Business Plan Sample 3

XX Coffee
Nitro Cold Brew

Coffee
Business Plan

Accelerates & Skyrockets you to flavor

January 20xx

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XX Cold Brew Business Plan

Executive Summary

This Business & Marketing Plan was prepared for XX and its new Nitro Cold
Brew Coffee that will be launched in London, UK this summer.
Coffee is the highest consumed beverage in developed countries, ready-to-
drink coffee demand is rising and the new trend is cold brew coffee. XX is a
unique Nitro Cold Brew Coffee charged with nitrogen to give it a rich, creamy
head, similar to nitro draft beer like Guinness.
The new product will be launched in selected areas to affluent sporting
consumers with larger disposable incomes, males and females aged 20- 35.
The XX new Nitro Cold Brew Coffee will be introduced to the market in a
modern style 250 ml can at an average price compared to competition, for
quick market penetration and higher market share capture.
This superb coffee will be sold at premium grocery stores, pubs, restaurants,
sports clubs & facilities, marinas and yacht clubs and through the company’s
e-shop.
XX’s promotion plan includes a themed launch party, social media marketing
campaign as well as outdoor advertising and street marketing activities within
the launching target areas, in order the consumers to get to know the new
Nitro Cold Brew Coffee, taste it and love it.
Sales are estimated to reach £200,000 in the most likely scenario and close to
£200,000 in best case in the first year and grow at a double speed the
following years. Consumers will adopt the new coffee because it is trendy and
tasteful. It is cold brew and it’s nitro. And nitro…

Accelerates & Skyrockets you to flavor

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XX Cold Brew Business Plan

Table of Contents

Executive Summary.................................................................................... 2
The Company ............................................................................................ 4
Market – Competition ................................................................................. 4

Market Overview .................................................................................... 4
Coffee Key Trends ............................................................................... 5

The UK Market ....................................................................................... 6
Competition............................................................................................ 7
SWOT Analysis ....................................................................................... 9
Target Market.......................................................................................... 11
UK Population....................................................................................... 11
Potential Customers .............................................................................. 11
Target Areas ........................................................................................ 11
Marketing Strategy................................................................................... 13
The Product ......................................................................................... 13
Price .................................................................................................... 13
Distribution .......................................................................................... 14
Promotion ............................................................................................ 15
Action Plan .............................................................................................. 17
Financial Projections................................................................................. 19
Objectives & Assumptions ..................................................................... 19
Distribution Cost ................................................................................... 19
Promotion Cost..................................................................................... 20
Operational Cost................................................................................... 21
Most Likely Scenario Budget .................................................................. 22
Best Case Scenario Budget .................................................................... 23

Αppendix

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XX Cold Brew Business Plan

The Company

Intentionally omitted

Market – Competition

Market Overview

Coffee is the highest consumed beverage in developed countries, such as the
United States and European countries. It is the second most traded
commodity, after crude oil, in the world. It is produced almost exclusively in
the developing world, which includes about 17 least developed countries. The
coffee-producing nations are increasing their domestic consumption.

Coffee is worth over $100 billion worldwide. Worldwide, we drink over 500
billion cups of coffee every year of that 14 billion are Italian espressos.
Global coffee consumption (2015) is estimated to 155.71 million 60kg bags

Arabica and robusta are the two main commercially grown and sold coffee
beans. Arabica is the more common type of bean grown (70 percent of coffee
is Arabica), and it’s considered more flavorful. Robusta is hardier and
cheaper, most commonly seen in instant coffee jars.

Demand for coffee is strong in many countries, particularly in traditional
markets (Canada, EU, Japan, Norway, Switzerland, USA, others) but the
biggest potential is in emerging markets (Algeria, Australia, Russia, South
Korea, Turkey, Ukraine, others) and coffee exporting countries.

The people aged between 19 and 34 years account for the highest coffee
consumption. About 44% of the United States coffee demand comes from the
millennials. In eight years, through 2016, the daily consumption among 18 to
24-year-olds increased to 48% from 34% while, it increased to 60% from
51% among the population aged 25 to 39 years, as reported by the National
Coffee Association in New York.

Moreover, adults aged 60 years and above witnessed a decrease to 64% from
76 %, including the 40 to 59 age group. The advancing café culture is
becoming a “fashion symbol” and is driving the coffee consumption. Further,
other factors such as the availability of wide-range of coffee type, flavors and
brewing styles, rising urbanization & disposable incomes and increasing
number of food outlets, retail stores and cafes are driving the global coffee
market growth. However, the price fluctuation of coffee beans and climate
change, leading to supply shortage, are restraining in the market.

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XX Cold Brew Business Plan

The Top 10 Coffee Consuming Countries (2013) are:

1. Finland: 9.6 kg per capita

2. Norway: 7.2 kg per capita

3. Netherlands 6.7 kg per capita

4. Slovenia: 6.1 kg per capita

5. Austria: 5.5 kg per capita

6. Serbia: 5.4 kg per capita

7. Denmark: 5.3 kg per capita

8. Germany: 5.2 kg per capita

9. Belgium: 4.9 kg per capita

10. Brazil: 4.8 kg per capita

USA is no 22 with 3.1 kg per capita and the UK no 40 with 1.7 kg per capita.
Over 400 billion cups of coffee are consumed every year.

Coffee Key Trends

The ready-to-drink coffee demand is rising. The falling popularity of soft
drinks, including the caffeinated colas, are the driving sales of ready-to-drink
coffee. The pattern of on-the-go consumption is increasing the ready-to-drink
coffee demand, therefore, encouraging the top players to enter the ready-to-
drink sector. The Dunkin Brands partnered with Coca-Cola, in 2016, to bring a
new line of cold coffee beverages to retail in 2017.

Nitro Coffee is another key product trend that interests consumers. Nitro
coffee is poured from a tap and provides a mouthfeel similar to that of beer.
The foamy and creamy texture of nitro coffee allows brewers to add less milk
and sugar to cut off the bitter taste. Moreover, it appeals more to the health-
conscious coffee drinker. In addition, the texture is difficult to replicate in an
ready-to-drink coffee, giving cafes something to offer the consumers looking
for unique drinking experiences.

The Iced coffee is one of the most popular go-to drinks for the consumers
looking for a refreshing drink in summer or to get a kick of caffeine; however,
this trend is changing. The iced coffee is like the standard hot coffee as it
uses heat to extract sugars, oils, flavor and caffeine from the coffee beans,
which is further chilled & served over ice.

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XX Cold Brew Business Plan

The Cold Brew Coffee has gained popularity, over the last several years;
the cold brew sales increased to 580%, between 2011 and 2016. A large part
of these sales has been at coffee shops. A large number of retail brands are
adding cold brew products to their product line. Cold brew is different from
the traditional iced coffee. The cold brewing process uses time, instead of
heat as the beans are soaked in water for about 15-20 hours, to turn water
into coffee.

The consumption of specialty coffee is increasing as shoppers are
prioritizing experience over price in the consumption of gourmet and specialty
coffee beverages. Out of the USD 48 billion retail coffee market,
approximately 55% of spend is expected to go toward specialty coffee, in
2017, according to the Specialty Coffee Association of America.

The UK Market

UK is among the countries with the fastest growing coffee market which is
still thriving and innovating to stay ahead, according to new research.

The latest European – wide report, ProjectCafe2017 Europe from analyst
group Allegra World Coffee Portal, found that the UK, Greece and Turkey
showed the biggest growth in the coffee market over the last 12 months of
2016.

UK was also highlighted as the model for the branded coffee shop industry as
the most developed Market in Europe according to the report. Despite a
slight slowdown from 9% growth a year earlier overall the European coffee
Market - over 25 countries - had grown just over 6% over the past 12 months
adding 1,268 outlets in 2016.

Over the past six years, the landscape of coffee shops in the UK has shifted
dramatically — much to the delight of coffee-loving British. Nowadays, brands
like Starbucks and Costa are household names, with outlets found in the
majority of British towns and cities.

However, less than ten years ago, the number of these big-player coffee
shops was considerably less. Costa’s growth is perhaps the most impressive
— back in 2010, the chain had 658 coffee shops in the UK. In just a five-year
period, that figure had grown by more than double to 1,582.

Although widely regarded as one of the world’s biggest brands, the number of
Starbucks coffee shops in the UK is surprisingly low. In 2010, there were 595
outlets. By 2015, this figure had grown by just 124, taking the total to 719.
While still dwarfed by Costa’s market share, the increase still illustrates our
growing love affair with coffee.

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XX Cold Brew Business Plan

In fact, all of the UK’s big coffee brands, including Caffè Nero, Pret A Manger
and Wild Bean Cafe have witnessed growth in their number of retail outlets.

Other brands are trying to get a cup of the action too. Greggs has been
steadily introducing coffee to their offering, growing the number of shops
serving coffee from 1,269 in 2010 to 1,621 in 2015.

In fact, as of 2015, 39 percent of the coffee market was occupied by non-
specialist outlets, like pubs and supermarkets.

It’s no secret that pubs are struggling to keep up with the changing economic
climate. The Campaign for Real Ale (Camra) reports that an average of 27
pubs are closing each week, with 1,088 shutting their doors between June
and December 2015. The attachment of pubs to the thriving coffee industry
works to underline the popularity and success of the shops.

Naturally, the growth in coffee shops is fuelled by a growing demand for java.
According to research from Mintel, almost three quarters of Britons now buy
coffee when out and about. This lifestyle is most popular in the 16-34 age
category, with 81 percent doing so.

Further research from Kantar Worldwide found that 80 percent of coffee shop
fans visit an outlet at least once a week. Some 16 percent of hardcore coffee
lovers visit every day.

British consumers drink an estimated 55 million cups of coffee each day in the
country spending nearly £79 billion. Over the course of the year, around two
billion of these cups come from coffee shops. In 2015, spent £7.9 billion was
spent in UK coffee shops. Showing a 10 percent increase on the previous
year, this expenditure is set to soar again in the coming years.

Allegra predicts that by 2025, coffee shops in Britain will achieve a £15 billion
turnover. To support this growth in revenue, the number of outlets is
expected to expand too. The 20,728 coffee outlets recorded at the end of
2015 is set to grow to in excess of 30,000 shops.

Competition

XX’s competition is indirect and direct. Indirect competition is coffee
consumption at homes, facilities other than home and coffee shops. Direct
competition comes from ready to drink coffee - ice and cold brew coffee.

Total coffee market in the UK is estimated to be £79 billion (20.1 billion cups)
with 10% of that spent in coffee shops.

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XX Cold Brew Business Plan

Cold brew market is emerging in the UK as a result of its success in America
and the move towards premium coffee.

Major direct competitors are Cool Cold Brew Coffee, Brass Monkeys Cold
Brew, Sandows, Point Blank Cold Brew Coffee, KARACHO, Brew Lab Cold
Brew, Frank and Earnest and Kohana Coffee. All these are present in the UK
market either in physical points or online.

Also, there is a number of US brands that sell online and potentially may play
a more competitive role in the UK market, such as Lucky Jack Double Black
Nitro Cold Brew Coffee, High Brew Coffee Black & Bold, Califia Farms Cold
Brew Coffee, La Colombe Pure Black, Chameleon Cold-Brew, Stumptown Cold
Brew Coffee, Caveman Coffee Nitro Cold Brew, Villa Myriam Nitro Cold Brew,
Seaworth Coffee Co. Single Fin Sludge, Slingshot Coffee Co. and Death Wish
Coffee Co. (see full details in Appendix).

Prices vary from £2.5 to £4 for 200ml - 250ml volume cans or bottles. (see
full details in Appendix).

Since, there is a great interest in this particular market, big beverage and
coffee players are preparing or already taking the next step. All these could
lead to cold brew coffee RTG, since market researches show that this is the
new trend: Starbucks already launched the new cold brew coffee in UK and
partners with Pepsi, dr Pepper partners with High Brew and Coca Cola with
Illy.

Germany, which has the largest iced coffee market in Europe, has seen
strong growth in the market for chilled products, according to Innova Market
Insights.

Swiss milk processor and dairy products company Emmi has been a “pioneer”
in this area with its Caffe Latte range, according to Innova Market Insights.
Germany is one of Emmi’s key markets, although the range is also available in
other European countries and in the US. The range, which comes in a
characteristic cardboard cup with a snap-on lid, now encompasses a range of
flavour variants. It was relaunched across Europe in early 2013, with the 2012
limited edition Tahitian Vanilla variant becoming a permanent fixture in the
range under the name Vanilla. At the same time, a new limited edition New
York Caramel flavour was introduced.

The Emmi Caffe Latte range faces competition from other chilled lidded cup
lines in Germany, according to Innova Market Insights. The premium dairy
and ice cream brand Movenpick has a line of similar products, made under
licence by dairy company J Bauer. This range was extended in 2012, with a
Caffe Colombia variant sweetened with stevia. The Landliebe range from

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XX Cold Brew Business Plan

Dutch dairy co-operative Friesland Campina was also launched in the first half
of 2012.

As well as these brands, Germany and other European countries also saw the
launch of Starbucks Frappuccino range, under license from global dairy
company Arla Foods, as well as the Illy Issimo joint venture set up by Coca-
Cola and Illycafe in 2007 to develop premium Coffee RTD products. The
Starbucks Discoveries range in lidded cups has been joined by fair-trade
Coffee RTD specialities (Coffee, Mocha, Chocolate and Vanilla) in 250mL
bottles, marketed as “perfect for consumption on the go”.

Illy Caffe’s Issimo canned coffee drinks range, launched in the US and Greece
in 2009 and now available in 17 countries, was also introduced in the UK in
2011 in Caffe, Cappuccino and Latte Macchiato variants.

Unilever’s Café Zero range in Spain is made up of a frozen blend of coffee and
ice cream.

Café Pret a Boire from Lutin Malin in France, claimed to be the first RTD
coffee that can be drunk hot, cold or iced.

According to Innova Market Insights, the UK has also seen a number of new
entrants to the iced coffee market over the last year or so. International food
and beverage manufacturer Mars launched two Galaxy branded ambient
coffee drinks in lidded cups in mid-2012.

Smaller specialist brands have also been able to create space for themselves,
according to Innova Market Insights. Jimmy’s Iced Coffee, launched in 2011,
claiming to be the only chilled Coffee RTD made with British milk. The
Company has since introduced a range of standard and more “exotic” lines,
including the limited edition Gingerbread flavour, introduced in the European
autumn in 2012, and a decaffeinated variant in a 330mL screw-top carton,
which was introduced in April 2013.

SWOT Analysis

Based on the market and competition data, we will evaluate the elements of:
 Strengths, that is the characteristics of the product and business that
give it an advantage over others,
 Weaknesses, that is the characteristics of the product and business that
place it at a disadvantage relative to others,
 Opportunities, that is the elements in the environment that the product
and business could exploit to its advantage and
 Threats, that is the elements in the environment that could cause
trouble for the product and business.

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XX Cold Brew Business Plan
SWOT analysis is synopsized at the following table.

Strengths Weaknesses

 Few brands at the time in UK  New product.
market.  New market entry.
 Other brands with lower price.
 Few competitors at the time in  Not already build distribution.
UK market.

 Average RRP.
 Dynamic and adaptive target

group.
 High disposable income target

areas.
 Can instead of glass bottle

gives edge to a RTG product.

Opportunities Threats

 New product in the coffee  Big players are in or entering
market. the market.

 Growing international trend.  Short summer period for the
 Growing international and local UK.

market.  Lots of US brands can easily
 British consumer willingness to enter the UK market.

try new types of coffee.  Growing trend in the European
market.

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XX Cold Brew Business Plan

Target Market

UK Population

(www.ons.gov.uk/census)
The population of the United Kingdom at 30 June 2015 is estimated to be
65,110,000, consisted of 32.1 million males (49.3%) and 33.0 million females
(50.7%).

Potential Customers

Potential customers will be affluent sporting consumers with larger disposable
incomes. Customers will be males and females aged 20- 35.
Age 20-35 population is estimated to be 14,000,000, or 21.5% of total
population.

Target Areas

XX’s target market areas are Cambridge, Oxford, Cheltenham, Isle of Man as
well as areas under the postcodes of W1S 1HE, W1S 2EX, SW1E, W1J, W11,
SW7, SW3, SW1W, W1K, W8 and SW1X.
General and target population of these areas is shown on the following table.
(http://www.postcodearea.co.uk)

Area Population Target

Cambridge 123.900 26.639
Oxford 150.200 32.293
Cheltenham 110.013 23.653
Hanover Square (W1S 1HE)
Savile Row (W1S 2EX) 10.575 2.274
10.575 2.274

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XX Cold Brew Business Plan

Area Population Target

(SW1E) 10.828 2.328
(W1J)
(W11) 10.575 2.274
(SW7)
(SW3) 12.759 2.743
(SW1W)
(W1K) 9.270 1.993
(W8)
(SW1X) 8.839 1.900
Isle of man
Total 9.369 2.014

9.270 1.993

8.178 1.758

8.839 1.900

87.780 18.873

580.970 124.909

Out of the total 580,970 people living in these areas, XX’s target market is
124,909 males and females aged 20-35 years, which counts for 21.5% of
total.

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XX Cold Brew Business Plan

Marketing Strategy

The marketing strategy consists of the 4 P’s that is Product, Price,
Place/Distribution and Promotion.

The Product

XX is a unique Nitro Cold Brew Coffee. Nitro cold brew coffee is cold brew
coffee charged with nitrogen to give it a rich, creamy head, similar to
nitro draft beer like Guinness.
During the cold-brew process, time replaces heat. A roasted coffee bean
contains many compounds that are extracted during the brewing process.
Some of those compounds, including certain oils and fatty acids, are soluble
only at a high temperature.
During the cold brew process, coffee beans are never exposed to high
temperature. Cold water brewing extracts the delicious flavor compounds
(and some of the caffeine) from coffee beans, but leaves behind myriad bitter
oils and biting fatty acids, including undesirable elements such as ketones,
esters and amides. So, no need for milk or cream to soften the acidic taste.

Price

The product will be sold at £1.3 wholesale price while its recommended retail
price will be £3 per 250 ml can. Competitor prices vary from £2.5 to £4 for
200ml - 250ml volume cans or bottles.
The company’s pricing strategy for the new product is average price for
market penetration and market share capture.
Ex –factory price of the product is £0.38 at a 300,000 volume per year.
Transportation adds another £0.02 so, total cost is £0.40 per can.
Wholesale gross profit margin is 69.23% while Retail gross profit margin is
86.6%.

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XX Cold Brew Business Plan

Distribution

Point of Sale

The new product will be sold at:

 Premium grocery stores.
 Pubs.
 Restaurants.
 Sports Clubs.
 Sports Facilities.
 Sports Events.
 Marinas and Yacht Clubs.
 Festivals and Concerts.
 Company’s e-Shop.
 Exports.

Sales Representatives

A detailed list will be prepared containing all possible retailers at the target
market areas of Cambridge, Oxford, Cheltenham, Isle of Man and London
W1S 1HE, W1S 2EX, SW1E, W1J, W11, SW7, SW3, SW1W, W1K, W8 and
SW1X.

The sales representative will present the new product, give away samples and
will take orders.

Initially – Year 1, one sales person will be hired to cover the target areas. The
total annual cost will not exceed £45,000 and will consist of £1,200 monthly
salary plus commissions.

In Year 2, another sales person will be added with the same compensation.

Direct and Internet Sales

Direct and Internet sales will commence in the second year of operation.

Warehouse

Ware house for storing products ready for distribution will be located in
London and will cost £12,000 per year.

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XX Cold Brew Business Plan

Promotion

Based on the product’s characteristics, the target market, the target areas and
the considered points of sales, promotion will be deployed in several levels.

Point of Sale List

A detailed list of all points of sales within the target area will be prepared.
The list will include (if possible) contact name, phone number, address and
email.

First Contact

An initial contact will be made with all (if possible) point of sales list contact’s
in order to communicate the new product and the rep’s visit.

Product Placement

After initial contacts, the rep will ensure that the product is placed at the
points of sale.

Coffee Samples

An adequate number of samples will be offered to point of sales contacts,
party quests, etc. Also samples will be sent along with the kit to newspapers
and magazines.

Meetup.com

Set up a meetup.com networking group for coffee / cold brew coffee lovers.

Launch party

A themed launch party will be organized. Guest list will include Sports and
Social, club members, celebrities, bloggers, Yacht and Lifestyle magazines,
radio presenters, newspaper editors, lifestyle columnists, etc. The party can
alo include an entertainer who will pull in the right audience, demographic
make the night fun with espresso martinis being the leading drink on the
night.

The party could be also a day party at a marina or a sports club with maybe a
sports celebrity invited.

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XX Cold Brew Business Plan

Finally, the party can be in collaboration with a sporting goods or a luxury
goods firm.

Photos

Photo shoot with the branding demographics - high end establishment for
bars potential mixed with espresso martinis video, photo’s on yacht’s, super
cars big watches.

News/Press release

Right after meetup.com networking group and the themed launch party,
news/press releases will be sent to news papers, magazines, blogs, facebook,
sites, etc.

Press Kit

A press kit will be build with product details and photos, for newspapers and
magazines.

Product Brochure

A product brochure will be prepared with details and photos.

Social Media Setup

Social Media will be set up, that is instagram, facebook, etc.

Social Media Campaign

A social media marketing campaign will be released - including video,
targeted only in target market areas. The video could be animated 2d/3d
cartoon similar to red bull’s type of style with characters or some real summer
mood type like https://www.youtube.com/watch?v=BtrZcbshYSk adding a
couple of yachts, etc.

Outdoor Advertising and Street Marketing

Outdoor advertising and street marketing activities, situated within the
demographic locations. Initiate a viral street social media campaign, giving
away samples and stopping people that fit the product demographic. Also, a
free sample goodie bag give away can be planned in exchange for their
contact number and email in order to start a whatsapp group and add them
to the XX social media ie instagram or facebook, for invitations to the XX
exclusive social events & parties.

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XX Cold Brew Business Plan

Also, a street sports event can be organized in collaboration with a sporting
goods firm. This could lead to a XX street sports league type of event. Phone
numbers and emails can be collected from the participators.

Action Plan

Based on the promotion strategy, certain actions have to be taken by the
assigned team members.

Meetup.com by “date”

Chris to start up a meetup.com networking group for coffee/cold brew coffee
lovers where he can start to share his own story and the journey he has been
on these meetup events should be recorded.

Launch party by “date”

John will organize the themed launch party securing a venue. Guest list will
include Sports and Social, club members, celebrities, bloggers, Yacht and
Lifestyle magazines, radio presenters, newspaper editors, lifestyle columnists,
etc.

Coffee Samples by “date”

John will calculate the number of samples needed for rep and newspapers &
magazines.

Sales Representative (s) by “date”

John should see that sales representative(s) and/or agency are hired and
trained in order to start promoting the new product give away samples and
take orders. Also should see to products brochure with details and photos.

Product Placement by “date”

John should see and check that sales representative(s) and/or agency have
placed the product at the points of sale.

News/Press release and Press Kit by “date”

John will prepare and send news/press releases and press kit to newspapers,
magazines, blogs, facebook, sites, etc. Also, should work with X-Social
Media Campaign for product photos.

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XX Cold Brew Business Plan

Point of Sale List & Contact by “date”

John will list of all points of sales within the target area. The list will include (if
possible) contact name, phone number, address and email. Then an initial
contact will be made with all (if possible) point of sales list contact’s in order
to communicate the new product and the rep’s visit.

Social Media Setup by “date”

John will set up social media instagram, facebook, etc pages for the new
product.

Social Media Campaign by “date”

John will initiate a social media marketing campaign - including video,
targeted only in target market areas. Also, should get 30 sample prototype
sleeves made up Steve - (NDA) which will enable to start the photo shoot &
video’s earlier.

Photos by “date”

John will see to photo portfolio creation for all promotional uses. Especially for
branding demographics photos should find fashion social media influencers to
pay for ads.

Outdoor Advertising and Street Marketing by “date”

John will see to find an agency to organize outdoor advertising and street
marketing activities, situated within the demographic locations.

Names & Dates are intentionally omitted

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XX Cold Brew Business Plan

Financial Projections

The financial projections for launching the new Nitro Cold Brew Coffee are
based on two scenarios: 1) Most Likely Scenario, where customers number
are directly linked to target market and 2) Best Case Scenario, where
customers number increase by 50% due to product adaptation by more target
groups and areas. In the development of the two scenarios, only the number
of customers and therefore sales change.

Objectives & Assumptions

The product’s marketing and financial objectives and assumptions for Year 1,
2 and 3, are presented in the following table.

Objectives & Assumptions Year 1 Year 2 Year 3

Initial Target Market Capture 15% 20% 20%
New Market as % of Initial 0%
Returning Customers 15% 15% 15%
Times per month 4 15% 20%
Times per year (per month X 12) 48
Product price increase 0% 44
Distribution Cost
Promotion Cost 0% 48 48
Direct / Internet Sales
3% 3%

See table below

See table below 10% of
Total
10% of
Total

Distribution Cost

Distribution cost is the sum of expenses incurred in moving the product from
the warehouse to the points of sale.

The following table shows the distribution cost.

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XX Cold Brew Business Plan

Distribution Cost Year 1 Year 2 Year 3

Number of Sales Rep’s 1 22
£14,400
Sales Rep’s Salary £29,600 £28,800 £28,800
£1,000
Commissions (£) £ 7.989,15 £59,200 £59,200
£12,000
Travelling Expenses £2,000 £2,000
0%
Product Shipping & Handling Cost 0% £ 9.463,15 £ 12.599,84
£ 64.989,15
Warehouse rent £12,000 £12,000

Direct & Internet sales expenses 5% 5%
Direct & Internet
£1,000 £1,000
Administration Expenses
Total £ 112.463,15 £ 115.599,84

Promotion Cost

Promotion cost is the sum of all initial promotional actions and activities as
well as the cost of repeating activities. Promotion cost will include:

Promotion Cost Year 1 Year 2 Year 3

Point of Sale List £ 1.000,00 £ 1.000,00 £ 1.000,00
First Contact £ 500,00 £ 500,00 £ 500,00

Product Placement £ 2.000,00 £ 2.000,00 £ 2.000,00
Coffee Samples £ 5.000,00 £ 5.000,00 £ 5.000,00
Meetup.com £ 1.000,00 £ 1.000,00 £ 1.000,00
Launch party £ 25.000,00
Photos £ 1.000,00 £ 0,00 £ 0,00
£ 1.000,00 £ 1.000,00

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XX Cold Brew Business Plan

Promotion Cost Year 1 Year 2 Year 3

News/Press release £ 500,00 £ 500,00 £ 500,00
Press Kit
£ 1.000,00 £ 1.000,00 £ 1.000,00
Product Brochure
Social Media Setup £ 2.000,00 £ 2.000,00 £ 2.000,00
Social Media Campaign
Outdoor Advertising and £ 1.000,00 £ 1.000,00 £ 1.000,00
Street Marketing
£ 5.000,00 £ 5.000,00 £ 5.000,00
Total
£ 5.000,00 £ 5.000,00 £ 5.000,00

£ 50.000,00 £ 25.000,00 £ 25.000,00

Operational Cost

Operational Cost is all relevant operational expenses that contribute and have
an impact to product sales.

Operational Cost Year 1 Year 2 Year 3

Secretarial £ 5.000,00 £ 7.000,00 £ 7.000,00
Commercial & Accounting £ 5.000,00 £ 7.000,00 £ 7.000,00
£ 3.000,00 £ 4.000,00 £ 4.000,00
Utilities £ 3.000,00 £ 3.000,00 £ 3.000,00
Insurance £ 1.000,00 £ 1.500,00 £ 1.500,00
Office Supplies £ 1.000,00 £ 1.000,00 £ 1.000,00
£ 1.000,00 £ 1.500,00 £ 1.500,00
Travel £ 5.000,00 £ 5.000,00 £ 5.000,00
Telephone £ 24.000,00 £ 30.000,00 £ 30.000,00
Professional Services - Legal,
Consulting

Total

Page 21

XX Cold Brew Business Plan

Most Likely Scenario Budget

Year 1 Year 2 Year 3

Customers 18.736 24.982 24.982
New Customers 0 3.747 3.747
Total Customers
18.736 28.729 28.729

Returning Customers 134.901 206.849 275.798

Total Wholesale Coffee Cans 153.638 235.578 304.527

Wholesale Revenue £ 199.728,77 £ 315.438,31 £ 419.994,56

Cans sold Directly / Internet 0 23.558 30.453

Direct / Internet Sales Revenue £ 0,00 £ 72.793,46 £ 96.921,82

Total Sales Revenue £ 199.728,77 £ 388.231,76 £ 516.916,39
Total Cans 153.638 259.135 334.980

Wholesale CoGS £ 61.455,01 £ 97.057,94 £ 129.229,10
Direct / Internet CoGS £ 0,00 £ 10.676,37 £ 14.215,20

Total Cost of Goods Sold £ 61.455,01 £ 107.734,31 £ 143.444,30

Wholesale Gross Profit £ 138.273,76 £ 218.380,37 £ 290.765,47
Direct / Internet Gross Profit £ 0,00 £ 62.117,08 £ 82.706,62

Gross Profit Total £ 138.273,76 £ 280.497,45 £ 373.472,09

Operational Cost £ 64.989,15 £ 112.463,15 £ 115.599,84
Distribution £ 50.000,00 £ 25.000,00 £ 25.000,00
Promotion £ 24.000,00 £ 30.000,00 £ 30.000,00

Operational expenses

Total Operation Cost £ 138.989,15 £ 167.463,15 £ 170.599,84

Operational Profit -£ 715,39 £ 113.034,30 £ 202.872,25

Page 22

XX Cold Brew Business Plan

Best Case Scenario Budget

Year 1 Year 2 Year 3

Customers 28.104 37.473 37.473
New Customers 0 5.621 5.621
Total Customers
28.104 43.093 43.093

Returning Customers 202.352 310.273 413.697

Total Wholesale Coffee Cans 230.456 353.366 456.791

Wholesale Revenue £ 299.593,16 £ 473.157,46 £ 629.991,85

Cans sold Directly / Internet 0 35.337 45.679

Direct / Internet Sales Revenue £ 0,00 £ 109.190,18 £ 145.382,73

Total Sales Revenue £ 299.593,16 £ 582.347,64 £ 775.374,58
Total Cans 230.456 388.703 502.470

Wholesale CoGS £ 92.182,51 £ 145.586,91 £ 193.843,65
Direct / Internet CoGS £ 0,00 £ 16.014,56 £ 21.322,80

Total Cost of Goods Sold £ 92.182,51 £ 161.601,47 £ 215.166,45

Wholesale Gross Profit £ 207.410,65 £ 327.570,55 £ 436.148,20
Direct / Internet Gross Profit £ 0,00 £ 93.175,62 £ 124.059,93

Gross Profit Total £ 207.410,65 £ 420.746,17 £ 560.208,13

Operational Cost £ 68.983,73 £ 117.194,72 £ 121.899,76
Distribution £ 50.000,00 £ 25.000,00 £ 25.000,00
Promotion £ 24.000,00 £ 30.000,00 £ 30.000,00

Operational expenses

Total Operation Cost £ 142.983,73 £ 172.194,72 £ 176.899,76

Operational Profit £ 64.426,92 £ 248.551,45 £ 383.308,38

Page 23

Appendix

Compe

Product Name Variety Volume
(ml)

Cool Cold Brew 1 250
Coffee

Brass Monkeys 1 330
Cold Brew

Sandows 1 200

etitors Price Link
Remarks www.coolcoldbrew.co.uk

Ready to £2.5
drink £5/2

UK Market

Ready to www.brassmonkeyscoldbrew.co.uk
drink

UK Market

Ready to £4 www.sandows.com
drink

UK Market

Point Blank Cold 1 250
Brew Coffee

Chameleon Cold- 4 946
Brew

KARACHO cold 2 235
brew coffee

Brew Lab Cold 1 250
Brew

Ready to £2.5 www.amazon.co.uk
drink £20/8 http://www.pointblankcoldbrew.com

UK Market

Organic £12.57 www.amazon.co.uk
Concentrate www.chameleoncoldbrew.com

UK Market

Ready to €2.10 www.amazon.co.uk
drink €25/12 www.karacho-coldbrew.de

UK Market £2.10 www.brewlabcoffee.co.uk
£24.85/12 www.blcoldbrew.co.uk

Ready to £2.5
drink £30/12

UK Market

Frank and Earnest 2 250

3 473.2
Kohana Coffee

5 236.6

Lucky Jack

Double Black 5 310.5
Nitro Cold Brew

Coffee

Ready to £3 www.frankandearnest.coffee
drink
www.amazon.co.uk
UK Market www.kohanacoffee.com

Organic £8.83
Concentrate
$3.7
Ready to $42/12
drink

UK Market

Organic $4 http://www.luckyjackcoffee.com

Ready to
drink &
Concentrate

High Brew Coffee 5 237
Black & Bold

Califia Farms Cold 8 Ready 310
Brew Coffee to drink

La Colombe Pure 5 266.16
Black

Chameleon Cold- 5 295.7
Brew

Ready to $2-3.75 http://www.highbrewcoffee.com
drink $25/12
$15/4
$40/12

Ready to $3.8 www.califiafarms.com
drink & $45/12
Concentrate

Ready to $3 www.lacolombe.com
drink $12/4

Organic $4 www.chameleoncoldbrew.com
$48/12
Ready to
drink &
Concentrate

Stumptown Cold 4 310.5
Brew Coffee 355

Caveman Coffee 2 236.60
Nitro Cold Brew

Villa Myriam Nitro 1 236.6
Cold Brew

Seaworth Coffee

Co. Single Fin 1 354.90

Sludge

Organic $5.60 http://www.coldbrew.com/
$67/12 www.cavemancoffee.com
Ready to
drink

Ready to $6.25
drink & $25/4
Concentrate

Ready to $3.10 http://www.villamyriam.com
drink $27.95/9

Ready to $5 www.seaworthcoffee.com
drink $20/4

Slingshot Coffee 2 354.90
Co. 473.18

Death Wish 1 325.3
Coffee Co

Grady's Cold Brew 1 946.35

Ready to $4 www.slingshotcoffeecompany.com
drink & $12/3
Concentrate
$11
$22/2

Ready to $5 www.deathwishcoffee.com
drink $20/4

Concentrated $10 www.gradyscoldbrew.com
$60/6

946.35
Red Thread Good 3+3 &

473.18

Wandering Bear 1 2,839
Coffee

Concentrated $16 www.redthreadgood.com
$7

Ready to www.wanderingbearcoffee.com
drink
$29