Document 448457

Smart Food SMART AS YOUR CHOICE e-­‐Commerce of organic products based on a Nutritional Plan studied with University professors Free home delivery www.smartfood.bio ANTONIO ANTONACCI [email protected] +39 340 3197533 Skype: systony LinkedIn: linkedin.com/in/antonioantonacci Overview PROBLEM . main players in the e-­‐Commerce sector primarily offer not-­‐organic products (Cortilia organic offer ๝10%) . organic products mainly distributed in retail (Almaverde, ŝŽ͛Đ͛ŽŶ, NaturaSi) . current e-­‐Commerce platforms are not user friendly (e.g. BioExpress, BuonEssere) SELLING PROPOSITION . user-­‐friendly website, offering only organic products in accordance with a Nutritional Plan . presence in the 2 biggest cities of the country: first Milan and then Rome MARKET . italian organic market value: 1550Φ mln* (of which 30% fruit and vegetables) . organic products e-­‐Commerce: Milan 73,5Φ mln -­‐ Rome 197Φ mln . potential Customers: Milan 44K -­‐ Rome 118K = 162K PROOF . consumers are more likely to buy food online -­‐ CORTILIA evidence of success (in 3 years 3Φmln of Revenue only in Milan) . in the testing phase (July -­‐ Sept 2014) of SF website 6K visits registered . other institutions have already believed in the project: Unicredit, Naturitalia, University of Milan Needs: 500K Φ of Investment in next years . marketing: customers captation and media advertising . website maitenance and App development . owned fleet and delivery optimization software *font FIBL-­‐IFOAM 2012 and ISMEA 2013 The Team Nicola F. Casassa Antonio Antonacci Grad in Political science Decades of experience in IBM as Marketing and Commercial Manager University of Milan P. Magni & M. Ruscica Professors and Nutritionists Brunella Giacobbe Web Marketing Consultant founders Agronomist & Entrepreneur Decades of experience as Sales Manager in the Food Industry WebSolute Web Agency and Strategy consultants Cesare Guerreri Industrial Engineer Operations Consultant Problem DISTRIBUTION Considering the Milan area, where the business has started since 3 months: GDO 226 POS x 1.300K inhabitants* ORGANIC retailers : . NaturaSì 10 POS . ŝŽ͛Đ͛ŽŶ 3 POS . Almaverde 1 POS . Others** 26 POS CURRENT OFFER: . inadequate presence: . limited number of POS, half of the city is not served . northwest of the city is the area more inclined to organic, but only 2 POS . POS more similar to a Mall, customer experience not aligned with the expectations of organic typical consumer . organic covers only a small percentage (5-­‐10%) of the offer of food e-­‐commerce leaders (e.g. Cortilia, Esselunga, Coop) . pure organic e-­‐commerce websites not user-­‐friendly and not focused on consumers needs . big organic retailers have shopping online section on their website with deliveries at the closest POS, otherwise delivery fee exceeds 10Φ (e.g. NaturaSi) *1 POS each 5,800 people, font http://www.mole24.it/ ** Family-­‐run shops www.smartfood.bio SOLUTION: HOW: . user-­‐friendly and well designed platform . intuitive graphical interface and effective communication . registration procedure faster and less clicks to buy . possible purchases for non-­‐registered users . no minimum purchase cart (e.g. Cortilia 35Φ) . focus on the customers by proposing each week boxes based on a nutritional plan studied by the university in 3 formats (i.e. single, couples, family) . increased shopping coverage to reduce the time spent in supermarket during the week. . limited information requests for the delivery . complementary goods available only as addition to the box purchase and free for subscribed users. . collaboration with Professors Magni-­‐Ruscica and weekly boxes definition with Naturitalia, our fruit and vegetables supplier. . offer integration with complementary products (current categories: bread, water, cheeses) Italian Organic Market ORGANIC is a fast-­‐growing market SUPPLY CHAIN & OFFER SIDE . Italy is the 6th country in the world for extension of surface used in organic farming . + 5,4 %* of organic growers and producers . + 12.8 %* of cultivated area under organic farming . organic firms are conducted by young entrepreneurs (22% of managers are under 39years) . introduction into the GDO of new product lines than in past years were not present . big players (e.g. Amazon, Eataly, Esselunga) have entered into food e-­‐commerce market . 6 food e-­‐commerce (no retail) in last 5 years in italian context: Cortilia (no organic), BioExpress, BioMi, BioBox, BuonEssere and Zolle *http://www.sinab.it/ -­‐ numbers vs 2012 Italian Organic Market DEMAND SIDE Var % YOY
. 25 % of Italian buys fruits and vegetables every day 14%
12%
. + 55 % of web shoppers in two years 10%
. + 17,3 %* family expenditure for organic food in the last year . + 7 %* average increase YoY of organic products sold in GDO, since 2010 variation subdued due to e-­‐commerce advent 2%
0%
Dairy products
Eggs
Cookies, candy and snacks
Sugar, coffee and tea
7,3%
6,9%
6,7%
5,2%
4%
. Cortilia in 2013 has doubled customers: 35000 boxes delivered in 1 year Pasta, rice and bread
8,8%
8,5%
6%
Fruit and vegetables
9,2%
8%
11,7%
1,2%
2005
2006
2007
2008
2009
2010
2011
2012
2013
. organic market value: 1550Φ mln** (of which 30 % fruit and vegetables) Beverages
Homogenized
Vinegars
Other
Meat
19,0%
10,0%
11,4%
30,5%
0%
10%
20%
30%
40%
50%
60%
4,2%
3,8%
8,7%
70%
80%
90%
Fruit and vegetables
Dairy products
Eggs
Pasta, rice and bread
Cookies, candy and snacks
Sugar, coffee and tea
Beverages
Homogenized
Meat
Vinegars
Other
100%
19,0%
10,0%
4,2%
. organic consumer profile . Milan: city with the highest per capita income (31KΦ/year) . 3 profiles: faithful (4mln people) -­‐ new entry (8mln) -­‐ ethical . 69 %* of purchase intent among people with high annual income 30,5%
. 68 %* of organic buyers are graduated . 65 %**** of web-­‐shoppers are women 3,8%
11,4%
8,7%
. graduated inhab***: Milan 13,3 % = 65K people Rome 15,3% = 175K people 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
. potential customers: Milan 44K -­‐ Rome 118K = 162K . organic e-­‐commerce: Milan 73,5Φ mln -­‐ Rome 197Φ mln *http://www.sinab.it/ -­‐ numbers vs 2012 *** ISTAT: http://www.istat.it/it/prodotti/tavole-­‐di-­‐dati ** font FIBL-­‐IFOAM and ISMEA 2013 **** Osservatorio Netcomm & Politecnico di Milano 2013 Competitive Landscape . born in 2011 in Milan, nowadays operates also in Monza and Brianza, Varese and Como. . turnover: 3.000KΦ expected for 2014 families served : 3.200 . business model: internet platform, that provides a showcase to the farmers and competitive prices on the model of short chain to customers with 48-­‐72h deliveries . offers fruits and vegetables boxes: it could represent a threats in next years . born 10 years ago in Alto adige, nowadays operates also in Lombardy, Emilia Romagna, Veneto and Rome . turnover: 4.000KΦ in 2013 families served: 4.000 . business model: internet platform that offers organic boxes of fruits or vegetables, delivered through owned fleet composed by 13 vans . entirely organic offer . born in 2008 in Rome, operates mainly in Rome . turnover: 2.000KΦ in 2013 families served: 1.300 . business model: e-­‐commerce without online cart, offers complete packages of dynamic-­‐organic products Pontential new entrants: . strong player supported by huge investments . has already shown interest in the german market . competitive advantage: strong logistic network . strong retailer, that has a consistent customer base . has developed in early 2014 shopping online section OUR Competitive Advantages PARTNERSHIPS & UNIQUE OFFER . boxes supplier is the market leader Naturitalia . Naturitalia is located in Bologna: strategical position to serve both Milan and Rome . only ones to propose a Nutritional plan studied by a University and on which the products offer is based PRICING & COSTS . prices in line to online competitors and retailers . no costs related to the POS management (e.g. salesmen, maintenance, property tax, depretiation) . moderate incidence of warehousing and stock costs, according to MTO approach. Stock of only lasting complementary products TIMING . entering in a highly potential and attractive market before big players will do it (e.g. Amazon Fresh) . great visibility and importance to Food Supply Chain and Alimentation in 2015 thanks to Expo 2015 in Milan THREATS . market entry of big players such as Amazon or Cortilia, which have already a consolidated logistic network Business Model we designed a business model and a supply chain easy to replicate even abroad farmers Naturitalia orders Spot Subscription weekly designed offer based on a Nutritional Plan 2 formula: spot purchase -­‐ subscription FVM offer: fruits ʹ vegetables ʹ mixed boxes and complementary products 3 formats: single (5kg) ʹ medium (7,5kg) ʹ big (10kg) . Professors of University suggest the weekly composition of the boxes . Smart Food weekly sends to Naturitalia the orders received on the website . Naturitalia composes boxes by combining products from multiple farmers and proceeds with the quality control . from bologna the boxes arrive the morning after to the logistic hub in Milan, from where the currier starts delivering house after house to the customers . nowadays orders consolidation once a week, but the logistic network is ready to pass in few months to daily deliveries Abroad: first Switzerland . 5th market in Europe . population: 8 mln (13% of Italian) . organic market value: 1.411Φ mln (90% of Italy) 2 cities to serve: Zurich and Lugano PROS . high income per capita + elevated propensity to organic food . potential customers: 39.000 people . consistent revenue streams in only 3 years . chance to use the supply chain (boxes supplier) already designed for Milan thanks to the proximity CONS . currency rates risk: costs in Φ and revenue in CHF CHF/Φ 0,84 . regulatory compliance . increase of secondary transport costs . development of the website in other languages 0,80 2012 2014 Go-­‐to-­‐Market Strategy july 2014: hired a web marketing specialist to present the project on social networks: FB ʹ Twitter from august 2014: leafleting at the main points of interest in the city september 2014: guests to the radio broadcast Radio to invite customers to visit the website october 2014: investment on 20 keywords ǁŽŶƚŚĞƚĞŶĚĞƌ͞Innovazione del terziario ϮϬϭϰ͟ďLJRegione Lombardia for a total investment of 50.000Φ october 2014: analysis by Zip code of inhabitants propensity to organic food send to a target of 350 people of a letter with promotion Economics REVENUE STREAMS year 1 (2015)
year 2 (2016)
year 3 (2017)
year 4 (2018)
year 5 (2019)
Sales Revenue (with IVA)
Occasional user purchases
Sales Revenue (with IVA)
Subscriptions
Occasional user purchases
Add on
Subscriptions
Other incomes
Add on
Total Sales Revenue
Other incomes
year 1 (2015)
year 2 (2016)
year 3 (2017)
year 4 (2018)
year 5 (2019)
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Total Sales Revenue
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. products mix: units sold Milan 65K Rome 32K . small 30% -­‐ medium 45% -­‐ large 25%. Medium will be the main format sold, due to the perishable nature of the product and average number of members of families in Milan . subscriptions mix: 1 month 70% -­‐ 6 months 20% -­‐ 12 months 10% . shoppers profile will change during the years: . Y1: 85% of orders done by occasional user which want to test SF . Y5: 30% of orders done by subscriptions . in Y3 entry in Rome organic market, which will represent 30% of total turnover in Y5 . target market-­‐shares: Milan 6% on total organic market (3rd player in e-­‐commerce) -­‐ Rome 4% (2nd player) COSTS of SALES Cost of Sales
Box costs
Sales Revenue (with IVA)
Other Products (add on) Occasional user purchases
Picking
Subscriptions
Secondary transport
Add on
Total Cost of Sales
Other incomes
year 1 (2015)
year 2 (2016)
year 3 (2017)
year 4 (2018)
year 5 (2019)
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Total Sales Revenue
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. box costs represent on average 80% of total costs of sales . secondary transport will increased up to Q4 of Y3 (first 2 owned vans in Milan) Economics OPERATING COSTS year 1 (2015)
year 2 (2016)
year 3 (2017)
year 4 (2018)
year 5 (2019)
Operating Expenses
Sales Revenue (with IVA)
Total Sales and Marketing Expenses
Occasional user purchases
Total Research and Development Expenses Subscriptions
Add on
Total General and Adminstrative Expenses Other incomes
Total Sales Revenue
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Income from Operations ¼ ¼ ¼ ¼ ¼
Sales and Marketing consistent investments in: . advertising 328KΦ in 5 years in Google Display, Media and Couponing . web marketing and PR 362KΦ in 5 years for Blogger, Events and Press office . agents: 2 resources hired in Y3 to follow B2B in both cities R&D expenses: . Y2: development app for smartphone . web-­‐site maintenance for 73KΦ in 5 years . university partnership: 40KΦ/year invested onto the relationship General and Administrative expenses: . personnel: Y1 1 resource, a further in 2016, to arrive in 2018 with 4 new employees + 6 drivers for owned fleet . office rent in Milan since September 2015 . fleet: since Y3 investment in vans to internalize secondary transport in first 2 years negative income from operations due to the initial investments in consultants, web-­‐site development and advertising, losses will be covered by Y3 Done so far 9 designed the whole Supply chain on Milan 9 obtained a loan of 35KΦ by Unicredit to develop website 9 GO LIVE on the 17th July 2014 www.smartfood.bio . 6000 visits . 123 subscriptions to our newsletter . 4KΦ of Turnover 9 blog, social and media advertising . collaboration undertaken with a web-­‐marketing specialist . 12 posts on our blog . 169 like on FB for 545 people reached by our posts . guests to the radio broadcast Radio 24 HAVE TALKED ABOUT US Investment need Needs: 500K Φ of Investment to support in next 5 years . marketing: 330KΦ -­‐ customers captation and media advertising . website maitenance and App development: 30KΦ . owned fleet: 130KΦ for leasing of 3 vans in Milan and 3 in Rome . delivery planning and optimization software . market research and supplier scouting to enter in the swiss market within 5 years Smart Food become smarter with us Thanks 
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