William Davis, Michael Firn, Jason Halsted, Julie Liang, Alex Lloyd George, Jason Pesek, Francesca Whitehead
Contact: Francesca Whitehead E-mail: [email protected] Phone: 401-560-0150
1 Table of Contents EXECUTIVE SUMMARY ...... 3 COMPANY DESCRIPTION ...... 4 THE PORTION MEAL KIT ...... 4 TARGETING A YOUNG AND BUSY NICHE ...... 5 MARKET RESEARCH AND ANALYSIS ...... 5 THE INTERSECTION OF THREE GROWING MARKETS ...... 5 COMPETITIVE LANDSCAPE RIPE FOR DISRUPTION ...... 7 LISTENING TO OUR CUSTOMERS ...... 8 FINANCIALS ...... 10 COST OF GOODS SOLD ...... 12 Materials and Ingredients ...... 12 Assembly and Delivery ...... 13 OPERATING EXPENSES DRIVEN BY SALES & MARKETING ...... 14 MULTI-TIERED MARKETING PLAN ...... 15 BUILDING A LOCAL MEDIA PRESENCE ...... 15 ENGAGING OUR CUSTOMERS THROUGH SOCIAL MEDIA ...... 16 REWARDING CUSTOMER LOYALTY ...... 16 BROADENING EXPOSURE THROUGH GOOGLE’S AD PLATFORM ...... 16 A FRESH, SUSTAINABLE, AND CONVENIENT BRAND ...... 17 CUSTOMER LIFETIME VALUE FAR EXCEEDS ACQUISITION COST ...... 17 STREAMLINED OPERATIONS PLAN ...... 17 TAPPING INTO LOCAL PRODUCER ECOSYSTEMS ...... 17 INTEGRATED LOGISTICS AND ASSEMBLY ...... 18 ON-DEMAND DELIVERY: AVAILABLE AT THE CLICK OF A BUTTON ...... 18 ACCELERATED STARTUP SCHEDULE ...... 18 EXPANDING THROUGH GEOGRAPHY AND PRODUCT OFFERINGS ...... 19 POINTED REGIONAL ROLLOUT ...... 19 DIVERSIFYING TO ALL COURSES AND ALL MEAL-TIMES ...... 19 QUALIFIED MANAGEMENT TEAM ...... 20 ADVISORS BRING A WEALTH AND DEPTH OF EXPERIENCE ...... 21 CRITICAL RISKS AND ASSUMPTIONS ...... 22 FIERCE COMPETITION ...... 22 REGULATORY SCRUTINY AND SAFETY CONCERNS ...... 23 LIMITED UPTAKE IN NON-URBAN AREAS ...... 23 ENSURING CONSISTENCY IN THE FACE OF SEASONALITY ...... 23 FOOD WASTE ...... 23 PROPOSED FUNDRAISING OFFERING ...... 24 EXIT STRATEGY PROVIDES RETURN ON INVESTMENT ...... 24 APPENDIX ...... 25
2 Executive Summary
More than ever, young people crave fresh and local food. Yet these same consumers also find themselves short on time. To a demographic that values convenience over all else, the process of planning a meal, buying food, and cooking requires too much time and effort for millennials to undertake often. To solve this problem, we designed Portion: a meal kit composed of locally sourced ingredients that is delivered on demand and designed to be cooked in 25 minutes or less.
Portion appeals to young professionals by reconciling two opposing desires: increasing demand for healthy home-cooked meals, and decreasing disposable time. By sourcing locally from farms, we provide high-quality ingredients and sourcing transparency to customers. By distributing directly to the consumer, we streamline the food’s journey and preserve its freshness from farm to table. The product itself also prioritizes convenience—all ingredients are pre-chopped in the exact quantities corresponding to a single serving so that our customers can put a fully cooked meal on the table quickly and without any unwanted food waste or leftovers. These elements of our product—fresh, sustainable, and convenient—are key to the brand we will build through a multi-tiered marketing approach.
This space is promising, but crowded. Portion operates at the intersection of three market segments: farm fresh food, meal kits, and online food delivery. Together these segments brought in $15 billion in revenue in 2015 and collectively project to grow 13.5% annually over the next 10 years. The success of meal kit subscription companies such as Blue Apron and Plated has proven that today’s consumer is willing to pay a premium for the convenience of fresh ingredients and novel recipes delivered to their door. But though these companies have reached a key subscription-oriented demographic, their model is ill-suited for consumers who cannot commit to the rigid schedule and recurring cost of a subscription. Portion differentiates itself through a disruptive on-demand delivery model, targeting an underserved stretch of the market.
To realize our vision, Portion will maintain a focus on operational efficiency. Portion will source its ingredients through established local producer ecosystems that leverage excess distribution capacity to avoid distributor markups and keep prices low. Proprietary software development will allow us to optimize our delivery model, which sends drivers stocked with our product out to rove hot spots, distributing as they receive orders. Our operational efficiency will allow us to serve the flexible needs of our consumers, and reduce the cost of growth as we expand geographically from our launch market in Boston.
In Year Five, Portion projects to sell 7.7 million meal kits in 12 cities, earning $110 million in revenue and $15 million in operating income. We seek a $5 million investment to finance capital expenditure on assembly locations, equipment, and software development, as well as recruiting staff and pursuing geographic and product expansion toward the end of our five-year plan.
Our team brings experience in the food industry, financial services, warehouse operations, transportation of goods, industrial design, and marketing. Our extensive networks of advisors provide expertise in the food industry and startups in general. Portion management pools its experience to form a cohesive and invaluable team in pursuing this venture.
3 Company Description
The Portion Meal Kit Portion provides access to farm- fresh ingredients while offering Figure 1 the dining flexibility demanded by busy, single consumers. Market trends indicate that customers increasingly crave fresh food, home-cooked meals, and convenience.1 Existing options address only some of these consumer needs: farmers' markets provide fresh and local food, but are inaccessible and do not facilitate varied cooking; subscription meal kits are recipe- based, but are generally sourced nationally and are delivered on a rigid schedule; takeout is quick and convenient, but is not fresh or healthy and does not involve home cooking.
Portion is the only comprehensive solution on the market. We source all our food from local farms, so that our customers know that they’re eating the freshest food possible. We offer a bi- weekly changing menu of three to five meal kit options delivered on demand, so that our customers can choose exactly what and when they eat. We wash and chop ingredients into single serving sizes, so that customers can cook a full meal without wasting any food or time. All these benefits are packaged into a product sold at a competitive price of $9.99 plus delivery.
Included in each Portion meal kit is a recipe card that provides detailed, easy-to-follow instructions on how to assemble our fresh ingredients into a healthy and delicious meal in under 25 minutes. On the back of each recipe card is a map that shows exactly from which local farm each ingredient was sourced.2 Because our target demographic strives to minimize waste, we have worked to limit the use of packaging in our meal kits.3 All the components of our packaging are fully recyclable and biodegradable.4 With Portion, users are able to enjoy a nutritious meal without having to worry about leaving unwanted waste behind.
Portion will deliver its product on demand to consumers who require flexibility in their dining decisions. To successfully implement this distribution model, we will initially offer our product for $10.99 on online aggregate ordering platforms such as Seamless and GrubHub, during which we will gain valuable insights about our customers’ ordering patterns. After a year of software
1 See Market Research and Analysis section. 2 Appendix 2D. 3 Fromm, Jeff. “Six Trends CPG Brands Must Embrace to Win With Millennials.” Forbes. February 18, 2015. http://www.forbes.com/sites/jefffromm/2015/02/18/six-trends-cpg-brands-must-embrace-to-win-with-millennials/#237203174ec3 4 Appendix 2E.
4 development, we will integrate these insights into our own website and mobile application.5 Portion meal kits will be offered on our own platforms for $9.99, incentivizing customers to order through our website and app. To deliver the product, we will hire part-time drivers and fit each car with refrigerated coolers which will store approximately 30 meal kits. Each stocked car will circulate around a designated section of the city. When an order is placed, the driver closest to the delivery destination will fulfill that order. Removing the need for drivers to ping pong between assembly center and final destination will maximize our distribution capabilities and minimize delivery time, allowing us to deliver the freshest product possible in 20 minutes or less.
Targeting a Young and Busy Niche Portion will target an audience of young working adults aged 18-29 who live alone in an urban city environment—people who do not have time to cook full meals, but still value a healthy lifestyle. We provide for professionals who work long hours yet actively want to cook. These users are tired of ordering takeout and want a fresher alternative that they can prepare themselves. They care about what they eat, and where their food is sourced from. A 2015 Mintel report noted that 43% of millennials did not trust big food companies—contrastingly, only 18% of non-millennials expressed the same sentiment.6 With Portion, the time, price, and knowledge barriers of home cooking are removed with an easily accessible meal kit that culminates in a delicious, healthy, homemade meal.
Market Research and Analysis
The Intersection of Three Growing Markets Portion combines the benefits of meal kits, farm-fresh food, and Figure 2 online delivery into one easily accessible product. A Technomic report found that these three segments earned $15 billion in revenue in 2015, and projected that they would grow at a 13.5% annual rate through the next decade.7 Collective demand for these market segments is particularly high in the 18-29 age group, a demographic dominated by young single urban professionals. A Bosch survey found that, despite an increasing desire for home-cooked meals in lieu of takeout, these young adults are not cooking because they do not have the time or simply do not know how.8
The food industry in the United States generates over $1 trillion annually, 40% of which is spent on dinner.9 The two fastest
5 Appendix 2F. 6 Mintel. ”The Millennial Impact: Food Shopping Decisions.” September 2015. http://store.mintel.com/the-millennial-impact-food-shopping- decisions-us-september-2015 7 Technomic. “Food Industry Transformation: The Next Decade.” 2015. http://www.iddba.org/pdfs/wis/Technomic-Food-Industry-Transformations.pdf 8 Bosch Home Appliances. “What’s Keeping Americans out of Their Kitchens? National Survey Reveals the Top Excuses for Not Cooking.” August 21, 2015. http://www.bosch-home.com/us/press-releases-detail.html?pressrelease=what-s-keeping-americans-out-of-their-kitchens- national-survey-reveals-the-top-excuses-for-not-cooking~25865 9 Konrad, Alex. “Blue Apron’s Got Big Plans for Dinner—But So Do Its Hungry Rivals.” Forbes. October 14, 2015. http://www.forbes.com/sites/alexkonrad/2015/10/14/inside-blue-apron-and-the-meal kit-rush/#7d69d77b7af9
5 growing segments within this industry are meal kits and online delivery services. Technomic research finds that growth in these segments is driven by increased demand for convenience, willingness to order online, and prioritization of time among 20-40 year-old consumers. Its research also projects the meal-kit delivery sector to grow to a $3-5 billion industry over the next 10 years. Furthermore, a Bosch survey found that among young adults that do not cook, 21% say they do not have the time, 28% say they simply do not know how to cook, and 66% say that grocery shopping is too time-consuming.10
Availability of fresh produce is the main decision factor for consumers in deciding where to shop. According to Business Insider, 75% of consumers list the produce department as the most important, followed by fresh meat, poultry, and seafood (60%); store brand products (36%); local farm foods/produce (35%); and in-store bakery (29%).11 According to the USDA, these consumers are also increasingly interested in knowing where food is produced, inflating demand for locally grown food.12 This trend has led to substantial growth of farm-direct and farmers' markets from 4,594 markets in 2006 to 8,268 in 2014. In 2012, this sector accounted for $1.15 billion in revenue.13 But despite this growth, consumers cited inconvenient timing and location as the primary obstacles to accessing farmers' markets.14 To a demographic of young single professionals who are especially short on time and live in urban centers, farmers' markets are too inaccessible to serve as a viable and frequent source of farm-fresh food.
Grocery stores have responded to consumers’ growing concern for food source by emphasizing local offerings such as fresh fruits and vegetables, baked goods, meat, poultry, and dairy products. Still, the prevailing model of grocery shopping does not fit the lifestyle of many young single consumers. Because consumers must buy ingredients in quantities larger than necessary for single-serving recipes, they are often forced to choose between two unsavory options: over- purchasing and wasting food, or repeating meals to make use of excess ingredients. According to World Food Day, 40% of food supply is wasted in the US, primarily by single people between the ages of 25 and 29.15 The mismatch between the grocery model and the needs of single consumers is the primary culprit for this egregious food wastage.
Despite growing demand, numerous forces conspire to prevent our target demographic from cooking fresh meals for themselves. Single consumers are unable to buy fresh and local food in suitable quantities, and do not have time to cook. While existing options fall short of satisfying these consumer needs, we provide a comprehensive solution by offering fresh, local, pre- chopped ingredients delivered on demand in single-serving sizes. Portion will fully capitalize on these prominent market trends, allowing us to secure a dominant share of a market currently undergoing explosive growth.
10 Bosch Home Appliances. “What’s Keeping Americans out of Their Kitchens? National Survey Reveals the Top Excuses for Not Cooking.” August 21, 2015. http://www.bosch-home.com/us/press-releases-detail.html?pressrelease=what-s-keeping-americans-out-of-their-kitchens- national-survey-reveals-the-top-excuses-for-not-cooking~25865 11 Ibid. http://www.businessinsider.com/trends-that-are-changing-grocery-stores-2014-4 12 Low, Sarah A., Aaron Adalja, Elizabeth Beaulieu, Nigel Key, Steve Martinez, Alex Melton, Agnes Perez, Katherine Ralston, Hayden Stewart, Shellye Suttles, Stephen Vogel, and Becca B.R. Jablonski. Trends in U.S. Local and Regional Food Systems, AP-068, U.S. Department of Agriculture, Economic Research Service, January 2015. http://www.ers.usda.gov/media/1763057/ap068.pdf 13 Low, Sarah A., Aaron Adalja, Elizabeth Beaulieu, Nigel Key, Steve Martinez, Alex Melton, Agnes Perez, Katherine Ralston, Hayden Stewart, Shellye Suttles, Stephen Vogel, and Becca B.R. Jablonski. Trends in U.S. Local and Regional Food Systems, AP-068, U.S. Department of Agriculture, Economic Research Service, January 2015. http://www.ers.usda.gov/media/1763057/ap068.pdf 14 McGarry Wolf, Marianne, Arianne Spittler, and James Ahern. “A Profile of Farmers’ Market Consumers and the Perceived Advantages of Produce Sold at Farmers’ Markets.” Journal of Food Distribution Research 36(1). March 2005. http://ageconsearch.umn.edu/bitstream/26768/1/36010192.pdf 15 ReFED. “The Roadmap to Reducing U.S. Food Waste by 20 Percent.” 2016. http://www.refed.com/?sort=economic-value-per-ton
6 Competitive Landscape Ripe for Disruption The meal-kit space is currently a hot market full of successful players such as Blue Apron, Purple Carrot, HelloFresh, and Plated. The stratospheric rise of these companies has proven the viability of the meal-kit model. Blue Apron recently topped a $2 billion valuation and, with over eight million monthly deliveries, is projecting 2016 sales of $500 million. HelloFresh, a Berlin- based company, just received a $2.9 billion valuation with $40 million monthly revenue globally.16 17 Plated is a smaller firm that focuses on product variety—with more than 1,000 unique recipes—and has reached estimated sales in the tens of millions of dollars.18 Between the three of them, these firms have raised hundreds of millions in private investment. The market is also home to smaller operators like Purple Carrot, which has carved out its own niche by targeting vegans.
But like any consumer product, these meal-kit subscription services can not reach every segment of the population. Consumers who leave meal-kit services do so because they find they do not have enough time to cook three meals a week or because they tire of having their meals dictated by someone else. Customers told us directly that Blue Apron’s average cook-time of one hour is too time-intensive for regular use. New York Times columnist Jennifer Jolly encapsulated the grumblings about these types of services: “I was really excited the first time a large insulated box of meat, vegetables, and spice packets arrived at my doorstep from Plated. But my spirits sank as I unpacked ground lamb and beef and a whole eggplant. The recipe for ‘Baked Eggplant with Beef, Lamb, Fresh Mozzarella and Pine Nuts’ called for what seemed like at least an hour of preparation and cooking.”19 Meals are often too exotic for picky eaters, and there are not enough of them to fully eliminate the trip to the grocery store. Despite healthy competition, the food market is a huge space and Portion has differentiated itself from other players in the meal-kit space. Through its differentiated product and approach, Portion will capture its own strong base of customers who are underserved by existing options, yet demand the same dining experience.
Other competitors who offer on-demand meals focus on delivering pre-cooked meals prepared by brick-and-mortar restaurants. Touting the convenience and flexibility of its platform, Grubhub earned $361.83 million in 2015 revenues.20 But despite this success, the services offered by online delivery companies do not address the segment of consumers who crave fresh and home- cooked meals. Portion offers similar convenience and time savings through its on-demand delivery model, yet targets an audience that demands fresh and local ingredients rather than cooked meals sourced far from the end consumer.
Grocery stores are an established competitor for meal kit services, but have observed little innovation or product curation since their introduction in the 1940s. As Chad Arnold, president and CEO of the online grocery service Door to Door Organics, states, “When a customer walks into a store of 40,000 items and only wants to buy 30 of them, that's a terrible customer experience. Companies are now scaling back stores and getting them more focused to specific
16 Konrad, Alex. “Blue Apron’s Got Big Plans for Dinner—But So Do Its Hungry Rivals.” Forbes. October 14, 2015. http://www.forbes.com/sites/alexkonrad/2015/10/14/inside-blue-apron-and-the-meal kit-rush/#7d69d77b7af9 17 Gharib, Susie. “This Is How Blue Apron Was Built from Scratch.” Fortune. April 21, 2016. http://fortune.com/video/2016/04/21/blue-apron- starting-from-scratch/ 18 Crook, Jordan. “Plated Is Served $35 Million in Series B.” TechCrunch. July 16, 2015. http://techcrunch.com/2015/07/16/plated-is-served-35- million-in-series-b/ 19 Jolly, Jennifer. “Mastering the Art of Dinner-on-Demand Services.” The New York Times. November 13, 2015. http://well.blogs.nytimes.com/2015/11/13/mastering-the-art-of-not-cooking-with-dinner-on-demand-services/ 20 MarketWatch. “Annual Financials for GrubHub Inc.” Retrieved April 28, 2016. http://www.marketwatch.com/investing/stock/grub/financials
7 customers, instead of a one-store-fits-all approach.”21 This old model requires the consumer to sift through a store to find their desired ingredients. By reducing the time and energy required to cook and shop, while also satisfying increasing demand for varied, quality, and fresh food, Portion will disrupt a growing market ripe for innovation.
It is important to note that Munchery, a pre-prepared food delivery service, has recently attempted to enter the on-demand meal-kit space. The company, which is in the early stages of development in San Francisco, aims to decrease cook-time for consumers that want to prepare their own meals.22 Unlike Portion, however, Munchery targets couples and families and markets a brand more similar to takeout than fresh cooking.
Portion differentiates itself from all existing options in several key ways, combining the best elements of farm-fresh food, individual meal kits, and online delivery. In doing so, we minimize cooking time, hassle, and waste, and maximize freshness, flexibility, and choice to better fit the mobile lifestyle of our target consumers.
Listening to Our Customers For preliminary research, the Portion team consulted over 100 peers regarding the constraints that factor into their food preparation habits. We observed buying habits and talked to shoppers in local grocery stores such as Stop n’ Shop, East Side Market, Trader Joe’s, and Whole Foods. We also spoke with grocery store managers about how they attempt to meet the demands of consumers. Finally, we extracted relevant conclusions about consumer trends from online food forums.
Our consumer research confirmed broader market trends, revealing that the three main barriers to cooking healthy meals are price, inconvenience, and knowledge. Purchasing fresh and organic ingredients is costly. Cooking complex meals is inconvenient and time-intensive. Compiling a varied repertoire of healthy meals requires a rare level of cooking knowledge and familiarity. Furthermore, consumers emphatically told us that, due to the way ingredients are packaged and sold, people were forced to buy too much of certain ingredients. What was particularly striking was the feeling of guilt that shoppers repeatedly expressed when it came to their cooking and eating habits.
To gauge demand for our concept, we mocked up two sample meal kit recipes tailored toward the needs expressed in our consumer research (Figure 3). To approximate the quality of our meal kits, we sourced organic ingredients from Whole Foods and individually packaged the ingredients to correspond to single serving sizes. The value of our primary research showed when we sold out of all ten of our meal kits in just one hour on the Brown University Main Green (Figure 3). Our customers, largely college students and young professionals, were eager to share their experiences with Portion:
21 Peterson, Hayley. “Four Ways American Grocery Shopping is Changing Forever.” Business Insider. April 15, 2014. http://www.businessinsider.com/trends-that-are-changing-grocery-stores-2014-4 22 Kokalitcheva, Kia. “Munchery’s meal kits promise restaurant recipes in less than 15 minutes.” Fortune. October 27, 2015. http://fortune.com/2015/10/27/munchery-meal-kits/
8
These conversations and responses confirmed that there is a strong demand for a service that can decrease the amount of time required to cook and increase the accessibility of flexible food options. One of the most frequent questions we received from our customers was “Where did this food come from?” People care about where their food is sourced, as well as what ingredients are being used. Portion provides that transparency.
Figure 3
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Financials We project to bring in $110 million in revenue in Year 5 of operations. This translates to an operating income of $15 million, providing a 40% gross margin.23 Portion’s revenue growth will be driven by three key factors: deeper penetration into existing markets, geographic expansion into new markets, and product line expansion. We project to generate positive EBIT and EBITDA by Year 4 along with a positive net income in Quarter 2 of Year 4.24 This timeline allows us to turn net cash flow positive by Quarter 3 of Year 5, not consider the cash flow effects of external financing.25 The initial sustained period of negative cash flow results from our investments in sales and marketing, R&D, and operations that are necessary for our launch. We predict our sales and marketing costs to be $20 million in Year 5 as we work to establish our brand in new markets and attract new customers in existing markets. These necessary costs will position Portion well for long-term success, and allow us to achieve the aggressive growth that we are forecasting.
Strong Revenue Growth Driven by Expansion Portion’s revenue will grow as we expand to new cities, increase our market infiltration in established cities, and diversify our product line. Per city revenue growth is based on projected market penetration (Figure 4) and each city’s young population size. Our business features a high cost of growth due to rapid development into 12 cities—the 13th being built in the last quarter of Year 5. We seek early and aggressive geographic expansion to secure a foothold in major cities that could serve as sourcing hubs and efficient supply chains for future nearby expansion. Accordingly, we plan to expand in regional clusters, starting with the Northeast before progressing to the West Coast and then to Texas (Figure 7). Specific cities were identified as
23 Appendix 1A. 24 Appendix 1A. 25 Appendix 1D.
10 expansion markets if they satisfied the following criteria: high population, high population density, and rising number of young professionals. In Boston, our first established city, we expect to complete 2.2 million orders for a total of $32 million in revenue in Year 5 (Figure 4). We chose Boston as our launch city because it fits our criteria and our advisors have the most experience of operating in the Northeast. Boston also represents the perfect point from which to expand regionally.26
In order to make our revenues more sticky, Portion will allow consumers to order batches of several meal kits, which are delivered one at a time on designated days throughout the week. These customers will receive a discount on their order in exchange for their commitment to purchase several Portion meal kits.
Figure 4
After consulting with startups like Farmer Willie’s Alcoholic Ginger Beer on historical and projected growth, we modeled our penetration based on a logistic growth curve, or s-curve, derived from a declining quarterly growth rate as we gain market saturation (Figure 5). Boston will be the only city to reach Year 5 so we use it to estimate our stabilized revenue growth, which we estimate to be 13%. This is the rate our three market intersection segment is estimated to grow.27 This will be fueled by our customer engagement, referral, and marketing.
26 Please refer to Expansion Plan for more details. 27 Technomic. “Food Industry Transformation: The Next Decade.” 2015. http://www.iddba.org/pdfs/wis/Technomic-Food-Industry-Transformations.pdf
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Figure 4
In Year 4, once we have gained strong customer loyalty in our key markets, we will expand our range of product options by including breakfast and dessert meal kits to increase the average revenue per delivery.
We chose a constant price for all recipes to demonstrate consistency to our customers and allow us to better predict revenue streams. We price our main product at $9.99 plus $2 delivery, with breakfast and dessert kits priced at $4.99 and $3.99, respectively. This pricing model makes us competitive with alternatives like takeout and Blue Apron, which costs $10 per person per meal in fixed bulk orders of $60. Expanding our product options will increase revenues per order without increasing delivery costs. It will also establish us as a more ‘complete’ solution to the dining experience and give customers more reasons to order from Portion. We estimate that, once the full product line becomes available, the pre-tax order price for each delivery destination will yield on average $11.24 before delivery.28 This figure comes from our conservative estimates that on average 1% of orders will be for four meal kits, 5% of order will be for two meal kits, 5% of orders will contain breakfast kits, and 5% of orders will include a dessert kit.
Cost of Goods Sold
Materials and Ingredients We based our ingredient costs on a sample recipe for Chicken Bruschetta.29 Actual prices and shipping ranges obtained through WhatsGood amounted to ingredient’s costs of $2.70 per meal.30 After considering the necessary specifications for each component of our packaging, we
28 Appendix 1E. 29 Appendix 4H. 30 Appendix 3.
12 found this cost to equal $1.15 per package.31 The same ratio of packaging cost to ingredients was used to estimate packaging expenses for breakfast and dessert meal kits.
Assembly and Delivery Based on advice from our advisor Donald Halsted, who has experience in acquiring operational space for a startup in Boston, we estimated our facility costs via a module-based approach that considers all costs associated with a unit of 10,000 ft2. We then projected total costs by determining how many units of these 10,000 ft2 modules we would need to generate the projected level of output in a given city. This size allows for the necessary components including refrigeration space, loading docks, and assembly space. Each module is operated by shifts of seven active workers (pulled from a pool of 10 on a rotating basis)—one to retrieve food, four to assemble meal kits, one to load into delivery cars, and one supervisor. We predict an all-burden salary of $16 per hour for these employees—the norm for warehouse workers32—implying a cost of $286,160 per shift with salary growing 2% annually to adjust for inflation.
Each one of the four assembly workers will create 20 meal kits per hour, working seven hours per day. This production rate is feasible given our own experiences assembling meal kits (Figure 3). At this rate each team will produce a total output of 200,000 meals per year. The facility could operate up to two shifts per day, adjusting output per 10,000 ft2 up to 400,000 meals per year. We expect meal output efficiency to increase in Years 3-5, allowing us to double our output as we automate our processes and increase scale.33
Facility size and number of workers required to operate our business are derived from our projected revenue growth per city. Based on the assumptions above in Year 5 we will operate 21 modules and a total of 30 worker shifts to fulfill demand for 7.7 million orders.34
Cost per facility is based on an estimate of $12 per square foot, derived from current South Boston real estate prices.35 This expense is listed triple net (before taxes, insurance, and utilities/maintenance), and we added a 75% increase to the listed price for the cost of operating the space on the counsel of our advisors. This brings total cost per 10,000 ft2 to $210,000 per year.36
The cost of capital for each facility amounts to $100,000, a number derived from equipment suppliers Urschel and Master-Bilt.37 This expense will cover refrigeration units, industrial cutting machines, assembly tables, and industrial washers. This capital expenditure cost is incurred when the facility is set up, one quarter before production begins. Compared to other manufacturing
31 FoodBizSupply. “BioPlus View Recycled Take Out Cylinder.” Retrieved April 28, 2016. http://www.foodbizsupply.com/bioplus-view- recycled-take-out-container.html FoodBizSupply. “Clear Cellophane Sheets 8x8 Biodegradable c88.” Retrieved April 28, 2016. http://www.foodbizsupply.com/clear-cellophane- sheets-8x8-biodegradable-c88-2000-cs.html FoodBizSupply. “534x734 Flat Biodegradable Enviro Bags.” Retrieved April 28, 2016. http://www.foodbizsupply.com/5-3-4-x-7-3-4-flat- biodegradable-enviro-bags-clear.html General Bottle Supply. “Boston Round HDPE Bottles - Natural.” Retrieved April 28, 2016. http://www.bottlesetc.com/plastic-containers/boston- round-hdpe-bottles-natural-1001.html 32 Glassdoor. “Chef Salaries.” Retrieved April 28, 2016. https://www.glassdoor.com/Salaries/warehouse-worker-salary-SRCH_KO0,16.htm 33 Appendix 1B. 34 Appendix 1B. 35 LoopNet. “Industrial Property for Lease: 20-70 Colony Ave. South Boston, MA.” Retrieved April 28, 2016. http://www.loopnet.com/Listing/17606785/20-70-Old-Colony-Avenue-South-Boston-MA/ 36 Appendix 1B. 37 Urschel. Retrieved April 28, 2016. http://www.urschel.com/
13 companies, this is a relatively low capital expenditure for production, because the majority of funds are for single large installations.
Cost of delivery will be fully covered by our delivery fee and optional tip. Based on advisor John Jannotti’s experience operating food delivery services Foodler and Dash, we are confident that we can start by delivering six meals per hour per driver, scaling up to eight meals as the density of customers increase and distances between orders decrease.38 Our distribution will be more efficient than traditional delivery services, as drivers can remain on their delivery routes without having to loop back to our assembly facility. Charging a $2 delivery fee plus a suggested 15% tip, delivering 6 meals per hour at an average pre-delivery charge of $11.24, will yield $22.11 per hour per driver in book revenue.39 These economics imply that our delivery output will be able to cover the additional costs associated with hiring drivers as part-time employees rather than contract employees. By offering a more efficient roving delivery system in conjunction with the benefits of being part-time employee, we will be able to compete for delivery drivers willing to supply their own vehicles.
We came to understand the key concerns of delivery drivers by speaking to individuals working at top food-delivery services. We found that most drivers faced a trade-off between valuing the ability to work flexible hours and wanting to earn a competitive hourly wage. Josh Latin, an avid driver for Postmates Boston, a popular delivery logistics company, said that he earns between $14 and $25 per hour depending on the number of orders he can fulfill. When we talked to him about our delivery model he stated, “I drive for Postmates because I can earn a high hourly wage without committing to a full-time schedule. However, I would definitely give up some flexibility to drive for a service that allows me to fill more orders and make more money by not having to drive to each individual restaurant before delivering to the customer.” Josh’s comments, in conjunction with our market research, give us confidence in our ability to attract drivers and execute our innovative distribution model.
Operating Expenses Driven by Sales & Marketing Sales and marketing will be a significant expense as we build our brand in both established and new markets. This cost will begin as 85% of revenue in Year 1, decreasing to 18% in Year 5 for a total of $20 million.40 This expense will fund advertising, marketing, and hiring employees to expand the brand and engage with customers. Since we spend no money marketing to restaurants, our marketing cost as a percentage of sales is lower than for other delivery companies. GrubHub, for example, spends 25% of revenue on marketing.41 In addition, the meal- kit industry has successfully relied on word-of-mouth marketing to grow business, lowering total sales and marketing cost. Blue Apron CEO Matt Salzberg pointed to the importance of social- media marketing and referral programs for the company’s expansion, which has been rapid.42
Research and development will initially cost $500,000 in Year 1.43 This expense will be used to hire four software developers: two web application developers to develop the website and
38 Appendix 1B. 39 Appendix 1B. 40 Appendix 1B. 41 SEC. “GrubHub Inc. Annual Report 2015.” April 2015. http://s2.q4cdn.com/772508021/files/doc_financials/2015annual/2015-Grubhub- Annual-Report.PDF 42 eMarketer. “Blue Apron Relies on Referrals, Social Networks to Drive Food Delivery Subscriptions.” February 18, 2015. http://www.emarketer.com/Article/Blue-Apron-Relies-on-Referrals-Social-Networks-Drive-Food-Delivery-Subscriptions/1012068 43 Appendix 1B.
14 backend application, and two mobile developers—one iOS and one Andriod. These developers will be critical to creating an easy-to-use consumer platform and an efficient back-end interface for drivers44. Each developer will earn an all-burdened salary of $100,000 in Year 1 growing to $140,000 in Year 5.45 In addition, we will hire a chef and sourcing expert per city to develop our recipes at a $50,000 salary per employee growing to $85,000 annually.46 Research and development costs will decrease as a percentage of revenue over time, from 23% of revenue in Year 2 to 5% in Year 5. Year 5 R&D will cost $5.6 million, funneled toward recipe creation, increasing efficiency of production and delivery, and developing supply chains in our new cities.47
The founders will take small salaries of $25,000 each in the first year. This number allows us to work full-time on Portion venture without putting a strain on the company’s financials. These salaries count toward general and administration expense, which begin as 78% of revenue in Year 1 and progress to 4% of revenue by Year 5.48 This figure remains relatively low because, as stated above, rent and utilities is flowing into the cost of goods sold in our financial model.
Multi-Tiered Marketing Plan Portion will focus on showing customers why their single portioned meals provide a fresh, on- demand way for people to cook meals that fit their lifestyle. We will achieve this brand recognition through four major marketing strategies: local press, social media engagement, a rewards program, and Google’s Ad Platform (Figure 6).
Figure 6
Building a Local Media Presence We will focus on local Boston markets, starting with selling our kits in farmers' markets. We also plan to give out free samples to people in the markets to increase exposure to our products and push people to start talking about Portion. We will also distribute free meals to local news stations, columnists, and bloggers to spread the word about our product. This tactic is pivotal to reaching early adopters in our target demographic—according to Forbes, 33% of millennials refer to blogs before making a purchasing decision.49
44 Appendix 1B. 45 Appendix 1B. 46 https://www.glassdoor.com/Salaries/chef-salary-SRCH_KO0,4.htm 47 Appendix 1B. 48 Appendix 1B. 49 Schawbel, Dan. “10 New Findings About The Millennium Consumer.” April 28, 2015. http://www.forbes.com/sites/danschawbel/2015/01/20/10-new-findings-about-the-millennial-consumer/#5c4dd91328a8
15 Engaging Our Customers through Social Media Next our marketing strategy will focus on customer outreach via social media, specifically with Facebook, Twitter, and Instagram accounts. Rather than just post information and advertisements, we want to connect with users on a daily basis, allowing them the opportunity to interact with our brand. We will offer special deals through these platforms, boosting exposure of our brand and incentivizing customers to engage with us on social media. Our followers will also have the opportunity to post photos of their meals to our social media accounts, as well as offer suggestions for future meal-kit recipes. The closer customers feel to the company, the stronger our brand becomes. Accordingly, our whole social-media strategy seeks to breed customer loyalty.
Rewarding Customer Loyalty Once Portion is able to position itself as a major player in Boston, the company will transition to its own website and mobile app from which customers can directly order, simplifying the user experience and increasing our own margins50. We will place fliers in each meal kit to announce the launch of our own ordering platforms. Customers will be incentivized to order through our platforms rather than through GrubHub or Seamless—at $9.99, Portion meal kits will cost a full dollar less than on these ordering aggregators.
When the majority of customers begin ordering through the Portion website or mobile app, the company will launch a rewards program that encourages customer retention. Firstly, the program will offer special deals to loyal customers. Customers will also earn points that can be redeemed for meal kits and add-ons—every dollar spent on the Portion website or mobile app confers on customers $0.10 in points. Portion will capitalize on word-of-mouth marketing through referral coupons. Customers who refer their friends to our product will receive a coupon toward a free Portion meal. This strategy will encourage greater interaction between customer and brand.
Broadening Exposure through Google’s Ad Platform Google’s Ad Platform will provide us with an exposure outlet in expansion markets. Specifically, Portion will exploit the broad reach of YouTube. On mobile devices, YouTube reaches more 18- to 49-year-olds than any broadcast or cable TV network.51 Because Portion seeks to tailor its advertisements to this demographic, channeling our advertising efforts through this platform will comprise a critical marketing strategy in expansion markets.
We will also use other features on Google’s Ad platform such as AdWords, display advertising, and remarketing to connect with potential customers. The use of AdWords will drive exposure to Portion through displaying brief advertising copy based on search terms like “online food delivery.” Display advertising allows us to go beyond search engines to present banners on popular websites to attract customers. Finally, remarketing creates an opportunity to reach people who visit our website without purchasing anything. In this model, such customers will see our ads on other sites that they access, reminding them about our service. These tools encompass a multifaceted strategy that will grow our audience and widen brand exposure.
50 Appendix 2F. 51 O’Neil-Hart, Celie, and Howard Blumenstein. “The Latest Video Trends: When Your Audience is Watching.” thinkwithGoogle. April 2015. https://think.storage.googleapis.com/docs/brandcast-online-video-marketing-statistics-d.pdf
16 A Fresh, Sustainable, and Convenient Brand Transparency is important to us. We take pride in supporting our surrounding community by only sourcing from local farms. We will provide ingredient information in every meal kit so that customers know exactly where their food originated52. Portion strives to be environmentally conscious by limiting the use of packaging in its meal kits, and will ensure that all packaging elements are either recyclable or biodegradable53. Food waste is a problem we are fully aware of and dedicated to alleviating through donating all chopped, unused produce to soup kitchens. In addition to boosting our brand image, this strategy will also support net income by providing a tax write off starting in Year 5. Our brand also conveys flexibility—on-demand delivery confers on consumers the ability to choose what and when they eat. When consumers think of Portion, they think fresh, sustainable, and convenient.
Customer Lifetime Value Far Exceeds Acquisition Cost The lifetime value (LTV) of our customers exceeds their acquisition cost for all three customer profiles we anticipate. Our rare customers, who order three meals per year with a retention rate of only 25%, will carry LTV of $14.26. Frequent customers will have a much higher LTV of $219.75, averaging twenty meals per week and a retention rate of 60%. Our loyal customers will have an even higher customer LTV of $1,175.68, due to a higher retention rate of 85% and an average of fifty-two meals ordered per year. These LTV figures compare favorably to an acquisition cost of $7.12 per customer. Detailed calculations can be found in Appendix 1F.
Streamlined Operations Plan Because we are a consumer-facing product that emphasizes freshness and on-demand delivery, supply chain and distribution channels are critical to Portion. The three main planks of Portion’s operations are sourcing, assembly, and distribution.
Tapping Into Local Producer Ecosystems Sourcing farm-fresh produce that quickly turns into meal kits at a reasonable cost is pivotal for Portion’s product. In practice, this involves making connections to and ordering from local farmers, fishermen, artisans, and producers. We intend to use the WhatsGood online marketplace operated by Crave Food Services—of which Matt Tortora, one of our advisors, is founder and CEO—to connect with and purchase from these local producers. WhatsGood functions as a “virtual farmers market,” providing other marketplace functions like purchase planning and pricing information. For example, if a certain type of strawberry drops below a preset price, Portion can automatically place a bulk order for it from the farmer selling at that lower price. There are significant cost benefits to using the service; Matt Tortora noted that purchasers saw an average reduction in costs of 11.5%. The most important advantage Portion derives from WhatsGood is the ability to quickly ramp up operations at scale in the Northeast without having to spend time and resources finding and building relationships with local producers. Considering the importance of seasonality and biweekly variation to Portion’s business model, the ability to pivot quickly from one producer to another will be critical.
52 Appendix 2D. 53 Appendix 2E.
17
As our business continues to scale and expand geographically, we intend to independently establish relationships with local farmers in regions outside the scope of WhatsGood’s Northeast operations. To facilitate this transition, we’ll develop our own proprietary software to monitor produce supply and pricing, as well as lean on the expertise of our advisor, Matt Tortora.
Integrated Logistics and Assembly Once the produce is sourced and purchased, WhatsGood’s service also connects us to wholesale distributors with excess capacity on their trucks. Portion will rent this excess capacity to transport the produce to Portion city assembly centers without paying the distributor markup. Limiting our partnership with distributors to logistics and delivery—rather than distributing through them—reduces both the amount of time the produce spends in warehouses and the costs involved. At our assembly centers, small teams of around seven employees will perform the washing, chopping, and packaging processes necessary to turn that produce into a meal kit ready for delivery.
On-Demand Delivery: Available at the Click of a Button To deliver the product, Portion will develop an on-demand delivery system. We will hire part- time drivers and supply each car with refrigerated coolers which have capacity to store approximately 30 meal kits at a time. We designed the refrigerated coolers to fit in the trunk of a sedan—a relatively average-sized car—and would allow for larger cars to stock multiple cooler units. Each stocked car will then circulate around a designated section of the city until a nearby order is placed. At this point, the driver closest to the delivery destination will respond and deliver the product to the end consumer. Because drivers will not have to return to the assembly center between orders, Portion can serve more customers with fresher products within 20 minutes of order placement. After three hours or upon depletion of inventory, the driver will return to the assembly center and restock their cooler with new meal kits at alternating intervals.
Accelerated Startup Schedule By leveraging our WhatsGood partnerships with local farmers and fulfillment software provided by GrubHub we can commence our operations very quickly. Once we have secured our assembly location, health certification, and driver contracts, we can begin to deliver meal kits on-demand.
Figure 7
18 Expanding through Geography and Product Offerings
Pointed Regional Rollout Boston will serve as our initial market due to its young demographics and urban density. According to the Boston Globe, Boston is “home to the largest proportion of young adults of any major US city.”54 Because Portion’s prime target audience is adults between the ages of 20 and 35, this youthfulness makes Boston an ideal first locale. The city is also known for a “high density urban core” that allows Portion to target more consumers within a given area without stretching supply chains or distribution channels as much.55 Furthermore, during our initial phase of operations we want to leverage our advisors’ extensive networks and experience in the Boston area. As we expand regionally, Boston’s location will make ease the transition into the rest of the Northeast.
We will set up operations in the high density areas of New York City by the end of our Year 2, Philadelphia by the second quarter of Year 3, and Washington, D.C. by the end of Year 3 (Figure 7). Our expansion will unfold on a regional basis, and the Northeast Corridor would constitute our first region. Expanding on a regional basis allows for more supply chain crossover. After the Northeast, our next region will be the West Coast, which represents a great opportunity due to the large number of young, population-dense cities that can be serviced by the same supply chains.56 The West Coast also features a favorable climate and diverse availability of availability. The rollout will commence with the early-adopter cities of San Francisco and San Jose at the beginning of Year 4. In the third quarter of Year 4 we will enter Los Angeles, followed by San Diego in the fourth quarter, Seattle in the first quarter of Year 5, and Portland in the second quarter of Year 5. After the West Coast, we will expand into the population-dense areas of Texas, where a single supply chain can service multiple markets. We will enter Houston in the third quarter of Year 5, followed by Dallas-Fort Worth, Houston, San Antonio, and Austin in each successive quarter after that.
Diversifying to All Courses and All Meal-Times Product expansion allows us to move beyond dinner entrées to capture a wider market segment. At the beginning of Year 2, we will have finished building our fulfillment platform, which we will use to effectively deliver our product. Analytics from this platform will allow us to better understand consumer demand and taste. Building on the strong presence in the dinner-targeted space, Portion will begin to offer desserts and breakfast meal kits in Year 3 of operations. Some of the principal attractions of Portion dinners—single portions with easy instructions and no need to grocery shop—hold especially true for baking and dessert options. Alternatively, the Portion breakfast meal kit offers consumers the ability to purchase their breakfast for the next day and have ingredients ready for cooking in the morning, when the reduced time spent on preparing meals may be especially valuable. Because consumers will be inclined to order meal kits plus
54 Cloutier, Catherine. “Boston’s young adults plentiful, influential—and often burdened.” The Boston Globe. December 1, 2014. https://www.bostonglobe.com/metro/massachusetts/2014/11/30/boston-young-adults-are-influential-and-often- burdened/kp2Oek4nIcMrTtehgDnl1M/story.html 55 Cox, Wendell. “America’s Densest Cities.” The Huffington Post. September 26, 2014. http://www.huffingtonpost.com/wendell-cox/americas- densest-cities_b_5888424.html 56 Struzner, Suzy. “The 10 Best Cities To Live in If You’re 35 or Under.” The Huffington Post. http://www.huffingtonpost.com/2014/12/29/best- cities-for-millennia_n_6374304.html
19 add-ons—for example, dinner with breakfast for the next day, or dinner with dessert— diversifying our product offerings also increases revenue per delivery.57
In order to fund this growth we seek to get $5 million in Series A funding. This funding will finance the employment of four software engineers to develop our easy-to-use applications for the drivers and consumer, as well as our data analytics platform. It will also fund the lease and construction of our first assembly location, staff, and ingredients and materials needed to source, create, and deliver our meal kits. Specific costs of each of these factors is laid out in the Financials Section and Appendix. The last of this first round of funding will go towards purchasing a second assembly location as we expand to New York City. Thereafter, we will seek Series B funding of $4 million to enable our expansion beyond New York City—this investment will primarily support marketing, assembly locations, and capital costs.
Qualified Management Team Portion’s team consists of highly motivated students from Brown University and Rhode Island School of Design.
Francesca Whitehead is the CEO of Portion. Francesca has worked on the Structured Finance team at Goldman Sachs, dealing primarily with real estate and restaurant franchising. She has worked in the global conglomerate Jardine Matheson’s taxation department focusing primarily on their consumer facing companies and franchises. She has further corporate experience working at the Bank of Tokyo, IKEA, Loro Piana, and the Court of Final Appeal. In addition, Francesca has had experience in the food industry at Geronimo Inn. Her experience as Ivy Film Festival’s business coordinator, Transfer Coordinator, Managing Editor of the Intercollegiate Finance Journal, and Varsity Crew coxswain have honed her leadership skills over the last few years. She completes her Bachelor of Arts in Economics in May 2016.
Jason Halsted is the Head of Finance at Portion. Jason has worked on the Equity Capital Markets team at Morgan Stanley, dealing primarily with the technology and transportation sectors. Prior to Morgan Stanley, he worked at AGC Partners, a leading Boston boutique investment bank specializing in technology mergers and acquisitions. In addition, Jason has consulted for Providence beverage startup Farmer Willie’s Alcoholic Ginger Beer on financial modeling, funding, and corporate strategy. He completes a Bachelor of Arts in Economics at Brown University in May 2016.
Michael Firn is the Head of Marketing at Portion. Michael has worked in the investment management division of Goldman Sachs, spending time on both the sales and product sides of the business. Most recently he worked as a Product Management analyst, marketing GS equity mutual funds to new and existing clients through creative marketing tactics. Michael has copious entrepreneurship experience and has attending several competitive accelerators while working for a successful tech startup in 2013. He completes a Bachelor of Arts in Economics at Brown University in May 2016.
William Davis is the Head of Product and Business Development. William has extensive experience in the entertainment industry in branding and product licensing. In his role at
57 Appendix 1E.
20 NBCUniversal’s Partnerships & Licensing division, William worked on various film franchises, building and maintaining product licensing relationships with several clients. At DreamWorks Animation, William was responsible for creating long-term strategy plans for the studio’s key brands and establishing new opportunities for monetizing DreamWorks IP. William completes a double concentration at Brown University in May 2016, earning a Bachelor of Arts in Economics and Modern Culture & Media.
Alex Lloyd George is the Head of Communications at Portion. He has worked in the investment management sector, spending time at the hedge fund Ward Ferry Management and asset manager Compass Group. Those experiences have allowed him to hone his communication skills and ability to interface with high-level individuals. Previously the Senior Managing Editor and Head of Blog at campus publications Brown Political and the Intercollegiate Finance Journal, respectively, he brings a wealth of leadership experience to the fore. He completes a degree in Political Science in May 2016.
Jason Pesek is the Head of Operations at Portion. He has has worked in the tech consulting sector, working in business development and supply chain operations at World Wide Technology. His experience working with sales teams to create global operation solutions will help the company remain agile throughout expansion and growth. Working as the Head Teaching Assistant of the Management of Industrial and Nonprofit Organizations class at Brown has allowed him to gain valuable leadership experience through leading class discussions and guiding students with their projects. He completes his degree in Business, Entrepreneurship, and Organizations with a focus in Organization Studies in May 2017.
Julie Liang is the Head of Research & Design at Portion. She is passionate about using design to impact social and environmental issues. With experience in product design at Boeing and UX design at Punchcut, she provides a clear execution of meaningful storytelling through branding and product development at Portion. Working in the design consulting industry has given her an comprehensive understanding of the intersection between business and design. Her previous executive leadership position at RISD E’Ship has proven her substantial abilities to spearhead large initiatives. She graduates with a degree in Industrial Design with a concentration in Nature & Sustainability from RISD in May 2017.
Advisors Bring A Wealth and Depth of Experience Eric Flores is a strategic advisor with substantial experience assisting startups and entrepreneurs. He has worked as an independent consultant on sales and financing to more than 18 startups, as well as performing a similar function at Google Ventures. As a cofounder of Amitee, a personal finance app, he has undertaken this process himself. His other professional experiences include working at Goldman Sachs. Eric has a degree in Economics, Organizations, and Entrepreneurship from Brown University.
Lynn Tripp has taught at Johnson and Wales University, a culinary school in Providence, RI, for the past 16 years. Prior to teaching at JWU, she worked as a food scientist at Ocean Spray Cranberries, a company that produces cranberry cocktail drinks and created the first juice blend. In 2013, she won an RCA President’s Award from the Research Chef’s Association.
Manny Stern is a food consultant with prodigious experience in the industry, advising companies
21 ranging from startups like Runa to blue-chip companies like Cadbury’s. He is also a serial entrepreneur, having started, built, managed, and sold over thirteen companies that ranged from retail to manufacturing, and from hi-tech to gourmet foods. He has a graduate degree in Physics from New York University.
John Jannotti is an Adjunct Assistant Professor in the Computer Science Department at Brown University whose interests include wireless protocols, operating system flexibility, and sensor networks. In 2004, he cofounded the online food delivery service, Foodler. He studied for his undergraduate and doctorate degrees at the Massachusetts Institute of Technology.
Matt Tortora is the founder, chairman, and CEO of Crave Food Services, a food systems technology and consulting company. Crave operates the WhatsGood online marketplace. After spending ten years in the Navy as a Nuclear Missile Technician, Matt was driven by his love of food and cooking to attend Johnson and Wales University, where he trained to be a chef. Afterwards, an interest in entrepreneurship led him to channel his cooking expertise into a startup—Crave.
Nico Enriquez and Max Easton are the cofounders of Farmer Willie’s Alcoholic Ginger Beer, a company that produces alcoholic ginger beer derived from a homebrewed recipe. They have only marketed their product through social media and guerilla campaigns, and this use of word-of- mouth marketing has proven successful for them. We hope to learn from their experience as we move forward and begin to use social media as a marketing tool.
Amy Halsted is the president and creative director of The Halsted Agency, a boutique marketing firm. Her clients include International Superyacht Society (ISS), Christensen Shipyards, Maine Mineral & Gem Museum, and Cause for Laughter. Beyond her marketing experience, Amy has a love for cooking, spending her spare time learning to be a chef. Her focus is on organic and local ingredients.
Donald Halsted is the Chief Financial Officer of Nucleus Scientific, Inc. He has previously served as the Chief Financial Officer of Cedar Point Communications and 3Com. His experience in the technology sector spans fledgling startups and companies with over $500 million in annual revenue. Donald holds an MBA and a B.S. in Mechanical Engineering and Economics from Cornell University.
Critical Risks and Assumptions
Fierce Competition Currently, strong players exist in the meal-kit subscription market. Companies like Blue Apron and HelloFresh pulled in about $360 million and $290 million, respectively, in revenue last year, delivering millions of portioned meals per month as they continue to grow at an astronomical pace.58 59 As a new entrant into the business, Portion will have to adequately differentiate itself
58 Konrad, Alex. “Blue Apron’s Got Big Plans for Dinner—But So Do Its Hungry Rivals.” Forbes. October 14, 2015. http://www.forbes.com/sites/alexkonrad/2015/10/14/inside-blue-apron-and-the-meal kit-rush/#7d69d77b7af9 59 Gharib, Susie. “This Is How Blue Apron Was Built from Scratch.” Fortune. April 21, 2016. http://fortune.com/video/2016/04/21/blue-apron- starting-from-scratch/
22 from these massive competitors. Should any sizable meal-kit competitor choose to shift to an on- demand service offering, it would seriously undercut Portion’s competitive edge. However, given the huge infrastructure both of these companies have built through their subscription services, such a shift seems unlikely. Beyond these large companies, an equally dense amount of competition exists in the on-demand takeout delivery space. In response to this competition, Portion will provide a superb product experience that successfully satisfies our demographic’s preference for fresh ingredients over unhealthy takeout food.
Regulatory Scrutiny and Safety Concerns As the food industry has become more mobile, it has fallen under a heavier regulatory burden. Portion will need to ensure that it upholds the highest regulatory and legal standards on a state- by-state basis. Because we are pre-chopping our meals, issues of food safety become even more pressing. If any batch of our kits were to become contaminated or threaten the health of our customers, a public relations nightmare could ensue. Chipotle’s recent health issues illustrate how even the largest of companies can still err when it comes to food safety.60 We will seek FDA approval and health inspection that are as vigorous as a restaurant. Our refrigerated delivery system will also significantly reduce this risk.
Limited Uptake in Non-Urban Areas In order to expand, Portion will eventually need to move out of major cities and begin to operate in suburban areas. Leaving urban confines will present major hurdles such as delivery optimization, demand patterns, and assembly location placement. Strong understanding of these markets, sourced from quick learning and data aggregated from our existing markets, will help us with our expansion.
Ensuring Consistency in the Face of Seasonality Because we plan to source our produce from local farms, our meal kits are heavily affected by seasonality, especially on the east coast. A key feature of our brand is the variety we offer to consumers, but this variety may be difficult to obtain year round. Additionally, any major fluctuations in prices for our staple items may cause unforeseen financial strain on the company. To address both of these issues, we will forecast availability, demand, and prices, well in advance by utilizing metrics made available from our distributor and from our own software. From the outset, operating through WhatsGood will allow us to plan orders based on market prices and produce availability, adjusting our offerings based on seasonality and cost. We will also seek to establish relationships with farms that use hydroponics to grow fresh produce year- round.
Food Waste As with any restaurant or grocery store, Portion will be susceptible to major food waste— especially as we first launch—which may cut heavily into our margins if we incorrectly forecast our supply. An estimated 10% of food is wasted in the average restaurant, a rate which will
60 Alba, Davey. “Chipotle’s Health Crisis Shows Fresh Food Comes at A Price.” Wired. January 15, 2016. http://www.wired.com/2016/01/chipotles-health-crisis-shows-fresh-food-comes-at-a-price/
23 likely apply to Portion as well.61 To combat this waste, we will donate all unused chopped produce to local food banks, which will provide us with a tax write-off and solve the issue of reduced margins. Additionally, as we grow we will utilize our robust analytics platform to forecast demand and fine-tune our supply efficiency.
Proposed Fundraising Offering Portion is currently seeking to raise $5 million in a Series A financing round. We will utilize this first round of funding to hire four software developers, a sourcing employee, and a chef. We will also use this money to lease and build out the first assembly location in Boston, source ingredients, and expand into New York.
We estimate annual salaries of $100,000 for each software developer. As such, we will spend a total of $900,000 on software development through the first two years, with four developers in Year 1 and five in Year 2. We will hire one chef and one sourcing employee for each city. At a cost of $50,000 each per year, these employees will require $300,000 in salaries through the first two years. We have allotted $1.7 million in sales and marketing for the first two years. Finally, it will cost $1.3 million to open our facilities in Boston and New York. As such, we will require $4.2 million by the end of Year 2, providing Portion with a generous buffer against unforeseen costs, initial ingredient and packaging costs, and general expenditures. See the Financials Section and Appendix for the assumptions used to establish these numbers.
Portion will require a Series B funding round of $4 million at the beginning of Year 3 to continue our expansion in 10 new cities. Beyond this point, we can fund further growth with the cash flow from our operations.
Portion seeks to issue equity to value-added investors with broad expertise and connections across the food preparation and delivery industries. Beyond the funding this investor will provide, we seek a partner with strong expertise in data analytics and software to help us build an efficient supply and delivery operation.
Exit Strategy Provides Return on Investment In five years, Portion will have generated sufficient brand loyalty to be value-accretive to a potential strategic acquirer. Subscription meal-kit delivery companies, grocery stores, and food delivery services struggle to reach our target demographic of young single workers who are unwilling and unable to commit to the recurring cost and rigid schedule of a subscription service. Furthermore, these companies do not possess the distribution networks or infrastructure required to reach these customers through on-demand delivery, and would be forced to invest significant resources to build out these capabilities. By seeking an acquisition in an industry poised for growth and consolidation, Portion will provide liquidity and significant returns to its investors.
61 Barclay, Eliza. “For Restaurants, Food Waste Is Seen As Low Priority.” National Public Radio. November 12, 2012. http://www.npr.org/sections/thesalt/2012/11/27/165907972/for-restaurants-food-waste-is-seen-as-low-priority
24 Appendix 1. Financials
A. Profit and Loss
-
315
3,861 5,516 3,891
Ye ar 5 27,371 11,369 27,146 65,886 44,428 19,856 29,233 15,195 14,880 10,989 110,314
- -
185 866 866
5,948 3,041 3,548 1,051
Ye ar 4 50,685 13,220 12,472 31,641 19,044 11,404 17,993
- -
80 4,532 2,867 4,069 5,061 1,322 4,959 1,488 7,769
(2,708) (2,788) (2,788) Ye ar 3 16,529 11,469
- -
25 870 826 742 515 418 700
2,954 2,438 1,477 2,595
(2,080) (2,105) (2,105) Ye ar 2
- -
78 67 10 270 301 446 210 229 500 939
(176) (1,115) (1,125) (1,125) Ye ar 1
- -
5
48 41 58 (47) 167 124 214 117 125 300
(347) (352) (352) Y1Q4
- -
5
30 26 52 72 (76) 103 124 180 125 249
(325) (330) (330) Y1Q3
------
53 53 50 40 (53) 125 215
(268) (268) (268) Y1Q2
------
50 125 175
(175) (175) (175) Y1Q1
(1) (All numbers in 000s) in numbers (All Revenues Total Revenues Cost Goods of Sold Materials and Ingredients of Cost Workers and Facility of Cost Delivery of Cost Sold Goods of Cost Total Profit Gross Operating Expenses Administrative and General Marketing and Sales Research Development and Total Operating Expenses BeforeEarning Interest, Taxes, Depreciation Amortization and Depreciation Interest Expense BeforeEarnings Taxes Expense Tax Net Income corporate 40% tax rate and carryover tax loss (1)Using
25 B. Assumptions Ye ar 1 Ye ar 2 Ye ar 3 Ye ar 4 Ye ar 5 Meal Kit Revenue Meal Kits Percent of Orders for 4 kits 0% 1% 1% 1% 1% Percent of Orders for 2 kits 0% 1% 3% 5% 5% Percentage of Orders with Breakfast Kit 0% 0% 5% 5% 5% Percentage of Orders with Breakfast Kit 0% 0% 5% 5% 5% Cost of Materials Cost of Ingrediants $2.70 $2.57 $2.44 $2.31 $2.20 Cost of Packaging $1.15 $1.09 $1.04 $0.99 $0.94 Decrease is Cost because of scale 0% 5% 5% 5% 5% Facility and Workers Food Wastage 10% 8% 8% 5% 5% Facility Module (Size ft2) 10,000 10,000 10,000 10,000 10,000 Shifts per facility 2 2 2 2 2 Maximum Output (kits) 400,000 400,000 600,000 800,000 800,000 Facility Cost (per ft2) $12.00 $12.00 $12.00 $12.00 $12.00 Taxes, Utilities, Insurance 75% 75% 75% 75% 75% Total Cost per Facility Module ($) $210,000 $210,000 $210,000 $210,000 $210,000 Facilities Needed (Based on total demand 1 2 8 12 21 for kits in each city / maximum output)
Workers per Shift 7 7 7 7 7 Hours per Shift per day 7 7 7 7 7 Meals per shift per day 550 550 825 1100 1100 Estimated Output per Shift 200,000 200,000 300,000 400,000 400,000 Wages (Fully Burden per hour) $16.00 $16.32 $16.65 $16.98 $17.32 Total Cost per Shift $286,160 $291,883 $297,721 $303,675 $309,749 Shifts Needed (Based on total demand 1 3 8 15 29 for kits in each city / Output per shift) Total Cost of Facility and Workers $301 $826 $2,867 $5,948 $11,369
Capital Cost per Facility $100,000 $100,000 $100,000 $100,000 $100,000 Driver Assumptions Meals delivered per hour 6 7 7 7.75 8 Delivery Charge $2.00 $2.00 $2.00 $2.00 $2.00 Estimated Tip 15% 15% 15% 15% 15% Expenses G&A as Percent of Revenue 78% 14% 8% 6% 4% G&A Cost ($000s) $210 $418 $1,322 $3,041 $3,861
S&M as Percent of Revenue 85% 50% 30% 23% 18% S&M Cost ($000s) $229 $1,477 $4,959 $11,404 $19,856 Advertising as Percent of Revenue 4% 4% 4% 4% 4% Advertising Cost ($000s) $14 $148 $826 $2,534 $4,413
R&D as Percent of Revenue 185% 24% 9% 7% 5% R&D Cost ($000s) $500 $700 $1,488 $3,548 $5,516 Software Developers 4 5 6 7 8 Salaries per Developer ($000s) $100 $100 $120 $130 $140 Chefs and Sourcing Employees (1 set per city) 2 4 12 16 24 Salaries per ($000s) $50 $50 $60 $70 $85 Other R&D Costs (Test kitchen, assembly design, etc.) $0 $0 $48 $1,518 $2,356
26
C. Balance Sheet
0 0 0 0
763 557 (615)
2,100 1,485 1,637 1,637 1,637 9,000 9,000 5,836
Ye ar 5 13,669 14,989 16,474 14,836 16,474
0 0 0 0
377 289 900 896 896 896 (300)
3,177 3,844 1,200 4,744 9,000 9,000 3,848 4,744
(5,152)
Ye ar 4
0 0 0
142 114 800 685 348 348 348 (115)
2,390 2,646 3,331 5,000 4,000 9,000 2,982 3,331
(6,018)
Ye ar 3
0 0 0 0
31 27 80 80 80
(35) 200 165 1,628 1,685 1,850 5,000 5,000 1,770 1,850
(3,230)
Ye ar 2
4 3 0 9 0 9 0 9 0
90
(10) 100 3,788 3,795 3,885 5,000 5,000 3,875 3,885
(1,125)
Ye ar 1
4 3 0 9 0 9 0 9 0
90
(10) 100 3,788 3,795 3,885 5,000 5,000 3,875 3,885 Y1Q4 (1,125)
2 2 0 6 0 6 0 6 0
(5)
95
100 (773)
4,134 4,138 4,233 5,000 5,000 4,227 4,233 Y1Q3
0 0 0 0 0 0 0 0 0 0
100 100 (443)
4,458 4,458 4,558 5,000 5,000 4,558 4,558 Y1Q2
0 0 0 0 0 0 0 0 0 0 0 0 (175)
4,825 4,825 4,825 5,000 5,000 4,825 4,825 Y1Q1
(3) (1) (4) (2) (All numbers in 000s) in numbers (All Assets Cash Equivalents Cash and Receivable Accounts Inventory Assets Current Other Assets Current Total Equipment and Plant, Property, Gross Depreciation Accumulated PP&E Net AssetsTotal Labilities Payable Accounts Accrued Liabilities Liabilities Current Total Debt Long-Term Liabilities Total Owner's Equity Contributed Capital Beginning (Period) Contributions Capital Contributed Capital Ending Earnings Retained Owner's Equity Total Owner's and Equity Labilities Total charge credit traditional fora of2 days outstanding sales on days (1)Based ofinventory) (30% of3 days packaging and ofinventory) (70% 2ofdays inventory in ofingredients ofdays average on weighted (2)Based depreciation straight-line on 5year (3)Based of30 days advertising and of30 days, packaging of5 days, foringredients payable days (4)Based
27 D. Cash Flow Statement
0 0 0
88
(900) (900)
3,177
(3,891)
Ye ar 5 15,195 11,392 10,492 13,669
0 0 0 0
137 788 (400) (400)
1,051 1,188 2,390 3,177
Ye ar 4
0 0
70
762 (600) (600)
4,000 4,000 1,628 2,390
(2,708) (2,638)
Ye ar 3
0 0 0 0
20
(100) (100)
3,788 1,628
(2,080) (2,060) (2,160)
Ye ar 2
0 3 0 0
(100) (100)
5,000 5,000 3,788 3,788
(1,115) (1,112)
Ye ar 1
0 1 0 0 0 0 0
(347) (346) (346)
4,134 3,788 Y1Q4
0 2 0 0 0 0 0
(325) (324) (324)
4,458 4,134 Y1Q3
0 0 0 0 0
(268) (268) (100) (100) (368)
4,825 4,458 Y1Q2
0 0 0 0 0 0
(175) (175)
5,000 5,000 4,825 4,825 Y1Q1
(1)(2) (All numbers in 000s) in numbers (All Operating Activates: EBITDA Expenses Tax Capital Working in Change Activities Operating from Cash Flow Total Investing Activities: Purchase PP&E of Activities Investing from Cash Flow Total Activities:Financing Raised Debt Raised Equity Activities Financing from Cash Flow Total ChangeCash Cash Equivalentsin and Balance Cash Beginning Cash Ending Balance inventory, payableaccounts and to receivable, accounts Change (1) in change of effect flow the cash makes to inventory receivable accounts relative and advertising, of amount payable,accounts of to amount due the large Note:(2) the high positive capital working
28 E. Average Order and Delivery Tables
Average Pre-Delivery Order Revenue Kit Type Percent of Orders Price per Kit Revenue per Order Traditional Dinner Kit 108%(1) $9.99 $10.79 Breakfast Kit 5% $4.99 $0.25 Dessert Kit 5% $3.99 $0.20 Average Pre-Delivery Order Revenue $11.24 (1) Based on 1 of 100 orders for 4 meal kits, 5 of 100 orders for 2 meal kits
Driver Hourly Book Revenue by Delivery Rate Average Pre- Estimated Hourly Delivery Charge Delivery Order Estimated tip of Book Revenue Deliveries per Hour ($2 per order) Price 15% per Driver 6 $12.00 $11.24 $10.11 $22.11 7 $14.00 $11.24 $11.80 $25.80 8 $16.00 $11.24 $13.49 $29.49
29 F. Customer Lifetime Value and Acquisition Cost
Customer Lifetime Value Calculation Type of Customer Rare Frequent Loyal Marginal Per Order $6.06 $6.06 $6.06 Average Orders per Year 3 20 52 M - Margins Customer Generates a year $18.17 $121.13 $314.95 r -Retention Rate 25% 60% 85% c - Communication Cost(1) $0.00 $7.70 $19.25 i - Interest Rate 10% 10% 10% AC - Acquisition Cost $7.12 $7.12 $7.12 Customer Lifetime Value (CLV)(2)(3) $14.26 $219.75 $1,175.68 (1) Communication Cost is based on a point system, earning 10% back in points per order (2) Note: Loyal customers have a high retention and margins per year resulting in the high CLV (3) Calculated based variables above used in the equation below
� − � �������� �������� ����� (���) = − �� 1 − � + �
Customer Acquisition Cost Calculation Acquisition Costs Cost per Activity Impressions Conversion Customers AC/Customer Samples (1000 samples) $3,850 20,000 5% 1,000 $3.85 Free Local Press 0 500,000 0.05% 250 $0.00 Internet Advertising $10,000 500,000 0.10% 500 $20.00 Free Meals to Reviewers, Bloggers etc. (100) $385 50,000 0.50% 250 $1.54 Total Acquisition Cost $14,235 1,070,000 0.19% 2,000 $7.12
30 2. Visuals
A. Branding Style Sheet
31 B. Recipe Card in Context
32 C. Recipe Card – Front
33 D. Recipe Card – Back
34 E. Packaging Sample
35 F. Digital Interface Mockups
36 F. Digital Interface Mockups (Continued)
37 3. Ingredient Pricing
We reached out to our advisor Matt Tortora, founder of CEO of Whats Good, to discuss the prices of local produce in Massachusetts. These are based on the delivery cost and prices of produce on April 25th 2016. These are the costs we would incur to source these from local farms and are used in the assumptions in the financial model to price out the cost of our sample recipe, Chicken Bruschetta.
Ingredient Price - High Price - Low Average
Cauliflower $18.00 / box $18.00 / box $18.00 / box
Onion $1.75 / lb $0.34 / lb $1.35 / lb
Garlic $8.85 / lb $8.85 / lb $8.85 / lb
Thyme $4.00 / oz $4.00 / oz $4.00 / oz
Tomatoes $3.50 / lb $1.25 / lb $2.23 / lb
Tomatoes - Heriloo $3.50 / lb $1.83 / lb $2.52 / lb
Tomatoes - Hydro $2.50 / lb $2.50 / lb $2.50 / lb
Goat Cheese $1.27 / oz $1.27 / oz $1.27 / oz
Cinnamon $7.07 / lb $4.66 / lb $5.67 / lb
Salmon - Fillet $29.95 / lb $5.50 / lb $9.12 / lb
Salmon - Whole $3.95 / lb $9.95 / lb $5.74 / lb
Parsley $3.50 / oz $0.31 / oz $1.40 / oz
Basil $4.50 / oz $0.50 / oz $1.46 / oz
Shallot $3.50 / lb $3.50 / lb $3.50 / lb
Parmesan Cheese $5.70 / lb $4.55 / lb $5.13 / lb
Chicken Breast $5.09 / lb $2.70 / lb $3.94 / lb
Pine Nuts $15.45 / lb $15.45 / lb $15.45 / lb
Shrimp $22.95 / lb $3.55 / lb $11.07 / lb
Peas $2.00 / lb $2.00 / lb $2.00 / lb
38 4. Sample Recipes
A. Tacu tacu
Ingredients: ½ cup of rice ½ a peeled plantain (1.5cm sliced) 1 clove of garlic (chopped) 1 red chilli (finely chopped) ½ an onion (finely chopped) 200g of Haricot Beans (drained of water) 2 eggs
Instructions: 1. Put the rice and 1 cups of water in a pot. Place a lid on it and allow it to simmer (keep cooking the rice until the water has evaporated). Keep an eye on it and remove the lid and turn off the heat once it is done. 2. As the rice is cooking, add a generous amount of oil to a frying pan and begin cooking the plantains on medium heat. This should be a few minutes on each side. Cook them until they are golden and crispy 3. Remove the plantains but keep the oil in the frying pan 4. Now cook the chilli, garlic, and onions in the frying pan on medium to low heat for 5-10 minutes (the ingredients should look soft and lightly golden when ready) 5. Add more oil and turn to high heat 6. Add the beans and rice to the chilli, garlic, and onion mix. Stir regularly 7. The rice should begin to crisp when it is extremely hot. When this begins to happen stop stirring for the last 5 minutes to let the base get really crispy 8. Transfer this to a plate 9. In the same pan add a little bit more oil and fry the eggs (salt to taste) 10. Add the eggs and crispy plantain to the top of the rice and beans on the plate
39
B. Pea and Goat’s Cheese Risotto
Ingredients: ¼ litre organic chicken or vegetable stock 6g of butter ¼ of an onion (finely chopped) 25g of bacon (cut into matchsticks) 1 small bunch of fresh thyme ½ cup of rice rice 40ml of white wine 50g of frozen peas black pepper 30g crumbly goat's cheese
Instructions: 1. Put the rice and just over 1 cup of water in a pot. Place a lid on it and allow it to simmer (keep cooking the rice until the water has evaporated). Keep an eye on it and remove the lid and turn off the heat once it is done. 2. Heat the stock up in a saucepan heat the butter, then add the onion, bacon, and thyme and fry this for about 8 minutes (onion should be soft but not coloured) 3. When the rice is ready, add the rice to the frying pan and turn up the heat. The rice should almost fry 4. After about a minute add the wine and keep stirring (add the wine when the rice looks translucent) 5. Turn down the heat to a low simmer 6. Add 3 tablespoons of stock and some salt to the rice then stir 7. Keep adding tablespoons of stock to the pot but let each ladle to be absorbed before adding the next
40
C. Thai Green Curry
Ingredients: ½ cup of rice 1 skinless chicken breast (diced into bite size chunks) 1 tbs of thai green curry paste 20g of green beans ½ tbs of brown sugar 1 cup of coconut milk ½ tbs of soya sauce ½ of a fresh lime (squeezed)
Instructions: 1. Put the rice and just over ½ a cup of water in a pot. Place a lid on it and allow it to simmer (keep cooking the rice until the water has evaporated). Keep an eye on it and remove the lid and turn off the heat once it is done. 2. Whilst the rice is cooking. Put some oil, chicken, green beans, curry paste and brown sugar into a pan on a medium heat and keep stirring for about ten minutes, or until the chicken is opaque. 3. Add the coconut milk, stir well and bring to a simmer. 4. Add the fish and soy sauce to taste. Let the curry simmer gently until the liquid has thickened a little and the chicken is cooked through. 5. Then add the lime juice
41
D. Paella in Quince
Ingredients: ⅛ pound pre-cooked chorizo, casings removed and cut into bite-size dice 3 oz chicken breast (diced into bite-size pieces) ¼ medium onion, chopped 1 garlic clove, finely chopped or grated ¾ cups chicken stock ½ cup of couscous ¼ cup frozen green peas ¼ roasted red pepper, chopped A generous handful of flat-leaf parsley, chopped
Instructions: 1. Put the couscous and ¾ cups of water in a pot. Place a lid on it and allow it to simmer (keep cooking the couscous until the water has evaporated). Keep an eye on it and remove the lid and turn off the heat once it is done. 2. Heat 1 tablespoon of oil in a deep pan over medium-high to high heat - make sure to choose a pan with a tight fitting lid. 3. Add the chorizo 4. After 1 to 2 minutes add the chicken and brown. Cook for 2-3 minutes. 5. Add the onions, garlic, and shrimp, season with salt and pepper to taste, and cook 3 to 4 minutes more. 6. Add the stock and bring it to a boil, then stir in the couscous, peas, and peppers. 7. Cover and turn off the heat. Let stand for 5 minutes then fluff with a fork. 8. Top each serving of paella with some chopped parsley.
42 E. Steak Indian-style with mango dessert
Ingredients: ½ a cup of rice 1 tbs of sesame seeds ½ of a lemon juice (split into 2x ⅛ slices, 1x ¼ slice) 35g of Jalfrezi cooking paste 50ml of coconut milk ½ of a ripe mango (slice downwards around the stone. Take the half and score a crisscross pattern about 2cm down through the flesh, stopping at the skin. Leave it in the skin) ¼ of a tsp of icing sugar A pinch of fresh mint (finely sliced leaves) ¼ of a lime 150g of steak A pinch of fresh coriander 60g of fat-free natural yoghurt
Instructions: 1. Put the rice and 1 cup of water in a pot. Place a lid on it and allow it to simmer (keep cooking the rice until the water has evaporated) 2. Put a griddle pan on a high heat. 3. Put ½ of the jalfrezi paste into a large flat bowl and mix in the juice of ⅛ of a lemon, a generous amount of oil and salt and pepper to taste. 4. Rub this all over the steaks on top. Then set aside and wash your hands. 5. Spoon the yoghurt into a dish. 6. Add ½ the mint, a drizzle of oil, ⅛ of a lemon juice, and salt to taste to the yoghurt. Set aside 7. Transfer the steaks to the now very hot pan. 8. Cook for about 6 minutes turning the steaks every minute, for medium-rare steaks. Around 8 minutes in total for medium. About 10 minutes for well done. 9. Once cooked slice up the meat at an angle then set it aside on a plate. 10. Put a pot frying pan on a medium heat. 11. Add the rest of the jalfrezi paste, pour in ½ the coconut milk, mix well, then leave to bubble and thicken. 12. Once the sauce has boiled down to a nice consistency turn off the heat 13. Turn the mango skin inside out, make it look like a mango hedgehog. 14. Sieve the icing sugar all over, then sprinkle a few mint leaves over. 15. Pour the warm curry sauce over the cooked rice 16. Stir the yoghurt
43 F. Potato & chorizo breakfast hash
Ingredients: ½ a large onion (peeled and finely chopped) ½ a clove of garlic (peeled and finely chopped) 60g of chorizo (chopped) 2 cooked potatoes (diced) A small bunch of fresh flat-leaf parsley leaves (chopped) 1 large free-range eggs
Instructions: 1. Preheat the oven to 180ºC/gas 4. 2. Gently fry the onion and garlic in a little oil in an ovenproof pan until the onion is soft. 3. Add the chorizo and fry for 2 to 3 minutes. 4. Add the potatoes and cook for 5 minutes more. 5. Crack the egg on top. 6. Transfer the pan to the preheated oven and bake for 8 minutes, or until the egg white is set but the yolk is still runny. 7. Sprinkle salt and pepper to taste, and add the parsley, to serve.
44
G. Socca pancakes with broccoli and cheese - vegetarian
Ingredients: 20g gram (chickpea) flour ¼ of an onion (peeled and thinly sliced) ¼ of an clove of garlic (peeled and thinly sliced) 27.5g of broccoli (trimmed then sliced into 3cm pieces) ⅛ of a lemon 12.5g of goat’s cheese (crumbled) 10 g of Parmesan cheese (shaved) A small bunch of fresh flat-leaf parsley leaves (chopped)
Instructions: 1. In a bowl, whisk together the flour, ¼ of a tablespoons of oil, 25ml of water and a pinch of salt. Set aside for at least 15 minutes. This is your batter 2. Heat 2 tablespoons of oil in a pan over a medium heat. 3. Add the onion and fry for 10 minutes, or until beginning to brown. 4. Add the broccoli and garlic and cook for 7 to 8 minutes, or until the veg is tender and the onion caramelises. 5. Remove from the heat, add the lemon zest and juice and set aside. 6. Heat 1 tablespoon of oil in a the pan over a medium heat. Ladle in the batter. 7. Cook for 2 to 3 minutes, until bubbles appear, then flip and cook for 2 more minutes, or until golden. 8. To serve, top the pancakes with the broccoli, goat’s cheese, parmesan and parsley.
45
H. Chicken Bruschetta with Goat Cheese
Ingredients: 1 chicken breast ½ Heirloom Tomato (diced) ¼ Organic Onion (diced) ½ Garlic Clove (minced) ½ tsp balsamic vinegar ¼ oz Basil Strips ¼ cup Goat Cheese
Instructions: 1. Sprinkle chicken with salt and pepper. Saute in olive oil for 7-10 minutes per side until juices run clear. 2. Meanwhile, combine chopped tomatoes, garlic, onion, olive oil, balsamic vinegar, sea salt and basil in a bowl. Refrigerate until chicken is ready to be served and spoon over top of the chicken. 3. Top with goat cheese.
46