Sample on FreshTec: Revolutionizing Fresh Produce Case Analysis

FreshTec: Revolutionizing Fresh Produce, Case Analysis

Preliminary evaluation of the case shows that, the idea of Fresh Tec and its advent in SmartPac box technology that Machado had resulted from a wealth of experience. In essence, Machado collected or amassed this massive experience and inspiration through a long career and working in a produce distribution system (Alvarez & Ryan, 2011). Because of the challenges seen in the system, Machado thought of a simple way of solving the issues, which surrounded fresh produce distribution. This concerned the freshness, taste, bruising, spoilage, waste, and accessibility to distant markets. By reflecting on the experience at all levels of the supply chain, he felt that there was a clear opportunity in the packaging technology, which he would have exploited. This Prompted, Machado, who is the founder and chairman of the company to explore opportunities and designs in modified atmosphere packaging, MAP, commonly sued in extending the life of fresh-cut produce. The meeting Machado had with one of the leading packaging technology firms in the discussion of linerboard technology gave him inspiration. This revealed to him that he could develop a functional and commercial MAP that would be applied to fresh produce. This step helped him draft initial designs and subsequently patented and developed the initial models of the SmartPac box. At this point, it attracted Lidster, a Canadian scientist who had experience in packaging technologies, especially oxidation and MAP (Alvarez & Ryan, 2011). This meeting centered on SmartPac, where Lidster joined the forces based on the opportunity of improving the fresh produce supply chain. Lidster later became the technical director and prior to that, he utilized his lab in Canada to focus greatly on the atmospheric balance inside the box. Through the test, Machado formed an initial partnership with a local California cherry grower, which saw the development of a SmartPac system for fresh sweet cherries. All through Machado and other important personnel worked hard to make every test work by sealing any possible gap or challenge until they were sure everything is well. This led to the development of the final prototype that was used in field education targeting key players like farmers and retailers. This paved way for discussions involving the top-level officials, on how to launch the product and the issues associated with the new packaging technology. This paper aims at discussing the challenges facing the introduction of Fresh Tec Company and SmartPac box packaging technology to the market.

Key external factors affecting Fresh Tec`s industry

            To begin with, as a new packaging technology product, which is to be launched in a mature market, there are many factors associated with that launch. Essentially, a new packaging technology being launched by a new company, new in the industry has various issues that must be evaluated to help the company position itself for growth and emerge at the top of the industry. Looking at the external aspects in the packaging industry, many issues come clear and they exert much pressure on key players in the market. This is because; they determine whether a company stands or goes down or emerges to the top of the game in the industry. In consequence, in Fresh Tec`s industry analysis, it is vital to begin by looking at the external factors that may influence positively or negatively, the operation of the company, right from the start (Alvarez & Ryan, 2011). The first external aspect is about technology, the level of technology used by a company to create and launch its products for the first time determines whether it will have long-term growth or it will sustain itself for short time and then punch into failure. With this, it is vital to understand Fresh Tec`s technological aspect as it was developed through time (Elizabeth, 2008). Thus, Fresh Tec employed a unique modified atmosphere as a packaging technology, which was a standalone product. Even though the developed atmosphere in the box looked similar to other MAP, it had an effective way of exchanging heat from the box. This notion helped in the cooling of sealed contents through simplified refrigeration.

Moreover, this encompassed a natural oxidation cleanliness structure, which eviscerated and pasteurized the produce while in shipment. The other thing is about, the technology Fresh Tec used in capturing carbon dioxide, normally emitted from fruits and vegetables in the usual senescence process. Here, Fresh Tec utilized a patented SmartPac linerboard membrane and system to capture the released carbon dioxide, thereby steadily decreasing oxygen content in the carton (Alvarez & Ryan, 2011). Accordingly, it was found that the atmosphere in a SmartPac box, was customized to a specific fruit or vegetable produce packed inside. Essentially, inhibited the ripening, softening of the tissue, and eventually maintained the structure of the production cell walls. Through tissue and cells strength maintenance, reduced spoilage as microbial growth was cut off and ripening was slowed significantly. The membrane created a high humidity atmosphere and thus, conserved the water content of the fruit, thus resulting in consistency in weight and appearance. This extended the life of fresh produce, which made it possible for ripe picking and delivery of the fresh produce to the clients with more freshness, and improved quality through cheap transport models. Moreover, the design of the SmartPac lids allowed support of other cartons stacked on top and it created a wide enough space through which air was allowed to pass to cool the contents in the box.

On the other hand, the legal aspect was a key determinant in the external environment of Fresh Tec. In essence, Fresh Tec did everything in light of the laws that relate to the formation of a new company, the creation of novel technologies, and other key legal aspects it deemed right. To start with, Machado patented the efficient method or technique he used in his company to exchange heat from the box. This was done according to the set industry standards for pressurized cooling. The second legally developed feature of the technology and product is the natural oxidation sanitation system, which met the health standards for a sanitation system (Elizabeth, 2008). This was employed to guarantee cleaning and sterilization of produce while in shipment to various destinations in the world. The technological aspect employed here met the health safety standards of the United States and thus no inhibitions on the aspect as far as legal matters are concerned at this level. The other legal aspect regarding the effect of transporting fruits, which contributed to the carbon print, was dealt with effectively. The threat of carbon dioxide released into the atmosphere through the natural senescence process was reduced or eliminated through a legally registered linear board membrane system. This was used to capture the released carbon dioxide and thereby reduce its effects in the atmosphere (Alvarez &Ryan, 2011). Accordingly, the company achieved two goals at one go; first, it protected its technology for capturing carbon dioxide. Secondly, it helped in reducing carbon dioxide released into the atmosphere. Furthermore, the patented SmartPac lids were designed in a way that met the set regulations and standards for cooling practices. Hence, this design allowed the packaging of produce while warm but the produce was pressure-cooled in a sealed environment, which kept out airborne infections; thus meeting another health concern. In essence, regarding the natural oxidation system, it was designed in a way that allowed the SmartPac system to have a central compartment, which held sachets that contained dry oxidizers. In consequence, this chemical mix of the oxidizers had received credit approval from the United States Food and drug administration. Subsequently, this means that the technical aspects behind the oxidation process were legally and health-wise right for use; thus, the legal part of the environment had little inhibition.

Successively, concerning the carbon capture system eliminated the threat of facing legal requirements to reduce carbon print while transporting the product to various destinations in the world markets. Accordingly, the process reduces the rate of spoilage, which means that the rotten produce percentage is highly reduced through regulated ripening senescence effects (Alvarez & Ryan, 2011). Thus, the environment will be kept clean at every level of the supply chain.

Economically, SmartPac technology and its subsequent product were deemed too costly; the cost was twice that of the conventional packaging box and associated technology. However, many benefits that were recorded during the preliminary prototype tests indicated that the technology and the SmartPac packaging box had numerous advantages. To start with, the level of carbon dioxide released in the air or the carbon print while the product was on transit was highly reduced. Secondly, the ripening process was reduced or regulated to prolong the life of the product by a big margin. This has the benefit of enabling retailers to finish all the stock in time with reduced or eliminated incidences of having spoiled vegetable or fruit production. Secondly, it offered retailers or customers fresh produce with original quality; texture, shape, the right content of water, and importantly the right level of essential nutrients like sugar. Thus, customers will get what they desired and in the right proportion (Alvarez & Ryan, 2011). On the other hand, the technology offers growers an opportunity to present their products or to pick the produce like fruits while they are ripe and ready for the market. This increased the chances of getting money faster and without the worry of spoilage in case of delayed shipments. At the same time, this is because of the regulated ripening process. This is achieved through the controlled atmospheric conditions in the SmartPac box through embedded and customized oxidation elements and refrigeration systems (Alvarez & Ryan, 2011). Therefore, based on these benefits, the grower, retailer, as well as distributors, save on the cost because of spoiled produce that reaches the market (Elizabeth 2008). Furthermore,  because of the prolonged ripening process and regulated humidity and carbon print, the technology allows growers as well as distributors to use alternative means of transportation like water and rail transport that are cheaper. In essence, SmartPac box and associated technology save more money about twenty-eight percent for every box, which increases profit margins. Essentially, based on the above external environment factors, Fresh Tec is well-positioned to succeed once it launched its product in the market. However, much has work has to be done to ensure that all the anticipated benefits are passed on to the relevant parties appropriately and in a more sustained manner.

Ways in Which Fresh Tec Will Approach Industry Adoption of New Product

To start with, because Fresh Tec`s product is new in the market, the company needs to build channels of distribution. This should center on selective distribution, where dealers or retailers are supposed to be given promotional assistance to support the product (Alvarez & Ryan, 2011). Accordingly, the marketing team of Fresh Tec needs to develop primary demand or pioneering information. This is whereby the communications disseminated across should emphasize the benefits of the new SmartPac box and associated cooling as well as oxidation technologies to associated key players, growers, dealers, or retailers. Thorough education has to be given to growers and retailers of the many important benefits this new packaging product and technology would have at the end of the product life to growers as well as to retailers, in extension to end-users or consumers. At this point, Machado and his team ought to set a high price as a strategy to regain developmental costs early enough. However, price penetration has to be considered. This is where the company needs to set a considerable price to avoid risking competitor re-emergence with the conventional packaging box. In this instance, Fresh Tec will increase demand and hence permit the organization to take full advantage of economies of scale. At the same time, as Fresh Tec will be launching its new product, it will be followed soon afterward that the company needs to encourage strong brand loyalty (Elizabeth, 2008). This is because, as time goes by, competitors may set in or re-emerge in the marketplace; hence, the profits may begin to decline later in the growth stage. Early performance of various product modifications in a bid to make corrections to correct weak and omitted attributes in the new packaging system will help in keeping alive the expectations of customers (Alvarez & Ryan, 2011). By having every communication statement stressing the brand of SmartPac box and associated system or technology, selective demand will be achieved. This is because customers will be more aware of SmartPac box technology and its numerous benefits. At this point, intensive distribution to make Smart Pac box more acceptable, since intermediaries are more inclined to risk accepting SmartPac box. Moreover, there will be a need for price dealing after some time, especially when the management adopts price skimming during the SmartPac box`s launch.

The Target Audience for FreshTec technology

In examining this case, Fresh Tec has many options to choose from and every choice has its own way that it exerts on the company`s final emergence and growth in the packaging industry. Thus, it calls for a carefully selected strategy that allows the company has a broader perspective of the market and the consequences associated with every decision reached. As such, based on the right choice, Fresh Tec`s SmartPac box may be seen useful and profitable to associated parties or it may be downplayed based on unfounded notions about it (Alvarez & Ryan, 2011). Therefore, the company management has to be swift and technical in choosing its target audience very well. Accordingly, since local farmer packing operations already have the right and ripe notion reading SmartPac box technology, it will be much easier to penetrate such market segment before expanding out. As such, Fresh Tec has to utilize the advantage that farmers are usually found within reachable clusters (Elizabeth 2008). Thus, many farmers would attend a similar workshop concerning the new packaging product. In essence, Machado has to consider building expansion structures to reach out to other production markets. In consequence, influencing or associating first with growers has the potential of manipulating the process of how things are done throughout the distribution line. This is because the new SmartPac box ensures safe handling of produce and improves on-time and freshness of the produce. Thus, retailers will, and distributors will easily be drawn into the game without much marketing or promoting efforts and money. At the same time, this technology is set allows growers from all over the world to access good markets of their choice in any part of the world (Alvarez & Ryan, 2011). This is because,   the reduction or regulation of the ripening and transpiration,  growers may choose cheaper means of transport, which take s longer to reach the market, but still in good condition. It also helped reduce carbon print labeling ratings; a factor that would make the product more appealing to customers and thus increase revenues. Additionally, the saved on costs in packaging issues, reduced spoilage, and transportation means more revenues would be recovered. Thus, the system would make dependent payers make or generate income. Therefore, the right audiences for Fresh Tec are local farmers in California, who may be used in piloting the product in the market.

Furthermore, based on the above decisions, it is important that Fresh Tec strive to make farmers alter their produce picking times. This is because; the new packaging technology allows farmers to transport their produce by utilizing various cheap alternatives like water and rail, which are much slower. However, they are slow at a reduced cost, which means that when farmers are persuaded on picking their produce at conveniently ripe stages, they would be sure to get returns earlier than it was previously (Alvarez & Ryan, 2011). This is because ripe and fresh produce fetches cash faster than unripe and less fresh produce. This means that farmers can be able to reach distant but well-positioned markets and offer great deals. Moreover, since the oxidation technology and refrigeration were made possible through this SmartPac box, there is a reduced carbon print. Subsequently, this is a factor, which will allow farmer`s produce to outperform competitor products in terms of carbon print ratings. Timely picking of fruits or vegetable s means that only ripe produce gets to the market and it receives readily available market with good competitive prices. Furthermore, based on Machado`s initial analysis of the great potential in Panama, Mexico, southern Africa, and the Netherlands, it was found that this area had a great agricultural base (Elizabeth, 2008). Thus, creating a grower partnership in the regions had the potential of shifting the balance to growers who had the desire to market their products across the world. For instance,   melons, and fresh-cut flowers, maybe cut early enough and stored to peak seasons like a valentine. Furthermore, it would be easier for Fresh Tec to persuade growers in these new lands to practice new picking times; only when the products is ripe or beginning to ripe. Therefore, this would guarantee farmers a wider base of market and cash flow with reduced losses (Alvarez & Ryan, 2011). At the same time, since these potential lands and many other established lands produced large amounts of fruits, vegetables, and other produce,   convincing farmers to alter their picking times had numerous advantages for the company. This is because, if all farmers or the majority of them agree to alter picking times it means they would solely rely on the SmartPac box for the safety of their produce. Thus, this will guarantee the company a continuous open market for SmartPac boxes and this translates Fresh Tec`s to business growth potential.

Fresh Tec`s Growth Plan to Launching their New Product

In every new product launch in a developed market, it is important to have a great and wonderful strategy to enable a new company with its new product to overcome every limitation. As such, looking at the first option of partner to scale with, several issues are important and have to be evaluated. Firstly, there was a need to find a willing retailer or foodservice partner, and it was not to find any retailer, it called for a  large enough retailer to supply a significant volume and with a willingness to team up on agreed-upon terms (Elizabeth, 2008). Even though the partner would be useful since it would be easier to use their supply chain to implement SmartPac box into the system, it will call for more than just convincing to be able to get such a partner. Furthermore, this is a fast-growth plan, it will be difficult to find a large retailer just like that, and in any case, and large retailer may not be found easily (Alvarez & Ryan, 2011). Thus, it would be a task locating them, convincing and training or familiarizing them and at the same time, Fresh Tec has to have ways of making sure its team is equipped to run with the speed of the retailor. Thus, this option seems promising but there is more in terms of hidden costs and requirements that may not be fulfilled to the desired level, hence limiting the growth of the company.

In essence, looking at the third option, which involves Fresh Tec taking the place of a broker, to run a buy-sell operation, many issues emerge. Foremost, it would call for a larger initial investment from investors, and at the same time, logistical challenges would be inevitable. Convincing investors to pump in more money on something they have to see working is a very big uphill task that may not be desired by the company`s management. Buying produce at a wholesale price means, there has to be the increased or added cost of warehousing or storing before packaging. Subsequently, it also calls for transportation costs from farmers, and to the retailers. Hence, it calls for people to work on new market channels to find retailers (Elizabeth, 2008). This seems more of an uphill task than a business venture and it may discourage many investors and potential buyers or partners (Alvarez & Ryan, 2011). This is because, it is not an appropriate option and it will be the slowest growth strategy, which may not give the desired results to convince more potential partners or growers from that case to partner to or buy the SmartPac boxes.

The second option, which is also a slow way in terms of growth strategy, has various aspects that are worthy note. Thus, this option is much easier and less stressful as a transition process for the company to develop into a revenue-producing company. This calls for partnership with local growers based in California. The first advantage is that the growers or farmers have the ripe idea concerning SmartPac box and at the same time, they have a burning desire to export and make more money (Elizabeth, 2008). This is because the preliminary tests carried out gave good results as they convinced the growers who have a strong belief in the technology as the samples used gave extraordinary results (Alvarez & Ryan, 2011). This option may be a pilot project that carries the flagship of the company for future expansion of the company`s market segment. Accordingly, this option does not involve added costs and time or activities to help launch the new product in the market. This is more beneficial since the company has to concentrate on making more growers subscribe to the buying of the SmartPac boxes. This allows room for the company to launch its missiles well by studying the market and marketing or distribution channels extensively (Alvarez & Ryan, 2011). This would help the company adjust its strategies to find and explore new markets for its product in a steady but sure manner (Elizabeth, 2008). Thus, the success of the first lot of the initial launch would help the company convince potential partners. Hence, the company may end up having a multipronged marketing and growth strategy that would be very advantageous to all key players, particularly the company itself. Following this, the company has to start with the second option, which is a slow-growth strategy that will help it position itself for future growth and expansion to potential markets in Panama, Mexico, southern Africa, and the Netherlands.

SmartPac Technology Disruptive to the Market

Findings show that disruptive technology is an innovation, which helps in creating a new market value network through innovation and eventually disrupting an existing market and network; this displaces an earlier technology (Christensen, 1997). This kind of technology is an innovation that improves a product or service in a manner that improves an existing product in unique ways. Essentially, disrupting expertise as a novelty does not fashion new marketplaces or worth marketplace but rather, it progresses prevailing ones with improved significance. Hence, this allows organizations within a market to compete against each other`s sustaining improvements. Accordingly, Christensen (1997) asserts that SmartPac technology is a disruptive innovation, in that it changes how the game of packaging is done and it has many advantages that overwrite the old packaging technology. It is set to change how fresh produce is packaged, how they are transported and the quality or condition in which they reach the end-user. It is also a game-changer in that, the picking times have to be altered with minimal losses and expected high profits or benefits from the use of SmartPac boxes to package various fresh produce. Importantly, this will change the quality of the product and service offered to customers in that the product delivered to them will be fresher and with all the nutrients in the right balance (Christensen, 1997). Moreover, right from the start of the distribution channel the technology is set to minimize losses by allowing the key players to use alternative cheap transport and at the same time have little or less spoiled. Based on this, it will alter the launching path of the product. The company would need to focus initially on serving the least profitable customers, who are happy with the goodness of the product (Danneels, 2004). This will be farmers, who are not willing to pay a premium for enhancements in the SmartPac box functionality. This will allow Fresh Tec to gain a foothold in the grower’s segment, it will therefore seek to improve its profit margin. To do this, Fresh Tec will access the segment of retailers who will be willing to pay a little more for the high quality of service and product delivered to them. Afterward, Fresh Tec will be able to move upmarket by centering on the more attractive customers, a path that will help it to meet tend demand of the most profitable segment.

References

Alvarez, J and Ryan, J. (2011). Fresh Tec: Revolutionizing Fresh Produce. New York, NY: Harvard business school.

Christensen, M. C. (1997). The Innovator’s Dilemma. When New Technologies Cause Great Firms to Fail. Boston, Massachusetts: Harvard Business School Press.

Danneels, E. (2004). “Disruptive Technology Reconsidered: A Critique and Research Agenda.” Journal of Product Innovation Management 21 (4): 246–258.

Elizabeth J. (2008). Innovator’s Guide to Growth – Putting Disruptive Innovation to Work. Harvard Business School Press.