CUTO Enterprises Business Plan C. Baillargeon, K. Ivey, C. Mardell & K.Templeton Comm 492.3

Greenhouse industry in SaskatchewanGreenhouse industry in Saskatchewan –relatively small –marketing problems: economies of scaleeconomies of scale consistencyconsistency –other problems climatic conditionsclimatic conditions location of growerslocation of growers Industry Overview

Mission Statement “The aim of CUTO Enterprises is to establish a profitable agri-business venture while facilitating the establishment of an infrastructure to expand the greenhouse vegetable industry in Saskatchewan.”

The Marketing Mix Products and Services Pricing Promotion Place

Products & Services Product: –Greenhouse grown cucumbers and tomatoes Service: –A central marketing arm for the greenhouse growers of Saskatchewan

Pricing Product price based on contract with wholesaler –calculated using a weighted average price index Distributor fee –producer paid fee for service

Promotion Product promotion –promote an above standard premium quality product Service promotion –provide grower information seminars –provide ease of production

Place Wholesale market in Saskatchewan Produce is sold FOB Saskatoon

STP Segmentation –Provide a premium quality product that is higher than regulation standards –Provide a niche product vine-ripened tomatoes Targeting –Main target is the wholesale distributors Positioning –competitive advantage over local market

Competitive Analysis Main competition exists outside of Saskatchewan –Alberta, British Columbia, USA, Mexico, etc. Competition exists with substitute products

Marketing Strategy Product Strategy –present an above standard premium quality product to the wholesalers Service Strategy –combine grower production to capture benefits of accessing wholesale market –provide ease of production –provide an excellent information source

Marketing Strategy Investment Strategy –profitable business that allows future expansion in the greenhouse industry

Revenues and Expenses Projected Revenues Marketing Expenses - $20,000/year

Location Selection Factors –Market Accessibility –Supply of Fresh Produce –Services and Utilities

Saskatoon Western Grocers and Federated Co-op South Saskatchewan River Central Saskatchewan Natural Gas, Power, Telephone, Infrastructure

1323 Fletcher Road Par k- ing FletcherRoadFletcherRoad CUCUTO BUILDING CUTO CUTO U L P Site Plan Expansion Area N

Floor Plan 100’ 25’ 175’ 70’ C T FC FT PP R M W M F/I A F GM WRWR 20’ FL Unload/Load Docks

Site and Building Costs Land $ 134,000 Building $ 750,000 Tomato Grading Line $ 678,000 Cucumber Grading Line $ 77,405 Office Supplies & Furnishings $ 15,825 Fork Lift, Pallet Jacks & Pallets $ 11,229 Electrical & Natural Gas Installation $ 60,000 TOTAL $ 1,726,860

Average Business Year Operate March through October –Due to: higher energy costs decreased production Busy Season –End of May until the beginning of August

Average Business Year Full-Time Staff Remains on in Off-Season –Grower Seminars –Prospective Grower Contacts –Market Exploration Industry Seminars –Product Diversification Studies –Season Reviews

Strategy CUTO is a corporation owned by growers and local investors. Goal: to maintain a healthy and enjoyable work environment. Employees will clearly understand their specific roles and duties in CUTO.

Organizational Structure MAINTENANCEQUALITY CONTROLLER 25 PART-TIME EMPLOYEES BOARD OF DIRECTORS FACILITY SUPERVISOR BOOKKEEPER GENERAL MANAGER

Expansion of Personnel No expansion in first 5 years. However, if production and number of growers increase, CUTO will adapt to ensure sufficient service. Re-evaluation of market and CUTO’s position will occur in 5 years. Possibility of new full-time employee after year 5.

Financing Budget Assumptions ‘class A’ voting shares = $750,000 equity $1,000,000 debt 9.0% Dividend Policy: year end cash balance > $175,000 Production: 20 acres of cucumbers & 20 acres of tomatoes

Sensitivity Analysis Distributor $0.34/kg tomatoes & $0.07/cucumber

Why CUTO? Market Penetration –expansion of the SK greenhouse industry Lower Producer Packaging & Marketing Costs per unit CUTO’s high quality standards –producer focus on quality Invaluable information source Dividends

Acknowledgments Glen Sweetman - Sask. Ag & Food Bill Brown & Marv Painter - U. of S. B.C. Hot House Growers Association Supplier Contacts