Tarlton Beetroot Business Plan — Customer Problem, Value Proposition and Monetisation

What fresh-produce buyers need from a beetroot supplier, and how the business converts that into revenue.

Section 5 of 37

Customer Problem, Value Proposition and Monetisation

Jump to section

Retailers and wholesalers do not have a beetroot shortage. They have a consistency problem — and consistency is what a certified, staggered-planting supplier sells.

The problem, stated from the buyer’s side

South African beetroot supply is fragmented across several thousand growers, most of them planting opportunistically and selling into municipal markets when they have volume. The consequence for a formal buyer is not scarcity but unpredictability: volumes arrive in gluts and gaps, quality is inconsistent between consignments, traceability is often absent, and the supplier who delivered last month may have nothing this month. A category buyer running a pre-packed beetroot line needs an agreed volume, at an agreed specification, every week, with audit-ready documentation behind it.

Table 6 Customer problem, solution, value and monetisation

Customer problem	Existing alternative	Company solution	How value is monetised
Supply gaps in shoulder and winter months	Buy on the market at whatever price is being asked	Staggered plantings across nine months, sized so that no month has zero harvest	Seasonal supply agreement priced above the annual market mean in exchange for continuity
Inconsistent size grading and soil contamination	Sort at the distribution centre or accept markdowns	Wash, hydro-cool and grade on site to an agreed specification before dispatch	Pack margin retained rather than surrendered to a third-party packer
No traceability for private-label listings	Restrict listings to accredited suppliers only	GLOBALG.A.P. certification with lot-level traceability from Year 3	Access to a channel that pays R9.80 per kilogram against R6.30 net on the market
Shrinkage from poor post-harvest handling	Accept a higher waste allowance in the buying price	Cold chain from field to distribution centre, cutting shrink at the shelf	Lower claim and rejection rates support price retention

Quantifying the economic value to the buyer

The value proposition can be sized. A retail distribution centre handling 40 tonnes of beetroot per month at an average buying price of R9.80 per kilogram spends R3.92 million a year on the category. Typical shrinkage and out-of-specification rejection on unwashed, ungraded market-sourced product runs at 9 to 14 per cent. Reducing that to 4 to 6 per cent through washed, graded, cold-chained supply is worth R235,000 to R390,000 a year on that volume alone, before any consideration of the labour saved sorting at the distribution centre or the margin recovered on markdowns avoided.

That is the economic argument for paying R9.80 per kilogram to a certified supplier rather than R7.20 gross on the market floor. It is also why the Company’s pricing premium is defensible rather than aspirational: it is a share of a cost saving the buyer can measure.