October 2022

From our Hydroponic Farm to your Tables

Volume 1

TABLE OF CONTENTS

Urban Fresh Terminal Year End Report Acknowledgement

01

Message from CEO

02

Highlights of Performance

04

Strategy Evaluation

05

Success Factors

20

Challenges and Actions

21

Significant Learnings

22

Socially Responsible Actions

23

Future Plans

26

Mission and Vision

06

Objectives

07

Major Business Strategies

09

Management Team

10

Financial Highlights

11

Financial Ratios

13

Production Report

14

Acknowledgment Urban Fresh and its founders want to acknowledge the people who have helped the company in achieving great things throughout the whole Practicum course To all our family and friends, we thank you for the unending support you have given each of us. To all DSI Faculty, we thank you for your comments and suggestions during the group's early stages To Dr. Aida Licaros Velasco, our Practicum adviser, we thank you for your guidance, encouragement, and support Lastly, we would like to thank God for blessing the group at all times and for continuously giving the group the strength to continue everything we venture into

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Message from the CEO

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The mission Urban Fresh wants to achieve by the year 2030. Although there have been many challenges and constraints along the way. We, at Urban fresh, have also created opportunities that we were able to materialize on - pioneers of urban sustainability is the vision we have in mind that provides people with the crops they need in achieving a healthier lifestyle. Urban Fresh’s purpose is to start the stage of sustainable urban living in the Philippines. Through the products, the company wants to promote a healthier lifestyle and a better way of living wherein there are plants in every household, most especially in urban areas.

When it comes to innovation, Urban Fresh’s products are different in the way it is grown, sold, and maintained. hydroponically grown crops develop in a short span of 2-3 weeks. The houseplants being offered only require a bit of sunlight and a change of water every once in a while, thus having low maintenance requirements. Similarly, we want to stand out by offering delivery services, lengthy warranty policies, and a strong customer service and social media presence.

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Urban Fresh came a long way to where it is today. Back in 2018 when I was in my Highschool days, I was able to identify a market gap in the urban farming industry that I decided to pursue in our business simulation subject. Before Urban Fresh came into reality, it was first named as “Verti” - Vertical Planting. Although I heard numerous positive feedbacks as well as excellent grades, it experienced a problem in its profitability and scalability which led me to terminate the idea. Fortunately, it was later revived and was renamed Urban Fresh while taking up the course ENTMARK, wherein we were tasked to come up with a product or service. From there on, I was able to build a fruitful partnership with my group mates that supported me; Without their guidance and support, Urban Fresh would not be here today.

Message from CEO

Highlights of Performance When it comes to the performance of Urban Fresh, it was able to improve and maintain competitiveness in the industry market share wise given that they were able to build a group of loyal customers. Through the hydroponics system Urban Fresh uses, they were able to reduce air, water, and land pollution in urban cities in the Philippines even on a small scale. For the business to have a market share in the international markets, it must first establish itself locally first. To improve the overall quality and performance of the company in attaining local and global market share, research & development initiatives within the company are made. In support of our initiatives, the targeted organizational objectives were met as the group was able to achieve stable growth in terms of sales while ensuring high quality of products being sold in the market

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Strategy Evaluation In the ENTPLA2 paper, it was stated that the threats for Urban Fresh are decreasing consumption, the unemployment rate, and a high threat for substitutes. Urban Fresh tackled these threats by using technology or machines. When people hear hydroponics, they often think of lettuce. In order to stand out, Urban Fresh grows crops and herbs that aren’t as common in the Philippines. In the current production system of Urban Fresh, the company has implemented technology like WiFi tracking and grow lights into their hydroponics system. Marketing-wise, the greatest strength of Urban Fresh is its adaptability. They are quick to adjust their marketing efforts to fit the target market they are catering to. One weakness is the ability to constantly create new customers. For operations, a weakness turned into a strength, and that weakness is the lack of knowledge with regard to growing hydroponically. Urban Fresh joined social media groups and learned from experienced hydroponic growers to address this. Another strength of the operations department lies in its research and development efforts. The company has done experiments in hopes of creating a new product. The strength of the finance department is that they are quick in doing things. They work at a fast pace.

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Urban Fresh, wants to promote a healthier or greener urban environment by raising awareness towards the practice of small-scale gardening. It is also Urban Fresh’s mission to help people in any way they can, most especially amidst the pandemic. Lastly, another mission that Urban Fresh is eyeing is to revolutionize the old way or the traditional way of farming

As a business, Urban Fresh envisions themselves as one of the pioneers of urban sustainability while achieving stable inflow of income and stable public recognition by the year 2030

n o i s i V

Corporate Objectives Improve and maintain competitiveness in the industry, market share wise

Strengthen research and development efforts

Obtain multiple sources of income for the company

Place Urban Fresh products in a grocery or a hole-in-the-wall store 7

Functional Objectives Ensure that the products coming out of the company are of high quality

Ensure that the products are readily available anytime

Build and develop a customer base

Analyze and adapt depending on the financial resources and needs of the company 8

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Loyalty is Not Overated For some like AG Lafley and Roger Martin (2017), customer loyalty is overrated. For Urban Fresh it proves otherwise. Urban Fresh had a hard time getting new customers. so the company focused on existing customers. Due to this strategy, the company had a small customer base of loyal customers who purchase from the company on a regular basis.

Mantra on R&D "Research is what I'm doing when I don't know what I'm doing" - Wernher von Braun At the start, no one in the group knew anything growing plants hydroponically, which urged the group to do intensive research on the topic. The company also wanted to enter different industries, which is they underwent experimentations. They tried to produce veggie chips and herb oil infused soaps, but unfortunately, it only went as far as the prototyping stage.

Major Business Strategies

Adapt, Adapt, Adapt! After a few months of operations, the officers of Urban Fresh noticed that engagement in their social media pages are not that high, given that they decided to shift their marketing and advertising efforts into a faceto-face style of marketing. Instead of posting flyers, it was printed and posted in the bulleting boards of different villages

The Greatest Ideas are the Simplest In the De La Salle University Entrepreneurship Bazaar, the officers thought that packed vegetables is something that would be hard to sell in a campus setting, so Urban Fresh decided to turn their herbs and crops into salad bowls. This idea turned out to be a hit given that they were sold out everyday

Chief Operating Officer

Renzo Michaelo G. Cruz is the Chief Operating Officer of the company. He is the one assigned to oversee the production process of the company. This implies that he is responsible for activities like growing, maintenance and training. Additionally, the company decided to give the COO the responsibility of managing the company’s human resources

Meet the Management Team

The Chief Financial Officer is Carlos Miguel J. De Guzman. The CFO is the one responsible for the company’s financial resources. He is concerned with budgeting as well as keeping track of both cash inflows and outflows. Financial Statement creation is also done by the CFO with the help of the company’s external accountant.

Chief Financial Officer

Chief Marketing Officer

The role of Chief Marketing Officer is assigned to Andrew Philip R. Uy who is responsible for any activity where the company interacts with the public. This means that he is the one responsible for the creation of marketing materials, strategic planning of marketing activities, and dealing with the orders of the customers

Chief Executive Officer

The Chief Executive Officer of the company is Martin Luis V. Lazaro. He is assigned with overlooking the day-to-day operations of the company. He is also tasked with building relationships with external players such as investors and suppliers as well as building partnerships with different companies

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Sales wise, Urban Fresh did not meet the forecasted sales in both peso value and units for two of their products, namely the hydroponic crops and1,herbs as well asthethe lowcrops maintenance For Practicum the variance in the sales of hydroponic and herbs are crops and herbs. However, Urban Fresh did well in selling the salad bowls in the DLSU Bazaar wherein they managed to exceed the projected sales both in peso value and units.

Financial Highlights

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The planned net income of the group amounted to PHP 55,624.25 and the actual net income of Urban Fresh is PHP 24,983. Urban Fresh did not meet their target net incomes given that they did not meet their sales projection and they started selling at a later time. In addition to this, Urban Fresh incurred unexpected costs like rent expense and CSR expense

In the planning stage, the group planned that for every month, the company would purchase a hydroponics NFT system, but due to the group not meeting its forecasted sales, they decided to forego the plan. The approach taken by the group was to focus on selling and after 6 months of selling, the group decided to sell their current system and purchase a commercial hydroponic system.

The original plan of the group was to garner PHP 60,000 for their capital investment. Initially, the plan was to spread the collection of PHP 60,000 throughout the practicum course, but after the first contribution of PHP 6,150 per member, the group decided that it was enough to cover the costs of the business. They did not add more capital for Practicum 2 and 3 since the sales and the accounts payable were enough to cover the expenses.

Financial Ratios Liquidity Ratios

Ratio

Planned

Actual

Variance

Current Ratio

0%

86.26%

86.26%

Quick Ratio

0%

86.26%

86.26%

Profitability Ratio

Ratio

Planned

Actual

Variance

Gross Profit Margin

47.66%

80.25%

38.81%

Net Profit Margin

22.29%

28.13%

5.84%

Return on Investment

101.56%

42.08%

59.48%

Return on Assets

32.65%

42.46%

-9.81%

Liquidity Ratios

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Ratio

Planned

Actual

Variance

Current Ratio

0%

86.26%

86.26%

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Production Report

The production of Urban Fresh started in January since the months of November and December were used for rebranding and learning the procedure on how to grow crops hydroponically. From May onwards, the company was capable of producing more units, however, they decided to maintain production to keep it at par with the demand. A total of 449 packs were produced.

For the houseplants, Urban Fresh partnered with Novo Agroventures. Novo Agroventures is an agribusiness based in Nueva Ecija. The partner company agreed to produce the houseplants for free. The planned production was 120 units, but in reality, the group produced 60 units. Urban Fresh decided to reduce production since demand for this product is low.

For the salad bowls, it is pre-made the night before the bazaar. Production per day is based on the sales of the day prior to that. Given this, the initial plan was to produce 50 units, but the group produced a total of 63 units

Raw Materials for Hydroponic Crops and Herbs

Seeds

Nutrient Solution

Packaging

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Sponge

Seedling Tray

Raw Materials for Low Maintenance Houseplants

Grafted Stem

Upcycled Glass Bottles

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Raw Materials for Kani Salad Bowl

Carrots

Lettuce

Packaging

Crab Stick

Salad Dressing

Raw Materials for Caesar Salad Bowl

Carrots

Bread Pan

Lettuce

Crab Stick

Croutons

Parmesan

Salad Dressing

Packaging

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Unsold crops that are almost overripe is harvested and taken home by the officers for their personal consumption

Used sponges are used again, at least for the germination process. After a few days, the water in the system is changed, and the used water is used to hydrate other houseplants.

If the sponge breaks or if it is not fit for use anymore, then it is thrown away. Seedlings that are not growing anymore are also thrown away.





Urban Fresh used the almost overripe unsold crops and herbs for experimentation purposes.

Unsold herbs and houseplants that are past their due date are also given as freebies to the loyal customers of Urban Fresh



Waste Disposal System

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S S E C C SU

S R O T C A F

OPERATING

MARKETING

FINANCE

During the start of Practicum 1, the group unfortunately had to change their entire business due to supplier issues. This event turned out to be a good thing for the company since the officers were able to use the time to research deeply into the process of hydroponics growing.

The success factor, at least marketing wise, is the adaptability of the group. The officers noticed that social media was not as effective, so after a quick brainstorming session, the group quickly adjusted their marketing efforts to a face-to-face style. In terms of quotas, the group also decided to implement a company quota instead of individual quotas.

The strength of the finance department is the ability to generate funds quickly and find the cheapest option, at least in the online market. For the generation of funds, or the gathering of the capital, the finance department was able to gather the necessary funds in a matter of hours. The finance department was also able to find cost-friendly raw materials available in the market

Another success factor is the relatively cheap cost of production. The production process of Urban Fresh does not require too much labor, thus there is no need for Urban Fresh to pay high wages. The raw materials needed to produce the crops and herbs are also relatively cheap.

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Challenges and Actions Lack of Knowledge

Attracting New Customers

The first challenge is the lack of knowledge from the side of the officers. They did not know how to grow the product, thus delaying the company’s selling time. To address this, members of the company joined multiple groups found in Facebook. These groups are composed of hydroponic growers in different parts of the country. The group saw that other people had the same concerns, and the action done by the group was to scroll and take note of the comments and advice of experienced growers.

Another challenge was during the start of practicum wherein the group had a hard time attracting new customers despite consistent marketing efforts in the company’s social media sites. The group simply noticed that social media marketing was not as effective, to solve this, the group shifted to face-toface marketing. This meant that the group printed a few flyers and constantly talked to the people around and enticed them to buy vegetables. Through this action, the group was able to build a customer base who is willing to buy products on a monthly basis.

Location of Each Member one of the biggest challenges faced by the group is the location of each member. All members were in different places in the Philippines and it would be difficult to meet face-to-face due to lockdowns, quarantines, and restrictions. This meant that for the majority of the practicum course, there was only one member who took care of production, thus the group having a slower than usual production process. The action done by the team was to meet through Zoom and for the production, the action was simply to power through it and endure doing the production alone while waiting for the pandemic to significantly ease up

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Significant Learnings OPERATING The significant learning of the group operations-wise is the value of research and the practice of remote production. First is the value of research, if the group did not do any research, then the company would not operate. Because of the research efforts of the group, they were able to produce quality products on a consistent basis. As stated earlier, the group was separated, which is why they learned ways how to contribute to production even if it is just through video conferencing. Another lesson learned is to keep it simple. The group did a lot of experimentations for more complicated products like the herb oilinfused soap and the veggie chips but failed. For the bazaar, the group made simple salads, and surprisingly, Urban Fresh was sold out for the 4 days of the bazaar. Basically, the lesson is that there is no need to overcomplicate innovation, the simplest innovation can also work wonders.

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MARKETING Throughout the company’s operations, the group has learned many different lessons. One of which would be, reaching and actually selling to customers is a tough task. Marketing requires a lot of planning and strategizing. Moreover, the group has also learned the value of perseverance. We have learned to keep moving forward even on months wherein our targets weren’t met. This experience was really a huge learning experience for the entire group. Another lesson is to not get intimidated by numbers. We did not meet our targets for months, but we continued to do business as usual and as of date, we have made profits. During the bazaar, we were hesitating to bring more than 10 salad bowls since we thought that we wouldn’t be able to sell it all, it turns out, we were just intimated by the number since we actually sold out pretty fast.

FINANCE One significant learning from the finance department was the importance of extensive planning. The planning made, at least financially, during the business proposal stage was not that realistic, which made the group plan and adjust their financial plan. There should basically be plan b to plan z as a backup for plan a. Finance and accounting are not a strength of the company, which is why one learning is the significance of a network for a business. What the company lacks is aided by the external players in the network of Urban Fresh. Furthermore, another lesson from the finance department is to integrate technology right away. In the start of the practicum, the group did their finances and accounting the traditional way, a pen-andpaper approach aided with tools like excel. Due to that, there was human errors, so the group decided to try out an accounting software named Zoho Books which basically automates accounting. Thanks to that accounting software, the group was able to find and correct their errors.

Kythe Foundation Date Conducted: June 9, 2022 Total Duration: 1 day Type: Socio-Cultural Development Location: N/A Brief Description: One day, a group from an EVENTMA class approached the company to ask for donations to the Kythe Foundation. The group decided to donate financial resources to the group and in return, the company became a bronze partner. Kythe Foundation is an organization that is focused on improving the life of children, most especially children who have serious diseases.

Candle Making Assistance Date Conducted: June 21, 2022 Total Duration: 1 day Type: Socio-Cultural Development Location: N/A Brief Description: One member of the company had organized a candle making project as a requirement for COBCSRG class. The project needed financial support and Urban Fresh offered help through manpower and donating money. The money donated by Urban Fresh was used to purchase some materials that the beneficiary would use. For the manpower, Carlos De Guzman made an instructional video on candle making, and members of Urban Fresh helped in the video production process and also offered a little help in the designing of the resource material. Members served as cameramen and some even helped in the editing of the video. The candle making project was for Gawad Kalinga Blue Eagle Village.

PISAYUDA Date Conducted: July 11, 2022 Total Duration: 1 day Type: Socio-Cultural Development Location: N/A Brief Description: Days after the reported flash floods and landslides in the Banaue Area, the company wanted to donate, so the officers looked for credible and trustworthy organizations that were doing donation drives. During this time, the members of the group were still in different cities, so the company decided to just donate financial resources. The organization that the group chose was PISAYUDA, an organization started by Philippine Science High School student leaders with the aim of providing relief operations when natural calamities strike

Fundraiser Event Date Conducted: October 15, 2022 Total Duration: 6 days (Monday - Saturday for Marketing, Saturday event proper) Type: Resource Generation Location: Poseidon Park, Acropolis, Quezon City Brief Description: The company hosted a basketball tournament as a way to generate funds to be used for other CSR Activities. The group invited their family, friends, and past classmates to register for the event. The set registration price per team is PHP 500.

Urban Fresh Food Drive Date Conducted: October 19, 2022 Total Duration: 1 day Type: Socio-Cultural Development Location: TPasig and Quezon Area Brief Description: Urban Fresh prepared meals in the form of rice, dish, and drink. These meals are to be donated to the people who are around the pasig and quezon city are, these include the homeless people, the security personnel, and maintenance personnel. The funds used for this project are the proceeds from the basketball tournament event organized by the company.

Red Cross Blood Donation Date Conducted: October 18, 2022 Total Duration: 1 day Type: Resource Generation Location: Quezon City Hall Brief Description: The officers of the company decided to donate blood to the blood banks of Red Cross. Last October 18, 2022, the four officers, along with their friends, went to the National Blood Center (PRC Tower) in Boni Avenue, Mandaluyong Avenue. Mr. Lazaro wasn’t able to donate blood, but he brought a friend to serve as a subsitute for him.

Church Service Date Conducted: October 23, 2022 Total Duration: 1 day Type: Spiritual Development Location: St. Francis of Assisi Parish Brief Description: The four officers of the company went to Citylane Townhouses to extend help in the form of manpower. The four officers alongside invited people helped the parish by cleaning and sanitizing the facilities. Unfortunately, Mr. Lazaro and Mr. Cruz weren’t available on that day, so the other officers encouraged them to invite their friends to act as proxies.

Clothes Donation Date Conducted: October 30, 2022 Total Duration: 1 day Type: Spiritual Development and Socio-Cultural Development Location: Holy Family Parish Church, Kapitolyo Brief Description: The company gathered old and unused clothes from their neighbors and family members. The gathered clothes were then donated to the Holy Family Parish Church.

ENTCares Participation Date Conducted: October 17-18, 2022 Total Duration: 2 days Type: Socio-Cultural Development Location: De La Salle University Campus Brief Description: The company gathered their old toys, books, and extra supplies that were donated to the ENTCares project. ENTCares was a project that aims to donate supplies to a daycare center located in Barangay 313, Metro Manila. Aside from this, Urban Fresh used their social media pages to further promote the project

Future Plans #01 Continue Operations

#02 Add more revenue streams

#03 Study

The group did not meet their targets in terms of sales, that is why they decided to continue operations for 6-12 more months

While continuing the business, the officers want to add new streams of revenue. Examples would be investment income and consultancy income

The officers of the company plan to continue their studies while operating the business. Furthermore, the officers want to study the leading competitors to further improve operations

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