Executive Summary Our society relies on paper products everyday friendliness and low prices of our products. We for various tasks. Most of these products rely plan to do small scale advertising in order to on heavy deforestation to be manufactured. establish our consumer base. We will launch a The world’s forests are slowly disappearing national advertising campaign once we’ve a because of heavy deforestation. Husk Paper secured a spot in the market. We estimate to Products is a company that is dedicated to have a revenue of about $31 million by year reducing deforestation and improving the five with our products being sold at about health of the environment. We work to reach 1000 stores nationwide. Husk Paper Products that goal by manufacturing household paper requests $5 million for initial funding in order to products from an alternative and unique cover start up costs. material: corn husks and stalks. Husk Paper Products is nothing without its Since we manufacture paper products, our outstanding executive officers. They are main competitors are big paper companies dedicated not only to the company but to the that are already well-established in the paper eco-friendly cause the company is supporting. market. We will compete with these companies Jazmine Wong is the driving force behind the by focusing our marketing and distributing to company as its CEO. Bernard Deleon does eco-friendly consumers, specifically LOHAS his best to advertise Husk’s products as the consumers. LOHAS is an acronym for Lifestyle of Marketing Director. Alejandro Ramos crunches Health and Sustainability, which describes an numbers daily as the Chief Financial Officer to eco-friendly market. Husk Paper Products will make the company a profit. attract consumers by emphasizing the eco-
Company ProfileMISSION STATEMENTTo reduce world-wide deforestion by providing high quality and inexpensive paperproducts that benefit both the environment and our customers.COMPANY HISTORY We searched far and wide to find a suitableHusk Paper Products was founded by three substitute. We finally found it in corn waste, whichindividuals who were concerned about the can be made into paper using the same processesimpact society has on the environment, as tree-based paper and is more readily availableespecially on the world’s forests. Billions of trees than trees. We use only corn waste to createare cut down annually fill our need for paper household paper products of the same quality asproducts, ranging from printer paper to paper leading manufacturers and suppliers of householdtowels and beyond. With that in mind, we paper products. We believe we will make anbegan with one goal: to reduce society’s heavy impact on the paper industry and become leadersdependence on trees for paper produ cts. in the green movement.
EXECUTIVES Jazmine Wong has always been one to take the role of a leader. In 2008, she was elected vice president of MDHS Class of 2011. During her time as VP, she helped promote and fundraise money for the organization, as well as improve school spirit. Joining the Digital COMING Safari Academy during her Junior year in high school, she presented SOON a video and song for the Speaking of I.D.entity project, showcasing her creative ability as well as her charisma and confidence. As a developing philanthropist, Jazmine has also worked as an intern for a non-profit organization called Sustainable Contra Costa, which focused on promoting green lifestyles and programs in the community. With intense drive and focus Jazmine has helped a fledgling company spread its wings and take flight.Alejandro Ramos is a man defined by his accomplishmentsas a leader. He served as president for the class of 2011 during the2009-2010 school year. He worked hard to raise funds and organize COMING SOONclass events that his peers would enjoy. He’s now stepped down fromhis presidential role, but continues to participate in his high school’sstudent government. He previously worked for the Bay Point Garden asa garden leader, helping raise different plants and teach after schoolclasses on gardening. He left his job at the garden to focus solely on hisrole as Chief Financial Officer for Husk Paper Products and now worksdiligently to further the success of Husk Paper Products. Bernard Deleon joined the Digital Safari Academy in mid-2008. His major project was the Legacy of Imperialism, in which he and three other group members devised a plan to provide safe and clean water to Zimbabwe and to slow down the Cholera epidemic. Bernard COMING also made a music video paying homage to John Legend’s hit, “Stay SOON With You”, and he wrote a spoken word piece and performed on the stage for the Speaking of I.D.entity project. He also participated in the We Are Mt. Diablo documentary project about school diversity. He is now Husk Paper Products’ Marketing Director, aiming to promote and attract customers to make greener choices.
Product Data Sheet FEATURES • It dries • It wipes • It cleans You will no longer have to rely on paper products • It’s green made from trees. Husk Paper Products is proud to present household paper products made from a unique material: corn husks and stalks. M ade CONSUMER BENEFITS using the same processes as paper products • Same quality as leading brands produced from trees, paper from corn waste is • Reduces reliance on trees equally functional to current tree-based paper, without the detrimental effects to forests. Husk Paper Products provides an environmentally ENVIRONMENTAL BENEFITS friendly alternative to help reduce heavy • Reduces deforestation deforestation. • Source material is readily available
Market Analysis This means that sooner or later we won’t have enough trees to supply the demand for paper. This presents an opportunity for our paper productsOPPORTUNITY ASSESSMENT because they are made from an agricultural waste that is more renewable and readily available thanHusk Paper Products is proud to introduce paper the depleting resource of trees.made purely from the husks and stalks of corn.Made with the same processes as leading The market for eco-friendly products has been onbrands in the paper industry, our products offer the rise. According to the Mintel Research Group,an eco-friendly alternative to household paper 35% of US consumers are willing to pay more forproducts currently found on the market. Husk eco-friendly products. Not only that but in 2008,Paper Products’ main goal is to provide high the “Green” industry grew 6%, out performing thequality household paper products while reducing US economy as a whole. This presents a viableheavy deforestation for the production of paper. market opportunity for Husk Paper Products as we would be appealing to the rising demand for green products from an increasing number of eco-friendlyThe worlds forests are being depleted for the consumers.production of paper products. According toPaper Chase by Sam Martin, each year over 4 Our society uses paper products every day.billion or 35% of the world’s trees are cut down The paper industry alone generates over $200and used in the production of paper products. billion dollars a year. According to a 2000 reportThe NRDC has stated that the production of by PaperCom Alliance, the paper industry haspaper products accounts for 42% of the trees cut increased 30% in six years and is expected todown annually, worldwide. Although new trees continue to grow. This growth in the paper industryare planted to replace these, the harvest of treeshas outpaced the growth of new trees.
implies that there is an increasing demand for paperproducts. This increasing demand for paper productscreates an opportunity for our product to succeed.CUSTOMER PROFILEHusk Paper Products hopes to one day provide eco-friendly household paper products for all, regardlessof socioeconomic standing. However, we understandthat we simply cannot jump into such a wide marketall at once. For this reason we are focusing our efforts mostly in only natural and organic consumer goodson the smaller but booming LOHAS market. The and Drifters, who are interested in eco-friendly goods,LOHAS market is valued at $209 billion and has about but do not make many natural/organic purchases41 million consumers, or about a 19% of the United due to cost. Therefore the LOHAS market is a veryStates’ adult population, as shown in the chart below. good entry point for our product because it has aThis chart also defines the percentage of consumers large number of consumers that will buy productsfor groups such as Naturalites, who are interested based almost completely on their eco-friendliness. LOHAS consumers do not fit into any one demographic group; they are instead defined by their socially conscious decisions in their purchases of goods. That being said, there are still certain Unconcerned demographic trends among LOHAS consumers. 17% Conventionals About 60% of all LOHAS consumers are female, as 29% shown by a survey we conducted in 2010 in Todos LOHAS Santos Plaza and by a report from market-insider. 19% com. Young people between the ages of 18-34 are Drifters most likely to buy LOHAS products since they have 21% Naturalites grown up exposed to environmental awareness. 14% BREAKDOWN OF CONSUMER TYPES
loyalty to brands whose ideals on environmental and social issues line up with their own. They tend toMost LOHAS consumers are college educated be very insensitive to price; 80% of LOHAS consumersindividuals that fall into the middle class income are willing to pay up to 20% more for LOHASrange, making approximately $36K a year. We products.plan to distribute our household paper productsto natural food chain markets and nationalsupermarkets, such as Whole Food’s and COMPETITIVE ANALYSISSafeway. As a result, our geographic areas willbe centered around these stores. Natural food The paper industry has many competitors, butmarkets tend to be located in wealthy suburban only the big corporations survive. Husk Paperareas and largely populated cities while national products main competitors are companies thatsupermarkets can be found in many suburban are well established and have many more yearsareas throughout the nation. of experience. These companies include Seventh Generation, Georgia-Pacific, and Kimberly Clark.LOHAS consumers are socially consciousindividuals that define themselves by their Seventh Generation Inc. is a company thatvalues on social and environmentVal issues. They produces paper products from 100% recycledexercise those values when choosing goods and paper. Their paper products include towels, tissue,services, believing that buying green products toilet paper, and napkins. Not only is Seventhis “cool”, giving them a feeling of satisfaction. Generation Inc. selling the same products weLOHAS consumers are known to exhibit are, but also providing alternatives to using paper products made from virgin wood pulp. This is in direct competition with Husk Paper Products,
both as a paper company and an eco-friendlycompany. We will be competitive because we areusing virgin agripulp, which is of higher quality thanreused wood fibers.Georgia Pacific, one of the largest papercompanies in the world, is another competitor toHusk Paper products. They own Angel Soft toiletpaper, Brawny paper towels, and other variousbrands that present competition for our products.Georgia Pacific’s products are known to be of high wood fibers and some recycled fibers to producequality and inexpensive, the only drawback being their products, but is not an eco-friendly company.that they are not eco-friendly. Husk Paper Products Husk Paper Products provides products that offer thehopes to compete because of the fact that we same quality as Kimberly-Clark’s while being eco-provide the same high quality paper, without the friendly.environmental costs. These companies are well established and it willAnother competitor to Husk Paper is Kimberly-Clark, be a challenge competing against them. Ourwhich produces and sells general household items. company will differentiate itself and succeedAmong these items are several tissue and paper due to the fact that we use agripulp to createtowel brands, such as Kleenex, Cottonelle, and paper products, instead of virgin wood pulp orScott. These are top selling, high quality products recycled wood fibers. Our products will appeal tothat present competition for our products. Kimberly- LOHAS consumers and eventually to the rest of theClark uses consumer market by providing the same quality and reliability as brands such as Kleenex and Bounty. COMPETITIVE MATRIX HUSK PAPER SEVENTH GEORGIA-PACIFIC KIMBERLY-CLARK PRODUCTS GENERATION STRONG § § § § ABSORBANT § § § § COMFORTABLE § § § § ECO-FRIENDLY § § CHEAP § MATERIAL VIRGIN AGRIPULP USED PAPER VIRGIN WOOD PULP VIRGIN WOOD PULP This comparative matrix highlights the different qualities of paper towels and tissues as well as stating the main source material for each company.
Marketing PlanPRODUCTHusk Paper Products will be manufacturingdisposable towels and tissues made of absorbent PRICEpaper. Made from corn husks and stalks,our products will feature the basic functions Husk Paper Products has determined that ourof household paper products such as high target price will be about 25% less than ourabsorbency, softness, and effective wiping and leading competitor, Seventh Generation. Alldrying ability. Our products will be bleached od our products are sold by the case and arewith non-chlorine bleach and environmentally priced accordingly. Our paper towels will besafe products, giving them that bright white sold at $54.00, toilet paper at $64.80, and tissuescolor that customers expect. We will be using at $60.00. We will be offering our customers thebiodegradable plastic material to package option of buying our products in large quantitiesour products in order to further emphasize our of buying our products in large quantities throughdedication to the environment. our website and select stores. By buying online, customers have the option of receiving special discounts, limited to online purchases only.
PLACEMENTOur target customers are general consumers PROMOTIONwho may have an interest in buying eco-friendlyproducts. We will be distributing our products We understand that our product is difficult toto one natural food store to attract consumers differentiate and promote when there arewho are more into being eco-friendly and one companies that have already establishednational supermarket chain to appeal to the themselves with high quality products, such asgeneral consumer. The natural food store is Charmin and Brawny. With that in mind, we planWhole Foods, which is known to serve LOHAS to attract our target customers by remindingconsumers, while the national supermarket chain them of the benefits they are receiving byIs Safeway, which serves the general public but purchasing our product. It’s crucial that ourhas eco-friendly tendencies. customers understand that our products are made from an already pre-existing waste, reducing the amount of waste that goes out into the environment, while also creating something that is much needed in our society. We will be doing in-store and direct mail advertising to build up our consumer base in our first years and shift towards a larger advertising campaign once we’ve established ourselves.
Life Cycle Analysis MANUFACTURING The corn waste has to be pulped before it can be used to make paper products. It will be pulpedAQUISITION using the Kraft process, which uses chemicals to convert the corn waste into pulp. After the cornHusk Paper Products will primarily be using corn waste has been pulped, it will be sent to a paperwaste to manufacture its paper products. Corn machine to be shaped, pressed, and dried intowaste is usually disposed of by being burned in large rolls of paper. Several additives will be used tothe fields, which causes CO2 and smog emissions give our paper products their wet strength. While thethat are known to be health and traffic hazards. Kraft process is not as eco-friendly as mechanicalOur use of the corn waste will reduce the CO2 pulping, which uses machines to pulp the plant, itand smog emissions from this method of disposal. results in higher quality paper which is needed toWe will acquire our stock from farms in the make high-quality tissue paper.midwest after annual harvests. We will also beusing water to manufacture our paper products,which we will acquire through pipelines leadingto our factory. - famers harvest corn - we bale corn husks/stalks 1 - reduce CO2 emmissions from corn burning 3 - corn husks/stalks go through a pulping process producing 2 various paper products
TRANSPORTATION We will be transporting our paper products from our factories in the midwest to various stores throughout the nation by trucks and trains. These vehicles add to air pollution by burning fossil fuels as their energy source. We will do our part to help reduce air DISPOSING pollution by relying on trucks that run on biodiesel. Most of our products will end up in landfills and sewage systems once used. They will be biodegradable, however, so they will not USING contribute greatly to the amount of garbage in the world. Our products will be used by individuals and businesses for hygienic and cleaning purposes. Consumers will benefit socially when they use our product by knowing that that they have done their part to help the environment. The use of our products will promote awareness of the heavy deforestation that occurs as we will put fun facts on our packaging. The products will not create any health problems for any individual unless used irresponsibly (I.e attempting to ingest, starting a fire with it, etc.)- product is shipped to - product ends up in a landfillstore locations - product goes to a- fossil fuels are used invehicles that transport 5 sewage treatment plant - product is compostedproducts - product is used by 4 4 consumers - product is thrown away or composted
Financials ProjectionsSALES AND REVENUEHusk Paper Products plans to distribute paperproducts to about 20 stores in the first year in OPERATIONS BUDGETorder to establish ourselves. Since we will beselling to these buisnesses, we will be selling For the purposes of this project, it is assumed that theour products in cases. The prices are as follows: operations budget for our company comprises 10%Toilet Paper - $64.80, Paper Towels - $54.00, of our revenue and is composed of the followingand Tissue - $60.00. These stores will be located individual items:throughout California, as the large majority of • ElectricityLOHAS consumers live in there. We will expand • Salariesto 1,000 stores throughout the nation by year • Rent for floorspacefive and estimate to have a revenue of $31M. • Upkeep of machineryWe took into consideration store location, • Insurancenumber of stores in the U.S, average number of • Advertisingconsumers per store, and average consumptionof household paper products in order to arrive tothese conclusions. Total Quarterly Revenue Quarterly Revenue for Products 400000 600000 300000 450000 200000 300000 100000 150000 0 Q1 Q2 Q3 Q4 0 Toilet Paper Paper Towels Tissues Q1 Q2 Q3 Q4
COST OF GOODSFor the purposes of this project, it is assumed thatthe cost of goods for our company’s productcomprises 85% of our revenue and is composed ofthe following individual items: SOURCES AND FUNDS NEEDED • Raw material (corn husks and stalks) • Chemical additives for paper Husk Paper Products will be requesting at least $5 products million in funding to start up. Funds will initially be • Manufacturing Costs used to rent space for our factory, the acquisition • Distribution of raw materials for Husk Paper Products, buying • Waste Disposal the machinery required, and hiring, training, and paying workers. Our next step would be to hire distribution companies to distribute our goods and to buy shelf space in our target stores. It is expectedADVERTISING AND MARKETING that $5 million will cover these costs, but our executive officers are prepared to invest their ownHusk Paper Products has, on average, 900k to spend money in the event that more funding is needed.on advertising and marketing. We plan to do smallscale advertising to attract consumers, as largescale national advertising would cause losses. Wewill advertise in store, through the weekly ads of thestores selling our products, and by mailing samplesto household. We Will eventually begin advertisingthrough magazines and other publications by yearfour of business.