blueavocado business plan appendix...

Business PlanJanuary 2013

ABlueAvocado Business Plan APPENDIX

Appendix A BlueAvocado Business Plan 1

BlueAvocado CONFIDENTIAL

Source: BlueAvocado, Co. Reprinted with permission.

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Table of ContentsI.0 BLUEAVOCADO OVERVIEW

2.0 THE COMPANY2.1 Sustainability Vision 42.2 Key Differentiators 5

3.0 WORLDWIDE SUSTAINABILITY MARKET OPPORTUNITY3.1 The Economic Market 73.2 The Reusable Tote Category 83.3 The “Conscious Consumer” 93.4 The Socially Responsible Investor 93.5 The Environmental Opportunity 103.6 Retailers’ Focus on Sustainability 11

4.0 PRODUCT OVERVIEW4.1 At the “Pit” of the Blue Avocado 124.2 Brand Overview & Channel Stratification 124.3 Category Overview and Growth 134.4 Competitive Overview 144.5 Proprietary Position 14

5.0 TECHNOLOGY SERVICES OVERVIEW5.1–5.6 (not provided)5.7 Launch Timeline 15

6.0 SUPPLY CHAIN6.1 Description of Supply Chain 156.2 Production Timeline 166.3 Factory Audit 166.4 Material Sourcing 176.5 Made-in-the-USA Initiative 17

7.0 SALES & MARKETING7.1 Sales Team 177.2 2013 Sales Goals 187.3 Sales Channels & Key Accounts 187.4 Marketing Mix 207.5 Market & Competitive Research 237.6 Pricing Strategy 23

8.0 FINANCIAL OVERVIEW8.1 2012 Financial Performance 238.2 2013 Cash Cycles 238.3 2013 Forecast 248.4 Five-Year Forecast 24

9.0 TEAM9.1 Management Team 259.2 Board of Directors 279.3 Advisory Board 27

10.0 CAPITAL PLAN 10.1 Exit Potential 27

11.0 SUMMARY 27

Appendix A BlueAvocado Business Plan2

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1.0 BLUEAVOCADO OVERVIEW

A women-led C-corporation headquartered in Austin, Texas, BlueAvocado’s vision is to inspire consumers to reduce their ecological footprint with eco-chic products for life and home. Tapping the $10B sustainable living segment, BlueAvocado’s product portfolio includes reusable shopping kits, lunch kits, washable Ziploc replacements, recycling bins, eco-travel, and eco-beauty items. In 2011 (name not provided), a multi-million dollar brand, author, and celebrity, joined the company as an investor and lead designer to tap the 18−25 millennial segment. Currently all BlueAvocado–branded products are made with certified 50%–100% post-consumer PET water bottle fabric from REPREVE® and an impact label on each product showing the waste avoided or bottles upcycled, and its carbon footprint. In April 2012, the company launched its technology service with a green rewards iPhone application with Whole Foods and the Whole Planet Foundation, rewarding shoppers who make daily green actions with coupons that can be used or donated to mirco-enterpreneurs. The app received a Wired magazine award for one of the best green apps for 2012. BlueAvocado has a distribution partnership with 100-year old distributor (name not provided), who has secured placement in more than 5,000 flagship retail outlets including: The Container Store, Whole Foods, BedBath & Beyond, Meijer, JCPenney, Target, and Safeway. BlueAvocado has been featured in major media outlets including People, RealSimple, InStyle, CNN and more. To capitalize on the growth opportunity, BlueAvocado is rais-ing $3−4M in equity capital to hire key sales and marketing executives, build inven-tory, launch national marketing programs, create a Made-in-the-USA line and expand its green rewards technology ecosystem.

Appendix A BlueAvocado Business Plan 3

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1.0 THE COMPANY

2.1 Sustainability VisionBlueAvocado Co™ (the “Company”) is a women-led, C-corporation located in Austin, Texas. It is not only what BlueAvocado makes that counts, but how we operate that sets us apart as a leading sustainable brand and business. The company’s vision outlines our triple-bottom line goals that include the economic, social and environmental impact metrics. We measure ourselves against these goals quarterly, and share our results with our key stakehold-ers. Underpinning this vision is a “One Planet” stakeholder-driven business model that aligns all of our key stakeholders around the vision that we must cherish and preserve the finite resources of our planet. In addition, our mission—“Do good. Get it done.” reminds our team members of the job we have to do every day. Our corporate values reinforce a culture aligned to create joy and impact. BlueAvocado endorses CERES principles, a

ten-point environmental code of conduct that rein-forces a company’s commitment to environmental awareness, stewardship and accountability. Four key codes of the CERES principles that under-score many of our decisions include: protection of the biosphere, reducing use of natural resources, reducing the disposal of wastes, and inspir-ing energy conservation. To measure and share its environmental and economic performance, BlueAvocado publishes an annual sustainability report, following the international standards set by the Global Reporting Initiative (GRI). As a pri-vately-held company, this is a unique and signifi-cant initiative, underscoring the commitment to a triple-bottom-line.

For BlueAvocado, sustainability is a platform for innovation. From product devel-opment to marketing, BlueAvocado has sought to reduce our environmental impact and make a ripple. Our product development roadmap is guided by consumer behav-ior and how millions are greening their lives. Working with leading market research firm BBMG, we work to stay on the cutting edge of green trends, while seeking the input of our BlueAvocado fans and retail customers. In addition to creating products that reduce our impact, BlueAvocado has created a supply chain to back-up its green products. The company forged a partnership with (name not provided), using their (name not provided)™ recycled polyester fabric, made from recycled bottles and waste yarn. (Name not provided) offers a level of certification at the fiber level that ensures the percentage of recycled content. In addition, BlueAvocado partnered with (name not provided) to audit its own energy use throughout its supply chain. In addition, BlueAvocado conducted its own audit of its manufacturer to ensure the company’s was meeting environmental, health, safety and labor standards.

BlueAvocado takes this vision of behavior change to the con-sumer, providing a carbon footprint label (a nutrition label for the planet) on every product, reminding the shopper of the plastic bags and carbon avoided with each trip, and annualized over the course of a year. As part of its mission-driven marketing campaign,

BlueAvocado Vision & Metrics•Deliver a strong ROI for

shareholders•Create an impact that

makes a ripple—where the acts of one affect the lives of many.

• Empower millions of people to reduce their carbon footprint—because they can

• Take a stand for the planet and leave it billions of pounds lighter in CO

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emissions• Invest in the dreams and

journeys of other women entrepreneurs

4 Appendix A BlueAvocado Business Plan

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BlueAvocado created the Billion Bag Pledge, inviting 1 million to pledge to avoid 1 billion plas-tic bags. To inspire participation in the Billion Bag Pledge, BlueAvocado created “Schlumpy,” an 8-foot ball covered in 1,000 plastic bags (the number an average family uses in a year) to be its mascot. As a tangible symbol for environ-mental problems too big to ignore, Schlumpy has “rolled” around the country, from Los Angeles to New York, music festivals to rallies and races, raising awareness about the damag-ing environmental effects of plastic bags and inviting Americans to kick their habit of more than 100 billion plastic bags each year, as a first step on a journey to awareness and understand-ing about what living a greener life means. At the end of 2009, BlueAvocado had gathered the support of thousands pledging to avoid 1.4 million plastic bags, was a social media celebrity and had been featured on CNN at the National Mall for Earth Day.

BlueAvocado founding management team members—Amy George, Paige Davis, and Melissa Nathan—are committed to and steeped in the field of sustainability. In addition, they have tapped the expertise of management team members, leading sus-tainability consultants, investors, and Board Members who have played key leader-ship roles in product development, organizational development and green sourcing with leading companies like Whole Foods, Helen of Troy, MPower Labs, Levi’s and Patagonia. As a company, BlueAvocado has tapped the expertise of market leaders, to create a fresh green brand that resonates with the needs of a new generation of con-sumers, and whose mission is sincere, and the opportunity for potential environmental impact—significant.

2.2 Key Differentiators1. Green Business Model from Inception

• Offers retailers confidence in their backing of a green brand and poten-tial partners an authentic, traceable and transparent commitment to sustainability

• Recycled materials used on product, packaging and in promotional materials; processes to reduce waste

• Carbon footprint label on every product, audited by Green Mountain Energy, shows the customer the impact they make—plastic bags reduced and CO2 avoided, every time they shop

• Stakeholder Model

• Invites supply chain partners to green processes and practices through educa-tion and opportunity

• Follows CERES Principles (see “Company” Section 8.2)

• Follows the BSR Sustainable Consumption model which works to close the loop on the supply chain, and reduce resource consumption throughout the process (see below)

5Appendix A BlueAvocado Business Plan

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2. Retail in Mass Distribution Channels

• Placement in mass retail outlets, breaking through the niche green retail segments, BlueAvocado is securing shelf space and creating success in 9 key retail channels with a focus on mass retailers: Grocery, Mass, Department Store, Home, Catalog, Online Retailer, Direct TV, BA.com.

• Distribution by (name not provided), 100-year old distributor with access to most home retailers today as a result of the success of their launch of the Keurig single-serve coffee maker, which has made retailers millions of dollars.

3. Key Strategic Partnerships

• BlueAvocado forged a partnership with (name not provided), a manufac-turer of textiles based in North Carolina. The company offers a unique recycled polyester fabric made from recycled plastic bottles and yarn that is certified using proprietary thumb printing technology. The company has forged a partnership with BlueAvocado, underwriting media and public relations initiatives, partnering on sales efforts with key national accounts (i.e., Target), and investing in private label merchandise powered by BlueAvocado.

• (Name not provided), the longest serving green power provider in the U.S. BlueAvocado partnered with (name not provided) to create a first of its kind “carbon label,” which is a CO2 emissions footprint for the production and fac-tory shipment. In addition, (name not provided) worked with BlueAvocado to offset 100% of its CO2 emissions associated with producing and shipping their bags. With this purchase, Blue Avocado helped to avoid over 30 metric tons of CO2, a harmful greenhouse gas that contributes to global warming. This has the same environmental impact as: driving a car over 75,000 miles, planting over 4,000 trees annually and recycling over 27,000 pounds of newspaper.

• (Name not provided) is a celebrity partner and designer at BlueAvocado. This partnership provides tremendous brand awareness, market validation, and access to design talent that helps create better products for the fashionable consumer. (Name not provided) participation in our business has also drawn the attention of other top designers, who are eager to design green products that tap our supply chain and green vision.

• Collegiate Licensing Company—The Collegiate Licensing Company (CLC) is the nation’s leading collegiate trademark licensing and marketing company, assisting collegiate institutions in protecting, managing and developing their brands. Founded in 1981, CLC is the oldest and largest collegiate licensing agency in the nation and currently represents nearly 200 colleges, universi-ties, bowl games, athletic conferences, The Heisman Trophy, and the NCAA (including the Men’s and Women’s Final Four, the College World Series, and all NCAA Championships). In 2009, BlueAvocado’s reusable shopping sys-tem (including all 6 items) was approved as reusable shopping tote option. CLC’s mission is to select only high-quality brands. This provides competitive advantage and differentiation to our retailers.

4. Commitment to Shifting Consumer Behavior

• Design, positioning and services to increase use of system and educate con-sumers about their environmental impact, including a carbon label that describes the company and products carbon footprint.


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• Use of packaging to help remember your bag as targeted communications to empower customers to remember their bags

• Implementation of technology services

5. Technology Service that underscores role as the consumer brand of the future

• Provides tighter relationship with our customer, rewarding them for green steps on their journey

• Provides weekly insights to our customers behavior which fuels product devel-opment, marketing, and potential for the greening of America

• Platform to inspire retailers to understand their shoppers’ green needs and provide products that cater to that lifestyle and customer

• Technology service that allows for incremental retailer service revenue, daily visibility with the retailer customer, and puts us in the hands of thousands daily

1.0 WORLDWIDE SUSTAINABILITY MARKET OPPORTUNITY

3.1 The Economic MarketIn the May issue of Harvard Business Review, sustainability was identified as a “mega-trend” of our time, like the information technology generation, sustainability would define the next 60 years. The companies that would capitalize on this opportunity as market “Winners” would be those companies that transformed their business, not just through risk mitigation, but investing in innovation of their products and business model to deliver significant environmental impact. BlueAvocado is in a unique posi-tion to catapult its sincere commitment to sustainability and become a market “win-ner” and leader in the category, creating a platform for growth for the next 30+ years.

The U.S. market for green products that nurture a healthy, sustainable lifestyle (often referred to as LOHAS) is estimated at a $208 billion market in the U.S., and is fast-growing annually (Lohas.org). Globally it is estimated at $600 billion. According to a National Geographic Society/GlobeScan survey of 17,000 people in 17 countries, environmentally friendly behavior among consumers in 10 out of 17 countries has increased over the past year, with consumers in Brazil, India, and China scoring the highest. In addition, GlobeScan’s analysis reveals that “consumers are sending a mes-sage that they want ‘less talk and more action’ from business (and government), or at least action before talk.”

According to the Natural Marketing Institute, the LOHAS market can be classified into the following segments with the estimated market opportunity in the U.S. alone:

• Natural Lifestyles ($10.3B U.S. Market) (Apparel and accessories, indoor & outdoor furnishings, organic cleaning supplies, compact fluorescent lights, social change philanthropy)

• Personal Health ($117.41B U.S. Market) (Natural organic products, nutri-tional products dietary health supplements, integrative health care)

• Alternative Energy ($700B U.S. Market) (Renewable energy, carbon credits/ off-sets)

• Alternative Transportation ($20B U.S. Market) (Hybrid vehicles, biodiesel fuel, car sharing programs)

• Eco Tourism ($42B U.S. Market) (Eco-tourism travel and adventure travel)


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3.2 The Reusable Tote CategoryBlueAvocado’s mission has been to design lifestyle products that make it easy to “do good and get it done” targeting the $10B (U.S.) natural lifestyles market segment. BlueAvocado introduced its first product—the reusable shopping kit intentionally. Market data and advocacy groups often cited “buying a reusable bag” as an “easy first step” on the journey for consumers going green. The company estimates the U.S. reus-able bag market, at $1.9 billion. Growing regulatory pressure and retailer support for “bring your own bags” to provide alternatives to the plastic bags, is fueling growth in the category. In 2008, Swedish Furniture Company IKEA and organic grocery Whole Foods market banished plastic bags. China and Australia have banned plastic bags and numerous cities around the world have joined them. Earlier this year Wal-Mart Stores Inc., the world’s largest grocery and retail chain, pledged to cut its plastic shopping bag waste by 33 percent—or 9 billion bags a year—by 2013 and began a bag-free trial in California, eliminating plastic bags at three stores. Target Corp. in April handed out 1.5 million reusable tote bags in honor of Earth Day. In addition, Target’s 5-cent rebate program for every time a shopper uses their own bags instead of a new plastic one is shifting behavior in America. In August 2010, Mexico City banned plastic bags.

In August 2010, California considered statewide legislation (Bill AB 1998) that would eliminate the distribution of 19 billion plastic bags in California, making them the first state in the U.S. to ban plastic bags. While the bill did not pass it set standards for manufacturers in the reusable bag industry, focusing on the following key attributes:

• Durability = Defined as a bag that must last 100 uses, to be classified as truly reusable and environmentally better than the disposable plastic bag alternative

• Washability = Must be able to be washed or wiped clean to remove or elimi-nate harmful bacteria

• % Post-consumer waste used in material = While the legislation did not require a certain amount, it set the standard for some % of post-consumer waste to be used in the manufacture of the product, providing transparency to allow the consumer to decide

BlueAvocado bags meet or exceed the California standard for durability, washabil-ity, and % of post-consumer waste. While California did not succeed, cities are adopting the legislation at the local level and retailers are studying options to leapfrog the mar-ketplace and comply with these standards. As of September, more than 30 cities includ-ing LA (the largest city to date) and the state of Hawaii has banned or taxed plastic bags.


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3.3 The “Conscious Consumer”According to market research studies in the U.S., the target “conscious consumers” possess the following key traits:

• Busy women 135– 45 2 working hard inside and out of the home, with an aver-age of 2 children

• Controlling discretionary spending for the household

• Focusing on convenience, style and value

• Makes an average of 94 trips to the grocery store annually and spend 2 hours a week shopping

• Naturally wants to do the right thing, aligning purchasing decisions with social values

The company expanded its market to include millennials age 18–25 years of age, who will represent the #1 segment of consumer spending by 2015 and 87% of whom expect businesses and brands to act and offer green. BlueAvocado’s unique focus on women customers makes the case for tapping this growing marketplace.

3.4 The Socially Responsible InvestorThe exponential growth of Socially Responsible Investing (SRI) over the past 20 years is the best evidence that investors and the market will reward companies that make positive contributions to society. Between 1995 and 2007, total dollars under professional management in SRI grew from $639 billion to $2.71 trillion (www .sri.org), outpacing the overall market. SRI investments may include enterprises with good employer-employee relations, strong environmental practices, prod-ucts that are safe and useful, and operations that respect human rights around the world. Community investing, investing in businesses, organizations and individu-als overlooked by traditional lenders, is the fastest growing area of SRI. Over the


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past decade, community investing has grown over 540 percent, from $4 billion to $25.8 billion in assets. The bottom line is that more and more investors adopt and use SRI strategies not only because such investments allow a focus beyond the bot-tom line, but also because returns are comparable to those of more conventional investments.

3.5 The Environmental OpportunityREUSABLE BAGSIn June 2009, the United Nations called on every country to ban plastic bags since there was no justification, and they were killing marine life. Plastic bags are a significant environmental problem, the primary component of urban litter pollution and marine litter pollution worldwide. Single-use plastic bags are light, aerodynamic and are lit-tered at a high rate. Once littered, plastic bags travel through the environment, ulti-mately ending up in the ocean where they join giant “garbage patches” of plastic litter circulating in ocean vortices. In the North Pacific Gyre North of Hawaii, for example, plastic litter originating from California and elsewhere in the North Pacific Rim, ends up in the vortex. In February, scientists discovered another giant “garbage patch” in the Atlantic. In the U.S., Oprah has featured the “garbage patch” island on Earth Day issue for the past two years, challenging consumers to stop using plastic bags. As a result, consumers are more aware of the degradation of our oceans, and the urgency to invite personal and global change. In the U.S., we consume more than 100 billion plastic bags each year.

SUSTAINABLE CONSUMPTIONWith population growth, increasing per capita consumption, and tremendous tech-nological capacity leading to ever greater levels of production and consumption, we have begun to reach planetary limits, threatening the health and function of ecological systems that support all activity on Earth. Consider these facts: i

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• Marine biodiversity loss is increasingly impair-ing the ocean’s capacity to provide food, maintain water quality, and recover from disturbances.

• More than 386,000 square miles (1 millionsquare kilometers) of forest were lost around the world between 2000 and 2005, representing a 3.1 percent loss of total forest as estimated from 2000.

• In 60 percent of European cities with more than 100,000 people, groundwater is being used at a faster rate than it can be replenished.

• By recent estimates, our global footprint now exceeds the world’s capacity to regenerate by about 30 percent, and if our current demands continue, by 2030 we will need the equivalent of two planets to maintain our lifestyles.

As a result, new consumer products companies have to be faced with a new paradigm. Business for Social Responsibility (BSR) has the most holistic view of a “closed-loop” business model designed

Appendix A BlueAvocado Business Plan

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to support sustainability consumption (see below). The BSR model offers a framework for action in three key areas:

• Product Design: Enable sustainability from the start with design that delivers value without taxing natural resources—or people—in the process.

• Consumer Engagement and Behavior: Influence sustain-able consumer choices and behavior through actionable information.

• End-of-Use: Use closed loop models that extend the produc-tive life of materials and energy, and avoid waste.

3.6 Retailers’ Focus on SustainabilitySustainability initiatives for retailers are divided into two views: what the consumer sees (i.e., products), and the initiatives the retailer embraces to increase impact and reduce waste (i.e., energy conservation, green buildings, com-munity activism, labor policies). Publicly traded retailers are under pressure by shareholder groups to enact environmental and social initiatives and disclose envi-ronmental and social information through Sustainability Reports. These communi-cation tools have spawned new strategies and initiatives but are largely reactionary and focused on risk mitigation and cost reduction. As one of the largest retailers in the world, Walmart’s Sustainability initiatives are elevating the topic of sustainability and forcing action among retailers around the world. In less than a decade, Walmart has migrated from the status of underlord among environmentalists, to being one of the most talked-about/ innovative companies at sustainability conferences. While one could argue the initiatives are designed to reduce costs in the supply chain, and not drive product or business innovation, no one can deny the impact. Since 2009, Walmart has launched Supplier Sustainability Assessments to 100,000 suppliers to track environmental footprint and resource use. In 2010, Walmart announced the Sustainability Index designed to rate the sustainability of products and companies, and ultimately share the rating with customers. In 2011, Walmart partnered with Patagonia via the Sustainable Apparel Consortium to create an Index for apparel manufacturers to follow. Despite growing awareness around the importance of sus-tainability, the retail segment is lagging other industry segments in their sustainabil-ity leadership.

Newsweek conducts the only comprehensive study of companies “GREEN RANKINGS” across industries that focus on the 500 largest companies in the U.S. and around the world. The rankings do not assess the “customer experience” (i.e., products), but they do assesses the companies’ environmental footprint (including greenhouse-gas emissions and water use); management (including environmental policies, programs, and initiatives); and disclosure (including company reporting and involvement in transparency initiatives). In their 2011 survey, only 8 retailers were in the top 100 companies nationwide. The top 5 by ranking are heralded as Office Depot—#1, Staples—#2, Best Buy—#3, Walmart—#4, and Kohl’s—#5. BlueAvocado analyzes the sustainability profile of each retailer, targeting those with a sustainability mission and with stated objectives to increase the number of green products.

While the grocery channel has pursued organic and all-natural product growth, the mass retail channel has not pursued the introduction of “non-food” sustain-able products. However, evidence suggests the consumer and the marketplace is


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ripe for green products. This has been the fasted growing segment at the Natural Products Expo (ExpoWest) in recent years, doubling or tripling in number of ven-dors and far outpacing the food industry for growth. In addition to Walmart, three other retailers have a corporate goal to increase the number of green products and greener companies on their shelves: Target, Kohl’s and Safeway. All of these ini-tiatives have been launched in the last 6–12 months. Each retailer has a different method to vet these products to verify green claims (as an example Target has a green claim team). However, the charter is clear that mass retailers want to inspire their customers with more sustainable products, but this is a new field for many mass retailers.

1.0 PRODUCT OVERVIEW

4.1 At the “Pit” of the BlueAvocadoAt the “pit,” or center, of BlueAvocado’s Brand and Product Innovation lies a simple core philosophy: We make it EASY for our target customer to Do Good and Get It Done™. The Company founders and employees hold true to the belief that change is about being mindful, not militant—and about finding some joy in the process. The Company’s brand and product innovation is driven by its commitment to using the following questions as our roadmap for all that we do. When answered in the affirma-tive, the results are products and processes built not only to last—but built to make a difference:

1. ENVIRONMENT: Are our products creating solutions that allow people to reduce their impact on the environment?

2. INNOVATION: Are we going the distance to make our products unique— providing greater functionality to make it EASY to be green?

3. INSPIRATION: Do our products inspire customers to make change in a way that is joyful?

4.2 Brand Overview & Channel StratificationAs a company, BlueAvocado’s brand stands for certified, eco-friendly, smile inducing everyday solutions you can trust. We want our brand to be one customers and retailers can turn to for greener and more innovative options. We work to stratify our brand in market with a “good, better, best” strategy. This evolves to meet the changes and opportunities in the marketplace.


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Good Channel: $9.99 & Under Eco-collection—Primarily Grocery & Drug Channel

• Brand: BlueAvocado Eco-collection

• Retailer-specific Brand: BlueAvocado for Target, BlueAvocado for Whole Foods

Better Channel: Home, Department Stores, Specialty Grocery, Direct TV, Catalog

• BlueAvocado

• XO(eco) by BlueAvocado

Best Channel: Specialty Retail

• BlueAvocado Made in the USA (in development)

• BlueAvocado 100 – 100% Post-consumer

4.3 Category Overview and GrowthBlueAvocado continues to look at category expansion in three ways: Can we green our customers lifestyle in this area or offer green options? Does the retailer see growth in this area? Is there a core need not being addressed in our customers lives? In addi-tion, we evaluate if there is incremental growth tangential to the categories we are currently in within a traditional “buyer footprint,” and incremental product develop-ment expansion based on manufacturing strength (i.e., eco-cosmetic bags). For many retailers, BlueAvocado is offering a first-to-market “Eco-Collection,” helping them bolster their green offerings, while addressing growing market segments. The com-pany continues to study trends in consumer behavior and mass retail in the growth in green categories and look to offer innovation that matches with the company’s prod-uct development strength. Three new categories identified for incremental growth this year are recycling storage bins, back-to-class and lightweight travel.

Food-on-the-go category is a fast growing segment. There are two segments of growth in lunch: adults (primarily women) that are carrying their lunch to work and kid’s back-to-school lunch accessories. Adult consumers are eating healthier and looking for ways to reduce costs from their budget. Retailers from Bed Bath & Beyond to TJMaxx to Belk have introduced “lunch” as new categories of expansion in the last 12 months and realized tremendous growth. The fashionable alternatives are the cat-egories that are experiencing the fastest growth, versus traditional “cooler” options. BlueAvocado has been instrumental partnering with retailers to pioneer this category, from (name not provided) to (name not provided), offering both the first lunch option and the only “eco-option” for many of the retailers.

• Washable Food Storage: The second segment of growth is the light weight food storage. The primary goal is to eliminate the Ziploc for disposable solu-tions and reserve it for heavy-duty applications, thus reducing packaging waste in lunches, diaper bags, and for everyday storage. As highlighted in a recent New York Times article, “The Plastic Sandwich Bag Flunks” there is tremendous pressure to move away from disposable items in the traditional lunch bag (i.e., Ziplocs, throw-away drinks) to environmentally friendly back-to-school products that reduce waste. Retailers like The Container Store are seeing significant growth in the category. Certain schools in the United States and entire provinces in Canada support “boomerang lunch” programs where everything that goes to school must come back with the child. These trends are driving options that are washable, lightweight, and durable. BlueAvocado


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leverages its strength to offer great innovation, and in many cases the only eco-option made from recycled materials for consumers on the retail shelf.

• Reusable shopping category is seeing a resurgence from its peak in 2008 and 2009, driven by growing city and state bans and regulatory requirements to ensure durability, washability and recycled fiber certification. Grocery contin-ues to be the destination for these products, but mass retailers are looking to add “market totes” into their assortment. In addition to grocery, drug and conve-nience store retailers are seeking to meet the regulatory requirements, we antici-pate an upgrade for many retailers. BlueAvocado is working to offer greener lower-price point solutions, and marry these with our technology options.

• Recycling Segment: Recycling is often a “first-step” for many consumers, who want to adopt a greener lifestyle. Americans have doubled their waste in the last 5 years. However, they are recycling 40% more than they were 5 years ago. While many cities offer “free” curbside recycling bins, there is inconsistency in the offerings nationwide. In addition, there are single-stream waste feeds and waste streams that need to be sorted. Retailers are seeing a demand in this category. BlueAvocado is offering recycling/storage bins for home, school, or office that allow consumers to have more fashionable options, while offering staging/collecting receptacles that can be dumped into municipal bins.

• Eco-Cosmetic/Travel: There are two trends that are driving growth in this category: regulations at airports that charge for luggage thus demanding more lightweight/carry-on options and the demand from retailers to offer “eco-friendly” alternatives.

Sustainable products for home and life are at their infancy for many mass retailers. BlueAvocado wants to be the destination brand for eco-products for mass retailers. The company will evaluate expansion into other home and garden products in 2013 but looks for pilot support for retailers to justify the investment and expansion.

4.4 Competitive OverviewBlueAvocado’s goal is to be the greenest home brand available in mass retail at the right price. The company has successfully gained a beach head in mass channels from big-box to grocery and department stores, while maintaining its market capture in specialty channels. Many of BlueAvocado’s competitors are strong only in grocery but have not crossed over to leaders like BedBath & Beyond or Bloomingdale’s. In addition, the com-pany offers a range of prices and products in the good, better, best strategies allowing the company to invite value and luxury consumers to participate in greening their lives.

BlueAvocado also analyzes the competition at the individual product category, feature/function, and retailer level to ensure we understand our value differentiators. Below is a quick summary of what makes BlueAvocado great.

4.5 Proprietary PositionBlueAvocado has invested in an intellectual property portfolio to include brand, trademarks, and patentable designs and innovations. The company has a utility patent application filed for the “shopping bagsystem” focusing on the attributes and inter-changeable features of the shopping system.

• Registered brand marks: BlueAvocado®, nuBLU®, XO(eco)®, gro-pak® shop-ping system

• URLs: blueavocado.com, xoeco.com, schlumpy.com


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• Copyright: Carbon label

• Patent filed: Shopping Bag System

We have identified a number of additional IP investment opportunities for 2013 to reinforce our market position:

• Brandmarks: Green rewards app (TBD), Clever Bag name (TBD)

• Copyright: Key BlueAvocado custom prints

• Patents: (re)zips, technology reward, green point exchange, clever bag

• Design Patent: 1–2 unique silhouettes

51.0 TECHNOLOGY SERVICES OVERVIEW

5.7 Launch TimelineBlueAvocado will leverage its technology pilot and customer relationship with Whole Foods to create a 2.0 framework. The company plans to hire a business leader and a technol-ogy team to create the universal framework for a national green rewards loyalty program. The company expects initial phase of development to be around $500K; this may be off-set by investment from Whole Foods and its supplier part-ners. If the team recruitment occurs in November, the beta will launch in February/March with Whole Foods with a full debut on Earth Day (April 2013). The company will also recruit additional customers of different sizes to be part of the full-scale launch in Fall 2013. By Fall 2013, the company will have recruited sales and customer service personnel to mar-ket, recruit and manage additional customer requirements.

61.0 SUPPLY CHAIN

6.1 Description of Supply ChainOur goal is to minimize the complexity of the supply chain by sourcing materials, printing and manufacturing in one loca-tion. After receiving cost proposals from three factories—Taiwan, Indiana, and China, we elected the low cost provider in China to meet our margin objectives. We identified a man-ufacturing facility in China, as a result of an in-depth search for the best quality facility and ultimately the one that allowed us to produce the most competitive product. As a company, we are committed to maintain a highly transparent supply chain and have obtained factory audits on all factories as well as personally visiting the factories throughout the year.

BlueAvocado is currently working with (name not pro-vided) as its manufacturing partner who manages factory

SUPPLY CHAIN Mill

(sources the Repreve recycled polyester yarn) (blends with virgin polyester yarn)

(weaves fabric)

(cut-n-sew patterns)

(Quality Control)

BA CUSTOM DESIGNS

(BA designs custom patterns)

FACTORY

(holds fabric, packaging, raw goods)

(dyes fabric, prints patterns with special tooling)

(Assemble / Packaging)


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relationships with J.B. Bags, our mill, printer and UNIFI Repreve China. (Name not provided) has vast experience bringing products to major retailers in the U.S. including Costco, Target, Meijer, and Sam’s Club as well as specialty retailers including REI and BassPro. Specific services included in the partnership include costing, program plan-ning, quality control, factory audit and compliance.

Since 2010, BlueAvocado has partnered with (name not provided), a 100-year old supplier of end-to-end supply chain solutions. (Name not provided) has over 1 million in warehouse space, the latest state of the art J.D. Edwards system, and EDI set-up via Commerce Hub with most retailers in America today. The company operates three main warehouses that provide geographic distribution throughout the U.S., including: Redlands, CA, Chicago, IL, and Knoxville, TN. (Name not provided) will expand into Canada in 2013, and BlueAvocado will leverage this expansion to tap this new market. Given their efficiencies, (name not provided) is able to ship to store and offer drop ship programs that make market expansion possible.

American Shipping is currently BlueAvocado’s shipping supplier from China to U.S. They offer LCL, 20 foot container and 40 foot container services. In addition, they offer a warehouse for Point-of-Entry programs. The company evaluated trans-ferring business to a new supplier to take advantage of a better pricing structure and reduce gross margin.

6.2 Production TimelineThe BlueAvocado supply chain, estimated time and key vendors are as follows:

• Materials Sourcing–Find & Print Fabric (30–60 days)

• Manufacturing (Cut-n-Sew) in China (4–12 weeks)

• Transferred product to port of export is Ningbo, China (2–3 days)

• American Shipping Company will handle the shipping via container between China to the U.S. warehouse (14–17 days on water).

• Port of import is LAX (1–4 days on to achieve import clearance)

• American Shipping will ship on to Planet E by rail in Dallas (1–2 weeks days)

• PlanetE offers full warehousing, shipping, and electronic data interchange (EDI) for online sales support

6.3 Factory AuditBlueAvocado’s primary factory has undergone a number of audits, initiated with BlueAvocado’s own audit in 2009 to evaluate quality, environmental and social indices. The factory initially scored 87% from Bureau Veritas, and the company implemented a corrective action plan (CAP) and continues to monitor. In addition, BlueAvocado has worked with JCP, Tupperware and Princess House to conduct a number of audits in the last 3 years, providing a similar score of 83%, and identifying areas of improvement related to quality.


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6.4 Material SourcingBlueAvocado recognizes price is the greatest driving factor for market adoption. However, we have explored using materials that were sustainable (i.e., bamboo, corn resin) or reused (i.e., recycled plastic, nylon, etc.) in all cases. BlueAvocado elected recy-cled polyester textile for the primary material of the premium product. In cases where hardware (grommets, zippers) are used, we have requested recycled materials. The final is made of approximately 50% recycled material (list of materials per product is above next to each product picture).

BlueAvocado recently partnered with a leader in U.S. textiles—(name not provided), which produces (name not provided) recycled polyester yarns. (Name not provided) yarns are traceable, using both post-consumer (PET bottles) and post-industrial fiber wasted. The yarns are made in Asia. Each production run is audited by (name not provide) using a thumbprinting technology in order to carry the (name not provided) label, guaranteeing the produces are made of certified recycled materials. (Name not provided) and BlueAvocado are partnering on several sales and marketing initiatives to forge the relationship and expand both brands amongst consumer media audiences.

BlueAvocado is partnering with (name not provided) to take advantage of its Textile Takeback program and recycling center, allowing customers to upcycle exist-ing polyester products or old BlueAvocado products. This innovative program allows the company to “close-the-loop” on its supply chain. The company continues to evalu-ate how to increase the percentage of (name not provided) in its product line. In 2012, it introduced its first 100% (name not provided) product, via the green mesh produce bags. Additional sustainable fabrics will also be explored to provide greater depth to our core product offerings.

6.5 Made-in-the-USA InitiativeBlueAvocado is evaluating partners with whom to launch the BlueAvocado Made-in-the-USA product line, offering the company to create job opportunities, reduce inter-national risk, and provide product stratification. Retailers like JCPenney, Target, and Whole Foods have articulated an interest in Made-in-the-USA products. The company is evaluating 4 –6 plants in Q4, with a goal to launch this product line in March 2012 at the International Home & Housewares show.

71.0 SALES & MARKETING

7.1 Sales TeamBlueAvocado is the green brand leader for home retailers today, capturing shelf space and online space in 11 key retail channels with the market leader in the category. BlueAvocado partners with (name not provided) who serves as the national distributor and sales team to top-tier retailers. Their national sales team of 8 key account manag-ers, each with an average of 30 years of experience works in the field with BlueAvocado to secure placement on the shelve of national retailers. (Name not provided) is a 100-year old company, and the #1 distributor for home retailers today with brands like Keurig, Sensio, Starbucks, and Procter and Gamble in their portfolio they have access to the executive leadership for home, general merchandise, food storage, electrics, and executive leadership in the buying chain. With pre-established vendor set-up via EDI with most retailers, (Name not provided) leadership has enabled BlueAvocado to grow from their beachhead of 1,000 stores to 5,000 stores in 18 months.


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Building on this strong position and the growth potential, BlueAvocado will build out its sales team to support (name not provided) and target key segments not part of (name not provided) core focus area. Key hires include Director of Sales & Marketing, National Account Manager, and Sales Coordinator. BlueAvocado will forge additional distribution opportunities to support growth in the Canadian market, personal beauty care, specialty grocery, and specialty boutiques.

7.2 2013 Sales GoalsKey sales goals for 2013 include:

• Ensuring success in key (name not provided) accounts that will drive major-ity of revenue growth for 2013 (JCP, Target, Safeway, BedBath & Beyond, Amazon.com)

• Secure adoption at new key accounts–COSTCO, Office Max, Fred Meyer/Kroger, 7-Eleven

• Secure pilot program at Kohl’s with the (name not provided) collection

• Secure support for the (name not provided) xo(eco) collection in market with the 2013 line

• Continued growth of Princess House from $800K to $1.2M

• Leveraging success in department stores with premium line (Celebrity, Made in the USA)

• Leverage national mobile app partnership with Whole Foods to build place-ment in front-end, grocery and Whole Body

• Forge distribution opportunities and partnerships in key areas:– Canada

– Beauty

– Specialty grocery

– Specialty boutiques

• Working with BA-Digital team to secure pilots and adoption of the “green games app”

7.3 Sales Channels & Key AccountsBlueAvocado is currently available in 10 different channels—all providing access to the multi-bag, female shopper:

• Mass Retailers

• Niche Housewares/Retail

• Online Retailers

• Catalog

• Specialty/Natural Grocery Stores

• Mass Grocery Stores

• Direct TV to Consumer

• Grocery Stores

• Company Website (blueavocado.com)

• Discounters

• Private label partners


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Mass Retailers: BlueAvocado will continue to target national retailers, as a key part of their strategy and differentiation. The company is in stock at more than 900 BedBath&Beyond stores, and will be on Target and JCPenney shelves (900 –2100 stores) by March 2013. Additional retailers in this segment which are forecasted for 2013 include OfficeMax, COSTCO, and 7-eleven. For 2013, most of the growth is fore-casted in this channel.

Niche/Specialty Retailers: BlueAvocado has been adopted by The Container Store who is a category leader for home organization and is on the shelf at the first Greenhouse, eco-products focused home improvement superstore.

Boutiques & Ace Hardware: Upon launch, BA established strong portfolio of small boutiques. With limited sales resources, the company not focused on this segment for the last few years. In 2013, BA will recruit sales reps in target regional areas, with a focus in cities that have plastic bag bans that help drive adoption. Key regions include Northeast (NY), Northwest (Seattle, Portland), and California.

Online Retailers: The company is currently a vendor on Staples.com, Amazon .com, Cooking.com, Drugstore.com, and Reuseit.com. The company will look con-tinue to grow this channel, leveraging (name not provided)’s established vendor set-up via Commerce Hub with most major retailer.com’s. Potential strategic partners include: (names not provided). In addition, BlueAvocado is in discussions with UNFI’s Honest Green back-end portal providing online distribution and marketing of “green products” to specialty grocers nationwide.

Catalog: Catalogs offer BlueAvocado the opportunity to explain the story of our brand, our impact and our product impact. In addition, the primary catalog shop-per is a direct profile of the BA customer. The company is currently distributed via Amway Global catalog. The company is in conversations with QCI Direct and Miles Kimball. Additional targets include Garnet Hill, Viva Terra, Acacia, Serena & Lily, Chefs Catalog, Napa Style, Travelsmith, Magellan’s, Territory Ahead, Sundance, Soft Surroundings, Sahalie, Herringtons, Cambria Cove, Femail Creations, Northstyle, Restoration Hardware-Baby & Child, Pottery Barn.

Company Website: To generate online sales via the company’s website, the com-pany will continue to invest in public relations, online advertising, strategic partner-ships with green and fashion ad networks, niche newsletter sponsorship, and targeted Search Engine Optimization campaigns.

Grocery & Natural Food Stores: The company has secured adoption in grocery store chains taking a leadership role in the plastic bag alternatives and seeking fash-ionable and green alternatives for their food-on-the-go category. BlueAvocado has key accounts with Whole Foods in 5 regions with the front-end-buying team. Given this is the most competitive environment, the company has not focused on this segment. However, the company has had early success Sprouts, GreenLife Grocery, Draeger’s, Metropolitan Market and Bristol Farms and will seek distribution partners in 2013 that tap and can support the sales demands of this channel. Leveraging the national partnership with Whole Planet Foundation and the mobile green rewards application, the company will push to seek additional store penetration within Whole Foods of its everyday, and is looking at bringing the Made in the USA line into this segment.

Direct to Consumer: BlueAvocado has offered its products for sale on television to the home shopper community. The direct-to-shopper environment offers unique opportunity to describe the brand, how it works, and its functionality and fashionabil-ity “live.” BlueAvocado will look to tap HSN and QVC, leveraging unique function, value and celebrity-endorsed offerings.

Discount Retailers: Discount retailers offer BA an effective channel to reduce slow-moving inventory and obsolete items and patterns. The company forged partner-ships with key retailers in 2009 including (name not provided) (800 stores), (name not


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provided) (220 stores), (name not provided), (name not provided)—Canada (80 stores), (name not provided) and (website not provided).com. The company will selectively partner with these retailers so as not to compromise the value created in the main channels.

Private Label: BlueAvocado does partner with companies and brands to offer co-branded or private label programs. Forecasted at between 5 and 10 percent of 2013 revenue, BA will build on its partnership with (name not provided) to help them pro-vide soft goods for food-on-the-go and travel to their Latina market in Texas and California. The company will continue to look for opportunities to partner with (name not provided) to bring greener products to worldwide customers. In addition, the com-pany partners with brands like (names not provided) to create private label and co-branded pieces that support marketing strategies.

7.4 Marketing MixBlueAvocado is one of the top green brands in our categories and has been featured in national home and fashion magazines—from RealSimple and Better Housekeeping to Glamour and People. From inception, the company invested in creating an authen-tic green brand and ensuring we used our packaging and product labels to share our vision and our impact at the product-level. BlueAvocado has accomplished a tremen-dous market momentum, despite having invested little in marketing relative to sales (since inception—average 5 –7%). The company plans to invest 10 –15% of its revenue on marketing initiatives in 2013 to support its 3x growth goals. The company will build on its marketing team led by Chief Inspiration Officer Paige Davis and supported by a Marketing Assistant. The company plans to hire a Marketing Manager with green consumer brand experience to build and implement a plan. With market validation of the digital technology service, the company will also hire a Marketing Manager to manage the digital services implementation.

Key marketing efforts to date include:

1. Building customer demand and brand awareness via public relations efforts in key national media, blogs, and trades,

2. Supporting tradeshows to drive retailer demand and awareness,

3. Supporting retailer-specific marketing initiatives (i.e., Amazon Vine) to drive sell-through within the store environment,

4. Developing product-level brand strategy to reinforce vision and create a coherent story,

5. Creating sales tools, catalogs and collateral to support the sales team,

6. Creating packaging and point-of-sales tools in the retail environment to drive sell through, and

7. Maintaining and driving sales on the company’s online store (blueavocado .com) which provide strong gross margin.

BlueAvocado will make a significant investment in marketing this year to sup-port the company’s 3x growth and environmental goals. 2013 new marketing objectives include:

• Driving sell-through inside stores (physical and virtual)

• Leveraging (name not provided)’s role as a BlueAvocado ambassador and spokesperson to drive awareness and placement of BlueAvocado and XO(eco)

• Launch the Ross Bennett men’s collection


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• Increasing blueavocado.com sales potential with a store re-launch, online advertising plan

• Securing placement of BlueAvocado’s premium line in department stores (XO(eco), Made in the USA)

• Re-launching BlueAvocado into the specialty grocery segment and green boutiques

• Refine brand strategy with celebrity to articulate a “American Designer” series

• Partnering with the BlueAvocado digital team to brand, secure adoption, and use of BlueAvocado’s “green game” platform

• Leveraging the Make Change Not Waste Whole Foods customer base, and insights to inform 2014 product development and invite them to be BlueAvocado fans

• Launching BlueAvocado into the Canadian market

• Tapping the BlueAvocado/clever bag launch

BlueAvocado’s marketing mix includes:

BRAND DEVELOPMENTAs a consumer brand, BlueAvocado puts an emphasis on its brand, sub-brand and overall brand management strategies. In 2012, the company developed a sub-brand XO(eco) to reflect the collection designed by (name not provided). The company will refresh its brand strategy to include additional celebrities in a universal framework. In addition, BlueAvocado will continue to evaluate its brand strategy to ensure it is reinforcing its differentiators, environmental impact, and channel strategy.

PUBLIC RELATIONSSince inception, BlueAvocado has partnered with leading PR firms to secure place-ment in key media trades and gift guides. (Name not provided) PR firm (pro-bono) and (name not provided) publicist at UTA are currently partnering with BlueAvocado to secure placement, leveraging (name not provided)’s role as designer and inves-tor. (Name not provided) has been featured on the cover of Glamour featuring her BlueAvocado XO (eco) line (May 2012), cover of ALLURE (November 2012) and cover of Lucky Magazine (March 2012). In addition, we have secured placement in dozens of print and online magazines, and TV including People, InStyle, MTV.com, ecoturre, Good Afternoon America, and Larry King Live. BlueAvocado sponsors key events with giveaway items both locally via partnerships with like-minded customers like Sustainable Food Center fundraisers and nationally with events like the Lucky FABB fashion blogger event, featuring LC as the keynote. The company plans to hire a PR firm who specializes in green consumer brands to manage and expand opportunities on a more consistent basis, and employing innovative initiatives to both inspire envi-ronmental action and realize brand exposure in traditional and online media.

SOCIAL MEDIABlueAvocado continues to use social media platforms to build community, create brand awareness, and drive retailer success (partners and online store).

Here are ways we engage with our community.

• BlueAvocado has a customer database of more than 5,000 online customers. With the launch of the Whole Planet iPhone app, BlueAvocado has access to a larger community of 5,000 customers (12% detailed customer information). In addition, BlueAvocado is tapping (name not provided)’s audience to build its Facebook page and Twitter fans. To date, BlueAvocado has 2,586 Facebook fans, and 1,983 Twitter followers.


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• BlueAvocado leverages existing social networking applications to build brand loyalty and word of mouth (i.e., Facebook, MySpace, YouTube, twitter, Pin-terest), BlueAvocado seeks feedback from customers, educates and provides deals via these mediums. BlueAvocado provides giveaways and promotions via partnership offers to run on various social networks and SEO campaigns. Examples of key successful strategic partnerships include: Ecorazzi Twitter Thursday: Through a 3 hour giveaway period with popular celebrity green blog Ecorazzi, BlueAvocado nearly doubled its Twitter base and gained additional customers and Facebook followers who are now loyal customers. Currently BlueAvocado engages monthly (and bi-weekly) via (website not pro-vided).com’s 500,000 Facebook fans and 2 million Twitter fans.

• Community

• Deal of the Day Promotions: Through ships with group couponing sites like (name not provided) and (name not provided), we were able to extend our brand into new geographic regions and gain additional viral buzz to custom-ers who are now part of the BlueAvocado database. BlueAvocado proved to be a top performer on both of these programs exceeding number of coupons purchased and google alert postings.

• The company launched BlueAvocado’s Billion Bag Pledge campaign to create awareness for “problems too big to ignore” led by Schumply, the 8 foot plas-tic bag ball. The point of the campaign was to secure pledges of people will-ing to kick their plastic bag habit. Our goal was to get 1 million pledges and avoid 1 billion plastic bags. The online viral video was so successful, stores and schools wanted him to come for openings, Earth Day and education. Schlumpy has traveled from Austin to Tennessee to California to Washington DC, creating a platform for more environmental change. There is an ability to use him as an educational tool in schools around the world, it has the ability to create educa-tion, while increasing brand awareness in a positive way. In BlueAvocado’s esti-mate, the Billion Bag Pledge campaign with grassroots and viral media efforts has reached 6x the individuals of its traditional marketing efforts. In addition, Schlumpy has the added benefit of inspiring adults through the power of kids. The company will evaluate the potential of this brand asset in its 2013 planning.

• The company has evaluated partnering with (name not provided) to create a video series that creates environmental awareness leveraging (name not provided)’s passion for oceans and sense of humor. The goal would be to drive online success at Amazon.com and other online retailers, while raising money for Ocean Recovery Alliance and Oceana to support reclamation and preser-vation of oceans.

ADVERTISINGBlueAvocado has not historically invested in traditional advertising, with the excep-tion of spot placement related to local events or tradeshows. The company has invested in online merchandising initiatives via Amazon.com that “boost” the company’s brand placement in the category, including A+ pages, brand store, and the VINE. The company will evaluate 2013 investment in traditional, mobile and online advertising initiatives that drive sell through at key retail partners to include but not limited to:

• Support of (name not provided) partnership providing visibility nationwide inside Whole Foods stores annually, with concentration in February

• Print ads in National fashion magazines driving shoppers to adopt (name not provided)’s line


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• Online Google advertising with targeted fashion and green online properties

• Catalog listing in national “green” pages

• Co-operative sponsorships that target core audience in key regions

• Mobile advertising/coupons directed at key retailers

7.5 Market & Competitive ResearchBlueAvocado believes it is important to understand trends of consumers, retail-ers and competitors. The company takes steps to conducts and invests in primary research, and takes advantage of secondary research. The company was a pioneer sponsor of BBM G’s The Collective, providing a platform for BlueAvocado to conduct primary research among green consumers. In addition, BlueAvocado taps BBMG and Cohn & Wolfe’s conscious consumer and green brand reports. The company surveys its customers online, via Facebook, and via focus groups to both evaluate consumer lifestyle trends and receptivity for new products and prints. In addition, BlueAvocado continually researches industry reports and trends available through trade magazines and associations.

7.6 Pricing StrategyBlueAvocado’s pricing model is designed to achieve a target of 35 –55% gross mar-gin, and 10 –25% net margin. Margins for retailers typically range between 40 – 60%. Margins for grocery stores on private label/co-brands range between 30 –50%. Our pricing model accommodates these needs while still providing solid profit margin to BlueAvocado. We do offer FOB China and POE programs and work with our retailers on volume purchases.

81.0 FINANCIAL OVERVIEW8.1 2012 Financial PerformanceBlueAvocado has consistently achieved strong top-line growth and is forecasting prof-itability for the year 2012. In 2011 the company achieved $885K in revenue and in 2012 the company more than doubled with revenues of approximately $2M. The company grew its retail stores from 1000 in 2011 to more than 3,500 stores by the end of 2012. The Princess House private label direct-import program produced strong growth for 2012, comprising 45% of revenue for 2012, but impacted overall company gross margin. For 2013 Princess House will remain an important customer with an improved gross mar-gin and will represent less than 10% of sales thereby further improving company-wide gross margin. Below are summaries of 2012 financial results in addition to customer level detail for 2013 sales that are already committed so are now in various stages of discussion on delivery terms.

8.2 2013 Cash CyclesBlueAvocado has focused on securing strong terms with key suppliers to improve cash cycles, a key to success for a growing business. Key terms are indicated below:

• Manufacturer—Net 45 Days from shipment (flexibility to extend to Net 60 on larger orders); 30% down payment on private label and large scale programs ($100K wholesale value). BlueAvocado is not responsible for working goods


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inventory, packaging or raw material fibers unless dormant for 6 months. The broker and factory take full responsibility for these investments.

• Fulfillment Facility—(Name not provided) will bill BlueAvocado Net 30 for shipments, with the cost between 12 –15% of sale.

• Accounts Receivables—BlueAvocado has worked to negotiate favorable terms from key suppliers. As they seek additional margin or fast timelines, BlueAvocado has negotiated more favorable than normal terms. Average A/R is Net 30, they range from Net 15 to Net 60. (Name not provided) will manage invoicing and collection of most BlueAvocado receivables, maintain-ing the Net 30–40 day average. The company will continue to manage direct the few accounts that it handles, like private label programs (Princess House) and Whole Foods.

BlueAvocado does not have a current working capital bank line so has financed inventory and receivables with equity capital and some purchase order-backed loans from shareholders. With further growth in inventory and receivables in 2013, coupled with marketing, webstore and technology platform enhancements, the company will seek the placement of additional equity in 2013 which will enable it to bring on another bank partner to facilitate working capital needs.

8.3 2013 ForecastFor 2013 the company is forecasting more than a 3x growth to achieve over $8M in revenue and $800K in operating profitability. A majority of this revenue is based on established accounts: Whole Foods, JCP, Target, BedBath&Beyond, Safeway, plus 3 growth accounts whose commitments are expected soon: OfficeMax, COSTCO, and 7-Eleven. The company has not included material revenue from the technology busi-ness unit in this forecast. However, the company is working to ensure there is revenue from customers to fuel its technology initiatives. The company expects to be available in more than 8,000 stores and Canada by the end of 2013.

8.4 Five-Year ForecastKey to BlueAvocado’s growth will be the adoption of our brand and products by major retailers, expansion of the product line, and success of major retail partners (including Target, JCP, Bed Bath Beyond). BlueAvocado has the opportunity to deliver signifi-cant top-line growth and significant incremental EBITDA by 2015.


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91.0 TEAM

The BlueAvocado management team is committed to the company’s growth, and play-ing key roles in the evolution. The company continually looks for ways to bring experts into the company as management team members, consultants and advisors to help it grow.

9.1 Management TeamBlueAvocado’s team includes 7 full-time employees in Austin, accounting and legal consultants, and more than 12 manufacturing rep team members nationwide. Blue Avocado’s management team represents more than 100 years of expertise in general management, retail, strategy, marketing/sales, product development e-commerce and sustainability. The management team is strengthened by their mutual respect, commit-ment to teamwork, and passion for success. As needed, BlueAvocado also contracts with additional consultants to manage product design from pattern development, to color forecasting to sample development and merchandising. BlueAvocado plans to recruit team members in 2013 to facilitate our growth.

Amy George: Co-Founder and CEO, Amy George brings 19 years of experi-ence in business, marketing and sustainability to the role of “Chief Ozone Officer.” In her role at BlueAvocado, George has created a business model built on sustain-able practices and processes, managed a national sales team to achieve 300% growth, and cultivated relationships with more than 700 retailers and key accounts including Whole Foods, Nieman Marcus, Sur La Table, The Container Store, Drugstore.com and Cooking.com. In addition, George has managed the investor and Advisory Board for BlueAvocado, recruiting individuals from PeopleAdmin, Whole Foods, Dell, The Container Store, MPower Labs and Patagonia to invest in the start-up venture. George also helped pioneer unique sustainability initiatives and was responsible for the company’s first 2010 sustainability report entitled—One Planet™. Prior to joining BlueAvocado, George helped privately-held Pavilion Technologies to market software that allowed manufacturing giants Chevron-Phillips, Cemex and Nestle to increase productivity, reduce their energy use (and carbon footprint), and track real-time emis-sions. The company achieved 30% year over year growth and was acquired in October 2007 by Rockwell Automation. George has pioneered new initiatives with a number of non-profit and social responsible organizations including Calvert Social Investment Foundation, Sustainable Food Center, The CSR Group, People’s Community Clinic and PeopleFund. As a Board member with the Sustainable Food Center, George was instrumental in founding the Austin Farmer’s Market, recently ranked one of the top 10 markets in the country. Nominated for Austin Under 40 and Barbara B. Jordan award for community service, George holds an MBA from The University of Texas at Austin and a Bachelor of Arts in English from The University of Florida. George lives in Austin, Texas and is a reusable bag shopper for her husband and two boys.

Paige Davis: As Co-Founder and “Chief Inspiration Officer” of BlueAvocado, Paige Davis brings her strategic perspective and background as a sustainability con-sultant and social media entrepreneur. Through collaborative partnerships, Paige assures the BlueAvocado business model inspires engagement marketing and sustain-ability awareness into all aspects of the business and communication efforts. Paige is responsible for the creation and management of the BlueAvocado website and social media strategy including the success of the popular social media “Billion Bag Pledge” campaign featured nationally through MSNBC, USA Today, CNN. Within 1.5 years in market Paige created and managed the PR and marketing campaigns for all product


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launches and sustainability initiatives securing placement in the top national media publications including Shape, InStyle, RealSimple, Healthy, Better Homes and Gardens, and multiple online communities. In addition, Paige managed all online sales and stra-tegic partnerships with key online retailers including Amazon.com, Cooking.com, and Soap.com as well as being responsible for the private label sales channel resulting in key relationships with Microsoft, O.N.E Water and Hello Kitty. Paige also forged key strategic partnerships with partners including Green Mountain Energy and Kiva.org. Prior to joining BlueAvocado, Paige worked in the Bay Area for Organic Inc. working with clients including Wells Fargo, Chrysler, and Barnes and Noble to develop first generation web commerce capabilities. Paige then consulted independently with top consumer brands conducting market research, analyzing industry trends, and devel-oping strategic recommendations within the emerging online environment. Following her passion for integrative health and sustainable living, she founded Pilates360, a wellness and Pilates studio based in Austin, Texas while simultaneously working with several start-ups in the green category, advising on social media, branding and strategic partnership development. Paige received her B.A. in Journalism and Environmental Science from Indiana University at Bloomington and was recently selected as a U.S. Fellow for the British American Project’s Sustainability Conference.

Felix Chavez: As Vice President of Operations, Felix Chavez brings more than 20 years of experience in retail sales, operations, inventory management and produc-tion to his role as VP, Operations. Formerly he served as VP of Sales Operations with Helen of Troy, an El Paso, Texas headquartered developer, manufacturer and distribu-tor of personal care and housewares and consumer products. Under his leadership in various management positions, Felix contributed to the successful growth of the com-pany’s sales from $36 million in 1984 to over $500 million in 2005. Under his leadership at BlueAvocado, he oversees profitably and COGS reduction, management of fulfill-ment facility, production, and sales operations to meet market demands, and improve customer service through on time delivery, production quality and compliance.

Melissa Nathan: Product Visionary and Co-Founder, Melissa Nathan brings to BlueAvocado, over 19 years of business, marketing and public relations experience to BlueAvocado’s management team. As Chief Innovation Officer, Melissa led the creation and execution of BlueAvocado’s award-winning brand and product portfo-lio, achieving recognition from industry insiders including International Housewares Design, New York Gift Show, Fast Company, REAL SIMPLE, Sustainable Life Media and Austin ADDY’s. In the company’s first two years in market, Nathan over-saw the launch of over 200 products, including the gro-pak™—the country’s first reusable grocery shopping system. From inception, Melissa served as brand steward, overseeing the design criteria and philosophy that made BlueAvocado’s messaging and product portfolio inviting, engaging and impactful. Melissa’s additional respon-sibilities include managing the company’s overseas manufacturing relationships as well as its domestic “direct to consumer” channel including the launch at Home Shopping Network where she represented BlueAvocado in its on-air debut. Prior to BlueAvocado, Melissa worked in a number of sectors including international business, politics, government, finance and not‐for‐profit. Melissa’s business acumen is derived in part from her time spent on Wall Street at Solomon Smith Barney in the cosmet-ics and household products industry as well as from her experience helping to launch the international division for Warnaco, Inc., a Fortune 500 company. Melissa’s back-ground in international and public relations includes time spent as Chief of Protocol for the United States Embassy in Mexico City. She began her public relations career as a press advance person in presidential politics and spent a brief period working in the Scheduling and Advance office at the White House. During her time in Austin, Nathan worked as the first Development Director for the Austin Film Society, helping


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to launch the first Texas Film Hall of Fame. Most recently, she spent three years as the Director of Marketing and Development for LifeWorks helping to raise and sustain an $8 million operating budget. Melissa received her BA from Duke University and holds an MBA from The University of Texas at Austin. Nathan currently resides in Austin, Texas and is wife and proud mother of two.

9.2 Board of DirectorsThe BlueAvocado Board of Directors is composed of the following five individuals:

Amy George – Chair of the Board, Founder

Jack Long – Investor Representative

Lee Valkenaar – Investor (Retail Representative)

Paige Davis – Founder

Melissa Nathan – Founder

9.3 Advisory BoardThe BlueAvocado Strategic Advisory Board is a network of experts who have agreed to give BlueAvocado Co. meaningful help on a regular basis in many different areas, including retail sales, sustainable design/sourcing, manufacturing, law, organizational development, and product development. Their abilities, experience, and knowledge were selected for how they complement BlueAvocado’s needs or the organization as a whole.

.01.0 CAPITAL PLAN

10.1 Exit PotentialBlueAvocado believes the demand for green consumer products will continue to grow. The company imagines exit potential in as little as 2 to 4 years, with attainment of key revenue growth and profitability. Financial market research demonstrates that trans-actions in the sustainability sector have exceeded those of the overall market.

1.0 SUMMARY

BlueAvocado has a vision of making life better for women and the planet. Consumers are concerned about climate change, industrial pollution, food safety and natural resource depletion. BlueAvocado is creating a vision, where products can help reduce our impact on the planet, empower more women entrepreneurs, and deliver economic value for its shareholders.

For more information, please contact:

Amy [email protected]


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blueavocado business plan appendix...

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