ColoURoseSBusiness Decision Making –Business Plan Team: Andrew

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Company Description•Startup in flower business •Focus roses•Create disruptive technology to engineer new color variants•Breeding takes > 20 yrs, our technology <2 yrs•Current and future potential buyers of the company's product(s) or service(s). •US market is $3.83B (2009)

• Cut flowers: $1B•World flower market is >$100B •Market is flat currently ( recession) but long term growth is estimated at 6% yearly •Mass market•Market exists of top-level specialty firms (new products), propagators and sale channels•Our goal: Specialty firm delivering new technology, new breeds

CEO J. Doe, MBACFO J. McCLoskeyVP R&D R.E. Everts, PhDVP Sales & Marketing L. ZhaoVP Operations T. Suseberry

Board of DirectorsJ. Doe, MBA (Chairman)N. Blue, CEO Florigene Pty (Suntory Ltd subsidiary)M.J.T. van Eijk, SVP KeygeneD. Austin, David Austin RosesS. Korban, Profesor UIUCW. Parrott, Professor UGA

Market analysis summary:• Global market

The floral industry has grown six percent annually, while the global trade volume in 2003 was US$101.84 billion. It consists of cutting flowers, pot plants, and bedding plants.

The worldwide cut flower market is estimated at $30B/annum

• RosesCut Flower Market size is >$30B globally. The rose is rapidly gaining in

market share, account for approx 15% of that market ($450M). New entrants into the cut flower trade concentrate on the rose, its

favourable value-to-weight ratio and high sales volumes being the main attractions (ITC, 1997).

We choose roses as our enter market, target is to acquire 10% of the market, 45million revenue/year.

Aiming for other potential market segments.

Market segmentation• Traditional market segmentation/supply chain:

Market segmentation• Our market segmentation/supply chain:

Growers, wholesalers, retailers are our direct customers. In this way we could shorten supply chain, increase our market share and benefit our end consumers.

Competitive edge• Our disruptive technology enables easy color additions to plants, and will

reduce market lead time from 20+ years to <5 years now and potentially <2 years in the near future.

• We have IP for this new technology. • Can have access to growers, as well as wholesales, retailer and individual

consumers.• Customization?

Marketing strategy• Brand marketing:

Sponsorship- fashion show, public welfare activities, etc.Search engine optimization- to increase our ranking on popular search engine, such as Google, Yahoo, Amazon, BingSocial media- facebook, twister, etc.

• Direct marketing:Company’s web- customer can order onlineOnline ads

Market segments

Breeders & Propagators

•Currently roses only 1 or 2 hues•All other roses are artificial•Cut Flower Market size is >$30B globally•US market is $1B •Roses account for approx 15% of that market ($450M)•Rainbow roses ~10% of that market ($45M/annum)•50% of roses get imported

What is our value proposition?

• Our technology has potential to enter any market segment and take up 5-10% share

• Licensing of our technology for other plant species generates royalties and profit

Bacterial color genes readily availableEasily implemented into plants

Suntory/Florigene own patents on several plant color genes

Florigene offers their BLUE gene IP for board position

R&D• Isolate and grow callus from leaf petioles – embryonic tissue (unlimited supply!)•Gene delivery is performed after routine subculture in Embryo Proliferation Medium•Gene construct is a fosmid containing a sequence of color genes interspersed with promoter sequences and transcription factor binding sites (pH and O2 dependent). Also included are SWITCH genes that enable turning genes of or on.

Create callus from leaf petioles

Create gene constructs and add to plant genome

Grow new plants from callus and select plants expressing correct behavior

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• Our main product will be the combination of transcription factor sites combined with the SWITCH genes. This results in a reproducible technology to create any color combination you want.

• Reduces time to market from 20+ years to <5 years now and <2 years in the near future• DISRUPTIVE technology to current breeder schemes!

PacC

pH regulated transcription factor

Nac-domain

O2 regulated transcription factor

CAH1-domain

CO2 regulated transcription factor

-651 - +41-822 - +1

BLUE RED YELLOW GREEN

COLOUR genes

WHITE PINK

Cre/lox Cre/lox

How do we do it?

Time frame for results

• Rooting takes approx. 3 weeks• Flower buds appear 12 weeks later• Flowers fully developed 3 weeks later.

From transfection to flowers <20 weeks!

When transfecting, many calli createdThus many opportunitiesCan do multiple combinations simultaneously!

Time frame year 1 - 5

• Year 1: create gene constructs for transfection; perform transfections

• Year 2: Propagate multiple “perfect” flowers to create many plants and observe flower color behavior. Can create new generation every 10 weeks

• Year 3-5: Sell stock to US growers– Sell small plants (100,000/year) for $100.00/each– Royalty payments ($0.01) for every stem sold to mass market

(100M stems/year US)– Royalty payments ($1.00) for each plant sold at

nurseries/garden centers to consumers– Gain access to other markets (Europe, Asia)

Requirements

Needs: Cost• 2 Scientists, 2 technicians $300,000*• Laboratory space, 1,000 sf $500,000*– Growth chambers (37°C) $ 100,000– Molecular biology equipment $ 200,000

• Green house, 2,000 sf $1,000,000• Farmland, 2 acres $30,000• Total $2,130,000

*yearly recurring cost

Exit strategy II:

*buyout by Florigene if successful

Exit Strategy I:License our technology to othersUse our technology to enter other flower segments (Chrysantemum, pansies)

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