Truearth Healthy Foods

TruEarth Healthy Foods

[pic 1]

Group 2:

Heather Bernier

Miles Blackwell-Orr

Paul Brown

Contents         

1. Situation Analysis                
2. Missing Information and Assumptions                
3. Problem Definition                
4. Development of Alternatives
5. Evaluation of Alternatives and Recommendation        
6.  Appendix        

Founded in 1993 by Gareth DeRosa, TruEarth is the maker of gourmet pastas, sauces, and meals. They pride themselves on being one of the first companies to recognize and focus on the need for whole grain product options in the market. The company has a reputation for being selective about their ingredients for their product line, and in turn, became the supplier to gourmet grocers throughout the midwestern U.S. After a successful launch of their pasta and sauces line, named Cucina Fresca, in 2006, the company is pondering whether or not to break into a new market segment and offer whole grain frozen pizza.

1. Situation Analysis

        Over the years, TruEarth has afforded themselves many strengths through their success in their pasta line that could be carried over into the pizza venture. By 2007, the company was seeing profits of 23 million dollars with their pasta and sauce line. They started by offering the standard dried version of pasta and expanded their offering when the company saw the need for refrigerated pasta. There was an initial investment required to upgrade their current manufacturing facilities due to the new production lines that were needed, as well as the packaging requirements for refrigerated food, increasing the necessity for newer equipment. To their advantage, if the company was to decide to add whole grain frozen pizza’s to their product line they already have an established manufacturing facility, requiring minimal upgrade expenses to their existing plant. As TruEarth continued to develop their pasta and sauces line, they saw the need to implement a process for their product development as their market prediction mistakes were becoming too great, this process is made up of four steps, including: idea generation, concept screening, product development and testing, and quantification of volume. The process has proven to be beneficial and could be transferred over to their whole grain pizza development. Arguably their biggest advantage, is that they already have established brand equity with stores and customers, they achieved this by raising awareness of their product through promotional programs, coupons, magazine advertisements, and in-store demonstrations.

        Although TruEarth already have established themselves as providing delicious and healthy pasta and sauce options, that is all the company currently offers. Having such a narrow product line, coupled with their decreased revenue growth, TruEarth may not have any other choice than to expand their product offering. Frequently the company was making mistakes with their projections of what was going to be a hit product and ultimately severely underestimating the product’s actual performance. It either caused the company to struggle to keep up with the demand, or their estimates were simply too confident, overtime as TruEarth grew, so did the cost of these mistakes.

        However, the company has several opportunities in front of them to change their situation. If TruEarth decided to invest in their “guilt free” gourmet pizza idea, they maintain their first-mover advantage in the market. At the time the company launched their Cucina Fresca pasta and sauce line, they were the industry leader in creating a healthy whole grain pasta option. They have the option to seize the opportunity of being the first to create a healthy frozen pizza option. Furthermore, if the company were to expand their product line, it could potentially increase their revenues.

        Although TruEarth was the first of it’s kind to create healthier, gourmet options, it was not long until they were met with the threat of competition. Rigazzi Brands is their only competitor that is of similar scale and offers all of the same products as TruEarth currently produces. The company can already confirm that Rigazzi has also tested a pizza concept so there is more pressure for them to move quickly if they were to expand their products to include pizza. Other pizza competitors currently exist including take-out and frozen pizza, restaurants, alternative refrigerated meals, Kraft & Nestle. Meaning, TruEarth is going to have to work harder in order to penetrate the pizza market, and to stay ahead of their competition by maintaining an innovative edge.