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June 29 presentation_verf

  1. 1. Copyright © 2014 very50 1 Mission on the Ground (MoG) - in collaboration with HAPA and Young Leaders TOKACHI PROJECT
  2. 2. Table of Content HAPA Project Overview1 Tokachi Café Project Overview2 Hawaii Macro Data3 Tokachi Café Two Models4 Food Restaurant Model (Tokachi Kitchen)6 Comparison Matrix (Pros & Cons)7 Take Away (Lessons)8 Concept Café Model (Community Café)5
  3. 3. HAPA Project Overview – Tokachi HAPA Project Overview Tokachi Project, first international MoG with HAPA, aims to revitalize agriculture and tourism through regional branding. TOKACHI HAPA Project Place : Tokachi, Hokkaido Date : May 24 – 28 May 28 - June 4 Stakeholders Objectives  5 Hawaii Uni Students  5 JP Uni Students  HAPA Executives  Hawaii Young Leaders  Mr. Goto Kenich  very50  JP Young Leaders  To propose a sustainable community-centric development approach with local values.  To promote an innovative community development initiative  To establish a global brand “Tokachi” around the world through five projects: Tokachi café, sister region, Tokachi documentary, its books and Azuki competition. IMPACT OUTPUT  Tokachi stakeholders *Product sales
  4. 4. HAPA Project Overview – Objectives (New Form of Community Development) Tokachi Project proposes an alternative community development approach: community-centric, sustainable and local values. Urban-centric Development Community-centric Development Connects regional communities with other nations directly on a global level. Regional Urban Global GlobalRegional Introduces authentic local values with traditional products and services. Supports the natural surroundings and ecosystem in a sustainable way. Makes the best use of traditional and regionally-unique specialties. Connects regional communities with other nations only through urban cities. Urbanizes regional communities by imitating big cities. Creates one directional relationship: regional → urban → global. Attracts tourists as a “gathering place” for people and money alone.
  5. 5. Partner Prot Asia (Mr. Goto) & other Tokachi stakeholdersSupport Tokachi, Hokkaido HAPA Young Leaders Promising 25-40 year old leaders in various fields Tokachi Project consists of international stakeholders with diverse backgrounds in terms of nationality, experience, education and profession. International MoG Team Hawaii StudentsJP Students Support very50 Staff Experienced Professionals Problem Solving  Concept Making  Marketing  Branding Strategy Successful businesspersons with social mission HAPA Project Overview – Stakeholders
  6. 6. International MoG team consists of 9 students from Japan & Hawaii Hawaii Team Japan Team Kurt Cullen Masato Itoh Tuan LaKaili Taniguchi Yusuke Noguchi Megumi Kimuro Moeka Mizuno Naoto Umezawa Shunsuke Maeda HAPA Project Overview – Tokachi Café Team
  7. 7. There were some big pivots in our project. The focus of the project shifted from Azuki to veggie tea cafe to Tokachi cafe HAPA Project Overview – Tokachi HAPA Project Overview Tokachi Azuki Veggie Café & Prod. Sales in Global Markets Veggie Café in SG & Hawaii Tokachi Café in Hawaii April 1 May 28 • Global sales of processed food made of Tokachi Azuki • Café & Tea product sales ? • Selecting HK, Shanghai, SG and Hawaii markets • Veggie tea café • Primary data and secondary data in SG & Hawaii was collected intensively • Two Tokachi café models were developed
  8. 8. Veggie Tea Cafe – Strategy in SG & Hawaii Veggie tea café project goes through three stages of strategy development. Tactics ManabeGardenetc. Basic Info1 Tokachi (Hokkaido) Agricultural policy (JA and TPP etc.) Food & Beverage Industry Community development Idea Generation Brainstorming of ideal cafés by team 5P*3 Product Promotion Price Place Partner * parts of stage 2 & 3 can be overlapping 2 Finance Marketing Branding •tax system •Initial capital •running cost •etc. •customer •country risk •mission/vision •brand message •efficacy of tokaté •tax system •Initial capital •running cost •etc. •competitor •company Primary1 Secondary1 Primary Secondary Market* Strategy 1 Primary & Secondary Data
  9. 9. In the end, Two Tokachi Café models featuring Tokachi produced food were developed. Tokachi Café in Hawaii Two Models were developed Tokachi Café Overview
  10. 10. Tokachi Café Overview – Project Flow Tokachi Café project have gone through three stages of strategy development. HW Macro Info Population Ethnicity Disposable Income Tourism Legal Logistics Mission Statement Mission & Vision Decisiontobemadeasaresultof comparisonmatrix Concept Café Supply Side (Concept) Demand Side (Customer/Competitor) Product Promotion Price Place Food Restaurant Supply Side (Concept) Demand Side (Customer/Competitor) Step 1 Step 2 Step 3 4P Product Promotion Price Place 4P
  11. 11. Tokachi Cafe Mission – Mission Statement Tokachi Café’s mission statement was created to convey Mr. Goto’s message in a concise way. Mission Statement Mission & Vision
  12. 12. Tokachi Cafe Mission – Mission Statement Tokachi Café’s mission statement was created to convey Mr. Goto’s message in a concise way. We Tokachi Café create “Ba” where the authentic culture of a region manifests into a unique localized experience to showcase Tokachi to the world while nurturing a sense of pride in identity to people in the region. Mission Statement
  13. 13. Mission statement was broken into missions (why Tokachi Café exists) for customers and community (region) respectively. Words to our Customers We Tokachi Café create “Ba” where the authentic uniqueness of the people, food and scenery in the region manifests into a localized experience to continue providing inspirational experiences and ambiance through our core values such as “perfection”, “honesty” “hospitality” and “relationship” with five senses. Tokachi Cafe Mission – Words for our Customers
  14. 14. The concentration of wealth, human resource and knowledge in urban cities is getting more intense everywhere around the world. This phenomena bring about the depopulation of regions and loss of their unique values. Tokachi exists as a region that supports nature and agriculture living together. We tell the world while building the “Tokachi model” which utilizes available resources in the region. The new model is created by Tokachi people which focus on the richness of people’s lives tomorrow with the vision like this everyone will benefit from a successful business growth. Like 130 years ago pioneers developed the area of Tokachi independently from the government. We accomplish Tokachi Café with people’s dream and hope. By succeeding this business, the new role model will be built up that can be shared between Japan and the world. We believe this experience will change people’s values and create a better future. Mission for Tokachi Tokachi Cafe Mission – Mission For Tokachi Mission statement was broken into missions (why Tokachi Café exists) for customers and community (region) respectively.
  15. 15. Tokachi mission statement and mission/vision for customers and community were created respectively. Tokachi Cafe Mission – Vision for Customer and Community By 2020, we would like people to recognize concept of “Ba” all over the world especially in Asian Pacific Region and provide high-quality and inspirational experiences. Vision for Customer Vision for Tokachi We do not rely on government support. We collect capital from the private sector. We will have “Tokachi Café” in Hawaii, Singapore, Hong Kong and Shanghai in 5 years. Companies from other prefectures will open shops overseas in 7 years. Tokachi Cafe will be introduced at Tokachi memorial museum after 20 years.
  16. 16. Hawaii Macro Data – Population, Ethnicity, Income, Tourism, Legal , Logics Hawaii macro information was researched to get an overview of what Hawaii market looks like. Hawaii Macro Info Population ・ Ethnicity Disposable Income Tourism Legal ・ Logistics
  17. 17. Hawaii Macro Data – Population, Ethnicity, Median Income Highlights of Hawaii are 1) dense population 2) large Asian community and 3) higher disposable income than the mainland. Population Median Income Density 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% Asian White Hispanic Mixed Race Black Native Ethnicity Distribution Hawaii: Honolulu: Oahu: Obihiro: 1,404,000 391,000 983,000 168,000 Honolulu: Obihiro: 2,152 /km2 271 /km2 $58,000/ house hold/ year
  18. 18. Hawaii Macro Data – Tourism Volume 7,800,000 visitors (2013 State) 4,500,000 (2012 Oahu) Per person per day spending: $214.20 (2012 Oahu) US West Coast, 3,180,000 US East Coast, 1,700,000 Japan, 1,470,000 Canada, 499,000 Other, 951,000 The largest number of tourists come from the mainland U.S., followed by Japan.
  19. 19. Hawaii Macro Data – Legal: Incorporation Method & Biz Operation Requirement Legal  Incorporation Method (LLC or C-corp)1  Hawaii Business Operation Requirements • Business Registration (Department of Commerce and Consumer Affairs) • Operating License (General Exercise License) • Liquor License (Liquor Commission) • Health Department Permits (Health Safety) • Fire Permits • Zoning and Land Use Permit (Commercial Use) • Other U.S customs and Import Laws (all commercial imports of food products required filing of Prior Notice with Food and Drug Admin (FDA)- foreign manufacturer must register)(no restriction on tea, coffee, spices) 2
  20. 20. 2 Hawaii Macro Data – Legal: Insurance & Visa Legal Cont.  Insurance Commercial Insurance (~10k/yr)(ACW group) • General Liability Insurance (~$4-5K/yr) • Business Property Insurance (~$2-3K/yr) • Workers Compensation Insurance (~2-3K/yr) Personal Insurance (medical,disability,life)  Working Visa for Temp Foreign Employees File petition with US immigration service Once approved, apply for either type: • H-2B: temp non-ag worker (1yr stay) • L: intra- company worker (3yr stay) 3 4
  21. 21. Hawaii Macro Data – Logistics and Shipping Matson Shipping Company Quote: Tokyo  Shanghai  Honolulu Tea products, milk, cheese, confectionaries, pastries $4,915 for 20ft Refrigerated Container $6,640 for 40ft Refrigerated Container + Surcharges $781 - $1,095
  22. 22. Two Tokachi models are developed and thought of from both supply and demand sides. Tokachi Café – Two Models: Concept Café and Food Restaurant Concept Café Supply Side (Concept) Demand Side (Customer/Competitor) Product Promotion Price Place Supply Side (Concept) Demand Side (Customer/Competitor) 4P Product Promotion Price Place 4P Food Restaurant
  23. 23. Two different models of Tokachi Café, namely Concept Café and Food Restaurant were developed. Tokachi Café – Two Models: Concept Café and Food Restaurant Concept Part of revenue is pooled into Tokachi Café Fund, which is used to support community activities for local people. Open-home kitchen restaurant featuring healthy, natural, fusion-Tokachi style food prepared & served by your own personal (mother) Tokachi Chef Targeted Customer 20 ~ 40 Females Medium Income ($58,000) Male & Female Professionals Lead Menu 1. Veggie tea 2. Fusion 3. Butado Fresh, natural, and locally produced traditional Tokachi fusion (w/ Hawaii) foods. Concept Café (Community Café) Food Restaurant (Tokachi Kitchen)
  24. 24. Concept café model, “Community Café” was developed and thought of from both supply and demand sides. And 4P was elaborated in greater details. Concept Café – Community Café Concept Café Supply Side (Concept) Demand Side (Customer/Competitor) Product Promotion Price Place 4P
  25. 25. Concept Café Model – Product : Concept (Overview) Part of revenue is pooled into Tokachi Café Fund, which is used to support community activities, of local people, by local people, for local people. By doing so, it becomes a platform of community activities where people, information and places are connected. Community Café 1 2 3 4 Tokachi Café Fund support local people and its community Personnel expresses hospitality through welcoming attitudes High quality drinks (teas) & food are provided Transparency toward customers is in thorough Action 1: KSF - Key Success Factor 2: CA – Competitive Advantage “Ba” concept for local people Hospitality Perfection Honesty Core Value KSF1 ○ ◎ ○ ○ CA2 ◎
  26. 26. Concept Café Model – Product : Concept (Overview) All aspects of the café are organically connected to convey the Mr. Goto’s vision of “Ba” to customers. Menu Entertainment InteriorPersonnel Tokachi Hawaii Community Café Customer InformationCustomerPersonnel
  27. 27. By decomposing items that make up of a café, important factors contributing to a successful café are to be analyzed and worked upon. Menu Round Table Long Table Black Board Workshop Concert Exhibition Fringe Benefits Japanese Style Events Combo Fusion Menu Veggie Tea Café Concept EntertainmentInterior Personnel Concept Café Model – Product : Concept (Overview) Butadon Guide Books Fund Free Samples
  28. 28. Combo Menu Concept Café Model – Product : Concept (Menu) Menu was decided based on the concept of connecting a region (Tokachi) with the world (Hawaii).  Fusion – Mixed Ingredients Menu + Combo Menu1  Introduction of Tokachi dishes to the world2 Mixed Ingredients Menu 1: High recognition in Hawaii 2: High demand in the States 3: Easy to export from Tokachi 1: Info on ingredients, calories & producers 2: Tokachi info/sayings in the bottom of the plate 3: Seasonal foods combo 4: Samples for next order e.g. Bite-sized foods with a six hollowed plate e.g. Mixing Tokachi produced Kinako with milk produced in Hawaii  Kinako Latte
  29. 29. Butadon Concept Café Model – Product : Concept (Menu) Menu was decided based on the concept of connecting a region (Tokachi) with the world (Hawaii).  Fusion – Mixed Ingredients Menu + Combo Menu1  Introduction of Tokachi dishes to the world2 Veggie Tea 1: No competitor serves veggie tea (CA*) 2: Advantage of Tokachi as “agricultural kingdom” 3: Easy to export 1: High popularity among Hawaiian people 2: Original Tokachi dish (Tokachi’s uniqueness) *: CA – Competitive Advantage
  30. 30. Concept Café Model – Product : Concept (Atmosphere/Interior) Configuration of Tokachi Café is shown below. On the huge black board, included are community activities, seasonal events, product/info and mission statement. One person counter Long Table with Toakchi relevant materials Open Kitchen HugeInfoBlackBoard Round Table Toilet TransparentShelf
  31. 31. Concept Café Model – Product : Concept (Atmosphere/Interior) Atmosphere/Interior was decided based on the concept of connecting customers with other customers and information. Connecting customers with other customers  Round tables with round chairs  Long tables with long chairs 1 2 1. Tables and chairs to be shared together Make comfortable and friendly atmosphere so that customers can have talks 2. Tokachi / Hawaii guide books to be prepared Make Tokachi and local information accessible to customers 3. Seasonal foods and processed foods to be tried Make processed foods made of Tokachi ingredients such as jams and dressings available for free to customers
  32. 32. Concept Café Model – Product : Concept (Atmosphere/Interior) Atmosphere/Interior was decided based on the concept of connecting customers with other customers and information. Connecting customers with information  Big info sharing black board1 “Community Board” is used to encourage communications between customers 1. Social / community activities e.g. recruit helpers for the elderly living alone & volunteers for cleaning parks 2. Regular / seasonal events e.g. sports event, music festival, bazaar, flea market, tea ceremony 3. Café information & product information e.g. mission statement, café history, production process
  33. 33. Concept Café Model – Product : Concept (Entertainment) Entertaining parts of the café was though of based on the concept of connecting the café with surrounding areas  Events – Workshop, Concert, Exhibition1  Tokachi Café Fund – Funding for community activities2 Workshop Concert Exhibition • Theme is decided by local people’s proposals & voting • Tokachi & Hawaii food day for local wives • Azuki beans mosaic art workshop for local kids • Locals play ukulele & other music instruments and sing local songs to deepen understanding local cultures • Local school kids show their arts • Scenery pictures of Tokachi and Hawaii • Make a short movie with customers and broadcast it
  34. 34. Concept Café Model – Product : Concept (Entertainment) Entertaining parts of the café was though of based on the concept of connecting the café with surrounding areas  Events – Workshop, Concert, Exhibition1  Tokachi Café Fund – Funding for community activities2 Sales Fund Community $1000 $1 Park cleanup program Education program Event organizing Part of revenue is pooled into Tokachi Café Fund, which is used to support community activities, so that its benefits are shared with everyone
  35. 35. Concept Café Model – Product : Concept (Personnel) Personnel aspect of the café was though of based on the concept of connecting personnel with customers.  Education – Japanese style, Fringe benefits1  Relationship – Joint workshop, free sample2 Fringe Benefits Japanese Style 1: Both polite and friendly attitudes toward customers 2: Bow deeply and give back money with both hands 1: Motivate personnel while getting to know Tokachi more 2: Visit farms and production sites and learn more Personnel who work for more than 3 years can fly to Tokachi
  36. 36. Concept Café Model – Product : Concept (Personnel) Personnel aspect of the café was though of based on the concept of connecting personnel with customers.  Education – Japanese style, Fringe benefits1  Relationship – Joint workshop, free sample2 Free Samples Served Joint Workshop 1: Opportunity for personnel to build good relationships with customers even beyond cafe 2: Share info and knowledge about Tokachi with customers 1: Opportunity for personnel to interactive with customers 2: Free samples to be made at workshops
  37. 37. Concept Café Model – Product : Concept (Summary) Level of Attraction (New Customer) Feature LowSocial High LowTokachi Middle HighMenu Low MiddleExperience Middle Level of Attraction (Repeater) Although menu has to attract new customers to come there in the first place, “social part” of Community Café is certainly the differentiating factor. In order to attract customers, four aspects (menu, atmosphere/interior, entertainment and personnel) of the café are thought of creatively, but the concept of “Ba” was expressed most in a way that Tokachi Café Fund supports local people and its community.
  38. 38. Concept Café Model – Product : Customer (Persona) Three potential customers were interviewed to find unmet needs more precisely. 1 Jessica, University Student (21 years old) Tea Farm Café Reasons: working by herself after work 2 Kaili, University Student (21 years old) 1) Starbucks Coffee 2) Bogart’s Café Reasons: 1) working after work 2) go for a lunch 3 Chie, Aesthetician (39 years old) 1) Nordstron Café 2) Café Julia Reasons: 1) go for a lunch 2) go for a lunch with acquaintance
  39. 39. From proximate purposes of going to a café, underlying needs, and in turn possible solutions were considered. Concept Café Model – Product : Customer (Customer Behavior Analysis) Possible Solutions Underlying Needs Proximate Purpose Café Serving tea with pots Movie theatre Relaxing background music Kitchen timer Pictures Outside seats Staying long Easy to concentrate Easy to gather Having conversations Different atmosphere Going for lunch Guide books Working
  40. 40. Concept Café Model – Product : Competitor List of potential competitors with a focus on The Pacific Place Tea Garden Café. Cafe Food Facilities Demographics Locations Key Factor Sucess Age Price Tea Farm Café Wide selection of tea, sandwiches, soups, desserts Small size, limited seating, no kitchen Students, tea lovers, tea enthusiasts, Hawaiians, visitors S. King St, Honolulu Quality, wide tea selection 18-24 $3-$30 The Pacific Place Tea Garden Café 60 specialty teas and coffees, pastries, sandwiches Small size, limited seating, no kitchen Health conscious consumers, tea and coffee lovers Ala Moana, Honolulu Innovative products: tea and fruit fusions, tea lattes; award- winning specialty drinks 20-40 $3-$10 Fresh Cafe Fresh sandwiches, salads, soups, and drinks Small size, limited seating, large warehouse space in back Artists, students, musicians, entrepreneurs Kaka'ako Large warehouse in back, host events for local community 20-40 $3-$10 Kahumana Cafe Local, fresh organic meals straight from farm to table Medium size, big windows, located on a farm Health conscious consumers, students, chefs, cooks Waianae Farm to table concept, located on a farm, serve local food 20-40 $15-$20
  41. 41. Concept Café Model – Product : Competitor Summary of competitor analysis  No competitor has an unique competitive advantage (CA).  Competitor’s Key Success Factors (KSF) are the following:  Unmet Needs: There are very few café’s that focus on Japanese tea and fusion tea. In conclusion, there is a market for a café that focuses on vegetable tea and fusion tea experience. Quality products, innovativeness, wide selection, along with a focus on health and sustainability.
  42. 42. Concept Café Model – Promotion Promotion will be broken down into two focuses: media blitz and buzz campaign. Social Campaign Media blitz will include coverage via newspaper articles, T.V. highlights, magazines, etc. Coordinated effort to encourage sharing via social media through engagement with active consumers. E.g. Facebook, Instagram, Twitter, Yelp events, soft opening, etc. Media Blitz • Newspaper: Midweek and Honolulu Star Advertiser • Local T.V. stations: KGMB, KHNL, and KFVE • Magazines: Pacific Business News, Hawaii Business Magazine, Honolulu Magazine etc.
  43. 43. Concept Café Model – Promotion Listed are several promotion ideas for the café, and we’ll focus in on two of them. Promotion Ideas 1. Teach agricultural techniques to local Hawaiian farmers. 2. Collaborate with locals living in Hawaii. 3. Give out an annual Tokachi Pioneer Award. Will be given out at Startup UH or Startup Weekend Honolulu to the team that exemplifies a pioneer spirit. 4. Have a Tokachi Queen. Partner with the Cherry Blossom Festival and their beauty pageant. 5. Flash mob with Tokachi inspired music.
  44. 44. Concept Café Model – Promotion These promotion ideas are explained more in-depth. Ideas Description Teach agricultural techniques to Hawaiian farmers. The farmers from Tokachi can share and teach their agricultural techniques to Hawaiian farmers. This will be beneficial to the local Hawaiian community, and in return, the Hawaiian farmers can share their knowledge with Tokachi. This will promote awareness to the agricultural community and will be mutually beneficial. Collaborate with locals living in Hawaii Through collaboration, the café will gain a wider audience. For example, the café can partner with Peter Dods, the president of Easy Music Center, and host a live music event featuring local Hawaiian music and Tokachi music. In addition, we can use other locals in different industries to create awareness and buzz.
  45. 45. Concept Café Model – Price : Cost (Financial Model) Café Model Revenue 33,761$ Revenue/sqft/month 47.48$ Cost of Goods Sold 11,141$ Cost of Labor 13,600$ COGS revenue multiple: 0.33 Gross Profit 9,020$ Tusbo: 20.0 SQFT of property 711 Seats 25 Rent 2,631$ SQFT Rental rate/month $3.70 Common Area MX 1,067$ NNN Property Taxes 284$ NNN Building Insurance 200$ NNN Utilities 2,500$ Marketing 1,688$ Marketing Rev multiple: 0.05 Insurance 650$ Sub Total 9,020$ EBITDA -$ Interest -$ Depreciation -$ Tax 30% -$ Net Income -$ Cash flow -$ Enterprise Value -$ Avg Daily Sales 1,125.35$ Avg Occupied Seats 10 Hours Open 12 Avg Sales/Hr 93.78$ Seat Hours: 120 Sales/Seat 9.38$ Break Even Revenue: $33,800 / month $1,125 / day ~$10 / customer Costs: 33% COGS 40% Cost of Labor 27% Gross Margin Size: 711 SQFT 20 Tsubo 25 Seats Staff: GM: 1 Kitchen: 1 Hourly: 5
  46. 46. Concept Café Model – Price : Competitor Comparison Perceptual Map of Tea Cafes in Hawaii Quality $20 $10 $0 $5 $15 5 Star*1 Star* * Global Review Site, Yelp’s star (evaluation) is assumed to reflect the quality of cafes Price Minimum price per customer from a cost point of view Tea Farm Café Tea Garden Starbucks Tokachi Café
  47. 47. Concept Café Model – Price : Competitor Comparison Pictures of other Tea Cafes in Hawaii. - Tea Farm Cafe
  48. 48. Concept Café Model – Price : Competitor Comparison Pictures of other Tea Cafes in Hawaii. - The Pacific Place Tea Garden Café
  49. 49. Concept Café Model – Price : Competitor Comparison Pictures of other Tea Cafes in Hawaii. - Taste Tea
  50. 50. Concept Café Model – Place : Secondary Info (Land)
  51. 51. Concept Café Model – Place : Secondary Info (Land)
  52. 52. Concept Café Model – Place : Secondary Info (Land) Demographics – 2320 South King Street Population (2012) 1-mile radius 3-mile radius 5-miles radius Male Population 34,652 107,089 149,830 Female Population 35,829 111,275 154,419 Total Population: Adult 62,205 187,995 255,005 Total Daytime Population 96,881 314,622 417,525 Total Employees 64,438 209,448 265,437
  53. 53. Concept Café Model – Place : Secondary Info (Land) Demographics – 2320 South King Street Population (2012) 1-mile radius 3-mile radius 5-miles radius Total Population: Median Age 41 44 43 Total Population: Adult Median Age 46 49 50 % Total Population: 10 – 19 years old 8.93% 8.63% 9.91% % Total Population: 20 – 29 years old 19.39% 15.30% 14.32% % Total Population: 30 – 39 years old 14.18% 13.52% 12.87% % Total Population: 40 – 49 years old 13.40% 13.90% 13.79% % Total Population: 50 – 59 years old 13.89% 15.01% 14.90% % Total Population: 60 – 69 years old 11.17% 11.74% 11.46%
  54. 54. Concept Café Model – Place : Secondary Info (Land) Demographics – 2320 South King Street Population (2012) 1-mile radius 3-mile radius 5-miles radius % Asian Alone 51.30% 53.58% 55.98% % White Alone 23.97% 21% 17.68% % Two or More Races Alone 15.32% 16.62% 16.27% % Native Hawaiian and OPI alone 6.66% 6.71% 8.27% % Hispanic 5.31% 5.04% 4.86% % Black or African American 1.48% 1.09% 0.91%
  55. 55. Concept Café Model – Place : Secondary Info (Land) Demographics – 2320 South King Street Housing (2000) 1-mile radius 3-mile radius 5-miles radius Housing Units 38,443 102,843 128,083 Occupied Housing Units 31,358 88,431 112,004 % Owner Occupied Housing 33.17% 41.38% 44.40% % Renter Occupied Housing 66.83% 58.62% 55.60% Vacant Housing Units 18.43% 12.98% 1255%
  56. 56. Concept Café Model – Place : Secondary Info (Land) Demographics – 2320 South King Street Income (2012) 1-mile radius 3-mile radius 5-miles radius Household Income: Median $44,352 $54,591 $57,740 Household Income: Average $63,099 $77,008 $82,644 % Household income: Less than $25,000 26.12% 22.33% 21.38% % $25,000 - $50,000 24.74% 19.94% 18.92% $50,000 - $75,000 18.14% 17.59% 17% $75,000 - $100,000 10.81% 12.25% 12.08% $100,000 - $150,000 9.16% 13.76% 14.82% $150,000 or more 6.34% 10% 11.84%
  57. 57. Concept Café Model – Place : Secondary Info (Land)
  58. 58. Concept Café Model – Place : Secondary Info (Land)
  59. 59. Concept Café Model – Place : Secondary Info (Land)
  60. 60. Concept Café Model – Place : Secondary Info (Land) Demographics – 2320 South King Street Population (2012) 1-mile radius 3-mile radius 5-miles radius Male Population 17,943 82,510 125,055 Female Population 19,123 85,200 129,785 Total Population: Adult 31,259 144,268 217,599 Total Daytime Population 31,533 203,206 360,155 Total Employees 13,119 122,419 235,581
  61. 61. Concept Café Model – Place : Secondary Info (Land) Demographics – 2320 South King Street Population (2012) 1-mile radius 3-mile radius 5-miles radius Total Population: Median Age 46 44 44 Total Population: Adult Median Age 52 50 50 % Total Population: 10 – 19 years old 9.43% 8.97% 8.98% % Total Population: 20 – 29 years old 12.7% 15.51% 14.43% % Total Population: 30 – 39 years old 12.01% 13.05% 12.99% % Total Population: 40 – 49 years old 13.7% 13.68% 13.88% % Total Population: 50 – 59 years old 15.42% 15.07% 15.33% % Total Population: 60 – 69 years old 11.35% 11.77% 11.87%
  62. 62. Concept Café Model – Place : Secondary Info (Land) Demographics – 2320 South King Street Population (2012) 1-mile radius 3-mile radius 5-miles radius % Asian Alone 58.46% 52% 54.19% % White Alone 16.36% 23.36% 20.69% % Two or More Races Alone 19.5% 16.63% 16.64% % Native Hawaiian and OPI alone 4.52% 5.98% 6.55% % Hispanic 4.35% 4.88% 4.81% % Black or African American 0.47% 1.03% 0.99%
  63. 63. Concept Café Model – Place : Secondary Info (Land) Demographics – 2320 South King Street Housing (2000) 1-mile radius 3-mile radius 5-miles radius Housing Units 13,653 78,927 115,132 Occupied Housing Units 12,990 66,687 99,995 % Owner Occupied Housing 60.54% 46.08% 45.07% % Renter Occupied Housing 39.46% 53.92% 54.93% Vacant Housing Units 4.86% 15.51% 13.15%
  64. 64. Concept Café Model – Place : Secondary Info (Land) Demographics – 2320 South King Street Income (2012) 1-mile radius 3-mile radius 5-miles radius Household Income: Median $78,459 $57,351 $58,047 Household Income: Average $98,407 $85,087 $83,872 % Household income: Less than $25,000 11.64% 20.42% 21.03% % $25,000 - $50,000 14.34% 19.29% 18.88% $50,000 - $75,000 17.44% 17.3% 16.87% $75,000 - $100,000 14.08% 11.85% 12.32% $100,000 - $150,000 22.83% 14.12% 14.51% $150,000 or more 15.03% 12.82% 12.31%
  65. 65. Supply Side (Concept) Demand Side (Customer/Competitor) Product Promotion Price Place 4P Food Restaurant Food restaurant model, “Tokachi Kitchen” was developed and thought of from both supply and demand sides. And 4P was elaborated in greater details. Food Restaurant Model – Tokachi Kitchen
  66. 66. Tokachi Café’s mission statement was created to convey Mr. Goto’s message in a concise way. We Tokachi Café create “Ba” where the authentic culture of a region manifests into a unique localized experience to showcase Tokachi to the world while nurturing a sense of pride in identity to people in the region. Mission Statement Food Restaurant Model – Recap of mission statement
  67. 67. Food Restaurant Model – How can we create “Ba”? Kita no yatai Junko-san’s kitchen Homey atmosphere customer customer chef customer
  68. 68. Food Restaurant Model – Product : Concept (Overview) TOKACHI KITCHEN An open-home kitchen concept restaurant featuring healthy, natural, fusion-Tokachi style food prepared and served by your own personal (mother) Tokachi Chef
  69. 69. Food Restaurant Model – Product : Concept (Overview) Homey Healthy Tokachi TOKACHI KITCHEN Foods are not like so- called “Japanese food” (Sushi, sashimi…) Chef serves healthy meals. Customer can easily talk with chef.
  70. 70. Food Restaurant Model – Product : Concept (Overview) Kitchen table chef customer Food is prepared and served by customer’s own personal chef. Homey atmosphere Healthy Tokachi meal Fresh, natural, and locally produced traditional Tokachi fusion (w/ Hawaii) foods is served.
  71. 71. Food Restaurant Model – Product : Concept (interior) Large, Open- home Kitchen 4-6 seats 4-6 seats Move-able divider Tables can combine Wall art of Tokachi farmer/food/to wn/culture Prep kitchen/ca binets Head chef Cooking student Cooking student sous chef
  72. 72. Food Restaurant Model – Product : Concept (Personnel) Head chef / Sous chef1  Personable, friendly  Tokachi Food and Culture Knowledge  Skilled in Cooking Cooking Student (Apprentice Program)  From local culinary school (KCC)  Potential to move to Chef Position 2
  73. 73. Food Restaurant Model – Product : Concept (Menu) Locally produced traditional Tokachi fusion (w/ Hawaii) foods can be new for customer. Japanese restaurants in Hawaii There are no specific lead items. Menu will be like tapas style(small-plate dishes) based on Junko-san’s recipes.
  74. 74. Food Restaurant Model – Product : Concept (Key Success Factors) Key Success Factors (KSFs) = experience of personalized healthy home meal prerared and served by personable chef.  Visual Experience (beautiful and real home kitchen)  Emotional Experience (important, special, warm, safe, fun, and Ohana/Family feeling)  Taste Experience (fresh, natural, healthy, local product, made from scratch)  Service Experience (excellent service/ personal attention)  Knowledge/Social Experience (Tokachi culture, food source, cooking, socialize with friends, chef, student) Key Success Factor
  75. 75. 2 Food Restaurant Model – Product : Customer image • Locals • Works in a professional field • Median Income in Honolulu (greater than $58,000) • Health conscious: nutrients/food awareness and support local products) • Likes Asian/Japanese food • Often goes to the restaurant with his family Peter Dods (35 yrs old, male)
  76. 76. Food Restaurant Model – Product : Customer Analysis Interviewed with Hawaiians Cultural Differences: 1. Transportation: Most of people go out to eat dinner by car: Legal issue difference 2. Food & Menu •Already familiar with Japanese foods such as Kushiage, shabushabu, izakaya menu and sushi
  77. 77. 2 Food Restaurant Model – Product : Customer Analysis Cultural Differences: 2. Food & Menu •Menu written in Japanese shows authenticity •In the United State, most of food menu is Categorization of Japanese food is different •Secret menu does not exist often in Hawaii •Less knowledge about some Japanese food to stimulate ordering more
  78. 78. 2 Food Restaurant Model – Product : Customer Analysis Popular Food : 1. Butadon 豚丼 2. Robatayaki 炉辺焼き 2. Korean BBQ 焼肉KAGURA 4. BBQ@ 千年の森 4. Dinner 懐石料理@十勝川温泉 4. Asparagus 4.Junko-san’s cone soup Desert : 1.Soft cream ソフトクリーム 2. Ohagi おはぎ 2.Soy bean pudding 豆乳プリン
  79. 79. Food Restaurant Model – Product : Competitor Potential competitors would be Fresh, Healthy and Natural restaurants.
  80. 80. Food Restaurant Model – Product : Competitor Potential competitors would be Fresh, Healthy and Natural restaurants. Competitor Summary  No Competitor has any unique competitive advantage  Competitor’s key success: able to just provide consumer need for vegan and healthy food. However, there are limited offerings to meet the growing trend of locally produced and healthy organic offerings.  Un-Met Needs: There are very few healthy restaurants. Other needs are met by Whole Foods or Healthy Grocers. Whole Food is very profitable in Hawaii, and is already planning a third location opening in Ward-Ala Moana area.  Thus, there is still room for a successful health-conscious restaurant
  81. 81. Food Restaurant Model – Promotion Promotion Plan 1) Similar to Café 2) Need for public promotion of Chef or Visionary Paid Promotion  $5,000 budget prior to open  5% of sales in perpetuity  Weekly Magazines (Light House, KauKau, MidWeek) Media Promotion  3-Month media campaign, begin before hard open  Features in documentary, local TV, radio, and print  Arrange access to restaurant/cafe Social Engagement  Active social media (Facebook, instagram, yelp!)  Employ “freemium” advertisement on Vivinavi, Yelp  Host or attend culture, agriculture events
  82. 82. Food Restaurant Model – Price : Company (Financial Model) Break Even Revenue: $53,180 / month $1,770/ day ~$22 / customer Costs: 35% COGS 44% Cost of Labor 20% Gross Margin Size: 1000 SQFT 28.1 Tusbo 40 Seats Staff: GM: 1 Kitchen: 2 Hourly: 8 Restaurant Model Revenue 53,175$ Revenue/sqft/month 53.18$ Cost of Goods Sold 18,611$ Cost of Labor 20,910$ COGS revenue multiple: 0.35 Gross Profit 13,654$ Tsubo: 28.1 SQFT of property 1,000 Seats: 40 Rent 3,500$ SQFT Rental rate/month $3.50 CAM 1,500$ NNN Property Taxes 400$ NNN Building Insurance 200$ NNN Utilities 4,000$ Marketing 2,659$ Marketing Rev multiple: 0.05 Insurance 800$ Sub Total 13,059$ EBITDA 595$ Interest -$ Depreciation 595.24$ Non Cash Tax 30% 0$ Net Income 0$ Cash flow 595$ Principle PMT, Dep Enterprise Value 79,365$ Avg Daily Sales 1,772.51$ Avg Occupied Seats 10 Hours Open 8 Avg Sales/Hr 147.71$ Seat Hours: 80 Sales/Seat 22.16$
  83. 83. Food Restaurant Model – Price : Company, Competitor & Customer Prices driven by cost and market COST:  Income model requirement: 35% Cost of Goods Sold (COGS) and 44% labor  COST + Pricing: divide costs by 79%  (ex. Cost of Pizza is $6.50: 6.5/.79 = $8.22)  21% gross margin and compare with market value MARKET:  Comparables are Medium to High-end Japanese Restaurants in Honolulu  Per-person Dinners range from $12 - $50 based on type of food (Udon to Sushi) Ultimately the customer determines value and makes the decision to buy based on his/her own perception of:  Quality (ingredients, taste, hospitality/service)  Convenience (distance from home/work, speed of service, parking)  Price
  84. 84. Food Restaurant Model – Price : Competitor Comparison (Healthy Food) Price range of Healthy Restaurant in Hawaii Price $10 Chef Chai Simply JoyLoving Hut Andy’s Sandwich Green & Vines Veggie Star Peace Cafe $40 $20 Break Even Revenue : ~$22 $60 $30 $50 Tokachi Kitchen
  85. 85. Food Restaurant Model – Price : Competitor Comparison (Healthy Food) Price range of Japanese Fusion Restaurant in Hawaii Price $10 $40 $20 Break Even Revenue : ~$22 $60 $30 $50 Hiroshi Eurasion Tapas Alan Wong’s Restaurant Roy Yamaguchi’s Izakaya Naru Tokachi Kitchen
  86. 86. Food Restaurant Model – Price : Competitor Comparison Pictures of other Japanese-Hawaiian fusion Restaurant in Hawaii - Izakaya Naru(Okinawa style)
  87. 87. Food Restaurant Model – Price : Competitor Comparison Pictures of other Japanese-Hawaiian fusion Restaurant in Hawaii - Hiroshi Eurasion Tapas(Japanese chef, fusion)
  88. 88. Food Restaurant Model – Price : Competitor Comparison Pictures of other Japanese-Hawaiian fusion Restaurant in Hawaii -Roy Yamaguchi’s(chef:Hawaiian, born in Japan)
  89. 89. Food Restaurant Model – Price : Competitor Comparison Pictures of other Japanese-Hawaiian fusion Restaurant in Hawaii -Alan Wong’s Restaurant (chef’s father is Japanese)
  90. 90. Food Restaurant Model – Price : Competitor Comparison Open kitchen style restaurant - Nanzan Girogiro(Kyoto Kaiseki)
  91. 91. Food Restaurant Model – Place : Cost (Financial Model) Location: Central Honolulu - High concentration of Japanese restaurants - Rental Rate: ~$3.50/Sqft $124/坪 per month KAKA’AKO WAIKIKI ALA MOANA MOILIILI MAKIKI DOWNTOWN
  92. 92. Food Restaurant Model – Place (Competitor & Customer) KAKA’AKO Median Income: $62,440 (Honolulu: $58,000) 15-year redevelopment plan (Population 12,000  50,000 in 2030) Access to downtown for lunch services Urban lifestyle
  93. 93. Food Restaurant Model – Place (Competitor & Customer) Ala Moana Median Income: $45,307 (Honolulu: $58,000) High Concentration of Japanese Restaurants Accessible by Waikiki Tourists
  94. 94. Food Restaurant Model – Place (Competitor & Customer) MOILIILI Median Income: $43,800 (Honolulu: $58,000) Near Waikiki and University of Hawaii Concentration of Japanese Culture
  95. 95. + + - There are pros and cons to both Concept Café Model and Food Restaurant Model. Food Restaurant Concept Café PROS CONS - • Elaborate Tokachi food dishes can be served (High Quality) • Experience of healthy home meals are prepared and served by personable chef (Hospitability) • Local cooking students in community are trained (Concept of Ba) Comparison Matrix – Concept Café and Food Restaurant • Initial capital required (rent & kitchen equipment) and running cost are high (High Cost) • Success is highly dependent on chef (High Risk) • There are many high-quality JP food restaurant (High Competition) • Thanks to Tokachi Café Fund, the relationship with community can be easily established (Concept of Ba) • Initial capital required (rent & kitchen equipment) and running cost are relatively low (Low Cost) • Fusion meals and veggie tea can be competitive advantage (CA) • Elaborate Tokachi food dishes cannot be prepared (Less Tokachi) • Sales per customer is low and rotation rate is slow (Low Sales) • Concept resonates only among people who share Community Café’s values and lifestyle (Less Reachable)
  96. 96. • Difficult to understand Goto-san’s univerzalized thoughts for Tokachi and communicate it to Hawaiian side Verbalizing Client’s Thought • Difficult to understand what other members are doing • Overtask • Feeling of trust Language • Students’ strength= can get primary information • Interviewed 75 people and did online survey for 62 people Primary data / secondary data Take Away – Lessons we learned from Tokachi Project Common difficulties of conventional MoG projects are intensified further in Tokachi project.
  97. 97. • Likely to lose our positioning, role • Listening to professions and private things from a variety of professionals in HAPA Big Scale • Few fixed conditions • Difficulty of understanding real clients’ desire and vision • Great change in plan or strategy by small change Starting from scratch • Gap of motivation between Hawaii and Japan side • Gap of how to think • – Think about what we can do first, not what we want to do • Information organizing in Communication – Skype, Google drive Global Project Take Away – Lessons we learned from Tokachi Project Tokachi project’s uniqueness made it even more difficult to finalize it.

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