Institute of Management, Nirma University

Integrated MBA Batch 2017-22Semester – IX

Project Planning and Control

GROUP ASSIGNMENT

Submitted to:
Prof. Ritesh Patel
Submitted by:
Group Number 6
Name Roll No.
Devlina Bajaj 177111
Himanshi Naryani 177119
Samiksha Kakwani 177144
 Acknowledgement
We would like to offer our deepest gratitude to all those people who not only gave us this
wonderful opportunity but also helped and assisted us in completing this report. The
completion of the Project Planning and control Group Assignment gives us much delight and
satisfaction. We would firstly like to extend my gratefulness to Prof. Ritesh Patel, (Faculty:
PPC Subject) for his constant assistance at all the levels of the training and his generosity in
clarifying all our doubts and concepts, which not only helped us in conceptual clarity of the
respective topics but also proved to be a great aid in learning about the market , technical and
financial fundamentals related to this assignment. Moreover, his guidelines also served as an
unending and provided a robust foundation to the completion of our report. Further it becomes
imperative to mention the crucial role of the other staff members as well of the institute which
provided us a platform to undertake a research study like this. We would also like to offer our
deepest regards to all those people who have directly or indirectly guided us in this project and
also gave us a zeal and deep inspiration in continuously improving our tasks.
Contents
Introduction ........................................................................................................................................ 1
Indian Superfoods Industry .............................................................................................................. 1
Preferences and Buying Behaviour ................................................................................................... 3
Technical Analysis .............................................................................................................................. 5
About the Product ............................................................................................................................. 5
Manufacturing Process of Fox Nuts ................................................................................................. 5
Factors Affecting Location ............................................................................................................... 6
PEST Analysis..................................................................................................................................... 7
Marketing Analysis ............................................................................................................................ 8
Marketing Strategy ............................................................................................................................ 9
Segmentation .................................................................................................................................... 9
Positioning ...................................................................................................................................... 10
Targeting ........................................................................................................................................ 10
4P’s Of Marketing ............................................................................................................................ 11
Product............................................................................................................................................ 11
Place ............................................................................................................................................... 11
Promotion ....................................................................................................................................... 11
Price ................................................................................................................................................ 11
Financial Analysis............................................................................................................................. 13
Key Financials ................................................................................................................................ 13
Weighted BEP .................................................................................................................................... 16
Cost of Capital .................................................................................................................................... 16
Capital Budgeting ............................................................................................................................... 18
Conclusion ......................................................................................................................................... 19
References ............................................................................................ Error! Bookmark not defined.
Introduction
Superfoods are food items that are rich in nutrition and beneficial for maintaining health. These
foods contain high minerals, vitamins, fibres, fatty acids, antioxidants, etc. Such foods include
fruit, vegetable, seeds, herbs, grains, roots, etc. which help in boosting immunity, metabolism
and improve energy levels.

Consumers have become more health conscious which has led to the increase in demand of
Superfoods. There is high prevalence of obesity, heart-related diseases, diabetes and other
diseases that is catalysing the demand of the product. Post pandemic, people have shifted to
healthier options and have started incorporating Superfoods in everyday meals. People are
including plant sourced ingredients like soybean, sunflower seeds, pumpkin seeds, chia seeds,
flax seeds, watermelon seeds, etc. to stay healthy and this is driving the market.

Further, prevalence of social media is influencing the choice of the consumers as celebrities
and number of influencers are promoting benefits of Superfoods leading to increase in demand
of the product.

Superfoods market is a highly competitive market which is driven by consumer demands and
needs. There are various opportunities for new entrants owing to continuous shift of the
consumers towards healthy foods.

Indian Superfoods Industry

There was a time when Indian market was completely alienated from organic and Superfoods.
But now, almost every supermarket and Kirana store in the country offer Superfoods for
various brands.

According to an EY report, the organic and Superfoods market has grown from INR 675 crore
in 2009 to INR 40,000 million within 10 years with an annual growth of 25%. India is second
largest exporter of organic and Superfoods in Asia after China. Current domestic market has
achieved the estimation and is expected to increase by INR 100,000 million to INR 120,000
million in coming years.

Sudden outbreak of coronavirus has led to change in consumer behaviour. Consumers are
inclined towards online retail stores for buying Superfoods than brick and mortar channels.

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The above figure shows the consumption pattern of the consumers. Conversations during
Covid-19 were focused on themes like food as immunity boosters, quarantine snacking, etc. A
survey has shown that Gen Z has become extremely conscious about their health, that is, 78%
of them are conscious eaters and 56% follow diets. This generation followed a strict diet even
during lockdown and despite continuous effort 74% are gaining weight.

Pandemic came as a boon for Superfoods as there was extensive demand for these goods. In
European Region, there is a paradigm shift towards healthy and Superfoods like chia seeds and
quinoa. In America, nine out of 10 people want to learn more about foods and their health
benefits.

Post Covid, people are shifting to healthier options. Demand for organic and Superfoods has
increased by 25% and is expected to grow by 40%. Immunity is the new buzz word apart from
health. People want to stay healthy and fit in order to fight with various dangerous diseases.

Mintel GNDP (Global New Products Database) shows that between 2011 and 2015 the demand
for products containing Superfoods increased by 202% globally.

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Preferences and Buying Behaviour
Since the pandemic, global food industry has been under pressure to adapt changes with the
change in demand. There are six consumer behaviour thresholds-

• Health-minded buying
• Health Management
• Pantry Preparation
• Restricted Living
• Living normal life
• Quarantined Living Preparation

All these changes led to increase in consumption of healthy food consumption with are rich
in nutrition and promote immune health such as chia seeds, flax seeds, pumpkin seeds which
are rich in antioxidants, minerals, etc.

Consumers are now focusing more on foods that work as a stress relief and are rich in
nutrients and have medical benefits as well. It is imperative for food companies to understand
the need of the consumers as to what they want during stressful times. As consumers’
awareness continues to rise, that there is a connection between health and food, this trend will
soon become a norm. Consumers are incorporating Superfoods in their diets to give
themselves wide range of protection and to stay healthy.

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Preferences

Mintel Research reveals that foods and drinks that contain chia seeds has risen by 70%, foods
with pumpkin seeds has increased by 27% and with sunflower seeds and grown by 22%.

• Flax seeds- These seeds contain Omega-3 fatty acids which prevent consumers from
heart disease, stroke, hypertension, depression, etc. These seeds are rich in minerals,
calcium and protein.
• Quinoa- Contains copper, iron, magnesium and phosphorous. They are rich source of
protein and manganese.
• Nuts- Loaded with vitamins and minerals like almonds, walnuts, etc. These nuts
improve good cholesterol and lower bad cholesterol.
• Berries- Strawberries, blueberries, etc. work as antioxidants and therefore reduce the
risk of heart disease, and other inflammatory conditions. One of the most effective ways
to treat digestive and immune related diseases.
• Fox Nuts- Fox nuts are lotus flower’s seed. These nuts are low on saturated fats and
Sodium and high on Magnesium, Potassium and helps in controlling high blood
pressure and diabetes too.

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Technical Analysis
About the Product
The company would be offering 5 products for now-

1. Fox Nuts
2. Flax Seeds
3. Chia Seeds
4. Pumpkin Seeds
5. Sunflower Seeds

Manufacturing Process of Fox Nuts

After we have received the harvested Makhana seeds from the farmers, following steps will be
followed-

• Sun drying and Storage- Cleaned seeds will be sun dried for 2-3 hours, so that the seeds
lose the moisture of around 31% for easy transportation and storage. Storing fox nuts
is a problem as they cannot be stored for a very long time even under ambient
conditions. In order to store them, it is important to sprinkle some water at regular
intervals so that they remain fresh.
• Size Grading- The seeds would be graded based on their size so that they are heating
uniformly during roasting. They are graded in 5-7 different sizes.
• Pre-heat- These sun-dried nuts are heated in earthen pitcher and the temperature of the
pan varies from 250° C – 3000° C. this reduces the moisture to 20 percent.
• Tempering- These pre-heated seeds will be stored for 48-72 hours at ambient condition
so that the kernels are loosen within the seed coat.
• Roasting and Popping- The most laborious task. Approximately 300 grams of pre-
heated and tempered nuts will be taken and roasted in an iron pan. In about 2 minutes
a cracking sound would be heard. The roasted seeds will be then scooped out by hand
on a hard surface and then pressure will be applied so that the hard-shell breaks and the
Makhana pop come out.
• Polishing- This step is to ensure that the fox nuts look whiter. This step would be done
by rubbing the pops against bamboo in a basket.

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 • Grading- The popped nuts would be graded in two grades where one would be lava,
that is, nuts which are swollen and a little reddish and another would be thurri, that is
nuts that are semi popped and reddish.
• Packaging- We will be packing Fox Nuts in a stand-up zipper pouch for the consumers
as it would protect the nuts from moisture and light and consumers will be able to store
them for longer period of time. Gunny bags with polythene lining will be used to supply
to the businesses who want to sell the product under their brand name.

Tools and Equipment

This Makhana machine has the capacity of 25-30 kg/hr. and is 90% efficient. The machine is
divided in two parts, one is roasting unit and second is popping unit. For the roasting unit, the
temperature and the duration of the roasting is controlled electronically whereas the feed rate
is controlled mechanically. This part of the machine is used for both initial roasting and for
final popping step.

The popping unit of the machine has hard impact surface. When the seeds strike the impact
surface, the shell breaks and because of sudden pressure the shell breaks. This side can also be
used for producing Makhana flour for food applications.

Factors Affecting Location

• Proximity to the Consumers- The facility will be based in GIDC Ahmedabad. The target
audience is urban and semi-urban areas of Gujarat, Madhya Pradesh and Rajasthan.
Therefore, the proximity will be high.

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 • Labour- To run the facility to its full efficiency, both skilled and unskilled labours will
be required. Skilled labours like engineers, managers will be hired for better
functionality of the departments and for smooth running of the production. Unskilled
labours will be needed for carrying the manual task involved in the production.
• Raw Materials- The procurement of raw materials for these five products would be easy
from the chosen location. Flax crop is generally grown in Madhya Pradesh,
Chhattisgarh, Maharashtra, Rajasthan, etc. Fox Nuts raw materials can be procured
from Madhya Pradesh and Rajasthan.
• Economies of Scale- The capacity of the plant in the initials few years would be 50%
which will gradually be increased to 70% and from five years and beyond, the facility
will run on 90% capacity. We will be able to achieve economies of scale by 90%
production capacity and constant supply of raw materials.

PEST Analysis
Economic Factors- Consumers lying in high- and middle-income group will be targeted for
such products. Since, people are switching to healthier options, market for Superfoods will be
rising. Taxation and consumer spending will affect their choice but people are switching

Social Factors- Food trends are changing. Immunity and healthy are the new buzz words.
Consumers are stress eating and during that time, they are shifting to the healthier options like
Superfoods as they are not only fulfilling but also healthy.

Technological Factors- With technological advancements, we can reach to a greater number

of people. Through social media and influencer marketing, awareness can be spread about the
health benefits of Superfoods. An online shop can be set up in the later stage to deliver the
products to the consumers’ quickly.

Political Factors- One of the most tightly regulated industry. Regulations related to food
storage facilities, etc. will affect the political environment while starting the business.
Government should promote the Superfoods and organic industry owing to its health benefits.

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Marketing Analysis
Name of our brand-
The name of our brand is Vitaminds.
The packaging of our product will look like-

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Marketing Strategy
Segmentation
The growing consumer health consciousness coupled with increasing awareness towards
nutritional benefits of super foods is primarily driving the market growth of this category
moreover the high prevalence of obesity, diabetes and heart related medical ailments due to
complicated lifestyles is also helping with the demand for super foods.

Changing consumer inclination from conventional food products towards gluten-free and
vegan foods has also led to the emergence of newer product variants such as Soya bean,
flaxseeds, Chia seeds, granola et cetera.

When we talk about key market segmentation of the global super foods market it can be
categorised into various categories based on product type, application and distribution
channels. Break up by product type can be on the basis of the fruits, vegetables, grains and
seeds, herbs in Russia, meat and others. Break up application can be into bakeries, beverages,
supplements, ready to eat foods and others whereas break up by distribution channels can vary
from supermarkets to convenience stores to specialty stores to online sales and others. As we
can witness from the information stated above, there are various categories of super foods that
can fit into various budgets and also according to availability of the food in that place. So, it is
safe to say that we will approach the complete market for super foods as the categories inside
it caters to mostly every specification.

However different kinds of super foods will be marketed to different categories of market
segment. Like for example according to demographic market segments, we will market the
products like herbs and roots and seeds and meet to them according to what their income
bracket is. If we talk about geographic segmentation, the products will be categorised according
to the products available in the place of promotion and also the climate and though food and
water conditions of the place. For behavioural segmentation here we will cash in on customer
loyalty with increased brand interactions.

However, if we have to categorise the customers, demographically about 30% are aged between
25 to 34 and about 19% are aged between 35 to 44 years old. Also, the super foods audience
includes females with about 68% women in the target audience. This shows that the marketers
need to target millennials as they are leading the baton of change in health and wellness and
also accepting new trains and products being introduced in the market.

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Positioning
From a bird’s eye point, positioning refers to the place that a brand occupies in the mind of its
customers and potential customers it is a strategy to establish the image of the brand of the
product in the customers mind sets and also creates a perception of the same in relations to its
competitors. With super foods, the brand generally wants to incept in the minds of the
customers and potential customers that it enhances their brain and body. It also needs to be
positioned as a product that can provide more health benefits in lesser consumption. It can also
be placed as a substitute for the benefits derived from non-vegetarian food for the vegetarians
like protein derived from oats or broccoli or even plant-based protein powders. They are
basically to be seen as food with very high nutritional density.

The increased health awareness associated with consumer willingness to experiment has led to
the development of super foods and the demand for these extracts helps in the positive impact
on health. We must also emphasise that it plays an instrumental role in minimising the risk of
chronic diseases and contributing to a healthier lifestyle.

Targeting
Targeting in marketing involves breaking the target audience into segments and deciding upon
the activities that will reach these segments to have more response towards the efforts. As we
stated in the segmentation, there is no specific target groups for this product as it is helpful and
useful to people from all ages, coming from all demographics and psychographics. However,
with the primary segment with people aged 24 to 34 who we think I have the most ability to
understand and apply the benefits of super foods must be the primary target segment here. What
are the marketing activities must be concentrated towards digital marketing including all social
media platforms so that it catches the eyes of the consumers with the targeted age group with
a decent income? This will eventually help us to choose the right audience segment and slowly
and gradually make a job easier to reach the potential customers and let them be aware of the
brand and the products that it is offering.

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4P’s Of Marketing
Product
• Fox Nuts
• Flax Seeds
• Chia Seeds
• Pumpkin Seeds
• Sunflower Seeds

Place
• Department stores
• Supermarket
• Superstores
• Online buying platforms

Promotion
• Advertisement – In advertisement we will market our products through newspaper,
magazines, radio, Direct mail and Leaflets.
• Sales Promotion

Price
Initially we have planned that we will have average pricing strategy as our pricing strategy for
our brand.

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Below is a storyboard for a suggested magazine: (Self-Created)

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Financial Analysis
Key Financials
We decided to acquire our own piece of land and make a building on it with the installation of
the whole manufacturing unit. Thus, the following costs were forecasted.

Land and site development 70

Building 20
Plant and machinery 50
Miscellaneous fixed assets 3
Preliminary expenses 0.2
Pre-operative expenses (including interest during
construction) 0.2
Contingency margin 0.2
Working capital margin 0.5
TOTAL 144.1

Some of the basic assumptions which we took during the financial projections are as follows-

Basic Assumptions
Installed capacity in Customer per yr. 1664640

Year Capacity utilisation

1 45%
2 65%
3 80%

Onwards 95%
Increment per year from 4th year 10%
The finances of the company that we will either generate or take loan is as follows-

The proposes means of Finance (Rs. In million)

Owner's fund 80
Term loans 64.1

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 State government's special incentive loan (Repayable in 6
0
instalments after 12 years)
144.1

The table below will show the assumed factory overhead expenses that will take place in a
year-

Factory overhead expenses in year (Rs. in million)

1 2.0
Increment per year from 2nd year 5%
Administrative expenses per year (Rs. in million) 3.0
Selling expenses per year in Rs.as a percentage of sales 4%

The depreciation will be charged on the fixed assets being used by the company. The rates of
depreciation are mentioned in the table below-

Company law For income tax

purposes- under purposes
Depreciation rates for
straight line under WDV
method method
Building 3.34% 10%
Plant and machinery 7.42% 15.00%
Miscellaneous fixed assets 7.42% 15.00%

The following table then shows the forecasts of revenue done for the unit installed for the
purpose of different seeds manufacturing:

Sales
Installed capacity Production Capacity
Year realisation
(TPA) (TPA) utilisation
(Rs. Million)

1664640
1 749088 45% 111.69

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 1664640 1082016
2 65% 161.33

1664640
3 1331712 80% 198.56

1664640 1581408
4 95% 235.79

1664640 1581408
5 95% 235.79

1664640 1581408
6 95% 235.79

1664640 1581408
7 95% 235.79

1664640 1581408
8 95% 235.79

1664640 1581408
9 95% 235.79

1664640 1581408
10 95% 235.79

Salary structure and the number of people that could be employed with the organisation.

Designation Number Salary per month Salary annual

Workers 30 8000 2880000
Sweeper 6 5000 360000
Managerial Staff 15 20000 3600000
Extra labour 4 25000 1200000
delivery man 4 8000 384000

The total of the salaries of all employees in the organisation is equal to 804000.

The wages and salaries during operating year is equal to 804000/1000000= 8.4.

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Weighted BEP
Weighted costs and price of the different product variants which were further used to calculate
the break-even point in terms of number of units to be produce.

Investment 144000000
Selling Price 146
Cost 84.3
Contribution Margin per unit 61.7
BEP (Customers needed to serve) 2333873.582

As we have 5 variety in seeds and each seed has different material cost and the pricing. In the
table below we have mentioned all the prices and the material cost of respective seeds. The
weighted average is also been calculated to determine the breakeven point.

Weighted
Products Price Material Cost Weighted Cost
Price

Fox Nuts 140 42 91 27.3

Flax seeds 150 52.5 82.5 28.875

Chia Seeds 180 30.6 108 18.36

Pumpkin
100 8 60 4.8
Seeds
Sunflower
160 16 80 8
Seeds

Average 146 149.1 84.3 87.335

Cost of Capital
Cost of Capital estimated using the two sources of funds being equity i.e. the owner’s capital
and debt.

Cost of Capital Estimation

Source Amount Weightage Interest Rate Cost
Equity 80 0.555170021 15 8.32755

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 Debt 64.1 0.444829979 11 4.89313
Total 144.1 1 13.22

The profit estimates calculated on the basis of revenue and keeping in mind all the expenses
related to business we got the net cash flows for the next years.

Year 1 2 3 4 5
Sales realisation 111.69 177.46 218.41 259.37 259.37
Cost of production
Raw materials 67.01 106.48 131.05 155.62 155.62
Power 2.23 3.55 4.37 5.19 5.19
Wages and salaries 8.04 8.04 8.04 8.84 9.73
Factory overheads 2.00 2.10 2.21 2.32 2.43
Administration &
selling expenses
Administration
expenses 3.00 3.00 3.00 3.00 3.00
Selling expenses 4.47 0.00 0.00 0.00 0.00
Gross profit before
interest 24.93 54.30 69.75 84.40 83.40
Total financial
expenses
Interest on term loans
Interest on bank
borrowing 8.90 8.90 8.90 8.90 8.90
Depreciation 4.61 4.61 4.61 4.61 4.61
Operating profit 11.42 40.78 56.24 70.89 69.89
Preliminary expenses
written off 0.02 0.02 0.02 0.02 0.02
Profit/Loss before tax 11.40 40.76 56.22 70.87 69.87
Provision for tax 1.51 9.20 13.36 17.28 17.25

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 Profit after tax 9.89 31.56 42.86 53.59 52.62
Less: Dividend 0 0 0 0 0
Retained profit 9.89 31.56 42.86 53.59 52.62
Add: Depreciation 4.61 4.61 4.61 4.61 4.61
Preliminary expenses
written off 0.02 0.02 0.02 0.02 0.02
Net cash accruals
(Cash Flow) 14.53 36.20 47.49 58.22 57.25

Capital Budgeting
The estimated cash flow from the project and the present value being calculate taking cost of
capital as the discounting factor.

Year Cash Flow Discounting Factor Present value

0 -144.1
1 14.53 0.88 12.83
2 36.20 0.78 28.24
3 47.49 0.69 32.72
4 58.22 0.61 35.43
5 57.25 0.54 30.77
6 56.24 0.47 26.70

The NPV of the project comes to 22.60 Million with an IRR of 18%. The organisation can also
reach its break-even point in 5 years and 2 months.

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Conclusion
While calculating the NPV for 6 years we get Positive value of 22.60 Million which shows that
the project can be undertaken by us. We also achieve the Breakeven after 5 years and 2 Months
with an IRR of 18 %, which is a very good. We have estimated that our product is in high
demand and due to expecting an increase in the acceptance of the product in the market, the
sales realization is increasing year on year. (Assuming all the units manufactured are sold in
the market) The Capital Expenditure was done with the funds of the owner’s capital and
through Loans which comes as 13.22% as weighted average cost of capital. The Debt capital
is obtained from term Loans taken from the bank. As the Company is a capital Intensive, hence
investment in fixed assets is high. But overall, the project is good to go with.

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References
Superfoods Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast
2021-2026. (n.d.). Retrieved from https://www.imarcgroup.com/superfoods-market
Dash, S. (2018, August 22). From Organic Products to Superfoods, What Has Made the
Industry So Popular? Retrieved from https://www.entrepreneur.com/article/318857
Rawat, R., Kishor munot May 5, Organic May 6, Lifeline Organic Natural Food May 6, Tushar
kohad January 29, Saumya Sen June 16, . . . Name*. (2021, October 27). We're Selling More
Than Before Pandemic: India's Organic Food Industry. Retrieved from
https://www.pureecoindia.in/were-selling-more-than-before-pandemic-indias-organic-food-
industry-rutaksha-rawat/
News, M. (2019, February 15). Super growth for "super" foods: New product development
shoots up 202% globally over the past five years. Retrieved from
https://www.mintel.com/press-centre/food-and-drink/super-growth-for-super-foods-new-
product-development-shoots-up-202-globally-over-the-past-five-years
(2021, September 14). Https://t.co/kQmbjVqyqF. Retrieved from
https://twitter.com/Bashirbagdadi/status/1437715336002818048
(PDF) A Report on Makhana (Foxnut) Production, Processing and Supply Chain. (n.d.).
Retrieved from
https://www.researchgate.net/publication/318960974_A_Report_on_Makhana_Foxnut_Produ
ction_Processing_and_Supply_Chain

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