Health and Nutrition Are Becoming a Major Concern to Our Society Today - Research Paper Example

? and number:   PEEZANO™ CHEESE Feasibility Study Prepared by: Submitted on: June, 20th ContentsContents Page number Background & Introduction 3 Phase 1 : Product/Service Feasibility Analysis 3 Concept and usability testing 4 The market opportunity 6 Target market 7 Intellectual property rights 8 First Movers advantage 8 Phase 2 : Industry/Market Feasibility Analysis  9 Appeal of the market 9 Attractiveness of industry 9 Phase 3 : Organizational Feasibility Analysis 10 Phase 4 : Financial Feasibility Analysis 14 References 16 Peezano™ Cheese Project Feasibility Report Background & Introduction: Health and nutrition is becoming a major concern to our society today and rightfully so indeed. Studies are being conducted on a daily basis that help us understand the enormous health benefits and risks associated with the consumption of food products and the importance and benefits of using food rich in vitamins, minerals, proteins, peptides, amino acids and various lipid fractions found in dairy products, not to mention the additional benefits of pro-biotic found in cultured dairy products. Protein is in the spotlight today because it is not only healthy, but it is also truly the essence of life. The Atkins diet hasn’t hurt the business any either but rather it has enlightened the mankind about importance of protein rich diet and ho it is healthy and valuable to the human beings. Many consumers have found cheese great for their diets and it has helped spur growth in the single-serve cheeses that are purchased in the grocery stores as an easy means of a quick snack readily available off the corner. Convenient foods are an ever growing food segment too which mostly contain cheese. Peezano™ seeks to leverage and capitalize on the numerous competitive advantages its patents are able to provide in the food service (bulk cheese) and packaged cheese goods markets. In addition, the Company has identified a line of proprietary, delicious tasting, health conscious and convenient meal solutions. Peezano will initially target the domestic mozzarella cheese market as a means to leverage its advantage over the mozzarella cheese. This market represents well over 3 billion pounds of cheese produced and consumed each year which represents over pounds 4 billion in sales. The Company’s Peezano™ cheese, will be marketed as a Premium level cheese with more flavor, fewer calories, less cholesterol, more tender and with a longer shelf life. Phase 1 : Product/Service Feasibility Analysis Cheese manufacturing technology developed by Peezano™ allows it to produce a new kind of cheese that is better tasting than mozzarella and yet at a 30% lower cost. In 2010, the British consumers have consumed more than 2.6 billion pounds of cheese (www. .dairyco.org.uk). According to the most recent statistics, “Latest Kantar Worldpanel data shows that cheese volume sales have increased by 3.2% (12,649 tonnes) to 407,642 tonnes in the 52 weeks ending 26 December 2010, when compared to the same period in 2009. Spend has also increased compared to the previous year, up by 3.6% (?84.8m) to ?2.5bn for the 52 weeks ending 26 December 2010.  The total average price stood at ?6.03/kg, 0.4% (?0.02/kg) more than the same period last year.” (www.dairyco.org.uk). Cheese is a highly nutritious and palatable food which contains protein, essential minerals, vitamins, and other nutrients found in the milk base. “Almost all households in Britain purchase cheese with the average household buying 1.5 times per week. The typical basket size was up by 4.7% over the last year with the average price paid of ?2.70 per kilogram giving a total spend per person of ?95.68.”” (www.flex-news-food.com) Today, British manufactures are using more than one-third of their milk production to produce cheese for the country. Concept and usability Testing:  The new technology of cheese manufacturing and the cheese quality produced was subjected to extensive consumer taste research. The concept was subjected to a ‘Centreal Location Test’ (CLT) whereby the consumers of Pizza were invited to attend a blind taste test at a central location in an office of the Peezano™. They were offered the pizza prepared with mozzarella cheese and Peezano™ cheese separately with no labels attached to them. Their preference son taste and linking and disliking of each were gathered on the two kinds of pizzas prepared from Mozzarella cheese and Peezano™ cheese separately. The concept tests provided insightful unbiased information about the quality of new Peezano™ and consumer responses confirmed that the consumers preferred the Peezano™ over Mozzarella cheese and they ere even willing to pay a bit more for the new quality of Cheese i.e Peezano™. This concept and taste test research confirmed that the Peezano™ was sure hit on the market and there prevailed a huge opportunity for Peezano™ from within the current cheese market. In the second round of research, we also sought out opinion from the key central retailing store managers who dealt with the sales and promotion of cheese on their floors. The expert opinion interviews were conducted on their premises and they were offered the samples of cheese in pizzas prepared from the two alternative of Peezano™ and mozzarella cheese. They also opted for Peezano™ and a better tasting option. They were asked about the price of the product and they replied that Peezano™ was able to be sold 10% higher prices than the mozzarella cheese. The concept test and taste test research conducted via CLT and in-depth interviews confirmed the validity of our central premises of the business idea and it also confirmed that the trade buyers were willing to stock and sell the new product a higher price than the existing quality of mozzarella cheese. The Peezano™ was reported as simply superior in taste and it also tasted sweet and creme at the same time. The consumer confirmed that they would be willing to use it on their pizzas and sandwiches and home made pastas as well. The trade buyers such as big pizza sellers were reported to have shown an inclination to use it in their special new pizza brands. They intended to launch a new premium pizza brand with Peezano™. The Market Opportunity The cheese market is a very large and highly competitive one. Producers operate on conventionally thin margins. Any process or product that can be produced at even a small savings has tremendous competitive advantage. With a projected 30% or more ingredient cost savings, Peezano™ will have tremendous advantage in the market. It will be able to be priced at Pounds 0.045 less than all other competitors and this represents a huge savings to consumers in the food services industry. Peezano™ also plays right into the growing and explosive desire for healthier and more convenient foods. With its lower fat content, reduced calories, potential vitamin enhancement, better taste and longer shelf life, Peezano™ will generate large consumer interest and has tremendous opportunity to capture a large market share. We have also had extensive negotiations to acquire, merge and or align with a small regional western food shredder/distributor for sales of its Peezano™ cheese. This $40 million mozzarella cheese and other related products shredder and distributor is an excellent platform for our company to introduce Peezano™ cheese products and to seek out other acquisitions or alliances of distributors throughout UK. We just recently reached an agreement with the owner of a world renowned Italian Restaurant and Brand Specialty Foods, (Chef New Mag), to have them endorse or become an alliance partner with some of the Peezano™ products or products to be developed. They have won more awards then anyone else in America for tomato and Pizza sauce and their endorsement will provide Peezano™ with great credibility and perceived world class quality and taste. We are now also in discussions to purchase a large (65,000 sq. ft.) modern frozen pizza manufacturing facility. We believe that it can successfully introduce a pizza product with the following characteristics: Healthier cheese toppings using Peezano™ Vitamin enhancement Excellent sauces from an exclusive recipe by the multiple award-winning Sauce developer A low carb crust Target Market: The target market for Peezano™ would be based on the consumers of the Peezano™ would be normal consumers of cheese especially those currently using Mozzarella cheese. They would be using Peezano™ on their pizzas, pastas, sandwiches, burgers, salads, soups and a host of other uses where mozzarella cheese is being used. The buyer segments can be  defined as follows: 1. Individual residential consumers 2. Pizza restaurants hotels and pasta houses 3. Chain stores and grocery stores 4. Retail resellers 5. Dealer, stockers and wholesale buyers of cheese. The first year sale would be aimed at based at pounds 0.5 million initially to grow at an annual growth rate of 20% per annum for the first 3 years. Intellectual Property:  The intellectual property rights inherent in the making of Peezano™ have been preserved by us under the prevailing UK law that deals with intellectual property rights. We have already secured the intellectual property of the new technology that has been developed as a result of our R& D efforts. Peezano™ is the new technology that has been developed by us. The British law protects and defends our proprietary rights and defends our intellectual property right in this respect. First Mover Advantages:  There is definitely a first movers’ advantage in the making and marketing of Peezano™ because we have already patented the technology in our name for the next ten years and we have exclusive rights to the manufacture of the new Peezano™ via the new technology that has been developed by us. The British law protects and defends our proprietary rights and defends our first movers’ advantage in this market. Phase 2 : Industry/Market Feasibility Analysis  Overall Appeal of the market: The largest growing cheese segment in the past has been mozzarella cheese. Mozzarella cheese has been topping over 90% of the pizzas consumed in the country and its growth equals the continued growth in pizza sales across the country. Mozzarella accounts for two-thirds of the cheese production today Concurrently, Britons have also begun looking for newer, healthier, lower-fat alternatives to the foods they have been consuming in the past. As the general population has become more and more aware of the benefits of eating healthier, they have also begun to look out for better alternatives to their favorite foods. Cheese, in whatever form, is no exception and consumers are looking for better-tasting, more nutritious alternatives. This is where the new cheese Peezano™ is precisely relevant and helps the consumers search for a low fat high nutrition option in cheese range. It overcomes the bad points of mozzarella cheese and offers new interesting health benefits that the consumers are long looking forward to. Keeping in view the benefits looked for and offered by the Peezano™, there is a great appeal of the market. Industry Attractiveness: In 2010, the British consumers have consumed more than 3 billion pounds of cheese. According to the most recent statistics, cheese consumption in UK continues to grow steadily. On a per capita basis, in 2003 British consumed 30 lbs of cheese for every man, woman and child. This compares to just 11.1 lbs per capita in 1980s. Cheese is a highly nutritious and palatable food which contains protein, essential minerals, vitamins, and other nutrients found in the milk base. Today, British manufactures are using more than one-third of their milk production to produce cheese for the country. Peezano™, is a dairy food company that has very recently developed a unique new type of cheese manufacturing technology that allows it to produce a new kind of cheese that is better tasting than mozzarella and yet at a 30% lower cost. The convergence of these two trends creates a huge market potential for the new patented technology, Peezano™. It can well provide the UK Punds 20 Billion cheese marketplace exactly what it is seeking – a healthy, low fat, low carb form of better tasting cheese at not only meaningful lower costs but optionally enhanced with quality vitamins, and other proprietary products. Market Timeliness: The introduction of Peezano™ deemed absolutely right and ripe. Because the cheese industry worldwide and in UK as well has already passed through the introduction phases and now it has entered the growth phase which is still ongoing and it is well rooted within the demographical growth. Therefore we consider that the introduction of a new kind of cheese which is healthier and more economical and yet better tasting at this point in time is very right and it must be rated as no 5 on a 5 point scale where 5 is the highest rate.   Phase 3 : Organizational Feasibility Analysis Management Prowess: The founding members of the project are based on a four member team who are listed as below. 1. Paula jones 2. Jeremy white 3. Tom alter 4. Peter tuner Paula Jones is the MS.c chemistry and she made a major contribution in the development of this technology and validating the findings. She is devoted researcher on dairy products and she has developed the technology. Jeremy white is MBA and is the key marketing resource for our organization. He has extensive experience in marketing cheese and dairy products in the UK. Tom alter is an ACA and is a key person managing the finance and administration of the entire operation. Peter tuner is the HR manager who looks after the HR needs and requirements of the organization. The organizational structure of the company is to be as follows: Organizational Structure Future HR Needs: While the current organizational structure is based on start up estimates, as the business grows and the market unfolds, the structure of the organization and the team size will change. There will be new members to be added to the team. Current estimates point out the following new members to be added to the team. Future HR Needs Production Production manager 2 Production supervisors 4 Production floor staff 20 Sales and marketing Sales managers 2 Sales supervisors 4 Sales promotional officers 20 Finance and Admin: Finance and accounts manager 1 Accountants 2 The production manager and supervisors will provide a unique support in the production and logistics area. When the production volumes will increase, the sales growth will need to be substantiated by the increase in production output as well. The marketing and finance staff will be needed to share the work load on increasing number of orders and volume of market sales and institutional selling as well. Resource Sufficiency (non-financial): The resources needed for the initial start up of the project are based on the following list. 1. Building premises for the production of cheese, 2. Office premises (3), 3. Machinery & plant, 4. Furniture & fixtures for 3 sales offices and 5. Delivery vehicles and 6. HR team. Location:  Peezano™ is going to be located in the central part of the UK near East of London. It will have a factory and head office located together in the same building. The building will have enough space to house the production, store and head office area. There will be south and North sales office located in the southern and Northern part of the country. Phase 4: Financial Feasibility Analysis Capital Requirements:  The venture is moderately capital intensive. It needs initial capital outlay which will have a long durability and will stretch over a period of 20 years before needing a replacement. On a scale of 1-5, the venture’s capital intensity is 3. The organization has access to capital required for the venture as all of its partners are willing to fund the project at the rate of equal sharing and the debt equity ratio will be 50:50. The financial performance of the venture will be measured through a series of financial ratios that measure the working capital efficiency, profitability, financial stability and gearing of the project. Since the product is already welcome by the customers at a premium of 10%, it will have good cash flows and given the moderate risk, the return on capital invested and ROI will be high enough to justify a feasible investment in this venture. At the overall level, the project investment is highly attractive because of the above mentioned facts Conclusion: At the overall level, the venture is highly lucrative investment and market opportunity with a long term potential and gains involved to be leveraged. The premium prices and significant profit margins point towards a positive cash flows stream waiting to be unleashed in this project. References 1. http://www.dairyco.org.uk/datum/consumer/cheese-market/cheese-market.aspx [accessed:June.18.2011] 2. http://www.flex-news-food.com/console/PageViewer.aspx?page=30228 [accessed: June.18.2011] Read More