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Industry

Private Label/ Contract Manufacturing

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Private Label Canned Food Manufacturer
Customer & Market and Operational Due Diligence of Private Label Canned Food Manufacturer:  Establishing Growth Prospects, Margin Risk, CapEx Risk, and Operations Improvement Opportunities

In sync with the needs of each stage of the deal process, conducted phased customer, market, and operational due diligence, initially focusing on:  1) growth outlook – established the target’s category presence, identified key market trends, and built a model to project category growth; 2) competitive positioning – interviewed 27 PL and category buyers from supermarkets, wholesalers, food service companies, and brokers; and 3) CapEx and operational risk – visited the target’s 3 plants, assessed capacity, and reviewed operational improvement plans. After the client signed the LOI, Gotham conducted:  a deep dive assessment of margin risk, using 7-year SKU-level price/margin data and outlook for major input cost drivers; and an in-depth operational diagnostic of material yield, direct labor, and inventory costs.  

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Juice Manufacturer/ Co-packer
Manufacturing Operations Improvements at Foodservice/Co-pack Juice Company: Network-wide Operating System to Turn Around Performance

Turned around plant performance by implementing basic plant operating system (downtime, waste, and scheduling). $600K in run rate cost savings captured by the end of the 6-week engagement, with tools and processes in place to capture the rest. Building on the initial success, rolled out the network-wide standard operating procedures to the other 2 plants during an 8-week Phase II effort with additional savings of $2-2.5MM expected. Company generating record EBITDA (60+% improvement in EBITDA) and the PE firm decided to market the company for an exit.

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Beverage Co-Packer
Operations Diagnostic at Niche Beverage Co-Packer: Throughput and Cost Improvements to Become a Competitive Full-line Co-packer

2 week diagnostic that benchmarked conversion costs for the company and identified 15-20% in cost reduction opportunities. The effort indicated that with improved scheduling processes and more efficient use of labor, the company could save at least $1.5MM in the short-term. Recommendations also included putting in place a system to track true costs and performance to enable longer-term improvements.

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Ethnic Foodservice Products Manufacturer
Operations Improvement At Ethnic Foodservice Products Manufacturer: Rapidly Capturing Manufacturing And Logistics Cost Reduction Opportunities

Captured $1.2MM in operations run-rate savings in 12 weeks at an ethnic foodservice and retail private label products manufacturer by implementing shop floor management best practices. Gotham worked on the shop floor to: observe operations; identify potential improvement opportunities; provide immediate guidance to client personnel; and troubleshoot and pilot solutions. We improved line through from ~225 cases/shift to ~375 cases/shift, reduced fill weight by 3-7% to minimize overfill, reduce floor scrap by 50%; and eliminated expired rework scrap. To ensure sustainability and further improvements, we: trained client personnel, put in place process changes, tools, KPIs and reporting system; and identified/planned next set of improvement opportunities. Gotham also launched logistics savings capture by developing direct ship pilot and facilitating conversation between company sales teams and foodservice distributors.

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Food, Personal, and Home Care Products Manufacturer
Operational Due Diligence Of Family-owned Food, Personal, And Home Care Products Manufacturer: Rapidly Establishing Manufacturing Outsourcing Economics And Requirements

Conducted rapid operational due diligence to establish manufacturing outsourcing economics at a family-owned food, personal care, and home care products manufacturer. Gotham quickly:  built a bottom-up view of the target’s cost structure, current product costs, co-pack costs, and organization structure; conducted plant walkthrough and interviewed operations management; and interviewed companies in food and personal care products outsourcing. We established that outsourcing economics are slightly favorable as logistics and G&A would generate sufficient savings to more than offset a slight increase in food manufacturing cost. As our assessment indicated higher costs and risks associated with outsourcing food products, our client successfully pursued a restructured transaction of carving out personal and home care brands and products.

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Fresh and Frozen Food Manufacturer
Operational Due Diligence of Premium Fresh and Frozen Food Manufacturer:  Rapidly Pinning Down Capacity/CAPEX Situation in Support of 2nd Round Bid 

Built a robust plant and equipment profile and comprehensive capacity model to provide client with understanding of true capacity picture in support of valuation assumptions for target in competitive bid process.  Determined target could achieve ~3X stated capacity through minimal CAPEX; established 10% in quick-win cost savings available in labor, material, and overhead; and provided client with preliminary growth strategy utilizing co-packers, including targeted list of 9 potential co-packers interested in potential strategic alliance.  Client moved forward with a more competitive bid based on Gotham’s capacity assessment.

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