Wonder

Log in

Research Outline

Prepared for Douglas R. | Delivered May 24, 2020

Business Model Case Studies

Goals

To find any academic articles, critical press, or corporate documents, describing the business models and supply chain growth and acquisition of companies POM Wonderful, Nutella, and Blue Diamond Almonds, including how they began, in order to emulate these models and to become a major honey/honeycomb brand.

Early Findings

  • An article on Celebrity Net Worth states that before POM Wonderful, the Resnicks were involved in a variety of business endeavors, such as the purchase of a fake pearl necklace once belonging to Jackie Kennedy for $211,000. Lynda Resnick then sold over 130,000 knock offs of the necklace, grossing over $26 million.
  • In 1978 the Resnicks started to invest heavily into fruit to offset inflation, buying 2,500 acres worth of orange trees in California. In 1988 the couple bought "an insane number of acres of pistachio, almond, and citrus groves at bargain-basement prices," due to the drought in California at that time. By the year 1996, these agricultural business moves had positioned them as the largest producer and packager of both pistachios and almonds, having over $1.5 billion worth of sales. The couple owns 130,000 acres of farmland to this day, grossing around $4.8 billion.
  • The Resnicks also have purchased 100 acres of pomegranate orchards after Lynda Resnick commissioned a study on the fruit after hearing from the family physician about the fruit's role in folk medicine. The study results revealed there were more antioxidants in pomegranate juice than in red wine, and so Lynda immediately started POM in 2001 as an immediate success, selling millions of dollars and having success to this day.
  • A report from Course Hero is available after subscription discusses how POM Wonderful marketed products to consumers using claims of the many ways the juice would benefit their health. The company claimed serious health claims, including reducing the chance for disease, reducing cholesterol, preventing prostate cancer, and promoting heart health.
  • A report from The Los Angeles Business Journal, although an older source from the early 2000s, states that over the five years the POM Wonderful company "planted thousands of pomegranate trees in the San Joaquin Valley, doubling the commercial market's size." Besides also funding the medical research at UCLA and the marketing campaign of fruit's benefits, the company "purchased development rights to the method it uses to extract and process the juice, giving them control of production."
  •  According to Gary Hemphill, the managing director Beverage Marketing Corp. who track juice marketing and sales, “They've single-handedly created the market for pomegranate juice in the United States." According to the Pomegranate Council, a non-profit group in San Francisco, POM Wonderful owns over half of all 15,000 pomegranate acres being cultivated in the U.S.
  • Due to the health claims the company made a nearly six-year court battle launched by the company ensued, with the Resnicks against federal regulators who questioned the science behind the claims. The case resulted in the U.S. Supreme Court ultimately "declining to review an appeals court decision that health claims in Pom Wonderful advertisements misled consumers."