Salvador’s is a producer of authentic Hispanic foods, such as salsa and chips. Their products are considered to be at the highest quality and most affordable price point on the market. Salvador’s has been in business now for three years and has grown in popularity. Salvador’s was originally a business that targeted the Hispanic community, but has since expanded to appeal to a wider audience.
Salvador’s has several goals that they want to achieve in the next three-years. First, a two-million dollar increase in sales by Year 5. Salvador’s also would like gross margins to be above 55%. Salvador’s wants to distribute their product through 40 outlets. They aim to be the best Hispanic food producer in the region with an expanding geographic distribution.
Currently, Salvador’s has two main line of products. Their salsa is the company’s flagship product. It is well-known for its freshness, uniqueness and high quality ingredients. Originally introduced in one temperature, hot, the market demand has asked for milder temperatures and Salvador’s has responded with both a medium and mild version. To compliment their salsa, Salvador’s offers fresh chips in both yellow and blue corn.
Salvador’s has chosen three primary customer groups to target their products. First, grocery stores. The grocery stores will then sell directly towards the end consumers. This market is currently growing at 75%, with 53 potential customers. The wholesale distributors is the second group. This segment is growing at 100% with five potential distributors. Restaurants account for the last customer segment. This segment has a 45% annual growth rate. There are 18 potential restaurants customers. Salvador’s originally targeted Hispanics, as we have already mentioned. Salvador’s realized that their products are more popular than they thought and responded accordingly. The Hispanic community was targeted initially because of its incredible growth rate. The community is growing at 22% per year, nearly twice the rate of the US average.
Salvador’s high cost point has many direct competitors. Salvador’’s can take advantage of this situation to continue being the leader in authentic Hispanic cooking.
Salvador’s strong management team, Ricardo Torres (Pat Torres), will ensure long-term growth. Pat has 12 year experience in the food and beverage industry. Five years ago, Pat was the manager of a four-store Tex-Mex restaurant chain. Pat gained tremendous insight and industry knowledge, which reinforced his decision to open a new business. Ricardo brings Salvador’s over six years of financial control experience that was gained as a CPA with Arthur Andersen. Salvador’s management team will be able to help Salvador achieve his dream of becoming the most prominent Hispanic food manufacturer.
Salvador’’s has started to achieve profitability, and the company expects a modest net income in three years. Sales will provide the modest profit margin necessary to achieve this level of profitability. The plan’s financials further emphasize the business’s exciting nature.
1.1 Objectives
- Over the next three year, sales will increase significantly.
- Gross margins should be increased by % over current product lines and maintained at the same level.
- Create new products and services to satisfy market demand. Again, this is at a high gross profit.
- You can increase inventory turnover and lower the cost of goods, while still maintaining the product’s high quality.
- To offer Hispanics rewarding and satisfying jobs.
1.2 Mission
Salvador’’s is known for its authentic hot salsa which is full of Hispanic heritage. Family recipes that have been passed down through generations are rich with ethnic heritage. Knowledgeable consumers were looking for authentic products, filled with the best ingredients. The consumer was crying out for a change! They wanted authentic Hispanic salsa.
Salvador’s answered this call, first with its hot salsa, then adding mild and extra hot salsa, followed by yellow and blue corn chips. We are constantly looking for the right product to meet the needs of our customers.
We can only improve on the products and services that are already in stock and provide new services for areas in demand to ensure our success within a market driven entirely by consumer desire.
1.3 Keys to Success
- High quality products that differentiate themselves from all others in taste and price.
- Service, support and a greater than average margin for our dealers.
- Increase gross margin to %
- In order to increase sales volume, introduce new products.