Scope of Work Advantage Scope of Work.pdfScope of Work Attachment A to the Contract between Wyoming Business Council and Voltedge, Inc. dba Ady Advantage Page 1 of 15 . Detailed Methodology

Detailed

Methodology

STRATEGY MATTERS

Scope of Work

Attachment A to the Contract between Wyoming Business Council and Voltedge, Inc. dba Ady Advantage Page 1 of 15

Detailed Methodology

608.663.9218 | AdyAdvantage.com

. PHASE ONE: OPPORTUNITY ASSESSMENT - OUTCOMES

• The current value of the beef processing industry in Wyoming.

• Understanding of the environment in which beef processors operate nationwide. This information will help inform the

opportunities/threats for value-added beef processing.

• Identification of growing markets and their needs, as well as identify value-added opportunities.

• Major challenges/success factors related to value-added beef processing.

• An understanding of the workforce effects of a medium or large beef processing facility.

• Understanding of Wyoming’s current and potential capacities within key components of the beef processing value chain, including

crop/feed inputs, livestock growing, and beef/bison processing.

• Initial thoughts and discussion on potential business models for further development and refinement in Phase 2.

PHASE TWO: BUSINESS MODELS

• A day-long in-depth work session with the Wyoming Business Council team to review findings to date and to identify and evaluate draft

business models.

• On-site participation at the agricultural diversification conference to gain further input from ranchers.

• Finalization of up to three business and financial models for value-added beef processing facilities in Wyoming.

• Development of site selection requirements for each potential model.

• An analysis of Wyoming’s capabilities for competing within each business model.

• An analysis of gap’s in Wyoming’s competitiveness for value-added beef processing and the value chain, as well as the identification of

potential strategies to address those gaps.

• Final presentation of all findings in Cheyenne.

PHASE THREE: MARKETING & BRANDING (FUTURE PHASE)

• Development and implementation of strategies to drive awareness, interest and participation by both the Wyoming beef ecosystem and

external audiences.

PHASE FOUR: POLICIES, CAPACITY BUILDING, SYSTEMS (FUTURE PHASE)

• Development and implementation of strategies to strengthen Wyoming’s competitive position in value-added beef.




PHASE ONE: OPPORTUNITY ASSESSMENT

Step 1: Project Kick-Off Teleconference

Outcome: A solid project management framework so that the project runs smoothly.

• Determine project communication protocols and identify the main points of contact for Wyoming Business Council and for Ady Advantage.

o Included are bi-weekly phone calls between Ady Advantage and Wyoming Business Council. Wyoming Business Council will be

responsible for writing up notes from those meetings to share with its stakeholders.

• Discuss goals for the project and expected outcomes and milestones.

• Collect and review any relevant data needed for research, including:

o Past beef-related studies, such as the 2004 “Mobile Slaughter Unit for Wyoming Assessment of Need and Values” and the

2014 “Report to the Wyoming Legislature regarding Cooperative Interstate Shipment of Meat”

o Contact information for and introduction to key individuals, such as Lisa Johnson; Big Horn Basin group; state agricultural

statistician; leaders of state trade associations; etc.

o Emsi data as requested by Ady Advantage

• Discuss and plan agenda, invitees, and logistics for the following three planned presentations/ meetings:

o On-site work session in Cheyenne in late October

o On-site participation at the agricultural diversification conference in Goshen County in early December

o Final presentation in late January or early February

Step 2: Snapshot of Current Wyoming Beef Value Chain

Outcome: The current value of the beef processing industry in Wyoming.

• Work with UW, or other in-kind partner of Wyoming Business Council’s choice, to calculate the current value of the Wyoming beef

industry. This will be used as a starting point to analyzing potential value-added opportunities throughout this process and monitoring

over time.




PHASE ONE: OPPORTUNITY ASSESSMENT (CONT’D)

Step 3: Review of Past Feasibility Studies for Critical Success Factors

Outcomes: Key models for Wyoming Business Council to consider, as well as major challenges/fatal flaws related to beef processing.

• There have been at least two dozen value-added meat processing feasibility studies conducted in recent years by groups from coast to

coast. The purpose of this step is to leverage the key findings from all of this work to focus in on critical success factors and fatal flaws

related to business models, byproduct deployment, facility design, social acceptance, and other issues to be determined.

• We plan to approach this dataset in two steps. First, we will index and map up to 30 existing meat processing feasibility studies, and

provide a brief summary of the goals, conclusions and recommendations of each study. We will discuss initial hypotheses with the

Wyoming Business Council project team, and identify up to five of the studies to delve into more deeply.

• We will then report on findings, including best practices and challenges from each of the five chosen feasibility studies. This information

will help direct the recommendations provided to Wyoming Business Council.

Step 4: PESTLE Analysis on the National Beef Processing Industry

Outcomes: Understanding of the environment in which beef processors

operate. This information will help inform the opportunities/threats for

value-added beef processing.

• Conduct high-level, secondary research on the national macroenvironment as it relates to beef processing in the U.S. by reviewing:

o Political factors – Tax policy, environmental regulations, tariffs, etc.

o Economic factors – Economic growth, trade-weighted index, disposable income rates, etc.

o Social Factors – Population growth, health consciousness, etc.

o Technological Factors – New ways to process, package, distribute goods, etc.

o Legal Factors – Consumer rights laws, product labelling and safety, etc.

o Environmental factors – Sustainability of companies, environmental regulations, etc.

• Determine impacts each might have on the future of the industry.

• This will also include looking at the following data for the national beef processing industry.

o Industry structure

o Key players and concentrations

o Industry drivers

o Growth indicators

Attachment A to the Contract between Wyoming Business Council and Voltedge, Inc. dba Ady Advantage

Page 4 of 15




Step 5: Workforce Impact Case Studies

Outcome: An understanding of the workforce effects of a medium or large beef processing facility.

• Ady Advantage will conduct research in up to five communities across the U.S. that have medium or large meat processing operations,

with the goal of identifying potential workforce impacts on the community.

• This will also include both secondary and primary research to learn best practices in terms of what to anticipate in terms of immediate

and ripple effects, and key strategies for addressing.

Step 6: Teleconference to Discuss Potential Business Models

Outcome: Initial thoughts and discussion on potential business models for further development and refinement in Phase 2.

• Share findings from the previous steps.

• Discuss initial goals for the Wyoming Beef Processing Industry and potential business models for consideration.

• This will include thinking about key parameters that will influences the business models, such as size of facility/facilities, main cuts

versus byproducts, beef and/or bison, ability to sell regionally versus nationally or internationally, fresh versus frozen, etc.

Step 7: Value-Added Agriculture Program Research

Outcome: Identification of best practices from Value-Added Agriculture programs around the U.S.

• Ady Advantage conducted a research project in July of 2012 that reviewed the value-added agriculture programs in all 50 states (not all

states had such a program, but most did).

• Knowing that the State of Wyoming is anticipating reviewing its own existing marketing programs, and possibly adapting its guidelines for

the promotion of value-added beef opportunities, Ady Advantage will conduct a scan of competing states’ programs to identify best

practices, key decisions (such as how to define “Wyoming”), and other insights. Because we originally did this research in 2012, we have

the unique opportunity to provide Wyoming with a benchmarking of programs and strategies from 2012 to 2018 to identify what has

changed and why.

• This step will be a separate deliverable, so can be completed anytime throughout the project process. We anticipate that this will take

five weeks to complete.





Step 8: Evaluation of Wyoming’s Capacity in the Beef Processing Value Chain

Outcomes: Understanding of Wyoming’s current and potential capacities within key components of the beef processing value chain, including crop/feed inputs, livestock growing, and beef/bison processing.

8a: Secondary Research - NASS, WASS, USDA, etc.

• Review and analyze data from both the National and Wyoming Agricultural Statistics Service, as it relates to the beef processing value

chain, including, but not limited to:

o Inventory and values of crops required for livestock

o Inventory and values of livestock (beef and bison) in Wyoming

• Collect a list of USDA-inspected facilities and state-inspected facilities by county in Wyoming.

• Data will be provided at a state-level for Wyoming, as well as a county-level within Wyoming and aggregated on a regional-level based on

the existing economic development regions.

• Review database of feedlots in Wyoming, as available.

• As possible, data will be mapped to show existing beef processing and livestock inventories in the state.

8b: Primary Research – Survey of Ranchers

• Ady Advantage will develop a survey and work with the statewide partner identified by the Wyoming Business Council (e.g., the Wyoming

Stock Growers Association) to distribute the survey.

• The survey will address:

o Current facility locations and capacities

o Potential for expansion of future capacities and limitations

o Supply chains (including feed, veterinary services, etc.)

• The survey will also be used to determine both state and regional capacities and strengths as it relates to beef production.

8c: Primary Research – Interviews with Existing Wyoming Beef Processing Plants and Industry Experts

• Ady Advantage will interview up to 15 companies on-site including a mix of USDA and Wyoming state-inspected plants, as well as industry

experts via phone to collect information on:

o Regional/state operating costs and conditions

o Site selection requirements

o Supply chains and byproduct opportunities

o Potential/willingness for expansion

o Challenges• Ady Advantage will conduct these interviews in-person and complete a tour of each facility. This will include two consultants on-site for

three days each.


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Step 9: Evaluation of Beef Processing Competitive Environment

Outcomes: Understanding of the competitive environment to help identify potential business models and value-added opportunities.

9a: Secondary Research – USDA-Inspected Beef Plants

• Obtain a list and map national USDA-inspected beef plants by location and possibly by function (slaughterer, fabricator, processor,

further processor) to see where concentrations exist and what Wyoming’s likely competitive regions are.

• Identify USDA-inspected plants in Wyoming and surrounding states and to the extent possible, determine their general size, functions,

etc. to provide a picture of the competitive environment in the immediate region.

9b: Secondary Research - Byproducts

• Collect information related to byproducts from past feasibility studies, survey of ranchers and all other sources available to-date,

including subject matter experts.

• To the extent possible, group or prioritize byproducts based on perceived highest value-added opportunities, perceived strength of

market demand, and other factors to be determined.

• This will include identifying potential end-user markets for the byproducts, such as pet food, etc. These end-user markets will be

explored further in the following step.

Step 10: Assessment of Market Needs and Value-Added Opportunities

Outcomes: Identification of growing markets and their needs, as well as identify value-added opportunities.

10a: Secondary Research – Consumption, Consumer, and General Food Trends

• Identify beef consumption trends by country, as well as within the U.S.

• Identify consumer trends related to meat including, to the extent possible, source verification, non-GMO, hormone-free, veganism,

synthetic meat, etc.

• Identify other general food trends as it relates to the U.S., and specific countries of interest, such as Kosher, Halal, etc.

• Report on impacts these trends will likely have on market needs for beef processing, as well as obstacles they may create.

10b: Primary Research – Interviews with Industry Experts

• Ady Advantage will interview up to eight individuals involved in end-user markets for beef processing to gain further insights into trends

and needs of consumers/end-users.

• These interviews will also be used to expand upon secondary research as outlined above, as well as explore more broadly and/or more

deeply value-added opportunities for Wyoming.




PHASE TWO: WYOMING BUSINESS MODELS

Step 11: Draft of Potential Business Models

Outcome: Draft of potential business models based on all research to-date.

• Using all findings to date, make some assumptions about the maximum availability of cattle over a given period of time to help determine

what the potential value of Wyoming’s beef processing could be. This will help drive the potential business models.

• Examples of business models may include: a small-scale slaughter facility that makes sausage products and sells them wholesale and in

their small retail store, a meat wholesale business that is owned by a small number of farmers and uses a third-party slaughter facility,

etc.

• The business models that are developed may not be mutually exclusive.

• Review and assess portfolio of financial models for beef processing to determine which of these small-scale meat models is most likely

to be financially feasible in the Wyoming business environment.

• This will be based on all findings to date, and a range of business model elements that are summarized in a lean business model canvas.

• Note: A sample work product of what shall be included for each business model is available for review, but because it includes actual

work products for other clients, requires a specific NDA for that purpose.

Step 12: On-Site Work Session (target dates: October 30-November 2)

Outcome: A day-long in-depth work session with the Wyoming Business Council team to review findings to date and to identify draft business

models. This meeting is targeted to include the Ady Advantage team (Janet Ady and Ashley Scray, as well as Ron Gould , beef operations

subject matter expert; and Tera Johnson, food finance expert.) Confirm up to three potential business models for Wyoming to focus on.

• Tour a large and a small beef processing facility in Colorado upon arrival to gain insights into the different structures, business models

and needs of these processors.

• As appropriate, tour the soon-to-be USDA certified beef facility in Laramie and/or visit with that business owner and/or visit with other

beef facilities in the Greater Cheyenne region.

• Interview the two beef processing facilities in the Big Horn Basin region.

• Meet with the Wyoming Business Council team to:

o Review and discuss all research completed to date.

o Discuss potential business models and confirm up to three different business models to flesh out more in subsequent phases.

o Discuss logistics of mock RFI.


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PHASE TWO: WYOMING BUSINESS MODELS (CONT’D)

Step 13: Finalization of Key Inputs for Business Models

Outcome: Site selection requirements for each potential model.

13a: Secondary Research - Review Feasibility Case Studies

• Identify site selection requirements from previous feasibility studies, as reviewed in Step 3. This may include facilities, land,

infrastructure, workforce, etc.

• Through this, we will also identify if there are other requirements that are necessary for each model.

13b: Primary Research - Site Selectors and Business Interviews

• Identify a list of site selectors that have done projects to locate meat processing facilities. This list will be used for these interviews, but

can also be used in the marketing phase of this project to start developing relationships.

• Interview up to five site selectors to gain insights into the key selection criteria for the meat processing projects that they have worked

on.

• Interview up to five representatives from companies around the country that operate under similar business models to the

recommended ones.

• Report on key site selection criteria for each model, where different.

Step 14: Finalization of Beef Processing Business Models

Outcome: Finalization of up to three business and financial models for financially viable, vertically integrated local meat processing facilities

in Wyoming.

• Use our prior work with meat businesses, combined with Wyoming’s conditions, to develop a proforma financial model for the optimized

meat business model.

• The financial model will demonstrate what is needed for the business to reach breakeven cashflow, including all of the key indicators of

operating performance: sales, cost of goods sold, expenses, and debt service. It also includes an optimized capital structure

documented in a Sources and Uses of Capital table.

• Compare this table to available capital sources (both optimal debt and equity), to identify potential gaps for the business seeking capital.

It is these gaps that become the points for highest leverage for economic development efforts designed to foster success in these

businesses.

• Work with Wyoming Business Council staff to conduct up to three economic impact analyses (one for each recommended business

model), utilizing Wyoming Business Council’s RPASS system, to see the effects on the state for each model.





Step 15: Assessment of Wyoming’s Competitiveness for Each Model

Outcome: An analysis of Wyoming’s capabilities for competing within each business model.

15a: Secondary Research – State Business Climate for Beef Processing

• Evaluate Wyoming on key statewide business costs and conditions required for a successful beef processing facility. This will

include:

o Waste and environmental considerations –What are the regulations related to disposal of beef processing

byproducts? Are there harmful regulations looming?

o Logistics and transportation – What transportation infrastructure exists in the state that would be required for a

beef processing plant?

o Workforce considerations – What are the typical occupations required for each model? What labor pool exists at a

statewide-level that a potential beef processor could tap into? What training programs exist for the

skills/positions needed?

o Regulatory environment - What regulations exist that may prohibit or limit beef processing in the state?

o Tax Climate/Incentives – What does the tax climate look like for beef processing? Are there incentives in place to

assist these types of companies?

• This information will be supplemented with regional information collected through the mock RFI that will shed light on

local/regional aspects of the above criteria.

15b: Primary Research – Mock RFIs

• Create and distribute individual mock RFIs for potential projects within each of the business models (up to three) through

Wyoming Business Council’s existing RFP dissemination system. We will allow each organization to respond with its best

sites that meet the needs of one or all of the hypothetical beef processing models.

o The mock RFIs will be created using key site selection criteria developed through all of our research to-date

(typical facility size, utility needs, transportation needs, workforce needs, related training programs, etc.).

o The mock RFIs will request information related to community support for a beef processing facility in the region,

adequate sites (up to three per region per model), infrastructure to support a beef processing facility, insight on

citizen’s likelihood of acceptance, and existence and proximity of other companies participating in or supporting

the beef ecosystem within the region.


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15c. Primary Research - On-Site Focus Groups with Producers – December 6-7, 2018

• Two Ady Advantage staff will conduct focus group with producers/ranchers as invited guests/speakers to the Wyoming agricultural

diversification conference scheduled for December 6-7 in Goshen.

• Topics of focus groups will include state business climate for value-added beef, identification of challenges and opportunities associated

with each business model from ranchers’ perspectives, etc.

• Report on key findings and inputs into business model development.

Step 16: Positioning Wyoming for Competitiveness

Outcome: An analysis of gaps in Wyoming’s competitiveness for beef processing and the value chain, as well as strategies to address those

gaps at a statewide level.

• Conduct a gap analysis of Wyoming’s current business climate as it relates to beef processing and the business climate it needs in order

to be competitive for the recommended models.

• Provide recommendations on state programs that could address those gaps related to:

o Waste and environmental considerations – Strategies may include increasing water/wastewater capacity, changing

regulations, etc.

o Logistics and transportation – Strategies may include improvements to transportation infrastructure, etc.

o Workforce considerations – Strategies may include creating specific training programs, housing improvements, etc.

o Regulatory environment – Strategies may include regulatory changes, financing programs to support challenges, etc.

o Tax Climate/Incentives – Strategies may include incentives programs, financing programs, etc.

Step 17: On-Site Work Presentation(s) – February 2019

Outcome: Final presentation of all findings, presented to various stakeholder groups.

• Create a final deliverable report. This report will include all research and recommendations, and will have an executive summary that will

show key findings.

• The Ady Advantage team will spend up to two days on-site in Wyoming to present the report to key stakeholder groups identified in

conjunction with the Wyoming Business Council.


Page 11 of 15

Timeline and

Investment

STRATEGY MATTERS


Timeline and Investment


PROJECT TIMELINE

Based on the timeline on the following page, we anticipate that this project will require 22 weeks to complete. This is assuming a September

24th start date. Ady Advantage will schedule a bi-weekly check-in call with the Wyoming Business Council team, and will be on-site several

times throughout the project. We anticipate being on-site the week of October 29 for a work session, December 6-7 for producer focus groups

and in early February for the final presentation. The project timeline is dependent on scheduling and the availability of the project team and the

necessary stakeholders.

PROJECT MANAGEMENT

Project management is included as follows:

• Biweekly phone calls

• Report outs: (dates based on September 24th start date)

o Deliverable 1: Report on Snapshot of Current Wyoming Beef Value Chain, Review of Past Feasibility Studies and PESTLE – Week 4

o Deliverable 2: Workforce Impact Case Studies – Week 5

o Deliverable 3: Report on Wyoming’s Capacity, Competitive Environment, Market Needs and Value-Added Opportunities – Week 9

o Deliverable 4: Draft Business Models – Week 11

o Deliverable 5: Finalized Business Models – Week 17

o Deliverable 6: Assessment of Wyoming’s Competitiveness and Gaps – Week 21

o Deliverable 7: Final Report including all Deliverables to-date – Week 22

o Deliverable 8: Value-Added Agriculture Program Report – Can start anytime throughout this process. Will take five weeks to

complete.

• Presentations:

o Budget includes up to three one-hour webinar/telephone presentations throughout the project to WEDA, Wyoming legislators,

etc., on an as needed basis.

o Final presentation: Week 22


Page 13 of 15



PROJECT TIMELINE

On-site visit Meeting via teleconference


Page 14 of 15



PROJECT INVESTMENT

The price for the proposed scope of work is $222,000. This includes all services as outlined in this document, all travel and out-of-pocket

expenses, and the services of the subcontractors as defined within this document.

Payment Terms. Ady Advantage assumes that this project will start by September 24, 2018 and finish by the week of February 25, 2018. For this

project, Ady Advantage will invoice Wyoming Business Council monthly, by the 30th of each month, for one-sixth of the total fee for professional

services, with the first invoice to be provided by September 30, 2018 and the final invoice to be provided by February 28, 2018. Net 10, 1.5%.

Ady Advantage reserves the right to prepare a revised proposal if the scope changes significantly from what is described in the Detailed

Methodology section of this proposal. Ady Advantage shall provide a written proposal and will get approval from authorized staff involved in

economic development efforts, before beginning any additional work.

Should the project be cancelled or progress postponed for more than 45 days, the client shall pay one-half actual costs for the work

performed to date.


maggie.schwartz

Sticky Note

Please see if this is actually correct... it doesn't match what we have in the contract.

Documents

Scope of Work Advantage Scope of Work.pdfScope of Work Attachment A to the Contract between Wyoming Business Council and Voltedge, Inc. dba Ady Advantage Page 1 of 15 . Detailed Methodology