Husk Paper Products aims to reduce deforestation by manufacturing household paper products from corn husks and stalks rather than trees. They plan to compete with established paper companies by marketing to eco-friendly consumers and focusing on LOHAS consumers in particular. Husk Paper Products requests $5 million in initial funding to cover start-up costs and estimates $31 million in revenue by year five with products in 1000 stores nationwide.
2. Executive Summary
Our society relies on paper products everyday friendliness and low prices of our products. We
for various tasks. Most of these products rely plan to do small scale advertising in order to
on heavy deforestation to be manufactured. establish our consumer base. We will launch a
The world’s forests are slowly disappearing national advertising campaign once we’ve a
because of heavy deforestation. Husk Paper secured a spot in the market. We estimate to
Products is a company that is dedicated to have a revenue of about $31 million by year
reducing deforestation and improving the five with our products being sold at about
health of the environment. We work to reach 1000 stores nationwide. Husk Paper Products
that goal by manufacturing household paper requests $5 million for initial funding in order to
products from an alternative and unique cover start up costs.
material: corn husks and stalks.
Husk Paper Products is nothing without its
Since we manufacture paper products, our outstanding executive officers. They are
main competitors are big paper companies dedicated not only to the company but to the
that are already well-established in the paper eco-friendly cause the company is supporting.
market. We will compete with these companies Jazmine Wong is the driving force behind the
by focusing our marketing and distributing to company as its CEO. Bernard Deleon does
eco-friendly consumers, specifically LOHAS his best to advertise Husk’s products as the
consumers. LOHAS is an acronym for Lifestyle of Marketing Director. Alejandro Ramos crunches
Health and Sustainability, which describes an numbers daily as the Chief Financial Officer to
eco-friendly market. Husk Paper Products will make the company a profit.
attract consumers by emphasizing the eco-
3. Company Profile
MISSION STATEMENT
To reduce world-wide deforestion by providing high quality and inexpensive paper
products that benefit both the environment and our customers.
COMPANY HISTORY
We searched far and wide to find a suitable
Husk Paper Products was founded by three substitute. We finally found it in corn waste, which
individuals who were concerned about the can be made into paper using the same processes
impact society has on the environment, as tree-based paper and is more readily available
especially on the world’s forests. Billions of trees than trees. We use only corn waste to create
are cut down annually fill our need for paper household paper products of the same quality as
products, ranging from printer paper to paper leading manufacturers and suppliers of household
towels and beyond. With that in mind, we paper products. We believe we will make an
began with one goal: to reduce society’s heavy impact on the paper industry and become leaders
dependence on trees for paper produ cts. in the green movement.
4. EXECUTIVES
Jazmine Wong has always been one to take the role of a
leader. In 2008, she was elected vice president of MDHS Class of 2011.
During her time as VP, she helped promote and fundraise money for
the organization, as well as improve school spirit. Joining the Digital
COMING Safari Academy during her Junior year in high school, she presented
SOON a video and song for the Speaking of I.D.entity project, showcasing
her creative ability as well as her charisma and confidence. As a
developing philanthropist, Jazmine has also worked as an intern for
a non-profit organization called Sustainable Contra Costa, which
focused on promoting green lifestyles and programs in the community.
With intense drive and focus Jazmine has helped a fledgling company
spread its wings and take flight.
Alejandro Ramos is a man defined by his accomplishments
as a leader. He served as president for the class of 2011 during the
2009-2010 school year. He worked hard to raise funds and organize
COMING
SOON
class events that his peers would enjoy. He’s now stepped down from
his presidential role, but continues to participate in his high school’s
student government. He previously worked for the Bay Point Garden as
a garden leader, helping raise different plants and teach after school
classes on gardening. He left his job at the garden to focus solely on his
role as Chief Financial Officer for Husk Paper Products and now works
diligently to further the success of Husk Paper Products.
Bernard Deleon joined the Digital Safari Academy in mid-2008.
His major project was the Legacy of Imperialism, in which he and
three other group members devised a plan to provide safe and clean
water to Zimbabwe and to slow down the Cholera epidemic. Bernard
COMING also made a music video paying homage to John Legend’s hit, “Stay
SOON
With You”, and he wrote a spoken word piece and performed on the
stage for the Speaking of I.D.entity project. He also participated in the
We Are Mt. Diablo documentary project about school diversity. He is
now Husk Paper Products’ Marketing Director, aiming to promote and
attract customers to make greener choices.
5. Product Data Sheet
FEATURES
• It dries
• It wipes
• It cleans
You will no longer have to rely on paper products • It’s green
made from trees. Husk Paper Products is proud to
present household paper products made from
a unique material: corn husks and stalks. M ade CONSUMER BENEFITS
using the same processes as paper products • Same quality as leading brands
produced from trees, paper from corn waste is • Reduces reliance on trees
equally functional to current tree-based paper,
without the detrimental effects to forests. Husk
Paper Products provides an environmentally ENVIRONMENTAL BENEFITS
friendly alternative to help reduce heavy • Reduces deforestation
deforestation. • Source material is readily available
6. Market Analysis
This means that sooner or later we won’t have
enough trees to supply the demand for paper. This
presents an opportunity for our paper products
OPPORTUNITY ASSESSMENT because they are made from an agricultural waste
that is more renewable and readily available than
Husk Paper Products is proud to introduce paper the depleting resource of trees.
made purely from the husks and stalks of corn.
Made with the same processes as leading The market for eco-friendly products has been on
brands in the paper industry, our products offer the rise. According to the Mintel Research Group,
an eco-friendly alternative to household paper 35% of US consumers are willing to pay more for
products currently found on the market. Husk eco-friendly products. Not only that but in 2008,
Paper Products’ main goal is to provide high the “Green” industry grew 6%, out performing the
quality household paper products while reducing US economy as a whole. This presents a viable
heavy deforestation for the production of paper. market opportunity for Husk Paper Products as we
would be appealing to the rising demand for green
products from an increasing number of eco-friendly
The worlds forests are being depleted for the consumers.
production of paper products. According to
Paper Chase by Sam Martin, each year over 4 Our society uses paper products every day.
billion or 35% of the world’s trees are cut down The paper industry alone generates over $200
and used in the production of paper products. billion dollars a year. According to a 2000 report
The NRDC has stated that the production of by PaperCom Alliance, the paper industry has
paper products accounts for 42% of the trees cut increased 30% in six years and is expected to
down annually, worldwide. Although new trees continue to grow. This growth in the paper industry
are planted to replace these, the harvest of trees
has outpaced the growth of new trees.
7. implies that there is an increasing demand for paper
products. This increasing demand for paper products
creates an opportunity for our product to succeed.
CUSTOMER PROFILE
Husk Paper Products hopes to one day provide eco-
friendly household paper products for all, regardless
of socioeconomic standing. However, we understand
that we simply cannot jump into such a wide market
all at once. For this reason we are focusing our efforts mostly in only natural and organic consumer goods
on the smaller but booming LOHAS market. The and Drifters, who are interested in eco-friendly goods,
LOHAS market is valued at $209 billion and has about but do not make many natural/organic purchases
41 million consumers, or about a 19% of the United due to cost. Therefore the LOHAS market is a very
States’ adult population, as shown in the chart below. good entry point for our product because it has a
This chart also defines the percentage of consumers large number of consumers that will buy products
for groups such as Naturalites, who are interested based almost completely on their eco-friendliness.
LOHAS consumers do not fit into any one
demographic group; they are instead defined by
their socially conscious decisions in their purchases
of goods. That being said, there are still certain
Unconcerned demographic trends among LOHAS consumers.
17%
Conventionals About 60% of all LOHAS consumers are female, as
29%
shown by a survey we conducted in 2010 in Todos
LOHAS Santos Plaza and by a report from market-insider.
19%
com. Young people between the ages of 18-34 are
Drifters most likely to buy LOHAS products since they have
21% Naturalites
grown up exposed to environmental awareness.
14%
BREAKDOWN OF
CONSUMER TYPES
8. loyalty to brands whose ideals on environmental
and social issues line up with their own. They tend to
Most LOHAS consumers are college educated be very insensitive to price; 80% of LOHAS consumers
individuals that fall into the middle class income are willing to pay up to 20% more for LOHAS
range, making approximately $36K a year. We products.
plan to distribute our household paper products
to natural food chain markets and national
supermarkets, such as Whole Food’s and COMPETITIVE ANALYSIS
Safeway. As a result, our geographic areas will
be centered around these stores. Natural food The paper industry has many competitors, but
markets tend to be located in wealthy suburban only the big corporations survive. Husk Paper
areas and largely populated cities while national products main competitors are companies that
supermarkets can be found in many suburban are well established and have many more years
areas throughout the nation. of experience. These companies include Seventh
Generation, Georgia-Pacific, and Kimberly Clark.
LOHAS consumers are socially conscious
individuals that define themselves by their Seventh Generation Inc. is a company that
values on social and environmentVal issues. They produces paper products from 100% recycled
exercise those values when choosing goods and paper. Their paper products include towels, tissue,
services, believing that buying green products toilet paper, and napkins. Not only is Seventh
is “cool”, giving them a feeling of satisfaction. Generation Inc. selling the same products we
LOHAS consumers are known to exhibit are, but also providing alternatives to using paper
products made from virgin wood pulp. This is in
direct competition with Husk Paper Products,
9. both as a paper company and an eco-friendly
company. We will be competitive because we are
using virgin agripulp, which is of higher quality than
reused wood fibers.
Georgia Pacific, one of the largest paper
companies in the world, is another competitor to
Husk Paper products. They own Angel Soft toilet
paper, Brawny paper towels, and other various
brands that present competition for our products.
Georgia Pacific’s products are known to be of high wood fibers and some recycled fibers to produce
quality and inexpensive, the only drawback being their products, but is not an eco-friendly company.
that they are not eco-friendly. Husk Paper Products Husk Paper Products provides products that offer the
hopes to compete because of the fact that we same quality as Kimberly-Clark’s while being eco-
provide the same high quality paper, without the friendly.
environmental costs.
These companies are well established and it will
Another competitor to Husk Paper is Kimberly-Clark, be a challenge competing against them. Our
which produces and sells general household items. company will differentiate itself and succeed
Among these items are several tissue and paper due to the fact that we use agripulp to create
towel brands, such as Kleenex, Cottonelle, and paper products, instead of virgin wood pulp or
Scott. These are top selling, high quality products recycled wood fibers. Our products will appeal to
that present competition for our products. Kimberly- LOHAS consumers and eventually to the rest of the
Clark uses consumer market by providing the same quality and
reliability as brands such as Kleenex and Bounty.
COMPETITIVE MATRIX
HUSK PAPER SEVENTH GEORGIA-PACIFIC KIMBERLY-CLARK
PRODUCTS GENERATION
STRONG § § § §
ABSORBANT § § § §
COMFORTABLE § § § §
ECO-FRIENDLY § §
CHEAP §
MATERIAL VIRGIN AGRIPULP USED PAPER VIRGIN WOOD PULP VIRGIN WOOD PULP
This comparative matrix highlights the different qualities of paper towels
and tissues as well as stating the main source material for each company.
10. Marketing Plan
PRODUCT
Husk Paper Products will be manufacturing
disposable towels and tissues made of absorbent PRICE
paper. Made from corn husks and stalks,
our products will feature the basic functions Husk Paper Products has determined that our
of household paper products such as high target price will be about 25% less than our
absorbency, softness, and effective wiping and leading competitor, Seventh Generation. All
drying ability. Our products will be bleached od our products are sold by the case and are
with non-chlorine bleach and environmentally priced accordingly. Our paper towels will be
safe products, giving them that bright white sold at $54.00, toilet paper at $64.80, and tissues
color that customers expect. We will be using at $60.00. We will be offering our customers the
biodegradable plastic material to package option of buying our products in large quantities
our products in order to further emphasize our of buying our products in large quantities through
dedication to the environment. our website and select stores. By buying online,
customers have the option of receiving special
discounts, limited to online purchases only.
11. PLACEMENT
Our target customers are general consumers PROMOTION
who may have an interest in buying eco-friendly
products. We will be distributing our products We understand that our product is difficult to
to one natural food store to attract consumers differentiate and promote when there are
who are more into being eco-friendly and one companies that have already established
national supermarket chain to appeal to the themselves with high quality products, such as
general consumer. The natural food store is Charmin and Brawny. With that in mind, we plan
Whole Foods, which is known to serve LOHAS to attract our target customers by reminding
consumers, while the national supermarket chain them of the benefits they are receiving by
Is Safeway, which serves the general public but purchasing our product. It’s crucial that our
has eco-friendly tendencies. customers understand that our products are
made from an already pre-existing waste,
reducing the amount of waste that goes out into
the environment, while also creating something
that is much needed in our society. We will be
doing in-store and direct mail advertising to build
up our consumer base in our first years and shift
towards a larger advertising campaign once
we’ve established ourselves.
12. Life Cycle Analysis
MANUFACTURING
The corn waste has to be pulped before it can be
used to make paper products. It will be pulped
AQUISITION using the Kraft process, which uses chemicals to
convert the corn waste into pulp. After the corn
Husk Paper Products will primarily be using corn waste has been pulped, it will be sent to a paper
waste to manufacture its paper products. Corn machine to be shaped, pressed, and dried into
waste is usually disposed of by being burned in large rolls of paper. Several additives will be used to
the fields, which causes CO2 and smog emissions give our paper products their wet strength. While the
that are known to be health and traffic hazards. Kraft process is not as eco-friendly as mechanical
Our use of the corn waste will reduce the CO2 pulping, which uses machines to pulp the plant, it
and smog emissions from this method of disposal. results in higher quality paper which is needed to
We will acquire our stock from farms in the make high-quality tissue paper.
midwest after annual harvests. We will also be
using water to manufacture our paper products,
which we will acquire through pipelines leading
to our factory.
- famers harvest corn
- we bale corn husks/stalks
1 - reduce CO2 emmissions
from corn burning
3
- corn husks/stalks go through
a pulping process producing
2 various paper products
13. TRANSPORTATION
We will be transporting our paper products from our
factories in the midwest to various stores throughout
the nation by trucks and trains. These vehicles add
to air pollution by burning fossil fuels as their energy
source. We will do our part to help reduce air
DISPOSING
pollution by relying on trucks that run on biodiesel.
Most of our products will end up in landfills
and sewage systems once used. They will
be biodegradable, however, so they will not
USING
contribute greatly to the amount of garbage in
the world.
Our products will be used by individuals and
businesses for hygienic and cleaning purposes.
Consumers will benefit socially when they use our
product by knowing that that they have done
their part to help the environment. The use of our
products will promote awareness of the heavy
deforestation that occurs as we will put fun facts
on our packaging. The products will not create
any health problems for any individual unless used
irresponsibly (I.e attempting to ingest, starting a fire
with it, etc.)
- product is shipped to - product ends up in a landfill
store locations - product goes to a
- fossil fuels are used in
vehicles that transport
5 sewage treatment plant
- product is composted
products
- product is used by
4 4
consumers
- product is thrown away
or composted
14. Financials Projections
SALES AND REVENUE
Husk Paper Products plans to distribute paper
products to about 20 stores in the first year in
OPERATIONS BUDGET
order to establish ourselves. Since we will be
selling to these buisnesses, we will be selling
For the purposes of this project, it is assumed that the
our products in cases. The prices are as follows:
operations budget for our company comprises 10%
Toilet Paper - $64.80, Paper Towels - $54.00,
of our revenue and is composed of the following
and Tissue - $60.00. These stores will be located
individual items:
throughout California, as the large majority of
• Electricity
LOHAS consumers live in there. We will expand
• Salaries
to 1,000 stores throughout the nation by year
• Rent for floorspace
five and estimate to have a revenue of $31M.
• Upkeep of machinery
We took into consideration store location,
• Insurance
number of stores in the U.S, average number of
• Advertising
consumers per store, and average consumption
of household paper products in order to arrive to
these conclusions.
Total Quarterly Revenue Quarterly Revenue for Products
400000
600000
300000
450000
200000
300000
100000
150000
0
Q1 Q2 Q3 Q4
0
Toilet Paper Paper Towels Tissues
Q1 Q2 Q3 Q4
15. COST OF GOODS
For the purposes of this project, it is assumed that
the cost of goods for our company’s product
comprises 85% of our revenue and is composed of
the following individual items:
SOURCES AND FUNDS NEEDED
• Raw material (corn husks and stalks)
• Chemical additives for paper
Husk Paper Products will be requesting at least $5
products
million in funding to start up. Funds will initially be
• Manufacturing Costs
used to rent space for our factory, the acquisition
• Distribution
of raw materials for Husk Paper Products, buying
• Waste Disposal
the machinery required, and hiring, training, and
paying workers. Our next step would be to hire
distribution companies to distribute our goods and
to buy shelf space in our target stores. It is expected
ADVERTISING AND MARKETING
that $5 million will cover these costs, but our
executive officers are prepared to invest their own
Husk Paper Products has, on average, 900k to spend
money in the event that more funding is needed.
on advertising and marketing. We plan to do small
scale advertising to attract consumers, as large
scale national advertising would cause losses. We
will advertise in store, through the weekly ads of the
stores selling our products, and by mailing samples
to household. We Will eventually begin advertising
through magazines and other publications by year
four of business.
