Past Winner Stories
Endangered Species Chocolate
www.chocolatebar.com
The Raintree Group’s acquisition of
Endangered Species Chocolate, the nation’s number one selling brand of natural organic chocolate, was anything but smooth in the weeks following its purchase.
Challenges were inevitable as The Raintree Group had decided to make a full-scale operational move from the company’s location in Talent, Oregon, to its present location in Indianapolis. Such a transition required Raintree to slow the company’s sales growth in order to maintain enough inventory reserve to ensure that it could fill orders. Under a five-year plan, which forecasted 30 percent total growth for the company by the end of the fourth quarter of 2005, the goal seemed attainable. This forecast was based on available financial growth history of 40 percent, which would be reduced to 30 percent.
However, prior to the move, sales growth exceeding 100 percent made it virtually impossible for the company to build a reserve of inventory. At the same time, further sales growth in conventional markets was running at 216 percent with natural organic category sales growth at 130 percent.
“This unprecedented growth, coupled with an inadequate inventory reserve, and the many logistical challenges associated with a cross-country move, placed the company under a great deal of stress and threatened direct, wholesale and distributor order fulfillment,” says Wayne Zink, owner of Endangered Species Chocolate. “Every day that we were not in production, we lost sales and shelf space. Every day we did not take to properly prepare our new factory systems and equipment was a day that contributed to great waste and inefficiency.”
Endangered Species Chocolate was forced to proceed with its move beginning on June 30, 2005, despite its inability to create a three-month inventory. “As such, we moved with nearly no reserve, necessitating the need to begin production in the ill-equipped Indianapolis facility immediately,” Zink says.
Several tactics were immediately employed to help Endangered Species Chocolate survive this challenging period. They included:
Endangered Species Chocolate, the nation’s number one selling brand of natural organic chocolate, was anything but smooth in the weeks following its purchase.
Challenges were inevitable as The Raintree Group had decided to make a full-scale operational move from the company’s location in Talent, Oregon, to its present location in Indianapolis. Such a transition required Raintree to slow the company’s sales growth in order to maintain enough inventory reserve to ensure that it could fill orders. Under a five-year plan, which forecasted 30 percent total growth for the company by the end of the fourth quarter of 2005, the goal seemed attainable. This forecast was based on available financial growth history of 40 percent, which would be reduced to 30 percent.
However, prior to the move, sales growth exceeding 100 percent made it virtually impossible for the company to build a reserve of inventory. At the same time, further sales growth in conventional markets was running at 216 percent with natural organic category sales growth at 130 percent.
“This unprecedented growth, coupled with an inadequate inventory reserve, and the many logistical challenges associated with a cross-country move, placed the company under a great deal of stress and threatened direct, wholesale and distributor order fulfillment,” says Wayne Zink, owner of Endangered Species Chocolate. “Every day that we were not in production, we lost sales and shelf space. Every day we did not take to properly prepare our new factory systems and equipment was a day that contributed to great waste and inefficiency.”
Endangered Species Chocolate was forced to proceed with its move beginning on June 30, 2005, despite its inability to create a three-month inventory. “As such, we moved with nearly no reserve, necessitating the need to begin production in the ill-equipped Indianapolis facility immediately,” Zink says.
Several tactics were immediately employed to help Endangered Species Chocolate survive this challenging period. They included:
- Designing and implementing a plan to move entire operations across the country in no more than five days.
- Moving completion date for the build-out of the Indianapolis facility, including equipment installation, up by three months.
- Adding and training employees.
- Increasing production capabilities with the addition of a second shift.
- Growing the shipping department to accommodate increased shipping and receiving volume.
- Increasing shipping lead time from one week to two weeks.
Such planning and team commitment, despite the major obstacles, resulted in the company’s increased growth from July through December of 2005 of more than 130 percent. Waste and efficiency were improved, with waste dropping from 40 percent of production to 2 percent. The company, which has 50 employees, now boasts sales of $20 million a year.
“Most importantly, as a company of employees deeply committed to the core value, reverence for life, Endangered Species Chocolate pledged to see each challenge through to completion,” Zink says. “Absent a shared core value or ethic, the company’s ability to power through this period, while nurturing its mission to help support species, habitat and humanity, would have been greatly compromised.”
“Most importantly, as a company of employees deeply committed to the core value, reverence for life, Endangered Species Chocolate pledged to see each challenge through to completion,” Zink says. “Absent a shared core value or ethic, the company’s ability to power through this period, while nurturing its mission to help support species, habitat and humanity, would have been greatly compromised.”