Reference no: EM133393163

Case: Meet Chiwis founder and CEO Sarah Goodman How this nutritionist turned her love of one dehydrated fruit into a growing healthy snack business A little more than a decade ago, Sarah Goodman bought a dehydrator and began creating different snacks to fuel her hikes through the mountains of British Columbia. Dried kiwis ended up being her top choice. "They were crispy and light, and they tasted like healthy Sour Patch Kids," she recalls. At the time, Goodman was running a consumer health tech company. But by late 2019, she felt ready for a career change. During her evenings and weekends, she researched the food production industry, participated in business workshops, and networked with distributors. She named her company Chiwis, from the words chips and kiwis, and developed a second product - a tropical mix of dried kiwis, rich coconut and sweet pineapple. For her products, she'd use upcycled fruit, when possible, to reduce costs and make the product more appealing to eco-conscious consumers. By March 2020, Goodman was ready to launch her business. She left her job, rented space, and purchased commercial dehydrators and manufacturing equipment. She intended to start small with independent markets and build up a major grocery chain.

But to her surprise, a distributor quickly brought Chiwis on board and landed her a contract of 20 cases for seven Whole Foods Market locations in British Columbia. "I immediately thought 'this is amazing. This is so great. And so terrifying.'" Goodman got to work; she put in 15-hour shifts to get the order ready, doing everything from slicing kiwis on a mandolin to arranging the slices by hand on dehydrator trays, then packaging and heat-sealing bags. Her first round of Chiwis ended up on Whole Foods' shelves a few weeks later priced at $5.99 per 50g bag (much more expensive than other products). "To see it come to life and then to go into a store like Whole Foods was such a cool feeling," says Goodman. A month later, her distribution grew to two other small grocery chains in the province - Nesters Market and Choices Markets - reaching a total of 50 stores. But it wasn't all smooth sailing, Goodman encountered some stumbling blocks as she scaled the company. "The commercial drying machines weren't providing a consistent product," she says. "Some chips would be great, and some would be burnt." So, in May 2020, Goodman made the difficult decision to halt production. "I paused because I needed to figure out how to grow the business in a better way."

During that time, Goodman recalled some advice she received. "I was told, 'if somebody else has the equipment, staff and space to do what you're doing, use them. Don't reinvent the wheel," she says. So, Goodman partnered with a co-manufacturer, placing a 1,000-pound order with an intended relaunch for January 2021. The order, however, didn't turn out as Goodman expected. "They had overdried them, and they had also used fruit that wasn't ripe enough. They were sour and inedible." Thankfully, the co-manufacturer took ownership and remade the order for a February 2021 relaunch in 75 stores using social media to drive demand. The growth of Goodman's business has been steady ever since. By the end of last year, Chiwis were available in 385 stores, mostly in British Columbia. She also introduced three new products to the lineup: pineapple, mango, and orange chips. Keeping the momentum going, earlier this year, Goodman launched 85 London Drugs stores. Save-On-Foods came on board in May and the summer of 2022 saw Chiwis go national thanks to a launch in 7-Eleven. By the end of August, Chiwis will be in more than 1,000 stores. Goodman is now focusing on research and development with plans to introduce more products in 2023. She also hopes to launch in the U.S. Pacific Northwest focusing on Washington, California and Oregon.

Question 1. Chiwis' target customer is outlined in the article. Using terms from the text, describe the target customer and detail two segmentation methods being used.

Question 2. Goodman launched 3 flavours - original, pina and tropical. Due to manufacturing restrictions, she can only produce two right now. Explain the marketing research that Chiwis should do to decide on the two flavours to move forward with.

Question 3. Goodman talks about a way to grow her company. How is she planning to do this?

Question 4. Using examples from the case, outline the marketing mix that Chiwis is using.

Question 5. Explain the decision-making that a potential Chiwis purchaser is likely to do on their journey to purchase a package of Chiwis?