Project: Hnutu Walnut Butter
Client: Self/ Carey Business School
Team: None
Role: Entreprenuer
Hnutu Business Plan Executive Summary
Hnutu (etymology of the word “nut” from old English), is the producer and marketer of a new, premium, natural walnut butter. The company’s mission is to produce, market, and sell the most delicious natural walnut butter for consumers seeking healthier options to peanut butter. Founded in early 2008 by John Koblinsky, Hnutu has been developing partnerships with walnut farmers, food processing facilities, and walnut associations to prepare for the launch its first product, a 12oz jar of walnut butter, in 2009.
Many wonder, why walnuts and why walnut butter? Of all the world’s nuts, walnuts are considered king. Labeled a “super food,” walnuts are packed with nutrients that contribute to good health. Walnuts are an excellent source of the healthy omega-3 essential fatty acids that researchers have found to protect the heart; promote bone health; provide anti-inflammatory benefits for asthma, rheumatoid arthritis, eczema, and psoriasis; and help reduce the risk of high blood pressure, stroke, diabetes, and clinical depression.
Americans love peanut butter, but consumers are increasingly looking for healthier alternatives. Hnutu wants to fill this void. In 2004, there were $1.8 billion in peanut butter sales, up 11% since 2000. Year-to-year growth from 2003 onward has been on the order of 0.5%, according to a study by Mintel International. Nut butters other than peanut butter are now growing in popularity due to research and publicity about their health impacts. A recent national study, “The Profile of American Baby Boomers: Health, Diet and Consumption Behaviors and Attitudes” found that this group is now worried about fat, cholesterol, sugar, and salt, and are changing their eating/diet habits to address health and weight issues (NPD Group, 2005).
Hnutu will pursue an aggressive sales strategy to meet demanding sales goals. Goals for unit sales are determined by the financial analysis, which considers the low profit margins for most food product sales. Hnutu aims to sell 5,000 jars in its first six months, followed by 10,000 jars during the second half of the year. Two full-time employees will be hired to market the product, with a particular focus on stores that specialize in organic and specialty foods (e.g., Whole Foods, Ukrop’s, Balducci’s). Currently there are no walnut butters on the shelves of retail stores in the Washington, DC area so Hnutu is easily able to differentiate itself from the other nut butters.
As a result of low profit margins and high production costs, Hnutu would have to make changes to its operations after the first two years. Without restructuring operations to become more vertically integrated, Hnutu would not be able to become profitable. There is a current need to invest in more research and development related to product taste, storage, and marketing of health benefits. After successfully addressing these issues, this product could be regarded as a delicious, healthy alternative to peanut butter. Time to fix a Hnutu and jam sandwich…
