Pumpkin Meadows Pumpkin Meadows Processing Ltd.Processing Ltd.
Kara ForgeKara Forge
Genevieve HamolineGenevieve Hamoline
Jim McQueen Jim McQueen
Laura ShymkoLaura Shymko
IntroductionIntroduction Our business plan outlines the Our business plan outlines the
development and feasibility of development and feasibility of Pumpkin Meadows Processing Ltd.Pumpkin Meadows Processing Ltd.
The goal of our company is to find a The goal of our company is to find a market for non-carving pumpkins, market for non-carving pumpkins, made into puree, unable to bring in made into puree, unable to bring in premium pricingpremium pricing
Mission StatementMission Statement
To provide a high quality, Saskatchewan To provide a high quality, Saskatchewan made, value-added product to wholesale made, value-added product to wholesale distributors within 2000 km of the plant distributors within 2000 km of the plant in an environmentally friendly way, by a in an environmentally friendly way, by a
company whose objectives include company whose objectives include growth and diversification.growth and diversification.
Business OrganizationBusiness Organization Private corporationPrivate corporation Seasonal operationSeasonal operation Process 400,000 lbs. raw pumpkin in Process 400,000 lbs. raw pumpkin in
year oneyear one Expand to 540,000 lbs. raw pumpkin by Expand to 540,000 lbs. raw pumpkin by
year six year six Purchase pumpkins for $0.10/lb. from Purchase pumpkins for $0.10/lb. from
MaxCore Ltd.MaxCore Ltd.
Site PlanSite Plan
18 miles north of Moose Jaw on 18 miles north of Moose Jaw on highway #2highway #2
Plant built on old barn site.Plant built on old barn site. Significant advantagesSignificant advantages
– Highway accessHighway access– Located along “veggie corridor”Located along “veggie corridor”– Excellent water supplyExcellent water supply
Future home of building site for Pumpkin Meadows Future home of building site for Pumpkin Meadows Processing Ltd.Processing Ltd.
Processing of PumpkinsProcessing of PumpkinsUnload
Wash
Inspect forDefects
Destem
Dispose ofStems
Quarterer /Slicer
Steam Cook Pulper Finisher
Package Puree
Dispose of Rind& Other Waste
Freeze
Transport toWholesalers
EquipmentEquipment
Zwilling J.A. Henckels ~ 4 pc. Chef’s setZwilling J.A. Henckels ~ 4 pc. Chef’s set
World’s Finest Cutlery Since 1731World’s Finest Cutlery Since 1731
Processing of PumpkinsProcessing of PumpkinsUnload
Wash
Inspect forDefects
Destem
Dispose ofStems
Quarterer /Slicer
Steam Cook Pulper Finisher
Package Puree
Dispose of Rind& Other Waste
Freeze
Transport toWholesalers
Processing of PumpkinsProcessing of PumpkinsUnload
Wash
Inspect forDefects
Destem
Dispose ofStems
Quarterer /Slicer
Steam Cook Pulper Finisher
Package Puree
Dispose of Rind& Other Waste
Freeze
Transport toWholesalers
Equipment
Saskatoon Boiler Model OTS-G15L Low Pressure Steam Saskatoon Boiler Model OTS-G15L Low Pressure Steam BoilerBoiler
Processing of PumpkinsProcessing of PumpkinsUnload
Wash
Inspect forDefects
Destem
Dispose ofStems
Quarterer /Slicer
Steam Cook Pulper Finisher
Package Puree
Dispose of Rind& Other Waste
Freeze
Transport toWholesalers
Equipment CostsEquipment Costs
Boiler 11,000.00Steamer 10,000.00Pulper/Finisher 20,272.00Quarterer/Slicer 1,500.00Cooler 4,086.90Knives and Tools 500.00Cutting Tables 1,500.00
Water tanks 3,900.00Water filter 392.00
Washing Equipment 1,000.00Total $54,150.90
Capital Budget SummaryCapital Budget Summary
Land 1,000Buildings 121,850Equipment 54,151Working Capital 19,193
Total Capital Required 196,194
Variable Operating ExpensesVariable Operating Expenses
Communications 1,800Salaries (SG &A) 44,000Benefits (SG &A) 4,303Marketing Expenses 9,500Office Expenses 2,000Packaging Costs 26,334Transportation Costs 3,591Interest - LT Debt 7,040
Total Expenses $98,568.00
Organizational StructureOrganizational Structure
P la n t W o rke rs
P la n t F o re m an
G e ne ra l M a na g er A ccou n ts M a na g er
B o a rd o f D ire c to rs
Human Resource ManagementHuman Resource Management
General ManagerGeneral Manager Accounts ManagerAccounts Manager Plant ForemanPlant Foreman Full-time Plant WorkersFull-time Plant Workers Part-time Plant WorkersPart-time Plant Workers
Product FeaturesProduct Features
Saskatchewan grownSaskatchewan grown 100% pure frozen pumpkin puree100% pure frozen pumpkin puree No substitution of squash or carrotsNo substitution of squash or carrots Produced from the finest, hand-picked Produced from the finest, hand-picked
productsproducts Minimal pesticide use on raw materialsMinimal pesticide use on raw materials
The MarketThe Market
Pumpkin puree market is very stablePumpkin puree market is very stable New entry is difficultNew entry is difficult Demand is seasonalDemand is seasonal
– peak consumption between October and peak consumption between October and DecemberDecember
Demand for ready-to-eat baked goods Demand for ready-to-eat baked goods is increasing is increasing
Target MarketTarget Market
CustomersCustomers– wholesale distributors who supply wholesale distributors who supply
bakeries, restaurants, and grocery store bakeries, restaurants, and grocery store bakeriesbakeries
– further processed into ready-to-eat further processed into ready-to-eat productsproducts
Competitive AnalysisCompetitive Analysis
$0.65 $0.69
$1.56
$0.48
$0.00$0.20$0.40$0.60$0.80$1.00$1.20$1.40$1.60$1.80
Daw n Foods Grocery Store Organic(Nutters)
PumpkinMeadow s
Competitors
$/lb
Past PerformancePast Performance
Previous attempts at processing puree have Previous attempts at processing puree have occurred in Saskatchewan.occurred in Saskatchewan.
Assumptions that have been made:Assumptions that have been made:
– Simple process Simple process
– Major drawback - MarketingMajor drawback - Marketing
– Success is dependent on a successful Success is dependent on a successful marketing managermarketing manager
Marketing BudgetMarketing Budget
Website Construction 500.00Magazine Advertising 2,000.00
SK Food Processors NewsletterFood Center Publications
Tradeshows 6,500.00Booth RentalTransportaion CostsAccommodations
Direct Mail 500.00
Total Marketing Expenses $9,500.00
Financial BudgetFinancial Budget
$88,000.00
$112,000.00
Equity Financing(56%)
Long Term BankLoan (44%)
Total required = $200,000Total required = $200,000
Financial SummaryFinancial Summary
Required rate of return was 20%Required rate of return was 20% 10-year projection showed an internal rate 10-year projection showed an internal rate
of return of 27.8%of return of 27.8% Positive net income in year 1Positive net income in year 1 Cash flow of $28,000 in year 1Cash flow of $28,000 in year 1 Dividends paid out in year 2Dividends paid out in year 2 Break-even volume - 365,000 lbsBreak-even volume - 365,000 lbs
Financial ResultsFinancial Results
Year 2003 2005 2008 2011 2012
Revenues $191,520 $223,886 $282,973 $300,293 $306,299COGS $72,968 $98,850 $108,992 $108,950 $109,245Gross Margin $118,552 $125,036 $174,051 $191,343 $197,053Expenses $98,568 $105,103 $116,418 $120,970 $122,452Net Income B4 Taxes $19,983 $19,932 $57,632 $70,373 $74,601Income Taxes $3,821 $3,811 $11,019 $13,455 $14,264Net Income $16,163 $16,121 $46,613 $56,918 $60,338Dividends $0 $8,047 $17,904 $26,754 $28,459
Critical VariablesCritical Variables
Critical Variable Base Case IRR = 20% Allowable Change
Selling price of puree (per lb) $0.48 $0.45 6%Volume of puree produced (lbs) 399,000 365,645 8%Price paid for raw pumpkin (per lb) $0.10 $0.25 150%
Sensitivity AnalysisSensitivity Analysis
0
10
20
30
40
50
60
Selling Price (per lb) Yearly Increase inProd'n (lbs)
Buying Price of RawPumpkin (per lb)
Critical Variables
Proj
ecte
d In
tern
al R
ate
of R
etur
n
Base Case
Worst Case
Best Case
ScenariosScenarios
* using the selling price as the critical variable
Scenario - Selling Price (15%)
NPV IRRAverage Annual
Cash FlowsAverage Annual
Net Income
Best Case 159,398 48.3% $38,771 $68,389Base Case 42,612 27.8% $22,005 $37,735Worst Case (76,381) 5.5% $5,239 $7,081
Future AlternativesFuture Alternatives Canning Canning Processing other vegetablesProcessing other vegetables Organic productionOrganic production Contracting pumpkin production Contracting pumpkin production
from other producersfrom other producers Rental of processing plantRental of processing plant Utilization of the Food CenterUtilization of the Food Center