Tarlton Beetroot Business Plan — Market Analysis and Sizing

Market size, inelastic year-round demand, price behaviour and the addressable volume for this operation.

Section 8 of 37

Market Analysis and Sizing

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The addressable opportunity is modest and the Company’s Year 5 output equals 3.3 per cent of the national crop — large enough to move the price it receives.

Figure 1. Market sizing from national consumption to Year 5 planned output.

Top-down sizing

National beetroot production of approximately 68,000 tonnes, valued at an average wholesale realisation of R9.00 per kilogram, implies a total addressable market of approximately R612 million at the wholesale level. Gauteng and its adjacent metropolitan catchment account for an estimated 31 per cent of national consumption, giving a serviceable available market of roughly 21,100 tonnes or R204 million. Of that, the formal retail and structured wholesale channels the Company can realistically access represent approximately 11,600 tonnes or R118 million.

Bottom-up sizing

The bottom-up calculation reaches a similar place by a different route. Gauteng’s population of approximately 16.1 million, at an estimated per capita beetroot consumption of 1.3 kilograms per year, implies annual consumption of roughly 20,900 tonnes — within four per cent of the top-down estimate. Applying an estimated 34 per cent formal retail share and a 16 per cent food service share to that figure produces an accessible formal-channel volume of approximately 10,400 tonnes, against 11,600 tonnes top-down. The convergence of two independent methods within 11 per cent gives reasonable confidence in the order of magnitude.

Table 11 Market sizing reconciliation

Measure	Top-down	Bottom-up	Adopted
Total addressable market (tonnes)	68,000	—	68,000
Gauteng catchment (tonnes)	21,100	20,900	21,000
Accessible formal and structured channels (tonnes)	11,600	10,400	11,000
Company Year 5 output (tonnes)	2,215	2,215	2,215
Company share of accessible market	19.1%	21.3%	20.1%
Company share of national production	3.3%	3.3%	3.3%

Demand drivers and seasonality

Figure 2. Seasonal price and yield indices, deviation from the annual mean.

The seasonal pattern is unhelpful in a specific way. Municipal market prices peak between June and August, when national supply is constrained by winter, and trough between November and February when the main summer crop arrives. Unfortunately the Highveld yield index moves in the same direction: July yields index at 0.82 against a December index of 1.08. The seasonal arbitrage is therefore only partly capturable — a Tarlton grower producing into the winter price peak does so with materially reduced yield, and the model reflects this by applying both indices to the same harvest month rather than assuming the price benefit can be obtained without the yield penalty.