To: John Williams
I want to outline some of my strategy ideas for you. Frog Leap has a real opportunity to increase market share over the coming years, but we also have to address some serious problems with the company. I think addressing the debt issue starts with an evaluation of our assets and the real growth opportunities in the market.
Frog's Leap has a few strengths on which to draw upon. The company has all three of sustainable practices, green land and green winery certification. The winery has a healthy size right now, and has an experienced staff that we have retained with forward-thinking HR policies. In addition, the brand is older than many on the market, which helps us when it comes to distribution. There are weaknesses, however. We doubled our land and increased our volume by 5%. That means we have a lot of low-production land. We have a lot of debt and that is going to affect how much money we have to plow back into expansion. Our prices are pretty high, but the most credible reviewers aren't talking about us – we probably lack buzz. Another weakness is that we really haven't modernized our marketing. We have been too hesitant in embracing the younger, wired consumer and this is allowing other wineries to reach this audience better than we are.
That said, there is a real opportunity with the younger consumer. The current 21-44 demographic is going to drive growth for the next thirty years, and really the younger end of that demographic is much larger than the front end. They have not yet established their drinking preferences, but if the success of microbrews and high-end cocktails is any indication they prefer high quality and are willing to pay for it. The problem is that our industry is intensely competitive – there are wines as good as our available for half the price, and savvy consumers will recognize that. So our price points are a weakness, and competition is a threat....
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