The Almond Milk Case

Study

Executive Summary
Our company name:
Orlov milk ltd. i.e.
Indian subsidiary of
Almond milk(framed by
team members)
Orlov milk Ltd. plans to
enter the market with a
new product Almond
milk
Increasing
Increasing
health
health
The
challenges
it has in
consciousness
of
of
its consciousness
path are:
Indians
Indians
Increasing
Increasing the
the
awareness
awareness of
of almond
almond
milk
milk
Entry
Entry into
into the
the
competitive
competitive Indian
Indian
market
market

The research
India is a market
that consumes low
Almond milk
products. Probiotics
are widely sold
Almond milk
products are
beneficial as they
help the growth of
a bacteria in the
colon that can
improve health

Company Overview
Blue Diamond Growersis
aCaliforniaagriculturalcooperativeandmarketing
organizationthat specializes inalmonds. Founded in 1910 as the
California Almond Grower's Exchange, the organization claims to
be the world's largest tree nut processing and marketing
The
company produces almonds in various forms, including
company.
roasted almonds (under the "Blue Diamond" brand) andalmond
milk(under the "Almond Breeze" brand).
Now, the companys Indian subsidiary, Orlov (named by the team)
is trying to launch its product i.e. Almond milk and its products in
the Indian Market. As a starting point, we would like to launch the
product in the state of Himachal Pradesh i.e. Shimla.
As Himachal Pradesh has Almond farming, it would be easy for
logistics and there would not be any need for importing the raw
material. As a result, the production cost would be low. At the
same time, the competition is also very less in the case of states
like Himachal Pradesh since the presence of Amul is not

Industry Analysis

The dairy products industry in India is mainly dominated by Amul

and Cavinkare where flavored milk and other variants exist in the
market.
The total market size of this industry is approximately 10,000 crores.
The growth rate of this industry on an average is 15 percent.

Competitor Analysis
Major Competitor in this industry is Amul and CavinKare
They grab a market share of around 55%
Amuls Revenue on flavoured milk products and other variants is
approximately 3000 crores.
Cavin has mainly positioned itself in the Milkshake zone with stylish
packaging and total revenue from its sales is around 2500 crores.

Customer Analysis and Target

Consumers
The market for lactose-reduced and Almond milk dairy products
has undoubtedly risen in recent years. The dairy alternatives
market is segmented on the basis of types into soy milk, almond
milk, rice milk, and others. Almond milk is the fastest-growing
segment in the market. On the basis of formulations, the global
market is segmented into plain-sweetened, plain unsweetened,
flavored sweetened, flavored-unsweetened and others. On the
basis of application, this market is segmented into food &
beverages.
The empirical research has indicated that about 5% of the Indian
population is medically diagnosed with lactose intolerance. Although,
the figure is bloated at 15%, if we look at the self-diagnosed
population. Our target needs to be this population who have
inhibitions in consuming lactose content in dairy products and as a
result of this they feel certain biological symptoms like cramps,
nausea etc.
Also, as the sugar content of Almond milk is more. Lactose before
breaking has 0.15% sugar, but when lactose is substituted by
Almond, the enzyme is broken into glucose and galactose which have
0.75% sugar content. Hence, this milk will be ready-to-consume,

Operation
Overview
The companys operations are based
out of Shimla in the state Himachal
Pradesh.
A city with easy connectivity and vast
tourist and village population and more
than 1500 outlets to cater.
Also the Logistics and warehousing
cost and the transportation is less
costly.

Location
Our factory is located on the road of Bagh which en-route to Shimla.
Strategically this location is ideal since it is nearer to many almond farms which supply almonds to our factory.
Also, being in the outskirts of the city helps the company to employ workforce easily and manage the
transportation and warehousing.

Equipment
Equipment needed for preparing Almond milk is Almond blender
Cheese cloth or nut milk
Strainer to Strain out the pulp

Suppliers
Suppliers to the factory are the local almond farmers
Himachal has rich almond organic farms with around 500 hectares of land in
Shimla and other districts of Himachal Pradesh

Product Description
almond milk also displays a number of unique health and
nutritional benefits, which distinguish it from other products in the
milk alternatives category. Almond milk, for instance, is
particularly low in calories compared to other non-dairy milk forms
The product would be placed as a protein supplement for lactose
intolerant population. It tastes like real milk, without any synthetic
flavors and also is lactose free which doesnt impact the bowels
A standard cup (240ml) of Orlov almond milk contains just 60
calories (25 from fat), compared to 100 calories (35 from fat) in a
cup of Silk's soy milk, and 120 calories in a cup of Rice Dreams
rice milk.
half (56%) of Indian consumers are paying "high" or "very high"
amounts of attention to the ingredients being used in the food
and drinks that they buy. This highlights the point that nutritional
information, such as fat content, is likely to be a consideration for
a significant proportion of Indian consumers

Placement
PRODUCT

PRICE

PLACE

PROMOTI
ON

Promotion
Consumer education is key to promoting Almond milk brand.
Consumers have to be educated about lactose intolerance and the
various cholesterol levels in the ordinary milk drunk through various
channels, especially social media websites like Facebook, Twitter, etc.
There is a common misconception that Almond milk is not real milk
[and is artificial]. These misconceptions have to be cleared through
informative advertisements.
Highlight the history of Orlov and Blue Diamond in the field of
making dairy products and the revolution it has brought about in
United States and how good it is to be in India in the advertisement.
This reinforces the trust of consumers in the brand though its new to
India.
As already discussed, self-diagnosed lactose intolerant people are
more in number than medically-diagnosed people. To encourage
more people to diagnose the condition themselves, information may
be provided in the official website to try Orlov brand Almond milk and
find the difference themselves. This would increase the consumer
base greatly.
Rather than limiting to just Almond milk, Orlov milk can offer a range
of other products like milk shakes, ice-creams, margarine, etc.

Selling Story
Advertisement campaign may be launched with all the
necessary information about the product information
about lactose intolerance, the story of Orlov and Blue
Diamond, etc.
Information may be passed on through social media
outlets like Facebook, Twitter, etc.
The product to be placed in supermarkets,
hypermarkets, convenience stores and various other
modern outlets like online stores.
The price of the product be set a little lesser than the
market leaders like Soymilk, Rice milk etc. The market
for the product is fast-growing that a premium of 100%
over regular products may be charged. But, to offer
better competition to existing players and gain ground
a premium of anywhere around 25% should be feasible.

Financials
Land and Building: INR

Fixed Costs: INR

10000000

40,00,000
Land:

INR 9,50,000

Site Dev: INR 50,000

Building: INR 30,00,000

Factory Overhead:INR
750000
Admin Overhead: INR 250000
Sales Expenses: INR 1500000
Total Overhead: INR 2500000
Total Fixed Capital :INR

Plant and machinery :INR

50,00,000

Other FA: INR 10,00,000

Office equp

200000

Prelim exp

160000

Pre op exp

640000

1 Crore

Cost

: Operations(Annual)

Total RM cost = 20000*350 = 70,00,000

Almond
Water
Cream
Packing
Logistics

50,00,000
:
5,00,,000
:
10,00,000
:
50,000
:
4,50,000

Employee
Staff

(1020,00012) : INR 24,00,000

Depreciation of Equipment : INR 690000(in Year

1)
Utilities: INR 120000
Total: INR 1,02,10,000

Other consideration
Depreciation @ 5% on building

@ 10% on machine

@ 20% on office equipment

Rate of interest @ term loan 22%
@ working capital 20%
Repayment of loan start from first year

Depreciation chart
Depreciation
table(Written
down value
method)

Plant
and
Machine
ry

Land and
Building

Off eqp

WDV

Total
Dep

DEP

WDV

DEP

WDV

DEP

Y1

150000

800000

500000

4500000

40000

160000 690000

Y2

40000

760000

450000

4050000

32000

128000 522000

Y3

38000

722000

405000

3645000

25600

102400 468600

Y4

36100

685900

364500

3280500

20480

81920

421080

Y5

34295

651605

328050

2952450

16384

65536

378729

Working capital
term

mm

Total

bank

promoter

RM

2m

25

1200000

900000

300000

Overhead

2m

100

420000

420000

Utility

1m

100

10000

10000

Wages and Salaries

1m

100

200000

200000

Work in Progress

1w

40

1000000

600000

400000

Finished Good

2w

40

2000000

1200000

800000

Credit Sales

1m

25

4000000

3000000

1000000

8830000

5700000

3130000

Profitability Projection

I year
II year
III year
Capacity Utilization
100
100
100
Sales and revenue P.A @ 5000000
5000000
Rs. 20/pkt
0
0
50000000
1096000
1079200
Cost of Production
0
0
10738600

IV year
100
50000000

50000000

10691080

10648729

Administrative
Expenses
Salaries
Postage, Telegram,
telephone etc.
Selling Expenses
EBIT

2400000

2400000

2400000

2400000

2400000

250000
1500000
3489000
0

250000
1500000
3505800
0

250000
1500000

250000
1500000

250000
1500000

35111400

35158920

35201271

835211.52
583680
33740028.
48
16870014.
24
16870014.
24
421080
17291094.

651464.98
56
466944
34082862.
01
17041431.
01
17041431.
01
378729
17420160.

Financial
Expenses
Interest on Term Loan
Interest on Bank Loan
EBT
Provision for Tax 50%
EAT
Depreciation(+)

V year
100

1760000
1140000
3199000
0
1599500
0
1599500
0
690000
1668500

1372800
912000
3277320
0
1638660
0
1638660
0
522000
1690860

1070784
729600
33311016
16655508
16655508
468600

Funding requirement
Term loan (80% of F.C):
Rs 80 lakhs
Bank loan for working capital: Rs 57 lakhs
Self financed capital:
Rs 51.3lakhs

Total capital required : 188.3 lakhs

THANK YOU