Green Master Vegetables Business Plan — Route to Market
The channel mix across fresh produce markets, retail and informal trade, and how each prices, pays and charges.
Route to Market
Jump to section
- Overview & contents
- i. Important Notice
- 1. Executive Summary
- 2. Why Limpopo
- 3. The Market and the Commission Problem
- 4. Water: The Binding Constraint
- 5. Open Field Versus Tunnels
- 6. Crop Plan and Rotation
- 7. SWOT and Competitive Position
- 8. Route to Market
- 9. Unit Economics
- 10. The Five-Year Build and Its Gates
- 11. Funding
- 12. People and Operations
- 13. Certification and Compliance
- 14. Financial Projections
- 15. Break-Even
- 16. Sensitivity and Scenarios
- 17. Risk Management
- 18. Implementation Timeline
- 19. Returns
- 20. Key Performance Indicators
- 21. Key Assumptions
- 22. Conclusion
- A. Appendix A: Consolidated Financial Summary
- B. Appendix B: Capital Schedules
- C. Appendix C: Funding and Debt Schedules
- D. Appendix D: Risk Register
- E. Appendix E: Glossary
- 8.1 The economics of the shift
- 8.2 Building the direct channel
|
Channel |
Share Year 1 |
Share Year 5 |
Character |
|---|---|---|---|
|
Market agents at the fresh produce markets |
86.0% |
58.0% |
Clears any volume, any grade, reliably. Costs up to 12.5%. Price entirely outside the farmer’s control |
|
Wholesalers and hawker suppliers |
Small |
Growing |
Cash on collection, no commission, negotiated price. Requires consistent supply to hold the relationship |
|
Formal retail and processors |
— |
From Year 3 |
Best price stability and volume certainty. Requires GLOBALG.A.P. or equivalent certification, traceability and a packhouse |
|
Local and institutional |
Small |
Steady |
Schools, hospitals, mines and lodges. Unglamorous, reliable, and pays without commission |
The certification investment in Section 13 exists to unlock the third row. A formal retailer or processor will not buy from an uncertified farm, and those buyers are the only ones offering contracted volumes at negotiated prices rather than whatever the floor pays on the day.
8.1 The economics of the shift
|
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
|
|---|---|---|---|---|---|
|
Share via market agents |
86.0% |
80.0% |
72.0% |
64.0% |
58.0% |
|
Share direct |
14.0% |
20.0% |
28.0% |
36.0% |
42.0% |
|
Premium earned on direct volume |
6.0% |
7.1% |
8.0% |
9.0% |
10.0% |
|
Direct-channel premium, R’000 |
19 |
65 |
205 |
475 |
898 |
|
Commission avoided on direct volume, R’000 |
38 |
110 |
308 |
634 |
1 079 |
|
Combined value of the direct channel, R’000 |
57 |
175 |
513 |
1 109 |
1 977 |
The direct channel is worth R1.97 million in Year 5, R898 000 of premium and R1.08 million of commission avoided. That is 57 per cent of Year 5 EBITDA, generated by a commercial decision rather than by an agronomic one, and it requires no additional capital.
8.2 Building the direct channel
- Start with hawker suppliers and small wholesalers in Year 1. They pay cash on collection, they take mixed grades, and they require no certification. The volumes are small but the relationships are real.
- Add institutional buyers in Year 2. Schools, hospitals, mines and lodges buy predictable weekly quantities, pay by invoice without commission, and care more about reliability than about price.
- Begin GLOBALG.A.P. certification in Year 3 so that formal retail and processor conversations can start in Year 4 with the documentation already in place rather than as a promise.
- Sign the first retail or processor contract in Year 4. It is a Year 4 gate condition, and it is the point at which a share of the crop has a price before it is planted.
- Keep the market floor for surplus, gluts and off-grade throughout. It is the only channel that will absorb an unexpected 40 tonnes at short notice, and that capacity is worth the commission on the volume that goes through it.