Producing and Serving the Fresh Juices - Business Plan Example

Business Planning The Business Idea In the health conscious era, my new business idea has emerged from the possibility of producing and servingthe fresh juices from the exotic fruits that are not native to the UK; however, highly rich in antioxidants. Juice bars serving orange, apple, straw berry juices are many and widespread; however, hardly anyone has ventured into serving fresh juices of tropical fruits that offer rich health benefits. The paper attempts to explore the feasibility of this project in the UK and the issues involved to make it a success. Description Mangosteen (a tropical fruit from countries such as Indonesia, Thailand, Malayasia), Amla (Indian gooseberry), and Acai berry (a fruit from South and Central America). The juices can have several variances when supplemented with ginger, and herbs. These fruits offer several health benefits that include weight reduction, immune power enhancement, and joint flexibility improvement and so on. Their antioxidant properties protect human body from cancer causing free radicals (Carlsen, 2013). Mangosteen contains xantohones, a group of powerful antioxidants, in huge quantities that has characteristics to function as the chemopreventive agents (Shan et al. 2011). Similarly, amla from Indian subcontinent contains some unique medicinal properties and extensively used in aurved (Indian medical treatment system). Acai berry is also known as a super food. Apart from its anti-oxidant properties, it stimulates digestive system to its optimum level as it provides dietary fiber too. It protects body cells from free radicals generated during food metabolism. Due to presence of high amount of vitamin C, it boosts immune system and prevents cancers of varied kinds. Due to high amount of phytochemicals, it slows down ageing process (Globalhealing Center, 2015). Mangosteen Amla Acai Berry Industry Related Issues There are the companies that retail mangosteen, acai berry juices in 946 ml packed cans under varied brand names to be procured from supermarkets. They are sold online also at the rates between £15 and £25 per 946 ml bottles. In true sense, they cannot be called competitors to the new business because they serve the different niche. While the idea is to open juice bars to serve fresh juices to the customer made from delicious tropical fruits that offer a lot of health benefits, the startup is targeted at ‘health conscious masses’. Unlike canned juices, these fresh juices will be free of any food colour, sugar or preservatives. Only herbs such as ginger, elder flower will be added to enhance juice flavour and health benefits. Usually, strawberry, orange and apple juices are served fresh across the UK but serving fresh fruit juices made from tropical fruits not native to the UK or Europe is a novel idea. Organic farming free of pesticides is a major issue in growing fruits and vegetables. The key issue is to procure fruits from farmers or agencies that can ensure consistent supply of good quality fruits grown organically in their native farms. Further, the shipment of fruits and their storage locally with appropriate packing is an issue that needs meticulous planning and logistics. Transportation and storage has to be cost effective to make it affordable for the consumers. Usually, these fruits have seasonal crops and they must be procured in sufficient quantities and stored in deep storage at appropriate temperatures to preserve them for a long time. The key issue is to identify suppliers that can ensure regular supply. The Food safety Act 1990 is applicable in the UK. The Food Hygiene Regulation 2006 is applicable since 1st January 2006. Enforcement of the Hygiene requirement is a prerequisite in any food serving industry. Juice bars also need to maintain proper hygiene so that customers do not take any critical view about it. Juice bars are also subject to regular inspection and audits by a concerned authority (Finnerty & Tombs, 2010). Target Market and Customer Related Issues Due to increasing health awareness, a large number of young adults in the UK have been thinking in terms of healthy diets that can keep them free from illnesses. People have become scared of obesity, asthma, arthritis, gout, and many chronic illnesses that are difficult to cure permanently with the help of medicines currently available. Essentially, the Tropical Fruits Juice Bars are meant for such health-conscious adults of the age between 30 and 70 that not only want to remain physically fit but prefer to follow a strict dietary regime. They usually embrace a living style that helps develop them a strong immune system to remain healthy throughout. The target customers would have above average income levels with disciplined living style. Many of these potential customers do not want to consume packed juices served in cans as producers use artificial flavours, preservatives, sugar to enhance its acceptability while preparing them. Such consumers cannot procure such exotic healthy fruits in small quantities to prepare juices at their homes. They are always ready to patronise ready-to-serve outlets at slightly higher costs provided juice bars can offer them fresh juices in a hygienic environment. Founder Related Issues Founder has some major issues to resolve before they can launch and run juice bars of fresh tropical fruits. The founder needs to ensure that exotic varieties of tropical fruits are received uninterruptedly during most part of the year. There has to be minimum three suppliers to avoid risks involved in the procurement process. Choosing right suppliers is essential to ensure that these fruits are organically grown and free of pesticides. If necessary, they must ensure that samples from each batch are analysed by a recognised food laboratory to ascertain that they are free of pesticides and impurities. Irradiation process is a prerequisite applied to all foods including fruits and herbs while importing them. That means import must accompany with a proper documentation. As per the Food Irradiation Provision Regulation 2000, all imported foods must be properly labelled; the irradiation doses should not exceed permissible limits as per the provisions prescribed (Food Commission, 2002). Founder must decide the source of financing – own contribution or borrowing from institution, banks or some other source. Founder must ensure that initial fixed costs are kept at minimum so that break-even point is as low as possible to get established successfully (Bplans, 2015). Founder needs to develop new variances of the three main products quickly so that customers have reasons to visit again and again. While no large budget for marketing is required, it needs to be directed towards local population offering deep discount schemes to loyal customers. Financial Issues Juice bar startup entails certain financial issues that include whether to own juice bar shops or avail it on rent. Renting the shop will reduce the financial burden on the founder as far as capital investment is concerned. Banks can provide loans for working capital at around 4% -5% interest rates; however, its quantum will depend upon how quickly suppliers can make available the produce. At minimum, it is advisable to keep the stock for at least 7 days in own warehouse as these tropical fruits are not grown locally. It is necessary to make a contract with local suppliers to avail supply on landed-cost basis including freight, insurance and other incidental charges. The advantage in this kind of startup is that the product will get sold on cash basis while all fruit supply can be availed on credit for a week or so depending upon how supplier agrees. The final product can be sold at appropriate mark up on the calculated variable cost. The variable cost will have fruit cost, power and other utilities cost including disposables such as paper napkins and glasses. It is required that the fixed cost is kept at minimum so that break-even point is as low as possible based on working of 25 days in a month (Bplans, 2015). Overall Business Potential Overall business potential for the Tropical Fruits Juice bar is significant. As per the statistics available, at least, 20 million people in the UK consumed fruit and vegetable juices in 2013 (The Statista, 2014). Currently, people give preference to fruit juices over soft drinks as they are nutritious and health promoting. The town throbbing with business activities and tourist visitors will be an ideal place. Health-conscious residents around the location of juice bar will be potential regular customers in morning and evening time when they go for walk and fitness exercise. A marketing drive informing about the new startup to the people nearby is essential for at least a few weeks. Finally, summarising on the feasibility of the new startup, the venture under consideration is a novel business that has some unique features with no direct competition from any of the existing players. Nevertheless, success of the startup largely rests on two factors: how the startup markets its products in the region so that people are enticed not only to taste but patronise new offering with enthusiasm, and secondly, equally important is to tie up with reliable suppliers that can ensure supply of the organically grown tropical fruits regularly. References Bplans (2015). Break-even Point. [Online] Available from http://www.bplans.co.uk/glossary/index.cfm?STerm=Break-even+point&a=b1 [Accessed 11 March 2015] Bryce, T. (2014). The Elements of a Good Feasibility Study. [Online] Available from http://www.projectsmart.co.uk/elements-of-a-good-feasibility-study.php [Accessed 10 March 2015] Carlsen, M. (2013). Nutritional Journal. nutrition.com. [Online] Available from http://www.nutritionj.com/content/9/1/3 [Accessed 10 March 2015] Finnerty, N., & Tombs, G. (2010). UK: A Review of Food Hygiene Legislation And Related Criminal Offences. [Online] Available from http://www.mondaq.com/x/97124/Health+Safety/A+Review+Of+Food+Hygiene+Legislation+And+Related+Criminal+Offences [Accessed 10 March 2015] Food Commission (2002). Irradiated food in Europe and the UK. [Online] Available from http://www.foodcomm.org.uk/campaigns/europe_and_the_uk/ [Accessed 10 March 2015] Globalhealing Center (2015). 12 Health Benefits of Acai Berries. [Online] Available from http://www.globalhealingcenter.com/natural-health/benefits-of-acai/ [Accessed 10 March 2015] Shan, T., Ma, Q., Guo, K., Liu, J., Li, W., Wang, F., Wu, E. (2011). Xanthones from mangosteen extracts as natural chemopreventive agents: potential anticancer drugs. ncbi.nlm.nih.gov [Online] Available from from http://www.ncbi.nlm.nih.gov/pubmed/21902651 [Accessed 10 March 2015] The Statista (2014). Number of people using ready-to-drink fruit & vegetable juice and smoothies in the United Kingdom (UK) in 2013. [Online] Available from http://www.statista.com/statistics/302422/ready-to-drink-fruit-and-vegetable-juice-and- smoothies-usage-by-drink-type-in-the-uk/ [Accessed 10 March 2015] Read More