L.AKitchen Marketing Plan
L.A Kitchen is a part not-for-profit and part social business companyfounded by Robert Eager and started its operations in 2014. Thecompany deals in food reclamation, repurposing fruits and vegetablesdeemed unsalable due to lack of commercial demand as well as cosmeticissues into healthy foods and snacks. The transformed and ethnicallydiverse meals are then distrusted to other non-profit partners forfree and some sold through the company`s for-profit program (L.AKitchen, 2015). The company also uses the recovered fruits andvegetables for its culinary arts job training program, which aims atproviding men and women who have just come out of foster care as wellas those returning from incarceration with culinary skills.
Thecompany`s for-profit program, Strong Food, aims at generatingrevenues that would help the company sustains its operations andexpands to other regions in the state of California. This marketingplan is based on the strengths, weaknesses, threats as well asopportunities available to the organization and that are highlightedin SWOT analysis (L.A Kitchen, 2015). The marketing plan focuses onthe markets niches the organization can explore as well as waysthrough which the organization’s relationship with mainstakeholders including customers, volunteers and partners can beenhanced.
Apartfrom outlining the long-term objective of an organization, themission statement highlights why the business is in operation (May,2010). L.A kitchen’s mission statement points out theorganization’s main objective and why it is in existence. Thecompany’s mission statement is “Revealing the power of food (L.AKitchen, 2015).” The company aims at reclaiming food that wouldotherwise be thrown away to empower, nourish and engage with thecommunity. By partnering with local farmers as well as wholesalesuppliers of fruits and vegetables, the company purchases andrecovers these vegetables and fruits, transforming them into mealsand snacks that are safe, healthy and nutritious (L.A Kitchen, 2015).
Throughits rigorous culinary training program, the company is able toempower various members of the community who are unemployed. Theprograms aim at preparing youths getting out of the foster caresystem as well as men and women coming out of the prison system withthe necessary skills that will enable them to get jobs in theculinary industry as well as within the company itself. Apart fromreselling the food it prepares, the company also distributes its foodto different social service agencies as well as other not for profitpartners (L.A Kitchen, 2015).
Thecompany’s operations are governed by strong moral and ethicalprinciples. The company highly regards all the resource available inthe community, both the human resources and naturals. As such, itbelieves that both food and human resources should not go to waste(L.A Kitchen, 2015). The company values the people and resourcesavailable to them and is thus dedicated to revealing both the powerof food and the people. Apart from that, the company believes thateveryone in the society has the ability to contribute positively tothe well-being of the society. As a result, the company’s focus ison engaging the different members of the society including students,volunteers and its staff in meaningful work. The company alsorecognizes the fact that hunger is not just about food, but povertyis its main cause. The company is thus focused on identifying andaddressing the various causes of poverty.
Thecompany also believes in sharing of solutions. The company is willingto share it model and programs with other partners with similar goalsand objectives. The company is described as an “open-sourcecompany” meaning that it is open to suggestions as well ascontributions from all members of the society (L.A kitchen, 2015).Another value the company embraces is transparency. The companybelieves that is important to make decisions and operate in full viewof the society. L.A kitchen also believes in reinvesting wealthderived from a place locally. The company focuses on strengtheningthe local economy by empowering the local communities.
Theorganization runs five main programs namely:
ReclaimL.A connects the organization with local farmers as well as producewholesale companies in a relationship where the organization gets tocollects and repurpose food that would otherwise go to waste. EmpowerL.A is the organization’s job training program, which focuses ontraining foster youths and adults coming out of the prison system invarious skills including culinary arts, nutrition education, foodsafety as well as life skills. On the other hand, Nourish L.A linksthe organization to the most vulnerable communities to whom theorganization distributes the reclaimed food. The program focuses onthe aging population as well as the homeless, treatment centers andafter school programs. Engage L.A is L.A Kitchen’s Volunteerprogram through which the organization recruits volunteers to work inthe processing hub as well as the commercial kitchen. The lastprogram is Strong Food, which is the organization’s for-profitprogram. Under this program, the organization gets to compete forfood service contracts to supply high-quality food products to cityagencies, other food businesses, government agencies as well asnonprofit organizations.
L.A Kitchen is a not-for-profit company founded by Robert Eager andstarted its operations in 2014. The company deals in foodreclamation, repurposing fruits and vegetables deemed unsalable dueto lack of commercial demand as well as cosmetic issues into healthyfoods and snacks. The company’s model is quite unique and waspioneered by the founder in DC Central. The model is similar to thatof DC Central Kitchen. The DC Central Kitchen was America’s firstcommunity kitchen. It opened in 1989 and has been able to use fooddonated by farms and other hospitality businesses to fuel a culinaryarts training program that is now recognized around the nation. TheUS food industry is quite competitive. Despite producing a lot offood, many poor and homeless families go without food. It is alsoimportant to note that almost 40% of the food America produces goesto waste, despite some families having difficult access to nutritiousfood. The 40% wastage costs the economy over $ 165 billion each year.California alone with its farmlands that span approximately 25million acres produces half of America’s vegetables and fruits.However, the state is the largest source of food waste in the countrysince it throws away up to 6 million tons of food every year(Calrecycle 2015).
Despitethe high rates of food wastage, which has proved to be quite costly,there has been an increase in the demand for local food and betterfood. The current food vendors are struggling to meet this increaseddemand. L. A Kitchen aims at meeting this increased demand fornutritious local foods while ensuring that none goes to waste byreclaiming food that would otherwise go to waste and allowing thepublic to access the food easily at lower prices or for free throughdonations.
Despitebeing a new player in the FoodIndustry, the company’s proprietorshave the necessary experience and the financial capacity to expandinto one of the most influential brands in the market. Thecompetition in the food retailing industry is quite high, with neworganizations entering the market quite. The food retailing industryis quite competitive at the local, national and even worldwidelevels. This implies that advancement and a solid promoting procedureare vital for a brand to get acknowledged at all the market levels.L.A Kitchen has set itself at a strategic position by reclaiming foodthat would have otherwise gone to waste. These vegetables and fruitsthat the company reclaims are not only easy to access, but it alsoless expensive, a fact that makes it possible for the company to sellits products at a relatively cheaper price.
Amarketing and sales strategy that is well worked out is necessary forany organization operating in an environment characterized by stiffcompetition. Under such conditions, it is important for the businessto identify the main products they wish to produce and their targetcustomers as early as possible. An organization that is aware of itscustomers and their unique needs is able to design its products insuch a way that the customers will derive maximum satisfaction fromthe said product. This way, the business will be able to advertiseitself to new customers through word of mouth. In such industrieswhere competition is stiff, businesses have to strive to maintain itscurrent customers. Having knowledge of the customers’ needs andaddressing then in a proper way is one way through which businessescan improve their sales (Cant, 2006).
Theorganization’s image is also important to any organizationalsuccess under conditions of stiff competition. The organization hasto make sure that its image reflects the real purpose it is inoperation and how unique the organization is. A better image willenable the organization locate new markets and to target new buyersin the new markets. When the customer base expands, the organizationis able to spread its sales risks thus cutting down on these risks.As the business increases its customer base, it is also importantthat it finds out what the main competitors are doing. Havingknowledge of the products and operations undertaken by competitorsallows business to come up with effective countermeasures (Kotler,2009).
L.AKitchen operates in a stable political environment, which allows theorganization to go out its business with limited politicalinterference. Such a political environment is important forbusinesses that have just started, as it is conducive to the growthand expansion of the business. The political conduct and leadershipin L.A and the U.S as a whole is governed by an effective legalframework. As such, the stability is likely to last for many years,thereby providing the organization with the right politicalenvironment to expand and serve more people. The legal and regulatoryframeworks are also favorable to the organizations, especially withincreased focus and public campaigns on the importance of foodreclamation.
TheUS food industry comprises of food sold by different food retailersincluding mass merchandisers, grocery stores, food servicefacilities, convenience stores as well as drug stores. In 2014 alone,the total food service sale at the retail level alone was 5.27trillion dollars, meaning that food is one of the commodities thatconsumers in the US heavily spend on. The food retail channel isdominated by supermarkets and grocery stores, which form the largestfood retail channel (Statista, 2015). Different supermarkets andgrocery stores sell general lines of food products including freshfruits and vegetables, frozen foods as well as fresh and preparedmeats. Certain issues including increased awareness by consumers,increased demand for safe and nutritious food as well as the need tocut down on food wastage has led to various changes and developmentsin the industry. The current food retail environment does not onlypresent a lot of challenges, but it also presents a lot ofopportunities, including food reclamation in which L.A Kitchen seeksto capitalize on.
Thefood marketing system in the US connects consumers and farmersthrough food manufacturing, reselling and wholesaling. Wholesalinginvolves assembling, storing and the transportation of food to foodservice operators, retailers, government agencies as well as otherwholesalers. Over the past two decades, significant changes haveoccurred within the food marketing system. Non-traditional foodstores including drug stores and warehouse club stores have seen asignificant increase in their share of food sales. This and otherchanges are an indicator of the changes in the consumer food choices,which have led to increased demand for certain food items andcontributed to the introduction of new products (Elitzak, 2015). Thechannels in the US food marketing system include traditional grocerystores, non-traditional grocery, convenience stores as well ase-commerce. Traditional grocery channels include supermarkets, Freshformats, super warehouses as well as small grocery stores. Thenon-traditional grocery channels include wholesale clubs andsupercenters while convenience stores are split between those withgasoline and those without gasoline (Elitzak, 2015).
Overthe past few years, supermarkets have emerged as the leaders in termsof grocery sales. The country has a total of 37,716 stores with theaverage sales per store as of 2014 being $ 16.51 billion (Statista,2015). Generally, grocery stores and supermarkets lead in terms offood sales. Convenience stores with gasoline come in next. Some ofthe top grocery retailers include Wal-Mart stores, Publixsupermarkets, Safeway supermarkets as well as Kroger supermarkets.Nontraditional food stores have seen their popularity rise. There hasbeen a steady rise in the food-at-home sales for nontraditionalstores compared to traditional stores, with the sales shareincreasing from 13% in 2000 to 21.5% in 2011 (Elitzak, 2015). Thegrowth of warehouse club stores, as well as supercenters, account fora large portion of this increase since sales through these channelshave increased more than two times over the said period.Nontraditional retailers including drug stores have also increasedtheir offerings of retail food and, as a result, have managed toattract more consumers.
Inresponse to the growing popularity of nontraditional food stores,traditional food stores have also expanded their range of food items.Additionally, many traditional food retailers have come up with newstore formats and increased the use of innovative in-storetechnologies, all aimed at improving the consumer’s shoppingexperience. Many supermarkets are now expanding their labels with theaim of meeting the needs of economizing consumers (Elitzak, 2015). To attract more customers and increase sales, some supermarkets suchas Kroger have also installed gasoline pumps within their premisesand included promotional tie-ins to most of the food purchases. Consumers are keener about what they eat and most of them are nowseeking natural and organic food. Most traditional retailers haveresponded by including such foods in their range of products.
Apartfrom increased focus on natural and organic foods, consumers havealso shown an increased interest in local food. Traditional foodstores have responded by placing more emphasis on the local foodsthey have to offer. Most of the locally produced foods are promotedas being natural and organic, with some retailers pointing out howpurchasing locally produced food is more environmentally friendly andhow it contributes to the local agriculture and the economy (Elitzak,2015).
FoodWastage and Its Impact on the Food Industry
Thelevels of food wastage in America have been rising over the pastthree decades. Reporting for the Washington Post, Ferdman (2014)points out that American consumers discard more food than glass,plastic, metal and paper. This is a clear indicator that food wastageis a growing problem in the country. The recent estimates of thenumber of food consumers in America were published in 2012. Theestimates, published by the Environmental Protection Agency, revealedthat 35 million tons of food went to waste in 2012 alone. Ferdman(2014) states that this was a 20% increase from the 2000 estimatesand 50% increase from the 1990 estimates. Approximately 40% of thefood produced in America goes to waste. This is despite the fact thatone out of nine people around the globe experience chronic hunger.Within the US, approximately 14% of households find it hard providefood for their families. California accounts for the largest portionof food that goes to waste in America. According to Calrecycle(2015), residents of California throw away approximately 5.6 milliontons of food per annum.
Theincreasing levels of food wastage have had a significant impact onthe American retail food industry. It has led to increased costsinvolved in producing and delivering food to the final consumers.Farmers and food vendors now have to set aside funds to manage theexcess food they produce. Food wastage has also led to increasedthreat to the environment as a result of the release of methane fromdecomposing food. Most of the food that is thrown away ends up indumpsters where they decompose releasing methane gas. Researcherspoint out that methane is 20 times more dangerous than Carbon (IV)Oxide as a greenhouse gas. Concerns over the amount of food that isgoing to waste have been raised by the government as well asnon-profit organizations. Many programs that seek to divertconsumable food to beneficial uses have emerged. California hostsmany food banks, animal feed manufacturers, composting operations aswell as renders, who are all interested in making use of this foodthat would otherwise go to waste (Calrecycle, 2015).
Severalinitiatives have emerged with the main aim of curbing the increasinglevels of food wastage. The Save Food program by FAO is one of suchinitiatives. It aims at creating awareness, policy development,collaboration as well as investments with the focus being onimproving food channels. The DC Central Kitchen, a sister program tothe L.A Kitchen, is another initiative that aims at reducing foodwastage. Other popular food recovery programs in the country includeThe 3000 Club, Campus Kitchens and Food forward. The 3000 Club isbased in Arizona and through partnerships with local food banks,acquires and distributes excess and rejected food to those familiesand individuals who are in dire need of food. On the other hand,Campus Kitchens works in partnership with high schools, universitiesand colleges to sensitize and engage students in the recovery andredistribution of food. Food Forward is based in Southern Californiaand brings together volunteers who then glean unharvested food fromfarms, public spaces as well as private gardens. This food is thendistributed to different food rescue organizations as well as localfood banks.
Themain product that L.A Kitchen deals in is repurposed fruits andvegetables deemed unsalable due to lack of commercial demand as wellas cosmetic issues into healthy foods and snacks. The organizationtransforms these vegetables and fruits that would otherwise go towaste into safe and quality food that consumers from all walks oflife can consume. The concept in itself is quite innovative and thecompany hopes that its products will gain popularity across all typesof consumers including high-income earners who wish to contributepositively to the reclamation of food.
Focus on shared value. L. A Kitchen is a social enterprise whose model focus on creating both economic and social values in the community it operates. As a result, it has been able to receive widespread acceptance and support
Decentralized leadership. The company’s leadership is shared meaning that different members of the organization can participate in the decision-making process. The decentralized system also encourages effective change management
A hybrid organization structure. The organization combines function-based and process based- structure, which in turn allows effective collaboration between management and employees. The cross-functional team under this structure enables the organization to identify the needs of both the internal and external customers
Effective talent management. The company does not set rigid roles for its employees but instead allows them the freedom to find their individual values
Limited range of food items. The organization currently focuses on fruits and vegetables, hence has a limited range of products to offer
Limited storage facilities. The organization has not invested in proper storage facilities that would facilitate the storage of food for a long time
Little focus on marketing. The company is yet to engage in any meaningful marketing campaign. The products offered through its for-profit program “Strong Food” remains unpopular among most consumers
The high level of food wastage means that the organization will be able to obtain reclaimable food at even a lower cost. This will offer the organization an opportunity to expand its operations across California
Increasing demand for local and organic foodstuff. Consumers are now keen about consuming locally produced and organic food. The increased demand is a great opportunity for the organization’s for-profit program “Strong Food” to expand its customer base
Increased focus on food reclamation. Farmers, food vendors and the general public are being made aware of the importance of food reclamation. Increased awareness offers the organization to expand its partnership as well as customer base
Expected increase in the number of older adults in Los Angeles. The number of older adults is expected to double over the next two decades. Since the organization’s main focus is on older adults, this will offer the company an opportunity to expand its service offerings
The increasing costs of producing food. This means that even food that would otherwise go to waste would be a little bit expensive to acquire
Increased production of genetically modified food. High amounts of genetically modified food would mean that the organization would not be able to provide natural or organic food. This is a great threat to the “Strong Food” program since most consumers are now keen about consuming natural food.
An increasing number of organizations offering similar services and products. This means that the organization is under threat of stiff competition, which threatens to jeopardize the organization’s for-profit program.
L.AKitchen runs a number of operations including food recovery anddistribution, job training, a volunteer program and the Strong Foodprogram. The organization’s target market mainly comprises ofvulnerable communities including the aging, the homeless, the sick,young adults coming out of the foster care system as well as adultswho have come out of the prison system. The Strong Food program aimsto compete for food service contracts with other established foodvendors. The program’s target markets include the aging population,healthcare service providers and government social service providers.
L.AKitchen is in the business of empowering the vulnerable members ofthe community while reducing rampant food wastage. The organizationshould come up with a customer-focused and market-oriented missionstatement for its for-profit program. Additionally, it should set anobjective to achieve at least 40% growth in its profits over the nextfour years. The company should also come up with effective marketingcampaigns that would enable its products to appeal to many consumerswithin L.A. The marketing campaigns should also target potentialpartners including farmers, government agencies and other companiesengaging in food reclamation. To achieve these objectives, theorganization needs to establish benchmarks that would allow forprogress to be measured. The benchmarks would not only allow theorganization to market its products to new markets, but they wouldalso facilitate improvements in the products that L.A Kitchen offers.
Marketingand Sales Strategies
Thefood retail industry is quite diverse and competitive. Differentplayers have positioned their product offerings to be in line withthe different segments they wish to serve. Additionally, the foodvendors have gone to great lengths to try and differentiate theirfood offerings from those offered by other competing vendors. It isimportant for the organization to identify and analyze the maintarget markets it seeks to serve. Thisshould be possible through the advancement of market segment hopefulsand making use of the available opportunities. Additionally, it isvital to note that clients play an important role in the success ofany organization. It is critical for any new company to distinguishand guarantee they address the issues of its objective clients (Hitt,Ireland &Hoskisson, 2009). The organization ought to figure outwho it will serve, the needs the objective clients have and whetherit will be conceivable to satisfy them and how the needs will befulfilled
Forany upcoming business, information about the needs of customers aswell information about competitors is acquired through marketingresearch. For L.A Kitchen, marketing research will allow theorganization get information that would help the organization toconnect with consumers and the society in a better way. Theinformation acquired through marketing research will be very usefulin the decision-making process. It also allows for differentestimations including the level of competition as well the marketsize the market to be done. The information also plays an importantrole measuring market viability.
Thisinvolves bringing together clients into groups with the comparativelikelihood of buying a thing when the same marketing blend isapplied. It allows direct marketers to identify various focal pointsthat can be helpful in expanding their business and managing thebusiness over the long haul. Notwithstanding that, it permits themarketers to identify the starting point of a business` sales.Furthermore, it makes it feasible for subsequent sales to be made andsplit-testing of the marketing endeavors to be finished. By isolatingthe market into distinctive client segments, the business will havethe capacity to figure out the precise needs of every clientfragment. Knowing the needs of every section makes it workable forappropriated marketing blend to be composed and actualized.
Theindustry segment in which L.A Kitchen operates in is quite differentfrom that in which commercial food vendors such as supermarkets andgrocery stores operates in. There are many organizations that deal inreclaiming of food that would otherwise go to waste. It is importantfor the organization to form a marketing team, which would facilitatethe implementation of the mentioned marketing strategies includingidentification of target markets, segmentation and marketingresearch.
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