Team 5

Emily Lawless, Lisa Marino, Sasha Thomas, Michael Djavaheri, Winston Jiatu

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ProPodCoffee.com A personal touch to the gift your loved ones will appreciate, every sip of the day.

Executive Summary Propod is the only leading personalization company within the single serve beverage industry. We

project to capture 1/8th of a multi billion dollar market share. Propod will allow you to take advantage of an established and exploding market, in which 1800Flowers currently has no footing. Hundreds of millions of Americans utilize single-­use coffee pods every day, in a market estimated at $4 billion dollars in yearly revenue and growing at a rate of 11% (as reported by Forbes), as more and more coffee drinkers turn to this simpler alternative to self-­brewed coffee. Coffee pods make great gifts, and the element of personalization makes it an even more attractive product. In ProPod, we create the perfect union between the ever expanding single-­use coffee pod industry and the gifting industry by producing premium single-­use coffee pods personalized by the consumer.

Ten to twelve million people already have single serve pod machines in their homes. The coffee pod

method is simple and convenient. In fact, to date, billions of K-­Cups have been sold by Keurig-­Green Mountain and its competitors, as the market expands significantly year after year. Over the next three years, $1.4 billion dollars of potential revenue from the traditional ground coffee market will convert to the single serve coffee pod market (Seattle Times). According to Forbes, 25-­30% of Americans are interested in personalization options;; we estimate the personalized pod industry to have a potential annual revenue of approximately $1,750,000.

1-­800-­Flowers already has Starbucks’ ground coffee baskets for sale, but at the current time they have no offering to meet the needs of the roughly 11 million consumers who no longer use ground products and have single pod machines. This is 1-­800-­Flowers’ opportunity to capitalize on a growing market. Through their 1-­800-­Baskets subsidiary, they would benefit from offering a basket of personalized ProPods as an alternative option to the Starbucks ground coffee baskets.

It is important to realize that ProPod stands to drive in additional revenue to the entire 1-­800-­Flowers

umbrella in the form of multi-­brand customers. A box of ProPod cups and some Cheryl’s cookies make for a great office gift or basket idea, and a carousel lined with custom-­designed coffee pods adds an extra touch to one’s home decor. Consumers will also increase purchase frequency, as they keep drinking through their coffee and gift it to others.

All in all, ProPod aims to deliver smiles and major returns for a relatively small investment.

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Our Story Founded on goal of satisfying the need consumer product personalization, our company is

dedicated to helping people connect more deeply with their beverage of choice. By allowing you to design your own premium beverage pods, we put the power into your hands. Whether it is for the office, personal use, or a gift to a friend, “ProPod” allows you to put your personal touch on the pods.

Using a single serve beverage machine is an enjoyable experience as it is convenient, simple and quick. So why not make the experience that much more enjoyable by making someone smile with your unique pod design? “ProPod” is a game changer for the beverage pod industry because it not only adds a personalization aspect to the product itself, but also brings the beverage pod industry into the gifting industry.

Thanks to “ProPod” beverage pods can be personalized both inside and out for any occasion. Whether it’s a birthday, wedding, or any other occasion that involves gifting, personalized beverage pods are the perfect idea to make someone smile. One could even add the pods to his home decor with a simple carousel displaying the designs. The pods even complement 1800Flowers’ existing brands, such as Cheryl’s and 1-­800-­Baskets.com. ProPod has the potential to create tens of thousands of new multi-­brand customers who will drive in significant revenue to the 1800Flowers umbrella.

ProPod core product, aimed at driving in revenue with high margins, is a package of 60 fully customizable, inside and out, ProPods, for the premium price of $79.99, which includes a personalized tops, cups and choice of coffee blends. Everything will be packaged in a box with a cellophane top allowing the buyer to see inside. Consumers will be able to upload their own designs and images or pick from our library of themes made for a variety of occasions. Major retailers, such as Bed Bath & Beyond, Barnes’ and Noble, will also feature our predesigned cup lines themed with “Happy Birthday” wishes and “I love you” lines.

At startup, ProPod will partner with an existing coffee supplier and manufacturing firm to produce the custom cups via orders taken on our website, while leveraging existing 1800Flowers.com infrastructure for assets and services. Our goal is to gain a 5% share in the market (approx. $50 million in annual revenue) within five years and then buyout our suppliers and manufacturing partners in order to offer even more customizable options for a more affordable price. At that point, ProPod will also target major businesses, such as hotel chains, which consume high volumes of single-­use pods in short periods of time, thereby gaining an even greater market share.

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Mission Statement & Company Vision Mission: To provide customers with one-­of-­a-­kind coffee pods through personalization. We strive to deliver smiles to their faces by adding their personal touch or experience to the pods, inside and out. Vision: To continue to meet the needs of our customers through great service by providing them with desired images, designs and coffee blends.

Company Summary

Products At startup, propod will offer a flagship unit of 60 fully personalizable coffee pods, which can be ordered via our website for the premium price of $59.99. Additionally, through our partnership with 1-­800-­Baskets.com, we will also offer a number of ProPod baskets, which will include different combinations of the same 60 fully personalizable coffee pods, as well as a customizable mug, card, and combo packs with the other 1-­800-­Flowers.com brands, such as Cheryl’s and Harry London. Additionally, each unit will allow for a variety of coffee blends, including Starbucks coffee.

Finally, major retailers like Bed Bath and Beyond, Target, Macy’s, and Starbucks will sell our pre-­designed themed packages with 60 cups, each bearing generic holiday greetings and happy occasion messages. They will be priced at $69.99, and will be packaged in a nice box with a cellophane top, allowing the consumer to see the attractive design for himself.

Marketplace/Industry Analysis ProPod has decided to concentrate on B:C and B:B:C, focusing on products with the end user in mind. A partnership with 1-­800-­Baskets and Cheryls would be ideal in providing well designed packages that are appealing to the customer. Eventually, we can expand to B:B transactions in the future, allowing companies to order large numbers of pods for business use.

Web Plan Summary A website will be designed and used to provide information about ProPod’s products and will allow the customer to personally design any pod they desire. Customers can purchase from the website, in addition to the 1-­800-­Baskets.com venue.

Website Marketing Strategy The marketing strategy for our website will help to develop awareness for the website by directing people to our site for more information about the personalization of our products. ProPod will make submissions to search engines such as Google to ensure that when a customer types in “coffee pods” or some keywords similar, ProPod is high up on the list of hits. Our key strategy to raise brand awareness, however, will stem from 1-­800-­Baskets partnership sales.

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Customer Analysis Our ideal clientele base share common characteristics with those who shop at 1-­800-­Flowers and its subsidiaries. Based on information gathered from the Single Serve Beverage market and the Personalization industry we can determine that our target consumers:

Age ranges from 18-­55. [Primarily, we plan to target those 25 and above] Mid -­ Upper class [Disposable income] White collar workers Desires to express individualism

Google search data shows that users searched for coffee pods or related terms most during the month of December last year, which indicates that there is already a consumer demand for coffee pods as holiday gifts.

Competitive Analysis The single-­serve coffee business is growing in competition. ProPod will be different from these companies by offering personalization to our products, targeting B:C, while the competition mainly focuses on B:B. Keurig K-­cups: US market leader

Competitive advantage-­ Keurig designs their own pods, designs the beverage in the pods, and designs the lines that make the pods.

Disadvantage-­no personalization Nespresso: expanding aggressively Unlike Keurig K-­cups, which yield brewed coffee, Nepresso prepares espressos. Showcased in high end boutiques.

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Current B:B Pod Branding Companies (not BC) MeToYou Brew Capsule Pack Baronet

Marketing Plan

Objectives To build awareness of the brand by advertising on several platforms that attracts our customer

base. To acquire new customers, while retaining existing 1-­800-­flowers customers. To develop a variety of personalized coffee pods based on the customers desires. To anticipate the needs of the customers and delivering the best service

Customer Profile College educated consumers, both male and female, primarily ages 25-­55 with a decent amount of

disposable income. Family oriented Celebration focused (weddings, anniversaries, birthdays, etc.)

Marketing Vehicles In order to maximize brand awareness for ProPod, we must capitalize on the characteristics of our target market by utilizing the channels and mediums that they are exposed to. Propod plans to leverage SEO of Google and other various search engines to position ourselves in front of consumers. We plan to potentially hit the highest yielding channels of current customers of 1800-­Flowers, such as:

Digital Untagged Web Natural Search Mobile and Social Media Phones and Email

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Operations Plan By leveraging existing 1-­800-­Flowers infrastructure to reduce costs, we aim to profit by the second year of operation. We will feature three profit venues. B:C directly from our website, B:B:C through 1-­800-­Baskets.com offerings, and, eventually, B:B targeting major hotel chains and other companies looking to place their brands on the coffee they order.

B:B:C #1, 1-­800-­Baskets.com Offerings

B:B:C #2, Predesigned Holiday/Celebration Pods*

*Assume in all following venues that supplier flow remains the same as in #1.

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B:C, ProPodCoffee.com Offerings

B:B, Branding for major retailers, hotel chains, etc.

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The Numbers

$ Year 1 Year 2 Year 3 Year 4

Projected Earnings 2,800,000.00 3,080,000.00 3,388,000.00 3,726,800.00

Production Costs (870,000.00) (957,000.00) (1,052,700.00) (1,157,970.00)

Salaries (250,000.00) (275,000.00) (302,500.00) (332,750.00)

Marketing Costs (360,000.00) (396,000.00) (435,600.00) (479,160.00)

Total Costs (1,480,000.00) (1,628,000.00) (1,790,800.00) (1,969,880.00)

Net Profit 1,320,000.00 1,452,000.00 1,597,200.00 1,756,920.00

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Financial Plan Financial estimations are made taking into account the current market in the beverage pod industry and the known 5% desire in customer personalization.

Estimated Income Statement FY1, FY2, FY3 Revenue Year 1 Totals Year 2 Totals Year 3 Totals

ProPod 2,879,520 3,167,472 3,484,219

Total Revenue $2,879,520 $3,167,472 $3,484,219

Cost of Goods Sold

ProPod 873,600 960,960 1,057,056

Total Cost of Goods Sold $873,600 $960,960 $1,057,056

Gross Margin 2,005,920 2,206,512 2,427,163

Payroll 270,630 324,756 422,182

Operating Expenses

Advertising 367,752 378,785 390,148

Total Operating Expenses $367,752 $378,785 $390,148

Income (Before Other Expenses) $1,367,538 $1,502,972 $1,614,833

Other Expenses

Depreciation 571 571 571

Interest

Commercial Loan 343 302 258

Total Other Expenses $914 $874 $830

Net Income Before Income Tax $1,366,624 $1,502,098 $1,614,003

Income Tax $273,325 $300,420 $322,801

Net Income/Loss $1,093,299 $1,201,678 $1,291,203

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Estimated Cash Flow FY1, FY2, FY3 Year 1 Totals Year 2 Totals Year 3 Totals

Beginning Balance

Cash Inflows

Cash Sales $863,856 $950,242 $1,045,266

Accounts Receivable $1,751,708 $2,190,835 $2,409,918

Total Cash Inflows $2,615,564 $3,141,076 $3,455,184

Cash Outflows

Investing Activities

New Fixed Asset Purchases -­ -­ -­

Additional Inventory -­ -­ -­

Cost of Goods Sold $800,800 $953,680 $1,049,048

Operating Activities

Operating Expenses $367,752 $378,785 $390,148

Payroll $270,630 $324,756 $422,182

Taxes $273,325 $300,420 $322,801

Financing Activities

Loan Payments $772 $772 $772

Owners Distribution -­ -­ -­

Line of Credit Interest -­ -­ -­

Line of Credit Repayments -­ -­ -­

Dividends Paid -­ -­ -­

Total Cash Outflows $1,713,279 $1,657,993 $2,184,951

Net Cash Flows $902,285 $1,483,084 $1,270,233

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Organizational Structure

Emily Lawless will be our CEO, and most of the positions will be filled by our five person team. By leveraging the existing 1-­800-­Flowers infrastructure, we won’t need to hire anyone else, just like Fruit Bouquets. Second level employees will begin at start-­up. Third level will be added as company expands and as necessary.

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