Tarlton Beetroot Business Plan — Business Model
How the business earns across channels, and why net realisation rises from R5.70 to R8.76 a kilogram.
Section 11 of 37
Business Model
Jump to section
- i. Important Notice and Basis of Preparation
- 1. Executive Summary
- 2. Investment Thesis
- 3. Company, Structure and Stage of Development
- 4. Customer Problem, Value Proposition and Monetisation
- 5. Products, Portfolio and Unit Economics
- 6. Industry Analysis
- 7. Market Analysis and Sizing
- 8. Customer and Channel Analysis
- 9. Competitive Landscape
- 10. Business Model
- 11. Go-to-Market Strategy
- 12. Operating Model: Agronomy and Production
- 13. Operating Model: Post-Harvest, Packhouse and Logistics
- 14. Water, Energy and Land: The Three Binding Constraints
- 15. Management and Organisation
- 16. Strategic Plan
- 17. SWOT Analysis
- 18. Risk Analysis and Register
- 19. ESG and Development Impact
- 20. Implementation Roadmap
- 21. Financial Assumptions
- 22. Projected Income Statement
- 23. Projected Balance Sheet
- 24. Projected Cash Flow
- 25. Capital Expenditure and Working Capital
- 26. Funding Requirement and Structure
- 27. Break-even Analysis
- 28. Debt Serviceability
- 29. Investment Returns and Valuation
- 30. Sensitivity and Scenario Analysis
- 31. Phase 3: Processing Optionality
- 32. Key Performance Indicators and Management Dashboard
- 33. Conclusion and Investment Recommendation
- A. Appendix A: Monthly Projections, Year 1
- B. Appendix B: Detailed Assumptions Register
- C. Appendix C: Glossary
Capital converts into water-entitled land and post-harvest capability; those convert into channel access; channel access is what converts tonnes into margin.
Table 16 Business model canvas
|
Building block |
Detail |
|---|---|
|
Customer segments |
Formal retail private label (46% of Year 5 volume); municipal market agents (22%); informal and township wholesale (17%); processors and juicers (15%) |
|
Value proposition |
Certified, washed, graded, cold-chained beetroot delivered to specification every week of the year, from a single traceable origin |
|
Channels |
Direct delivery to retail distribution centres; consignment through a market agent at the Johannesburg Fresh Produce Market; farm-gate cash sales; contracted processor collection |
|
Customer relationships |
Seasonal supply agreements with retail; transactional with market and informal; annual contracts with processors |
|
Revenue streams |
Beetroot 69% of Year 5 revenue; rotation vegetables 31% |
|
Key resources |
Water use entitlement; freehold arable land; packhouse and cold chain; GLOBALG.A.P. certification; agronomic and commercial management |
|
Key activities |
Staggered planting and irrigation scheduling; harvest and field heat removal; wash, grade and pack; cold chain logistics; account management |
|
Key partners |
Market agent; seed and agrochemical suppliers; certification body; contract packer during Phase 1; asset finance providers |
|
Cost structure |
Field cost R86,080 per hectare-cycle; post-harvest R0.35–R2.74 per kg by channel; overhead R6.45m at Year 5 |
How capital converts to returns
Table 17 The conversion chain, base case Year 5
|
Stage |
Year 5 |
Conversion logic |
|---|---|---|
|
Capital deployed |
R35.5m |
Two equity tranches plus term and asset debt |
|
Productive assets |
R24.9m |
Land R10.6m and net plant, irrigation and packhouse R14.3m |
|
Hectare-cycles cropped |
93 |
41 beetroot plus 52 rotation |
|
Tonnes harvested |
2,215 t |
At 54 tonnes per beetroot hectare-cycle |
|
Marketable tonnes |
2,037 t |
After 8 per cent field and pack-out loss |
|
Revenue |
R25.8m |
Beetroot R17.8m at R8.76/kg plus rotation R8.0m |
|
Gross profit |
R12.2m |
47.4 per cent gross margin |
|
EBITDA |
R5.8m |
After R6.45m of overhead |
|
Free cash flow |
R5.3m |
After working capital and maintenance capital expenditure |
|
Equity value at exit |
R43.8m |
Enterprise value R53.4m less net debt R9.5m |
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