...Founders Tom Scott and Tom First opened Allserve, a minimart on the water, which catered to boats and other water vessels in the Nantucket Harbour. They began serving the Nantucket Harbour area during the summer vacation in college. Their first product was released after graduation in 1990, and consisted of a recreated peach fruit drink. In fact, the product was first founded in Spain during Tom’s travels, and was thought of as a way to make extra money while abroad. Everyone admired the product resulting in the first Allserve General Store on the wharf on Nantucket Harbour. That is where the first juice name was established, Nantucket Nectars. The two gentlemen began the company with their life savings of $17,000, and contracted a bottler, along with a finance inventory. All this happened within the first two years of operations. The following two years displayed affects of undercapitalization. They had been operating on a small bank loan, which was clearly not enough to improve distribution and increase inventory. With that said, Scott and First had to sell 50% of their company to Mike Egan. The transaction gave Mike Egan 50% of the company for $600,000 of investment. Upon completion, the company showed it’s first profits in the fiscal year of 1995. Moving forward, through 2000, the company had been growing and gaining interested from outside buyers. Scott and First had to make a decision at this point: whether to 1) sell a portion of the company 2) partake in IPO or 3) remain...
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...Nantucket Nectars Nantucket Nectars has captured America’s modern day lifestyle with its signature juices, quirky marketing, and intimate workplace. Tom and Tom’s huge success has drawn attention from bigger corporation such as Ocean Spray, Tropicana, Welch’s, Pepsi, and Starbucks. Nantucket Nectars should sign with Pepsi to keep the most control over their product and its image, allowing customers to still enjoy the item. Pepsi is a much better alternative to sign with because Tom and Tom would most likely have a better opportunity to keep up their current control of the company. Since Pepsi is not big in the juice market, it would allow Tom and Tom a lot of freedom in return for Pepsi’s entry into this market. Signing a contract with Pepsi that keeps upper management and main control with Nantucket is ideal. Pepsi can own a share of the company, but Tom and Tom can have virtual control over all other aspects in order to keep their company name and guarantee the same ingredients and quality that Nantucket has maintained thus far. Additionally, Pepsi is a worldwide name, allowing Nantucket Nectars possibly to reach a wider market of consumers. Pepsi could potentially provide a global market for Nectars. Pepsi would probably allow for the smoothest transition into a large corporation since Nantucket would make the most money and keep the most control under Pepsi. On the same token, Pepsi would want to acquire Nantucket Nectars as it would help increase its customer base...
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...Nantucket Nectars: Case Study Carl Medeiros 5/1/2010 Tom Scott and Tom First started Allserve, a floating convenience store serving boats in the Nantucket Harbour during their summer holidays in college. After graduation, during the winter of 1990, Tom First recreated a peach fruit juice drink that he came across in Spain and started a side business selling his fresh juice. Everyone loved the product and they went on to open the Allserve General Store on Nantucket's Straight Wharf. They named the fruit juice "Nantucket Nectars". Tom and Tom invested both of their life savings, which was about $17,000 to contract a bottler and finance inventory in the first two years. The next two years saw them operating in an undercapitalized state on a small bank loan so in order to raise funds to improve distribution and increase inventory, they sold 50% of the company to Mike Egan. Nantucket Nectars achieved its first year of profitability in fiscal year 1995. As Nantucket Nectars continued to grow, they were eventually approached by several companies that were interested them. Tom and Tom had to decide if they should: 1) Undergo an IPO 2) Remain independent 3) Sell the company In order to provide a recommendation for Tom and Tom I will first need to conduct a SWOT analysis to assess the company’s strength, weakness, opportunities, and potential threats. Then I will weigh the pros and cons of the three options listed above. SWOT Analysis Strength Nantucket Nectars'...
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...Nantucket Nectars Entrepreneurs and best friends, Tom First and Tom Scott, had started Nantucket Nectars in the early 1990’s. Since then, after some initial difficulties business has been booming. This has put them in the very unusual position of being courted by many corporate giants looking to break into the New-Age Beverage market. Tom and Tom sat back and evaluated all of their options. After awhile they came to the conclusion that they had three paths to take. Among these, the first is to do nothing, that is continue to operate as they have with no major changes in ownership or structure. The second option would be to take the company public through an IPO, or lastly they can sell to one of their many suitors, Ocean Spray, Pepsi, Tri-Arc, Coke, etc. The first step they need to take would be to discount all of their future values, then find the NPV of the firm. To do this Tom and Tom must break out their TI BA II Plus calculator from their days at Brown. Next they need to enter in all of the previous cash flows on record. However they still must determine a discount rate that would be fairly accurate. Being off by even a few points could make a huge difference in their ability to judge the fair value of their firm. Nantucket Nectars is currently borrowing at a rate of 8.5% with very little debt. They could fairly easily take on more debt as it is. It is difficult at this time to figure out a good beta for Nantucket, however we can assume that equity investors would...
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...NANTUCKET NECTARS IMPERATIVES FOR GROWTH - Access to larger distribution network with greater emphasis on the supermarket segment. - Access to new markets. Geographical expansion into the Midwest and West regions of the US, these areas currently account for only 9% of sales. - Reduction in cost structure, gross margins are currently at 34%. SWOT ANALYSIS Strength Nantucket Nectars have a unique all natural product line-up. They have a strong management team who has developed a strong brand. The management has been astute in exploiting the small and rapidly changing market opportunities in the single-serve section of the new age beverage market. They can create value for any large player who wants to play in the single-serve products market. Weakness: The company has limited financial resources and this has become evident in its limited access to larger distribution channels. The company is unable to access the supermarket channels with only a 1% sale via this channel versus 55% for the overall New Age beverage Market. Sales by Nantucket Nectars have been mainly through other channels invariably cutting of a significant portion of potential consumers. The company has limited futures contracts and relies heavily on expensive spot market for sourcing its major raw material, thereby impacting its margins severely. Opportunity Nantucket Nectars have received unsolicited expression of interest for a part sale from Ocean Spray, Triac and Pepsi. Threat The intensity of...
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...Nantucket Nectars Nantucket Nectars Tom Scott and Tom First started Allserve, a floating convenience store serving boats in the Nantucket Harbour during their summer holidays in college. After graduation, during the winter of 1990, First recreated a peach fruit juice drink that he came across in Spain and started a side business selling fresh juice. Everyone loved the product and they went on to open the Allserve General Store on Nantucket's Straight Wharf. They named the fruit juice "Nantucket Nectars". Scott and First invested their collective life savings of about $17,000 to contract a bottler and finance inventory in the first two years. The next two years saw them operating in an undercapitalized state on a small bank loan. Subsequently, in order to raise funds to improve distribution and increase inventory, they sold 50% of the company to Mike Egan. Nantucket Nectars achieved its first year of profitability in fiscal year 1995. Nantucket Nectars continued to grow and in 2000, they were approached by five companies that were interested in acquiring a portion of the company. Scott and First had to decide if they should: 1) sell a part of or all of the company; 2) undergo an initial public offering (IPO); or 3) operate under status quo. They had several questions that they would like answered. If they do proceed with the sale, how should they negotiate for a maximum price? How could they hold the meetings with the prospective buyers and not let the employees find...
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...Nantucket Nectars: The Exit Nantucket Nectars has been a success since its inception in 1990. With a focus on distribution and a commitment to quality, taste, and brand storytelling, Tom Scott and Tom First built a $30 million brand in just seven years. However, as the company continues to grow, Scott and First need to decide whether to stay onboard and reap the benefits of their company’s success or sell Nantucket Nectars while they’re ahead. The first option of selling the company faces both opportunities and obstacles. Selling the company will give it access to a more experienced management team, since a bigger company will be acquiring the brand. In addition, it will provide the company financing, which will accelerate its growth. On the other hand, proceeding with the sale of Nantucket Nectars has the disadvantage of the uncertain outcome of the current 100 employees. The potential buyer could fire all the employees and even keep the two Toms from running the company. This option also poses a threat to the laidback Nantucket Nectar company culture, which could transform into a more corporate,...
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...Nantucket Nectars has many options that determines their future at the time of this case. They are faced with a decision to remain independent, go public, or sell. The managers are comfortable with any of the options; however, pros and cons exist for each possible decision. Decision One - Go Public with an IPO If NN were to go public and have an initial public offering, many benefits would arise. First, the company would receive instant capital funding. Given their financially problematic history, financially uneasy present, and robust growth plans NN would be able to settle many of their financing issues and reduce their worry of compromising their product for the sake of costs if they were to go public. An IPO would also allow the managers to remain in control. A large concern of Scott and First was how the company would be managed after a decision. With an IPO, at least Scott and First would be able to manage NN according to the plans they have already strategized. Going public would greatly increase the brand awareness of NN. They know the value of their “quirky” and “memorable” brand and feel that they have tremendous geographic growth opportunities. An IPO would generate more awareness and, in turn, generate more consumer demand for the product. The downsides of going public also could arise. First, despite their control retention, management would have to now report to the shareholders associated with an IPO. Since it would be their “job” first to make the...
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...Harvard Business School 9-898-171 Rev. December 11, 2000 Nantucket Nectars Well, we knew we were in an interesting position. We had five companies express interest in acquiring a portion of the company. Sometimes you have to laugh about how things occur. Tropicana (Seagram) and Ocean Spray became interested in us after reading an article in Brandweek magazine that erroneously reported that Triarc was in negotiations to buy us. (See Exhibit 1 for a copy of this article.) At the time, we hadn’t even met with Triarc, although we knew their senior people from industry conferences. We have no idea how this rumor began. Within weeks Triarc and Pepsi contacted us. We told no one about these on-going negotiations and held all the meetings away from our offices so that no Nectars employee would become concerned. It was quite a frenetic time. The most memorable day was just a few days ago actually. Firsty and I were in an extended meeting with Ocean Spray, making us late for our second round meeting with Pepsi. Ultimately, Tom and I split up: Firsty stayed with Ocean Spray and I met with Pepsi. Ocean Spray never knew about the Pepsi meeting. Tom and I have learned under fire throughout our Nectars experience, but this experience was a new one for us. —Tom Scott, co-founder of Nantucket Nectars Research Associate Jon M. Biotti prepared this case under the supervision of Professors Joseph B. Lassiter III and William A. Sahlman as the basis for class discussion rather...
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...Supply Chain Management Fruit juice- Dabur Nepal Pvt Ltd. Dabur Nepal has been producing fruit juice in Nepal for many years. The major fruit juices produced by Dabur Nepal are:- • Real • Activ The major raw material required to produce these juices are:- • Fruit pulp (orange, apple, mango etc) • Concentrated • Sugar • Water • Natural flavors The majority of the mango pulp comes from the India, while other fruit pulps like: - apple, orange, cranberries are imported mainly from Europe. Sugar and water are obtained from the domestic suppliers of the country. Beside juice productions, for other major products of the Dabur the major supplying companies are: - Orano, Doehler, LDC. In Dabur, the spices are imported from Indonesia, Glucose from china, and palm oil from Malaysia. In Dabur, the sales and marketing department forecasts the demand for fruit juices for coming 6 months. They use the system developed by SAP inorder to forecast demand and manage their inventory. RPP (Revolving Product Planning) is used to determine the market requirement once a month. Through this system they are able to determine what and when the raw materials are required. The SKU (Stock Keeping Unit) has the FG code for every item. Then the system determines the purchase requirement. After that the purchase order is placed by the company to their suppliers. After the raw materials are received from the suppliers, quality testing of the material is done. For the quality test, 5 days...
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...|BUSINESS PLAN | |ESSENCES | |Vegetable Juice | |BBA 6 | [pic] Sehrish Inayat (090016) Sarah Masood (090014) Fatima-Tu-Zahara (090028) Tahir Ayub (090006) EXECUTIVE SUMMARY Juices consumption is high because of increased awareness of health consciousness among people. The competitive analysis identified that competition within the industry is high as the industry has some humongous names in it i.e. nestle, shezan, fresher etc. The application of Porter’s five forces to the Pakistani juice industry provides us a view of the potential attractiveness in terms of profitability of the industry. By doing PEST analysis we have learnt that although the political situation of the country is not satisfactory but the GDP and per capita income has increased and raised demand of FMCG’s. The awareness about health consciousness has increased a lot and people are accepting vegetable juices as a regular and healthy drink. SWOT analysis reflected that the industry is full of opportunities. In the end, the strategies for launching vegetable juices are quite similar which were used while launching fresher. The vegetable juices will initially be launched only in flavors that are commonly accepted by the public i.e. Celery, Spinach, Kale, Collard, Greens, Lettuce, Carrots, pumpkin, Cucumber and Mixed vegetable etc...
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...2.1 Micro-environments Micro-environmental analysis model used to analyze the internal business environment as. Company The company under analysis Atlantic Quench is manufacturing and distributing the fruit juices since 80 years in the US and now in the UK also. Atlantic Quench is famous for its Cranberry juices and dried Cranberry i.e. Crantanas. The company made the strategic alliances for its manufacturing and distributing of fruit juices with Gerber and Coca-Cola in 2013 and 2007 respectively (Ofori, 2013). The company has to buy raw materials at high price and unpredictable harvesting of Cranberry affects the share value of it. The company is famous for its canned and bottled juices and has introduced diet, white Cranberry and other flavored juices. Competitors The company Atlantic Quench has its competitor in its every field of work from manufacturing to selling of the product i.e. Fruit juices. In the UK, the consumers are health and diet conscious, so the company has larger market for its product range. The company faces cut throat competition in the UK with Tropicana, Rubycon and The ChagWorth Valley. According to the recent report about the Fruit juice and products, Tropicana is the leading brand with around 15% market shares in the UK (Elepu, Nabisubi, and Sserunkuuma, 2016). Customers Atlantic Quench has consumers in all the segments of the market, whether children, youth or adults. The people of the UK are health conscious so the company has wide market...
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...FRUIT/VEGETABLE JUICE IN LEADERASIA HEADLINES * Fruit/vegetable juice grows at 11% in total value and 9% in total volume terms to reach $12.3 billion and 231 million litres in 2011 * Product and flavour innovations from leading manufacturers help add dynamism to fruit/vegetable juice * Juice drinks excluding Asian registers the strongest growth as a result of aggressive marketing and new products from Minute Maid and Tropicana Twister * Average unit price continues to rise due to increasing production costs and aggressive penetration of the super-economy segment * Coca-Cola (Leaderasia) Ltd leads fruit/vegetable juice with a 22% of-trade value share in 2011 * Fruit/vegetable juice is anticipated to see 6% CAGRS in constant value and volume terms over the forecast period TRENDS * Fruit/vegetable juice continued to show healthy growth in 2011 in both volume and value terms, helped by the ongoing health and wellness trend as well as aggressive marketing and product innovation in 100% juice and juice drinks excluding Asian. * Juice drinks excluding Asian registered the healthiest performance in 2011, backed by aggressive marketing activities and advertising for Minute Maid Pulpy from Coca-Cola (Leaderasia) Ltd and Tropicana Twister from Pepsi-Cola (LDR) Trading Ltd. Minute Maid Pulpy was more active than Tropicana Twister in terms of advertising and marketing activities in 2011. However, both manufacturers continued to stimulate strong...
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...shastras Real tropicana Minute maid need Need for hygienic option for juice with high pulp content as juice available was from the road side vendor or had to b churned out on own. The problem with buying from the vendor was the hygiene factor and the one with churning on own was time consuming. Targeted juice to the health conscience crowd. There was no juice that catered to the needs of growing number of health conscience and upper middle class Indians. Minute maid was launched in India at the time when pesticide controversy in soft drinks had broke out. People hesitated to consume aereated drinks and market demand for juice drink automatically increased and minute maid tried to cater to that demand. seed Real seeded the idea of having a healthy start to the day by having fruits. And Real proposed that its juices served as an excellent fruit substitute. It all seeded the idea of the need to have hygienic drinks and emphasized on the 6 layer tetra packs in which the juice was packed in. they targeted the product to housewives and children. They seeded the idea of adding fruit juice after the workouts or sports activities as an healthy habit. They emphasized on health oriented but tasty fruity drink. It tried to establish a cool quotient attached to their product. Their target consumers were health conscious people and sports persons. Coca cola was involved in the pesticide scam. So in an attempt to regain its public trust it launched this fruit drink. So all efforts were made...
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...VIRGINIA INTERNATIONAL UNIVERSITY COURSE: MBA 500 MANAGERIAL COMMUNICATIONS (A) DATE : OCTOBER 29, 2012 TO : DR. ONU FROM : TEAM 4 SUBJECT : A SHORT REPORT ABOUT STUDENT CUSTOMER’S BEHAVIOR IN BANGALORE TO VEGETABLE JUICE PAGES : 9 I. SUMMARY Indian students don’t drink vegetable juice much. Primarily, they drink soft-drinks, fruit juices, and hot drinks. They buy beverage at school, groceries stores, and gas stations sometimes. 90 percent of students drank vegetable juice before but a portion of them don’t want to drink it anymore because of taste. Indian students like vegetables such as tomato, potato, carrot, etc. and spend about 8,000 rupees on average for foods and drinks per month. Price is the primary factor when they consider to buy a product. Major Indian students use products that can help them in learning and willing to recommend vegetable juice for their friends and relatives. In order to capture this market segment, Coca-Cola should do market and customer behavior carefully before launching new line of vegetable juice production. Coca-Cola should consider the places, price and recipe for the product. Moreover, they should diversify the range of vegetable juice also and a good marketing strategy can help them to win customer. II. BACKGROUND Coca-Cola wants to establish the new line of production, vegetable juice to Indian students in Bangalore. This report is analysis and recommendation of the recent...
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