Organic Dried Food is an e-commerce marketplace targeting the expanding U.S. organic consumer demographic. The deck emphasizes a lean operational model, utilizing third-party distributor drop-shipping to avoid the 9% warehouse fulfillment costs typical of competitors like Vitacost. The presentation outlines an aggressive growth trajectory, forecasting a jump from $2 million in revenue in 2016 to $100 million by 2019. While the deck provides a clear acquisition strategy involving Google Shopping and co-op branding, it notably lacks a team slide, a specific funding ask, and detailed unit econom…
Key takeaways
- The problem is defined as a lack of availability for organic products at traditional supermarkets, citing the Organic Consumers Association (Slide 2).
- The company claims to offer 5X the products of Thrive Market and operates without an annual membership fee (Slide 5).
- A core competitive advantage is the use of distributor drop-shipping at no charge, contrasting with Vitacost's 9% warehouse fulfillment costs (Slide 5).
- The digital marketing strategy relies on Single Product Ad Groups (SPAG) for 37,000 products to ensure CPA does not exceed profit margins (Slide 6).
- Financial forecasts predict revenue growing from $2,013,472 in 2016 to $100,000,000 in 2019 (Slide 7).
- The business model expects repeat customers to grow from 25% of sales in Year 1 to 43% in Year 2 (Slide 7).
- The deck identifies 16 specific 'Exit Potential' prospects, including Whole Foods Market and Ahold Delhaize (Slide 8).
- The storefront, OrganicDriedFood.com, features a flat rate shipping fee of $6.95 for orders under 3 lbs (Slide 9).
Organic Dried Food Investor Presentation Analysis
The Organic Dried Food investor presentation is a straightforward, operationally-focused deck that pitches a lean e-commerce model within the high-growth organic food sector. The deck relies heavily on the efficiency of drop-shipping to justify its scalability and competitive edge. However, as a fundraising tool, it leaves several critical questions unanswered regarding the team and the specific terms of the investment being sought.
Slide 1: Title Slide
The cover slide introduces the company name, "Organic Dried Food," and its tagline, "Your Organic Marketplace." The visual theme is pastoral, using illustrated green hills and trees, which aligns with the organic and natural branding. The company is identified as Organic Dried Food Store Inc. in the footer, a convention maintained throughout the deck.
Slide 2: The Problem
The deck identifies a supply-side issue rather than a demand-side one. Citing the Organic Consumers Association, the slide states that the "lack of availability at supermarkets and grocery stores" is the primary reason Americans do not purchase more organic food. By framing the problem this way, the company positions its online marketplace as the necessary bridge between organic producers and underserved consumers.
Slide 3: Target Customer Demographics
This slide argues that the organic consumer is no longer a niche demographic. It claims the customer base is "bigger, younger, and significantly more diverse" than in previous years. The key assertion is that organic-buying families now "mirror the demographics of the U.S. population," suggesting a massive Total Addressable Market (TAM) rather than a specialized segment.
Slide 4: Sales and Marketing Strategy
The marketing plan is divided into three categories: Paid Customer Acquisition, Co-op Customer Acquisition, and Reorders. Paid Acquisition involves a partnership with a digital marketing firm to optimize conversion rates. Co-op Acquisition is a notable strategy where the company intends to develop programs with 2,200 brands to share the costs of full-page magazine ads. Reorders are handled through weekly "Specials" sent to the total customer base to drive lifetime value.
Slide 5: Competitive Landscape
This slide provides a direct comparison with Vitacost and Thrive Market. The company highlights that Vitacost (purchased by Kroger for $287 million in 2014) has warehouse fulfillment costs equal to 9% of sales. Organic Dried Food claims to eliminate this cost by using distributor drop-shipping. Against Thrive Market, they claim to offer "5X products" and a "free to join" model, contrasting with Thrive's $59.95 annual fee. The slide emphasizes that competitors are "duplicating distributor infrastructure" while Organic Dried Food leverages it.
Slide 6: Paid Customer Acquisition Strategy
This slide drills down into the technical aspects of their digital marketing. It lists various channels including Google Shopping, Bing/Yahoo Shopping, and AdRoll FBX Retargeting. A specific tactic mentioned is the use of "SPAG" (Single Product Ad Group) for each of their 37,000 products. The stated goal is to ensure the Cost Per Acquisition (CPA) does not exceed profit margins, indicating a focus on unit economic discipline.
Slide 7: Financial Forecast
The forecast covers the period from 2016 to 2019. For 2016 , the company projected $2,013,472 in revenue with a net loss of $166,146. For 2017 , revenue was expected to rise to $10,061,778 with a marginal profit of $20,279. The projections scale aggressively to $100,000,000 in revenue and $10,000,000 in profit by 2019. The slide also notes that by the end of 2017, they expected 190,000 customers and a $17 million run rate.
Slide 8: Exit Potential Prospects
The company lists 16 potential acquirers, primarily large grocery chains and holding companies. The list includes AB Acquisition LLC (Albertson's), Delhaize America, Whole Foods Market, and Winn-Dixie. The slide reiterates the Vitacost acquisition by Kroger as the primary proof of concept for this exit strategy.
Slide 9: The Storefront
The final attached slide shows a screenshot of OrganicDriedFood.com. The site features categories like Allergy Free, Fruits & Vegetables, and Grains. It prominently displays a "Flat Rate Shipping of $6.95 for orders under 3 lbs." This slide serves to prove the existence of a functional product and provides a visual for the user experience.
What Works in This Deck
Clear Competitive Differentiation: The focus on the 9% fulfillment cost savings via drop-shipping is a strong, quantifiable argument for why this model might be more efficient than established players like Vitacost. · Technical Marketing Depth: Mentioning SPAGs and specific CPA-to-margin constraints suggests the company has a granular understanding of e-commerce customer acquisition costs. · Market Timing: By citing the Vitacost acquisition, the deck successfully hit a "hot" sector trend where traditional grocers were aggressively looking for digital footprints.
What Is Missing from This Deck
Team Slide: There is no mention of the founders, their backgrounds, or their experience in e-commerce or logistics. In early-stage fundraising, the team is often as important as the model. · The Ask: The deck does not state how much capital is being raised, the valuation, or how the funds will be specifically allocated. · Current Traction: While the deck provides forecasts starting in 2016, it is unclear if the 2015/early 2016 numbers are actuals or purely speculative. There is no mention of current GMV or active user counts at the time of the presentation. · Unit Economics: While they mention CPA should not exceed margins, they do not provide the actual average order value (AOV) or the specific gross margins on their 37,000 products.
Founder Takeaways
Leverage Existing Infrastructure: If your startup uses a model that avoids the heavy CapEx of your competitors (like drop-shipping vs. warehousing), make that the centerpiece of your efficiency argument, as seen on Slide 5. · Be Specific About Acquisition: Don't just say "social media marketing." Listing specific tactics like SPAGs and retargeting (Slide 6) shows investors you have a tactical plan to reach your revenue goals. · Use Benchmarks for Exits: Identifying a recent, high-profile acquisition in your space (like the Vitacost/Kroger deal on Slide 8) helps investors visualize the liquidity event and potential ROI. · Don't Forget the Team: Even a great model needs a pilot. Always include a slide that proves you and your co-founders are the right people to execute the plan.
Frequently asked questions
- What is the primary business model for Organic Dried Food?
- The company operates as an online marketplace (OrganicDriedFood.com) that utilizes a drop-shipping model. According to Slide 5, they leverage the infrastructure of their distributors to ship products directly to consumers at no additional charge to the company. This allows them to avoid the capital-intensive process of building and managing their own fulfillment centers, which they claim costs competitors approximately 9% of sales.
- How does the company plan to acquire customers?
- The strategy is two-pronged: paid and co-op acquisition. Slide 4 and 6 detail a heavy reliance on Google Shopping, Bing/Yahoo Shopping, and AdRoll retargeting. They specifically mention managing 37,000 Single Product Ad Groups (SPAGs). Additionally, they plan to use 'Co-op Customer Acquisition' by partnering with 2,200 brands to share the costs of full-page magazine advertisements in publications like Food and Woman.
- What are the projected financials for the company?
- Slide 7 provides a four-year forecast. In 2016, they projected $2,013,472 in revenue with a loss of $166,146. By 2017, they expected to turn a small profit of $20,279 on $10.06 million in revenue. The long-term goal stated is to reach $100 million in revenue by 2019 with a $10 million profit, assuming a significant increase in the lifetime value of the customer base.
- Who does Organic Dried Food consider its main competition?
- Slide 5 explicitly names Vitacost and Thrive Market as primary competitors. The company differentiates itself from Vitacost by highlighting lower fulfillment overhead and from Thrive Market by offering five times the product selection and eliminating the $59.95 annual membership fee. They position themselves as a more accessible and efficient alternative to these established players.
- What is the exit strategy presented in the deck?
- The exit strategy is focused on acquisition by large-scale grocery retailers. Slide 8 lists 16 potential acquirers, including AB Acquisition LLC (Albertson's), Whole Foods Market, and Food Lion. The company uses the $280 million acquisition of Vitacost by Kroger in 2014 as a benchmark for the potential valuation and interest from the traditional grocery sector.
