Salvador’s is an authentic Hispanic food manufacturer, producing salsa and chips. Their products are high quality and affordable. Salvador’s has now been in business for 3 years and has gained popularity. The business was initially targeted only at the Hispanic population, but it has expanded to appeal to many more people.
Salvador’, has several goals for the next three decades. The first is to achieve a sales increase of two million dollars per year. Salvador’â€™s also wants gross margins higher than 55%. Salvador’s also hopes to have 40 different outlets that will distribute their product. They aim to be the best Hispanic food producer in the region with an expanding geographic distribution.
Salvador’’s currently has two main product lines. Their salsa, their flagship product, is highly acclaimed for its freshness. Originally introduced in one temperature, hot, the market demand has asked for milder temperatures and Salvador’s has responded with both a medium and mild version. Salvador’s also offers fresh chips with both yellow and blue corn to complement their salsa.
Salvador’s has targeted three main customer groups to sell their products to. The first is grocery stores. These grocery stores will then be sold directly to the consumer. This segment is growing at 75% and there currently are 53 potential customers. The second group is wholesale distributors. This market is expected to grow at 100% and has five potential distributors. Restaurants are the last segment with a growth rate of 45%. There are now 18 potential customers for restaurant business. Salvador’s originally targeted the Hispanic communities. The market has indicated that their products have broader appeal and Salvador’s has recognized this and acted accordingly. The Hispanic community was targeted initially because of its incredible growth rate. The community has grown at 22% per annum, which is almost twice the average growth rate for the US overall population.
While there are many competitors at the mid price point, both regional and national, there are few direct competitors at Salvador’s high price point. Salvador’’s can take advantage of this situation to continue being the leader in authentic Hispanic cooking.
Salvador’s strong management team, Ricardo Torres (Pat Torres), will ensure long-term growth. Pat has 12 year experience in the food and beverage industry. The five previous years were spent as a manager at a four-store Tex-Mex chain. Pat gained incredible industry insight that helped to strengthen the decision to start a new business. Ricardo brings Salvador’s over six years of financial control experience that was gained as a CPA with Arthur Andersen. Salvador’s management team is seasoned and will assist in Salvador’s dream to become the top Hispanic food producer.
Salvador’s has reached profitability and expects to make a modest profit over the next three years. Sales will generate a modest profit margin. This plan also highlights the excitement of the business.
- In the next three to five years, we will see a dramatic increase in sales.
- Gross margins should be increased by % over current product lines and maintained at the same level.
- To meet market demand, you can add products and/or services at a high margin.
- Increase inventory turnover and reduce the cost of goods while maintaining high quality products.
- To offer Hispanics rewarding and satisfying jobs.
Salvador’s hot salsa is authentic and made with love. It has a rich history that reflects the Hispanic community. These recipes, which have been handed down through generations, are full of ethnic heritage. Consumers with knowledge were searching for authentic products made from the finest ingredients. Consumers were ready for a new experience. They wanted real down home Hispanic salsa.
Salvador’s responded with its hot salsa, then milder and extra hot salsa, and then yellow and blue chip corn chips. We continually evaluate what is on the market and what we can offer to satisfy the customer’s needs.
In a market driven solely by consumer demand, our success will depend on improving what is already available and providing new services and products to those in need.
1.3 Keys to Success
- High quality products that are distinctive in taste and value.
- Service and support to dealers.
- Increase gross margin by %
- Increase sales volume by adding new products.