CocoLoco: Fresh Coconut Water

PROJECT REPORT

submitted for the course

Lean Start-up Management (MGT1022)

By
Vakul Goyal 16BCE2046
Harsh Kumar Kataruka 16BCE0621
P Sai Sri Bhavya `16BCE0652
K.Gowtham 16MIS0440
Anshuman Parashar 16BCI0122
Ayush Malra 16BIT0272

Fall Semester 2018 - 2019

Slot: TE1

Name of Faculty: Prof. Murugavel R.

 ACKNOWLEDGEMENT

We would like to thank our guide, Prof. Murugavel R. for the time,
support and knowledge he has granted us. This project would not have been
possible without your guidance. We are highly grateful to VIT University for
providing a platform to achieve academic success. We would also like to express
our gratitude to our loved ones who have supported us throughout the whole
process.

1. Vakul Goyal

2. Harsh Kumar Kataruka

3. K.Gowtham

4. Anshuman Parashar

5. Bhavya

6. Ayush Malra
 MGT1022 / Lean Start-up Management / TE1

CocoLoco: Fresh Coconut Water

Project Report

Team Members
Vakul Goyal 16BCE2046
Harsh Kumar Kataruka 16BCE0621
P Sai Sri Bhavya 16BCE0652
Ayush Malra 16BIT0272
K.Gowtham 16MIS0440
Anshuman Parashar 16BCI0122

• Team/ Brand Name:

CocoLoco: Fresh Coconut Water

(The name has a rhyme in it making it fun to pronounce and also conveys the true
characteristic of the product in Coco, i.e. Coconut. A short description of the product is
given in the subtext.)

• Product Logo:

(The logo is fresh and modern. The colour scheme is calming and reminds the buyer of
the ocean and the waves. The font is clean and understandable. A coconut clipart is
introduced to cement the branding ideology and the basis of the product.)

• Idea behind the product:

Coconut water is becoming a popular refreshing beverage, owing to its high electrolyte and
potassium content. It’s ideal as a sports drink substitute and as a quick pick-me-up,
especially for those who need to be rehydrated quickly. Coconut water is extracted from
 fresh young coconuts. It is fat free, low in calories and loaded with potassium. Coconut
water is great for replenishing lost fluids in the body as it is lower in sugar and sodium
yet higher in potassium than most sports drinks.

But there is one trade off: as it is a natural substance, it’s prone to spoilage through oxygen
exposure. In mature coconut water, this reaction is manifested in it turning brown due to
exposure to high heat and oxygen – such as leaving the liquid to sit openly at room
temperature. Given these limitations, preserving the shelf life of coconut water is needed
for it to have any viable commercial value. This results in low supply of coconuts to non-
coastal areas despite high demand and rise in coconut prices.

We at CocoLoco don’t believe that such a minor hiccup should stop this nutrient rich
drink to become a household name. Despite India being the third largest producer of
coconuts, there is no significant coconut drink brand in the country. Our aim is to tap
into this uncharted territory and build a brand of our own.

• Location of the warehouse:

We will be starting production in a warehouse which will also house our

administrative office in a section. The warehouse exact location is the following:

4/177 Kevigak Groups, Nathakadu Thottam, Karavali Mathapur, Arasur,

Arasur, Coimbatore, Tamil Nadu.

The map to the location is given below:

• Advantages of the location:

1. India is the third largest producer of coconut which Tamil Nadu being its flag
bearer. Coimbatore produces the best quality coconuts as it incorporates organic
farming in the state and are available all year round plus the prices are cheaper
than most other locations.
2. The distance of the location from the nearest highway is merely 3.07 kilometres.
This translates to smoother roads, cheaper transport cost and faster delivery to
the target customers in the North.

3. The location is also relatively close to the nearest railway station (26.5 km)
which can also be used for cheaper, faster and bulkier load delivery.

4. As the area is already a predominantly industrial area, therefore it will be

much easier to acquire permissions to set up a new trade.

5. The area of the warehouse is ample for the initial setup process (1,500 square
feet) for a rent price of an affordable sum of Rs. 9,000/month.

6. The warehouse also guarantees immediate possession so there is no lag in the

process of development.
 7. The warehouse also has a parking area which will come in handy while
unloading the raw material trucks and loading the trucks filled with products.

8. As the warehouse is near a river and has a water connection, continuous water
supply is guaranteed. Water is essential for our product and can also be acquired
via rain water harvesting.

9. As it is an industrial area, waste disposal options are aplenty. As our product

will only give out organic and non-toxic waste, we can dispose it off in the
nearby farm lands.

10. A continuous power supply of 3.5-7.5 kilo watt is also available for the
operations of the machines.

11. Waste products (like coconut shell, husk and flesh) buyers from our product
will be easily available as it is already an industrial area.

12. Shed construction option is also available from the owner for a nominal sum.

13. Man-power will be cheap as it already a well-established industrial area.

• Disadvantages of the location:

1. The location although close to raw materials, is still far from our target audience
in the north. Although the transportation costs are minimum, they will still be a
major chunk of our expenditure.

2. Although the area of the warehouse is enough for the start, but it will fall short
of our requirements if the enterprise continues to grow.

3. There is no in-built cold storage option available in the location. It would

have been essential for storage issues related to edibles.

• Executive summary
CocoLoco is a company 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 sugars, salts, and
vitamins and is low in fat, calories and has no cholesterol. It's a highly rejuvenating tonic
that can ward off fatigue in an instant. CocoLoco takes the nature’s gift in its natural form
by offering the tender coconut water in cans and simple packets that are food grade and
eco-friendly. Our emphasis is on 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 drinks. CocoLoco offers quality coconut water drink in its natural form.
Our vision is to be one of the largest producers of packaged tender coconut water in the
years to come.

Farm fresh tender coconut 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 months. The taste is natural and hence good. Tender Coconut Water is
considered the healthiest & best sports drink in the world, because it contains vitamins and
proteins. The benefits of tender coconut water discovered by ayurvedic experts centuries
ago, is even today being put to use in modern hospitals worldwide.

The size of soft drinks industry is estimated to be approximately 50 billion dollars and is
growing at a rate of 6 to 7% annually. The per capita consumption of soft drinks in India is
around 5 to 6 bottles compared to Pakistan's 17 bottles, Sri Lanka's 21, Thailand's 73, the
Philippines 173 and Mexico 605. Coconut products are gaining popularity world-wide.
FAO studies contributed significantly to its new acceptance by raising the level of
respectability of coconut products. CocoLoco aims at capturing the huge potential offered
by both domestic and international market.
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 sport persons with our
special energy pack. We want to make available our drink for homes, offices, hospitals,
sports-persons, marriages, other occasions, hotels and restaurants. Advantages of
investing in this industry:
• Good average 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.
• A global market
• Government incentives for agro-processing operations.

• Legal structure of the company

CocoLoco Pt. Ltd. is a privately held firm led by a team of young enthusiastic individuals
and guided by experienced senior professionals. We have chosen our business to be equally
shared among every members of our group. In this type of legal structure, the business has
limited liability. It is easier to raise capital than partnerships or sole traders as shares can
be sold to a large number of people (only friends or relatives). Management is shared.
Continuity-the business will still exist if one of the shareholders dies.
• Head of Departments
a. Technical: Anshuman
b. Marketing: Bhavya and Vakul
c. Sales: Vakul
d. Administration: Gowtham
e. Finance: Harsh

• Organizational chart

Organization structure based on the departments

Organization structure based on the hierarchy

• Market survey

Market conditions for a coconut water brand look exclusively favourable in the coming
years. Specially being from the country with the third largest coconut production and no
major brand selling it, this sector seems like a uncharted territory. The following is a brief
survey that out team did (amongst 100 individuals) that amongst the general public with
participants ranging from age 10 to 60 and above. The gender ratio was evenly distributed
and we found out that the general public goes for juices, shakes and carbonated drinks, but
there is a growing market of health-conscious people going for health drinks and energy
drinks as well. (30%) Along with the usual such as taste and brand, more and more people
are looking for health benefits in their drinking options (52%). When told about our
product, CocoLoco, more than 95% people were positive about the prospectus of the
product with around 71% people being super excited about it. Almost everyone believed
that our product will be a hit amongst people from all age groups and what is interesting
that about 80% of them did not know about any other familiar brand that sells similar stuff,
indicating that this market is still relatively new and easily dominatable. As far as the price
that the consumer base was ready to pay for the product came up to be around Rs.20.9.
Around 58% of the subjects would like to make coconut water a part of their routine. One
interesting pattern that popped up was that people were generally inclined to drink coconut
water after they needed to feel refreshed like when feeling dehydrated or after a workout
session.

Image 1. Survey screenshot

Image 2. Age group of survey subjects

 Image 3. Genders of survey subjects

Image 4. Usual soft drinks that the survey subjects have usually

Image 5. Soft drinks prerequisites for survey subjects

 Image 6. Views of survey subjects about the product

Image 7. Opinions of survey subjects about suitability of the product to all age groups

Image 8. Consumption statistics for survey subjects

 Image 9. Consumption frequency of survey subjects

Image 10. Expenditure statistics for survey subjects

The per capita consumption of soft drinks in India is around 5 to 6 bottles (same as Nepal's)
compared to Pakistan's 17 bottles, Sri Lanka's 21, Thailand's 73, the Philippines 173 and
Mexico 605. The industry contributes over Rs 12 bn to the exchequer and exports goods worth
Rs 2 billion. . An NCAER study says that 91% soft drink sales are made to the lower, middle
and upper middle classes. Euromonitor International's soft drinks 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.
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 sport persons with our special energy
pack. We want to make our drink available for homes, offices, hospitals, sports persons,
marriages, other occasions, hotels and restaurants. The recent studies showing the impact of
aerated drinks on health has turned customer to
ignore such artificially produced drinks and go for natural food drinks. The rising population
will require larger 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. There is a 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.

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? We target the young generation who
have a fancy for energy drinks. We also target the sport persons with our special energy pack.
We want to make our drink available for homes, offices, hospitals, sports persons, marriages,
other occasions, hotels and restaurants. So, we will have to focus on the market against cola
drinks. While sales of fizzy drinks remain sluggish, coconut water was the world's fastest-
growing cold drink last year. Worth $2.5 billion (economictimes.indiatimes.com). The global
packaged coconut water market size will cross US$8.3 billion, growing significantly with a
CAGR of 25% during the period 2017−2023. The market is expected to increase in terms of
volume and revenues. The global packaged coconut water generated a revenue of $2689.8
million in 2017 and is projected to rise with a CAGR of 24.2% during 2018-2023. Packaged
coconut water market is expected to witness significant growth due to its health benefits. The
increasing demand of tastier and healthier drink is one the reason boosting the flavoured
packaged coconut water market. (www.arizton.com)
India packaged coconut water market stood at $ 15.38 million in 2016, and is projected to grow
at a CAGR of over 17%, in value terms, during 2017-2022 to reach $ 40.73 million by 2022,
on the back of rising health concerns due to hectic and stressful lifestyle and increasing
consumer spending on wellness products to prevent signs of ageing. Moreover, surging demand
for packaged coconut water can be attributed to growing awareness about potential health
benefits of drinking coconut water, natural and healthy drinks over high calorie carbonated
drinks. All the above stated factors are likely to propel demand for India packaged coconut
water market over the next five years (www.techciresearch.com)

The coconut supply chain in India remains an unorganised and complex sector
(www.thehindubusinessline.com), with the majority of organised supply heading towards coconut
oil production and other coconut uses. Since the demand for the water on an industrial scale is still
so recent, marketers of the water often struggle to find large enough volumes from reliable
suppliers. While the Coconut Board of India aims to increase the demand for coconut water and
coconut-based products, their plans for generating demand are outdated and have not caught up
with the potential of packaged coconut water. Having said that, the Coconut Board has started to
promote technology that can extract the water and bottle it, a method that has been adopted by
several manufacturers in the southern states. For the coconut industry to truly modernise, the
Coconut Board will need to work alongside the new wave of packaged coconut water entrepreneurs
to mechanise the coconut collection and aggregation process and improve the availability of the
nuts in their young, drinkable form. (www.fnbnews.com)

• Competitor analysis

From the get go, the survey that we had conducted with the general public presented the
view that around 80% people did not know any widespread coconut water brand in India,
leaving a big market for us to explore.
 Image 11. Competition knowledge of survey subjects

The 50-bn-rupee soft drink industry is growing now at 6 to 7% annually. There are about 110
soft drink producing units (60% being owned by Indian bottlers) in the country. Although
relatively unknown there are some packaged coconut water brands in India such as ‘CocoSip’,
‘Cocofly’ and the most widely known ‘CocoJal’. India packaged coconut water market is
controlled by these major players, namely– Jain Agro Food Products Pvt, Pure Tropic, Dabur
India Limited, Nilgai Foods Private Limited and Nature’s First India Private Limited. Even
though the sector of coconut water has immense potential in India, there are not many
successful examples of popular products due to unsuccessful marketing campaigns and not
relating to the target consumer, sky-rocketing prices, having loads of preservatives and being
an unorganised as a sector.

We also have big competition from the carbonated drink industry which currently dominates
the market. Pepsi and Coke are the major players in soft drink industry. In India, Coke and
Pepsi have a combined market share of around 95% directly or through franchisees. There are
about 110 soft drink producing units (60% being owned by Indian bottlers) in the country.
Some of the leading Brands are Coca Cola, Thums Up, Limca, Fanta, Maaza, Pepsi, Mirinda,
7'UP, Slice etc. These drinks have always been a crowd favourite for their unique taste and
brand value. But in the recent years these brands have started losing their market shares due to
the new health conscious Indian consumers.
 • Feasibility analysis
A feasibility study is a study, which is performed by an organization in order to evaluate
whether a specific action makes sense from an economic or operational standpoint. The
objective of the study is to test the feasibility of a specific action and to determine and
define any issues that would argue against this action.

• Technical feasibility
Proposed product: CocoLoco: Fresh Coconut Water
Competition analysis: (mentioned in section 6)
USP of the product: (mentioned in section 8)
Resources required: Fresh coconuts, preservatives, infrastructural resources, man power
and transport resources.
 Capability of the organization to acquire resources: It is capable to acquire the above
resources mainly due to location suitability and economic sufficiency.
Regulatory standards for the product: FDA standards are maintained for the product.

• Market feasibility
Target market: Open-Air Events
1. Sports Events like IPL (Indian Premier league) Matches, Other Cricket matches,
Hockey matches, etc.
2. College Fests.
3. Carnivals.
4. Day light festival celebrations.
Selling place: Anyplace where the event is happening like Arenas, Grounds, Open areas.

• Overall risk assessment

Major risks associated with the operation: Major risks with the plan can be spoilage of
product, transportation delays, mitigated sales etc.
Survival outlook for each of the above risks: To deal with spoilage, we need to have a cold
storage unit, for timely transportation and distribution we need to make full use of the
national highways and railway line available and finally focus on the market and
advertising to boost sales.

Even the risk of spoilage of the product is minimised as the target market is Open Air events
so the production of the beverages will be done only when Ordered and will be sold within
two three days and will be consumed.

• USP of our product

Coconut water has innumerable benefits to the health of the individual that provides the
unique selling perspective to this product. There are various health benefits that will make
it very popular with our target audience and those are as follows:
1. CocoLoco water is refreshing, contains essential electrolytes, and is the most natural
isotonic drink that exists in the market. contains important minerals such as: Mg, Ca, P, K
and Na.
2. CocoLoco water is a digestive tonic. It helps in the absorption of food and improves
digestion through its bioactive enzymes.
3. CocoLoco has little to no additives present and is a long-lasting refreshing drink.
4. CocoLoco is a good alternative to commercial drinks with high caloric content and can
help you lose weight, reduce cholesterol and increase your metabolism, since you will be
consuming fewer calories than other commercial flavoured soft drinks.
5. It will appeal to the beauty conscious people because it has cytokines in it, which is a
well-known anti-ageing agent. Besides this, it also hydrates your skin to make it more
radiant and firmer and your hair shinier.
6. CocoLoco can be incredibly useful in the case of health and medicine as it can be injected
directly into the blood stream as plasma, can be used as a replacement to saline solution for
patients, treat cholera, infections, blood poisoning, malnourishment, kidney stones and
even hangovers as it is hygienic also.

• Marketing strategy

One of the biggest challenges that small business owners face is ensuring that they fare
talking to their target market. With limited marketing funds, it is essential that you talk to
the right people – your potential customers. It may sound obvious, but there are many
business owners who consider who will buy their products or services before they begin
their marketing.
As mentioned before, there is an unexplored market in India as far as coconut water is
considered, growth chances are huge and specially the new health conscious India will love
CocoLoco. Considering the immense health benefits of the product that we are manufacturing,
we feel that it will be beneficial for us if we tap into the unmarked market of health enthusiasts,
athletes and people requiring this product in case of emergency medical issues or otherwise like
in the military of hospitals. We are targeting the area around Delhi and NCR as our preliminary
market, gradually spreading to most of North and Central India. This section of the Indian
population loves coconut water but has to surrender to its unavailability or high prices. Our
economic target will be the growing middle and upper middle-class Indian who does not shy
away from spending a few bucks to ensure the much-needed health benefits. The age bracket
that we are targeting ranges from high energy teens to people relaxing in their retirement homes.
We feel that each age group can benefit from the mineral rich CocoLoco. We will be
distributing our products to gyms and sports parks as CocoLoco is a good alternative to
commercial drinks with high caloric content and can help you lose weight, reduce cholesterol
and increase your metabolism, since you will be consuming fewer calories than other
commercial flavoured soft drinks. In addition to this CocoLoco water is refreshing, contains
essential electrolytes, and is the most natural isotonic drink that exists in the market. contains
important minerals such as: Mg, Ca, P, K and Na. The above two properties will be lucrative
to gym beasts and professional athletes. We will also be stocking our product in military camps
and hospitals alike as CocoLoco can also prove to be a life saver. CocoLoco contains essential
electrolytes, and is the most natural isotonic drink that exists in the market. contains important
minerals such as: Mg, Ca, P, K and Na. It is a digestive tonic. It helps in the absorption of food
and improves digestion through its bioactive enzymes. CocoLoco can be incredibly useful in
the case of health and medicine as it can be injected directly into the blood stream as plasma,
can be used as a replacement to saline solution for patients, treat cholera, infections, blood
poisoning, malnourishment, kidney stones and even hangovers.

As marketing tools, we can use advertising on social media by influencers, television,

billboards and print media. A complete account of the publicity relations strategy including a
list of media that will be approached as well as a schedule of planned events can be mapped
out. We can schedule planned promotional activities such as special sales, coupons,
contests and premium awards. Apart from this we can also have a separate website with an
inhouse grievance cell and bulk order service. The health benefits offered by our product
will be the theme and key driver for our promotion campaigns. We intend to capitalize on
the promotions by government agencies like Coconut Development Board, who have been
involved in product promotion campaign. Financial assistance is provided by the
government for market promotion of coconut products through the media, participation in
exhibitions / developing / hiring display facilities in super markets, adopting attractive
packaging etc. @ 50% of the project cost limiting to Rs.10.00 lakhs for individuals. We
intend to use these options. If all this succeeds, we project our product to acquire 50% of
the existing coconut water market in India, which is about 2% of the total Indian soft drinks
market.

• Sales strategy

We’ll start selling of coconut water in summers and also in winters as in the open area/open
air events in India the climate is mainly hot and humid. People mainly consumes soft drinks
and carbonated drinks which are harmful and even not hydrate the body effectively. Selling
cool coconut water in tetra packs will be good even for health and as the nutritional value
of coconut water is high and a good source of electrolyte it will hydrate the body. Also our
drink is bound to be a hit banking on the USP of product as stated in the section above. We
also plan to enter into tie-ups with institutions, hospitals, pharmacies and gymnasiums via
partners and distributers to offer our product to them by establishing a counter at their
campuses. To bring the product to the masses, we will offer our product at all stores and
retail outlets. We can also seek help the help of well-established agencies such as Amazon
etc. as our online shopping partners and even give free samples at sporting events such as
the annual Chennai marathon to popularise our brand.

• GST for the product

28th GST Council Meeting was held 21st July 2018. Rates for 45 Goods and 2 Services
have been revised. There is 12% GST tax rate on Tender coconut water put up in unit
container and bearing a registered brand name. HSN code: 22029090

• Pricing strategy
Cost of production with packaging comes up to Rs. 10 – Rs. 11. Maximum Retail Price of
our product will be Rs. 20 for the year of 2019. We’ll sell the product at a cheaper rate first
so that we can compete with our already established competitors and then increase our
price.

Year Price
2019 Rs. 25
2022 Rs. 25
2027 RS. 27
• Clearances and Licenses

• CocoLoco will get the storage technology from the Defence Food Research
Laboratory, a Premiere Defence Lab, under the aegis of Ministry of Defence,
Government of India by paying a one-time license fee of Rs 3lakhs.
• Statutory requirement of FSSAI license for setting up of food processing industry.
State license - Its fees for 1 year is Rs. 2000/3000/5000 - can be applied for 1–2–3–4–
5 years
• MSME (Micro small medium enterprise) & GST registration – consultancy fee of
Rs. 1799 by Govt. of India.
• Registration under BOCW act and CESS valuation. Any Construction done on any
Industrial Plot the owner of the plot has to pay cess to the State Government. The
State Government then will issue a No Objection Certificate stating that the plot is
freehold. The Applicant has to submit the application along with building plan.
The time required is 4-6 Working days.
• Factory license - As per the provision of Factories Act and Rules applicable to the
state every Factory employing 10 or more workers with use of power or 20 or workers
without the aid of Power have to take Factory License before start of Factory. This
has to be renewed every Year. Before applying for Factory License every owner of
factory has to apply for factory building Plan approval. Under Factory Building plan
approval Maps and Drawing of the Factory is to be submitted to get them approved as
per the State Factory Rules. The Procedure for Building approval and Factory License
takes about 20-25 working days.
• Registration for ESI (Employees’ State Insurance) from Ministry of labour and
employment. Employees’ State Insurance Scheme of India, is a multidimensional
social security system tailored to provide socio-economic protection to worker
population and their dependants covered under the scheme. Besides full medical
care for self and dependents.
• EPF (Employees’ provident fund) from Ministry of labour and Employment – 12%
os salary of employee. As per the provisions of the employees' provident fund and
miscellaneous provisions act '1952 any establishment employing 20 or more persons ,
cinema theatres employing 5 or more persons. Has to get themselves registered and
contribute to the provident fund of the employees. The provident fund scheme has to
be approved and registered. If any of the establishment is not satisfying the above two
conditions for coverage and if the employer and majority of the employees are
willing, the act may be applicable to such establishment.
• As per the Provisions of the Contact Labour (Regulation and Abolition) Act, 1970
any contractor getting and performing outsourced work and employing more than 20
workers at any time during year has to take Labour License. There are separate rules
applicable to state. Time required for the Labour License 5-7 Working Days
• Fire safety plan approval - Every State has its own Fire Safety Act. The Industrial
building has to be approved by the Fire Department for the purpose of the Fire Safety.
 Under this application has to be submitted under with the building Plan/Maps.
After Application is submitted then Fire Inspector inspects the Building and Give
Certificate. The time required is 7-9 Working days.
• State Pollution Control Board where ever it is applicable. Every Industry has to take
certificate from the State Pollution Control Department which States that the industry is
free from Air and Water Pollution. Before start of work the Industries has to get
themselves approved by the Pollution Control Board. The Industries has to Submit their
Manufacturing Procedure and also there Building Plan and Machinery installed details
which should also contain the safety measure taken for Control of Pollution.

• List of machinery/equipment/ tools

Production process:

Coconut water
extraction, Packing the
Cold Storage Transportation
sterilization product
and processing

Equipment involved:
1. Machines for coconut water extraction and processing and sterilization:
This involves tools for break opening the coconut shell to extract the coconut water
and also facilities for storage of coconut water. Also, machines for the processing
of coconut water by which the coconut water is increased in quality and also its
shelf life is increased. This is the reason why sterilization is done and so we need
machines to carry out sterilization. It is here that our preservatives are mixed with
our product.
2. Packaging units:
After the processing of coconut water, the coconut water has to be packed in tetra
packs. For efficient and hygienic packing, we need packaging units.

3. Cold storage:
After packaging we need to properly store them which will addon to their shelf
life. So, we need cold storage facilities.

Production Calculations:
1 coconut :500ml
Total coconuts daily: 1000 coconuts
 1-day production: 500*1000 = 500lt
1 tetra pack volume: 200ml
Total tetra packs per day :500lt/200ml =2500 packs
Total tetra packs in a week :17500 packs

Cold room storage needed for 1-week storage: 3500lt +1500lt = 5000lt=5m3

• Comparison of atleast 3 brands/suppliers of the above

A. Processing Unit:

1. Ace Pack
Product Details: Automatic Grade: Automatic, Design: Standard, Capacity: 500 litres
Features: Long working life, high efficiency and sturdiness. It is capable of breaking
open the coconuts and then process the coconut water and also carry out the
sterilization processes all in one machine.

Area occupied: 3m *2 m
Cost: Rs 9 Lakh/Unit

2. Bertuzzi unit
In the Bertuzzi unit, there is no single unit where the processing and sterilization can
take place. It requires separate units and so it becomes more expensive and therefore
the 1st unit is more preferred.
Area occupied by processing unit: 2m*2m
Area occupied by sterilization unit: 3m*2m
Cost: Rs. 15 lakh/ unit

3. Jiaozuo Machinery
This machine is suitable for coconut cut half to collect water. It is advance in
technology. This machine is made of full stainless steel. This machine is mainly
composed of frame, conveyor chain, juice discharge bucket , dial the rack, transmission
reducer, and other important parts.

Area occupied: 3*1*23 m3

Cost: Rs. 14 lakh/unit
B. Packaging Unit:

1. Tetra Prisma Aseptic Packaging Unit:

The unit is capable of packaging 2000 litres per hour. It basically fills the bottles in a
hygienic manner and seals the bottles. A large number of bottles are simultaneously
being packed and also branded .
Area: 3m*2m
Cost: 1.5 lakh/ unit
2. Kira Aseptic packaging Machines

This is capable of packaging 7000lt per hour. It is massive and takes up a lot of space
and is very costly when compared to the other brand. This is preferred in factories which
are already established and are gaining a huge profit and are producing much larger
volumes of their products than we are at this initial stage.
Area: 3m*3m
Cost: 4 lakh per unit

3. Wenzhou urban exporters

It is a multi-Function Packaging Machine to be used for filling and sealing. It is
automatic and has certifications from CE. It can pack 30-80 packs per minute.
Cost: Rs. 4 lakh/unit
Area: 0.8*0.7*1.5 m3

C. Cold Storage
1. Tian Jin Cold Storage Room
Cost: Rs 6,30,000 per unit

Temperature: Can regulate the temperature from – 10 to 4 degree Celsius

Refrigeration System: Brand Compressor Unit
Usage: Fresh Keeping, Frozen
Certification: ISO, CE
Warranty: 5 years
Materials: 304 Stainless Steel Outer Plate
Dimensions: 2m *1.8m*1.5m (customized)
4. One Glass Door Vertical Showcase

Door Number: Single Door

Door Type: Folding Door

 Temperature Control: Mechanical Thermostat
Capacity: 101-200L
Type: Display Cooler
Power Source: Electricity
Temperature Type: Single-temperature
Function: Cold Storage
Cost: Rs 250000 per unit
The first one is preferred as this is more like a refrigerator and the capacity is less and
so we will need to buy multiple units in order to accommodate all our tetra packs and
so the first option is more feasible. Moreover, it’s a single temperature model where as
in the first one the temperature can be regulated according to our necessity.
5. Yourshine refrigerator room
Temperature: 0 to 10 degree Celsius
Warranty: 2 years
Usage: Food, Medicine, Food Storage, Lab Centre
Cost: 870000 per unit
Dimension 3m*2m*2m

It cannot be customized and so it is too huge and space consuming. Moreover, its more
expensive than the first option and the warranty is also for lesser number of years.

• Selected brand

1. Ace Pack Coconut Water Processing Machine:

It is a product of Ace Pack machines. The offered machine is available on numerous

specifications according to the needs of patrons. This machine is well designed by our
team of adroit professionals using high-grade basic materials and leading techniques in
compliance with international standards. Our machine is highly valued in the market
for its high-speed processing. There’s drillings and collection of coconut water
 happening in this unit. At a stretch 500 litres of coconut water can be collected. This
machine is also capable of in – container sterilization. The sterilization of the coconut
water also takes place in the same unit , that is , where the coconut water is collected.
This involves heating the extracted coconut water in temperatures ranging from 137 to
145oC for about 4 to 15 seconds. This has a more effective sterilization rate in killing
off bacteria that can cause degrading, which makes the water suitable for distribution
in paper cartons and storage for about 1 year in non-refrigerated conditions. In the other
units, there is no single unit where the processing and sterilization can take place. It
requires separate units and so it becomes more expensive and therefore this unit is more
preferred.
2. Tetra Prisma Aseptic Packaging Unit:

The unit is capable of packaging 2000 litres per hour. It basically fills the bottles in a
hygienic manner and seals the bottles. A large number of bottles are simultaneously
being packed and also branded. Other units are massive and take up a lot of space and
are very costly when compared to this brand. Others are preferred in factories which
are already established and are gaining a huge profit and are producing much larger
volumes of their products than we are at this initial stage.
3. Tian Jin Cold Storage Room:

A cold storage room where all our tetra packs can be stored until transportation. It can
regulate the temperature from – 10 to 4 degree Celsius, has a Brand Compressor Unit.
It keeps stores item fresh and frozen. It has certification from ISO and CE. Materials
include 304 Stainless Steel Outer Plate. This one is preferred as others are more like a
refrigerator and the capacity is less and so we will need to buy multiple units in order
to accommodate all our tetra packs and so the first option is more feasible. Moreover,
others are a single temperature model where as in this one the temperature can be
regulated according to our necessity. Others cannot be customized and are space
 consuming. Moreover, they are more expensive than this option and their warranty is
also for lesser number of years.
Dimensions: 2m *1.8m*1.5m= 5.4 m^3

• Quotation of all the machinery with exact prices and GST

a) Ace Pack Coconut Water Processing Machine

Cost: Rs 9 Lakh/Unit (Including 12% GST)

b) Tetra Prisma Aseptic Packaging Unit:

Cost: 1.5 lakh/ unit +12%GST = Rs 1,68,000

c) Tian Jin Cold Storage Room:

Cost: Rs 630000 per unit (Including 12% GST)

• Electric power requirement:

a) Lighting up the warehouse:

Lighting requirement for a factory is around 100 lumens per square feet for good
working conditions. The area of warehouse is 1500sq feet that implies we would be
needing around 150000 lumens. 1 t-12 27watt 4feet led tube light gives around 2800
lumen. So, require around 53 tube lights. Therefore, total power requirement for
lighting is 53*27 watts.

We will require around 26 tube lights and 2 tube lights cost 2500rs.
Total cost for lighting= 32000rs+4000(installation)

b) Fan requirement:
One 44-inch fan is effective for 225 square feet. So according to the area and
office we estimate a requirement of 5-6 fans. 1 fan is around 90watt so total power
used by fans would be 6*90 watts.
 Total cost for fans=5*20000rs+5000 (installation)

c) Cold Room:
Cold room requires a power of around 50 kwh/m3/year and we are required
to have a 5.4m3. So, we require a 270kwh power per year.

d) Packaging Unit:
Tetra-packaging may score over bottles on a variety of factors. But on cost,
it falls way behind. Since a bottle can be reused about 20 times, each refill costs
about 25paise. In contrast, 200 ml tetra pack costs 80 paisa. Power 2.6 kw. 220volt

e) Coconut Water processing machine:

380volt and 3Kwatt

• Electrical requirements:

a) Wiring: Cost of wiring for a 1500 sqft warehouse would come around Rs. 50,000 to
Rs. 70,00 using 200 amps high quality wiring for the load of the machines.

b) Generator: We are going to use a 7500-2500 KVA generator to power the machines.
Therefore, we are going to use the high quality generator from Ashok Leyland costing
around Rs. 3,88,000.
c) Switchboards: We need switchboards that can be used in a commercial setting therefore
we are using these switchboards and keeping in mind the machines we have, we will
be needing 3 of those with 3 normal ones to operate lights, fans etc. bringing the total
cost to Rs. 15,300.

• List of suppliers

a) Raw tender coconuts:

Primary supplier:
Pollachi Nature Fresh Tender Coconuts
Vendor: Sree Traders
Price: Rs. 8/per piece
Location: Mannur, Coimbatore
Alternative Suppliers willing to sell at competitive prices:
Kavinsurya Coconuts in Othakalmandapam
Sri Jai Maruthi Traders in Shevapet
Akm Traders in Amabarampalayam

b) Tetra pack rolls supplier:

 c) Sodium Benzoate supplier: Sodium benzoate is an inexpensive chemical and can
be bought online.

• Total Capital requirements

a) Start-up costs
Land and Buildings:
= (9000*12) = ₹1.08L
Machineries:
= (9L+1.5L+6.3L) = ₹16.8L
License Fees:
DFFL =₹3,00,000
FSSAI =₹2,000
MSME =₹1,799
Other Costs:
Salary = (3+1) * (₹200/day) * (300days) = ₹2.41L
Raw Materials
Coconut=₹24L
Tetra pack=₹8.1L
Additives=530*300=₹1.59L
Funds:
Self-generated=5*₹6L=₹30L
Loan=₹27L

b) Fixed capital

Land and Building=₹1.08L

Equipment=₹16.8L
 c) Working capital

Inventory:
Shelf=₹15L
Progress=₹45L
Raw Material=₹30L
Finished=₹45L
Customers=₹15L

d) Capital for contingencies

In this, if our start-up faces any loss of contract or any loss due to fire or any
natural accidents, we’ll claim the insurance of our company. So, we will be able
to overcome our losses by claiming money from Insurance company, which will
be around Rs. 40 lakhs.

• List of Incentives, Grants and Subsidies available from Govt.

The health benefits offered by our products will be the theme and key driver for our
start-up. We intend to capitalize on land, salary, machines and source for technical
upgradation by Government at 25%(₹5.07L) and ₹2.25L (75%) for market assistance
for micro, small and medium projects and also we will get some incentives from CDB.
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 products. We wish to make
use of this facility. We intend to use these options. Our product will be offered at
hospitals, health centres and gymnasium through retailers

• Source of funds

Personal funds =5 members *6 lakhs

=Rs 30 lakhs
Loan =Rs 27 lakhs

Total =Rs 57 lakhs

• Break even analysis

The following assumptions are made: The total production of coconut water is about
7,50,000 cans (2500 can/day X 300 days). Also, we assume there is no inventory i.e.,
the number of cans produced is sold in the market. The following table gives the total
sales turnover for the first year.
Table: Sales Forecast
Product Price/Unit No. of cans sold Sales in Rs.
Coco loco 25 7,50,000 Rs. 1,87,50,000

Total fixed cost comes to Rs. 42.9 lakhs including the interest paid for the loan at 13%.
Breakeven quantity is given by Q = Total fixed cost/ (Price/unit – Variable cost/unit)

Quantity Sold 7,50,000

Price per unit Rs. 25
Variable Costs 1,50,00,000
Variable Cost per Rs. 20
Unit
Total Fixed Cost 42,90,000
Breakeven Quantity 8,58,000
 Breakeven Quantity is 8,58,000 units and is achievable in 1.144 years assuming that
the production is 7,50,00,000 units per year.
Breakeven Units
Analysis 0 7,50,000 11,25,000 15,00,000 18,75,000 22,50,000
Sales 0 1,87,50,000 2,81,25,000 3,75,00,000 4,68,75,000 5,62,50,000
Total Fixed Cost 42,90,000 42,90,000 42,90,000 42,90,000 42,90,000 42,90,000
Variable cost/Unit 20 20 20 20 20 20
Total Variable Cost 0 1,50,00,000 2,25,00,000 3,00,00,000 3,75,00,000 4,50,00,000
Total Cost in Rs. 42,90,000 1,92,90,000 2,67,90,000 3,42,90,000 4,17,90,000 4,92,90,000

• Profitability analysis

(in Lakhs) Year 1 Year 2 Year 3

Income
Sales Turnover 150 180 240
Other Income 9 11.25 15.75
Total Income 159 191.25 235.75
Expenditure
Raw Material 32.1 39 53
Power Cost 1.5 1.818 2.199
Employee Cost 2.4 2.5 2.6
License Fees 3 0 0
Miscellaneous Expenses 1.5 3 3.3
Total Expenses 40.5 46.31 77.89
Profit 118 144 177
Taxes 11 14.4 17.7
Interest Expenses 2.4 2.4 2.4
Net Profit 38.1 43.91 75.43
• Repayment schedule (Principle and Interest)
Loan Principal Amount: 27 Lakhs

Rate of Interest: 13% (We are planning to take the loan from IDBI Bank, which
loans to small scale industries on a lower rate)

Duration: 2 Years

Total amount to be paid in 2 years: 34.47 Lakhs (Interest compounded annually)

Amount to paid monthly: 1.44 Lakhs

• Exit strategy/plan

The exit strategy that we are aiming for is the same exit strategy for most start-ups,
which is merger or acquisition by a bigger company. The buyer takes over our start-up
using cash or stock as a compensation, and key executives and employees from our
start-up will stay at the company for a period of time in order to be able to cash out and
vest our stock.

The advantages of this exit strategy are:

1. We can negotiate price. In an acquisition, the sky's the limit on the perceived value
of the company.
2. We can merge with a company that we prefer, based on work ethic, business
relationships, brand value etc.
3. Both the companies benefit financially from the merger and acquisition.
4. The original owners still have some level of control on the operations of the company.
5. The original business can employ all the resources of the investing business to
promote their cause.

• 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. CocoLoco 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 near Arasur, Coimbatore, Tamil Nadu. We have solid
growth plans as we plan to invest more to diversify into other coconut products. The
product has a huge export potential. Coconut product industry has been growing leaps and
bounds due the efforts taken by the government authorities. Besides there is a changing
perception 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.