As any new business owner has likely found, there are several basic hurdles that need to be crossed as a business gets itself moving. In a general sense, a fledgling company needs to reach a certain critical mass to get past the first year and avoid failure. Once that first year hurdle is crossed, a company’s management can begin to concentrate a bit more on growth and full execution of its business plan.
From an investor’s point of view, this is when becoming involved begins to appear a bit more interesting, as opposed to becoming involved when the company was working to simply survive. Given current economic conditions, finding companies that fit this mold is a bit more difficult, but if they can be found, a solid investment is likely to be available for profit.
Organic To Go Food Corp., a USDA organically certified “grab and go” food retailer/wholesaler, provides organic food products primarily along the west and mid-Atlantic coasts. The company operates through a multi-channel business model offering retail, wholesale, corporate catering, university services, franchise, airport and institutional sales.
Although the company has only been in operation since 2004, it is quickly expanding its number of locations and associations. It is currently comprised of 33 fast organic food cafes, 120 wholesale outlets, 11 universities services programs, 4 city oriented corporate catering services and several grab and go outlets at the Los Angeles International Airport. Announced November 21, 2008, the company will also begin offering its branded products through Southern California’s Jamba Juice franchise locations.
Appearing somewhat as an oxymoron, the company has found that its “fast food” grab and go organic business model sits well with customers even in difficult economic times. This is not to suggest that the company is not experiencing a certain amount of economy related difficulties, but that overall growth has been less affected then one might think. Movement into the Washington DC areas is a case in point. As the company began its forays into the area, it began to see indications that sales were showing it to be a leading profit center for the company. At what pace the company decides to continue its national rollout is speculative, but does appear to be progressing quickly.
Moving forward, it will be interesting to see how the company responds to a deepening economic situation. Approximately 45% of the company’s first half 2008 revenue was derived from its catering and delivery business. As corporate America retrenches, catering budgets may begin to shrink. The company’s grab and go channel, however, may well offset any slowdown from the catering channel. As with any investment, timing is the key. Organic To Go, however, does appear to be over the first hurdle and looking for the next.
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