1

COCOON CORPORATE PVT LTD

Submitted In Partial Fulfillment for the Award of the Degree of

Master of Business Administration

SESSION: 2021-22

SUBMITTED BY: Kanchan Bala

SCHOOL OF MANAGEMENT SCIENCES, LUCKNOW

 2

DECLARATION

This is to declare that I, KANCHAN BALA student of MASTER OF BUSINESS

ADMINISTRATION (MBA), have personally worked on a project entitled– “COCOON
CORPORATE PVT LTD” the data mentioned in this report were obtained during genuine
work done and collected by me . The data obtained from other source have been dully
acknowledged. The result embodied in this project has not been submitted to any other
university institute for the award of any degree.

PLACE: LUCKNOW KANCHAN BALA

DATE: 12th March, 2022 MBA 1stYear
 3

ACKNOWLEDGEMENT

I would like to express my deep sense of gratitude to all those people who have helped me
with their guidance and assistance during the research project without which this would not
have been possible.

I would like to convey my deep regards to our Director Dr. Manoj Mehrotra who have
equipped me with the requisite knowledge and help me to complete this project
I would like to express my gratitude to my coordinator Prof. Asad Kareem Usmani who
gave me the opportunity to do this wonderful mini project.

I would like to convey my deep regards to Mr. Satyajeet Asthana (Assistant Professor) and
other faculties who have equipped me with the requisite knowledge and help me to complete
this project within limited time frame.

I would also like to thank my friend who helped me complete this project.

I am extremely grateful to my parents for their eternal love and their sacrifices for educating
and preparing me for my future. They have been my source of inspiration and had a very
important role in the completion of this project work.
 4

TABLE CONTENT
Chapter 1 : Introduction 
                       Company Summary
                       Industry overview
                       Critical Success Factor

Chapter 2 : Design Thinking

                        Product Description
                        Unique Features
                        Production Process And Technology
                        Process Flow Chart

Chapter 3 :  Feasibility Analysis

                        Industry Analysis
                        Market Analysis

Chapter 4 :  Competitor Analysis

                        Marketing Strategy
                        Targeting Strategy
                        Pricing Strategy
                        Distribution Channel
                         Distribution Method

Chapter 5 : Promotion And Advertising Strategy

                       
Chapter 6 :   Financials
                         Startup Funds
                         Break Even Analysis
                         Financial Assistance

Chapter 7 : Conclusion
 5

INTRODUCTION

Company Description

COCOON Co. is a privately held firm engaged in production of packaged tender coconut
water. The water of tender coconut is a sterile, nutritious, thirst quenching health drink. The
pure and sweet tender coconut possesses enormous therapeutic properties and is a thirst-
quenching refreshing health drink for all age groups. It is loaded with natural sugar, salts, and
vitamins and is low in fat, calories and has no cholesterol. It is a highly rejuvenating tonic
that can ward off fatigue in an instant. COCOON Co. takes nature's gift in its natural form by
offering the tender coconut water it cans and simple packets that are food grade and eco-
friendly.

Our emphasis is delivering God’s gift in its true and natural form. We promote our product as
a natural thirst quencher, a health drink and also as a substitute for artificial energy drink.
COCOONCo offers quality coconut water drink in its natural form. Our vision is to be one of
the largest producers of packaged tender coconut water by the year 2021.

Farm fresh tender coconuts are selected and natural tender coconut water is squeezed out,
untouched by hand and put through a special process and packed in food-grade cans, which
keeps it fresh for 9/18 months. The taste is natural and hence good. Tender Coconut water is
considered the healthiest and best sports drink in the world, because it contains proteins and
vitamins. The benefits of tender coconut water discovered by ayurvedic experts centuries ago,
is given today being put to use in modern hospitals worldwide. Tender coconut water is
recommended for people of all ages. With the consumers turning health conscious and
preferring natural products, we believe that our product has a strong market both in domestic
circles and in countries abroad.

Our main target customer is the ordinary ‘AAM AADMI’ (common man on the roads).

Secondly we target the young generation who have a fancy for energy drinks. We also target
the sports person with our special energy pack. We want to make available our drink for
homes, offices, hospitals, sports persons, marriages, occasions, hotels and restaurants.

COCOONCo will primarily engage in extracting, processing and packaging of tender coconut
water into cans, bottles ready to deliver to the stores. It is a privately held firm COCOONCo
 6

will be located in the state of Uttar Pradesh. We have identified a location which is closer and
a good supply of coconut water throughout the year. COCOONCo sources the tender
coconuts for its requirement from its own farms and also additionally from other farmers
directly. 

Mission Statement 

Importance of Health Drinks in day to day life Health is our primary focus and the main
ingredient for being healthy is a balanced diet. We usually focus on the food that we eat and
easily ignore the quality of the fluids that we choose to intake. It can be easy to drink sugar
all day. One who strives for health balance must give a serious consideration to the drinks
they choose in their daily routine. When assessing the intake of fluids one may firstly give
higher consideration to water as naturally water is said to be one of the best means to quench
an individual’s thirst however beside water there are ample number of drinks which not only
quench our thirst but are also power packed with many health benefits.

We promote our product as a natural thirst quencher, a health drink and also as a substitute
for artificial energy drinks.

To deliver tasty, healthy and high-quality tender coconut water in containers to its customers.
At COCOONCo, we place great importance on health, hygiene and safety while making our
products. We want to showcase this natural drink and evolve as a big brand in the soft drinks
market.

Advantages of investing in this industry:

  Good average on returns on investment over the life of the project.

  Faster recovery of investment.
  Year round availability of cheap raw materials.
  With the use of appropriate machinery, the labour involved is not expensive, as it  is 
mostly unskilled and widely available.
 · Government incentives for agro-processing operations

 
 7

Some other benefits of this product are –

Convenience: A nice big glug, and you’re done! But it’s more than just the snack-in-ten-
seconds appeal that makes a drink convenient. It’s easy to carry around in a flask or bottle,
making it ideal for trips, hikes, rides and even the office. Powdered options like Smoothies
have the added advantage of just needing water or milk added. What’s more, there are times
when you actually can’t eat because you’re recovering - healthy drinks are a great alternative,
and make you feel full.
Delicious: Come on, we wouldn’t be drawn to something if it weren’t setting off a bit of
dopamine in the brain, would we? Finding the elusive balance between taste and health is a
tricky one. Thankfully, nature has provided us with several options - natural sugars and
sweeteners can satiate a craving without needing to resort to added sugar. Healthy drinks like
coconut water can be easily made without compromising on taste. “Would the kids steal it
from the larder when nobody's looking?” is our acid test. 
Customizable: Show us three people, and we’ll show you three different preferred styles for
their smoothies. Why our office itself is divided into warm milk and cold milk factions for
their Smoothies shakes. Some renegades prefer water. Others add coconut water! Some like it
nice and thick, others love the flow of a looser shake. And similarly with other drinks - some
like sweeter fruit juices, some love the citrus goodness of oranges. Healthy drinks are
democratic that way - you can have it in your style. You can (heh) shake things up.
Nutritional Powerhouse: You probably won’t derive much nutrition out of a soft drink or a
sugar-laden float. But the right ingredients can make your liquid snack not just delicious but
downright good for you! Coconut water is full of electrolytes. Tea has antioxidants. Millet
Smoothie brings you the benefits of twelve grains, a nice dose of protein and fibre,
antioxidants from natural preservatives, and sweetness not from sugar, but good ol’ natural
jaggery - making for an instant energy drink that’ll not just have both your taste buds and
doctor approving. Not to mention - they contain plenty of water, which keeps dehydration at
bay.
Aids Digestion: Apart from having a lot of minerals and vitamins, many facets of healthy
drinks aid digestion. Smoothie, for example, comes with 7g of fibre, almost as much as two
apples. Other ingredients in healthy drinks help keep your system sparkling’ clean as well. So
if you want a healthy digestive system.
 8

Industry Overview

Indian beverages, both alcoholic and otherwise, are as diverse as its people, influenced by the
country’s vast geography and the weather that comes with it. Hot summers demand thir st-
quenching, refreshing drinks, while chilly winters call for steaming hot cups of chai and
coffee. With a population of nearly 1.30 billion, India offers immense opportunities for
domestic and international beverage companies. The Indian non-alcoholic beverage market
has grown steadily over the years. However, much like the other markets, demand for
carbonated beverages has stagnated. Packaged juices, water, energy and health drinks have
taken a huge share from carbonated soft drinks.

The Indian non-alcoholic beverage market has come a long way in the past decades. With
only a few Indian players in the 1970s and 1980s, the market witnessed the re-entry of
several multinationals such as Coca-Cola and Pepsi in the 1990s. Since then, various Indian
companies as well as foreign multinationals have tried to get a piece of the fast-growing
market.
Today, India represents an important market for various players to build a strong beverage
brand. The Indian non-alcoholic beverage market is among the fastest growing markets
globally, as various macro factors support strong growth. The current low per capita
consumption signals significant potential for volume growth in the future. The Indian soft
drinks market might continue its “robust growth trajectory” as annual per capita bottle
consumption is expected to reach around 84 by 2021, according to the annual report. of
PepsiCo India’s bottling partner Varun Beverages Limited.
Still, compared to most of Asian countries, the Indian non-alcoholic beverage industry is
relatively underdeveloped with low penetration. The per capita consumption is far lower than
global averages, despite double-digit growth rates of recent years.  The main segments
constituting the soft drinks market in India are carbonated soft drinks, juices and bottled
water, which together accounted for over 99 percent of the total volumes sold. 
The battle on the Indian non-alcoholic beverage market:
Carbonated beverages, which traditionally has had the largest share in the Indian non-
alcoholic beverage industry, has been losing their market share to other beverage categories
in the last few years. The growing consumer preference for healthier food and beverages and
the excessive use of sugar in their soft drinks has played against the carbonated beverages
during these years. The packaged juices segment – categorised into three sub segments fruit
 9

drinks, juices and nectar – has grown at a CAGR of nearly 15 percent over the last five years.
Until now dominated by mango juices and nectars, other juices have recently started to grow
big. The mango juice segment, within the INR 120 billion packaged juices market in India, is
estimated to be over 50 percent in size, owing to the popularity of the fruit. This segment has
been growing in double-digits steadily, prompting beverage majors to focus on this category
in a major way. 
 
The Indian packaged tender coconut water is still an industry in its development phase. There
exist very few players in this market COCOON Co. aims to position its product in the general
market where there exists players like Pepsi, Coca-Cola, Parle Agro foods etc who are major
players in the soft drink segment. The emerging trend among the consumers to go for healthy
and natural food products will drive this industry. Coconut water is a fruit juice with many
unique features and a major one is its low calorie content when compared to other 100% juice
products- it has slightly less than half the calories of apple or orange juice. This makes it a
very attractive prospect for weight management positioned juices.  

Critical Success Factor

Coconut water is incredibly healthy and one of the best drinks to hydrate the body. Besides
helping to remove toxins from the body and aiding digestion, coconuts have amazing
antiviral, antifungal and antimicrobial properties that help to cure the disease. Our products
are nature friendly and health conscious with no harmful additives that are usually found in
other soft drinks. 
 10

Tagline : Health Goals Just a Beverage Away.

Our Logo 
 11

Our logo depicts the nature fresh tender coconut being packaged in green and eco-friendly
containers.

Critical Success Factor

Coconut water is incredibly healthy and one of the best drinks to hydrate the body. Besides
helping to remove toxins from the body and aiding digestions, coconuts have amazing anti-
viral, anti-fungal and anti-microbial properties that help to cure the disease. Our products are
nature friendly and health conscious with no harmful addictive that are usually found in other
soft drinks.
 12

PRODUCTS

Product Description

We intended to sell the extracted coconut water in cans, bottles and eco-friendly packs. Our
product offerings include:
 COCOON Cool – A natural thirst quencher.
 Choco COCOON – A drink with chocolate flavour.
 Minty COCOON – A drink with refreshment.
 Carmine COCOON – A drink with strawberry flavour
 “Joules” – Promoted as a sports drink/Energy drink

The small packs will be of 200 ml priced in the same range as the other fruit drinks in the
market. The larger capacity cans and bottles will be offered in the capacities of 1L.

UNIQUE FEATURES

The aims to offer high quality products in attractive packages which are easy to use and eco-
friendly to dispose of. The unique features of our products are:
 Product offered in natural forms as well as different flavours
 Offering in various quantities as per the customer need
 No more carrying heavy tender coconuts from outside. For 4 tender coconuts each
weighing approx. 2Kgs, i.e., 8Kgs could we easily replaced by our 1L bottle having
the same and equal but less than a Kilo; And further the messy work of cutting,
untidiness and last but not the least, waste of tender nuts.
 No need of the knife to cut it, and no worrying about the knife cleanliness.
 Strict quality and hygiene measures at our factory will ensure that the product is safe.
 Patients in hospitals are safer from infections because no chopping and transfer to
glass is involved. Just pierce, insert the straw and drink.
 The inconvenience of keeping bulky tender coconuts is also eliminated.
 Available at the nearest supermarket/retail shop/medical store. May be even at the
pharmacy inside your premises.
 13

Some facts about coconut drinks:

 Coconut water contains more potassium (at about 294 mg) than most sports drinks
(117mg) and most energy drinks.
 Coconut water has less sodium (25mg) where sports drinks have around 41mg and
energy drinks have about 200 mg.
 Coconut water has 5 mg of natural sugars where sports and energy drinks range from
10-25mg of Altered Sugar.
 Coconut water is very high in chloride at 118mg, compared to sports drink at about
39mg.

Production process and Technology

The starting point is selection of coconuts suitable for processing. Coconut

water of 6-7month stage is first filtered through pressure filters and then mixed with the
desired proportion of additives plus sugar and concentrated to the appropriate level. The
water is then packed in purchase/cans/bottles and retorted in an autoclave, after which it is
cooled in a stream of cold water.
The Coconut Development Board in collaboration with Defence Food Research
Laboratory, Mysore has developed the technology for packing tender coconut water is
pouches/aluminium cans, which is available at a total lumpsum transfer fee of Rs.3lakhs. We
intend to source this technology after paying the necessary fees.
The quality checks are done after each stage at regular intervals, right from the time the raw
material arrives to the final check before water is packaged.
 14

PROCESS FLOW CHART

Washing coconut &

Breaking shell

Tender Coconut Water

Filtration and Adding

Sugar

Bottling/Packing

Chilling and Storage

 15

The shells are cracked open with the use of thick heavy -bladed, pointed knives that are also
used to extract the kernel from the shells. Alternatively, the coconuts may be halved and
removed with the use of a rotary grater. Unnecessary handling of the kernel may also lead to
the spread of bacteria and other contamination. We intend to use machines with this facility
to do this operation to ensure cleanliness. Special customised machines are used for
extracting and packaging purposes.

The machinery will have the following components.

 The shell breaking unit
 Coconut water collection tank
 Filter: the micro filtration is carried out in two stages; pre-filtration using a 0.80µm
pore membrane prior to going through the final micro filtration using a 0.20µm
membrane.
 Additive mixing tank
 Coconut water storage tank
 Volumetric filling machine

After being contained into respective packs, the product is shifted to the company storage
facility. All the equipment that are required can be sourced locally.

Follow on Products

Currently concentrates on tender coconut water but it has plans to utilize the
kernel and develop them into marketable product. Besides the shell and other waste are
proposed to be sold off as scrap but we have plans to convert them into usable goods after
acquiring necessary technology. Thus, diversification is on the cards. We also plan further
research and development activities in the field of coconut harvesting, processing and storage
of coconut water.
 16

FEASIBILITY ANALYSIS

 Industry Analysis
The per capita consumption of soft drink in India is around 5 to 6 bottles (same as Nepal)
compared to Pakistan’s 17 bottles. An NCAER study says that 91% soft drink sales are made
to the lower, middle and upper middle classes. Euromonitor International’s soft drink data
shows that Brazil is currently the world’s largest market for packaged coconut water.
Coconut water accounted for 67% of 100% juice retail volume sales in 2010, compared to
47% in 2005 and 21% in 2003. This rapid share gain came primarily at the expense of orange
juice. Now a days Cola drink consumer rate is 38% and fruit drinks consumer rate is 62%.

Sales
1st Qtr 2nd Qtr

38%

62%
 17

 Market Analysis:

Tender coconut water is recommended for people of all ages. With the consumer turning
health conscious and preferring natural products. We believe that our product has a strong
market both in domestic circle and in countries abroad. Our main target customer is the
ordinary ‘AAM ADMI’ (common man on the road). Secondly, we target the young
generation who have a fancy for energy drink. We want to make our drink available for
home, offices, hospitals, marriages, other occasions, hotel and restaurant.
The recent studies showing the impact of aerated drinks on
Health has turned customer to ignore such artificial produced drinks and go for natural
food drinks. The rising population will require large amount of food drinks. Our product
will be a natural thirst quencher during the long summer months and during these days we
see demand picking up in northern parts of the country.

Source: Ministry of food processing industry govt. of India. There is huge potential for
our product to compete against the cola drinks. We also focus on areas like Delhi, north
Indian states where there is huge demand for tender coconut.
 18

COMPETITOR ANALYSIS

Pepsi and coke are the major players in soft drinks industry. Dabur and Parle agro are already
into fruit juice drinks. There are however few major players in
Coconut water processing with COCOJAL from Jain agro Foods being the leader.
In India coke and pepsi have a combined market share of around 95% directly
Or through franchises. There are about 110 soft drinks producing units (60% being owned by
Indian bottlers) in the country.
Some of the leading brands are coco cola, thums up, Limca, Fanta, Gold spot, rim zim,
maaza, pepsi, mirinda, 7UP, Mangola, slice, dukee’s, lemonade, crush,
Canada dry, campa

MARKETING STRATEGIES

The health benefits offered by our product will be the theme and key driver for our
promotional campaigns. We intend to capitalize on the promotions by government agencies
like Coconut Development Board, who have been involved in product promotion campaign.
We also plan to enter into tie-ups with school and colleges to offer our products to them by
establishing a counter at their campuses. To bring the product to the masses, we will offer our
product at all stores retail outlet financial assistant is provided by the government for market
promotion of Coconut products through the media participation in
exhibition/developing/hiring display facilities in supermarkets, adopting attractive packaging
etc. @50% of the project cost limiting to Rs.10.00 Lakh for individuals. We intend to use
these options. Our products will be offered at railway stations and bus stands through our
partners.
To gain popularity among the masses we also propose to have a leading sports personality to
endorse our product. We will enter into tie-ups with Health centre, Gym centres to offer our
health and energy drinks.
19
 20

 TARGETING STRATEGY- Our products fall into four categories viz,

 “Coco-Cool”- A Natural thirst quencher. We promote this as a replacement for artificial soft
drinks.
 “Joules”- Energy Drink, Promoted as a sports drink. Targeted at the sports persons or gym
goers.

 PRICING STRATEGY- Our products are nature fresh and are competitively priced. To
penetrate market we will follow penetration pricing in some markets which are dominated by
artificial drinks.

On basis of analysis, we arrive at the following prices for our products.

Reasons
Product Name Rs.

At price lower than

COCOON Cool 20
competitor

Priced due to its

Choco COCOON 54
uniqueness

Priced due to its

Minty COCOON 25
uniqueness
Priced due to its
Carmine COCOON 31
uniqueness
 21

COCOON Cool
Tasty and healthy
Natural Flavour
100% pure

 Carmine COCOON
 Steawberry flavour
 22

 Minty COCOON
 Mint & Herbs
 Taesty and
naturally
hydrating

 Choco COCOON
 Smooth & Creamy

Distribution Channels
 23

We have identified few distribution agencies as our partner but final selection depends on the
reach and cost benefits. For other states, we are planning to enter into alliance with major
distributors of food products as they already a well-established network and reach.

DISTRIBUTION METHOD
 Exclusive Distribution
 Selective Distribution
 Intensive Distribution
 Indirect Distribution
 24

PROMOTION AND ADVERTISING STRATEGY

Mass marketing will be employed by advertising via conventional media. The Foreign tourist
arriving in Kerala will be offered the products.
We also plan to start on-the -go store by offering our drinks at busy junctions and school
areas. The total budget for marketing activities has been packed at Rs.1000000. The fund
available from the government

 Good for feeding infants suffering from intestinal distributions.

 Oral rehydration medium
 Keeps the body cool
 Kills intestinal worms
 Cures malnourishment
 Diuretic
 Effective in the treatment of kidney and urethral stones
 Can be infected intravenously in emergency case
 Contains organic compounds possessing growth promoting properties.

We also plan to sponsor sports events like cricket matches etc. As part of our product
launches, a Kochi marathon will be organised and all participants will be given free samples
of our products. To attract the foreign customers we intend to use internet marketing and
other new age marketing tools.
 25

DEVELOPMENT

The road map for development is given below:

Purchase of land

Setting up of factory / Installations

Setting up the warehouse

Trail run
 26

In two years down the line, we expect to capture 10% market share in the overall soft drinks
market. We break even in the 2.5 years. Our total sales turnover will be Rs. 20,00000 in the
year 2021

MANAGEMENT

(COCCON COMPANY) is a privately firm led by a team of young enthusiastic individuals

and guided by experienced senior professionals. Our team structure consists of who Shivee
Gupta be chief officer. She is currently pursuing management degree from PSIT College of
science and technology Ms. Reena Maurya will be responsible for finance and accounting.
She is the co-promoter of the project. She has vast experience of about 35 year at leading
corporates handling finance and tax related matters. Ms Anjali will handle the operation and
distribution respectively. She has rich experience in distribution, marketing and sales.
 27

OPERATION STRATEGY

Cocoon will source the tender coconuts directly from its own farms. Our key strategy is to
minimize the dependence on external players for tender coconuts. To meet extra demand we
have plans to source tender coconuts from other farmers directly. The farm fresh tender
coconut water extracted. This water is refined and addictive are added. After this the water is
packed into cans . this is then taken to the cold storage and later placed in company
warehouses. From the warehouses the product is taken to the retailers with the help of
distribution partners. A flow charts below depicts the major process involved.

TTTTTTTextr
FRESH TENDER FACTORY BOTTELING UNIT
COCONUTS FROM STORAGE SHED
FARMS

COMPANY
CUSTOMER RETAILER/SHOPS
WAREHOUSES

Coconut for huge demand we also plan to source the tender coconuts from Tamil Nadu. The
plant will be run in two shifts operating from 6 a.m. to 2 p.m.
and from 2 p.m. to 10 p.m. All days except Sunday will have two shifts . Sunday will be
utilized for preventative maintenance activity if any.
We will rent trucks which be used for transporting the coconuts from farms t the factory. the
capacity of 1 truck is approximately 5000 unprocessed coconuts.
Rented truck will be used once a week to transport the stored from the company to the
charcoal industry the end product is transported in special trucks with refrigeration and cold
storage facility to the retailers
 28

LOCATION

Our unit will be located at KANPUR (Uttar Pradesh). This place has various advantages like
easy availability of raw material. It is close to International Airport. The place has good road
connectivity. The place is approximately 30kms from. It would be convenient to cater to the
market us the place is connected to all the important places by road link. The availability of
cheap labor also at to our advantage.
 29

PERSONNEL REQUIREMENT

The total manpower requirement for our project is about 7% including the management team.
We plan to recruit the locals and provide them training. The details of the staff required are
given below along with the nature of the job.

Total Salary/Wages Total

Man power Type of Total
including Rs. Per annual
requirement/ Roles labour salary/wages
both shifts person/month salary

Operators 2 Skilled 6000 144000

Loaders/Helpers 1 Unskilled 4000 48000

The executive team comprises of 4 members including 2 promoter incharge of overall

operation.

Executive Team No. Roles Annual Salary

Customer
management,
Marketing &
2 distribution channel 288000
Logistics
handlings, marketing
strategy logistics.
Overall
responsibility,
Management
2 finance, HR, Promoters
Operation
Accounting, taxes,
legal
 30

The total payrolls come to Rs. 48lakhs per year. The operators will be provided training to
operate the machines. They will also be trained to do some minor maintenance and repair
work. We plan to get trained at technology centre, Coconut Development Board, North. In
the expansion phase when we add more capacity, we will be recruiting extra persons for the
required function and provide them with necessary trainings.

PRODUCTION

The key process includes Coconut water extraction using the machine and filtration process.
After this will be adding additives flavours us per the requirement. The water is then chilled
and packed into cans of 200ml sizes. Strict quality control is ensured at different points by
physical inspection and lab testing. The operator will be trained on these aspects too.
We will be producing 200cans of 200ml capacity per day will amounts to about 60000 cans
annually. In addition to this we also have plans to introduce larger capacity bottles of 1l
gradually. A tender coconut has about half a litre of water in it which means we need one
such coconut to make two cans. Very good quality of tender coconut has about 0.75l of
water. The total capacity of our unit will be about 20000L of coconut water annually.

OPERATIONAL EXPENSES

We will source the coconuts at Rs.12/unit. The total initial investment is 20lakhs. The major
expenses include the raw material costs which is about 5lakhs. To optimize the power cost,
we plan to alter the requirement of machine for processes which could be done easily by
humans.
 31

FINANCIALS

STARTUP FUNDS

To arrive at the figures, we have certain assumptions as mentioned. We assume that on an

average one tender coconut will deliver about 0.5 L of tender coconut water. This means 1
tender coconut can cater to 2 cans of 200ml each of the final product.
Our daily production capacity is 200 cans of 200ml size.
Total working days in a year = 300 days
Assuming that we run the plant to full rated capacity, working 300days in a year we need
about 200cans *200ml *300 days i.e., 12000 litres of tender coconut water.
We will source about 100 coconuts per day which means we will have about 30000 coconuts
annually. This will deliver about 15000 litres of fresh coconut water. Even assuming worst
case scenario, we have a buffer of 3000 litres.

INITIAL START-UP COSTS IN RS.

Land and buildings 0
Machines 7,00,000
Storage Facilities 2,00,000
License Fee To DFRL (One time) 3,00,000
Total cost in Rs. 12,00,000

OTHER COSTS:

OTHER COST IN RS.

Salary 3,42,000
Raw material cost 3,60,000
Sugar+ additive cost 30,000
Fixed Cost 12,00,000
 32

We assume that we will get the nuts at Rs. 12 per unit. The total requirement for nuts being
nuts annually.
Thus Total start- up cost is Rs. 20,00,000, We expected to raise Rs.10,00,000 of our own
capital and borrow the remaining for remaining funds as a 10year loan.
The machinery and equipment cover hand tools, paring knives, coconut de-shelling machines
or manual devices to crack open nuts, stainless steel buckets and containers, packaging
machines, cans, bottles or plastic pouches, buckets, electrical water pumps and houses, AC
generator.

BREAKEVEN ANALYSIS

The following assumption are made. The total production of coconut water is about 60,000
cans (200cans per day). Also we assume there is no inventory i.e., the amount of cans
produced is sold in the market. For different product categories we have taken the proportion
of market we want to capture initially. The following table gives the total sales turnover for
the first year

% OF TOTAL NO. OF CANS

PRODUCT PRICE/UNIT SALES IN Rs.
VOLUME SOLD

COCOON Cool 20 40 24,000 4,80,000

Choco
54 30 18,000 9,72,000
COCOON

Minty
25 20 12,000 3,00,000
COCOON

Carmine
31 10 6,000 1,86,000
COCOON
 33

Some assumption made are that there will be changes in the market mix of products offered
in consecutive years. We have not considered the government subsidies while making the
projection. Interest rates are calculated at a rate of 12% annually. The first year shows huge
losses due to the one-time licence of Rs. 3,00,000 that is paid to acquire the technology from
DFRL.

FINANCIAL ASSISTANCE

Coconut Development Board provides Financial Assistance under Technology Mission on

Coconut to entrepreneurs for setting up /modernizing /expanding coconut processing units
and promoting value added coconut based product. We wish to make use of this facility.
 34

CONCLUSION

Our company makes products that are healthy and has a huge demand both in India and
outside. The location of our factory helps us in getting raw materials at a low cost.
Plant is well connected to other places which ensure smooth logistics. COCOON Co. is into
a business which is widely promoted as eco-friendly. The government is promoting the food
industry in a huge way as it is seen as an emerging industry. It’s a recession proof industry.
We are investing in latest technology to extract coconut water and store the final product. The
plant is located closer to other major places in Kerala like Aluva, Ernakulam, Angamaly etc.
We have solid growth plans as we plan to invest more to diversify into other coconut
products. The product has a huge export potential. To take into account the risks arising from
pest attack on coconuts; we have plans to source them from Tamil Nadu Karnataka.
Coconut product industry has been growing leaps and bounds due the efforts taken by the
government authorities. Besides there is a changing preception among the people about the
artificial drinks as we see them shifting to natural drinks. The tender coconut water has many
advantages over the other fruit drinks.