Healthy Frozen Meals Financial Model – Case Study

Introduction

Oak Business Consultant takes pride in creating tailored financial solutions to meet unique business challenges. In this case study, we delved deep to assist our clients in pursuing a detailed financial model. Our task was not limited to financial projections for an online and offline healthy frozen meals business. We were responsible for determining the target market, understanding geographical and channel-specific dynamics, and breaking down cost structures. The objective was to equip our client with an elaborate financial model, ensuring they can make informed decisions in their outsourcing and market penetration strategies.

Client Background

Based in Australia, our client had a unique idea for the frozen food market. They wanted to cater to vegetarians, vegans, and those looking for chicken-free and healthier meal choices. They planned to start in one state of Australia and then expand to other regions. Beyond the online presence through their website, they aimed to penetrate B2B channels, collaborating with gyms, retail stores, and supermarkets to make their products widely accessible. 

Business Objectives

Our client’s mission went beyond just introducing a product; they aimed to revolutionize the frozen meal sector in Australia. Their primary objectives included:

Niche Market Service: Recognizing a gap in the market, they wanted to cater specifically to vegetarians, vegans, and those seeking chicken-free meals, carving out a special place for themselves.

Healthier Alternatives: In a market saturated with fast food and preservative-packed meals, our client’s goal was to stand out by providing healthier, fresh, and nutrient-rich options.

Securing Investment: With a large vision, the client understood the need for significant capital. They aimed to appeal to potential investors by showcasing accurate and convincing financial projections, displaying the viability and promise of their venture.

As their business consultants, our role was to align with these objectives, conducting in-depth market research to validate the concept and providing them with a comprehensive financial model. 

Challenges

Defining the Target Market

Our client’s product was unique, making it a challenge to identify the right target market. They needed specifics, not just broad estimates. We had to find consumers who matched their business goals and appreciated the product’s distinct features. This wasn’t just about counting potential buyers but truly understanding their preferences and needs in the evolving food market.

Geographical and Channel-Specific Research

Our client’s healthy frozen food business strategy was detailed and phased. They wanted to start with their own online platform and then branch out to B2B partnerships with retail stores, gyms and supermarkets. Each channel and location had distinct launch dates. The challenge was determining the potential customer base for online sales and estimating how many businesses could be attracted in the retail, gym and supermarket industries across different regions.

Cost Estimation

With an initial menu of nearly 20 products, each with unique components and characteristics, estimating costs was a thorough task. Our client aimed to outsource production, but they needed a clear breakdown of costs for each product. Listing each product’s labor, material, overhead, packaging, and shipping expenses was required. Knowing these costs in detail was essential for working well with potential manufacturers. 

Finding Reliable Data

Estimating the number of potential target customers in each channel and region was tricky as we were working only with publicly available sources. It required extensive market research. Getting precise numbers from such limited resources was a big hurdle.

Complexity of Presentation

Our client wasn’t deeply familiar with the functionality of financial models or Excel. They wanted to understand each number, its source, and the calculation behind it. Presenting the information in a thorough and easy way for the client to understand was a challenge for us. 

Solutions

In-depth Internet Research

We tapped into extensive resources such as the Australian Bureau of Statistics, Statista, and other research reports to understand and define our target market effectively. Oak business consultant aimed to determine what percentage of Australia’s population is inclined to vegetarian meals. We then used this data to identify the potential customers across our key targeted regions for our client’s healthy frozen meals business.

With this knowledge, we gauged our potential market share, considering the competitive landscape and the inherent challenges of being a new entrant in the market. By determining the total number of retail stores, gyms, and supermarkets in our target regions, we estimated the number of businesses we could partner with. This thorough approach to understanding our potential audience and partners is what we termed as “Market Validation.”

Detailed Cost Estimation through Competitive Analysis

In our mission to estimate costs accurately, we conducted a robust competitive analysis. By assessing the pricing strategies of our competitors, we managed to approximate our costs while ensuring our client remained competitive in the market.  We checked average chef costs in Australia to guess labor costs. We did the same for packaging and shipping by looking at standard rates.

Assumptions and Extrapolation

Given the inherent challenges of data scarcity, we relied on established financial practices: assumptions and extrapolation. For example, we found out how many food stores there were from the total number of retail stores using the share of the food in the total turnover of the retail industry. This helped us give better estimates.

User-Friendly Presentation for Enhanced Understanding

For clearer client understanding, we improved our reports’ layout. We added a notes tab with hyperlinks to data sources, increasing transparency and data reliability. We crafted a detailed revenue analysis, representing the number of customers and businesses across each region and segment. This breakdown further showcased revenue and cost streams for every channel. Additionally, we held meetings to guide our client through all aspects.

Financial Highlights

Input Sheet

We carefully developed an input sheet to cater to our client’s healthy frozen meals business dynamic needs. It’s designed to let them modify assumptions concerning funding, revenue, costs, and more. The entire model updates automatically as they adjust, enabling a real-time experience of their financial blueprint.

Revenue Analysis

Our dedicated team invested significant effort into the Revenue Analysis. This tool not only projects revenues for a span of 5 years but also breaks down all the data year by year, month by month, and even week by week. By further diving into product segmentation, we ensured our client could see the broader picture and the finer details. Each channel’s summary provides insights into revenue, cost, and number of customers and products. 

Income Statement

Understanding the value of comparative analysis, our experts crafted an income statement that presents revenue, expenses, and profits. Moreover, it allows our client to compare performance across different monthly and annual years.

Cash Flow Statement

Recognizing the lifeblood of any business is its cash flow; we provided a comprehensive statement capturing all cash movements. It highlights financing, operating, and investing activities. With monthly and yearly overviews, our client can monitor and plan cash balances effectively.

Balance Sheet

The Balance Sheet, pivotal for financial decision-making, was crafted to provide a clear snapshot of the company’s assets, liabilities, and equity. Any change in the input sheet is reflected here, keeping our client informed about their financial position at all times.

Financial Ratios

We integrated key financial ratios to ensure our client is equipped with analytical tools. These metrics serve as a performance check, offering insights into profitability, equity health, asset utilization, EBITDA margins, and profit growth.

Sensitivity Analysis

We incorporated a sensitivity analysis in this Healthy Frozen Meals financial model to provide our client with a foresight tool. This assesses the potential impact of variable changes, allowing them to foresee possible outcomes and plan accordingly.

Company Evaluation

Anticipating investor queries, our experts assembled a detailed project evaluation. This includes estimations like present company value, IRR, expected equity percentages, and a payback period overview for 5 years. It’s designed to build confidence in potential investors.

Conclusion

Oak Business Consultant’s commitment to client satisfaction remained firm and steady throughout this healthy frozen meals financial model project. Working with this client was a journey of discovery and collaboration. The complexity of tasks didn’t deter us; instead, it propelled us to find innovative solutions through in-depth market research, comprehensive data analysis, and the development of user-friendly presentations. Regular follow-ups and open lines of communication ensured that our client’s vision and deliverables were always in sync and we followed the instructions correctly. We believe that beyond numbers and data, mutual trust and collaboration with our clients truly define successful consultancy. 

What Oak Business Consultant Offers?

As professional and proficient financial and business analysts at Oak Business Consultant, we are dedicated to supporting you in your financial planning endeavors. We take pride in offering exceptional financial services to all business owners. Our diverse services include Financial Modeling, Business Plans, Pitch Decks, and more. Additionally, we possess the expertise to assist you in fundraising and developing a comprehensive business plan. Our business plans incorporate strategies to target the right market and foster sustainable growth. 

We invite you to view our specialized frozen food financial template and pitch deck on our website for a deeper dive into the frozen food sector. Also, check some templates related to the Food Industry. Please note these resources are available for purchase. 

• Frozen Food Excel Financial Model Template
• Frozen Food Pitch Deck Template
• Frozen Food Multi-Channel Excel Financial Model
• Online Organic Food Store Excel Financial Model
• Food and Drink Marketplace Excel Financial Model
• Online Food Delivery Financial Model
• Online Organic Store Business Plan
• Cloud Kitchen Financial Model Excel Template

You can optimize your business operations by choosing us for your financial services. If you face challenges in launching your business, contact us for comprehensive support. Explore our portfolio to discover why numerous Micro-Small and Mid-sized Businesses consistently prefer our financial planning services. Once you embark on this journey with us, we assure you that success will be the only direction ahead.