Aerofarms Technological University Dublin Consultancy
Aerofarms Technological University Dublin Consultancy team focuses on making Aerofarms profitable in the short term and sustainable in the long term. They analyze challenges, conduct PEST analysis, evaluate Porter's value chain, SWOT analysis, and summarize their findings to deliver profitable and sustainable strategies for the future.
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AEROFARMS TECHNOLOGICAL UNIVERSITY DUBLIN S J M P CONSULTANCY
S J M P Dean Murphy Finance Jane Maher Marketing Graeme Phelan Operations SarahJane McGuigan Sales MEET THE TEAM
S J M P To make Aerofarms profitable in the short term and sustainable in the long term. CHALLENGE STATEMENT
S J M P 6 5 4 3 2 1 0 ANALYSIS
S J M P PEST Political Economical Social Technological High initial capital investment required Legislation is blocking foreign VC investments in the US Consumers perceive it as high caloric content IOT employed Funding is historically good Global population will be 9 billion by 2050 with less arable land Consumers perceive high CO2 emissions Data analysis extensively used US/China trade war Vertical farming global revenue $12.77 billion by 2026 Not officially recognized as organic Consumers do not see the brand as organic Patented technology reusable cloth Key insight: Market is very attractive but consumer and political challenges need addressing. Analysis Evaluation Recommendations Implementation
S J M P PORTERS VALUE CHAIN OPERATIONS MARKETING & SALES TECHNOLOGY DEVELOPMENT FIRM INFRASTRUCTURE Key Insight: PROCUREMENT Use existing technology to grow in more areas, expand operations and increase awareness. Strength SERVICES HR INBOUND LOGISTICS Level of Importance Analysis Evaluation Recommendations Implementation
S J M P SWOT Strengths Weaknesses 1. High initial cost 2. High energy consumption 3.US focused 4.Limitied variety 1. Largest vertical farming company globally 2. Patented Technology 3. Data analytics & machine learning 4. Global market value $12.71 Bn by 2026 Opportunities Threats 1. VC investment blocking legislation 2. Competitors - Gotham Green Focus 3.Public perception 1. US/China trade war bring food security into focus 2. Technical capacity means company is highly adaptable 3.Fast production capacity means close to market Key insight: Aerofarms is highly innovative with patented technology and ability to be quick to market. BUT plants in suburban areas mean high costs. Analysis Evaluation Recommendations Implementation
S J M P SUMMARY OF ANALYSIS Where are we now? Where we want to be? What are we going to deliver? 1. Claimed to be profitable with historically good funding 1. Sustained profits 1. Profitable and insulating from political funding concerns 2. Energy consumption is high and sustainability issues. 2. Efficient business model 2. Energy efficient and sustainable for the future. 3. Highly innovation in terms of innovation and poised to take advantage of a changing political and environmentally sensitive landscape. 3. Consumer awareness of Aerofarms technical innovation and benefits of their product. 3. Known as the worlds largest eco-friendly, vertical farming company. Analysis Evaluation Recommendations Implementation
Issues Listed S J M P 1. Attracting talent Issues Themed 2. High capital investment Attract talent On boarding & training Process 3. US Government legislation funding 4. Product diversification Understanding & perception Attracting talent Marketing 5. High energy consumption 6. High competition Energy consumption Not organically recognized Environmental 7. Market understanding & perception 8. On boarding & training High capital investment US Government investment legislation Product differentiation Increased competition Business Model 9. Not organically recognized 10. Poor buckets
S J M P ISSUES PRIORITIZED Issues Themed Attract talent On boarding & training High Low 1. Process 4 2 3 Understanding & perception Attracting talent 2. Marketing High 1 Prioritization Energy consumption Not organically recognized 3. Environmental Low High capital investment US Government investment legislation Product differentiation Increased competition 4. Business Model Urgency Analysis Evaluation Recommendations Implementation
S J M P ISSUE ONE EVALUATION Address the current business model to achieve sustainability. Long Term Option 1 Option 2 Option 3 Diversify distribution model Set up an entity outside of the US Expand to hydroponic. Short Term Option 4 Open locations in suburban areas Analysis Evaluation Recommendations Implementation
S J M P ISSUE ONE EVALUATION 1= favorable 5 = unfavourable Address the current business model to achieve sustainability. Issue One Suitability Feasibility Acceptability Total Option 1 Diversify distribution model Option 2 5 4 2 11 = low impact Set up an entity outside of the US Option 3 5 3 5 13 = high impact Expand to hydroponic 3 2 3 8 = high impact Option 4 Open locations in suburban areas 5 5 5 15 = high impact Analysis Evaluation Recommendations Implementation
S J M P ISSUE TWO EVALUATION 1. = unfavorable 5 = favorable Address the consumers level of education on vertical farming. Option 1 Option 3 Option 2 Marketing Strategy Social Media: to educate the public on the innovation in vertical farming Lobby to address non-organic status. Partner with more companies such as Singapore airlines and Dell. Issue Two Option 1 Suitability 5 Feasibility 4 Acceptability 5 Total 14 = high impact Option 2 3 2 3 8 = low impact Option 3 1 5 1 7 = low impact Analysis Evaluation Recommendations Implementation
S J M P RECOMMENDATION ONE Addressing business model for long term sustainability Rationale Features Benefits KPI s Biggest Short term challenge - Cost Have strong operations & infrastructure Maintain Farm to table reputation Leverage employment grants Mitigate against changes Well serviced Lower cost Suburban locations Cost Speed from initial setup to project recognition > 7 years Diversification portfolio Access to China & rest of world funding Access to funding New locations set up in asia CSR job creation Raising funding for new China entities Change distribution model New talent Analysis Evaluation Recommendations Implementation
S J M P RECOMMENDATION ONE Addressing business model for long term sustainability 0-6 Months how? Cost Identify suitable locations for 7 new plants Considerations; Grants, transport, land availability, weather $224000 Market analysis on resources and needs Create plan for a phased growth model Create an innovation hub in our first new location We are going to create urban areas again in deserted depopulated areas 6-12 Months how? Launch of first new location Build locations 2- 5 Goal 3 plants in Asia by 2025 Cost 0-6 months 12-18 months 6-12 months 18-24 months
S J M P RECOMMENDATION TWO Marketing Strategy Social Media: to educate the public on the innovation in vertical farming. Rationale Features Benefits KPI s Celebrity chef endorsements via cooking podcasts Public perception changes Feedback from customer surveys Education works Instagram campaign using influencers & advocates Mitigates against non- organic status Previous local education was moderately successful Monitor & measure acquisition and retention of talent Talent acquisition problem addressed Partner with more companies like Singapore airlines where differentiation is of value Short term profits need to be addressed Measure conversion rates Increased profits Analysis Evaluation Recommendations Implementation
S J M P RECOMMENDATION TWO Marketing Strategy Social Media: to educate the public on the innovation in vertical farming. 0-6 Months how? Cost 1. Conduct market analysis to establish/validate level of awareness and public concerns level of awareness and public concerns 2. Identify appropriate social media advocates within budget 3. Agree criteria for campaign with selected advocates (1%, 9%, 90%) 4. Launch test campaign with sample set of advocates promoting using agreed criteria 5. Collect analytics and consumer responses 6. Review test campaign and adjust approach appropriately. $75,000 $175,000 Total $250,000 0-6 months 12-18 months 6-12 months 18-24 months
S J M P RECOMMENDATION TWO Marketing Strategy Social Media: to educate the public on the innovation in vertical farming. 6-12 Months how? Cost 1. Expand advocate cohort to facilitate wide campaign but within budget 2. Launch broader campaign promoting Aerofarms using agreed criteria 3. Collect analytics and monitor consumer response. 4. Analyse increase in conversion using social media analytics 5. Review Campaign and adjust approach to next phase of the campaign $700,000 $50,000 Total $750,000 0-6 months 12-18 months 6-12 months 18-24 months
S J M P RISKS & CONTINGENCIES RECOMMENDATION ONE Addressing business model for long term sustainability Risks Likelihood Impact Contingency 1. Lack of available talent 5 5 -we already have this issue -improve process -have center of excellence -design online training 2. Lack of local gov. support 2 5 3. Time & securing funding 3 5 Scalability -Partner with our current investors leveraging resources 4. Removes focus on US 5 2 -Strong management -good planning -outsource specialist where needed
S J M P RISKS & CONTINGENCIES RECOMMENDATION TWO Marketing Strategy Social Media: to educate the public on the innovation in vertical farming. Risks Likelihood Impact Contingency 1. Social media campaign in ineffective in changing public perception 2 3 Test campaign and review. Allows adjustment of approach. 2. Wide social media campaign shows no change in public perception an increase in profits. 1 3 Partner with environmentally conscious companies and leverage strategic partnerships with Dell inc.
S J M P FINANCIALS Market share 300% 250% 200% 150% 100% 50% 0% Aerofarms LLC Bowery farming Inc. Revenue per capital Plenty Inc Gotham Greens Farms LLC Market share of vertical farming BrightFarms Inc. Lufa farms
S J M P FINANCIALS Financial Projections Rural costs Land (28 acres @ $20000) Building costs 560000 10000000 7 new US site P&L Revenue Electricity Distribution Wages Supplies Operating Profit 3 new Asian sites P&L Revenue Electricity Distribution Wages Supplies Operating Profit 38800000 -21000000 -7000000 -2520000 -3000000 5280000 38800000 -21000000 -7000000 240000 -3000000 8040000 ROI in 3 years vs 7 years currently Lower upfront costs means better 7 rural US sites ROI in 2 years vs 7 years Expanding to new markets 3 new Asian sites
S J M P FURTHER CONSIDERATIONS GOAL CURRENTLY 1 Transform agriculture 2 Responsible farming 3 Indigenous food security goals 4 Resolve the food crisis globally. Rome wasn t built in a day, but if this is goal, we need to be more serious about our intent to experiment with other fruit & vegetables. WHAT YOU NEED TO DO Make a commitment! Invested so heavily in tech now and commit to R&D in new product. Become a market leader. Start trialing the ROI and scalability of other products Experimenting is uncomfortable You say you can grow anything
THANK YOU TECHNOLOGICAL UNIVERSITY DUBLIN S J M P CONSULTANCY
