Gourmet Food Store Business Plan

Our main target markets are: 

• People who live and work in Moab, who are looking for quality ingredients needed to prepare their favorite international cuisine.
• Surrounding businesses looking for a tasty meal for their customers and staff.
• International and domestic travelers visiting Moab.
• Families looking for quality, affordable, home cooked meals to take home and prepare for their families with ease.
• People looking for a comfortable environment in which to enjoy a cup of coffee, read a book, or just shop.
• People looking for high quality, unique gifts and kitchen supplies.

Each market segment consists of people who either live, work, or vacation in the Moab, Utah area.  Each market will be seeking an establishment that will meet their desire for authentic, healthy food, quality service, and a pleasant atmosphere.

4.1 Market Segmentation

The total potential market in units is shown in the following table and chart. 

• There are approximately 175 business in Moab that could potentially be our customers.  We used 20% as a starting point with 10% growth per year.
• There are 8,485 residents in Moab, according to the 2000 U.S. Census, with 3% projected growth over the next ten years.
• Visitors were estimated using Arches National Park visitation report. From 1999-2003, an average of  787,578 people visited the park annually. We did not include projected growth, because we used an average number, and believe that visitation will remain similar over the next five years.

Even though the visitor population appears to be the largest the market segment, it is possible that much of our sales could come from local businesses, due to the fact that these companies make purchases for the visitors using their services. The local population is extremely important, because they can carry us through the four low visitation months, and will determine whether we become an established community destination.

4.2 Target Market Segment Strategy

The last ten years have seen an increase in American’s explorations of foreign and gourmet foods. Whether this can be attributed to celebrity chefs, travel to foreign countries, new health diets, or the increasing accessibility of once-obscure ingredients, it seems that gourmet and adventurous palates are here to stay.

The proliferation of visitors has forced this once-isolated community to learn about and offer a greater variety of foods and experiences than they would have sought out on their own, and many residents are now just as sophisticated in their food tastes as our tourists. In Moab, residents often use travel to larger cities as occasions to stock up on luxury and gourmet items not available locally. However, they prefer to shop locally whenever possible, and would welcome a store that offers this combination.

Moab is growing at 3% a year, allowing for increased business opportunities without diminishing the small-town feel. Our natural attractions are in no danger of becoming polluted or otherwise less accessible, and so we expect continued market growth for the foreseeable future.

Our marketing programs towards different target market segments will utilize different publications and media, but all will emphasize our good value, high quality, unique and varied selections, and great service.

4.2.1 Market Needs

Moab and Southeastern Utah are in need of a quality international market that sells items that are currently only available in large cities or over the internet.  Many residents tell stories of traveling to large cities with empty luggage so that they can fill their suitcase with speciality food they can not find in Moab.  The residents of Moab are dedicated to protecting its “small town” feel and make a point to shop locally whenever possible. The residents of Moab and its surrounding communities would be thrilled to be able to shop for the food they want at home. 

Moab, Utah is a rural community. The closest city is Grand Junction, Colorado, located 80 miles away, with a population of 42,000.  Salt Lake City, Denver, Albuquerque and Las Vegas are the closest big cities, all located 250-600 miles away. Moab is fortunate to be a popular domestic and international travel destination because of its proximity to national parks, ancient cultural sites, unique red rock landscapes, and world class recreational opportunities. 

Local and visiting customers desire high quality, healthy food that will appeal to their aesthetics. In addition, they desire a pleasant shopping and dining experience that allows them to learn about and purchase the grocery items they want in a comfortable, friendly, hassle-free environment.  Customers will also enjoy the delicious home cooked take-home meals available to them when they do not have time to prepare quality meals at home. 

4.2.2 Market Growth

We believe there is a market for our products and services in Moab and that the market has potential for growth.  Grand County’s population in the year 2000 was 8,485 and is expected to grow at a rate of 3% over the next ten years.  Moab is dedicated to remaining a travel destination “hot spot” without loosing its “small town” feel.  Because of its unique appeal it is likely to attract many vacationers for years to come. Our business will grow as customers become familiar with our products and services. 

U.S. Retail Sales of Gourmet Foods & Beverages  1998-2007 (in millions of dollars)

4.2.3 Market Trends

Market and market growth according to Tree of Life, The U.S. Market for Gourmet/Speciality Foods include the following profiles, trends, and outlooks (see attached information for more details). 

U.S. Retail sales of Gourmet Foods & Beverages 1998-2003

Share of the U.S. Retail sales of Gourmet Foods & Beverages by Outlet 2002

*Includes continent stores, natural food supermarkets, ethnic stores, mass merchandisers,

drug stores, mail-order & internet sales, and alternative channels.

Americans are developing a bigger appetite for more upscale foods. There are reasons behind this, starting with higher discretionary incomes, better educations, more frequent travel, more fine dining, endless celebrity chefs on TV, and more exposure to ethnic foods. As a consequence, average American families–not just the affluent ones– are becoming increasingly adventurous in their diets.

A growing number of consumers also perceive gourmet foods as an affordable treat–not something limited to the very rich. As Andrea Kelly, group brand manager for Ferrero Rocher Chocolate, told the press, “People across all economic strata have at least a couple dollars to buy something that will be a treat for them.” This is borne out by the proliferation of Starbucks cafes, and translated into the retail success of products like Starbucks frappuccino bottled beverages. Likewise, Simmons Market Research Bureau demographics data show that although gourmet foods and beverages generally hold the highest appeal to the highest-income groups, there are also strong pockets of interested consumers in more moderate income brackets.

According to Simmons, ethnic/foreign foods are definitely popular among Americans. More than 41% of those surveyed agree that they “enjoy eating authentic foreign foods” and over 20% say they enjoy eating them “a lot”. By comparison, 18% of consumers agree with the statement that they “try to eat gourmet food whenever I can” and less than 6% agree a lot. A bit further down the list is “prefer food presented as an art form,” with just 15% agreeing and less than 5% agreeing a lot.

There has long been a synergy between the natural foods industry and the gourmet foods industry.  From the early days of the health food movement and the organic food movement, Baby Boomers have been in the forefront of demanding healthy foods. Now, with the aging of the Baby Boomer generation, says John Roberts, president of the NASFT, “health concerns will make products that carry the words ‘natural,’ ‘organic,’ ‘healthy,’ and ‘fresh’  more saleable.”  Marketers are also appealing to consumers’ social consciences by offering products that are good for the environment and the workers who produce them, such as sustainable, shade-grown, and fair-trade coffees. 

More and more health and natural foods stores are carrying upscale, gourmet food items that meet their quality standards. For example, large natural food chains such as Whole Foods Market feature a wide assortment of upscale products ranging from organic produce, fresh baked goods, and cheeses produced from hormone-free milk, to a huge variety of packaged dry groceries. Their broad product mix and focus on high-quality foods draw consumers seeking gourmet foods as well as traditional health foods.

Sarrica’s Market realizes that there is a growing demand for speciality food items and a significant percentage of visitors and locals demanding naturally grown, organic specialty foods. We plan to pay attention to these trends and provide our customers with these products. 

4.3 Service Business Analysis

We are part of the retail grocery and prepared food industry, as well as the small-scale deli industry. In particular, our portion of the industry is “gourmet food stores.” This encompasses a wide range of specialty import shops, high-end delicatessans and cafes, and natural foods stores.

Gourmet food stores typically have relations with a number of far-flung distributors around the world, and access to direct sellers for major foreign brands. Large gourmet chains, like Bread and Circus, can benefit from economies of scale and obtaining more hard-to-find items in bulk. Smaller, owner-operated stores such as ours pay higher prices and have less space to store overstock or seasonal items.

Our success will depend on knowing our clientele, and what they want. Our challenges are to keep enough popular items in stock for repeat customers, while introducing new and seasonal items and specials frequently enough to keep buyers intrigued.

Many gourmet food stores offer meals or individual dishes prepared in the store. In addition to our frozen pre-made selections, Sarrica’s Market will have a deli, open for breakfast, lunch and dinner, and an in-store seating area. This part of our business competes with local restaurants and grocery stores. Our deli must offer foods that are familiar enough not to intimidate customers, but interesting, with new combinations or unique ingredients, to provide them with a sense of adventure and indulgence. The deli and the store offerings should complement each other.

4.3.1 Competition and Buying Patterns

In the gourmet food store industry, businesses must distinguish themselves from competitors (grocery stores, restaurants, cafes) by offering unique, hard-to-find groceries, and/or interesting, difficult-to-make prepared foods. They must convince customers that the special quality of their products and service is worth the price premium they pay.

In Moab, customers shop for groceries based on convenience, selection, and price. Sarrica’s market does not intend to compete with regular grocery stores on standard items – toilet paper, dog food, canned tuna, etc. Instead, we will exploit a previously unoccupied grocery niche: the gourmet food store, offering items otherwise unobtainable locally. Moab residents looking for gourmet foods are also looking for convenience, selection and price, and our competitors for their business (stores in larger towns, online, etc) are less convenient (farther away or longer waits for delivery), although they offer similar selections and prices. Visitors to Moab are looking for treats and meals that match their definitions of their trips: adventures, indulgent holidays, or experiencing new and interesting sights and sensations. Sarrica’s will offer foods that fit all of these desires.

Moab residents are used to long winters with frequent snowfall, making roads between here and the major cities obstacles. Our convenience factor in the winter for these residents is thus much higher than our competitors. For visitors, we offer a convenient alternative to bringing gourmet foods with them from home, and a more interesting shopping and dining experience than can be found in other local stores and restaurants.