View the Executive Summary - National Agri

Green Water Farms is a family-owned agribusiness based in Florida, who has
been proud to serve the needs of the horticulture industry for more than
30 years. Green Water Farms is excited to introduce their newest innovation,
GREEN WATER FARMS Fortress, a water and nutrient saving protection aid for young trees.
FORTRESS
FOR TREES
PRESENTED BY:
KANSAS STATE UNIVERSITY
NATIONAL AGRI-MARKETING ASSOCIATION
Advisors: David Lehman and Kellie Jackson
Marie Annexstad
Celine Beggs
Cooper Clawson
Jacqueline Clawson
Kathryn Clawson
Leah Clawson
Racya Doyle
Kaylie Lewis
Alana McClain
Zach Moore
Katie O’Brien
Georgina Rubio
Darby Schmidt
Youwei Yang
Rachel Zimmerman
GREEN WATER FARMS
MARKET ANALYSIS
FORTRESS
FOR TREES
TRENDS
INTRODUCTION
The citrus industry in the U.S. faces many challenges, primarily from disease and pressure to
develop land for non-agricultural uses in both Florida and California.
Although water covers about 70 percent of the earth’s
surface, the fresh water needed for drinking water and
agricultural purposes is rare. Only about three percent of the
world’s water supply is freshwater and two-thirds of that is
tied up in glaciers or otherwise unavailable. Agriculture is the
largest user of freshwater and much of the water used in
agriculture is wasted due to inefficiencies.1
In Florida, since 2005 when the disease Huanglongbing (HLB) or “citrus greening” was first discovered, citrus acreage has decreased 26 percent and production has dropped 42 percent. Orange
production has dropped from a high of 242 million boxes before 2005 to 104.6 million boxes in
2014. 3 Citrus greening was first discovered in California in 2015. There is no cure for the disease
and an infected tree can die within three to five years.4 Land development has also contributed
to the loss of citrus production as some citrus growers have sold their land for commercial and
residential real estate development.5
Green Water Farms, a family-owned agribusiness based in
Florida, has been serving the needs of Florida’s horticultural industry, including citrus nurseries and citrus growers
for more than 30 years. Green Water Farms is proud to
introduce its latest innovation, Fortress, designed to conserve
water and nutrients and protect young trees from frost
damage or loss due to cold temperatures.
As a result of these pressures on the citrus industry, growers have responded by increasing the
number of trees planted per acre, with some research trials planting as many as 500 trees per
acre instead of the current average of 194 trees per acre in an effort to maximize the production and efficiency from every remaining acre of citrus groves.6
BENEFITS
• Made from 100% recycled plastic.
• By containing the water within the 24-inch base, it saves
approximately 90% water compared to traditional practices.
• Use approximately 75% less fertilizer than your normal
program requires.
• Protects the trees from frost by increasing the temperature
around the base of the tree by 10+ degrees.
• Added critter control as tree trunk is protected.
• Helps create a stronger tree, with seven to nine inches
of deeper root growth per year because water is contained
around each tree.
• Can be utilized for up to five years after original plant
date to allow for good establishment of the root system.
• Withstands 60 mph wind.
• Can be used on all types of fruit trees.
“Instead of using 10,000 gallons
of water per tree per year without
Fortress, with it we are now using
only 800 gallons per tree per year
and watering more efficiently.”
JOHNNY GREEN 2
Another significant trend is increased emphasis on water and fertilizer efficiency. Agriculture uses
more than half of the available water supply in both Florida and California. In California, water
prices have recently increased almost ten-fold, from $140 per acre-foot to $1,100 per acre-foot.7
PRIMARY RESEARCH
Surveys and focus groups conducted with citrus growers and nurseries in the target market areas
in Florida and California indicate that 80 percent of growers want to increase the efficiency of
water and fertilizer use, while 60 percent are interested in finding more cost-effective ways to
prevent frost damage to newly planted citrus trees. Green Water Farms has completed a successful
test market with citrus growers and nurseries in Florida. The results of this target market confirmed the effectiveness of the product for protecting young fruit trees from frost damage or loss,
conserved water by more than 90 percent and also reduced the amount of fertilizer needed per
tree. The test market also confirmed that the results were greatest when applied to trees when
they were first planted.
MARKET POTENTIAL
Approximately 70% of the United States fruit production is grown in California and Florida.
When dividing the fruit production out into segments, Florida and California rank number one
and number two, respectively, in citrus production. Approximately 56% of the citrus production
comes from Florida with 459,100 bearing citrus acres. The next highest producing citrus state is
California with approximately 41% of the citrus production and 271,800 bearing citrus acres. The
other 3% of the citrus production comes from the states of Texas and Arizona with a combined
34,000 bearing citrus acres.8
TARGET MARKET
In the first year, Green Water Farms will target nurseries and citrus growers in Florida and
California. These states were selected as they have a combined contribution of 96% of the United
States citrus production. Also, the citrus production is concentrated in a very niche market in both
Florida and California.
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CUSTOMER PROFILE
FLORIDA
Approximately 60% of the citrus acreage is located in five
counties: Polk, Hendry, Highlands, DeSoto and Hardee.9
The two primary types of customers for Fortress will be nurseries that
grow citrus trees and citrus growers who produce citrus fruit. Within
these two types of customers, there are two subdivisions.
Among nurseries, there is a commercial nursery segment and a
private nursery segment comprised of citrus growers who grow their
own nursery stock from seeds. In Florida, there are a total of 42 citCALIFORNIA
rus nurseries, including 19 commercial nurseries who sell young trees
Close to 90% of the citrus acreage is located in five
to citrus producers and 23 private nurseries who grow stock for use
counties: Fresno, Kern, Tulare, Ventura and Riverside.10
on their own citrus farms. In California, there are about 100 nurseries
that grow and sell young citrus trees, with most of them operating as
In the first year, Green Water Farms will capture a 5% market share of the newly planted commercial nurseries and the rest are private nurseries growing trees
for their own citrus farms.
citrus trees in Florida and California through nurseries and citrus growers' farms. In the
following two years after our initial first year launch, Green Water Farms will position
Among citrus growers, there are two main types of operations: large
themselves to capture a greater market share of the newly planted trees in the citrus
corporate citrus farms and smaller family-owned citrus farms. In
production states of Florida and California.
Florida, the top 15 citrus farms produce 40 percent of the citrus.
However, most of Florida’s 7,000 citrus farms are family-owned and
YEAR 1
YEAR 2
YEAR 3
have been in the same family for multiple generations. The average
MARKET SHARE
5%
7%
10%
size of a family-owned citrus farm in Florida is less than 100 acres.
NUMBER OF UNITS SOLD 425,384
595,538
850,768
California similarly has a few large citrus growers who produce a
disproportionate share of the citrus; however, the majority of California’s 3,000 citrus growers are also family-owned farms.
COMPETITIVE ANALYSIS
Fortress is a product which offers many benefits to the producer. Compared to its competitors, Fortress stands apart due to its durable design, water saving capabilities, and affordable price. Green Water Farms seeks to capitalize on these benefits as they expand their presence in the marketplace.
SWOT ANALYSIS
COMPETITORS
STRENGTHS
Ooze Tube
•
•
•
•
•
Tree Watering Ring
Patented design
Substantial water savings of more than 90 percent
Protects young trees from frost damage
Made entirely of 100 percent recycled plastic
Made in U.S.A.
WEAKNESSES
• Currently lack distribution capability in California
• Small, family-owned company with limited financial resources
• Manual labor required to install
OPPORTUNITIES
•
•
•
•
Fruit growers and nurseries are looking for ways to conserve water
Increasing price of water will add additional pressure on fruit growers
Continuing drought in California will increase the need for water conservation
Government regulation of water use in agriculture will likely increase pressure to
conserve water
• Expansion opportunities outside of the United States
THREATS
• Competitors may try to copy design in spite of patent
• Long-life and durability of product will allow customers to reuse the product which
may limit future sales
• Relatively concentrated target market
Benefit: Low cost
Weakness: 15 gallon capacity
$12.99
Benefit: Hard plastic, can be buried
Weakness: 4.5 gallon capacity
$18.30
Treegator Junior
Benefit: Low profile
Weakness: 13 gallon capacity
$21.29
Treegator Original
Benefit: Flexible material
Weakness 20 gallon capacity
$23.49
Bio-Plex Drip Irrigation Tree Ring
Benefit: Rigid plastic
Weakness: 10 gallon capacity
$29.99
PAGE 2 | FORTRESS: FOR TREES
BUSINESS PROPOSITION
GREEN WATER FARMS
FORTRESS
FOR TREES
KEY PLANNING ASSUMPTIONS
1. Citrus nurseries and citrus growers are looking for conventional, water savings
methods while promoting tree growth.
2. Citrus growers and citrus nurseries will see the profitability of using the Fortress
product in their citrus tree nurseries and groves through substantial water savings, tree
growth and frost protection.
3. The average rate of citrus grove replacement is three percent of fruit bearing acres
per year. 11
4. A common spacing pattern for commercial citrus groves is a 15-feet square, which
equates to 194 trees per acre.11
GOALS AND OBJECTIVES
1. Achieve a 90% customer satisfaction.
2. Generate $3,364,894 net sales revenue in the first year.
3. Earn a net profit of $3,014,326 by the end of year three.
STRATEGY STATEMENT
Green Water Farms is proud to offer Fortress as the most cost effective water
containment system for citrus growers and citrus nurseries to save water, reduce
fertilizer costs, increase growth rate and protect young trees from frost.
ACTION PLAN
PRODUCT
Fortress is a plastic cone made from recycled plastic
that fits over the base of a citrus tree. This product
is designed as a water containment system for trees
that not only saves water, but also protects trees
from frost. Fortress can absorb heat and increase
the temperature around the base of a tree which is
key to the growth in young trees.
PRICE
Fortress will be sold to citrus growers and citrus
nurseries for $7.95 per unit. This will provide
Green Water Farms with a 269% markup from the
production cost of $2.95 per unit.
PLACE
Green Water Farms will distribute Fortress from our
established production facility in Florida. Customers
can order online from our website, or order directly
from our sales representatives. All orders received
will be shipped directly from our facility.
PAGE 3 | FORTRESS: FOR TREES
PROMOTION
Green Water Farms’ promotional strategies will establish Fortress in the marketplace utilizing both traditional and contemporary approaches. Sales representatives will
play a key role in introducing citrus nurseries and citrus growers to Fortress. The target market resides in a very connected and niche industry; once citrus growers
try the product, Fortress will rely heavily on customer approval.
PRINT ADVERTISEMENTS
Placing advertisements in weekly, bi-weekly, monthly and quarterly trade
journals will reach a large portion of citrus growers and citrus nurseries.
Advertisements will be placed before key implementation periods of Fortress.
Publications to include, but not limited to: American Nurseryman, Citrograph,
Citrus Industry Magazine, Florida Grower Magazine, and Nursery Management.
ADVERTORIALS
Along with our print advertisements, Green Water Farms will strategically place
editorial based content on Fortress in some of our key print publications. These
one-page advertorials will highlight the key benefits of Fortress, information
about the product as well as how to use the product.
RADIO ADVERTISEMENTS
Advertisements will be placed strategically based on location and audience rate
of radio stations. Ad placements will follow the designated sales regions. Fortress
will sponsor popular farm talk programs including AgNet West Radio Network
for our California target market and Southeast AgNet Radio Network for our
Florida target market.
DIGITAL ADVERTISEMENTS
Green Water Farms will place digital banners advertising Fortress in key citrus
industry eNewletters and on websites of our print and radio mediums. These
eNewletters already target our niche market of citrus nurseries and citrus growers, and also have a high volume of traffic specific to our niche market.
eBLASTS
Green Water Farms will work with print, digital and radio advertising mediums
to rent out email lists of citrus growers and citrus nurseries in California and
Florida. eBlasts about Fortress will be pushed out to these targeted segments.
These eBlasts will be pushed out in a series to educate consumers about our
company and product while highlighting key benefits of the product, how to use
the product and testimonials from current customers.
WEBSITE
Green Water Farms’ website will host information about our company and
products, as well as a place to order Fortress online. Fortress’s landing page will
contain tutorial videos on how to use the product, key benefits of the product
and testimonials from current customers. Emphasis will be placed on visual
content and highlighting Fortress’s easy application and durability. Our website
will also direct potential customers to contact their appropriate regional sales
representative for information.
SOCIAL MEDIA
Green Water Farms will have a social media presence on Facebook, Twitter and
YouTube. These channels will educate citrus growers on Fortress and drive them
to our website to learn more information.
PERSONAL SELLING
Green Water Farms will designate two sales representatives solely to Fortress in
the first year, one for the California region and one for the Florida region. Our
sales representatives will work directly with citrus nurseries and citrus growers
to educate them on Fortress and the key benefits through face-to-face conversations and informational product brochures. These sales representatives will be
the key component in driving sales to meet our market penetration goals.
SALES PROMOTION
A portion of our marketing strategy will be designated to sales promotions.
Green Water Farms’ sale force will target top citrus nurseries and citrus growers
in their respective region and implement a small number of Fortresses on their
farms. This will allow potential customers to see the substantial water savings
and frost damage protection in person, and prompt further purchases of our
product for the rest of their groves.
PUBLIC RELATIONS
Green Water Farms will work with their marketing agency to develop supplemental trade show materials, promotional materials, press releases and other
branding developments as needed. The agency will work closely with our inhouse staff to ensure branding efforts are maintained and the Fortress story is
conveyed to our target market.
NEW PRODUCT LAUNCH
Green Water Farms will launch Fortress at an invite-only event at one of our
test farm sites. Customers in our target market of citrus nurseries and citrus
growers will be invited as well as influential media representatives from print,
digital and radio mediums. At this event there will be informational meetings on
our product, demonstrations on how the product works and the opportunity to
see different stages of trees that have had the Fortress on since planted. This
event will create product awareness for our target consumers but also provoke
media to write and/or cover feature stories on our new product.
TRADE SHOWS AND SPONSORSHIPS
Trade shows are a launching ground for Green Water Farms to promote product
awareness and knowledge of Fortress through sponsorship and exhibits. As they
discover the product’s benefits through sales representatives and video tutorials,
Fortress will be the smart solution. Trade shows to target include: Citrus Expo,
Florida Ag Expo, Florida Citrus Show, and the Nursery/Landscape Expo.
PAGE 4 | FORTRESS: FOR TREES
FINANCIAL STATEMENT
In year one, Green Water Farms will invest
significantly in marketing Fortress to establish a
loyal and satisfied customer base. One of the major
marketing expenses will be in personal selling. This
will be a key component in creating product awareness with citrus nurseries and citrus growers.
Marketing expenses will increase annually to
maintain and expand the customer base as Green
Water Farms broadens its market share throughout
the target market. During all three years Green
Water Farms will work closely with their marketing
agency, and those costs are allocated respectively in
advertising and public relations.
Number of Fortress Sold
Price (Retail)
Gross Sales
Less Discounts and Allowances
2016
425,384
$7.95
$3,381,803
$16,909
2017
595,538
$7.95
$4,734,527
$23,673
2018
850,768
$7.95
$6,763,606
$33,813
Net Sales Revenue
$3,364,894
$4,710,854
$6,729,788
Costs of Goods Manufactured
Gross Profit
$1,254,883
$2,110,011
$1,756,837
$2,954,017
$2,509,766
$4,220,022
Advertising
$250,000
$275,000
$302,500
Personal Selling
$325,000
$347,750
$372,092
Public Relations
$300,000
$330,000
$363,000
Sales Promotions
$3,500
$4,025
$4,629
Marketing Expenses
$878,500
$956,775
$1,042,221
General and Administrative Costs
$101,454
$111,599
$122,759
Testing and Evaluation
$33,649
$37,014
$40,715
Net Profit/Loss
$1,096,408
$1,848,629
$3,014,326
MONITORING & MEASUREMENT
Monitoring and measuring efforts gauge product performance relative to pre-established goals. To ensure expected goals are met, Green Water Farms will monitor
the success of our Fortress product through sales, profitability and customer satisfaction.
MEASUREMENT
OBJECTIVES
METHODS
SALES
$3,364,894 net sales revenue Evaluate sales reports daily,
in year 1
monthly and quarterly.
If sales are less than planned, increase personal selling
efforts and other promotions. If sales are greater than
planned, increase production to meet demand.
PROFITABILITY
$3,014,326 net profit by
year 3
If profitability is less than planned, review costs to
make sure that costs are within budget and reduce
costs when possible.
Analyze monthly and quarterly
financial statements.
CONTINGENCY PLAN
Review quarterly sales goals.
CUSTOMER SATISFACTION
Ensure a 90% customer
satisfaction
Surveys and feedback from
company website and social
media.
If customer satisfaction is less than planned, then we
will find out what are the issues that are causing
customers to be less satisfied and fix these problems.
CONCLUSION
As citrus nurseries and citrus growers seek more water efficient practices for their groves, Green Water Farms will strategically position Fortress to capitalize on this opportunity. Fortress is the innovative solution to citrus grower's concern:
water supply. Through a select variety of marketing tactics, Fortress will establish itself as the citrus industry’s most
trusted and desirable source of water conservation while protecting trees from frost and promoting tree growth.
___________________________________________________
SOURCES:
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The Atlantic, 2015. theatlantic.com/business/archive/2015/01/florida-without-oranges/384774/ 6. University of Florida, 2014. crec.ifas.ufl.edu/extension/greening/PDF/advcitrusproductionstory.
pdf 7. Bloomberg, 2014. bloomberg.com/news/articles/2014-07-24/california-water-prices-soar-for-farmers-as-drought-grows 8. USDA, 2015. usda.mannlib.cornell.edu/usda/current/CitrFrui/
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