Description
A business plan is a formal statement of a set of business goals, the reasons they are believed attainable, and the plan for reaching those goals.
Pomona Organics
1/21/2009
Business Plan for Pomona Organics: A Student Enterprise Project
California State Polytechnic University, Pomona
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Contents
Business Plan for Pomona Organics: A Student Enterprise Project .............................................. 1 Contents....................................................................................................................................... 2 1 Executive Summary ................................................................................................................ 4 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 2 2.1 2.1.1 2.1.2 2.2 2.3 2.4 3 3.1 3.2 3.3 3.4 4 4.1 4.2 4.3 4.4 4.5 5 5.1 Introduction ..................................................................................................................... 4 Mission ............................................................................................................................ 4 Objectives ........................................................................................................................ 4 Business Opportunity ...................................................................................................... 4 Product/Service Description............................................................................................ 4 Current Business Position ............................................................................................... 5 Financial Potential ........................................................................................................... 5 Keys to Success ............................................................................................................... 5 Business Description ....................................................................................................... 6 The Spadra Ranch Site (PepperTree) ...................................................................... 6 The Lyle Center Site (LCRS) .................................................................................. 6 Ownership ....................................................................................................................... 6 Current Position............................................................................................................... 7 Start-Up Summary........................................................................................................... 7 Product Overview ............................................................................................................ 8 Competitive Analysis ...................................................................................................... 8 Suppliers and Inventory .................................................................................................. 8 Research and Development ............................................................................................. 8 Industry Definition .......................................................................................................... 9 Primary Competitors ....................................................................................................... 9 Market Size ..................................................................................................................... 9 Market Growth .............................................................................................................. 10 Customer Profile ........................................................................................................... 10 Market Analysis ............................................................................................................ 11
Company Overview................................................................................................................. 6
Products ................................................................................................................................... 8
The Industry, Competition and Market ................................................................................... 9
Marketing Plan ...................................................................................................................... 11
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5.1.1 5.1.2 5.2 5.3 5.4 5.5 5.6 5.7 6 6.1 6.2 6.3 6.4 6.5 6.6 7 7.1 7.2
Market Segment .................................................................................................... 11 Target Market Segment Strategy........................................................................... 11 Value Proposition .......................................................................................................... 12 Competitive Advantage ................................................................................................. 12 Pricing ........................................................................................................................... 12 Distribution Channels.................................................................................................... 12 Promotional Plan ........................................................................................................... 12 Sales Strategy ................................................................................................................ 13 Location ......................................................................................................................... 14 Facility........................................................................................................................... 14 Operating Equipment .................................................................................................... 14 Suppliers and Vendors .................................................................................................. 14 Personnel Plan ............................................................................................................... 14 General Operations ........................................................................................................ 15 Management/Principals ................................................................................................. 16 Organizational Structure ............................................................................................... 16
Operating Plan ....................................................................................................................... 14
Management, Organization and Ownership .......................................................................... 16
7.2.1 Pomona Organics Executive Board.................................................................................. 16 7.2.2 Individual Sites and Projects ............................................................................................ 17 7.3 8 8.1 8.2 9 9.1 9.2 9.3 9.4 Professional Consultants ............................................................................................... 17 Forthcoming SEP proposals .......................................................................................... 18 Long term Future Plans ................................................................................................. 18 Planting schedule, Cost and Revenue Sheets. ............................................................... 19 Site Description ............................................................................................................. 19 PepperTree Accounts Booklet ....................................................................................... 25 Calendar of Events ........................................................................................................ 25 Future Plans ........................................................................................................................... 18
Appendices and SEP Proposal for PepperTree ..................................................................... 19
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1 Executive Summary
1.1 Introduction
This document contains a broad description of Pomona Organics, with the purpose to establish us as a formal entity on the campus of Cal Poly Pomona. This document also contains specific information regarding the Student Enterprise Project (SEP) proposal for PepperTree.
1.2 Mission
The primary mission of Pomona Organics is to provide healthy produce, free of synthetic chemicals, to the Cal Poly Pomona community, including students, staff and faculty, as well as to the local population.
1.3 Objectives
• To provide income for students as they gain practical experience growing, directmarketing and managing farming and market-garden operations in support of the “learn by doing” mission of Cal Poly Pomona. To provide opportunities for students to conduct original research and develop new methods and technologies in sustainable agriculture. Pomona Organics will utilize the urban – agriculture interface to establish a business that is economically viable and ecologically sound.
• •
1.4
Business Opportunity
Current opportunities exist to supply high-quality produce throughout the year to Foundation Dining Services and the Farm Store with whom partnerships have already been achieved. The Collins School is another potential on campus market. Premium returns can be received through direct-market channels, particularly area Farmer’s Markets (i.e. Pomona, San Dimas, Diamond Bar, Chino Hills, Claremont, Baldwin Park, Upland, Irvine, Costa Mesa, Long Beach,). Partnerships have been developed and are being pursued with area Farmer’s Market organizers. Additional requests have been made by regional distributors such as Whole Foods, who are keen on expanding selection of locally grown, and student grown, organic produce.
1.5 Product/Service Description
Pomona Organics intends to grow, pack and distribute through the above-mentioned outlets. Our customers can expect the produce we deliver to arrive clean and on time, with high visual and taste appeal. They also expect our produce to be priced comparably with other vendors. Through direct marketing, Pomona Organics will exceed these expectations and will additionally provide new, unusual and visually appealing varieties not commonly found in the market place.
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1.6 Current Business Position
At present, we are relying on the expertise of students in the College of Agriculture and Environmental Design as well as their faculty advisors, to meet the opportunities we have already identified. Over time, we hope to enlist the assistance of students in marketing, engineering, and other disciplines to aid us in identifying new markets and developing state-of-the-art methods for sustainable production and delivery of top-quality produce.
1.7 Financial Potential
We would like to prioritize our relationships with on-campus entities, as the Cal Poly student body is our preferred customer. Bulk delivery and short transport make these destinations ideal from a fuel and marketing standpoint. However, as organic producers, our financial success hinges on receiving premium payments for our produce. Our input and field labor costs demand that we seek the high returns offered predominantly through Farmer’s Markets and Whole Foods. Thus, a balance will be sought between our input costs and premium returns. Success in the initial stages of the Pomona Organics strategy will result in great financial potential in the future. Cal Poly Pomona has the opportunity to take advantage of the huge population of the surrounding region and to be a pioneer in managing the urban-agriculture interface.
1.8 Keys to Success
Pomona Organics is poised to succeed by: 1. Producing and delivering high-quality organic produce, including value-added products on a regular basis. 2. Applying the expertise available through our affiliation with, and access to, interested students, their faculty advisors and local industry members. 3. Intelligent management of direct- marketing operations to the Southern California population. 4. Securing reliable labor force. 5. Executing and implementing useful research. 6. Pomona Organics will enjoy the benefits of the preexisting infrastructure and supportive environment of Cal Poly Pomona.
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2 Company Overview
Pomona Organics is a Student Enterprise Project (SEP) affiliated with the California State Polytechnic University at Pomona. It is organized to support the educational mission of the University by providing self-funding opportunities for students to obtain practical experience in organic agriculture and marketing of farm-fresh produce.
2.1 Business Description
Current operations include two sites: • • The Spadra Ranch site (PepperTree), which is owned by Cal Poly Pomona and managed by the Department of Plant and Soil Science within the College of Agriculture. The John T. Lyle Center for Regenerative Studies (LCRS) site, also owned by Cal Poly Pomona and managed by the College of Environmental Design.
2.1.1 The Spadra Ranch Site (PepperTree)
The PepperTree site includes roughly two and a half acres, and is located near the cross streets of Temple Ave. and Pomona Blvd. During the first year(s) of operation, the site will be leased under the auspices of the College of Agriculture. The site is ideally suited to bulk production of row crops for our chosen markets. The Plant Science Dept. is ultimately responsible for all SEP related activities at Spadra Ranch. PepperTree and any other College of Agriculture land will be accounted for in a single book. Direction for these sites will be provided by Plant Science Dept. faculty.
2.1.2 The Lyle Center Site (LCRS)
The Lyle Center site provides a unique opportunity for student research initiatives. It is of a smaller scale, approximately one acre, with discontinuous plots that are well suited to a market-garden approach. Because of it’s close proximity to labs and other research infrastructure, the LCRS site will provide a test bed for new crops and production methods, including value added processing such as dehydration, vacuum packaging, pickling, and other vertically-integrated principles aimed at establishing profitability on a small site. The LCRS is ultimately responsible for all SEP related activities at LCRS. Pomona Organics will maintain separate books for LCRS. Direction and oversight for this site will be provided by LCRS staff.
2.2 Ownership
Pomona Organics will operate as an autonomous entity within the Cal Poly Pomona Foundation. Our specific legal status for the first few growing seasons will be as a Student Enterprise Project (SEP) proposed by students and financed through CPP Foundation. In essence, Pomona Organics, its name, logos, product and materials belong to the students of Cal Poly Pomona.
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2.3 Current Position
Our current position is in a start-up and planning phase. We have forged business relationships with the Foundation Dining Services and the Farm Store for the purchase of produce we have available. We have also established ties to Farmer’s Markets in Baldwin Park and Irvine, and are developing ties to Whole Foods in Tustin, as well as their regional distributor. We are hard at work formalizing our relationship with all entities mentioned in this document. Cost and revenue analysis has been carried out for warm season production at PepperTree. Conservative estimation predicts that Pomona Organics will net a decent return on investment for ourselves and for CPP Foundation by next fall. It will be noted that vegetable farming, by nature, is a risky business and very rarely results in huge financial gains. Agriculturally speaking, we have seedlings in the green house, green manure at PepperTree and plan to plant our first round in the week of spring break. Rapid cooperation from CPP Foundation will provide the funds necessary for a smooth start up in late March. These funds will be useful immediately.
2.4 Start-Up Summary
Pomona Organics will seek start up funding for the warm season 2007 at PepperTree through a loan from the CPP Foundation. We expect to fully repay the first season’s loan, and the remaining net profit will be split 70% Pomona Organics, 30% CPP Foundation. CPP Foundation’s 30% constitutes interest on the loan and rent on the land.
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3 Products
3.1 Product Overview
We will occupy seasonal niches at each of our intended markets. Our major crops will be produced at PepperTree and will consist of tomatoes (hybrid and heirloom), bell peppers, cantaloupe, watermelon, cucumber, and sweet corn- all produced under the guidelines set out by the USDA for organic production, and certified by California Certified Organic Farmers (CCOF). These crops will be supplemented by tree crops, squash, herbs, specialty vegetables and cut flowers from the LCRS site, as well as value-added products previously mentioned.
3.2 Competitive Analysis
Because Pomona Organics is a student project serving the food need of the university community, our products have a competitive advantage against outside distributors who have no investment in the quality of campus life. We have the advantage because we are being offered land on campus at preferential rates and preferential purchasing of our products by the Foundation Food Services. Our products will prove competitive at Farmer’s Markets as well because of our proximity as an urban farm, the tendency of consumers to purchase local produce with a familiar name, consumer preference for student grown produce and our low fuel costs.
3.3 Suppliers and Inventory
All materials will be purchased initially from Western Farm Service or Evergreen Farm Supply, both of which have a very amiable relationship with the Plant Science Dept. and have shown great support for plant science students. Any supplies which cannot be procured through these resources will be sought on the open market. Additionally, because of the nature of Pomona Organics as a student enterprise, other members of the local vegetable industry have been willing to donate/ sell at cost their available bulk materials. In the future, fertilizer will be made on campus through green manuring, animal science manure, composting dining hall leftovers and green waste from Facilities Management.
3.4 Research and Development
Research and development of sustainable cropping systems and specialty crop trials will take place mainly at the LCRS. This partnership will help the Lyle Center fulfill its mission as an institution dedicated to research and demonstration of environmentally sustainable practices. The specifics of the LCRS proposal are forthcoming. As previously-mentioned, the concept of value-added processing will be explored as a competitive edge, as well as providing a medium for our name and logo to be distributed, increasing our public profile and establishing a unique niche. Pomona Organics intends to achieve brand identification with our discerning customers. Research at PepperTree will focus on the scale up and refinement of prospective techniques.
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Future projects include preparing more Cal Poly acreage for organic certification, greenhouse hydroponic production, expanding our seasonal window for production and hybrid development (i.e. heirloom varieties) to establish trademark “Cal Poly” cultivars.
4 The Industry, Competition and Market
4.1 Industry Definition
The industry in which this business will form is organic agriculture, serving a small but growing niche market of consumers desiring locally-produced food.
4.2 Primary Competitors
We do not consider other local farmers to be serious competitors as we feel that the lack of agricultural land in the Los Angeles area creates more demand for local organic produce than supply. This high demand is prevalent throughout the market from wholesale to Farmer’s Markets. A real competitor to local organic foods is supermarket produce, which because of its low prices and distributive capacity, has an advantage in the larger market. Pomona Organics is operating in a niche market, supported by customers who refuse to purchase industrial food. Finally, Pomona Organics will find competition close at home. The Plant Science Dept. already produces many of the same crops and will be selling these conventional crops side by side with our organic produce. Pomona Organics is confident that consumer demand for organic produce will give us the slight competitive edge we need to compensate for this friendly competition. We, quite literally, see this competition as mutually beneficial; both entities can cooperatively purchase material, share labor, transport to market and share ideas, experience and advice with each other.
4.3 Market Size
The market for local produce is small but growing, with demand outstripping the supply in many areas. Pomona Organics’ first year numbers will not constitute a major addition to this market. Pomona Organics and Cal Poly, however, stand poised to fill a substantial segment of the growing local organic industry. Pomona Organics will be very scrupulous in expanding acreage and output, so as to maintain favorable market conditions. The Farm Store and Farmer’s Markets constitute “smaller” markets, where a relatively small amount of Pomona Organics harvest will be sold. The Farm Store will fetch Pomona Organics a very fair price and will be more feasible because of the extremely short transportation distance and absence of marketing cost. The Farm Store proves socially valuable because it is a great location for making Pomona Organics produce available to the CPP campus community. Farmer’s Markets will also prove to be low volume outlets for our produce. These markets also demand higher transportation cost and labor inputs. This low volume and “high” inputs will be more than offset by the ‘very high” retail price that Pomona Organics will receive. Foundation Dining Service and Whole Foods will constitute our “large” markets. Pomona Organics prefers to sell into campus via Foundation, but as a start up business, we will
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have to carefully consider the economic advantages that Whole Foods delivers. Both of these markets are capable of purchasing the entire Pomona Organics harvest. In this theoretical situation Foundation Dining Services could have its consumption of tomatoes, cucumber, bell pepper and watermelon nearly or totally met by Pomona Organics. We will always be considered a small scale, local farm by Whole Foods. This is exactly what Whole Foods customers demand. Whole Foods will fetch us a high price, large purchases and one stop drop off of our produce. In addition to the immediate economic benefits, Whole Foods may well prove to be a valuable partner in Cal Poly’s role in the future of this industry. We will use prudent economic and social reasoning when considering the “large scale” marketing or our produce.
4.4 Market Growth
Direct marketing is economically viable and returns a higher percentage of gross sales to the grower. Coupled with a growing consumer demand for more control over food security, Farmer’s Markets have exploded. The number of retail farmers' markets in the USA grew from about 340 in 1970 to over 3,000 in 2001, and was especially rapid after the passage of the Farmer-to-Consumer Direct Marketing Act of 1976. The Geographical Review recognizes that a growing trend is materializing that prioritizes a return to closer relationship between farmer and consumer. In short, urban and suburban people desire a return to an agrarian society. The growth of certified organic produce is steadily on the rise as well: several years of 17 to 20 percent growth, compared to 2 to 3 percent for the food industry in general. Pomona Organics, by exploiting trends in direct marketing and a surging popularity of organic produce, has a bright future in the current market.
4.5 Customer Profile
Our customer profile will be diverse. From university students to retired suburbanites, Pomona Organics will deliver to an already-supportive customer base. The primary enthusiasm for Pomona Organics will come from entities and individuals who prioritize locally-grown products from small scale producers, and who are committed to agricultural practices that reduce the health and environmental impacts associated with conventional agriculture. Pomona Organics recognizes these customers as cultural orators who will encourage larger segments of the population to demand the same produce.
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5 Marketing Plan
5.1 Market Analysis
The local organic market is strong. It is a seller’s market.
5.1.1 Market Segment
Pomona Organics will fill many niches. We will serve as a poster child of Foundations Dining Services’ Green Campaign. We will offer the only Cal Poly grown organic produce at the Farm Store. We will offer the freshest, and the only student grown produce at Farmer’s Markets. We will provide Whole Foods with some of the most socially and ecologically sound produce they will ever have to offer. Once again, our strength is in our unique strategies.
5.1.2 Target Market Segment Strategy
5.1.2.1 Current Needs The Foundation Food Services has a need to meet the goals of their Green Campaign, one of which is to provide more organic produce in the dining centers on campus. Pomona Organics is “Good for you, Good for California and Good for Mother Earth.” Local communities have a need for healthy and savory food that is grown according to standards that they can trust. These customers will appreciate the chance to buy directly from the hand that has grown their food. Many customers will take interest into the on goings of Pomona Organics. Customers at the Irvine Farmer’s Market already go out of their way to find the Cal Poly booth. The Farm Store has no Cal Poly grown organic produce. Pomona Organics will offer this product, as well as a product that can be sold as “student grown”. Whole Foods’ customers demand the freshest, most ecologically sound produce. The Market will provide them this, as they are willing to pay top dollar. Pomona Organics will provide Whole Foods very local, organic, and student grown produce. Whole Foods and its customers will appreciate what Pomona Organics has to offer. 5.1.2.2 Current Trends Besides the redundantly mentioned local organic trends, Pomona Organics intends to follow and create trends in the variety of food people eat. We will provide unique crops and/ or cultivars that will give our customers the “spice of life”. Examples of this strategy are the sale of numerous heirloom tomato varieties. These tomatoes are as diverse in shape, size, color and flavor as the local population is diverse in people. We will also grow heirloom cauliflower and many Asian vegetables. 5.1.2.3 Growth Potential Pomona Organics has the potential, if the labor supply can grow to suit, to expand its operation into other agricultural land on campus and at the Lyle Center. Good relations with markets such as Whole Foods promise nearly unlimited market potential in the future.
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It will be critical to our success to use prudence when increasing our organic production levels. The high price currently enjoyed by organic producers can be contributed to the high demand for a low supply. Pomona Organics must be careful to allow demand to catch up when increasing the supply on the local market.
5.2 Value Proposition
Besides its educational value, Pomona Organics will also put agriculture land into “high value” fruit and vegetable production. This is the only type of agriculture system that has a chance at withstanding the increasing urbanization pressure.
5.3 Competitive Advantage
Pomona Organics has a unique strategy to obtaining and maintaining competitive advantage. These strategies include: • • • • • • Providing CCOF certified organic produce. Providing locally grown produce. Providing student grown produce. Providing high quality, delicious and visibly appealing produce. The ability to carry out our own research and development. Location in the center of southern California’s urban population.
5.4 Pricing
See appendix for “Crop Revenue and Cost Worksheets”. Pomona Organics will sell all of our produce for as much as the market will provide. In the special case of our preferred customer, Foundation Dining Services, we will sell our produce at wholesale market value or near to the cost of production. If Foundation Dining Service pricing is significantly below our other markets’, Pomona Organics will place the bulk of our produce into other marketing channels.
5.5 Distribution Channels
Bulk delivery routes will be established for target customers such as Foundation Dining Services and Whole Foods. The Farm Store relationship will be flexible as to what we have and what they need. Farmer’s Market teams will be assembled to deliver and sell a diverse array of produce to the surrounding markets.
5.6 Promotional Plan
Pamphlets will be printed out to raise awareness in the campus community. These pamphlets will also be available anywhere our product is sold. Funding may be available to create T-shirts and reusable grocery bags with the Pomona Organics logo. Periodic press releases to the campus and local newspapers will allow us to promote the latest developments on the farm. Art and Communications departments on campus will be recruited for artwork and public relations. Pomona Organics intends to concentrate on the
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name Pomona. She is a Roman goddess of agriculture. This mythological character represents this area’s rich agrarian history. Images of Pomona can be found throughout the city of Pomona as well as on the seal of Los Angeles County. Pomona Organics will prepare tasteful, classically styled images of Pomona for the purpose of promoting our products, our business and our values.
5.7 Sales Strategy
The PepperTree manager will perform the majority of sales along with the Farmer’s Market manager. This duty will entail recording harvest yields and strategically designating through which distribution channel a product will travel. These decisions will be based upon the yield, the input cost, marketing considerations and Pomona Organics’ mission. The Farmer’s Markets will require cash sales of our products. This requires a secure cash box, a petty cash change fund, access to the Farm Store’s safe and the ability to deposit cash into our CPP Foundation account. Pomona Organics has already secured all of the above items accept the ability to deposit cash into an account. Other markets will pay for their produce in non cash payments. Most likely this will be in the form of a check from Whole Foods and balance transfers from Foundation Dining Services and the Farm Store.
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6 Operating Plan
6.1 Location
Cropping systems will be established at the previously described sites on the campus of California State Polytechnic University, Pomona. See appendix for attached map of PepperTree and its soil analysis as well as weather graphs for Pomona.
6.2 Facility
Equipment storage will take place at Spadra ranch, either in a newly constructed shed, at the residence or in the existing “onion shed”. Storage at Lyle Center will utilize pre existing infrastructure. Washing, additional storage, plant propagation and possibly hydroponic production will take place at the Crops Unit (Building 28) managed by the College of Agriculture. Coolers, covered storage and a green house exist at this location. Pomona Organics will be sure not to interfere with the operations of Kellogg Ranch.
6.3 Operating Equipment
Tractors will be rented through the Plant Science Dept. The rate will cover fuel and maintenance. This rate is to be negotiated between the department and Pomona Organics management. Hand tools, backpack sprayers and other equipment will be bought and maintained by Pomona Organics.
6.4 Suppliers and Vendors
Pomona Organics will reach out and solicit aid from the industry. Companies such as Western Farm Service, Evergreen Farm Supply, Netafem, Milagro Ranch LLC, Tomato Fest Seed Company and the Plant Science Dept. may all fill the role of suppliers and hopefully the role of donors. Pomona Organics will always search out the best value for a product.
6.5 Personnel Plan
Pomona Organics intends to hire four student employees for this coming warm season at PepperTree; three managers/laborers and one Farmer’s Market manager. These employees will be hired through CPP Foundation and paid for by Pomona Organics. They will be hired to work at a $7.75/hour rate. Pomona Organics will pay 106.5% of these wages to CPP Foundation. This amount, $8.25/hour, will cover the students wage and pay into worker’s compensation fund and other benefits. These students will be asked to work approximately 15 hours a week. The work at PepperTree can realistically be carried out by two full time employees. Additional employees will reduce the workload on management and will also provide the opportunity for more student involvement. Pomona Organics will always attempt to employ underclassmen, who will receive direct training and will be strongly encouraged to
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become the future management of Pomona Organics. Additionally, Pomona Organics will support outreach to local high schools with agriculture programs in order to attract and recruit new students into applicable programs where they can become the future employees of Pomona Organics. Finally, Pomona Organics has already received many offers for volunteer labor from students, faculty, staff and local community members. We recognize this as not only an opportunity for free labor, but also as an opportunity to work towards our goal of community outreach and education. Volunteers will be required to fill out a waiver that states they, or their family, will not hold Cal Poly Pomona, CPP Foundation, the Plant Science Dept., LCRS and Pomona Organics responsible in the case of damages while they are volunteering for Pomona Organics.
6.6 General Operations
PepperTree will be managed by Patrick Dosier. He will be supported by co-managers Paul Nurre and Magdalena Vree. This site will be run as a high input continuous cropping system. The planting schedule, cropping system and economic analysis for this site have already been designed (see appendix). Jessica Lawson will work as the Farmer’s Market Manager, and her pay will come from the PepperTree account. LCRS will be managed by Paul Nurre and co-managed by Zora Tucker and Eric Zentmyer. This site will also be a continuous cropping system, but with a concentration on low input, agroecological techniques. The planting schedule, cropping system, economic analysis and operational strategy of LCRS are forthcoming. LCRS has generously agreed to pay for the manager of this location’s wage up to 20 hours/week. A continuous cropping system is characterized by regular (weekly, biweekly, monthly) plantings with the goal of having steady and regular harvest throughout the entirety of a growing season. Pomona Organics will split one year into two seasons, warm and cool, defined by the type of crops being grown. Attached to this document is the warm season crop plan for PepperTree. PepperTree’s cool season crop plan is forthcoming. Together, these two crop plans will span a year of time at the PepperTree site. These plans also will overlap in the fall and spring seasons as we convert our crops to meet the weather conditions.
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7 Management, Organization and Ownership
7.1 Management/Principals
• • • • • A prioritized “to do’ work list will be posted at each site. Direct instruction will be provided. If possible, daily work meetings and training sessions will be carried out. Stringent record keeping of hours worked, materials used and yield will be kept by managers. Make work enjoyable and educational for all employees.
7.2 Organizational Structure
Pomona Organics intends to be student owned and operated with the goal of benefiting all students of Cal Poly Pomona. We understand that it is not possible for students to operate such an endeavor with complete autonomy, but we believe that Pomona Organics will be the best education experience if students are allowed to work independently.
7.2.1 Pomona Organics Executive Board
Pomona Organics will self appoint an executive board made up of seven students. The purpose of the board is to interact with CPP Foundation, unify and connect separate internal units (i.e. PepperTree and LCRS), provide guidance in the overall direction of Pomona Organics, elect future board members, hire employees and to democratically resolve issues facing Pomona Organics as a whole. All executive board decisions will be subject to review by the Chairman of the Plant Science Dept. and the Director of LCRS. Site managers will be members of and accountable to the executive board. Site managers are responsible to make routine and daily decisions applicable to their site. Site managers must submit proposed SEPs to the executive board and receive approval before an SEP proposal will be presented to Foundation. The executive board will keep books tracking all major financial transactions. These transactions will include loans from CPP Foundation, transfers within Pomona Organics, total Pomona Organics costs and revenues, donations received and payment to CPP Foundation.
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Tentative Pomona Organics executive board members: 1. Patrick Dosier, agronomy undergraduate. CEO and PepperTree manager. 2. Paul Nurre, agronomy undergraduate. LCRS manager and PepperTree comanager. 3. Magdalena Vree, agronomy undergraduate. PepperTree co-manager. 4. Zora Tucker, regenerative studies graduate. LCRS co-manager. 5. Eric Zentmyer, regenerative studies graduate. LCRS co-manager. 6. Jessica Lawson, foods and nutrition undergraduate. Farmer’s Market manager. 7. Leanthony Jones, agronomy undergraduate. Seedling and GreenHouse manager. All major executive board decisions are subject to the approval of Dan Hostetler, Chairman of the Plant Science Dept. and Kyle Brown, Director of the Lyle Center for Regenerative Studies.
7.2.2 Individual Sites and Projects
Each individual site and individual project that Pomona Organics operates will be managed by a single person, under whom will be co-managers and/or employees. Managers will be given room to operate efficiently and autonomously to carry out the goals of their project as outlined in the approved SEP proposal which describes their operation. The executive board will not interfere with any day to day operations, or in any way that is outside the purposes of the executive board listed above. Each separate site or SEP will keep individual books. In the case of economic loss, and debt to CPP Foundation, the particular site responsible for the loss will be noted and the College responsible for the site will be liable for the debt. Site managers will go through the executive board for major economic transfers between separate SEP sites. Site managers will propose any new SEP proposals to the executive board, before going to Foundation. Site managers are accountable to the Chairman of the Plant Science Dept., or in the case of the LCRS site – the Director of LCRS, first and to the executive board second.
7.3 Professional Consultants
Dan Hostetler, Plant Science. Victor Wegrzyn, Plant Science. Fred Roth, Plant Science. Gaylord Patten, Plant Science. Terry Fujimoto, Plant Science. Juan Araya, LCRS. George Pool, Kellogg Ranch. Rick Mack, Western Farm Service. Don Stickles, Milagro Ranch. Wayne Morgan, Soil and Plant Science Information. And many more…
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8 Future Plans
8.1 Forthcoming SEP proposals
Pomona Organics intends to continue to submit detailed SEP proposals to CPP Foundation over the next few years. This spring, we will submit proposals for the cool season crops at PepperTree, greenhouse hydroponic tomatoes (contingent on agreement from the operator, David Still) and the processing of additional acreage for organic conversion.
8.2 Long term Future Plans
Pomona Organics has high hopes for itself in the mid- to long-term range. We understand that none of our long-term goals will be realistic unless Pomona Organics meets and exceeds the expectations outlined in this document. With that said, Pomona Organics intends to continuously increase its acreage and production. We plan to diversify our crop selection to the maximum diversity that our region will allow. Pomona Organics will attempt to become a household name within the CPP campus community and in the surrounding area as well. After we have financially stabilized, Pomona Organics intends to develop a serious outreach operation in which we will donate our produce to local and regional food banks and charity organizations. Pomona Organics would also like to develop a scholarship fund to help students participating in our program that need financial assistance. Finally, Pomona Organics envisions itself developing into an independent non – profit organization owned by and benefiting the students of Cal Poly Pomona. This final goal is contingent on successful execution of this business plan and great support from CPP Foundation, the Plant Science Dept., LCRS, the entire campus community and the regional community at large.
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9 Appendices and SEP Proposal for PepperTree
All appendices regard the specific SEP proposal for PepperTree warm season 2007. Patrick Dosier, manager of PepperTree, requests CPP Foundation to review the financial analysis. This analysis uses conservative estimation of prices and yields and attempts to overestimate costs. The final numbers reflect a break even scenario. Pomona Organics actually expects to net a very decent return. Planting is scheduled to begin around March 24, 2007. We will plant six rounds of sweet corn, seven rounds of hybrid tomato, two rounds of heirloom tomato, six rounds of bell pepper and three rounds of each cucurbit crop; cucumber, watermelon and cantaloupe. Our latest planting date, for hybrid tomato, is scheduled for August 8, 2007. These crops will be harvested between June 7, 2007 and October 22, 2007. PepperTree is being managed under the philosophy that timely inputs result in substantial gains in yield. Pomona Organics will input fertilizers, preventative organic pest control, hand labor and bed preparation in order to create the ideal conditions for the growth of large blemish-free produce. Weather data and soil analysis is included to show much research has been invested into the cropping system at PepperTree. It is important to note that this project has been carefully designed by two senior agronomy students. A financial synopsis is as follows: 1. Predicted costs totaling $16,359. 1.1. Material costs totaling $5835 (including fuel and applied material cost). 1.2. Tractor and other equipment rental totaling $623. 1.3. Labor costs totaling $8798. 1.4. Water costs totaling $142. 1.5. Contingency fund totaling $395 2 . Predicted revenue totaling $280. 2.1 $280 * 30% = $84 gain for CPP Foundation.
9.1 Planting schedule, Cost and Revenue Sheets.
See attached Warm Season Totals, Sweet Corn, Tomato, Bell Pepper, Cucumber, Watermelon (H20), and Cantaloupe worksheets. Each sheet serves as a planting schedule, a revenue predictor and a cost predictor. An attempt was made to overestimate costs and under estimate revenue. Additionally, 30% waste/loss was factored in as well as a contingency fund and general material cost fund were applied totaling $1155.
9.2 Site Description
The following pages contain information vital to the environment present at PepperTree.
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Above are soil analysis results from PepperTree ranch taken in late January. This sample was donated by Western Farm Service. Important results include: a need for high P inputs (we will use rock phosphate), low sulfates (we will add elemental S, inexpensive), and high lime (S will ameliorate this problem). All other nutrient needs will be met by our green manure and animal manuring programs.
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Pomona Organics PepperTree Ranch
Cal Poly Pomona – Spadra Ranch Created by Patrick Dosier Coastguard Beacon Coordinates 20 Dec 06
Gross = 3.59 acres Net= 2.59 acres 8oo’ x 140’ (inner)
Gas Pipeline
34.0417230°, -117.8114160°. 680’ Alt.
Above is a GPS map generated at PepperTree. The technology was made available by Western Farm Service. Rows will run the short way, making many manageable rows available for staggered plantings and crop diversity.
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Air Temperature 2006
105 95 85 75 65 55 45 35 25
Degrees F
Above is a graph derived from data collected at the CIMIS weather station located on Cal Poly Pomona’s main campus. 2006 data was used as changing weather patterns make the previous year the best indicator of 2007 conditions. Obviously, our warm season crops are found when air temperatures rise.
Soil Temperature 2006
85 80 75 70 65 60 55 50 45 40
Degrees F
Above is a graph derived from data collected at the same CIMIS station. Sweet corn planting dates are most effected by soil temperature. Pomona Organics will plant sweet corn around 3/26/2007, or when soil temperatures are approaching the desired 66º.
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1/ 1/ 20 06 2/ 1/ 20 06 3/ 1/ 20 06 4/ 1/ 20 06 5/ 1/ 20 06 6/ 1/ 20 06 7/ 1/ 20 06 8/ 1/ 20 06 9/ 1/ 20 06 10 /1 /2 00 6 11 /1 /2 00 6 12 /1 /2 00 6
Month Soil Temp.
1/ 1/ 20 06 2/ 1/ 20 06 3/ 1/ 20 06 4/ 1/ 20 06 5/ 1/ 20 06 6/ 1/ 20 06 7/ 1/ 20 06 8/ 1/ 20 06 9/ 1/ 20 06 10 /1 /2 00 6 11 /1 /2 00 6 12 /1 /2 00 6
Month Min. Air Temp. Avg. Air Temp. Max Air Temp.
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Rainfall vs. ETo 2006
1.4 1.2 1 0.8 0.6 0.4 0.2 0
inches
Above is more Pomona CIMIS data. Inches of rainfall are shown in blue. We expect a relatively wet spring in 2007. ETo stands for evapotranspiration rate. This rate estimates how much water will be lost from the soil via transpiration (what plants use) and evaporation (lost to the air). Pomona Organics may not have to irrigate intensively in the spring, but as summer sets in we will have to add .22 inches/day on average.
Average Relative Humidity 2006
95 85 75 65 55 45 35 25 15 5
% Moisture
Above is humidity information obtained from Pomona CIMIS. This information is less useful in predicting irrigation requirements than it is for predicting disease pressure. High humidity and heat will lead to break out of powdery mildew. Powdery mildew is most effectively controlled when it is prevented. Pomona Organics will be using dusting sulfur and Oxidate© when humidity and heat are high.
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1/ 1/ 20 06 2/ 1/ 20 06 3/ 1/ 20 06 4/ 1/ 20 06 5/ 1/ 20 06 6/ 1/ 20 06 7/ 1/ 20 06 8/ 1/ 20 06 9/ 1/ 20 06 10 /1 /2 00 6 11 /1 /2 00 6 12 /1 /2 00 6
Month Average Relative Humidity
1/ 1/ 20 06 2/ 1/ 20 06 3/ 1/ 20 06 4/ 1/ 20 06 5/ 1/ 20 06 6/ 1/ 20 06 7/ 1/ 20 06 8/ 1/ 20 06 9/ 1/ 20 06 10 /1 /2 00 6 11 /1 /2 00 6 12 /1 /2 00 6
Month Precip. ETo
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Wind Speed 2006
7 6 5 4 3 2 1
mph
Above is wind speed data collected at Pomona CIMIS. Average wind speeds of 3.5 mph during vegetable pollination will lead to large yields.
Solar Radiation 2006
700 600 500 400 300 200 100 0
Ly/Day
Finally, above is solar radiation data collected from Pomona CIMIS. This information relates to the intensity of light and will reflect on the days to harvest of our crops. When planning our continuous cropping system, we made sure to lengthen our days to harvest period at the beginning and end of our warm season.
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1/ 1/ 20 06 2/ 1/ 20 06 3/ 1/ 20 06 4/ 1/ 20 06 5/ 1/ 20 06 6/ 1/ 20 06 7/ 1/ 20 06 8/ 1/ 20 06 9/ 1/ 20 06 10 /1 /2 00 6 11 /1 /2 00 6 12 /1 /2 00 6
Month Solar Radiation
1/ 1/ 20 06 2/ 1/ 20 06 3/ 1/ 20 06 4/ 1/ 20 06 5/ 1/ 20 06 6/ 1/ 20 06 7/ 1/ 20 06 8/ 1/ 20 06 9/ 1/ 20 06 10 /1 /2 00 6 11 /1 /2 00 6 12 /1 /2 00 6
Month Wind Speed
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9.3 PepperTree Accounts Booklet
Attached is a columnar pad that is set up to keep a running tab of Pomona Organics’ overall account balance, and PepperTree’s account balance (income and expenses), records of organic chemical applications, labor hour records and records of donations.
9.4 Calendar of Events
Attached is booklet calendar labeled with estimated dates of major labor events.
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doc_710880530.pdf
A business plan is a formal statement of a set of business goals, the reasons they are believed attainable, and the plan for reaching those goals.
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Business Plan for Pomona Organics: A Student Enterprise Project
California State Polytechnic University, Pomona
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Contents
Business Plan for Pomona Organics: A Student Enterprise Project .............................................. 1 Contents....................................................................................................................................... 2 1 Executive Summary ................................................................................................................ 4 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 2 2.1 2.1.1 2.1.2 2.2 2.3 2.4 3 3.1 3.2 3.3 3.4 4 4.1 4.2 4.3 4.4 4.5 5 5.1 Introduction ..................................................................................................................... 4 Mission ............................................................................................................................ 4 Objectives ........................................................................................................................ 4 Business Opportunity ...................................................................................................... 4 Product/Service Description............................................................................................ 4 Current Business Position ............................................................................................... 5 Financial Potential ........................................................................................................... 5 Keys to Success ............................................................................................................... 5 Business Description ....................................................................................................... 6 The Spadra Ranch Site (PepperTree) ...................................................................... 6 The Lyle Center Site (LCRS) .................................................................................. 6 Ownership ....................................................................................................................... 6 Current Position............................................................................................................... 7 Start-Up Summary........................................................................................................... 7 Product Overview ............................................................................................................ 8 Competitive Analysis ...................................................................................................... 8 Suppliers and Inventory .................................................................................................. 8 Research and Development ............................................................................................. 8 Industry Definition .......................................................................................................... 9 Primary Competitors ....................................................................................................... 9 Market Size ..................................................................................................................... 9 Market Growth .............................................................................................................. 10 Customer Profile ........................................................................................................... 10 Market Analysis ............................................................................................................ 11
Company Overview................................................................................................................. 6
Products ................................................................................................................................... 8
The Industry, Competition and Market ................................................................................... 9
Marketing Plan ...................................................................................................................... 11
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5.1.1 5.1.2 5.2 5.3 5.4 5.5 5.6 5.7 6 6.1 6.2 6.3 6.4 6.5 6.6 7 7.1 7.2
Market Segment .................................................................................................... 11 Target Market Segment Strategy........................................................................... 11 Value Proposition .......................................................................................................... 12 Competitive Advantage ................................................................................................. 12 Pricing ........................................................................................................................... 12 Distribution Channels.................................................................................................... 12 Promotional Plan ........................................................................................................... 12 Sales Strategy ................................................................................................................ 13 Location ......................................................................................................................... 14 Facility........................................................................................................................... 14 Operating Equipment .................................................................................................... 14 Suppliers and Vendors .................................................................................................. 14 Personnel Plan ............................................................................................................... 14 General Operations ........................................................................................................ 15 Management/Principals ................................................................................................. 16 Organizational Structure ............................................................................................... 16
Operating Plan ....................................................................................................................... 14
Management, Organization and Ownership .......................................................................... 16
7.2.1 Pomona Organics Executive Board.................................................................................. 16 7.2.2 Individual Sites and Projects ............................................................................................ 17 7.3 8 8.1 8.2 9 9.1 9.2 9.3 9.4 Professional Consultants ............................................................................................... 17 Forthcoming SEP proposals .......................................................................................... 18 Long term Future Plans ................................................................................................. 18 Planting schedule, Cost and Revenue Sheets. ............................................................... 19 Site Description ............................................................................................................. 19 PepperTree Accounts Booklet ....................................................................................... 25 Calendar of Events ........................................................................................................ 25 Future Plans ........................................................................................................................... 18
Appendices and SEP Proposal for PepperTree ..................................................................... 19
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1 Executive Summary
1.1 Introduction
This document contains a broad description of Pomona Organics, with the purpose to establish us as a formal entity on the campus of Cal Poly Pomona. This document also contains specific information regarding the Student Enterprise Project (SEP) proposal for PepperTree.
1.2 Mission
The primary mission of Pomona Organics is to provide healthy produce, free of synthetic chemicals, to the Cal Poly Pomona community, including students, staff and faculty, as well as to the local population.
1.3 Objectives
• To provide income for students as they gain practical experience growing, directmarketing and managing farming and market-garden operations in support of the “learn by doing” mission of Cal Poly Pomona. To provide opportunities for students to conduct original research and develop new methods and technologies in sustainable agriculture. Pomona Organics will utilize the urban – agriculture interface to establish a business that is economically viable and ecologically sound.
• •
1.4
Business Opportunity
Current opportunities exist to supply high-quality produce throughout the year to Foundation Dining Services and the Farm Store with whom partnerships have already been achieved. The Collins School is another potential on campus market. Premium returns can be received through direct-market channels, particularly area Farmer’s Markets (i.e. Pomona, San Dimas, Diamond Bar, Chino Hills, Claremont, Baldwin Park, Upland, Irvine, Costa Mesa, Long Beach,). Partnerships have been developed and are being pursued with area Farmer’s Market organizers. Additional requests have been made by regional distributors such as Whole Foods, who are keen on expanding selection of locally grown, and student grown, organic produce.
1.5 Product/Service Description
Pomona Organics intends to grow, pack and distribute through the above-mentioned outlets. Our customers can expect the produce we deliver to arrive clean and on time, with high visual and taste appeal. They also expect our produce to be priced comparably with other vendors. Through direct marketing, Pomona Organics will exceed these expectations and will additionally provide new, unusual and visually appealing varieties not commonly found in the market place.
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1.6 Current Business Position
At present, we are relying on the expertise of students in the College of Agriculture and Environmental Design as well as their faculty advisors, to meet the opportunities we have already identified. Over time, we hope to enlist the assistance of students in marketing, engineering, and other disciplines to aid us in identifying new markets and developing state-of-the-art methods for sustainable production and delivery of top-quality produce.
1.7 Financial Potential
We would like to prioritize our relationships with on-campus entities, as the Cal Poly student body is our preferred customer. Bulk delivery and short transport make these destinations ideal from a fuel and marketing standpoint. However, as organic producers, our financial success hinges on receiving premium payments for our produce. Our input and field labor costs demand that we seek the high returns offered predominantly through Farmer’s Markets and Whole Foods. Thus, a balance will be sought between our input costs and premium returns. Success in the initial stages of the Pomona Organics strategy will result in great financial potential in the future. Cal Poly Pomona has the opportunity to take advantage of the huge population of the surrounding region and to be a pioneer in managing the urban-agriculture interface.
1.8 Keys to Success
Pomona Organics is poised to succeed by: 1. Producing and delivering high-quality organic produce, including value-added products on a regular basis. 2. Applying the expertise available through our affiliation with, and access to, interested students, their faculty advisors and local industry members. 3. Intelligent management of direct- marketing operations to the Southern California population. 4. Securing reliable labor force. 5. Executing and implementing useful research. 6. Pomona Organics will enjoy the benefits of the preexisting infrastructure and supportive environment of Cal Poly Pomona.
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2 Company Overview
Pomona Organics is a Student Enterprise Project (SEP) affiliated with the California State Polytechnic University at Pomona. It is organized to support the educational mission of the University by providing self-funding opportunities for students to obtain practical experience in organic agriculture and marketing of farm-fresh produce.
2.1 Business Description
Current operations include two sites: • • The Spadra Ranch site (PepperTree), which is owned by Cal Poly Pomona and managed by the Department of Plant and Soil Science within the College of Agriculture. The John T. Lyle Center for Regenerative Studies (LCRS) site, also owned by Cal Poly Pomona and managed by the College of Environmental Design.
2.1.1 The Spadra Ranch Site (PepperTree)
The PepperTree site includes roughly two and a half acres, and is located near the cross streets of Temple Ave. and Pomona Blvd. During the first year(s) of operation, the site will be leased under the auspices of the College of Agriculture. The site is ideally suited to bulk production of row crops for our chosen markets. The Plant Science Dept. is ultimately responsible for all SEP related activities at Spadra Ranch. PepperTree and any other College of Agriculture land will be accounted for in a single book. Direction for these sites will be provided by Plant Science Dept. faculty.
2.1.2 The Lyle Center Site (LCRS)
The Lyle Center site provides a unique opportunity for student research initiatives. It is of a smaller scale, approximately one acre, with discontinuous plots that are well suited to a market-garden approach. Because of it’s close proximity to labs and other research infrastructure, the LCRS site will provide a test bed for new crops and production methods, including value added processing such as dehydration, vacuum packaging, pickling, and other vertically-integrated principles aimed at establishing profitability on a small site. The LCRS is ultimately responsible for all SEP related activities at LCRS. Pomona Organics will maintain separate books for LCRS. Direction and oversight for this site will be provided by LCRS staff.
2.2 Ownership
Pomona Organics will operate as an autonomous entity within the Cal Poly Pomona Foundation. Our specific legal status for the first few growing seasons will be as a Student Enterprise Project (SEP) proposed by students and financed through CPP Foundation. In essence, Pomona Organics, its name, logos, product and materials belong to the students of Cal Poly Pomona.
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2.3 Current Position
Our current position is in a start-up and planning phase. We have forged business relationships with the Foundation Dining Services and the Farm Store for the purchase of produce we have available. We have also established ties to Farmer’s Markets in Baldwin Park and Irvine, and are developing ties to Whole Foods in Tustin, as well as their regional distributor. We are hard at work formalizing our relationship with all entities mentioned in this document. Cost and revenue analysis has been carried out for warm season production at PepperTree. Conservative estimation predicts that Pomona Organics will net a decent return on investment for ourselves and for CPP Foundation by next fall. It will be noted that vegetable farming, by nature, is a risky business and very rarely results in huge financial gains. Agriculturally speaking, we have seedlings in the green house, green manure at PepperTree and plan to plant our first round in the week of spring break. Rapid cooperation from CPP Foundation will provide the funds necessary for a smooth start up in late March. These funds will be useful immediately.
2.4 Start-Up Summary
Pomona Organics will seek start up funding for the warm season 2007 at PepperTree through a loan from the CPP Foundation. We expect to fully repay the first season’s loan, and the remaining net profit will be split 70% Pomona Organics, 30% CPP Foundation. CPP Foundation’s 30% constitutes interest on the loan and rent on the land.
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3 Products
3.1 Product Overview
We will occupy seasonal niches at each of our intended markets. Our major crops will be produced at PepperTree and will consist of tomatoes (hybrid and heirloom), bell peppers, cantaloupe, watermelon, cucumber, and sweet corn- all produced under the guidelines set out by the USDA for organic production, and certified by California Certified Organic Farmers (CCOF). These crops will be supplemented by tree crops, squash, herbs, specialty vegetables and cut flowers from the LCRS site, as well as value-added products previously mentioned.
3.2 Competitive Analysis
Because Pomona Organics is a student project serving the food need of the university community, our products have a competitive advantage against outside distributors who have no investment in the quality of campus life. We have the advantage because we are being offered land on campus at preferential rates and preferential purchasing of our products by the Foundation Food Services. Our products will prove competitive at Farmer’s Markets as well because of our proximity as an urban farm, the tendency of consumers to purchase local produce with a familiar name, consumer preference for student grown produce and our low fuel costs.
3.3 Suppliers and Inventory
All materials will be purchased initially from Western Farm Service or Evergreen Farm Supply, both of which have a very amiable relationship with the Plant Science Dept. and have shown great support for plant science students. Any supplies which cannot be procured through these resources will be sought on the open market. Additionally, because of the nature of Pomona Organics as a student enterprise, other members of the local vegetable industry have been willing to donate/ sell at cost their available bulk materials. In the future, fertilizer will be made on campus through green manuring, animal science manure, composting dining hall leftovers and green waste from Facilities Management.
3.4 Research and Development
Research and development of sustainable cropping systems and specialty crop trials will take place mainly at the LCRS. This partnership will help the Lyle Center fulfill its mission as an institution dedicated to research and demonstration of environmentally sustainable practices. The specifics of the LCRS proposal are forthcoming. As previously-mentioned, the concept of value-added processing will be explored as a competitive edge, as well as providing a medium for our name and logo to be distributed, increasing our public profile and establishing a unique niche. Pomona Organics intends to achieve brand identification with our discerning customers. Research at PepperTree will focus on the scale up and refinement of prospective techniques.
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Future projects include preparing more Cal Poly acreage for organic certification, greenhouse hydroponic production, expanding our seasonal window for production and hybrid development (i.e. heirloom varieties) to establish trademark “Cal Poly” cultivars.
4 The Industry, Competition and Market
4.1 Industry Definition
The industry in which this business will form is organic agriculture, serving a small but growing niche market of consumers desiring locally-produced food.
4.2 Primary Competitors
We do not consider other local farmers to be serious competitors as we feel that the lack of agricultural land in the Los Angeles area creates more demand for local organic produce than supply. This high demand is prevalent throughout the market from wholesale to Farmer’s Markets. A real competitor to local organic foods is supermarket produce, which because of its low prices and distributive capacity, has an advantage in the larger market. Pomona Organics is operating in a niche market, supported by customers who refuse to purchase industrial food. Finally, Pomona Organics will find competition close at home. The Plant Science Dept. already produces many of the same crops and will be selling these conventional crops side by side with our organic produce. Pomona Organics is confident that consumer demand for organic produce will give us the slight competitive edge we need to compensate for this friendly competition. We, quite literally, see this competition as mutually beneficial; both entities can cooperatively purchase material, share labor, transport to market and share ideas, experience and advice with each other.
4.3 Market Size
The market for local produce is small but growing, with demand outstripping the supply in many areas. Pomona Organics’ first year numbers will not constitute a major addition to this market. Pomona Organics and Cal Poly, however, stand poised to fill a substantial segment of the growing local organic industry. Pomona Organics will be very scrupulous in expanding acreage and output, so as to maintain favorable market conditions. The Farm Store and Farmer’s Markets constitute “smaller” markets, where a relatively small amount of Pomona Organics harvest will be sold. The Farm Store will fetch Pomona Organics a very fair price and will be more feasible because of the extremely short transportation distance and absence of marketing cost. The Farm Store proves socially valuable because it is a great location for making Pomona Organics produce available to the CPP campus community. Farmer’s Markets will also prove to be low volume outlets for our produce. These markets also demand higher transportation cost and labor inputs. This low volume and “high” inputs will be more than offset by the ‘very high” retail price that Pomona Organics will receive. Foundation Dining Service and Whole Foods will constitute our “large” markets. Pomona Organics prefers to sell into campus via Foundation, but as a start up business, we will
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have to carefully consider the economic advantages that Whole Foods delivers. Both of these markets are capable of purchasing the entire Pomona Organics harvest. In this theoretical situation Foundation Dining Services could have its consumption of tomatoes, cucumber, bell pepper and watermelon nearly or totally met by Pomona Organics. We will always be considered a small scale, local farm by Whole Foods. This is exactly what Whole Foods customers demand. Whole Foods will fetch us a high price, large purchases and one stop drop off of our produce. In addition to the immediate economic benefits, Whole Foods may well prove to be a valuable partner in Cal Poly’s role in the future of this industry. We will use prudent economic and social reasoning when considering the “large scale” marketing or our produce.
4.4 Market Growth
Direct marketing is economically viable and returns a higher percentage of gross sales to the grower. Coupled with a growing consumer demand for more control over food security, Farmer’s Markets have exploded. The number of retail farmers' markets in the USA grew from about 340 in 1970 to over 3,000 in 2001, and was especially rapid after the passage of the Farmer-to-Consumer Direct Marketing Act of 1976. The Geographical Review recognizes that a growing trend is materializing that prioritizes a return to closer relationship between farmer and consumer. In short, urban and suburban people desire a return to an agrarian society. The growth of certified organic produce is steadily on the rise as well: several years of 17 to 20 percent growth, compared to 2 to 3 percent for the food industry in general. Pomona Organics, by exploiting trends in direct marketing and a surging popularity of organic produce, has a bright future in the current market.
4.5 Customer Profile
Our customer profile will be diverse. From university students to retired suburbanites, Pomona Organics will deliver to an already-supportive customer base. The primary enthusiasm for Pomona Organics will come from entities and individuals who prioritize locally-grown products from small scale producers, and who are committed to agricultural practices that reduce the health and environmental impacts associated with conventional agriculture. Pomona Organics recognizes these customers as cultural orators who will encourage larger segments of the population to demand the same produce.
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5 Marketing Plan
5.1 Market Analysis
The local organic market is strong. It is a seller’s market.
5.1.1 Market Segment
Pomona Organics will fill many niches. We will serve as a poster child of Foundations Dining Services’ Green Campaign. We will offer the only Cal Poly grown organic produce at the Farm Store. We will offer the freshest, and the only student grown produce at Farmer’s Markets. We will provide Whole Foods with some of the most socially and ecologically sound produce they will ever have to offer. Once again, our strength is in our unique strategies.
5.1.2 Target Market Segment Strategy
5.1.2.1 Current Needs The Foundation Food Services has a need to meet the goals of their Green Campaign, one of which is to provide more organic produce in the dining centers on campus. Pomona Organics is “Good for you, Good for California and Good for Mother Earth.” Local communities have a need for healthy and savory food that is grown according to standards that they can trust. These customers will appreciate the chance to buy directly from the hand that has grown their food. Many customers will take interest into the on goings of Pomona Organics. Customers at the Irvine Farmer’s Market already go out of their way to find the Cal Poly booth. The Farm Store has no Cal Poly grown organic produce. Pomona Organics will offer this product, as well as a product that can be sold as “student grown”. Whole Foods’ customers demand the freshest, most ecologically sound produce. The Market will provide them this, as they are willing to pay top dollar. Pomona Organics will provide Whole Foods very local, organic, and student grown produce. Whole Foods and its customers will appreciate what Pomona Organics has to offer. 5.1.2.2 Current Trends Besides the redundantly mentioned local organic trends, Pomona Organics intends to follow and create trends in the variety of food people eat. We will provide unique crops and/ or cultivars that will give our customers the “spice of life”. Examples of this strategy are the sale of numerous heirloom tomato varieties. These tomatoes are as diverse in shape, size, color and flavor as the local population is diverse in people. We will also grow heirloom cauliflower and many Asian vegetables. 5.1.2.3 Growth Potential Pomona Organics has the potential, if the labor supply can grow to suit, to expand its operation into other agricultural land on campus and at the Lyle Center. Good relations with markets such as Whole Foods promise nearly unlimited market potential in the future.
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It will be critical to our success to use prudence when increasing our organic production levels. The high price currently enjoyed by organic producers can be contributed to the high demand for a low supply. Pomona Organics must be careful to allow demand to catch up when increasing the supply on the local market.
5.2 Value Proposition
Besides its educational value, Pomona Organics will also put agriculture land into “high value” fruit and vegetable production. This is the only type of agriculture system that has a chance at withstanding the increasing urbanization pressure.
5.3 Competitive Advantage
Pomona Organics has a unique strategy to obtaining and maintaining competitive advantage. These strategies include: • • • • • • Providing CCOF certified organic produce. Providing locally grown produce. Providing student grown produce. Providing high quality, delicious and visibly appealing produce. The ability to carry out our own research and development. Location in the center of southern California’s urban population.
5.4 Pricing
See appendix for “Crop Revenue and Cost Worksheets”. Pomona Organics will sell all of our produce for as much as the market will provide. In the special case of our preferred customer, Foundation Dining Services, we will sell our produce at wholesale market value or near to the cost of production. If Foundation Dining Service pricing is significantly below our other markets’, Pomona Organics will place the bulk of our produce into other marketing channels.
5.5 Distribution Channels
Bulk delivery routes will be established for target customers such as Foundation Dining Services and Whole Foods. The Farm Store relationship will be flexible as to what we have and what they need. Farmer’s Market teams will be assembled to deliver and sell a diverse array of produce to the surrounding markets.
5.6 Promotional Plan
Pamphlets will be printed out to raise awareness in the campus community. These pamphlets will also be available anywhere our product is sold. Funding may be available to create T-shirts and reusable grocery bags with the Pomona Organics logo. Periodic press releases to the campus and local newspapers will allow us to promote the latest developments on the farm. Art and Communications departments on campus will be recruited for artwork and public relations. Pomona Organics intends to concentrate on the
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name Pomona. She is a Roman goddess of agriculture. This mythological character represents this area’s rich agrarian history. Images of Pomona can be found throughout the city of Pomona as well as on the seal of Los Angeles County. Pomona Organics will prepare tasteful, classically styled images of Pomona for the purpose of promoting our products, our business and our values.
5.7 Sales Strategy
The PepperTree manager will perform the majority of sales along with the Farmer’s Market manager. This duty will entail recording harvest yields and strategically designating through which distribution channel a product will travel. These decisions will be based upon the yield, the input cost, marketing considerations and Pomona Organics’ mission. The Farmer’s Markets will require cash sales of our products. This requires a secure cash box, a petty cash change fund, access to the Farm Store’s safe and the ability to deposit cash into our CPP Foundation account. Pomona Organics has already secured all of the above items accept the ability to deposit cash into an account. Other markets will pay for their produce in non cash payments. Most likely this will be in the form of a check from Whole Foods and balance transfers from Foundation Dining Services and the Farm Store.
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6 Operating Plan
6.1 Location
Cropping systems will be established at the previously described sites on the campus of California State Polytechnic University, Pomona. See appendix for attached map of PepperTree and its soil analysis as well as weather graphs for Pomona.
6.2 Facility
Equipment storage will take place at Spadra ranch, either in a newly constructed shed, at the residence or in the existing “onion shed”. Storage at Lyle Center will utilize pre existing infrastructure. Washing, additional storage, plant propagation and possibly hydroponic production will take place at the Crops Unit (Building 28) managed by the College of Agriculture. Coolers, covered storage and a green house exist at this location. Pomona Organics will be sure not to interfere with the operations of Kellogg Ranch.
6.3 Operating Equipment
Tractors will be rented through the Plant Science Dept. The rate will cover fuel and maintenance. This rate is to be negotiated between the department and Pomona Organics management. Hand tools, backpack sprayers and other equipment will be bought and maintained by Pomona Organics.
6.4 Suppliers and Vendors
Pomona Organics will reach out and solicit aid from the industry. Companies such as Western Farm Service, Evergreen Farm Supply, Netafem, Milagro Ranch LLC, Tomato Fest Seed Company and the Plant Science Dept. may all fill the role of suppliers and hopefully the role of donors. Pomona Organics will always search out the best value for a product.
6.5 Personnel Plan
Pomona Organics intends to hire four student employees for this coming warm season at PepperTree; three managers/laborers and one Farmer’s Market manager. These employees will be hired through CPP Foundation and paid for by Pomona Organics. They will be hired to work at a $7.75/hour rate. Pomona Organics will pay 106.5% of these wages to CPP Foundation. This amount, $8.25/hour, will cover the students wage and pay into worker’s compensation fund and other benefits. These students will be asked to work approximately 15 hours a week. The work at PepperTree can realistically be carried out by two full time employees. Additional employees will reduce the workload on management and will also provide the opportunity for more student involvement. Pomona Organics will always attempt to employ underclassmen, who will receive direct training and will be strongly encouraged to
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become the future management of Pomona Organics. Additionally, Pomona Organics will support outreach to local high schools with agriculture programs in order to attract and recruit new students into applicable programs where they can become the future employees of Pomona Organics. Finally, Pomona Organics has already received many offers for volunteer labor from students, faculty, staff and local community members. We recognize this as not only an opportunity for free labor, but also as an opportunity to work towards our goal of community outreach and education. Volunteers will be required to fill out a waiver that states they, or their family, will not hold Cal Poly Pomona, CPP Foundation, the Plant Science Dept., LCRS and Pomona Organics responsible in the case of damages while they are volunteering for Pomona Organics.
6.6 General Operations
PepperTree will be managed by Patrick Dosier. He will be supported by co-managers Paul Nurre and Magdalena Vree. This site will be run as a high input continuous cropping system. The planting schedule, cropping system and economic analysis for this site have already been designed (see appendix). Jessica Lawson will work as the Farmer’s Market Manager, and her pay will come from the PepperTree account. LCRS will be managed by Paul Nurre and co-managed by Zora Tucker and Eric Zentmyer. This site will also be a continuous cropping system, but with a concentration on low input, agroecological techniques. The planting schedule, cropping system, economic analysis and operational strategy of LCRS are forthcoming. LCRS has generously agreed to pay for the manager of this location’s wage up to 20 hours/week. A continuous cropping system is characterized by regular (weekly, biweekly, monthly) plantings with the goal of having steady and regular harvest throughout the entirety of a growing season. Pomona Organics will split one year into two seasons, warm and cool, defined by the type of crops being grown. Attached to this document is the warm season crop plan for PepperTree. PepperTree’s cool season crop plan is forthcoming. Together, these two crop plans will span a year of time at the PepperTree site. These plans also will overlap in the fall and spring seasons as we convert our crops to meet the weather conditions.
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7 Management, Organization and Ownership
7.1 Management/Principals
• • • • • A prioritized “to do’ work list will be posted at each site. Direct instruction will be provided. If possible, daily work meetings and training sessions will be carried out. Stringent record keeping of hours worked, materials used and yield will be kept by managers. Make work enjoyable and educational for all employees.
7.2 Organizational Structure
Pomona Organics intends to be student owned and operated with the goal of benefiting all students of Cal Poly Pomona. We understand that it is not possible for students to operate such an endeavor with complete autonomy, but we believe that Pomona Organics will be the best education experience if students are allowed to work independently.
7.2.1 Pomona Organics Executive Board
Pomona Organics will self appoint an executive board made up of seven students. The purpose of the board is to interact with CPP Foundation, unify and connect separate internal units (i.e. PepperTree and LCRS), provide guidance in the overall direction of Pomona Organics, elect future board members, hire employees and to democratically resolve issues facing Pomona Organics as a whole. All executive board decisions will be subject to review by the Chairman of the Plant Science Dept. and the Director of LCRS. Site managers will be members of and accountable to the executive board. Site managers are responsible to make routine and daily decisions applicable to their site. Site managers must submit proposed SEPs to the executive board and receive approval before an SEP proposal will be presented to Foundation. The executive board will keep books tracking all major financial transactions. These transactions will include loans from CPP Foundation, transfers within Pomona Organics, total Pomona Organics costs and revenues, donations received and payment to CPP Foundation.
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Tentative Pomona Organics executive board members: 1. Patrick Dosier, agronomy undergraduate. CEO and PepperTree manager. 2. Paul Nurre, agronomy undergraduate. LCRS manager and PepperTree comanager. 3. Magdalena Vree, agronomy undergraduate. PepperTree co-manager. 4. Zora Tucker, regenerative studies graduate. LCRS co-manager. 5. Eric Zentmyer, regenerative studies graduate. LCRS co-manager. 6. Jessica Lawson, foods and nutrition undergraduate. Farmer’s Market manager. 7. Leanthony Jones, agronomy undergraduate. Seedling and GreenHouse manager. All major executive board decisions are subject to the approval of Dan Hostetler, Chairman of the Plant Science Dept. and Kyle Brown, Director of the Lyle Center for Regenerative Studies.
7.2.2 Individual Sites and Projects
Each individual site and individual project that Pomona Organics operates will be managed by a single person, under whom will be co-managers and/or employees. Managers will be given room to operate efficiently and autonomously to carry out the goals of their project as outlined in the approved SEP proposal which describes their operation. The executive board will not interfere with any day to day operations, or in any way that is outside the purposes of the executive board listed above. Each separate site or SEP will keep individual books. In the case of economic loss, and debt to CPP Foundation, the particular site responsible for the loss will be noted and the College responsible for the site will be liable for the debt. Site managers will go through the executive board for major economic transfers between separate SEP sites. Site managers will propose any new SEP proposals to the executive board, before going to Foundation. Site managers are accountable to the Chairman of the Plant Science Dept., or in the case of the LCRS site – the Director of LCRS, first and to the executive board second.
7.3 Professional Consultants
Dan Hostetler, Plant Science. Victor Wegrzyn, Plant Science. Fred Roth, Plant Science. Gaylord Patten, Plant Science. Terry Fujimoto, Plant Science. Juan Araya, LCRS. George Pool, Kellogg Ranch. Rick Mack, Western Farm Service. Don Stickles, Milagro Ranch. Wayne Morgan, Soil and Plant Science Information. And many more…
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8 Future Plans
8.1 Forthcoming SEP proposals
Pomona Organics intends to continue to submit detailed SEP proposals to CPP Foundation over the next few years. This spring, we will submit proposals for the cool season crops at PepperTree, greenhouse hydroponic tomatoes (contingent on agreement from the operator, David Still) and the processing of additional acreage for organic conversion.
8.2 Long term Future Plans
Pomona Organics has high hopes for itself in the mid- to long-term range. We understand that none of our long-term goals will be realistic unless Pomona Organics meets and exceeds the expectations outlined in this document. With that said, Pomona Organics intends to continuously increase its acreage and production. We plan to diversify our crop selection to the maximum diversity that our region will allow. Pomona Organics will attempt to become a household name within the CPP campus community and in the surrounding area as well. After we have financially stabilized, Pomona Organics intends to develop a serious outreach operation in which we will donate our produce to local and regional food banks and charity organizations. Pomona Organics would also like to develop a scholarship fund to help students participating in our program that need financial assistance. Finally, Pomona Organics envisions itself developing into an independent non – profit organization owned by and benefiting the students of Cal Poly Pomona. This final goal is contingent on successful execution of this business plan and great support from CPP Foundation, the Plant Science Dept., LCRS, the entire campus community and the regional community at large.
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9 Appendices and SEP Proposal for PepperTree
All appendices regard the specific SEP proposal for PepperTree warm season 2007. Patrick Dosier, manager of PepperTree, requests CPP Foundation to review the financial analysis. This analysis uses conservative estimation of prices and yields and attempts to overestimate costs. The final numbers reflect a break even scenario. Pomona Organics actually expects to net a very decent return. Planting is scheduled to begin around March 24, 2007. We will plant six rounds of sweet corn, seven rounds of hybrid tomato, two rounds of heirloom tomato, six rounds of bell pepper and three rounds of each cucurbit crop; cucumber, watermelon and cantaloupe. Our latest planting date, for hybrid tomato, is scheduled for August 8, 2007. These crops will be harvested between June 7, 2007 and October 22, 2007. PepperTree is being managed under the philosophy that timely inputs result in substantial gains in yield. Pomona Organics will input fertilizers, preventative organic pest control, hand labor and bed preparation in order to create the ideal conditions for the growth of large blemish-free produce. Weather data and soil analysis is included to show much research has been invested into the cropping system at PepperTree. It is important to note that this project has been carefully designed by two senior agronomy students. A financial synopsis is as follows: 1. Predicted costs totaling $16,359. 1.1. Material costs totaling $5835 (including fuel and applied material cost). 1.2. Tractor and other equipment rental totaling $623. 1.3. Labor costs totaling $8798. 1.4. Water costs totaling $142. 1.5. Contingency fund totaling $395 2 . Predicted revenue totaling $280. 2.1 $280 * 30% = $84 gain for CPP Foundation.
9.1 Planting schedule, Cost and Revenue Sheets.
See attached Warm Season Totals, Sweet Corn, Tomato, Bell Pepper, Cucumber, Watermelon (H20), and Cantaloupe worksheets. Each sheet serves as a planting schedule, a revenue predictor and a cost predictor. An attempt was made to overestimate costs and under estimate revenue. Additionally, 30% waste/loss was factored in as well as a contingency fund and general material cost fund were applied totaling $1155.
9.2 Site Description
The following pages contain information vital to the environment present at PepperTree.
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Above are soil analysis results from PepperTree ranch taken in late January. This sample was donated by Western Farm Service. Important results include: a need for high P inputs (we will use rock phosphate), low sulfates (we will add elemental S, inexpensive), and high lime (S will ameliorate this problem). All other nutrient needs will be met by our green manure and animal manuring programs.
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Pomona Organics PepperTree Ranch
Cal Poly Pomona – Spadra Ranch Created by Patrick Dosier Coastguard Beacon Coordinates 20 Dec 06
Gross = 3.59 acres Net= 2.59 acres 8oo’ x 140’ (inner)
Gas Pipeline
34.0417230°, -117.8114160°. 680’ Alt.
Above is a GPS map generated at PepperTree. The technology was made available by Western Farm Service. Rows will run the short way, making many manageable rows available for staggered plantings and crop diversity.
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Air Temperature 2006
105 95 85 75 65 55 45 35 25
Degrees F
Above is a graph derived from data collected at the CIMIS weather station located on Cal Poly Pomona’s main campus. 2006 data was used as changing weather patterns make the previous year the best indicator of 2007 conditions. Obviously, our warm season crops are found when air temperatures rise.
Soil Temperature 2006
85 80 75 70 65 60 55 50 45 40
Degrees F
Above is a graph derived from data collected at the same CIMIS station. Sweet corn planting dates are most effected by soil temperature. Pomona Organics will plant sweet corn around 3/26/2007, or when soil temperatures are approaching the desired 66º.
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1/ 1/ 20 06 2/ 1/ 20 06 3/ 1/ 20 06 4/ 1/ 20 06 5/ 1/ 20 06 6/ 1/ 20 06 7/ 1/ 20 06 8/ 1/ 20 06 9/ 1/ 20 06 10 /1 /2 00 6 11 /1 /2 00 6 12 /1 /2 00 6
Month Soil Temp.
1/ 1/ 20 06 2/ 1/ 20 06 3/ 1/ 20 06 4/ 1/ 20 06 5/ 1/ 20 06 6/ 1/ 20 06 7/ 1/ 20 06 8/ 1/ 20 06 9/ 1/ 20 06 10 /1 /2 00 6 11 /1 /2 00 6 12 /1 /2 00 6
Month Min. Air Temp. Avg. Air Temp. Max Air Temp.
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Rainfall vs. ETo 2006
1.4 1.2 1 0.8 0.6 0.4 0.2 0
inches
Above is more Pomona CIMIS data. Inches of rainfall are shown in blue. We expect a relatively wet spring in 2007. ETo stands for evapotranspiration rate. This rate estimates how much water will be lost from the soil via transpiration (what plants use) and evaporation (lost to the air). Pomona Organics may not have to irrigate intensively in the spring, but as summer sets in we will have to add .22 inches/day on average.
Average Relative Humidity 2006
95 85 75 65 55 45 35 25 15 5
% Moisture
Above is humidity information obtained from Pomona CIMIS. This information is less useful in predicting irrigation requirements than it is for predicting disease pressure. High humidity and heat will lead to break out of powdery mildew. Powdery mildew is most effectively controlled when it is prevented. Pomona Organics will be using dusting sulfur and Oxidate© when humidity and heat are high.
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1/ 1/ 20 06 2/ 1/ 20 06 3/ 1/ 20 06 4/ 1/ 20 06 5/ 1/ 20 06 6/ 1/ 20 06 7/ 1/ 20 06 8/ 1/ 20 06 9/ 1/ 20 06 10 /1 /2 00 6 11 /1 /2 00 6 12 /1 /2 00 6
Month Average Relative Humidity
1/ 1/ 20 06 2/ 1/ 20 06 3/ 1/ 20 06 4/ 1/ 20 06 5/ 1/ 20 06 6/ 1/ 20 06 7/ 1/ 20 06 8/ 1/ 20 06 9/ 1/ 20 06 10 /1 /2 00 6 11 /1 /2 00 6 12 /1 /2 00 6
Month Precip. ETo
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Wind Speed 2006
7 6 5 4 3 2 1
mph
Above is wind speed data collected at Pomona CIMIS. Average wind speeds of 3.5 mph during vegetable pollination will lead to large yields.
Solar Radiation 2006
700 600 500 400 300 200 100 0
Ly/Day
Finally, above is solar radiation data collected from Pomona CIMIS. This information relates to the intensity of light and will reflect on the days to harvest of our crops. When planning our continuous cropping system, we made sure to lengthen our days to harvest period at the beginning and end of our warm season.
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1/ 1/ 20 06 2/ 1/ 20 06 3/ 1/ 20 06 4/ 1/ 20 06 5/ 1/ 20 06 6/ 1/ 20 06 7/ 1/ 20 06 8/ 1/ 20 06 9/ 1/ 20 06 10 /1 /2 00 6 11 /1 /2 00 6 12 /1 /2 00 6
Month Solar Radiation
1/ 1/ 20 06 2/ 1/ 20 06 3/ 1/ 20 06 4/ 1/ 20 06 5/ 1/ 20 06 6/ 1/ 20 06 7/ 1/ 20 06 8/ 1/ 20 06 9/ 1/ 20 06 10 /1 /2 00 6 11 /1 /2 00 6 12 /1 /2 00 6
Month Wind Speed
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9.3 PepperTree Accounts Booklet
Attached is a columnar pad that is set up to keep a running tab of Pomona Organics’ overall account balance, and PepperTree’s account balance (income and expenses), records of organic chemical applications, labor hour records and records of donations.
9.4 Calendar of Events
Attached is booklet calendar labeled with estimated dates of major labor events.
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doc_710880530.pdf