Executive Summary

Problem
Crust Pizzeria currently exhibits food costs that are a steep 38% of total operating costs whereas
most restaurants experience anywhere from 25% to 32% of total costs. This is directly influenced
by Guåhan’s heavy importing culture to meet its needs. Additionally, Crust’s current importing
situation allows for a lot of product waste due to travel time, resulting in losing 30% to 40% of
each month’s expenditure on produce in sunk costs. Losing money like this for high carbon
footprint product is especially unsustainable and could be mitigated rather easily while benefiting
the restaurant in more ways than just cutting food costs.

Objective
Crust is currently looking to cut their extremely high food costs. They look to offer authentic
Neapolitan Cuisine that is quality, fresh, and tasteful. Locally sourcing more of their ingredients
will allow Crust to cut food costs, enjoy a higher product yield, and widen profit margins after
the garden’s implementation costs have been covered.

Proposal
To soften these steep costs, the initiation of ten 75 cubic foot of rooftop raised garden beds,
totaling at 750 cubic feet, would prove sufficient to cut Crust’s food costs significantly. A garden
plot of this size will allow Crust to locally source a good amount of produce for its weekly
demand. The plot will also allow for expansions on current offerings, opening up the opportunity
to grow and offer.

This initiative will enable Crust to offer fresher, tastier food, reduce costs, become more
profitable, and benefit from the image of being a local leader in sustainability, a status that many
local businesses are looking accomplish for themselves.

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 Introduction
Ignite LLC owns and operates Crust Pizzeria and Pasta, located on Marine Corps Dr. in Hagåtña
on the Pacific Island of Guåhan. Ignite, henceforth referred to as Crust, operates the only
restaurant in all of the Marianas Islands offering authentic Neapolitan cuisine.

I have worked in my father’s restaurants for most of my life and have always been aware of
produce loss. When I would work the kitchen and prep the greens, we would sometimes have to
throw up to half the box away due to rot or contamination by proximity. After that, many of the
passable ones were often cosmetically unappealing and needed to be turned over quickly before
they rotted as well. This summer, my father and I reflected on the heavy import state of island
life and its impact on our costs where my father played with the idea of growing some of our
product on site to lower costs. This proposal aims to explore that idea and its benefits.

With the current rising popularity in topics of sustainability on the island and education of the
fact that our costs are not mirrored around the world, many local businesses are making great
strides in becoming more sustainable and supporting local to source their needs. This initiative is
still new, however, and not all needs can be met by what is currently available on the island. Like
all movements, it will take time for local sources to catch up with current business needs.

For this reason, we have come up with this idea to take matters into our own hands. We aim to
grow our own supply on site with the intention of using it as proof of concept to pursue further
transition of our imports to local sources. We believe it will be small initiatives like these, and
the prosperity they bring, that will catch wind and inspire more to take sustainability and
supporting the local economy more seriously.

The Problem
Most Pacific Islands must import a majority of their food to meet demands. The shipping and
handling fees accumulate through the many different stages involved, making food costs
comparatively higher than mainland prices. This most evident in our restaurants, most of which
must raise prices to remain profitable over import cost and product yield loss, making many
locals reluctant to eat out more. Additionally, the incoming product has a very high carbon
footprint that will only rise as business and demand grow. For this reason, it is important for us,
as a local economy and as global players, to find more sustainable ways to meet our needs in
order to thrive.

Since Crust is the only authentic Neapolitan cuisine on the island, it has a lot of unique
challenges to operating. Crust must import many specialty items, which are unavoidable for
operation. This makes Crust’s food costs much higher than most restaurants’ average food costs.
Fresh produce for salads and greens are one of the food categories that are traditionally more
expensive for remote restaurants to offer and can easily be reduced by the garden initiative.

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 Figure 1. Example of Crust Food Costs vs. National Average

Simple
The principle of simplicity is necessary so as not to confuse an audience with any unnecessary
details. A long lasting idea is able to be passed on because it is easy to understand and just as
easily shared. When these ideas are stripped to the core to get the fundamental “why” behind
them, it allows for new “hows” and “whats” to be made, turning such a simple concept into a
vastly complex one.

The idea behind this proposal is to simply cut costs and reduce waste. The idea behind Crust’s
vision is to offer the best quality. These two very simple ideas, like the Commander’s Intent
“Hold this hill” can be carried out in many different ways. A way Crust can offer the best
quality, reduce waste, and cut costs, is by locally sourcing more of their needs.

Unexpected
Most of the ideas that stick with us for life are often due to the fact that they have broken the
mold from the usual and mundane. A seat belt advertisement can present itself like a soda or car
commercial, with upbeat music, bright lighting, and people having fun. Everything is normal,
and until the whole ambiance of the setting is abruptly upheaved with a loud car crash. This
surprise breaks the norm of the overused commercial formula, getting us to pay attention and see
“Didn’t see that coming? They didn’t. Fasten your seatbelt”. The next time the viewer enters
their car, they will undoubtedly fasten their seat belt, and perhaps warn others to do so.

Despite Crust offering the most unique cuisine in all of the Marianas Islands, more can be done
to grab customers’ attention. It isn’t until a prospective customer decides to come, and sits down
to a pizza that is smaller, but more costly than a Pizza Hut New Yorker, that their expectations
are broken. However, to the unfamiliarized, Crust is just another restaurant, falling back into the

norm. This initiative would make Crust the first restaurant on the island to grow any portion of
its menu. Additionally, if they like, Crust may even open it up to customers and the public,
making it truly a place like no other.

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Credible
Credibility is extremely important if you want your message and idea to stay with people. It
matters who is saying what things. We see reverence for certain speakers’ authority areas things
in everyday life. On every beer bottle you buy domestically, the message, “According to the
Surgeon General, women should not drink alcoholic beverages during pregnancy…” can be seen
on the label. The authority of the rank of Surgeon General makes people believe in the credibility
of the label's claims.

Although sustainability is becoming a more important issue on the island, many are still skeptical
and unversed in what about our everyday lives is unsustainable. This ignorance is not anyone's
fault per se. The person buying apples at the grocery store has no idea that the apple that at least
30% of its bunch didn’t make the trip over. Crust has an authority in this field because it is and
has been suffering from the harsh reality of an import-heavy system.

Necessity
Crust currently identifies three problem areas with their current produce importing situation,
product yield, quality, and profitability. The nature of importing from far away comes with risk.
After 3-5 days of harvest and trucking, without weather interruptions and shipping
complications, average shipping time for produce takes about 14 days.

Within these 17-19 days, 30 to 40% of produce can be lost to rot or made inedible due to
proximity contamination. Crust currently spends about $2,500 a month on produce. This means
that Crust is investing anywhere from $750 to $1000 a month on produce that can’t even be used.
This isn’t even counting in the value of produce the expires shortly after arriving at the
restaurant. Every day spent shipping could be another day that the produce is in proper storage,
allowing for significantly less waste and less ordering on our part.

For customer satisfaction, this incoming produce is no longer fresh, losing much of its crispness
and taste, and must be turned around quickly before it rots too. If we were to grow on site, this
would vastly cut down how much produce waste as well as significantly expand the time
produce can stay in inventory.

Project Description
Crust will erect ten 75 cubic foot raised garden beds on the rooftop to cultivate produce. The
individual plots will run 5x15 ft. and stand one foot tall. They will grow at least two species of
lettuce, preferably kale and arugula for salad mix and toppings, cherry tomatoes, cucumbers,
basil, rosemary, and whichever else Crust elects to cultivate. These plots may also be used to
grow microgreens of basil, flax seed, green onions, mint, early wonder beets, bean sprouts, for
the salads, garnish, seasoning, and presentation of its dishes.

After acquiring all the necessary materials at the local home depot, hiring a general contractor,

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treating the wood, and adding the soil, the seeds can be acquired at the growing co-op. First, the
wood will be treated to defend against the water damage of cultivating crops and our humid air.
This will only take 2 hours on the first day and require overnight drying. After this step is
completed, the garden beds can be erected within 3 workdays of 7-hour shifts. Once everything
is planted and set up, the back of house staff can easily maintain the garden, watering, trimming,
and the harvesting crops to then prep for usage in the kitchen.

Figure 2. Example of Garden Bed

Cost Analysis
The initial set up and implementation of this initiative will be very costly upfront and will not
prove profitable until produce can be used. Crust currently invests $2,500 a month into produce
importing, losing anywhere from $750 to $1000 a month to produce spoiling in transit. When
compared side by side with the yearly cost of yield loss we currently suffer, there is no question
that we lose a lot of capital that we should be trying to retain.

Figure 3. Garden Implementation vs. Yearly Cost of Status Quo Wastage

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To erect the plots, 20 cubic yard bags of soil, costing $640, 25 4x8 foot wooden panels for
flooring, and 60 4x8 panels for the walls, costing $1,188, a box of 750 screws costing $26, and a
5 gallon pail of wood sealer costing $62 will be needed and are available at the local Home
Depot. Additionally, a general contractor, costing $30 an hour will need to be hired. In total, the
garden will cost $2,606 to implement.

Figure 4. Breakdown of Direct and Indirect Costs of Installation

Due to this initiative being targeted to a very specific section of our total Costs, there is no one
way to measure its return on investment on the whole firm accurately. Instead, attached below is
a representation of the possibilities locally owned sourcing can do for our profit margins and
return on investment for specific menu items. Examples of a pizza and salad costs, profits, and
return on investment for cultivated and imported ingredients are compared side by side.

Figure 5. Example of Salad ROI. Figure 6. Example of Pizza ROI.

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 Assessment Strategy
The initiative will set Crust back quite a bit at first, costing in total $2,606 to implement. After
planting and cultivating our own produce, however, costs can be significantly cut on menu
offerings, enabling Crust to widen its margins and perhaps even lower its prices, which has
proven a push factor to many price-sensitive prospective customers.

Crust may even use this to expand on its menu, offering seasonal specials and offering higher
quality and tastier food. We can immediately measure its ROI on menu items for the financial
benefits of producing its own product. Furthermore, Crust may even see a significant increase in
customer satisfaction and customer growth as more people enjoy its food and lower prices.

Conclusion
Crust has now provided the island with authentic Neapolitan cuisine for nearly 3 years. Although
the concept has been a learning experience for customers, Crust has made many adjustments to
meet their needs. Currently, one of the biggest obstacles to acquiring new customers and getting
current ones to come more frequently is price sensitivity. Crust has had a hard time growing due
to this since it must keep its prices to maintain profitability. This garden initiative looks to drive
down those steep costs and high food wastage for Crust.

The garden initiative will enable Crust to free itself from much of the steep produce importing
costs, give us higher product yield, improve food quality and taste, and to even expand on our
current and prospective menu offerings with the possibilities of microgreens. The restaurant will
have yet another reason to stand out, one that customers can see and experience the tangible
benefits from through the tastier, healthier, and perhaps one day cheaper food they enjoy.
The restaurant will thrive beyond the financial benefits as well. Its customers and those in the
community who are advocating for sustainable change will appreciate its efforts, frequenting the
restaurant more. The initiative will also be enough to establish Crust as a credible leader in the
topics of sustainability and food sustainability entitling us to the good press and publicity that
follows.

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 Appendix: A Memo to the Employees
To: Crust Pizzeria & Pasta
From: Aidan Artero
Date: November 8th, 2018

Dear Crust Team:

After nearly 3 years of struggling with food costs, product yield loss, and customer
dissatisfaction with our pricing, our management team has finally decided to take matters into
our team’s own capable hands.

Crust Pizzeria and Pasta will be the first restaurant in all of Guåhan to grow and sell some of its
own food. This will solve our product yield loss and help to cushion our high food costs. We will
be erecting 10 raised garden beds on our roof, 75 cubic feet each with materials easily acquired
at the local home depot and transported using our shuttle vans. We will hire our Contractor,
Bong, to erect them on site, where we will then take over after he is finished. We simply need to
water, trim, and harvest the produce when it is ready.

This product will be high yield, fast growing, low maintenance, fresher and tastier, and will help
us order less from off island. We will no longer have to throw away up to half a box of product
and scramble to push certain items before they go bad. With the implementation of this garden,
we may even be able to either expand upon our menu or improve it with microgreens, using them
in specials, green mixes, and seasoning.

Thank you for your dedicated work, perseverance, and help in making this idea a reality.

Sincerely,
Aidan Artero