The expansion of profitable business in the conditions of demand exceeding supply and lack of competition

Project description

Field of activity: organic farming is a year – round cultivation of vegetables (tomato, cucumber) and leafy green salads (arugula, spinach, Pak Choy, Kale, chard, etc) quality as my grandmother in the garden in the summer

Location: Novosibirsk oblast (possible implementation in any major city from the Urals to the Far East)

Phase: operating a profitable business is the construction of a new facility to expand production volumes

The tenure of current business: 3rd season (2018)

Distribution channels: established implementation to end customers (home delivery). Developed rapid expansion of customer base by advertising investments in proven advertising channels.

Number of investors: one, preferably with investment opportunity in the next 2-3 years in the amount of 2-3 billion rubles to seeing all the practice to occupy a significant market share in several regions and at the international level in the next 3-5 years. The potential of the growing market for organic products in Russia is estimated at more than 100 billion rubles per year.

The size of the required investment: 70000000 rubles

The planned period of return of investment: 3-4 years (on paper 14 months — 2 season high prices).

The main advantage of the business: demand and supply and competitors 7 months a year there. This ensures maximum profitability and quick return on investment.

Protection from competitors due to lack of technology and qualified personnel, which you could just buy for year-round cultivation of the land, without chemicals. For the entrance to the market required

The term output to profit: November-December 2020

The contribution of the owner: technology, distribution channels, implementation of the project

The contribution of the investor: 100% of funds

Form the attraction of investment: equity participation in the business

The project implementation period: 6 months from the investment before the start of sales

Cost efficiency: 60% (of revenue)

Distribution of shares in business: 50 on 50

Number of owners: at the moment, one

Details in the attachment

Additional information

Quality natural foods — greens and vegetables all year round.

Our customers love and appreciate good greens (arugula, spinach, salads, etc) and vegetables (the first tomatoes and cucumbers). However, in Siberia, 7-8 months of the year offer completely absent. Everything that is sold on store shelves with the words themselves as consumers is not — at best tasteless and not fragrant. In the markets the quality is also low.

The quality of our products for taste and aroma – the Granny with the garden, but all year round.

For reviews of loyal customers – greens we get even better than they are able to grow at his dacha. These reviews very much.

At a cost 2-4 times more expensive than the store, our customers have objections on the price not sound. 90% of buyers made a trial order become regular customers.

Market analytics

At the moment the project is focused on the local market (Novosibirsk and the neighbouring regions). In the future 2-3 years it is planned to develop from the Urals to the Far East, as well as for foreign supplies (primarily China as a consumer of high-quality Russian food).

According to the report from Consulting SBS 2019 organic production is a dynamically developing segment of the world agriculture ( + 12% per year, 93 billion EUR in 2017), the growth rate of consumption is more than 2 times exceeds the growth of food market in General.

Russian demand for organic food growing faster than the world ( + 23% per year, 160 million EUR).

Due to the low base of the market for organic products in Russia grew 3 times faster food market (8% per year) and 2 times faster than the world market organic

Due to the outbreak of protracted crisis and decline in real incomes, the growth rate of the market in 2014 slowed down

Despite this, the market is at the initial stage of formation: – 0, 1% — percentage of "organic" food market of Russia – 1% of the population – consumers And expected to continue to grow

The rapid growth of land under organic matter is associated with an active demand, but still far from naseyani – more than 80% of the products are imported

From the organic segment in Russia high export potential, 3 now every manufacturer is an exporter

* Report SBS Consulting for the link

https://www.sbs-consulting.ru/upload/Organic_agriculture_perspectives_in_Russia_Mar2019%20.pdf

In Russia the market of organic products is beginning a new stage of development in 2020 with the entry into force of the law on organic production.

In 2018 the famous Moscow network "Coswell" specializing in quality products invested in construction in Moscow's own production base (aeroponika). As this aeroponika they are not our direct competitors.

But, according to the trading network of domestic sales of fresh herbs, as well as sales in a large network of restaurants in 10 regions of Russia, where a network of (mainly Central Russia) is 70 billion rubles per year.

And this does not include the volume sold in the markets and trading networks, as well as other restaurants.

Specifically in Novosibirsk at the moment, with the investment of 30,000 rubles in advertising only on Instagram (specifically our experience) get 100 customers in 2 weeks. Exactly the same situation in the neighboring cities of Siberia (checked specific offers).

A quick set of the customer base demonstrates the great interest of the population in such products. Specific rates at which our products are sold (in 1, 5-3 times higher than in stores) demonstrate the willingness of specific customers to pay for our products.

The uniqueness of the project

The uniqueness lies in the fact that there is no competition. The greens, tomatoes and cucumbers for quality, taste, aroma according to the consumers themselves pale in comparison to ours.

That is, the demand is there, but no offers. Why?

First, the market is still quite small. But the most important thing — Russia has no technology ready year-round cultivation through organic farming and no ready-qualified staff. In other words, it takes a long time for development of its own technologies of efficient cultivation. That was done for the period from 2018.

Monetization sources

To attract new customers using established advertising channels — first social network.

90% of consumers trying our products for the first time become regular customers.

At a cost of 30-50 T. R. we get 100 new regular customers.

Currently the business operates with zero advertising costs.

For a full load planned production capacity will be needed 3 500 regular customers.

In case of insufficient number of regular customers in the first month of the project implementation can be very bysro and easily attract buyers from the neighboring regions (Tomsk, Kemerovo, Novokuznetsk, Biysk, Barnaul), where if necessary you can arrange delivery and distribution. Customers of these cities are willing to buy products at the current prices — this has already been tested in practice.

Sales strategy and marketing

For the season 2020-2021 main distribution channel — end users (physical persons).

Delivery at home.

To obtain the required 3 500 regular customers will require investment from 1 to 2 million. in tested advertising channels to attract customers.

In subsequent years, with the formation of the broader market the development of supplies to retail outlets for the sale of food products segment of the organic. As well as the overseas (mostly China).

Project detailed information is available to investors after authorization.

Project detailed information is available to investors after authorization.

Translated by "Yandex.Translator"
Project No. 58229
Created on: 18.03.2020

Russia, Novosibirsk Oblast, Novosibirsk


Project price: 80 000 000

Investments volume: 70 000 000


Stage: Development of existing business


Website: http://instagram.com/zhivaya.zelen


445 reviews

Contact details of entrepreneur

Kurushin Anatoliy

Russia, Novosibirsk Oblast, Novosibirsk
Plant industry, Agriculture