia Background8
A. Location and Resort Information
1. Rodney Bay, Gros Islet St. Lucia, West Indies
2. 200 condos and villas
3. Private marina
4. Three in-house restaurants
B. Occupancy
1. Peak: Christmas - March/April
2. Slow: August – September (hurricane season)
3. Hot Season: May – August
4. Ideal rental pool of 80-90 rooms
5. Currently have 44 rooms signed for December, and budgeted
for 70-80
6. Buy-out during January and July
C. Suppliers
1. All local vendors
2. Higher cost on imported goods
3. Do not use any third party logistics in procurement
4. Meat quality questionable
5. Main vendors
a. Brydens: dry goods, liquor, frozen
b. Peter and Company: dry goods, liquor, frozen
c. Admac: diary
d. Crown Foods: frozen
e. J. A. Foods: dry goods, frozen
6. No current issues with local suppliers
7. Forecasting used in high season
8. Lean times during high season are next day
D. Storage9
1. Limited storage at resort
2. Dependent upon weekly deliveries
3. Possibility of paying for a container to be left on-site to
compensate for storage limitations; built on-site storage in
future
8
Smock, Adam. Food and Beverage Manager- The Landings St. Lucia. Phone interview. October 25, 2010.
9
DeLouise, Thomas. Corporate Director of Operations- Vail Resorts. Phone interview. October 15, 2010.
36

38. II. Vendors
A. Brydens10
1. Service Antigua, Barbados, Grenada, Guyana and St. Lucia
2. Headquartered in Bois D’Orange, Barbados
3. Annual sales of $49 million
4. Industries: automotive, liquor, food and beverage, hardware,
house hold goods, personal care, pharmaceuticals, tobacco
5. Source countries for products
a. Food products: Trinidad
b. Wines: Italy, Chile, France
c. Tobacco: Trinidad
d. Frozen foods: United States, United Kingdom, New
Zealand
e. Dry Goods: United States
B. Peter and Company11
1. Company owned by Goddard and Sons
2. Service Barbados and St. Lucia
3. Headquartered in St. Lucia
4. Distribution center in Castries
5. Products: dry goods, frozen, household goods, liquor
C. Admac 12
1. Service and headquartered in St. Lucia
2. Distribution center in Castries, St. Lucia
3. Deliver goods to resort by truck
4. Products: dairy, fresh fish, meat, coffee, dry goods
D. Crown Foods13
1. Service and headquartered in St. Lucia
2. Distribution center in Gros Islet, St. Lucia
3. Deliver goods to resort by truck
4. Products: wide range of meat products, dairy, vegetables, fruit,
pasta, pastries, desserts
10
Regis, Glenroy. Chief Financial Controller- Brydens. Email correspondence. November 17, 2010
11
“Peter & Company Ltd.” Goddard Enterprises Ltd. November 2, 2010.
http://www.goddardenterprisesltd.com/in_co__.cfm?com=43.
12
“Provisioning - Specialist.” Superyacht Services Guide to the Caribbean. November 2, 2010.
http://www.superyachtservicesguide.com/caribbean10/st.lucia/stl-provisiongSpec.html
13
“Our Products.” Crown Foods Ltd. November 2, 2010. http://crownfoodsstlucia.com/products-
page.
37

39. III. St. Lucian Hospitality Industry14
A. Caribbean region spends $10 billion annually importing food goods
B. Most products on the island are imported, but duties are levied on all
third-party imports as well
C. Resorts must be conscious of which vendors they buy from, as
crossing the wrong vendor can lead to being cut off completely
1. Large issue of timely payment with vendors
D. Link between agricultural sector and hospitality industry
1. Imported agricultural goods can be produced locally
2. Desire to reduce import bill and stimulate domestic economy
a. Generate interest in local food production by illustrating
cost savings to hospitality sector
b. Concern over reliability and consistency in ability to
produce goods locally
E. Key produce consumed in hotel industry
1. Fruits
a. Melons: honeydew, cantaloupe, watermelon
b. Pineapples
2. Vegetables
a. Romaine lettuce
b. Tomatoes
c. Cabbage: red and green
d. Squash
e. Zucchini
F. Growth of local agricultural industry
1. Sandals Resorts created a production schedule of items that can
be grown on-island after determination of unrealized potential
in local production.
2. Realized cost savings of $1 million in first year of buying
produce locally
3. Realization of huge cost savings drove demand for local
produce
a. Longer shelf life
b. Fresher
c. No storage costs
4. Today, strict protectionist practices exist to protect the industry
14
Vitalis, Eustace Chinie. Agricultural Economist- Sandals Resort. Phone interview. November 17, 2010
38

40. Interviews
The following are interviews that pertained most directly to the current ‘as-is’
environment of The Landings St. Lucia. They are listed in order from earliest to
latest since the timeline of the project helps explain the progression of questions
asked to each interviewee.
Interview – Nick Hagel, Vail Resorts Senior Manager-Procurement
Date & Time: 10/19/10 2:30pm
Attendees: Ellen Hammock
Questions Answers
1. Please list your main • Cheese: DCI (organic producer)
suppliers for all of the • Coffee: Starbucks
categories. • Dry Goods: US Foods
• Frozen: US Foods
• Milk and ice cream: Robinson Dairy
• Meat: US Foods
• Prepared Goods: US Foods
• Produce: US Foods
• Seafood: Seattle Fish
2. How were these suppliers Broadline Distribution
selected? Convenience? • Select suppliers to leverage spend
Price? Accessibility of • Use of same suppliers throughout supply chain
goods? Please specify for creates continuity and consistency
each category.
• Establishment of controls and compliance
3. What is the seasonality of Peak: Thanksgiving, Christmas – Easter
the resorts? • Deliveries daily during peak
• Pricing programs established in fall to lock in
prices for winter
Mud season: spring
4. What is your protocol for • File claim with U.S. Foods domestically
goods that are not up to • St. Lucia: claim filed with freight forwarder
code/health standards? • CH Robinson offers insurance on goods
• Use air shipping more than ocean freight in
distribution to St. Lucia
5. Have you experienced • Chef determines the menu, and thus all
any distribution products that need to be ordered. Need to first
bottlenecks getting goods establish practices and controls with chef
to the resorts? If so, how • Create standards for foods that US Foods or
were they remedied? other distributor can follow
• Monitor weather: path closures in Colorado,
hurricanes in St. Lucia
• Increase storage
39

41. Interview – Conference Call with Thomas DeLouise and Nick Hagel
Date & Time: 10/26/10 10:00-11:00am
Attendees: Ellen Hammock & Janaki Douillard
Questions Answers
1. What does this project The end result of this project is to create a roadmap that
need to do for it to be can be followed when implementing a food and
successful in your beverage supply chain at a new resort. This data will
eyes? include what products can be sourced on an island and
which will need to be imported, as well as the
regulation and taxation that is applicable on the island.
2. What has been/is St. Lucia is all about being politically correct and
your involvement building relationships. You have to be conscientious of
with St. Lucia? suppliers and buying local. The citizens are very
nationalistic and have stringent protectionist practices.
You have to make sure not to cross the wrong supplier
or they will cut you off. Most of the products on the
island are imported, but duties are levied on all third-
party imports.
There is very little storage at the resort. We are
currently considering leaving containers on site, but
additional storage is not in operation today. Freight is
the cheapest option for getting products to the island,
costing $4000 a container. Tropical Shipping (I believe)
is the current freight forwarder. Amijet is another
option, but costs are based on weight resulting in much
higher expenditures.
St. Lucia is also extremely seasonal. Peak season is
December to April or May, and slow season is August
to September (hurricane season). Slow season is
characterized by single digit occupancy. May-August is
also slow because of the extreme heat and humidity on
the island.
During peak season, containers do not go in more than
once a week. The Landings currently sources most of
its products locally, which are more expensive and can
be of a lower caliber, especially meat.
3. What will happen if There will be backlash from the local producers. St.
we move away from Lucia is extremely political and we will have to be very
local products in an careful in negotiating which products we will and will
attempt to acquire not source from them.
lower cost, higher
quality products?
40

42. 4. Could you please get Tempo Miami is in a transition period and its supply
me in contact with the chain is subject to change. Nick Hagel will arrange a
F&B Manager at meeting to walk through one of the Colorado resorts
Tempo Miami, or food and beverage supply chains.
their purchasing
manager to discuss
specifics of their
supply chain?
5. Pat Pascal has been A conference call between Adam Smock (F&B
unresponsive thus far. Director), Pat Pascal (Executive Chef), Thomas
Do you have any DeLouise (Corporate Director of Operations) and Ellen
other means of Hammock will be scheduled for next week to discuss
contacting her? the suppliers and products used at The Landings, in
addition to which suppliers are absolute constraints
moving forward.
6. How would you prefer Email is the best way of getting a hold of Thomas
to be contacted in the DeLouise.
future, especially with
regard to time-
sensitive material?
41

43. Interview- Glenroy Regis- Chief Financial Controller with Brydens
Date & Time: 11/16/10 9:00am
Attendees: Mileta Gebre-Michael
Questions Answers
1. What is the breadth of products you Foodstuff, spirits, wines, tobacco, frozen
could provide? food
2. Where are these products sourced? Trinidad-Food stuffs
Are these products imported and Wines: Italy, Chile, France
from where? (Please specify by each Tobacco Trinidad
product category i.e. operating Frozen Foods- USA,UK, New Zealand
supplies, dry goods, frozen, meat, Dry Goods-USA
etc)
3. Is there a mark up fee for each Yes
product category? If so how much?
4. How are the goods transported from Mainly containers
their origins to St Lucia?
5. How are these goods transported We have our own fleet of vehicles (30)
from the port at St. Lucia to the
Landing Resort?
6. What are the costs associated with Duties, container charges, de-stuffing
getting the products through charges, transportation.
customs, transportation, shipping
etc?
7. How often are orders placed? We formalized ordering systems that
factors sales, lead time etc.
8. Where is Brydens headquartered? Bois D’Orange in the north of the island
Where are your distribution centers
located?
9. How is safety and quality of We have standards
products ensured?
10. Do you have a sales report Unwilling to send
breakdown by volume for each
product category for The Landing at
St. Lucia? If so please provide a soft
copy as well as a product price list.
42

44. Interview - Eustace Chinie Vitalis
Date & Time: 11/17/10 2:00pm
Attendees: Ellen Hammock & Mileta Gebre-Michael
Questions Answers
1. Can you give us 1. Agricultural Economist
some background on 2. Link between agricultural sector and tourism
your experience with a. Imported goods can be produced locally;
Sandals?
substituted or produced on island
b. Reduce import bill
3. Payment to farmers major issue; require timely
payment
4. Reliability and consistency of goods issue in
Caribbean
2. What type of foods a. Create production schedule for items that can be
can be produced grown on island
more cheaply on a. Fruits: melons, pineapples
island? b. Vegetables: romaine lettuce, tomatoes,
cabbage (red and green), squashes
b. Saved $1 million in the first year producing the
above goods on island
c. Created demand for local produce
a. Longer shelf life
b. Fresher
c. No storage costs
3. Could you discuss 1. Provide list of desired import items to Ministry of
the importation Agriculture
process for goods that 2. Send list to suppliers in US if receive approval
cannot be produced
3. US supplier states whether they can or cannot ship
on island?
that specific good (i.e. cut of meat) to St. Lucia
4. What type of policies Importation is more or less a gentleman’s agreement
govern this? • File with marketing department of Ministry of
Agriculture for import license
• Only get clearance to import if quantity produced
on island is not sufficient to meet demand
• No formal contracts exist binding farmers to users
(resorts); farmers always look for best price
43

45. 4. Could you elaborate 1. Caribbean spends $10 billion annually importing
on the process of food goods
importation? 2. Not self-sufficient in producing diary products or
meat
a. Cheaper to import meat
b. No restrictions on the importation of diary
products
3. Restrictions
a. Lobster only seafood with a closed season
b. Cannot import citrus fruits
c. Cannot import honey
d. Restrictions on importation of beer and
Coca-Cola because bottling plants on island
e. No restrictions importation of dairy, dry
goods or operating supplies
f. Beef
• Only boneless beef
• Most comes from United States
• Need documentation of age of beef and
location of slaughter
g. Chicken
• Have to purchase 20-40% from local
suppliers
• Typically local wholesalers only provide
whole chicken, not cuts, which resorts do
not demand
h. Pork
• Do not have facilities to supply all cuts
on island
• Use local wholesalers to source specific
cuts
i. Restrictions exist because do not have
infrastructure to control outbreak if meat is
contaminated
44

46. Competitor Analysis
Summary
The Caribbean is one of the most visited vacation destinations due to its
beautiful beaches, remote location, and warm climate. Tourism constitutes the
majority of island nations’ GDP, and successful generation of revenue in this region
is attributed to the ability to manage the volatile inflow of travelers, a byproduct of
drastic changes in weather throughout the year. Resorts that focus their efforts on
creating a competitive advantage by reducing costs through logistics and supply
chain management prove most successful. The most effective way of reducing supply
chain costs is to collaborate with suppliers, necessitating effective and timely
communication, as well as vamping up strategic planning to utilize just-in-time
purchasing. The information pulled from academic journals, articles, as well as
interviews with contacts at world-renowned resorts offers valuable insight into this
arena.
Our research shows that utilizing a forecasting model that incorporates
occupancy, as well as historical data, increases the accuracy of purchasing
predictions. Cost deduction is achieved by only purchasing the amount of product to
be consumed within specific time intervals, reducing waste product. This cost
reduction allows resorts to focus on ensuring the procurement of the highest quality
products at the lowest price. Reducing order costs by increasing quantity of products
ordered and decreasing the frequency of orders distinguishes the elite resorts from the
competition.
45

47. Research Document
I. Competitor Environment
A. Leading Industry: Tourism15
1. 5xs number of resorts, restaurants & bars
2. Not enough of local population
B. 9/11
1. Huge decrease in tourists
2. Leverage costs
C. Business Environments
1. Major Economies: Jamaica, Dominican Republic, Trinidad &
Tobago, St. Lucia, St. Kitts & Nevis
2. Caribbean Tourism Organization: data rich with updated
statistics
a. http://www.onecaribbean.org/error.aspx?statusCode=500
3. Caribbean Hotel Association: organizes major players in
hospitality
a. http://www.caribbeantravel.com/
II. Doing Business in the Caribbean
A. Overview16
1. Thousands of islands
2. 5 colonial masters with distinct languages
3. Disparate legal systems
4. Different levels of development
5. Thousands of square miles of open sea
B. CARICOM
1. 32 members
2. Caribbean free trade bloc and principal voice
3. Organized to set foreign investment, energy, tourism &
agriculture dollars
C. US-Side Advocates
1. U.S. Commercial Service aims to place U.S. exporters in
Caribbean Markets
2. Compile market research, events & business matching
15
“Caribbean Living and Lifestyles.” Caribbean Property Magazine.
http://www.caribpro.com/Caribbean_Property_Magazine/index.php?pageid=313
16
.Brown, Greg. “Guide to doing Business in the Caribbean.” Business.com.
http://www.business.com/guides/doing-business-in-the-caribbean-1055/
46

48. D. Free Trade Advantage
1. DR CAfta trade deal easier to sell into Dominican Republic
2. Foreign Investments heavily attracted in large economy
countries.
III. Hotels & Resort: Food & Beverage
A. Forecasting
1. Yield/Revenue Management
a. Help hotels decide on most profitable mix of transient
business
b. Can increase revenue
i. Airline industry increased 0.5-3.0%17
ii. 10-11% increase in 34 out of 41 hotel food and
beverage outlets
2. Dimensions:
a. Reservation Arrival
b. Occupancy
c. Historical data
3. Benefits
a. Leverage Costs
i. Purchasing
ii. Kitchen staff preparation
iii. Labor costs
b. If occupancy is down during a low season- leverage costs
with appealing to locals
4. Forecast examples18
a. Total number of arrivals for a day and then break that
number into length of stay and rtae classes using historical
proportions
b. Forecast the total number of arrivals for a particular day in
each rate class, and then break that number into lengths of
stay using historical proportions
17
Weatherford, Larry R. “A comparison of forecasting methods for hotel revenue management.
International Journal of Corecasting. Volume 19 (3) July-Setpember 2003. Pgs. 401-415
18
Thompson, Gary M. “Revene Management Forecasting Aggregation Analysis Tool”. The center
for Hospitality Research. Cornell University School of Hotel Administration.
http://www.hotelschool.cornell.edu/research/chr/pubs/tools/tooldetails-15093.html
47

49. c. Forecast total number of arrivals for a given day in each
length of stay and then break that number into rate classes
using historical proportions
d. Independent forecasts of total number of arrivals for a day
for each length of stay and rate class.
B. Storage
1. Inventory significant effects on profit reporting & asset
valuations19
a. Directly affect cash flow, production levels, & customer
service
b. Inventory turnover ratio:
i. High- not buying enough stock
ii. Low- buying too much and sinking cash into expense
2. Manager must apply dollar amount to stored goods to a dollar
figure
a. Costs incurred
b. Waste & inefficiency of discarded food
C. Cold Storage
1. Risk of Food poisoning & food spoilage
a. Cold Chain20
b. Temperature-controlled supply chain: uninterrupted series
of storage and distribution that maintain a given
temperature range
c. Used to help extend and ensure shelf life of products such
as fresh agricultural produce, frozen
d. Global temperatures and climate change increase—cold
units drastically affected
e. Further prevent food born illness
2. Temperatures 21: 2-5
a. Freeze Point: 0 degrees Celsius
b. Cold Storage: 8 degrees
c. Room Temperature: 25
D. Quick Facts
1. Economics of Food Preservation
19
Ojugo, Clement. Practical Food & Beverage Cost Control. 2nd Edition. NY. 2010
20
A.R. Trott, T. Welch. “Refrigeration of foods. Cold storage practice.” Refrigeration and Air
Conditioning, (Third Edition), 2000, Pages 162-169.
21
Li Guo, Ying Ma, Da-Wen Sun, Peng Wang. “Effects of controlled freezing-point storage at 0 °C
on quality of green bean as compared with cold and room-temperature storages.” Journal of Food
Engineering, Volume 86, Issue 1, May 2008, Pages 25-29.
48

50. a. Produce & Ingredients
b. Equipment & supplies
c. Fuel consumption
d. Capital outlays
e. Time & energy
f. Cost of Similar food preserved commercially
g. Large capital outlays
2. Freezing Costs
a. Benefits
i. Simple to do
ii. Keeps food more like fresh produce
b. Disadvantage
i. Cost to buy and operate a freezer
• Divide over 20 years if new vs 9 used
• Lost interest on cash outlay for freezer
• Maintenance & repair
• Electricity needed to reach and maintain 0
degrees F
• Packaging materials
• Water & fuel to prepare food for freezing
• Added ingredients (sugar or ant darkening
agents)
ii. US DEPARTMENT OF AGRICULTURE
E. Shelf Life of Goods
Product Refrigerator (40 °F) Freezer (0 °F)
Eggs
Fresh, in shell 3 to 5 weeks Don't freeze
Hardcooked 1 week Don't freeze well
Hot dogs & Luncheon Meats
Hot dogs, opened package 1 week 1 to 2 months
Unopened package 2 weeks 1 to 2 months
Luncheon meats, opened package 3 to 5 days 1 to 2 months
Unopened package 2 weeks 1 to 2 months
Bacon & Sausage
Bacon 7 days 1 month
Sausage, raw from chicken, turkey, pork, beef 1 to 2 days 1 to 2 months
49

51. Ham
Ham, fully-cooked vacuum sealed at plant,
undated, unopened 2 weeks 1 to 2 months
Ham, fully-cooked, whole 7 days 1 to 2 months
Hamburger, Ground & Stew Meat
Hamburger & stew meat; Ground turkey, veal,
pork, lamb & mixtures of them 1 to 2 days 3 to 4 months
Fresh Beef, Veal, Lamb, Pork
Steaks 3 to 5 days 6 to 12 months
Chops 3 to 5 days 4 to 6 months
Roasts 3 to 5 days 4 to 12 months
Soup & Stews
Vegetable or meat added 3 to 4 days 2 to 3 months
Meat Leftovers
Cooked meat and meat casseroles 3 to 4 days 2 to 3 months
Gravy and meat broth 1 to 2 days 2 to 3 months
Fresh Poultry
Chicken or turkey, whole 1 to 2 days 1 year
Chicken or turkey, pieces 1 to 2 days 9 months
Cooked Poultry
Fried chicken 3 to 4 days 4 months
Pieces, plain 3 to 4 days 4 months
Chicken nuggets, patties 1 to 2 days 1 to 3 months
Pizza
Pizza 3 to 4 days 1 to 2 months
Stuffing
Stuffing-cooked 3 to 4 days 1 month
Beverages, Fruit
Juices in cartons, fruit drinks, punch 3 weeks unopened 8 to 12 months
7 to 10 days opened
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52. Fish
Lean fish (cod, flounder, haddock, sole, etc.) 1 to 2 days 6 months
Fatty fish (bluefish, mackerel, salmon, etc.) 1 to 2 days 2 to 3 months
Cooked fish 3 to 4 days 4 to 6 months
Smoked fish 14 days or date on vacuum 2 months in vacuum
package package
Shellfish
Shrimp, scallops, crayfish, squid, shucked clams, 1 to 2 days 3 to 6 months
mussels and oysters
Live clams, mussels, crab, lobster and oysters 2 to 3 days 2 to 3 months
Cooked shellfish 3 to 4 days 3 months
Dairy
Butter 1 to 3 months 6 to 9 months
Cheese, Hard (such as Cheddar, Swiss) 6 months, unopened 6 months
3 to 4 weeks, opened
Cheese, Soft (such as Brie, Bel Paese) 1 week 6 months
Cottage Cheese, Ricotta 1 week Doesn't freeze well
Cream Cheese 2 weeks Doesn't freeze well
Margarine 4 to 5 months 12 months
Milk 7 days 3 months
Sour cream 7 to 21 days Doesn't freeze
Yogurt 7 to 14 days 1 to 2 months
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F. Purchasing Process
1. Acquisition of appropriate goods and or services a the best
possible total cost of ownership
2. Documentations ensures best practice and regulatory authority
rules are compiled closely
3. Adapt to meet requirements of Caribbean
4. Minimize fraud and open competition
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“Cold Storage Chart.” U.S. Deparment of Agriculture and the US food and Drug Administration.
http://www.plasticsinfo.org/s_plasticsinfo/sec_level4_alt.asp?CID=577&DID=2335.
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53. 5. Decisions include:
a. Delivery & handling
b. Marginal benefit
c. Price fluctuations
d. Cost benefit analysis & cost utility analysis
e. Level of risk
6. Systems
a. Just In Time
i. Timing purchases of consumables so as to keep
inventory costs low
ii. Framework agreement setting terms & price created
between supplier and purchaser
b. Bidding
i. Depending on policy or legal requirements: quotes
from multiple vendors
ii. Prepare supply, expediting, shipment, delivery &
payment base don contract
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54. Interviews
The following are interviews that pertained most directly to the competitive
environment of the Landings St. Lucia. They are listed in order from earliest to latest
since the timeline of the project helps explain the progression of questions asked to
each interviewee.
Interview - The Ritz-Carlton, Denver Executive Chef: Justin Fields
Date & Time: 10/26/10 7:30-8:00am
Attendees: Mileta Gebre-Michael
Questions Answers
1. Ownership? 1. Ritz Carlton manages property
2. Operate with approved vendors based off:
a. Contracts
b. Volume based discounts
c. Lowest shipping and freight costs
2. Forecasting? 2. All volumes based on forecasting
3. Factors:
a. Percentage of occupancy within the hotel
a. 220 rooms with 2 people per room
b. Days of the week- Friday & Saturday higher traffic
c. Seasonal Times
a. Peak: July to mid-November
i. 81% Occupancy drops to 40%
b. Late November to January
i. 50-60% occupancy
d. Banquets
e. City wide events
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55. 3. Product 1. Dairy
Categories? a. Vendor: Leeds Robinson Dairy
i. Handles 80% of orders
ii. Amount: 400-500 lbs per order
a. 4-5 cases of butter
b. 4 cases of milk
iii. Ordered and Delivered 3 times a week
b. Vendor: Shamrock
i. Handles 20% of orders
ii. Amount: 50-100 lbs
a. Specialty cheeses
iii. 4 times a week
2. Meat
c. Vendor: K&M Meat brokers
i. All steaks come from same ranch
a. Prime prices for meat—company
finds best prices
b. Specifications—prime meat
ii. US Inspector on hand
iii. Amount: 800-1000 lbs per order
iv. Ordered and Delivered 3 times a week
3. Seafood
d. Vendor: North East Food
i. Amount: 25 lbs
ii. 6 days a week
a. Keep 2 days in house
b. If wanted specialty fish from
Hawaii—ship fish over night
i. 40% of cost of fish was
shipping
4. Produce
e. Vendor: Shamrock- Freshpoint
i. Handles 95% of orders
ii. Amount: 800 lbs per order
iii. Delivered and ordered 4x’s
f. Vendor: Fresh Guys-
i. Amount: 5%
ii. Small/ Specialty Items i.e. Asian fruits
iii. Maybe 1 a week
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56. SWOT Analysis
Food and Beverage at the Landings St. Lucia
Strengths Weaknesses
• RockResort caliber • Lack of visibility
• Choice views & private beach • No logistics standardization
• Culinary awards • No standard forecasting model
• Little Storage
• No formal purchasing process
SWOT Analysis
Opportunities Threats
• Fresh meats • Protective economy
• Economies of scale via importation • Legal and regulatory restrictions
• Remoteness of the island
Strengths
‐ Both the Beach Club and the Palms are RockResort caliber restaurants that
incorporate RockResorts’ environmental sustainability model by sourcing
produce and fresh fish locally.
‐ The Beach Club is an open-air restaurant with the best views of Rodney Bay
and the private Landings beach.
‐ The Landings has a strong culinary team. Recently, they were awarded Best
Presentation at St. Lucia’s Rhythm and Spice Festival. Also the Landing’s
Sous Chef Gilrey Samuel, as a part of St. Lucia’s national team, brought
home the bronze medal at CHTA’s Taste of the Caribbean event.
Weaknesses
‐ Lack of visibility with Vail Resorts headquarters. The Landings is potentially
losing money by not taking advantage of their corporate partners, analysis
capabilities, and capital investment for growth opportunities.
‐ There is little standardization of the food and beverage supply chain, which if
utilized, would allow for easy scalability to newly developing food and
beverage processes at other Caribbean RockResorts.
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57. ‐ Standard forecasting has yet to be perfected given how recently the food and
beverage operations began.
‐ There is very limited storage at The Landings. If they take advantage of
economies of scale in the future and import their own products, they will also
have to purchase a container to stay on site as additional storage, cutting into
the profit margin that importing would provide.
‐ There is no known formal purchasing process in effect at The Landings
currently, and they appear to order as needed from the local suppliers. This
ties back to the lack of storage, forecasting and standardization.
Opportunities
‐ Bring in fresh meats due to poor quality of meat on island. This could in turn
be a competitive advantage in the resort restaurant genre.
‐ Source meats, dry goods and operating supplies from US Foods to take
advantage of economies of scale.
Threats
‐ Local suppliers have been known to implement tying agreements where they
force certain foods to be sourced locally or else the local supplier will cut the
Resort off entirely.
‐ Importing products to St. Lucia can be very difficult given the quotas, food
restrictions, food safety regulations and limited existing shipping lanes to St.
Lucia.
‐ St. Lucia is such a remote island that not only is getting food and supplies to
the island a unique problem but being on an island, the Landings is more
prone to hurricanes and the effects of detrimental weather than are the
Colorado resorts.
Strategy
The Landings at St. Lucia’s Food and Beverage sector appears to be employing a
focused differentiation strategy since they are promoting a unique product to obtain a
competitive advantage in a narrowed market. In this instance, the unique product is
their luxury RockResorts standard restaurant experience that is targeted at the
specific market of the yachting community.
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