DSD/ Route-Based Distribution
Operational Due Diligence of National Coffee Roaster and Distributor: Establishing Quick Read On Cost Savings to Support Early Stage Go/No-go Decision
Conducted 2-week operations assessment of target to establish initial read on cost reduction opportunities. Despite limited access to the target’s management, plants, and operations data, Gotham was able to create a clear picture of the target’s cost structure in both operations and its DSD network. While the cost reduction opportunities needed to achieve our client’s financial target did exist, capturing those savings posed significant culture and business strategy challenges. Given the high valuation of the target and the significant hurdles standing in the way of savings, the client leveraged our work to make a fact-based decision at the early stage of the process to exit the auction process.
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Operational Due Diligence of Leading Dry Ice Manufacturer: Rapidly Pinning Down Capacity/CapEx, Manufacturing Cost, and Distribution Situation and Opportunities
Conducted 2-week operational due diligence to pin down capacity and CapEx situation, and to identify margin improvement opportunities in manufacturing, distribution, and branch operations ahead of a competitive auction bid. Created plant-specific profiles of 150+ pieces of production equipment and determined target had ample capacity for growth with minimal replacement CapEx risk. Analyzed and reconciled financial data from the target’s ~100 P&Ls and reallocated costs to establish true operational costs and production and distribution cost benchmarks across plants, branches, and routes and identified up to $6MM in margin improvement opportunities through disciplined distribution and pricing practices. Gotham’s due diligence enabled our client to move forward with a competitive bid.
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Logistics Strategy at Premium Baked Goods Company: Improving Cost-to-serve
Created a new logistics strategy, including implementing a new DSD network and delivery process, developing a new transportation and warehousing strategy, and re-balancing production among plants. Over 75% of the $2.5MM in savings (from a cost base of $12MM) highlighted in the strategy was saved in the first year of implementation.
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Customer & Market Due Diligence Of In-Store Bakery Supplier: Establishing Consumer Conversion Opportunity By Quantifying Available Whitespace
Conducted a 2-phased due diligence to:(1) determine the penetration levels and conversion opportunity of the target’s bakery supply products; (2) establish the retail bakery market dynamics; and (3) establish the target’s growth potential. Gotham conducted: a Phase I consumer panel survey of 1,116 consumers to validate ingoing thesis on consumer penetration opportunity; a Phase II survey of 2,233 consumers to establish buying behaviour and test potential concepts for driving consumer conversion. We also interviewed 37 retailer bakery executives/category buyers and surveyed 276 in-story bakery employees to establish their decision-making criteria, plans for the category, and requirements for growth, and modeled a complex market size matrix for 34 occasions and 7 product types to estimate the current penetration of the company's products and establish whitespace and conversion opportunities. These fact-based, actionable insights and reliable numbers gave the client the conviction needed to win this hotly contested auction.
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Operational Due Diligence of Regional Family-owned Coffee Roaster and Distributor: Identifying Consolidation Opportunities and Creating Roadmap for Professionalizing Operations to Support Future Growth
Conducted a 3-week operational due diligence to establish a robust fact base of cost and operational performance in a data-poor situation, identify consolidation opportunities, and provide a fact-based, actionable plan for post-acquisition value creation, including: delivery and service route optimization to eliminate 30-40% of current routes; brewing equipment CapEx reduction through better deployment of used equipment; warehouse consolidation; sourcing efficiencies; SKU complexity management and inventory reduction; and professionalization of roasting and supply chain operations. Gotham’s findings enabled the client to close the transaction with confidence; the company started capturing identified opportunities within a few weeks of the deal closure.
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Distribution Cost Reduction at National Seafood Company: Cleaning Up Distribution as a First Step in Establishing a Growth-supporting Distribution Platform
Conducted a diagnostic to reduce distribution costs as a part of an effort to integrate the distribution systems of two companies by identifying and sizing cost levers with savings benefits (quick hits, process changes, and cultural changes). Targeted cost savings of $1.5 to 2MM on a base of $7MM, of which $1MM are estimated to be achieved by quick hits alone.
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