First in Show Pet Foods, Inc.
A.Dog Food Industry
1.Dog food sales will total ≈ $10 billion
2.There are 50 dog food manufacturers and 350 dog food brands in the U.S. 3.Top five companies – Nestlé Purina PetCare, Iams, Hill’s Pet Nutrition, MasterFoods USA, and Del Monte – accounted for ≈ 75% of dog food sales in 2008. 4.Breakdown of dog food sales distribution: Supermarkets = 36% ($3.6 billion); mass merchandisers = 25%; pet superstores = 20%; farm /feed stores = 7%; veterinarians = 6%; Internet retailers and independent pet stores = 6% 5.The industry is yet to reach its full potential, since less than half of U.S. dogs are regularly fed prepared dog foods. B.First in Show Pet foods, Inc.
1.Major producer of dog food for U.S. show-dog kennels
2.Food contains 85% fresh meat with no additives or preservatives – packaged frozen 3.Changing packaging to a 15-ounce plastic tub with 12 tubs per case; total variable costs = $7.87/case 4.Selling Price = $5.29
5.Total Fixed Costs = Either $730,000 or $530,000
6.Unit Contribution = $4.63
7.Will distribute through supermarkets because of need for refrigeration 8.7% commission goes to supermarkets
9.Break-Even Volume: Either 157,668 units or 114,471units
10.$ Break-Even Volume: Either $834,286 or $605,714.29
1.U.S. dog owner population = 65 billion, and steadily increasing 2.Pet owners continue to view their pets as “part of the family.” 3.Dog owners spend over $20 billion on their dogs every year. 4.Growth in premium and super-premium dog foods
5.53.7% increase in claims for dig foods with no additives or preservatives 6.53.2% increase in claims for vitamin- / mineral-enriched dog foods 7.29% increase for all-natural dog foods
1.Should First in Show Pet Foods, Inc. enter the household dog food market and accept the proposal? 2.Will the company establish a foothold in the Show Circuit market? II.Alternative Evaluation
A.Do Not Enter the Market / Continue at Status...
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