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Cost of Goods Modelling for Soft Drinks Scale-Up

Sector:

Situation

A small soft drinks player asked us to model the COGS for their canned soft drinks business for different volume thresholds

What we did

Over the project we:

  • Split the COGS into the different components, identifying which were the main drivers of cost
  • Interviewed key players in the industry to establish the key cost drivers, establishing what was fixed and what was variable – this included equipment costs, changeover times, line speeds, truck fill rates and level of competition
  • Analysed the company’s existing quotes at different volumes and their distribution costs for different destinations
  • Modelled the change in costs for different volumes
  • Worked out reasonable upper and lower limits for these estimates and created a higher and lower COGS estimate for the different volumes
  • We highlighted the unknown factors such as future inflationary drivers

Results delivered

The client is using our modelling to support the raising of finance for the expansion of their business