By-the-Sea Biscuit Company: A

Decision in New Venture Analysis

-NandKishor/Paramjeet/Pranav/Rachit/Rashi/Sushanth
Market-
Pricing & BEP
potential Forecasting
analysis
analysis
Market-potential analysis
 Market-potential analysis

• Price of a bag of 12 biscuits: $2.99

• Price of a case of 216 biscuits: $53.82

• Population of the US: 299,344,150

• Per capita expenditure: $14.33 (forecasting at a conservative 5% growth rate)

• Market size in the US: 299,344,150 x $14.33= $4.29 B

• Similarly, market size in Canada: 32,623,490 x $12.20=$398 M

(Canadians spent ~15% less in similar category)
 Market-potential analysis: Retailer wise

• Co-op Atlantic operates in Atlantic Canadian Region having a

population of 2285729 @ 20% market share
= 2285729 x 20% x $12.20 = $5.57 M

• Price Chopper
Market Market size
Cities Population Expenditure
share in million
Albany, NY 36% 95658 $ 14.33 $ 0.49
Utica Rome, NY 17.60% 299896 $ 14.33 $ 0.76
Poughkeepsie, NY 6.70% 29871 $ 14.33 $ 0.03
Syracuse, NY 12% 147306 $ 14.33 $ 0.25
$ 1.53
Worchester 19.50% 172648 $ 14.33 $ 0.48
Burlington 11.60% 608827 $ 14.33 $ 1.01 $3.03M
$ 1.49
 Market-potential analysis: Retailer wise

• Market size for Co-op Atlantic = $5.57 M = 104000 cases

• Market size for Price Chopper = $3.03M = 56000 cases

 Pricing & BEP analysis
• Traditional: Retailer @13.50/case, consumers @53.82/case

• Flax Enriched: Retailer @20.25/case, consumers @80.82/case

(50% increase in price supported by statement: 25% would spend more on chemical free foods)
Fixed expenses $/Year
Equipment (10% Depreciation) 7400
Rent 90,000
Office Equipment 2400
Manager Salary 1 44800
Manager Salary 2 44800
Raw Material 30000
Marketing (PLMA & New England Food Service) 19500
Monthly Interest payment 7500
Assume Research Cost for Flax Version 13600
Total Fixed Cost 260000
 Pricing & BEP analysis
Variable cost

Traditional: $7.78/case Flax version: $11.6/case

Break-Even Point (units):

Fixed costs ÷ (Revenue per Unit – Variable Cost per Unit)

BEP units = ~45,500 units

= ~3.5 months @ 700/day
 Forecasting
(75% Traditional & 25% Flax) (50% Traditional & 50% Flax)
Production Production
No of Cases No of Cases
Plan Plan
Month Traditional Flax Month Traditional Flax
1 0 0 1 0 0
2 0 0 2 0 0
3 0 0 3 0 0
4 0 0 4 0 0
5 14000 0 5 14000 0
6 14000 0 6 14000 0
7 9800 4200 7 7000 7000
8 9800 4200 8 7000 7000
9 9800 4200 9 7000 7000
10 9800 4200 10 7000 7000
11 9800 4200 11 7000 7000
12 9800 4200 12 7000 7000
86800 25200 70000 42000
Revenue 1171800 510300 $ 1.6 M Revenue 945000 850500 $ 1.8 M
 Forecasting
Sales of commercial bakery
4000
3500
Million dollars

3000
2500
2000
1500
1000
500
0

Value Forecast(Value)
 Forecasting
Revenue & Profit Forecasting
3.50

3.00

Million Dollars
2.50

2.00

1.50

1.00

0.50

0.00
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Axis Title

Revenue (75/25) Profit (75/25) Revenue (50/50) Profit (50/50)