Abundant Harvest Case Study

Deeksha Manjunath
Prof. Johnsen
MGRL 190.04
30 October 2014
Case Study: Abundant Harvest
Abundant Harvest, located in Devil’s Valley, Wisconsin, is a long-time processor in the highly seasonal vegetable canning industry and is well known for the consistent quality of its product offerings. Chelsea Skye-Rice, previously the financial director, succeeded her father, Robert Skye, as the president of Abundant Harvest. Don Bartley, Robert Skye’s nephew, is the sole sales rep for the company. Abundant Harvest records more than $28 million in sales annually. Currently, sales are down and buyers for some supermarket chains that might be potential new customers have demanded quantity guarantees much larger than Abundant Harvest can supply, which is difficult to do in the short-run. Also, changes in minimum wage laws have increased costs. These and other rising costs have squeezed profit margins, leading to the recent closing of two plants. Chelsea has identified narrowing profit margins, debts contracted for new plants and equipment, and an increasingly competitive environment as concerns to address when formulating Abundant Harvest’s strategy.
Under Robert’s leadership, Abundant Harvest cultivated strong channel relations and Abundant Harvest was known for its cutting-edge technology.
Previously, Abundant Harvest mainly sold through food brokers to merchant wholesalers, supermarket chains cooperatives, and other outlets, mostly in the Midwest. Of lesser sales volume, were direct sales to local institutions, grocery stores, and supermarkets—and sales of dented canned goods at low prices to walk-in customers. Robert was also able to accomplish several key business deals: inexpensive pineapple was imported from Taiwan and sold by Abundant Harvest, primarily to expand the product line, and a technically advanced continuous process cooker was imported from England and installed at one of Abundant Harvest’s
plants.
Chelsea recently decided to change the strategy as a result of narrowing profit margins, debts contracted for new plants and equipment, and an increasingly competitive environment. Citing the 5% commission that food brokers charge (about $1.4 million), Chelsea decided to switch to a direct-selling method, like they had been doing with local institutions and grocery stores, in order to get around the 5% commission. Don was hired as the only sales rep to lead the new strategy. However, he is frustrated with being the only sales rep. While he has been helpful, Don’s limited familiarity with those in the industry or even with customers has been tough.
Abundant Harvest’s previous strategy was definitely appropriate for the times, which is why the company thrived. Identifying the opportunities for growth with the imports for Taiwan and England were strong points of the previous strategy. Further, the strong channel relations built by Robert laid the foundations for future success. The new strategy, while ambitious, is not supported properly. While Chelsea’s background in finance is helpful, it seems like she needs more experience in marketing. Also, hiring only one sales rep to cover all of the sales effort for what seems like a pretty large company is not sufficient.
Chelsea should be up-front with Robert about the current state of affairs. Robert’s expertise and experience could be helpful in determining next steps. Further, moving forward, Abundant Harvest should look to expand supply in the long-run to meet the demand. The company also should look to expand their sales department to help Don. It would be less expensive than returning to the food broker strategy. Don should look to cultivate relationships and establish a presence in the industry in order to guide his market penetration effort, perhaps using Robert as a guide.