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5.The Opportunity - Sample Business Plan

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5.The Opportunity


MA`O will utilize the organic production techniques and market research achieved through WCRC’s start-up period to expand production and sales. The youth-managed venture will provide planned financial incentives based on business and personal performance. MA`O will sell fruits and vegetables at the already established farmer’s markets, at the recently established Kapiolani Community College (KCC) Farmer’s Market, held every Saturday morning in Honolulu (the market attracts over 2,500 visitors each week), and to restaurants. In October 2004, WCRC received a $456,000 two-year grant from the U.S. Department of Health and Human Service’s Administration for Native Americans (ANA), for Native Hawaiian youth education and economic development activities. The ANA grant will provide salary support for 2-years for a total of five Native Hawaiian youth and project directors, and cover costs of equipment needed to operate a farm. WCRC carries a 25-year lease for 5-acres, 2.5 of which will be purchased in early 2006 using the aforementioned U.S. HUD federal grant.

6.Our Community


MA`O is situated in a community of 45,000 residents, of which more than 40% are Native Hawaiian. The entire Wai`anae Coast has levels of poverty near 20% with some census tracts exceeding 50%.vi On the Wai`anae Coast 45% of the entire population is under the age of 25 years, 34% is under the age of 18 years versus 24% across the State of Hawai`i (Census 2000). The current unemployment rate for O`ahu is 3.5% while the Wai`anae Coast rate is approximately three times the island average.vii
A report on food security to the 2003 Hawai`i State Legislature (“A Report to the Legislature on SCR 75, SD1, HD1, 2002”), submitted by the State Office of Planning, describes Wai`anae is one of the worst of the “at-risk,” food insecure communities, which translates to poorer self-reported physical and mental health, higher levels of obesity, diabetes, and arthritis.viii According to the Wai`anae Coast Comprehensive Health Center, the largest local health provider, at least 50% of residents suffer from obesity. Over multiple generations Wai`anae residents have become dependent on the welfare system in which the percentage of people in Wai`anae receiving welfare support (Temporary Assistance to Needy Families and Food Stamps) is four times that of the State of Hawai`i.ix And yet, this is not our community’s history. Wai`anae was once a self-sufficient community, easily growing food and managing land and water resources to provide for community needs.
Wai`anae youth, a majority of whom are of Native Hawaiian descent, attend local public schools that are failing to meet the federally mandated No Child Left Behind Act. Worse still, when you look beyond the school environment, there are few opportunities for post-secondary employment and training, strained parents and families, and high rates of school drop-out and illiteracy compared to the rest of the state. Add to this a rapid growth in the abuse of crystal methamphetamine and you have a formula for perpetuation of difficult conditions in Wai`anae.

7.Land Use, (Re)Connecting to `Aina (land) and Community Values


One of the core Hawaiian values is aloha `aina or love of the land. In pre-contact Hawai`i, people lived within an agricultural system that sustained as many as 500,000 people. Wai`anae has a rich agrarian history, from the pre-contact Western period when Hawaiians farmed the entire region, through to the late 1800’s and early 1900’s when Hawaiian, and Chinese, Filipino, Okinawan, and Japanese immigrants farmed the valley regions independent from the more dominant plantation agriculture system. Fresh water, a precious resource in arid Wai`anae, was carefully managed, with a portion diverted to taro patches in the upland and then returned to the stream with nutrients that would feed into the estuaries and coastal fisheries. Crops such as taro, banana, sweet potato and breadfruit were raised in abundance, but over time Hawaiian farmers have lost the use and ownership of the land.
Today, Wai`anae residents still embrace the idea of an agricultural community, characterizing the area with terms like “rural”, “open space” and “agrarian lifestyles.”x However, the economy and people’s lifestyles have moved away from agriculture. Two of our most fertile valleys are used predominantly by the U.S. military: Makua Valley is used exclusively for live fire training; and 75% of Lualualei Valley, where MA`O is located, is used for munitions storage and as a naval communications base. Makaha Valley, to the north of Lualualei, has an exclusive gated community, with a resort and two golf courses. In addition, much of Lualualei Valley’s prime agricultural land is no longer in production because the past generation of farmers encouraged their children to move away from the hard life of farming, encouraging them to seek professional careers. The Wai`anae area already has three landfills, and more prospective sites have been identified. In order to revive and expand upon Hawaiian’s traditional love and respect for the land, MA`O has been founded with an entrepreneurial philosophy that is rooted in our cultural traditions.

C.INDUSTRY AND MARKET ANALYSIS

1.Growth in the Organic Industry


From the early 1960’s to 1980 the organic agriculture industry grew steadily across the United States. In the 1960’s the industry was jump-started when information on the dangers of pesticides came to public prominence, most notably with the publication of Rachel Carson’s Silent Spring in 1962.xi Consumers grew to understand the connection between personal and environmental health, and over the course of time a genuine shift in food consumption patterns occurred. After 1980, the organic foods sector grew rapidly. By 2001, sales of organic foods reached $8 billionxii and there has been 20% growth annually in national organic sales over the past 10-years.xiii There are multiple factors that have contributed to this growing demand, including:

  • Increase in diet related illnesses, such as the rate of U.S. obesity amongst youth;

  • Increased health care costs and adoption of preventative medicinal practices;

  • Growth in the physical fitness industry, gourmet cooking, and fine dining;

  • Public awareness of fast-food’s detrimental impact on health; and

  • Major public health crisis, such as Mad Cow disease.xiv

What was once an industry propelled by farmer’s markets and natural foods cooperatives has now become mainstream. The Organic Trade Association (OTA),xv the leading industry advocate, lists some examples of growth trends; including:


  • In 2002, more organic foods were purchased in regular retail supermarkets than any other location. Organic foods are now available in over 20,000 natural foods stores and are found in over 70% of conventional retail groceries;

  • Huge food and beverage corporations, such as Kraft and Coca-Cola, have now joined the organic market by purchasing leading organic brands. USA Today reported in their December 2, 2004 edition that the San Diego Padres and the St. Louis Cardinals would be serving organic franks alongside conventional hot dogs;xvi and

  • A national survey done in 2002 of 1,000 consumers showed that 58% had purchased organic foods.xvii

OTA projects that the U.S. organic market will reach $30.7 billion by 2007. This is still miniscule compared to the conventional foods industry but OTA reports that conventional food growth at 2-3% per year while organic foods has been climbing at the growth rate of 17-20% annually.xviii



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