Tarlton Beetroot Business Plan — Products, Portfolio and Unit Economics

The product mix across bunched, loose and processing grades, and the economics of a planted hectare.

Section 6 of 37

Products, Portfolio and Unit Economics

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Four product-channel combinations with materially different economics — and the plan is principally about shifting volume between them.

Table 7 Product and channel portfolio, FY2028 real prices

Product	Gross price R/kg	Deductions	Net R/kg	Post-harvest cost R/kg	Primary demand driver
Retail pre-pack, washed 1 kg	9.80	—	9.80	2.74	Formal retail category volume
Loose bulk, 10 kg market pocket	7.20	12.5%	6.30	1.59	Municipal market auction demand
Informal and wholesale direct	5.20	—	5.20	0.53	Township and hawker trade
Processing and juicing outgrade	2.40	—	2.40	0.35	Juice and colourant processors

Municipal market deductions comprise 7.5 per cent agent commission and a 5.0 per cent market levy. Retail pre-pack cost includes packaging, packhouse conversion, freight and cold chain.

Figure 1. Blended net realisation against unit cost of production, beetroot only. The widening gap is created by channel mix, not by agronomy.

The unit cost of production is remarkably flat across the plan: R4.84 per kilogram in Year 1 falling to R4.26 by Year 5, a 12 per cent improvement driven by yield learning and lower pack-out losses. Net realisation rises from R5.70 to R8.76, a 54 per cent improvement. Almost all of that improvement comes from moving volume out of the municipal market and into the retail pre-pack channel. It follows that a delay in securing retail listings does not merely postpone growth — it removes the margin.

Figure 2. Channel mix by year. The commercial task is to move volume off the municipal market before the volume exists.

Year 5 unit economics

At Year 5 scale every marketable kilogram carries R2.13 of field cost, R2.06 of post-harvest and pack cost and R3.17 of absorbed overhead, against R8.76 of realisation — leaving R1.34 per kilogram of EBITDA. The absorbed overhead figure is the one to watch: it is R25.61 per kilogram in Year 1 and R3.17 in Year 5, and it is the single largest determinant of whether the business works.

Figure 4. Direct field cost build-up per hectare-cycle. Labour and fertiliser together account for roughly half the stack.

The rotation block

The rotation block is not a diversification play; it is an agronomic requirement that has been made to pay. Beetroot grown continuously on the same soil accumulates Rhizoctonia solani, Cercospora beticola and root-knot nematode pressure that no rotation-free programme can manage economically. A one-in-three rotation is the minimum defensible practice.

Table 8 Rotation block contribution

	Year 1 FY2028	Year 2 FY2029	Year 3 FY2030	Year 4 FY2031	Year 5 FY2032
Rotation hectare-cycles	0	0	5	34	52
Rotation revenue (ZAR m)	0.00	0.00	0.69	4.95	7.96
Rotation gross profit (ZAR m)	0.00	0.00	0.28	1.98	3.18
Share of total revenue	0%	0%	14%	27%	31%

Blended across sweetcorn, cabbage, butternut and green beans at R125,000 per hectare-cycle in FY2028 real terms and a 40 per cent gross margin, sold through the same packhouse and channels as the beetroot crop.

By Year 5 the rotation block contributes 31 per cent of revenue and R3.18 million of gross profit — more than half of reported EBITDA. Without it, the Company would carry the same overhead on 69 per cent of the revenue and would not reach profitability within the plan horizon. Investors should note that this makes the plan partly a mixed-vegetable business, and should test the rotation crop assumptions with the same rigour as the beetroot ones.