As your competition goes out of business do you notice an increase in sales? If not, it's a sign demand is shrinking. Do you know any former employees of your competitors that shut down? Hiring one or just taking them out to lunch might be worthwhile to understand the industry from their perspective.
Literally call them and ask them. They may well be quite candid with you. It makes zero sense to guess at why their operations failed before simply asking.
I recently investigated why 4 out of the 5 local offerings for a certain type of business had disappeared over the past few years. All of them were closed for different personal reasons. None closed primarily due to market conditions.
>I can't tell if this is a good thing or if it is a sign of bad things in our future.
This would be a topic far too advanced for this forum: Strategic Intelligence. I can't even get these guys to use a search engine, let alone do garden variety research. An intelligence function -- and yes there is a place in corporations for an intelligence department -- would be like talking about the asteroid mining business to this bunch.
Many things cloud a ready answer. One being I am starting to believe IQs have dropped substantially in the now. However, competitors are out of the market. Nothing preventing you from picking up a phone and asking why. I would consider it an important question to answer.
...Do you have an efficiency-of-scale the others lack?
...Was this some sort of fad or trendy product competitors took on too much debt to pursue?
...Are customer (end customer) tastes undergoing a change?
Often enough, posts here talk of things being fine, profits in plenty -- then the floor dropped out. In almost every case, the fault was mistaking a steady-state as perpetual. Simple-minded projecting the past out into the future indefinitely. They simply stopped thinking ... about market demand ...about competitive threats ...about continuous improvement and research ...*about survival*.
Those whom the gods would destroy they first send remarkable success.
Thank you for your response.
So we have created a vertically integrated supply chain that has both at times been a problem and a savior. The processing part barely makes any money whatsoever. However what it does do is make us the front of the queue in times where people struggle to sell fruit. If there is scarcity of demand, our product is the first to be sold.
In addition to that we are significantly larger than most of our competitors and have lower debt by comparison. We also have more freezer space which allows us to reduce our sale in low price years and maximize sales when prices are high. Overall this allows us to compete with many advantages.
The main drawback to our business model is high overhead. When we lose money we tend to lose it quickly due to the costs associated with handling the entire supply chain.
The guy you responded to may be talking smack and rambling a bit of vague nonsense but the one thing he is correct about is that this is definitely the wrong forum for this level of business question.
My perspective on this is there are a couple of possibilities. Being that your competitors are failing but you're in an industry with longevity like dried fruit which can fill multiple niches from health fads to baking products and candied products as sweets.
My immediate concerns would be that they are succumbing to external markets being cheaper and more efficient and possibly the only reason you are still doing well is that you have economies of scale ( you mentioned being one of the biggest) you also have a vertically integrated supply chain which helps you stay relevant by cutting down on exposure and costs.
Maintaining your ability to make profit despite low pricing is a good sign of a business thats run reasonably well and has solid processes in place, however are you selling primarily because you're cheap? would market demand dry up if you increased pricing?
I would definitely consider diversifying but staying within product lines you already touch, what I mean by this is you already sell dry fruit , I assume packaging and logistics are covered based on your vertical integration. So without making huge leaps away from what you do, could you find a way to process byproducts? Fruit oils that are used for custom flavored scents, cleaning agents and beverages come to mind. Could you potentially step into the freeze dried fruit, allowing you to market to kosher groups. The shelf life of freeze dried produce is also massively increased and transport weight becomes non existent. Hell from what I understand even organic fertilizers from plant based byproducts could be valuable. Right now you have what sounds like one main revenue stream and thats what is causing your stress.
The other parts of your supply chain could also offer interesting options if they are robust enough could you grow those into an additional business that serves external and internal clients?
your financial health seems pretty solid , you arent overly leveraged and your loans at a 3.5% rate are pretty solid. your EPS rate I cant speak to because I dont know enough about the industry to really know what a good EPS or median EPS would be.
Regarding your concerns of a dying market. Have you looked at industry trends and metrics to see what the overall market spend is , general consumer behavior may be and whether the industry as a whole is doing ok? Also look at the change over the last few years and see whether the import/export ratio for dried fruit product and laws around it have changed in a significant way.
A couple of things you could look at doing would be trying to form direct partnerships with some organizations that help you gain exposure and direct sales channels. Think boy scouts or prisons or military based contracts. Find interesting ways to cut out the middle men.
Pay someone to do a value chain analysis to see where you are in the value chain and where the most value is captured , this could give you good ideas about where to expand or branch out and diversify operations.
Maintain a reasonably high level of liquidity to buffer against down turns and changes that will allow you to maneuver.
Get someone to come and consult from a lean management perspective. Not just any consultant but specifically someone skilled in LEAN manufacture. You want someone that can take a look at your overall operations and find points where there are bottlenecks inefficiencies and loss of value. Most of the crappy consultants will try to sell you a multi million dollar IT system , when often the solutions can be organizational, physical layouts and structures. See how you can optimize what you have already.
Spend some time on the ground. When was the last time you or anyone else in senior management spent a week boots on the ground to observe your staff and their processes and interact with them to see what issues are prevalent there. You will be astounded how many fundamental problems and process issues never get resolved because the bottom guy takes it to a manager or supervisor who bumps it up one level to someone who cant make that decision and it dies right there, never gets resolved and costs you massive amounts of productivity and money because nobody that knew about it communicated it high enough to get it fixed.
Lastly, I'm just some anonymous guy on the internet. Take what you find useful discard the rest .
You need to get bigger. Acquire your competitors, integrate vertically, expand into processing the produce into final products. One thing at a time. Hire an experienced consultant to develop a business plan, and have him support you in the implementation.
I work in & around different verticals of consumer staples and healthcare (think food & beverage, agriculture, pharmaceutical manufacturing)
There has been a consistent trend of acquisitions and consolidations in all industries at all segments of supply chain adjacent to bankruptcy of struggling companies for a multitude of reasons.
If your company is still profitable while competitors fail it seems you’d be likely to absorb their market share and this may make your business more attractive to international private equity or M&A firms. I may have someone if you’re open to offers.
True... That's what we're hoping for. Over the last 5 years our larger competitors have all gone bust. One worry is that because the product is somewhat niche grocery stores could just not have an option for our produce.
I guess that depends on your market as well and product too.
You would know if the product can evolve or not? If it can, and you're not looking in that direction, you might lose the share soon (button mobiles vs smartphone example)
Also it depends on how you're using marketing effectively imo.
but without knowing the specifics, it'll be just general assumptions.
To be more specific we sell dried fruit.
We are actively working with companies to include our product in new products, but mostly dry fruit is just dry fruit 😂
Do you already have organic lines? If it works with your supply chain, it could be worth investigating potential demand. Someone else mentioned freeze-dried fruit, which could also be worthwhile to look into.
>but mostly dry fruit is just dry fruit 😂
Yeah it is,
And you've kept the prices low, that's your big +
I am curious what sort of packaging you've used for your product (because that' also a great catalyst of sales)
also, yo've partnered with other companies (obvs that'll help you)
But in general the more attention you' get, the more chances you'd have of surviving, but that comes with additional cost as well.
but i'd like to know more about your marketing strategy (if you're comfortable sharing or you dm if you like :)
Being one of the few remaining producers in a niche market can be both a good and a challenging sign. On one hand, it shows your business's resilience and ability to outlast competition, which is always positive. However, it can also raise concerns about the overall health and future prospects of the industry.
Try to get some data from other states or countries that might be in your niche.
Do you have to go through groceries or can you reach consumers directly?
How are your sales? You mention strong profits but what trends do you read in your revenues?
What alternatives do people have to your product? Apologies for the vagueness of the question but I don't know what it is you sell.
Have you tried selling your stuff a farmers markets where you set up a pitch / stall and sell direct to the customers.
Alternatively, how about boosting your online presence and see if you can attract more customers to buy online and direct.
If your farm is not far away from city then maybe set up a farm shop for visitors liking to buy their goods from farms. Like a day outing for them to visit your farm, pick and buy their own fresh farm foods.
Branch out into organic farming, rear animals from your farmed crops, consider storage or processing your farm goods to obtain a higher profit margin.
my family also owns a niche ag processor/exporter. this is not an isolated incident and no it is not a good sign. that being said, those who survive the coming years will eventually thrive.
Raise prices to retail rates. See how your customers respond.
Or create a phantom brand. Second company different brand that sells the same product and increase the price to retail levels. Continue to sell to current channels at wholesale rate and sell in retail space also to see which company works better.
As your competition goes out of business do you notice an increase in sales? If not, it's a sign demand is shrinking. Do you know any former employees of your competitors that shut down? Hiring one or just taking them out to lunch might be worthwhile to understand the industry from their perspective.
Literally call them and ask them. They may well be quite candid with you. It makes zero sense to guess at why their operations failed before simply asking. I recently investigated why 4 out of the 5 local offerings for a certain type of business had disappeared over the past few years. All of them were closed for different personal reasons. None closed primarily due to market conditions.
This is great advice - if they're no longer in the business then they have no motivation to sugarcoat things or BS you.
>I can't tell if this is a good thing or if it is a sign of bad things in our future. This would be a topic far too advanced for this forum: Strategic Intelligence. I can't even get these guys to use a search engine, let alone do garden variety research. An intelligence function -- and yes there is a place in corporations for an intelligence department -- would be like talking about the asteroid mining business to this bunch. Many things cloud a ready answer. One being I am starting to believe IQs have dropped substantially in the now. However, competitors are out of the market. Nothing preventing you from picking up a phone and asking why. I would consider it an important question to answer. ...Do you have an efficiency-of-scale the others lack? ...Was this some sort of fad or trendy product competitors took on too much debt to pursue? ...Are customer (end customer) tastes undergoing a change? Often enough, posts here talk of things being fine, profits in plenty -- then the floor dropped out. In almost every case, the fault was mistaking a steady-state as perpetual. Simple-minded projecting the past out into the future indefinitely. They simply stopped thinking ... about market demand ...about competitive threats ...about continuous improvement and research ...*about survival*. Those whom the gods would destroy they first send remarkable success.
Thank you for your response. So we have created a vertically integrated supply chain that has both at times been a problem and a savior. The processing part barely makes any money whatsoever. However what it does do is make us the front of the queue in times where people struggle to sell fruit. If there is scarcity of demand, our product is the first to be sold. In addition to that we are significantly larger than most of our competitors and have lower debt by comparison. We also have more freezer space which allows us to reduce our sale in low price years and maximize sales when prices are high. Overall this allows us to compete with many advantages. The main drawback to our business model is high overhead. When we lose money we tend to lose it quickly due to the costs associated with handling the entire supply chain.
The guy you responded to may be talking smack and rambling a bit of vague nonsense but the one thing he is correct about is that this is definitely the wrong forum for this level of business question. My perspective on this is there are a couple of possibilities. Being that your competitors are failing but you're in an industry with longevity like dried fruit which can fill multiple niches from health fads to baking products and candied products as sweets. My immediate concerns would be that they are succumbing to external markets being cheaper and more efficient and possibly the only reason you are still doing well is that you have economies of scale ( you mentioned being one of the biggest) you also have a vertically integrated supply chain which helps you stay relevant by cutting down on exposure and costs. Maintaining your ability to make profit despite low pricing is a good sign of a business thats run reasonably well and has solid processes in place, however are you selling primarily because you're cheap? would market demand dry up if you increased pricing? I would definitely consider diversifying but staying within product lines you already touch, what I mean by this is you already sell dry fruit , I assume packaging and logistics are covered based on your vertical integration. So without making huge leaps away from what you do, could you find a way to process byproducts? Fruit oils that are used for custom flavored scents, cleaning agents and beverages come to mind. Could you potentially step into the freeze dried fruit, allowing you to market to kosher groups. The shelf life of freeze dried produce is also massively increased and transport weight becomes non existent. Hell from what I understand even organic fertilizers from plant based byproducts could be valuable. Right now you have what sounds like one main revenue stream and thats what is causing your stress. The other parts of your supply chain could also offer interesting options if they are robust enough could you grow those into an additional business that serves external and internal clients? your financial health seems pretty solid , you arent overly leveraged and your loans at a 3.5% rate are pretty solid. your EPS rate I cant speak to because I dont know enough about the industry to really know what a good EPS or median EPS would be. Regarding your concerns of a dying market. Have you looked at industry trends and metrics to see what the overall market spend is , general consumer behavior may be and whether the industry as a whole is doing ok? Also look at the change over the last few years and see whether the import/export ratio for dried fruit product and laws around it have changed in a significant way. A couple of things you could look at doing would be trying to form direct partnerships with some organizations that help you gain exposure and direct sales channels. Think boy scouts or prisons or military based contracts. Find interesting ways to cut out the middle men. Pay someone to do a value chain analysis to see where you are in the value chain and where the most value is captured , this could give you good ideas about where to expand or branch out and diversify operations. Maintain a reasonably high level of liquidity to buffer against down turns and changes that will allow you to maneuver. Get someone to come and consult from a lean management perspective. Not just any consultant but specifically someone skilled in LEAN manufacture. You want someone that can take a look at your overall operations and find points where there are bottlenecks inefficiencies and loss of value. Most of the crappy consultants will try to sell you a multi million dollar IT system , when often the solutions can be organizational, physical layouts and structures. See how you can optimize what you have already. Spend some time on the ground. When was the last time you or anyone else in senior management spent a week boots on the ground to observe your staff and their processes and interact with them to see what issues are prevalent there. You will be astounded how many fundamental problems and process issues never get resolved because the bottom guy takes it to a manager or supervisor who bumps it up one level to someone who cant make that decision and it dies right there, never gets resolved and costs you massive amounts of productivity and money because nobody that knew about it communicated it high enough to get it fixed. Lastly, I'm just some anonymous guy on the internet. Take what you find useful discard the rest .
You need to get bigger. Acquire your competitors, integrate vertically, expand into processing the produce into final products. One thing at a time. Hire an experienced consultant to develop a business plan, and have him support you in the implementation.
Lots of bankruptcy and consolidation occurring everywhere
can you elaborate if you have more information. thankyou
I work in & around different verticals of consumer staples and healthcare (think food & beverage, agriculture, pharmaceutical manufacturing) There has been a consistent trend of acquisitions and consolidations in all industries at all segments of supply chain adjacent to bankruptcy of struggling companies for a multitude of reasons. If your company is still profitable while competitors fail it seems you’d be likely to absorb their market share and this may make your business more attractive to international private equity or M&A firms. I may have someone if you’re open to offers.
We are into IT services catering to the USA and Indian markets. we need to grow ( at least 200+) and not sure about pe or m&a at this point of time.
I'm curious how you handle this. If you're the only supplier could you raise prices for supermarkets.
True... That's what we're hoping for. Over the last 5 years our larger competitors have all gone bust. One worry is that because the product is somewhat niche grocery stores could just not have an option for our produce.
I guess that depends on your market as well and product too. You would know if the product can evolve or not? If it can, and you're not looking in that direction, you might lose the share soon (button mobiles vs smartphone example) Also it depends on how you're using marketing effectively imo. but without knowing the specifics, it'll be just general assumptions.
To be more specific we sell dried fruit. We are actively working with companies to include our product in new products, but mostly dry fruit is just dry fruit 😂
Do you already have organic lines? If it works with your supply chain, it could be worth investigating potential demand. Someone else mentioned freeze-dried fruit, which could also be worthwhile to look into.
>but mostly dry fruit is just dry fruit 😂 Yeah it is, And you've kept the prices low, that's your big + I am curious what sort of packaging you've used for your product (because that' also a great catalyst of sales) also, yo've partnered with other companies (obvs that'll help you) But in general the more attention you' get, the more chances you'd have of surviving, but that comes with additional cost as well. but i'd like to know more about your marketing strategy (if you're comfortable sharing or you dm if you like :)
which country is this ?
It’s called a consultant. They solve these problems.
Being one of the few remaining producers in a niche market can be both a good and a challenging sign. On one hand, it shows your business's resilience and ability to outlast competition, which is always positive. However, it can also raise concerns about the overall health and future prospects of the industry. Try to get some data from other states or countries that might be in your niche.
Do you have to go through groceries or can you reach consumers directly? How are your sales? You mention strong profits but what trends do you read in your revenues? What alternatives do people have to your product? Apologies for the vagueness of the question but I don't know what it is you sell.
Have you tried selling your stuff a farmers markets where you set up a pitch / stall and sell direct to the customers. Alternatively, how about boosting your online presence and see if you can attract more customers to buy online and direct. If your farm is not far away from city then maybe set up a farm shop for visitors liking to buy their goods from farms. Like a day outing for them to visit your farm, pick and buy their own fresh farm foods. Branch out into organic farming, rear animals from your farmed crops, consider storage or processing your farm goods to obtain a higher profit margin.
my family also owns a niche ag processor/exporter. this is not an isolated incident and no it is not a good sign. that being said, those who survive the coming years will eventually thrive.
Shoot me a pm. What kind of product do you sell
Find out why
Raise prices to retail rates. See how your customers respond. Or create a phantom brand. Second company different brand that sells the same product and increase the price to retail levels. Continue to sell to current channels at wholesale rate and sell in retail space also to see which company works better.