Bolthouse Farms' Research (Research Paper Sample)

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Bolthouse Farms
Table of Contents TOC \o "1-3" \h \z \u 1EXECUTIVE SUMMARRY PAGEREF _Toc421063745 \h 32HISTORY OF CARROTS AND THE CARROT MARKET PAGEREF _Toc421063746 \h 33HISTORY OF BOLTHOUSE FARMS PAGEREF _Toc421063747 \h 64PORTER’S FIVE FORCES PAGEREF _Toc421063748 \h 84.1Competing Sellers PAGEREF _Toc421063749 \h 84.2New Entrant PAGEREF _Toc421063750 \h 94.3Substitute Products PAGEREF _Toc421063751 \h 104.4Suppliers PAGEREF _Toc421063752 \h 114.5Buyers PAGEREF _Toc421063753 \h 125TOWS ANALYSIS PAGEREF _Toc421063754 \h 135.1Threats PAGEREF _Toc421063755 \h 145.2Opportunities PAGEREF _Toc421063756 \h 155.3Weaknesses PAGEREF _Toc421063757 \h 155.4Strengths PAGEREF _Toc421063758 \h 166STRATEGY PROPOSAL PAGEREF _Toc421063759 \h 176.1Collaborating with Fast Food PAGEREF _Toc421063760 \h 176.2Brokerage Transportation Services PAGEREF _Toc421063761 \h 186.3Product Line Expansion PAGEREF _Toc421063762 \h 187. CONCLUSION PAGEREF _Toc421063763 \h 198APPENDIX PAGEREF _Toc421063764 \h 219References PAGEREF _Toc421063765 \h 23
EXECUTIVE SUMMARRY
Bolthouse Farms is one of the leading and largest producers of fresh carrots and a variety of other carrot products. The company also ventures in the production of fruit juices, smoothies, and chai tea. It began as a family owned business in Western Michigan, supplying for processing to Midwest producers. Bolthouse was built based on carrot products and still maintains a strong focus on the carrot products though the company has greatly expanded its products offerings. By examining the business using the porters five forces model and performing a TOWS analysis, there are recommendations given on how the company can grow bigger and realize larger milestones.
HISTORY OF CARROTS AND THE CARROT MARKET
The cultivated carrot was derived from the wild carrot, which has a whitish colored root. The cultivated carrot is an important root vegetable that grows in the temperate regions. The most famous carrot is the orange root carrot, which comes from the yellow root domestic variety. Ancient writings refer to edible white carrots, which are still in existence today though they are used as animal feed. Consequently, people believe that carrots were originally white or purple with a thin root. The yellow carrots were brought into existence by the mutation of the purple carrot. The modification process led to the removal of the purple pigmentation on the carrot. The adjustment process continued, and the yellow colored carrots became orange. Consequently giving rise to the familiar orange carrots that we see today.
Different varieties of carrots are mainly found in Central Asia. However, the two main types of cultivated carrots are the Eastern Carrots and Western carrots. The eastern carrot is also referred to as the Asiatic carrot. Eastern carrots roots are purple although some have yellow-like roots. Their leaves have a gray-green color, which can easily scorch. These species of carrots can be found in countries like Iran, Russia, India, and Afghanistan. Their cultivation in Asia is under threat of being extinct as the locals are now widely cultivating the orange rooted western carrots. Western carrots or the carotene carrots are also cultivated and their roots are either orange, white, or red. Orange carrots cultivation was first practiced in Netherlands. They later spread because they can acclimatize to the northern latitudes due to their modification in photoperiod response.
Cultivating carrots in favorable conditions guarantees that the roots of the successive generations will broaden rapidly. It explains the evolution of cultivars, which contain significant sources. In the year 2012, the total carrot production for the fresh and processing markets in the US, hit the $643 million mark and it was a massive fall as compared to the profits realized in 2011, which was $711 (Bussell 134). 23 million cubic weight of carrots for fresh consumption were produced in the U.S in 2012. The harvest was obtained from over 70000 acres piece of land. The raw carrot producing states are California, Michigan, and Texas in that order. California takes the major portion, which stands, at 80 percent of all the fresh carrots for production. , Minnesota, Washington, Wisconsin, and California were the chief producers of carrots for the processing industry in 2012. The U.S farmers produced a total of 322,150 tons of carrots for processing that year. Wisconsin recorded the highest production that year at 37 per cent followed by Washington, which provided 31 percent of the total output. On the world map, the United States was the third-largest producer of carrots. The biggest producer of carrots presently is China followed at a distant by Russia. The success in carrot production in the U.S is due to the mechanization of the whole process.
The pricing of carrots has not been constant over the years. An example is in 2012 where the cost was approximately $26 per cubic weight, which was a drop from $33 per cubic weight in 2011. When one compares the prices for processing carrots and that for fresh carrots, he/she is bound to realize that the costs of processing carrots are lower as compared to that for raw carrots. In 2012, for instance, the prices for processing carrots was $103 per ton, which was way above $86 per ton in 2011.
The demand for carrot products rose to an estimated 9.8 pounds per person in 2010. The request of fresh carrots attributes to the majority of consumption. The demand for fresh market consumption is higher than the demand for processing carrots.
The factors that influence the demand for carrots include taste, convenience, as well as health issue concerns. The health concerns are attributed to the consciousness that carrots contain vitamins and minerals, which are useful as they lower the chances of one getting cancer. Carrot products are also helpful in the production of traditional cooking vegetables, salad items, and snack foods.
U.S has captured the international market by exporting her carrots to Canada and Mexico. The fresh carrots export recorded a significant profit value of $120 in the year 2012. Although this a higher negative deviation than what was plowed back in 2011 by 9 percent. According to Bolthouse Farms’ market research, Mexico is the largest market for U.S carrots. It purchases over $ 3 million per annum.
Apart from exporting the products, U.S also imports some carrot products. In 2012, for instance, it introduced fresh carrots worth $68 million. In 2011, it imported 15 per cent more fresh carrots. Mexico and Canada were the largest suppliers of these raw carrots. The United States also imported frozen carrots worth $4.6 million. Mexico again was among the major suppliers for prepared frozen carrots. Israel emerged in 2012 as the largest supplier of raw frozen carrot, providing carrots worth $1 million.
HISTORY OF BOLTHOUSE FARMS
Bolthouse Farms dates back from 1915 when the family decided to try their hands in commercial farming in western Michigan. Immediately after commencing this lucrative business, the family began by packaging fresh celery and onions then storing them for sale during the off-seasons. Bolthouse farms soon started receiving demands for fresh carrots from local canneries. The progress led to the establishment of a cellophane packaging plant by the family for the new carrot products. The construction of the cellophane packaging plant was in 1959. The new method of packaging was a hit to the consumers, as they demanded more products. The popularity allowed Bolthouse to market their produce in grocery chains and supermarkets.
A decade later, William Bolthouse, the founder’s son, saw the need to provide a year round fresh carrot product to consumers thereby moving the production to Bakersfield, California. As the company continued to impress customers even further, in 1990, the company introduced what was popularly known as SHORTCUT. Additionally, the line marked the ready to eat peeled and cut carrots. For years later, the demand increased for the new product that it became overwhelming for the packaging plant, which was giving into old age. The company is seeing this decided to construct a new packaging plant in 1999.
Due to the increase in profits and expansion of the market base, the company built its bottling facility to cut on costs incurred in procuring the bottle. The step saw an increases its profits further. They also introduced to consumers their new line of beverage products i.e. Bolthouse Farms Super Premium. It was after the discoveries that Bolthouse realized the health benefits of acai berry. It led to the establishment of another Bolthouse branch in Brazil that was particularly going to process beverages from acai berries and distribute the products around the world. Bolthouse farms acai berries are one of the purest products that exist in the market because of the advanced expertise that the company employs in the farm and the professionalism in the processing and handling (Nemetz 68)
Bolthouse Farms also produces a line of all-natural salad dressings, which are based on yogurt. This salad dressing is healthier as compared to the conventional mayonnaise since they contain only half of the calories and fats. The salad dressing products are a unique offering by the company since they are refrigerated. However, this does not take away the freshness and flavor of the products hence customers still buy them. The increasing number of clients who enjoy Bolthouse product is due to the consistent provision of excellent and quality products by the company.
Contrary to the admirable achievements of Bolthouse Farms, there have been challenges associated with the products in the market. One such incident occurred in 2006 when the Canadian Food Inspection Agency recalled the Bolthouse Farms 100 per cent Carrot Juice as well as other...