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MeMilk Project Presentation - 140430 Rev1
MeMilk Project Presentation - 140430 Rev1
30 April 2014
Agenda
A.
B.
C.
D.
Executive Summary
Product Information
Financial Simulations
Competitive Portfolio
Executive Summary
Recommendation: Not to pursue qualification of Me Milk project for the following reasons:
Me Milk Dairy Cream and Drink play in a small market. RTD Milk category and Yoghurt
combined market is P8.4B (P7.7B RTD Milk + P700MM Yogurt). However, flavored milk
is only estimated at P0.4B size
High procurement price of Me Milk will require a super premium selling price in trade,
making the products uncompetitive
SRP
P50.25
2.25
P56.35
3.22
Me Milk Dairy Cream USP only on packaging and format but product benefits is lower than yoghurt drinks
and just parity to flavored milk drinks
Me Milk Dairy Drink Me too vs. other RTD Milk players
There are established brands in the categories where Me Milk will compete in
Yogurt: Nestle
RTD Milk: Cowhead, Selecta. Nestle
Description
Competition
Market Size
Spoonable Yogurt
Nestle Yogurt, Nestle
Acti-V, Creamy Delight
Drinkable Yogurt
Nestle, Dutch Mill,
Alaska Yogurt
RTD Milk:
P7.7B
Flavored Milk
(non-choco) only
5% of total RTD
Milk at P386MM
Yogurt:
P700MM
(estimates only)
24
SRP
1,206.00
50.25
LIST PRICE
1,148.40
123.04
1,025.36
20.51
42.72
0.85
Net Revenue
1,004.85
COGS at 0.34/pack
Y2
5 year FORECAST
Y3
Y4
Y5
12,000
13,200
14,600
16,000
17,600
47.85
13,780,800
15,158,880
16,766,640
18,374,400
20,211,840
5.13
1,476,514
1,624,166
1,796,426
1,968,686
2,165,554
100.0%
2.0%
12,304,286
246,086
13,534,714
270,694
14,970,214
299,404
16,405,714
328,114
18,046,286
360,926
41.87
98.0%
12,058,200
13,264,020
14,670,810
16,077,600
17,685,360
537.67
22.40
52.4%
6,452,097
7,097,307
7,850,051
8,602,796
9,463,076
Gross Profit
467.18
19.47
45.6%
5,606,103
6,166,713
6,820,759
7,474,804
8,222,284
140.68
5.86
13.7%
1,688,148
1,856,963
2,053,913
2,250,864
2,475,950
Contribution Margin
326.50
13.60
31.8%
3,917,955
4,309,750
4,766,845
5,223,940
5,746,334
6,000,000
4,300,000
4,300,000
4,300,000
4,300,000
9,750
466,845
923,940
1,446,334
Vat
A&P
NET INCOME BEFORE TAX
(2,082,045)
ROI
-96.7%
764,824
23,200,000
8.21
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
24
SRP
720.00
30.00
LIST PRICE
686.40
Y1
Y2
5 year FORECAST
Y3
Y4
Y5
28,800
31,600
34,800
38,200
42,000
28.60
19,768,320
21,690,240
23,886,720
26,220,480
28,828,800
73.54
3.06
2,118,034
2,323,954
2,559,291
2,809,337
3,088,800
612.86
12.26
25.54
0.51
100.0%
2.0%
17,650,286
353,006
19,366,286
387,326
21,327,429
426,549
23,411,143
468,223
25,740,000
514,800
Net Revenue
600.60
25.03
98.0%
17,297,280
18,978,960
20,900,880
22,942,920
25,225,200
COGS at 0.34/pack
537.67
22.40
87.7%
15,485,033
16,990,522
18,711,082
20,539,176
22,582,340
62.93
2.62
10.3%
1,812,247
1,988,438
2,189,798
2,403,744
2,642,860
84.08
(21.16)
3.50
(0.88)
13.7%
-3.5%
2,421,619
(609,372)
2,657,054
(668,617)
2,926,123
(736,325)
3,212,009
(808,265)
3,531,528
(888,668)
5,000,000
4,000,000
4,000,000
4,000,000
4,000,000
(5,609,372)
(4,668,617)
(4,736,325)
(4,808,265)
(4,888,668)
Vat
Gross Profit
Variable Operating Expenses
Contribution Margin
A&P
NET INCOME BEFORE TAX
ROI
-217.7%
(24,711,247)
21,000,000
8.21
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
24
SRP
720.00
30.00
LIST PRICE
Vat
686.40
73.54
28.60
612.86
12.26
25.54
0.51
Net Revenue
600.60
COGS at 0.246/pack
Gross Profit
Variable Operating Expenses
Contribution Margin
Y2
5 year FORECAST
Y3
Y4
28,800
31,600
34,800
38,200
42,000
19,768,320
2,118,034
21,690,240
2,323,954
23,886,720
2,559,291
26,220,480
2,809,337
28,828,800
3,088,800
100.0%
2.0%
17,650,286
353,006
19,366,286
387,326
21,327,429
426,549
23,411,143
468,223
25,740,000
514,800
25.03
98.0%
17,297,280
18,978,960
20,900,880
22,942,920
25,225,200
388.41
16.18
63.4%
11,186,211
12,273,760
13,516,672
14,837,267
16,313,225
212.19
8.84
34.6%
6,111,069
6,705,200
7,384,208
8,105,653
8,911,975
84.08
3.50
13.7%
2,421,619
2,657,054
2,926,123
3,212,009
3,531,528
128.11
5.34
20.9%
3,689,449
4,048,146
4,458,085
4,893,645
5,380,447
5,000,000
4,000,000
4,000,000
4,000,000
4,000,000
48,146
458,085
893,645
1,380,447
A&P
NET INCOME BEFORE TAX
3.06
(1,310,551)
ROI
-93.0%
Y5
1,469,771
21,000,000
5.90
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
Me Milk Cream retail price of P50.25 will result to +125% on per gram more than the
market leader. Similarly, if we price parity to market leader, Me Milk Cream will still be
+34% more expensive on a per gram given pack size difference.
Alaska Yogurt
Dutch Mill
Nestle Yogurt Drink
Nestle Yogurt 0% Fat
Price
Index/ml Price
Index/ml Price
Index/ml
Price
Index/ml
Competition
15.75
1.00 17.00
1.00
32.00
1.00
33.00
1.00
MeMilk Dairy Cream Scenario 1
50.25
6.20 50.25
5.75
50.25
3.39
50.25
3.29
MeMilk Dairy Cream Scenario 2
30.00
3.70 30.00
3.43
30.00
2.02
30.00
1.96
Yogurt Drink
Me Milk Cream priced at P50.25 per pack will +475% more expensive than presumed
market leader in drinkable yogurt. Even when priced lower at P30.00, Me Milk Cream
will still be +243% premium than market leader.
24
SRP
1,352.40
56.35
LIST PRICE
Vat
1,287.60
137.96
53.65
1,149.64
22.99
47.90
0.96
Net Revenue
1,126.65
COGS at 0.20/pack
Y2
5 year FORECAST
Y3
Y4
Y5
6,000
6,600
7,200
8,000
8,800
7,725,600
827,743
8,498,160
910,517
9,270,720
993,291
10,300,800
1,103,657
11,330,880
1,214,023
100.0%
2.0%
6,897,857
137,957
7,587,643
151,753
8,277,429
165,549
9,197,143
183,943
10,116,857
202,337
46.94
98.0%
6,759,900
7,435,890
8,111,880
9,013,200
9,914,520
316.89
13.20
27.6%
1,901,325
2,091,457
2,281,590
2,535,100
2,788,610
Gross Profit
809.76
33.74
70.4%
4,858,575
5,344,433
5,830,290
6,478,100
7,125,910
157.73
6.57
13.7%
946,386
1,041,025
1,135,663
1,261,848
1,388,033
Contribution Margin
652.03
27.17
56.7%
3,912,189
4,303,408
4,694,627
5,216,252
5,737,877
6,000,000
4,300,000
4,300,000
4,300,000
4,300,000
3,408
394,627
916,252
1,437,877
A&P
NET INCOME BEFORE TAX
5.75
(2,087,811)
ROI
-97.1%
664,354
23,200,000
4.80
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
Scenario 2: At given COGS of 0,20/pack, and Parity pricing vs. Yoghurt Drinks
of P17.00, CM is negative Y-o-Y
SCENARIO 2: Using provided COGS, Ideal Price, Lower A&P
CM Computation
Per Case
Per pack
% to Rev
Volume (in cs)
24
SRP
408.00
17.00
LIST PRICE
Vat
388.56
41.63
16.19
346.93
6.94
14.46
0.29
Net Revenue
339.99
COGS at 0.20/pack
Y1
Y2
5 year FORECAST
Y3
Y4
Y5
29,760
32,800
36,000
39,600
43,600
11,563,546
1,238,951
12,744,768
1,365,511
13,988,160
1,498,731
15,386,976
1,648,605
16,941,216
1,815,130
100.0%
2.0%
10,324,594
206,492
11,379,257
227,585
12,489,429
249,789
13,738,371
274,767
15,126,086
302,522
14.17
98.0%
10,118,102
11,151,672
12,239,640
13,463,604
14,823,564
316.89
13.20
91.3%
9,430,571
10,393,909
11,407,949
12,548,744
13,816,294
Gross Profit
23.10
0.96
6.7%
687,531
757,763
831,691
914,860
1,007,270
47.60
1.98
13.7%
1,416,534
1,561,234
1,713,550
1,884,905
2,075,299
(24.50)
(1.02)
-7.1%
Contribution Margin
A&P
NET INCOME BEFORE TAX
1.73
(729,003)
(803,471)
(881,859)
(970,045)
5,000,000
4,000,000
4,000,000
4,000,000
4,000,000
(5,729,003)
(4,803,471)
(4,881,859)
(4,970,045)
(5,068,029)
ROI
-221.2%
(1,068,029)
(25,452,408)
21,000,000
4.80
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
24
SRP
408.00
17.00
LIST PRICE
Vat
388.56
41.63
16.19
346.93
6.94
14.46
0.29
Net Revenue
339.99
COGS at 0.105/pack
Gross Profit
Variable Operating Expenses
Contribution Margin
Y2
5 year FORECAST
Y3
Y4
29,760
32,800
36,000
39,600
43,600
11,563,546
1,238,951
12,744,768
1,365,511
13,988,160
1,498,731
15,386,976
1,648,605
16,941,216
1,815,130
100.0%
2.0%
10,324,594
206,492
11,379,257
227,585
12,489,429
249,789
13,738,371
274,767
15,126,086
302,522
14.17
98.0%
10,118,102
11,151,672
12,239,640
13,463,604
14,823,564
169.18
7.05
48.8%
5,034,728
5,549,028
6,090,396
6,699,436
7,376,147
170.81
7.12
49.2%
5,083,375
5,602,644
6,149,244
6,764,168
7,447,417
47.60
1.98
13.7%
1,416,534
1,561,234
1,713,550
1,884,905
2,075,299
123.21
5.13
35.5%
3,666,840
4,041,410
4,435,694
4,879,263
5,372,118
5,000,000
4,000,000
4,000,000
4,000,000
4,000,000
41,410
435,694
879,263
1,372,118
A&P
NET INCOME BEFORE TAX
1.73
(1,333,160)
ROI
-93.4%
Y5
1,395,326
21,000,000
2.52
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
8.16
0.09
61.70
5%
Flavored Milk
Competition
MeMilk Dairy Drink Scenario 1
MeMilk Dairy Drink Scenario 2
Yogurt Drink
Competition
MeMilk Dairy Drink Scenario 1
MeMilk Dairy Drink Scenario 2
Yakult
Bear Brand
Price
Index/ml Price
Index/ml
8.00
1.00
8.80
1.00
56.35
2.82 56.35
2.50
17.00
0.85 17.00
0.75
Goody Gulp
Ri-Chee
Cowhead
Price
Index/ml Price
Index/ml Price
Index/ml
19.95
1.00 16.25
1.00
74.50
1.00
56.35
2.54 56.35
4.33
56.35
3.78
17.00
0.77 17.00
1.31
17.00
1.14
Alaska Yogurt
Dutch Mill
Nestle Yogurt Drink
Nestle Yogurt 0% Fat
Price
Index/ml Price
Index/ml Price
Index/ml
Price
Index/ml
15.75
1.00 17.00
1.00
32.00
1.00
33.00
1.00
56.35
3.22 56.35
2.98
56.35
1.76
56.35
1.71
17.00
0.97 17.00
0.90
17.00
0.53
17.00
0.52
Me Milk UHT will only be competitive against the 3 milk segments above if
priced at P17.00 and with target cost of goods at 0.105