1. Gourmet Meats Business Plan for Balboa Burgers
Agribusiness Venture Management
Ray Lei
Biancia Rolle
Kyle Templeton
Dean Serdachny

2. Client Info
Currently producing lean hamburgers on a small scale (6 animals slaughtered)
Hamburgers are incorporated with special family recipes developed in the summer of 2004
Sales are driven by word of mouth and family

3. Industry Info Beef Consumption In Canada:
After bovine spongiform encephalopathy (BSE) was discovered per capita consumption in Canada actually increased
Before (BSE) 13.5kg/annum per person

4. Industry Info After (BSE) 14.2kg/annum per person
A significant portion of the per capita increase was geared to organic and natural beef products
Few competitors in his market currently

5. Operations Plan
Incorporation of:
Gourmet Meats

6. Work Plan and Flow of Work
Farms
Gourmet Meats
Processing Facility
Kyle
Seasoning and Filler Ingredients
Freezer Storage
Local Grocers
Bar/Pubs

7. Working Capital Planning and Management
Direct Materials
Cost/box
2006 Production 3100 boxes
Beef Trim $
$ 31,942.00
Ingredients $
$ 14,229.00
Processing $
$ 17,483.00
- Created Labels $ $
Trucking - Transport (Saskatoon, SK) $ $
Cold Storage Warehouse (Saskatoon, SK) $
$ 1,200.00
Trucking - Delivery To Retailers (Saskatoon, SK) $
$ 11,165.00
Total Materials $
$ 77,033.00
Kyle

8. Working Capital Planning and Management
Cost of Goods Sold
Overhead Cost
Cost
Source
Utilities- Pwr/Heat $
SaskPower
Phone/Fax/Cell $
SaskTel
Incorporation Fees $
Gov Sk website
Office Supplies $
Staples
Total Overhead
$3,500.00
Kyle

9. Working Capital Planning and Management
Total Cost of Goods Sold
Cost of Goods Produced in 2006
Direct Labour
$0.00
Direct Materials
$77,033.00
Processing Overhead
$3,900.00
Total Cost of Goods Produced
$80,933.00
Kyle

10. Working Capital Planning and Management
Cash Management
Minimal requirement necessary
Initial investment of $15,000
No large inventories
No large capital costs
Kyle

11. Inventories Flexible production More in winter, Less in summer
30 days in average
Inventories replenished in 4 days

12. Accounts Receivable Policy 15 days credit Reason Incurring customers
Small company

13. Larger purchasing options only
Accounts Payable
Larger purchasing options only
Processing fees
Trim cost from Natural Valley Farms

14. Variable with seasonal demand
Cash Conversion Cycle
Calculated to be 18 days
Variable with seasonal demand
Low turn around due to production capabilities

15. Marketing Plan
PUSH STRATEGY
PULL STRATEGY

16. Product Overview The Product Four different flavours: Teriyaki Spice
Hamburgers combined with ingredients for flavour
Four different flavours:
Teriyaki
Spice
Honey Mustard
Original
Cajun Maple
Size - 5 oz
Natural - follows current industry regulation standards
Lack of branded beef products

17. Market Objective GOAL = Product awareness
Focus on pub and grill market
Target year old males
Promote a differentiated product
Push strategy
First step of market penetration
GOAL = Product awareness
Pull strategy for summer retail market
ie) BBQ season
Lack of branded beef products
Dean

18. Market Analysis Market Size
lbs of beef consumed in Saskatchewan
lbs of ground beef consumed in Saskatchewan
lbs of hamburger eaten in Saskatchewan
Therefore, 50 x 0.40(ground beef) x 0.25(hamburgers) = 5 lbs of hamburger/year = approx. 20 patties =
5lbs x 2 x = lbs eaten in SK equal to hamburgers
85 establishments x oz. burgers/yr = 637,500 burgers/yr

19. Market Analysis Market Size
lbs of hamburger eaten in Saskatchewan
, 4 oz hamburger consumed in Saskatchewan
burgers/ year sold in non-franchised pubs and grills throughout Saskatchewan
Therefore, 50 x 0.40(ground beef) x 0.25(hamburgers) = 5 lbs of hamburger/year = approx. 20 patties =
5lbs x 2 x = lbs eaten in SK equal to hamburgers
85 establishments x oz. burgers/yr = 637,500 burgers/yr

20. Market Analysis Market Needs Consistent taste Cooking characteristics:
Flavour
Consistent taste
Cooking characteristics:
no shrinkage

21. Customer Analysis Target Market Aged 19-45 Blue collar workers
Primarily male demographic
Aged 19-45
Blue collar workers
Interested in new experiences and new tastes

22. Companies Supplying Pubs & Grills
Competitor Analysis
Companies Supplying Pubs & Grills
Prairie Meats Price: $0.50 for 4 oz Market Share: 40% Low price
Centennial Meats $0.96 for 6 oz Market Share: 10% Focus primarily on fast food chains
Chef Redi Market Share: 10% Local market only Poor promotion Harvest Meats Market Share: 5% Concentrated in rural areas and grocery
Mitchell’s Gourmet Foods
Price: $0.70 for 4 oz
Market Share: 10%
Packaging: 4.54 kg case
Beef line poorly developed compared to pork products

23. SWOT Strengths Weaknesses Opportunities Threats Flavours and recipes
Unique idea
Business flexibility
Weaknesses
Possible crumbling problems
Flat grill incompatibility
Low initial capital
Opportunities
1. No other flavoured burgers
2. Joint promotion with establishments through burger nights
3. Homegrown image
4. Natural beef
Threats
1. Market is very price sensitive
2. Homemade burgers in establishment
3. Loyalty to existing competition
4. Lack of product diversity
Ray

24. Key Planning Assumptions
Beef consumption will not decline dramatically
Consumers are looking for a consistent and flavourful product
Steady and dependable supply of materials
4. Reliability of manufacturing and distribution channels

25. Business Proposition
Therefore, 50 x 0.40(ground beef) x 0.25(hamburgers) = 5 lbs of hamburger/year = approx. 20 patties =
5lbs x 2 x = lbs eaten in SK equal to hamburgers
85 establishments x oz. burgers/yr = 637,500 burgers/yr

26. Price Target wholesale price: Average wholesale cost:
$1.17/ burger
final production/logistic costs
Average wholesale cost:
4 oz $0.50-$0.70/ burger
5 oz $0.60-$0.70/ burger
6 oz $0.90-$1.15/ burger

27. Non Franchised bar and grill establishments
Place
Non Franchised bar and grill establishments
Immediate access to their entire customer base
Increased demand for flavour
Ribs, wings
Reduced advertising costs
High traffic
Diverse Crowd

28. Local Grocery Stores and Gourmet Shops
Place
Local Grocery Stores and Gourmet Shops
Sask Made Store
Internet sales

29. Promotion To Consumers Table talkers and posters in establishment
Table talker website promotion
Sponsor beer and burger nights
Taste testing

30. Financials Unit Cost Analysis ($ per unit produced/case) 2006 2007
2008
2009
2010
Natural Beef Burger 5oz.
24.85
Unit Cost of Direct Labour
0.00
Unit Cost of Overhead
1.26
0.87
0.75
0.66
0.58
Total Unit Cost of Production for
26.11
25.72
25.60
25.51
25.43
Unit Administration & Marketing Cost
9.16
7.90
5.81
5.13
4.67
Total Unit Cost
35.27
33.61
31.41
30.64
30.10
Unit Selling Price
35.00
35.53
36.06
36.60
37.15

31. Financial Performance
For the year ended Dec. 31
2006
2007
2014
2015
Sales Revenue:
Total Revenue
108, 500
121,141
366,673
372,173
Cost of Goods Sold
74,189
87,131
231,873
235,163
Gross Margin
34,311
134,800
137,011
Expenses:
Total Expenses
28,402
26,930
27,448
27,997
Income Before Taxes
5,909
7,079
107,352
109,014
Net Income (Loss)
5,318
6,371
96,617
98,112
Beg Retained Earnings -
145,650
184,167
Dividends
End Retained Earnings
11,690
195,013
Year-end Cash
160
5,781
142,654
153,490
NPV
104,647
IRR
70.7%
ERR
48.9%

32. Risk Analysis Revenue/Cost Factor Original value
Results in 0 Ending Cash
Difference
% Change
Selling Price
$35
34.94
$0.06
-0.17%
Aero Trucking-delivery to retailers
$11,165
11,333
-$168.00
1.50%
Cajun Maple Sale(unit)
1240
1235 5
-0.40%
Natural Valley Trim
$31,942
32,109
-$167.00
0.52%
TML Processing
$17,438
17,605
0.96%
Co-Promotions Nights
$8,000
8,178
-$178.00
2.23%
Demo Product
$6,000
6,178
2.97%

33. Financials High risk Good profit potential IRR= 70.7% ERR= 48.9%
Razor thin margins
High risk
Good profit potential
IRR= 70.7%
ERR= 48.9%
No Dividends early on

34. CAN YOUR BUNS HANDLE OUR BURGERS?
QUESTIONS?
CAN YOUR BUNS HANDLE OUR BURGERS?