Manna Crisps Business Plan Essay Example

using imagery that will resonate with them. In order to remain competitive, ALMIGHTY Foods Corp. has decided to implement a high level of total quality management throughout their supply procurement and product distribution processes, regardless of whether sales occur through direct selling, consignment, or online ordering. The company also prioritizes product freshness and intends to utilize a just-in-time inventory system. Financially speaking, an initial investment of P18,000 is required from the six investors involved in the venture which will be divided equally amongst them. The majority of this capital will go towards purchasing the company's initial inventory as well as covering bazaar entrance fees.

The company aims to sell 1,060 units of Manna Crisps within the first three months of operation. It is important to maintain a minimum net profit margin of 22% each month. This strategy is projected to yield a 73% return on investment after the third month and achieve full recovery by the end of the first year.

II. Idea Generation Background Food holds immense importance for all living beings, prompting individuals to devise diverse methods of production and creation for various food products in order to fulfill this essential requirement. Given that food is a fundamental necessity, there will always be a consistent demand for it.

The food industry has attracted numerous players and businesses in different sub sectors, all aiming to make significant profits. Today, the food market is highly competitive due to its variety and complexity. While it is easy to enter, survival and prosperity prove to be challenging. The market has become crowded with an influx of various food products and services across multiple sectors. Many of these new food products

are short-lived trends rather than sustainable product lines.

Some past fads in the food industry include shawarma, pearl shakes, and mini donuts. There are still existing fads such as donuts from Go Nuts Donuts, Krispy Kreme, and Cellos, premium popcorn from Holy Kettle Corn, Kettle Corn, and Chef Tony's, and green tea drinks from C2, Lipton, One, and Sunkist. While green tea drinks have maintained consistent sales, pearl shakes have lost popularity. New food establishments constantly emerge while others close down. Despite the challenges, many aspiring entrepreneurs still choose to enter the food industry due to its relatively easy entry.

Producing or distributing food products requires little effort and capital. The demand for food is always present. However, succeeding in this industry is challenging for newcomers. It requires innovative thinking, long-term planning, and strategizing. A good business idea should address a certain need, and its feasibility and profitability depend on how it meets this need. In this case, the need for food is to be met by man.

The main inquiry is "What is the product?" Yet, in a world with numerous supply choices, it is also crucial to contemplate how the product fulfills a need. Moreover, there are alternative goods accessible that cater to the same need; hence, the query arises as to what distinguishes our product from others. Essentially, why would consumers opt for our product over other alternatives? Ultimately, the product ought not only surpass others but also add value to the market. In essence, it should be groundbreaking and distinctive, offering consumers novel options and improved selections.

The snack food industry focuses on meeting people's basic need for food. Snack foods like chips, cookies,

crackers, popcorn, and bread are designed to be tasty but not filling like a regular meal. These snacks are convenient for customers to carry around and readily available.

The fast-paced and instant nature of modern city lifestyle has led to a demand for delicious and convenient snack foods. However, these snacks are often seen as unhealthy due to their lack of nutrients and high cholesterol levels. Snacks prioritize taste over nutritional value because their main purpose is to temporarily satisfy hunger. As a result, they tend to have low nutrient content, reinforcing the belief that they are not beneficial for health. Additionally, the pre-prepared nature of snack foods reinforces the perception that they are not fresh and may contain preservatives.

The term "junk food" is commonly used to describe unhealthy food options. Moreover, the upper social classes (ABC1) prioritize health and value healthier food choices. As a result, there has been an increase in the availability of "healthier" alternatives such as low-calorie beverages like Coke Light and Sugar-free Pepsi. Additionally, there is a growing market for green tea drinks that claim to detoxify and purify the body. Specifically, within the snack food industry, brands like Nova and Oheya advertise themselves as healthy snacks with high fiber content. Therefore, to meet these demands and address these concerns innovatively, a product must fulfill these basic requirements while staying up-to-date with current trends.

The product of the company is commonly referred to as unleavened bread, which is the bread made by the Jews during their historical/Biblical Passover. It acquired the name "unleavened" because it lacks yeast or any other leavening ingredient. The Israelites employed this baking technique to expedite the

bread-making process (eliminating the need to allow the bread to rise).

Currently, an increasing number of individuals are opting to create their own unleavened bread. Unleavened bread, which is low in calories and cholesterol-free, is deemed healthier compared to traditional bread. Moreover, it can be enhanced with various flavors like plain, basil leaves, or sesame seeds, making it delectable and fulfilling. Nonetheless, bread is not commonly regarded as a convenient or portable snack option.

The product will be packed as a snack food, similar to chip products, making it convenient to carry and enjoyable to eat. Air-tight containers will ensure freshness and preservation. The design and material will differ from "junk food," resembling paper to create a comforting appearance that is both fresh and delicious. Additionally, the unleavened bread, known as lavosh, is crispy and has an irresistible taste, similar to chips and crackers. The customer will be enticed to purchase the product due to its feel-good factor, being freshly baked and cholesterol-free.

The image that will be created for the product will convey a sense of lightness, naturalness, and healthiness. This will appeal to individuals who are following a healthy food diet. The uniqueness and added value of the product lie in the fact that, unlike in other countries where unleavened bread is sold in local stores and groceries, it is not presented as a packaged snack food. In the Philippines, unleavened bread has not yet been commercially introduced, although it is already being made in some households.

The team will market the unleavened bread as a unique bread product packed as a snack food, which is fresh, healthy, appetizing, convenient, and readily available. It offers customers not

only a better snack food option but a new snack alternative, which has the good qualities of a snack (fresh, appetizing and convenient) while being healthy and natural at the same time. The feasibility of this idea relies on having sufficient means and resources. Producing the unleavened bread is easy and requires affordable ingredients. The production process requires limited capital and basic baking apparatus. Additional funding may be needed for packaging to ensure the preservation of quality and freshness.

Despite requiring only minimal financing, the snack is highly marketable. The foreign nature of unleavened bread allows for it to be positioned as a specialty snack, renowned for its exceptional quality and freshness. The key focus will be on marketing the bread as a health-conscious and entirely natural product.

Brief Industry / Market Background

The Philippines is known for being one of the leading countries in snack consumption worldwide. Food holds a significant portion of household spending, with snack food ranking 9th among the top 20 food categories in the country. These facts align with the Filipino culture of enjoying delicious food and being open to trying different varieties. AC Nielsen reports that there is a prevailing health trend across the nation.

Filipinos are increasingly opting for healthier food alternatives to the traditional meals and snacks that contain MSG (monosodium glutamate). This shift is exemplified by the success of C2, a product by Universal Robina Corporation that is derived from tea leaf extract. In 2005, C2 was able to significantly reduce Coca-Cola's sales by half. In current times, consumers are avoiding cakes and pastries in favor of bread, leading to a

notable growth in packaged bread products in 2006. Bread products are perceived as fresh and therefore healthier compared to other types of snacks and pre-packaged foods.

The perception that fruit is a healthy alternative to snacks leads to the ongoing expansion of the bread industry. Despite the health advantages, consumers opt for snacks due to their lower cost compared to fruit. Furthermore, snacks have a longer shelf life than fruit, which has a limited lifespan but can be extended through refrigeration.

Considering that fruits take up valuable refrigerator space, while snacks can be stored anywhere, companies are now targeting health-conscious individuals who desire the health benefits of fruit but also want the convenience and long shelf life of a junk food snack. Venturing into the profitable snack industry, which is one of the top revenue-generating sectors according to the Department of Trade and Industry, our product falls under the baking goods sector that recently experienced a 3% increase in sales volume.

In 2005, the weight of a specific substance was 185,380 tons and it increased by 3.5% to reach 192,200 tons in 2006. Revenue also experienced growth from 20,925.57 in 2005 to 23,066.17 in 2006. Furthermore, the rise of dual-income households in the Philippines is another significant factor for our business.

As families earn more money, both parents are often employed, leaving less time to prepare meals. The advancement of technology and information has led to higher expectations for our workforce, causing people to look for convenient ready-to-eat food options. This fast-paced lifestyle isn't just limited to adults; college students also juggle school, extracurricular activities, and socializing.

Students need food to satisfy their hunger while studying or in between classes.

The distinction between sweet and savory snacks, as well as the differentiation between snacks and meals, is becoming blurred. Nowadays, many people are choosing snack foods instead of full meals. They are turning to items such as biscuits and sandwiches to fulfill their cravings. This increasing demand for snack foods can be attributed to the fast-paced lifestyles that dominate today.

The demand for on-the-go foods that can be eaten while commuting or in between daily activities is increasing among consumers. These foods are also sought after as snack options. AC Nielsen has identified convenience as another significant trend impacting the food industry. Convenience encompasses easy packaging and preparation, portability, one-handed consumption, and products that cater to individual preferences – known as the 'just-for-me' trend.

The snack food industry's movements should be considered when entering the industry. It is important for manufacturers to respond to these trends by providing healthier and tasty alternatives to existing products in the market. The Philippine Snack Food industry was valued at around $81,600,000 in 2001 and has been consistently growing at an annual rate of 3.9%.

Our product falls under the sub-category of Bakery & Cereals in the industry. This sub-category is divided into six parts. Unleavened bread belongs to the Crackers category, which is a type of bread but is marketed as a ready-to-eat snack by Manna Crisps. We consider other crackers as our direct competitors rather than other bread products. Our packaging is crispy and thin, similar to the standard of crackers. We want our customers to consume our product in that manner. Since 2001, the sales volume for Baked Goods, including breads, cookies, cakes and pastries, has been continuously

increasing.

15% Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews, Euromonitor International estimates that the baked goods industry experienced a 5% increase in volume sales and a 10% increase in value sales. This growth was fueled by the health trend and the marketing tactics employed by companies selling "light" products. These "light" variations typically contain ingredients with reduced levels of fat, calories, cholesterol, and so on. It is anticipated that the industry will continue to expand steadily, with a projected 7% increase in sales volume and a 6% increase in peso sales.

This is because prices are expected to rise due to the introduction of different sizes and product variants in the industry. The V. STEP Analysis is used to assess the feasibility of the product, providing information on the current state of the country in which the business will be established. It is important to evaluate the environment and culture in order to better understand the context of the business. The socio-cultural demographic analysis provides insights into the culture and social trends of the target market.

The text below provides insights on how to effectively adjust to the environment and market preferences. The Philippines' population and demographics are as follows: The estimated population of the Philippines in 2007 was 88,706,300, making it the 12th largest in the world and accounting for 1.33% of the global population. It is also the second most populous country in Southeast Asia, after Indonesia.

The graph below, provided by the National Statistics Office, depicts the estimated population of the Philippines from 2000 to 2010. It demonstrates a consistent annual increase of 2.057%. Regarding gender distribution, approximately

half are women (49.7%) and the other half are men (50%).

The Philippine population is 3% of the total. Among them, 44% are aged 21 and below. This young age demographic of the market is significant when it comes to product design and marketing strategies. In Asia, Filipino consumers are considered the youngest, with a median age of 20. In the Philippines, the market in the Greater Manila Area (GMA) holds the most importance.

General Metropolitan Area (GMA) has the highest population density in the country, constituting 14% of the country's total population and residing in less than 1% of its total area. Additionally, GMA possesses an estimated 34% of the country's total wealth, with Manila serving as the hub for business and trade. In terms of lifestyle, there has been a noticeable shift towards convenience owing to the prevalence of dual-income households (explained in the Economic environment section). With both parents working, time has become crucial, leading to a demand for convenient products and services.

There has been a trend towards a healthier lifestyle, with 75% of respondents in the ACNielsen Regional Consumer Confidence Survey in 2004 stating that they exercise regularly. Out of that percentage, 18% reported going to the gym regularly. The same survey also revealed that 83% of respondents are focused on losing weight, either through low-fat diets or reducing sugar intake. Staying updated with technological advancements and innovations is essential for companies to remain competitive. E-commerce has become a popular platform for marketing products, especially with more Filipinos gaining access to the World Wide Web.

Online advertising is not only convenient, but also inexpensive due to the emergence of networking websites like MySpace, Friendster,

and Multiply. With e-commerce, sellers can not only display and advertise their products, but also accept orders online. The trend towards convenience has led to a preference for smaller packages among consumers, as seen in the growing sachet industry. Additionally, attractive and environmentally-friendly packaging options have become more popular in the market, such as Holy Kettle Corn's paper bag-like container and Kettle Chips' durable, air-tight package. Total quality management is crucial for companies in the food industry when it comes to packaging goods.

Standardizing production helps maintain the level of quality management that a company sets, thereby making it easier for producers and safer for the consumers. It is important to study the economic environment of the place where you would like to do your business so as to properly address the right market or give the right product to a market. The Philippines is primarily an agricultural country but has also evolved into an industrialized country, operating several major industries such as food processing, textiles and garments, and electronic and automobile parts. More recently, the Philippines has experienced a recent upsurge in Business Process Outsourcing, with call centers proliferating all over Metro Manila.

The Philippine economy has seen a tremendous increase in the past year, with a growth rate of 5.4%. Its current Gross Domestic Product per capita is $4,923, and the Philippine Peso has shown significant improvement from a Peso-Dollar Exchange Rate of P55.8 in 2005 to P45.93 in 2007.

The Philippines earned the title of Best Performing Currency in Asia in 2005. In terms of social stratification, the population in the country is mostly categorized as DE. However, it should be noted that even though

the majority of the market falls under the DE bracket, it is the ABC group that possesses higher purchasing power and a greater inclination to spend. The increasing purchasing power of Filipinos is influenced by several factors, including the 5% growth of the Philippine Economy mentioned in the Philippine Economic Overview and the significant recovery of the Philippine Peso's value during the past two years.

The rise in purchasing power is supported by two factors: the growing number of two-income households and the increase in women joining the workforce. Due to the escalating cost of gas, families are trying to manage price increases by having both parents working, thus having dual sources of income. This is evident through the increasing number of women entering employment. Additionally, it is observed that the average size of households in the Philippines has decreased over time, from an average of 5 members.

During the year 1980, the average number of people per household was 57. This decreased to 5.4 in 1990 and currently stands at 4.61 individuals per household. While this signifies a decrease in the number of consumers per household, it also suggests that income is divided among a smaller group, resulting in higher purchasing power for each individual. In 2003, Consumer Expenditure data reveals that food expenses account for a significant portion of household income, amounting to 42.6%.

In terms of other essential needs, Housing accounts for 14.5% of income, while transportation and communication represent 7.4%. Miscellaneous expenses, where education, medical care, taxes, household furnishings and equipment, and household operations are included, make up 28.7% of the income.

It is essential to be knowledgeable about the Political-Legal environment of the business

location in order to avoid any legal complications. Understanding what is allowed and what is not allowed can be extremely beneficial. As a manufacturer of consumer food and commodity food (flour) products, the Company must ensure that the products are safe and pure for human consumption and comply with the standards and quality measures set by the Bureau of Food and Drug, which is a government organization under the Department of Health. The Food and Drug Administration, founded by the government, establishes standards and quality measures for food, drug, and cosmetic products and implements measures to guarantee a pure and safe supply of these items in the country.

The Bureau of Food and Drugs (BFAD) has established standards for quality goods, which companies must adhere to in order to obtain BFAD's approval for their products. BFAD has issued several Food Administrative Orders, including the following:

1. AO 153 s. 2004 - issued on May 7, 2004; provides guidelines on the appropriate handling of food throughout the manufacturing, packaging, and repackaging processes to ensure product quality and cleanliness.

2. AO 66 s. ...

The 1983 release sets guidelines for the analysis of food and drugs by the Bureau of Food and Drugs (BFAD) on July 18, 1983. BFAD also periodically releases Bureau and Memorandum Circulars to update members on new laws and guidelines. Economic reforms and trade deregulation have allowed Western Companies to enter the Philippine Snack Market. Additionally, increasing urbanization and improved living standards have led to a greater demand for snack products. VI.

Porter’s Five Forces of Competitive Position, developed by Michael E. Porter, are used to determine the competitive intensity and attractiveness of a

market. In the snack food industry, these forces can be applied to analyze the expected increase in competition despite the market already being highly saturated.

The Philippine government is implementing trade liberalization measures in response to the World Trade Organization (WTO) and the ASEAN Free Trade Area (AFTA). As a result, an increase in imports is expected. The WTO is reducing tariff rates on food and agricultural products and eliminating import quotas for its member countries. AFTA is also gradually reducing or eliminating tariffs on manufactured goods, along with non-tariff barriers. This liberalization will introduce more competitors and innovative products into the market, making it more challenging for existing contenders. Additionally, the snack food industry experiences a strong power of buyers.

In a highly competitive market, buyers are presented with numerous choices for the products they purchase. However, despite the abundance of available products, there is a lack of variety. For instance, biscuits from one brand generally have comparable alternatives from other brands. Additionally, the prices of these products typically have minimal differences. As a result, market competitors have limited influence over consumer preferences. The entry of more innovative products into the market would be beneficial. This could involve the introduction of snack foods that incorporate revolutionary ingredients or offer new tastes. Furthermore, offering an original selection of snacks would diversify the range of snack food options for consumers.

This presents an opportunity for different brands to attract market interest and diminish the influence of buyers.

Supplier Power

The influence of suppliers depends on the type of ingredients required for producing snacks or food products. If the ingredients are simple and easily accessible, then the power of suppliers would

be low. A wide range of suppliers would provide competitors in the industry with more choices, ultimately weakening the control suppliers have over their market. On the other hand, if the ingredients are uncommon, suppliers possessing those ingredients would have greater power over their customers. Due to limited providers for such ingredients, contenders in the snack food industry would have fewer options. Nevertheless, the selling price of end products in the snack food industry must also be taken into account, regardless of the availability of ingredients.

The cost of raw materials plays a crucial role in selecting a supplier, as does maintaining positive customer relations to ensure customer loyalty. Additionally, the availability of substitutes is a key factor. Fruits and vegetables can be alternatives to snack foods commonly found in grocery stores. Similarly, both snack foods and fruits/vegetables are available throughout the year. However, it is important to note that these substitutes have a tendency to spoil more easily.

The presence of these fruits and vegetables does not pose a significant risk to the industry. Filipinos have developed a fondness for junk foods, candies, and other snack items available in the market. Even when not hungry, they still opt to purchase these food items for the pleasure of indulging in something delicious. However, research indicates that the affordability of these products is a key factor influencing Filipinos' preference for purchasing snack foods.

Another important consideration is the growing trend towards healthier lifestyles. The majority of snack foods available today are extremely unhealthy. Therefore, the introduction of improved and healthier products would have a significant impact on the performance of current food items. Additionally, the snack food industry is

characterized by intense competition, resulting in high levels of competitive rivalry.

The competition in the industry differs based on product category, country, and product segment. Both local and international competitors exist in this industry. Local competitors include Universal Robina Corporation, Storck Products, Inc., Liwayway Manufacturing Corp., Columbia Foods, Republic Biscuit Corporation, and Monde Nissin Corp.

The following companies are international contenders in the market: Procter and Gamble Company, Del Monte Foods Company, Frito-Lay, Nestle, Cadbury, Schweppes PLC, and Nabisco, Inc. These companies offer similar products and add to the high competition in the industry. Price, brand recognition, quality, taste, convenience, advertising and marketing, availability of products, and ability to distribute widely are the main competitive factors. The differentiation of techniques in these categories determines their success in the industry. In strategic planning, a SWOT Analysis is used to evaluate the internal and external factors that impact a company's success or failure.

It is essential for ALMIGHTY Foods Corp. to evaluate their strengths, weaknesses, opportunities, and threats. This will allow them to capitalize on their strengths and opportunities, while also improving on weaknesses and preparing for potential threats.

Strengths:

• Strong Commitment to Core Values
• Feasibility of Future Expansion and Product Development
• Minimal Capitalization
• Cost Efficiency and Availability of Raw Materials

Weaknesses:

• Proprietors’ Inexperience
• Minimal Budget for Advertisements
• Inventory Management
• High Product Substitution

Opportunities:

• Industry in

Top 10 Revenue Streams

Threats:

• Competitive Environment
• Product Replication
• Natural Disasters

StrengthsSt