CASE STUDY
PREMIERE MOISSON BAKERY
ELEMENTS OF THE SOLUTION
Introduction
Dear Madams, Sirs
The attached report contains PM Consulting Inc’s study concerning the opportunities of implementation and distribution of the Premiere Moisson Bakery products.
As required the options of a product market expansion were considered and they were analyzed for their present and future economic feasibility.
Based on the information that you provided to us, we concluded that there is a market for your products and that the project will be financially feasible.
We will recommend as a go to seek and negotiate partnership in the cities of Ottawa and Quebec however we recommend that the United States should be approached in an ulterior phase at a future date.
SITUATION
We, PM Consulting Inc were able to identify three specific phases of Ms Lilian Colpron business evolution. These are:
1. Liliane Colpron started her own business at the age of 30 years while having three children and being divorced.
She started by negotiating a partnership with a French baker and she opened a little bread shop.
She learned how to make and bake bread as well as how to package and deliver bread.
Liliane Colpron owned this little bakery for twelve years and then she sold it when she was making sales of $1,000,000 per year.
2. Once the frozen raw bread dough was starting to be the new “it” on the market, Liliane Colpron decided to exploit this new market.
This new business was an industrial size raw bread dough factory in Dorval Quebec.
The business was a medium size business with 15 employees and 8000 square feet manufacturing plant. The first year of this business the sales were of $250,000.
The new business grew to a factory of 40,000 square feet and it generated $10,000,000 in sales per year. The business was very profitable.
In the 80’s Liliane Colpron sold the business to Heinz which was her biggest competitor in this specific market.
3. Liliane Colpron tooked one year off work to re-think options and strategy for her to do what was really making her happy and passionate about, which turned out to be: making quality bread with healthy ingredients.
She opened a small specialty bread bakery in partnership with her three children:
- Bernard which was to be the baker as he was the artist of the family;
- Steven which was to help her with the administration of the business as well as with managing the production of delicatessen meats in Terebonne (Qc) and
- Josee as she was having a degree in marketing and she was to manage the commercialization of the business (R&D of new products, packaging, merchandising and sales).
At that point in her life, Liliane Colpron was in the business for 11 years.
Premiere Moisson Bakery is a family business and is still controlled by the family.
Premiere Moisson Bakery first store was opened in Dorion Quebec and the mission statement indicated that the bakery will be providing a variety of hand made specialized breads, croissants and pies.
The cost of opening this first store was $500,000 and in first year of operation the business lost in total $100,000.
The bakery only started to make money after 18 months of operation.
The bakery underwent 4 major renovations through 8 years in order to be able to keep up with the current trends. At the same time more products were added to the list of goods produced and sold in the bakery such as fine pastries, delicatessen meats and prepared meals.
Première Moisson Bakeries reorganized the business around the new trends in agri-products towards healthy and ready-made foods.
Colpron opted for a combination of partnership and franchise characteristics in order to see the business grow fast in the Province of Quebec. The concept is called affiliation.
The affiliation has two parts – two agreements that need to be signed. They are:
- A proprietorship agreement to manage the shares and rules of financing
- An affiliation agreement that states the rules of operations and the image and positioning of the Première Moisson Bakeries.
Products, production, marketing and administration processes are standardized.
This has been proved to be a money making concept as the newest bakery was profitable after 3 months of operation. The initial investment was $900,000.
Net sales were 2,000,000 a year, an average of $40,000 per week and an average purchase of $9 per client.
This newest bakery offered all the products the first one was offering however it was also offering products such as organic flour, jams, coffee and a small space for a restaurant.
After 8 years after the opening of the first boutique Première Moisson Bakeries managed 11 affiliations in the Montreal region.
In 1999 the 11 stores were generating annual sales of $23,000,000 which was a proof of the financial and commercial success of the business.
The Team members and employees were recruited personally by the family members. The employees are all people that are known by the family’s members and are part of their network.
The employees were chosen on the basis to be flexible and adaptable to the philosophy and culture of the organization. They were also chosen for their expertise and experience in the field.
The family will not be able to use this strategy of recruitment outside of the Greater Montreal region because they do not know too many people in the bakery industry in other regions.
Première Moisson tried different approaches for the Montreal Market such as:
1. Partnership with a Metro Grocery Store in Repentigny in order to take advantage of the customers already in the grocery store; this experiment did NOT generate the sales required to break-even.
2. A Smaller store concept on Sherbrooke Street in Montreal; this project showed that a minimum sales space is needed in order to be profitable and that production needs to be done on site.
Business development of Premiere Moisson:
In phase 1 Premiere Moisson developed the concept of market expansion, tested the concept and implemented the infrastructure and the expansion on the Montreal Market.
In phase 2 Premiere Moisson looks a different options of market expansion such as:
• applying same concept in the Province of Quebec as well as the rest of Canada,
• the implementation of a modified concept on the United Sates market,
• the potential adaptation of the concept to smaller stores,
• mass distribution of bread in stores like Costco and other big grocery stores,
• establishing franchises in the far regions of Canada and the United States.
A Market Study has been conducted for the client showing specifics such as socio-demographic profile of the consumers in area of interest as well as specifically which of the offered products looked more attractive for clients in specific area of interest. Appendix 1 and 2 are attached to this report.
Conclusion
Première Moisson is a family business that is going through an important growth period. This business that specializes in production, sales and distribution of specialized products: bread, pastry, fine grocery goods, natural products, deli meats, prepared meals, presents a concept that is different that the competition. They offer a variety of products, quality products and great service.
Première Moisson wants to expand in Canada and the United States by establishing franchises in these geographical areas and by applying the concept of smaller stores, mass distribution of bread in stores such as Costco and other big grocery stores.
Première Moisson Bakeries wants also to evolve in order to answer the changing needs of a gourmet clientele that wants to eat well and healthy.
PROBLEM / OPPORTUNITY
Market risk
Première Moisson needs to sell to a larger segment of consumers.
Première Moisson wants to expand the company even more because they want to penetrate the Quebec and Ontario markets.
Now the company has an established clientele in the Greater Montreal Region.
There are several products that are now competitive on the market basically same products that Première Moisson is offering.
The competition is made of small artisan bakeries.
Première Moisson needs to be more innovative.
Première Moisson wants to implement the same concept of the production of healthful products prepared in a way in which the tradition is maintained.
Première Moisson wants to apply the concept of smaller stores, mass distribution of bread in stores such as Costco and other big grocery stores, as there is an unexplored market there.
According with the market study that has been done, the business is only profitable for specific locations were there are at least 100,000 people and were there is a big concentration of families with mid to high income.
Première Moisson wants to expand in Canada and the United States by establishing franchises in these geographical areas. They do not know these markets.
Expansion is possible in many regions. More likely, based on the market study provided by the client, the interest is located in Quebec City and / or Ottawa. The owners would like to venture into partnerships with local entrepreneurs in these locations. Première Moisson needs to study the potential market of these locations that show an important population base and a good traffic flow in order to justify a high level of sales needed to be profitable.
To summarize their expansion plan we have the following:
• applying same concept in the Province of Quebec as well as the rest of Canada,
• the implementation of a modified concept on the United Sates market,
• the potential adaptation of the concept to smaller stores,
• mass distribution of bread in stores like Costco and other big grocery stores,
• establishing franchises in the far regions of Canada and the United States.
Marketing is standardized.
Organizational risks:
Première Moisson wants to keep the culture of tradition and the authenticity of their products while expanding the market which could be a challenge outside of their network and on long distance basis. The bakery business is a family business and the family has the control of it.
There is a challenge in finding people in the other geographical areas to trust that are able to adjust to the philosophy and culture of Première Moisson.
The ``Affiliation`` could be difficult to be accepted by different partners, so it may need adjustments.
Technical risks
Première Moisson needs on site trained bakers for the smaller store concept.
Première Moisson wants to implement their vision and concept to smaller stores, and to mass distribution of bread in stores like Costco and other big grocery stores.
Products, production processes are standardized
Technological risks
Première Moisson was always innovative however authentic (the authenticity of the bakery is centered on a fireplace oven in the middle of the shop).
The company has the “know-how” and its employees/bakers know how to use it (they were hired for their expertise and experience in the field).
The product is a mixed concept of styles between tradition and the newest trends in the food industry: healthy and ready-made foods.
The technology is innovative because it uses tradition and authenticity.
The bakery product requires additional adjustments and variation in order to be innovative and in order to distinguish them from the competition.
Products, production processes are standardized
FACTS AND FACTS ANALYSIS
Legal feasibility: NOT MENTIONED IN THE CASE STUDY
Environment feasibility: NOT MENTIONED IN THE CASE STUDY
Political feasibility: NOT MENTIONED IN THE CASE STUDY
Social feasibility: NOT MENTIONED IN THE CASE STUDY
1. Financial feasibility
Première Moisson Bakeries evolved on the market by having a strategy based on quality, innovation and diversification.
Première Moisson Bakeries created the Affiliation concept which is about:
- A proprietorship agreement to manage the shares and rules of financing
- An affiliation agreement that states the rules of operations and the image and positioning of the Première Moisson Bakeries.
This concept helped the business grow and helped to spreading of other bakeries all over the Province of Quebec.
In 1999 Première Moisson Bakeries had 11 stores which generate annual sales of $23,000,000.
Première Moisson Bakeries is still under the family’s control.
Première Moisson Bakeries`s sales are soaring and profits are increasing.
No major financial risk
2. Market feasibility
Strategy is:
Première Moisson Bakeries want to build the company even more to go from an Regional business to a National and International (USA) business.
Première Moisson wants to expand in Canada and the United States by establishing franchises in these geographical areas and by applying the concept of smaller stores, mass distribution of bread in stores such as Costco and other big grocery stores (strategy is based on quality, innovation and diversification).
Première Moisson Bakeries wants also to achieve growth by answering the changing needs of a gourmet clientele that wants to eat well and healthy, that will make the business more competitive.
At the same time more products were added to the list of goods produced and sold in the bakery such as fine pastries, delicatessen meats and prepared meals.
Première Moisson Bakeries reorganized the business around the new trends in agri-products towards healthy and ready-made foods.
Marketing is standardized.
Demand (client)
The food trend is going towards a healthy lifestyle and that is basically directing the consumers to make more smart choices such as organic food.
Demand is increasing for the healthy and ready made foods, as well as organic flour, jams, etc.
Première Moisson was always able to follow the demand, concentrate on target markets that evolve and adapt to the food trends of each decade.
The growth of Première Moisson Bakeries is due to the 11 stores (generate annual sales of $23,000,000) based on the ``affiliation`` agreements.
There is clearly a demand of the organic products that Première Moisson is providing.
Supply (competitors)
Première Moisson Bakeries has a competitive edge based on innovation and diversification.
Première Moisson Bakeries has a network of affiliations (11 stores).
Première Moisson Bakeries is trying to rethink its choices and concepts in order to innovate.
Main competition is made of small artisan bakeries such Au Pain Dore, however the fact that Première Moisson Bakeries opened small restaurants as part of their regular business, the competition expanded to every eatery in the area.
Première Moisson Bakeries tries to distinguish itself from competition adding a little extra (products such as organic flour, jams, coffee, small space for a restaurant, etc)
Première Moisson Bakeries knows the industry and its competition.
There are no entry barriers, however based on Première Moisson Bakeries`s experience, the costs to entry this particular industry are high.
The industry has an increasing competition.
Marketing strategy (product, price, distribution, promotion) ; marketing is standardized
Première Moisson Bakeries offers a complete package of bakery products and delicatessen meats and prepared meals.
Première Moisson Bakeries has multiple products (hand made breads, croissants, pies, fine pastries, delicatessen meats, prepared meals, organic flour, jams, coffee, etc) and services of sales as well as small space for restaurants on site which makes Premiere Moisson to be a bakery, deli and cafe all rolled into one.(this is a competitive advantage)
Première Moisson Bakeries is using a Diversification strategy.
Première Moisson wants to expand in Canada and the United States by establishing franchises in these geographical areas and by applying the concept of smaller stores, mass distribution of bread in stores such as Costco and other big grocery stores (strategy is based on quality, innovation and diversification).
The distribution of the products is done on the site of the bakery and affiliations (stores).
The prices provided seem to be reflecting the quality-price ratio.
They are focusing on promoting of healthful products prepared in keeping with authentic bakery, delicatessen meat and pastry hand-made traditions.
3. Organizational feasibility
Première Moisson wants to keep the culture of tradition and the authenticity of their products while expanding the market which could be a challenge outside of their network and on long distance basis.
The bakery business is a family business and the family has the control of it however they expand through a system of affiliations; however the partners were all in family’s entourage. Liliane Colpron showed always an entrepreneurial spirit.
The ``Affiliation`` could be difficult to be accepted by different partners, so it may need adjustments.
Première Moisson has a very dynamic team and competent and loyal staff (experts chosen among friends)
Première Moisson Bakeries went from an initial investment of its first store of $500,000 and a loss in first year of operation of $100,000 to net sales of 2,000,000 a year, an average of $40,000 per week and an average purchase of $9 per client for the second store were the initial investment was $900,000.
After 8 years after the opening of the first boutique Première Moisson Bakeries managed 11 affiliations in the Montreal region.
In 1999 the 11 stores were generating annual sales of $23,000,000 which was a proof of the financial and commercial success of the business.
The structure was adjusted to the form of affiliation in order to fit the needs of rapid growth of the company. Administration is standardized.
One identifiable risk: There is a challenge in finding known people or family in the other geographical areas to trust that are able to adjust to the philosophy and culture of Première Moisson.
4. Technical feasibility
Première Moisson needs on site experts bakers for the smaller store concept.
Première Moisson is both the producer (baker) and the distributor of its products (seller).
Première Moisson wants to implement their vision and concept to smaller stores, and to mass distribution of bread in stores like Costco and other big grocery stores.
Products and production processes are standardized.
One identifiable technical risk: There is a challenge to find experts in other geographical areas that have the same level of expertise, and to have exactly same know-how as the ones that are now working for Première Moisson Bakery.
5. Technological feasibility
Première Moisson made sure that its employees have expertise and experience in the field, so the employees are very competent specialists.
Following trends is key in this company as in the 8 years following the opening of the first Première Moisson Bakery they went through 4 major renovations in order to keep up with the current trends. Products, production processes are standardized
Première Moisson has an innovation strategy.
The fact that daughter Josee has a degree in marketing and that she is managing the commercializing side of the business implies the company spends funds in R&D of new products, packaging, merchandizing and sales.
One identifiable risk: The bakery product requires additional adjustments and variation in order to innovate and distinguish themselves from the competition even more.
Première Moisson needs to find a technology that allows to keep a traditional making of the bread on site and at the same time to be able to have a mass production.
IDENTIFICATION OF THE OPTIONS AND ANALYSIS OF THE OPTIONS
ANALYSIS OF THE OPTIONS
Problem 1: Market risk
Expansion is possible in many regions. More likely, the interest is located in Quebec City and / or Ottawa. The owners would like to venture into partnerships with local entrepreneurs in these locations.
Première Moisson wants to expand in Canada and the United States by establishing franchises in these geographical areas and by applying the concept of smaller stores, mass distribution of bread in stores such as Costco and other big grocery stores (strategy is based on quality, innovation and diversification).
Option 1
In order to expand in the Region of Quebec as well as in Ontario, an option would be to open small stores in already existing food businesses such as Costco, Marche Frais, Byward Market, etc. These stores should provide for starters only the bakery products that make Première Moisson unique. In order to penetrate the desired markets they should only provide the products that sell best and guaranteed such as: breads, baguettes, croissants, etc. (they should not start with all products at the same time but rather gradually)
These small stores should be operated by the affiliation’s co-owners under the close guidance of the owners.
Advantages:
- The clientele already exists; (if they are looking into buying fresh vegetables and fruits they will also look into buying fresh organic bread)
- High level of sales will be ensured;
- There is no need for a big space;
- Small inception investment;
Disadvantages:
- There is already a huge variety of bakery products on the market thus it could be difficult to match the prices, the average of $9 per client purchase in a store which is not a specialty store could be considered too expensive (assuming the purchases are bakery products only),they may need to drop the prices; they need a competitive edge.
- The consumers may not see the quality of the products as they will associate the product with the cheap price (Costco)
- The small space will not allow to have on site baking cycle which requires a specific length of time - so they will need to find a different technology to ensure the freshness of the products
Option 2:
The potential adaptation of the concept to smaller stores: go for a catering market and ready to go stores.
We are suggesting that Première Moisson should target the vineyards in the desired areas and providing them with the ready-made foods as well as with fresh baked breads, especially for the Ontario and United States market.
The reason for this edgy move is based on the market study which shows that the prepared meals are particularly interesting in Ottawa market and by extension we believe this would apply to the United States market as well. This will also address the implementation of a modified concept on the United Sates market as well as establishing franchises in the far regions of Canada and the United States.
We based our suggestion of going after the vineyards on the “outside of box” thinking that Ms Colpron showed along her business life.
We also based our idea on the fact that there are several vineyards in these areas that are touristic attractions and big revenue makers (Niagara, Ottawa, Orangeville, Oshawa, Owen Sound, Peterborough, Richmond Hill, Scarborough, etc).
What can be a more authentic French food habit than enjoying wine tasting while serving fresh baguettes?
This approach is targeting mainly an Anglophone segment of population and in our opinion will be a huge and unexplored yet opportunity.
Advantages:
- The clientele already exists as there are tours organized for visiting these vineyards;
- The food that is provided could be catered directly to the desired location from the closer Première Moisson store in the area;
- There is no workforce required unless the site at the vineyard should become permanent (only for the southern vineyards from United States)
- The catering service could be provided for social events, business function, etc.
- No competition;
Disadvantages:
- Is seasonal in Canada;
- Could request transportation costs for the catering service;
- It requires the existence of ready to go stores Première Moisson in the same areas
- The catering could be risky due to quality depreciation in case of inadequate storage and preservation of the delivered products;
- Liability issues could arise due to food intoxication lawsuits.
Option 3:
Go for direct distribution of goods in supermarkets such as: Loblaw’s, Loeb, Super C, IGA, etc as well as for trendy new places in central locations (such as coffee bistros), this will address the mass distribution of bread in stores like Costco and other big grocery stores.
Advantages:
- There is an established clientele;
- The goods can be delivered directly from the source;
- These places already have on site bakeries, so there is no need for trained experts on the site, meaning that pre-frozen could be delivered to these places in case it is decided that the products should be final baked in store.
Disadvantages:
- Needs to decrease price as part of the deal with the supermarkets
- Transportation costs for delivery of the products
- No control over end product in case is final baked in store (if is well enough baked, etc)
- It requires mass production thus industrialization of Première Moisson
- There are already similar products provided by competition.
Option 4:
Première Moisson should continue opening more same kind of bakeries in the Great Montreal area in the new developed housing areas (which have a population of at least 100,000) - applying same concept in the Province of Quebec as well as the rest of Canada.
Advantages:
- Known market
- The brand is already known by the consumers in Montreal region,
- It proved the system works.
Disadvantages
- Competition is made of all eateries that exists already in the Montreal area
Quantitative analysis: Assuming that the number of clients is 100,000, and there is retention of 100% and the average purchase per client is steady at $9 and the initial investment is $900,000. Break even moment will be after 1 year of functioning. Revenues from 100,000 clients over 5 years Retention 100% start after 1 yrs after 2 yrs after 3 yrs after 4 yrs
Number of clients/day 100,000 100,000 100,000 100,000 100,000
Set-up cost 900000
Gross Income 900,000 900,000 900,000 900,000
Cumulative Income -$900000 0 $900,000 $1,800,000 $2,700,000 Problem 2: Technological risks
The bakery product requires additional adjustments and variation in order to innovate and distinguish themselves from the competition even more.
Première Moisson needs to find a technology that allows to keep a traditional making of the bread on site and at the same time to be able to have a mass production.
Option 1:
Première Moisson could buy a frozen raw bread dough factory and use this technology to make frozen or semi-frozen bread (and pastry products in general) than can be delivered to the stores directly which can be baked for less of time on site (like any semi-cooked pie that could be found in any grocery store only better and organic in our case, and which requires a time of 15 minutes oven final baking).
Premiere Moisson should go industrial.
Advantages:
- Ms Colpron knows already the business of frozen dough and probably still has the network that she used to have back on her “frozen raw bread dough” days.
- Allows mass production of bakery products (bread, baguettes, croissants, etc)
- Eliminates some of the processes involved in the making of the bread on site however still keeps the freshness and the wonderful aromas which in terms reduces the baking time, which in the end will increase the production on site hence: more sales and mass production and distribution;
- Addresses at the same time the technical risk, meaning that they do not need necessarily experts qualified bakers on the site that are so hard to be found (they could be apprentices instead)
- By going industrial (mass production) Premiere Moisson will be able to distribute their products to large supermarkets such as Costco as well as any small independent bakery;
Disadvantages:
- Investment cost could be high for such a factory;
- Finding specialists in this particular specialty could be difficult;
- Needs an agreement with a truck company for delivery;
- Could imply buying trucks instead of renting, that will generate a technical risk and a bigger investment;
- May be not well received by the consumers (small risk though)
- Ms Colpron may had signed a clause of no competition when she sold the factory of raw dough to Heinz. This can be addressed if Premiere Moisson is using the known technology only to come up with a different product – semi baked bread and which will be used only for their business.
Option 2:
Première Moisson is big in agri-food products and it was said that the company reorganized the business around this trend. An example of diversification in this direction is the selling of jams and organic flour in their stores.
The bakery products are made of organic flour, which is made of organic wheat. This will leads us to the logical conclusion that Première Moisson should buy a mill, and secure agreements with farmers for organic wheat (and any other kind of cereals they use in the making of their organic bakery products) and for organic meat (for their organic deli products) so they will be able to diversify in a complete different direction than the one they are heading to now.
Advantages:
- Première Moisson will have total control on the delivery of the flour to the frozen dough/bread factory so it will eliminate any boycott from suppliers and any delay in production;
- They can reduce the price of their finite products (lower production costs);
- They can produce more organic flour;
- They can produce deli products made only with organic ingredients and meat (by having agreements with organic meat farms);
- Première Moisson will control the quality of the wheat and seeds that they use in the making of the bread this way they will create new variety of bakery products;
- Première Moisson could diversify their products to unlimited options; in fact the bakers can become more creative if they know what kind of products the mill can provide and even more: they can suggest what kind of products they need for certain end results, so custom made flour and ingredients;
- Première Moisson will control the quality of the flour that is being produced and that will ensure high quality fresh products;
- If they have agreements in place with the farmers for organic crop, then they will also obtain exclusivity with these farmers – so cheaper prices, and Première Moisson will also help to the development of that area (either Quebec farmers or Ontario farmers) and that will give them a very good image in the community; that is also good for environment as there will be no pesticides to be used.
- They could sell the products to other bakeries – achieving vertical integration based on diversification.
Disadvantages:
- The weather could be a risk factor as it will dictate the success or the failure of the crop in the sense that it could be a bad year for the agriculture; too humid wheatear generates bad wheat, thus more problems in obtaining high quality flour or even worse they may end up importing the wheat, which means bigger production costs;
- The competition could retaliate (although seems unlikely)
- High barrier of entry – high initiating costs
- Requires also a packaging line for the flour; (additional costs)
Problem 3: Organizational risks
There is a challenge in finding known people or family in the other geographical areas to trust that are able to adjust to the philosophy and culture of Première Moisson.
The business model used is a combination of partnership and franchise characteristics. The concept is called affiliation.
Première Moisson wants to keep the keep the culture of tradition and the authenticity of their products while expanding the market which could be a challenge outside of their network and on long distance basis.
The affiliation has two parts – two agreements that need to be signed. They are:
- A proprietorship agreement to manage the shares and rules of financing
- An affiliation agreement that states the rules of operations and the image and positioning of the Première Moisson Bakeries.
Option 1:
Première Moisson should attract a new generation from among family members and entourage. They should cultivate the passion about the bakery business among a younger generation of bakers.
Advantages:
- New blood coming into the business so new ideas can emerge;
- The trainees of today will be high trustworthy experts of tomorrow;
- Maintaining the vision and the philosophy of Première Moisson
Disadvantages:
- Takes time to grow a new generation
- Learning curve
- Training costs
- There may be a shortage of people wanting to go in this business among the family members or friends
Option 2:
Première Moisson could also opt for a mixed kind of management which should be half-half, meaning one manager from Première Moisson and one manager from the affiliate on the site. The affiliate although not a member of the family or from among the bakery network known by the owners should be chosen to have same values as the owners and from the bakery or food industry community in the area of interest.
Advantages:
- Première Moisson’s rep knows the business
- Ensuring the philosophy of Première Moisson is preserved and transmitted to the affiliates
- The Première Moisson’s rep does not need to be permanent on the site, he/she could only travel there periodically (or being there for two weeks, and then back home, etc)
- The affiliates are the cornerstone of the Première Moisson organization.
- The affiliates will be committed to their customers and engaged in their communities,
- The affiliates are representing the face of the organization to customers every day.
- The affiliates will have the full support of the brand Première Moisson which stands for quality, innovation and authenticity.
Disadvantages:
- May require the relocation of the Première Moisson’s rep as it may not be possible to just visit or be there a short period of time; it may require a permanent presence on the site
- There may be no willingness from the existing Première Moisson staff and family members to actually relocate or travel
- Costs of travel or relocation
- Costs of training the affiliates
- May hinder the relationship with the affiliate as this arrangement could be perceived as supervision or mistrust.
Problem 4: Technical risks
Première Moisson needs on site experts bakers for the smaller store concept.
Première Moisson is both the producer (baker) and the distributor of its products (seller).
Première Moisson wants to implement their vision and concept to smaller stores, and to mass distribution of bread in stores like Costco and other big grocery stores.
Products and production processes are standardized.
There is a challenge to find experts in other geographical areas that have the same level of expertise, and to have exactly same know-how as the ones that are now working for Première Moisson Bakery.
Option 1
Outsourcing, hiring locals and bring the personnel to training to the headquarters.
Advantages:
- The new employees will embrace the philosophy of the company.
- The new employees will get the “know-how” in exact same manner as the original stores
- The new employees will see the process of learning as an attractive opportunity to learn French bakery styles that are embraced by the experts of Première Moisson Bakery.
Disadvantages:
- Expenses in training
- Expenses in transportation, travel and accommodations
- Control can be lost easily once they are on their own back to the new open store
- Learning curve, takes time to become an expert baker, so the brand can be damaged in the process of learning at the new open store
- The new batch of newly trained experts could ask for more money due to different level of salary in a different geographical area
- There are not people from the “circle of trust” of the family.
Option 2
Relocation of the existing experts to the new locations could be a solution.
Advantages:
- They have the “know- how” and they know how to use it
- They do not need training or start learning
- They know the product itself, so in case the customers are asking specific questions about a particular product the experts can answer
Disadvantages:
- High cost of relocation of the experts and their families
- The experts need to adjust to the new customers’ habits
- Cultural/geographical adjustments may be necessary
Option 3
A mix of the two: hiring local work force and having one expert on site
Advantages:
- Cheaper costs of training, as the expert can provide training on site
- Having control over quality of the production
- Overall low cost of the workforce
Disadvantages:
- Training costs for the new employees
- Learning curve
- Expense of relocation or travel of the experts hired
The numbers provided by your representative are not sufficient for us to perform a quantitative analysis for each option presented such as Cost-Benefit analysis. We could however contact your representative and ensure the necessary information is transferred to our consultant, and we could provide you with such analysis at a future date, date agreed by both parties.
RECCOMMENDATIONS AND ACTION PLAN
1. Based on our analysis and on the market study that was provided to us, we PM Consulting Inc are recommending that client can go ahead with the distribution of their breads at Costco and in selected grocery stores in Quebec and Ontario.
We also recommend that client seeks partnerships with Super C, Marche Frais, Loblaw’s, Loeb and IGA.
The client should wait for market penetration in United States until the economical crisis is fading and under control.
Action Plan
In order to expand in the Region of Quebec as well as in Ontario, an option would be to open small stores in already existing food businesses such as Costco, Marche Frais, Byward Market, etc.
The Première Moisson should provide for starters only the bakery products that make Première Moisson unique.
In order to penetrate the desired markets they should only provide their best sellers such as: breads, baguettes, croissants, etc. (they should not start with all products at the same time but rather gradually)
These small stores should be operated by the affiliate’s owners under the close guidance of the owners. Première Moisson should seek partnerships with: Costco, Super C, Marche Frais, Loblaw’s, Loeb and IGA.
2. We are suggesting that Première Moisson should target the vineyards in the desired areas and providing them with the ready-made foods as well as with fresh baked breads, especially for the Ontario and United States market.
Although this endeavor could seem risky at the first glance, our recommendation is based on the market study which shows that the prepared meals are particularly interesting in short term for Ottawa market and in long term we believe this would be a good opportunity for the United States market as well.
We based our idea on the fact that there are several vineyards in these areas which are touristic attractions and big revenue makers (Niagara, Ottawa, Orangeville, Oshawa, Owen Sound, Peterborough, Richmond Hill, Scarborough, etc).
This will target specifically the Anglophone segment of population in the Ontario region.
Action plan:
We recommend that Première Moisson Bakeries to go for a catering market and seek partnership with vineyards owners.
3. PM Consulting Inc is recommending that Première Moisson continue to expand by opening more signature bakeries in the Great Montreal area in the new developed areas.
4. We recommend that Première Moisson to go industrial.
Action Plan
Is imperative for Première Moisson to buy a frozen raw bread dough factory and make frozen or semi-frozen bread and pastry products than could be delivered to the stores directly in order to insure mass production possible on site stores.
5. We recommend that Première Moisson buy a mill and secure agreements with farmers for organic wheat and for organic meat.
Action Plan
Première Moisson should look into the milling market and find a mill for sale, mill that is equipped with high end technology and packaging lines. If buying is not financial feasible at the moment we recommend going in partnership with a mill for securing this portion of the market. This way Première Moisson becomes supplier, producer and vendor at the same time. We also recommend that Première Moisson should look into acquiring a fleet of transportation trucks for the same reason above mentioned. This is also part of a vertical integration.
6. We recommend that Première Moisson starts a school to prepare the new generation of experts bakers.
Action Plan:
Première Moisson should provide Coop plans to interested people that either part of their family, or friends or even nurture a complete independent reliable young generation from outside the circle of business.
We also recommend keeping the affiliation system ongoing as is proven to ensure the success of the business. CONCLUSION
We recommend that a more in depth financial feasibility study to be conducted in order to provide you with a quantifiable analysis which at the moment is not available due to resource limitation.
We concluded that there is a sufficient demand for the food products that you are offering to the market however the highly competitive status of this market and the impact of the economical crisis on customer’s income can become an issue.
We are recommending that Première Moisson Bakery continually expand and in addition of products being available in your bakery locations, to start contracts with selected grocery stores in Québec and Ontario, as well as at Costco.
We are suggesting that Premiere should also expand through ready to go stores, offering catering services as well.
We the PM Consulting Inc’s team are recommending analyzing, planning, developing and implementing a specific action plan that will help you achieving your stated goals.
Thank you for contacting our company, we are looking forward to meeting you for necessary arrangements for a complete feasibility study.
