Published on March 5, 2014
CORPORATE DELIVERY OF ORGANIC SNACKS $3B RESGEMENTED MARKET
[ Andre ] [ Sales, Biz. modeling ] [JingShu] [ Sales, Design, Hacking ] [ Michael ] [ Sales, Design, PM ] [YiXin] [ Sales, Research ]
OH MY LEANLAUNCHPAD! Channel / Sales: • Catering service companies like Bon Appetite • NGOs who are battling obesity and GMOs Supply: • Snack manufacturers • Trade Shows Technology / scale: • Ecommerce, cloud support tools • 3PL (third party logistics) company • Curate & discover snacks to offer best tasting with best nutrition facts • Tech – design and dev of ecommerce system (Spree) • Logistics - Shipping and warehousing • Financial: Working capital • IP: snack and nutrition selection • Human: Field sales force, Developers, Biz dev (channel partners) • Fixed o Field Sales & Biz dev o Development cost • Economies of scale / variable: o Working capital: snacks with average 40% of revenue o Handling costs via 3PL • Problem: It’s difficult to manage purchasing and estimate need of snacks for employees/students • Initial sale through field sales force and occasional check ins • Personal assistance via support staff • Need: A reliable and efficient way to order snacks for healthy, happy, productive employees and students Access to new and differentiated brands with most being socially responsible brands (CSR benefit) • Direct sales • Web sales • Channel partners like catering service companies • Progressive universities o Payer Archetype: Dining services director, Coach for sport teams, Professors o User: employee/student s • Fortune 2000 o Payer Archetype: Cafeteria supplies person, HR director o User: employee • Recurring subscription through sale of snacks [Retail Price – company volume discount (0-20%)] Est. that we get about 30% of retail price as margin • Subscription fee for value added services later on
We tried to figure out who our customers would be We tested the model by interviewing university cafeteria managers, café and store managers and company office manager Quality of opportunity Universities • There are a relatively limited number of universities • Most universities need to resell their snacks to price-sensitive students Resellers Cafes/Stores • Smaller cafes wanted new healthy snack providers • Health-focused cafes were most interested, and have become repeat customers End buyers Companies • Companies complained that snack choosing and ordering is laborious • Unpacking snacks is also a waste of time • Gauging employee preferences is difficult • There are many companies who want to provide free snacks to employees
OMG’s value chain Universities Cafes Food ingredient producers Companies w/out catering Snack manufacturers Packaging producers Distributors Retail End consumers % retail 17% 33% 39% 80% 100% Retail cost ($) Dang coconut 0.50 1.00 1.17 2.40 2.99 Example firms
THE CUSTOMER Employees Employees Employees who are & community health conscious Happiness Manager • No catering service • or distributor • Tends to be female • • In their 30s • Less tech savvy • • Strong social network Office Manager or CEO, CFO Employees who love unhealthy snacks Tends to order from Safeway or Costco Purchasing is 10-15% of their job Reacts to employee feedback
BUSINESS MODEL CANVAS 2
SALES CHANEL Catering Service Distribution Company Direct sales/Events Web sales/Adwor ds Telesales/Sa mpling Customers Health focused institutions Experiment Direct sales Web sales/Adwords Cost Overview Yes, Personal touch High Important customers Yes Medium (under test) Telesales/Sampli ng Yes Channels Yes Medium Viable through optimization Under test (conversion rate) Low (institutions); Revenue share 5% (distribution) Must have
Business model canvas 3
What we did – more sales Sampling & drop offs Targeting multi locations & reordering Partnerships First order acquisition test • About 40 drop offs • No conversions yet after 1 week • Further experiment built on it (follow ups) Subscription & sales scaling test • Director of global operations: stealth • Free newly discovered samples: Silver lake • Reordering: Apple, Yammer, Harvard, Stanford, Sprout, Playphone Channel sales & cross selling test • Online marketplace: Channel & delivery 510% commission • Courier & shipping companies: $15/drop • Snack vendors: Philz coffee
What we found 3pm snacks • Core business: Branding & bonding • Trojan horse: upselling to breakfast, coffee etc. • Employee productivity research Employee engagement platform • Point system: feedback loop • Data & analytics: software • Defensibility: employee relationships with upselling and marketing opportunities
Business model canvas 4
USA IS $220B SNACK MARKET $14B IN HEALTHY SNACKS RTD Coffee Meal Replacement RTD Tea Healthy Snack Bars Snack Bars Healthy Sweet and Savoury Snacks Yoghurt and Sour Milk Products Breakfast Cereals Biscuits Sports and Energy Drinks Juice Bottled Water Drinking Milk Products Sweet and Savoury Snacks Baked Goods 1.5 206.2 3.2 4.5 6.0 5.1 6.7 7.6 11.3 1.7 3.5 4.9 6.3 5.4 213.7 7.1 11.3 8.0 220.2 1.8 3.7 6.6 5.0 5.7 7.5 11.4 8.5 13.2 13.8 13.4 15.1 13.8 15.6 17.4 17.4 17.5 16.8 17.8 18.1 18.9 18.9 19.1 32.9 34.5 36.2 47.4 48.6 49.8 2011 12 13
TROJAN HORSE GROWTH STRATEGY OFFERS 9AM EVENTS GIFTS SEGMENTS 3PM SNACKS FOR TECH COMPANIES BIOTECH GYMS MEETINGS PRODUCTS TECH: EMPLOYEE ENGAGEMENT CAFES SPORT TEAMS CONSUMER COFFEE FRUIT FAMILY DELIVERY WATER GEOGRAPHY STATIONARY USA INTERNATIONAL KIDS BOX
CUSTOMERS SINCE JANUARY REPEAT IMPLEMENTING PIPELINE + New Channels
INVESTMENT READINESS 7.5
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