Edible Arrangements

A Sweet Idea...

Edible Arrangements was founded in 1999 by Tariq Farid who partnered with his brother, Kamran, in East Haven Connecticut. They specialize in creating spectacular fresh fruit bouquets - they are made to look like flowers instead of the traditional, tiresome fruit baskets. In addition to the arrangements, they also sell specialty gift items, such as chocolate dipped strawberries that are made to look like long stemmed roses (see photo) and most recently have introduced "edible to go" items which includes fruit salads & fruit smoothies. To make your occasion extra special they also offer foil helium balloons or teddy bears that can be attached to the arrangement in order to create the perfect gift for birthdays, anniversaries, you name it!

Their mission is simple - to WOW you! They insist on having the freshest produce for use in their arrangements and have spent years developing inventive and imaginative new ways to make sure that the succeed in doing just that.

In 2000, a customer by the name of Chris Dellamarggio notices a sign on the side of the road that says "Edible Arrangements". He is intrigued by this and decides to take a detour to Tariq & Kamran's store. He was "wowed" by the creative and fresh bouquet that he received and later convinced them to franchise their idea so that he would be able to own his own store. The first official franchise was opened in Massachusetts in 2001.

In 2003, the first edible arrangements was opened in Canada. This location was located in East Toronto. Obviously a Canada themed Edible Arrangement was needed for this joyous occasion (see left) so pineapples were made into maple leafs and strawberry's dipped in white chocolate to be and represent the Canadian colors. Read more about the history of Edible Arrangement's on their sweet time line.

Developing the Delectable Delights...

In April 2012, Edible Arrangement hit a significant milestone and opened up there 1000th store which are spread across 15 different countries. The Fariq brothers reportedly slept on the floors of developing franchises all across the country in order to help new shop owners get a jump start. Tariq said "You've got to make their success your priority. Lose some sleep and lose some comfort so they're successful" (Meehan, 2012)

Their first two franchises combined reached sales of $1 million according to an article written by Martin Desmarais in 2006,and  sales worldwide that in the year the article was written were approximately 50 million. Last year the company saw sales of $422 million. That's an increase of $372 million in just 5 short years. Phenomenal. Their sales goal for 2012 is $488 million. Ranging in price from $25 to $130, that's a lot of fruit - over 3.2 million arrangement if we used the highest price for each and according to USA Today they went through 5.6 million strawberries on mothers day alone!

Significant variable costs for this type of business are the fresh produce that is required and any accessories that may be used in the production of each arrangement such as balloons, skewers, baskets, mugs etc. Fixed costs would be the building in which the franchise is located, equipment that is required, and royalty fee's which amount to 5% of weekly gross sales.

Competition?

Edible Arrangements is a very unique business and I don't believe there are any direct competitors that could compete with their volume of production. The closest competitor may perhaps be a flower shop; but why would you buy flowers that die after a few days when a fruit bouquet is just as visually appealing and you can eat it too!

For economists, this wouldn't be the industry to get into in the first place and Orley Ashenfelter who is the president of the American Economic Association said quote, "it goes against all we previously held to be true about the concept of supply and demand.", "In theory, the market should have done away with Edible Arrangements long ago, that's how it's supposed to work. Yet somehow, despite offering no product of any worth whatsoever, this company not only makes payroll every week, but also generates strong profits." (The Onion, 2012).

I guess opening anything BUT an Edible Arrangements franchise would suicide, so it's safe to say that they're safe when it comes to having any sort of competition. The Farid's apparently got very lucky!

Summary....

It began as a crazy idea that was thought up by a young man who owned a flower shop, and went from 2 stores to over 1000 in 10 years. Edible Arrangements has experienced extreme growth, turned out to be a very lucrative business, and has little to no competition. The market is theirs!
 

"It is sort of like planting seeds — you have to plant them in different places — and the first stores are seeds," Farid said. "If you bloom, you learn the challenges of each market."

- Tariq Farid.

 

References

The Onion. (2011, March 31). Retrieved December 19, 2012, from Continued Existence Of Edible Arrangements Disproves Central Tenets Of Capitalism: http://www.theonion.com/articles/continued-existence-of-edible-arrangements-disprov,19856/?ref=auto

Edible Arrangements. (2012, December 4). Retrieved December 19, 2012, from Wikipedia: http://en.wikipedia.org/wiki/Edible_Arrangements

Edible Arrangements. (2012). Retrieved December 19, 2012, from http://www.ediblearrangements.ca/

Franchise Direct. (2012). Retrieved December 19, 2012, from http://www.franchisedirect.com/directory/ediblearrangements/ufoc/25/

Desmarais, M. (2006, November 30). Indus Buisness Journal Online. Retrieved December 19, 2012, from Edible Arrangements concept continues to bloom: http://www.indusbusinessjournal.com/ME2/Audiences/dirmod.asp?sid=&nm=&type=Publishing&mod=Publications%3A%3AArticle&mid=8F3A7027421841978F18BE895F87F791&tier=4&id=FFA5D44EB0324119AA247A1960BC6FA2&AudID=0C5ABC84F3CE4D0DB8BF8D0BF8BD2F70

Meehan, S. (2012, May 7). Edible Arrangements grew from a flower shop. Retrieved December 19, 2012, from USA Today: http://usatoday30.usatoday.com/money/industries/retail/story/2012-05-04/edible-arrangements-ceo-profile/54790086/1