Industrial Feasibility study

on a new Energy Drink

M.M.W Aponso
AS2012704
Department of Food Science &
Technology

Introduction
An energy drink is a beverage that
provides physical and mental stimulation.
It has become popular among consumers
now a days due to its energy boosting
characteristic.
This feasibility study is done to analyze
whether this project is viable and
profitable

Market Feasibility

Product Identification
Product
Brand name
Tagline
Packaging material

Energy drink, 150ml bottles

Jive
Live Super Well
PET Bottles

Ingredient

Water, Sodium citrate, Carbon

dioxide, Taurine, Glucuronolactone,
Caffeine,
Inositol,
Niacin,
Pantothenic
acid,
Vitamin
B6,
vitamin B12, , Thickener xanthan
gum,
Sugar,
Colors
(caramel,
riboflavin)

Benefits

Increase energy in body & boost

performance
Prevents dehydration
Replace electrolytes

Sales forecast
a) Using primary data
-) A survey was conducted by giving questionnaires to 100 individuals and
received 65 responses out of 100.
-) Consumer preference for energy drinks were analyzed using the
obtained results.
b)

Using secondary data

-) Using data from household income & expenditure survey a demand

forecast was done.
-) Primary data was combined with secondary data to prepare the initial
production plan for the new energy drink.

Preference according to Gender

Preference according to age group

Under 18
18-24

3% 1% 1%

Male

30%

25-35

27%

Female

35-50

70%

50+

68%

Brand preference
Red bull

4% 2%
20%

Booster
BLU
XL

74%

Consumer preference to try a new brand

30%

70%

Yes
No

Product

Production
target

Production
(units)

Energy drink
150ml

Per day

1200

Per week

7200

Per month

31300

Per annum

375,700

Market competition

Energy
drink

Price

Red Bull
(250ml)

LKR 295.00

XL (250ml)

LKR 230.00

Booster Blitz
(250ml)

LKR 220.00

BLU (250ml)

LKR 215.00

Marketing Mix

Market Segmentation
Market segment

Target market

Geographic segmentation

Colombo, Gampaha & Kalutara

Districts

Demographic segmentation

Gender Males and females

Psychographic segmentation

Income level Middle to high

income level

Occupation- Students, working

professionals, sports enthusiasts,
athletes
Social class Middle to upper class
Attitude People concerned with
energy intake, fitness & boosting
performance, open to experience

Behavioural segmentation

Life style Athletes, people with

on-the-go life style, business class,
working class executives
Occasions Regular, special
Benefits Product quality
User status Regular user

SWOT Analysis

Technical Feasibility

Site selection
Location: Kimbulapitiya Polgalwatta Road
- 8 km from Katunayake expressway

Machinery & Equipment

Composite mixing
machine with carbo
cooler

Labelling machine

Composite filling
machine

PET bottle dryer

Small capacity water

treatment plant

Freezer

Plant establishment
Land:

30 perch land

Building:

5000 square feet building

Factory
design:
guidelines.

Food

manufacturing

facility

Doors: Self closing, easy to clean, non absorbent

Ceiling: Least accumulation of particles
Walls: Resistant material and corners are curved to
reduce
accumulations
Floor: Easy to clean, smooth & easy drainage

Passage

Factory Layout

Production Feasibility

Production process
Weigh
ingredients

Storage

HR requirement

Workers under the Manager:

12
Outsourced drivers:

All employees:

15

Raw material & packaging material

requirement
Raw material

Flavored
Energy drink
concentrate
Sugar syrup
SMS
Liquid CO2

Quantity per
day
3 kg

30 kg
9g
900 g
Packaging material

Quantity per day

150 ml PET bottle

1200

Berry cap

1200

Label

1200

Master cartons

50

Financial Feasibility

Cost structure
Description

Raw material cost

Packaging material cost
Labor cost
Utilities/Overhead cost
Depreciation cost

Cost (LKR)
4.44
11.50
9.52
47.28
3.39

Total cost

76.13

Profit margin (40%)

30.05

Price before tax

Tax (15%)

105.18
14.82

Price to retailor

120.00

Retailor margin

Consumer price

5.00
125.00

Break Even Point (BEP)

Break Even Point =

Fixed cost hhhhhhh

Contribution per unit

BEP=

21,055,930.50 =
(120-19.09)

208,660 units

Pay Back Period (PBP)

Return On Investment (ROI)

Net Present Value (NPV)

Environmental Feasibility

Waste Management
Solid organic waste
Solid inorganic waste
Waste water
&

- To compost bins
- To municipal council

- To waste water treatment plant

septic tank

Environmental considerations
Solid waste
management

Organic waste
management

Waste water
management

Solid
waste
management policy
by
National
Solid
Waste Management
SupportCenter
(NSWMSC)

Follow guidelines on
National
cleaner
production center for
promoting
organic
waste composting in Sri
Lanka

National
Environmental
(Protection & Quality)
Regulation No. 01 of
2008

Socio-Economic Feasibility

Social Acceptability
To gain social acceptance, need to consider social
responsibilities towards:
- Consumers
- Employees
- Society

Conclusion
Energy drink has an emerging & expanding market.
Consumer preference for energy drinks is rapidly increasing.
Regarding financial feasibility;
- NPV at the end of 3 years is greater than zero.
- IRR of the project is 16.85% (> 10% discount factor)
- ROI at the end of 3 years is 42.13%.
Therefore

the

product,

concluded as feasible.

150ml

energy

drink

can

be

References
http://most.comsatshosting.com/Files/PCSIR_Karachi/ENERGY%
20DRINKS.pdf
http://www.npd-solutions.com/feasibility.html
https://www.cerc.com/Content/Municipal_Planning.asp
www.investorwords.com/15399/financial_feasibility.html

Thank you!

Annexure