Feasibility study of establishing a Chevre blue cheese production plant in San Jose city, Nueva Ecija

Date

2010

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Nimfa D. Montes

Request Access

To request access of this material, please email the administrator at uscs-mainlib.uplb@up.edu.ph

Abstract

Blue cheese is a general classification of cow's or goat's milk cheese with a blue or blue- green mold. The blue mold in this cheese is due to mold spores of Penicillium Roquefori.

These complex blue-veined cheeses are generally ranked as some of the best cheese in the world. They are strong flavored and have a unique 'tang' that distinguishes these kind of cheese. Some of the best are Roquefort, Stilton, Gorgonzola and Danablu. The Philippines is a big importer of dairy products. 80% of the imported milk alone is composed of powdered milk only. This study may be able to improve the importation sector of cheese products and the utilization of goat’s milk as its raw material by establishing a production plant. This study aimed to answer the following objectives: 1) To present the chevre blue cheese production plant and its planned area of operations; 2) To determine the market, production, organizational and financial viability of operating the business in San Jose City, Nueva Ecija; 3) To identify potential risks and problems involved in the business; and 4) To recommend specific courses of action based on the findings of the study. Data collection was done by interviewing Mrs. Olive Puentespina. She is the major contributor for this study because she is the pioneer in the chevre blue cheese industry of the country. Thus, her practices have been the benchmark for the different business functions of the production plant. Institutional buyers were also interviewed to provide data for the study’s market while store check was employed for competitor analysis. The results of the interview were used in establishing the marketing (marketing mix), production (transportation and storage), personnel, financial (NPV, IRR, and Payback Period), R&D, and MIS aspects of the business. Break-even analysis was also used in determining the number of units needed to produce so as to cover the costs resulting to zero profits. The target market of the business would be institutions, specifically restaurants and food chains. This study identified six of them: Melo’s Steak House, Bellissimo Ristorante, New York Pizza Depot (NYPD), Friuli Trattoria, Crave Burger and Flaming Wings. This is because they are already using blue cheese as a food component. Supermarkets were also a part of the target market; it would be the business’ way of reaching individual customers. The name of the product is Bliss: A Deluxe Blue Cheese. Bliss means a state of happiness; this easily suggests that when the product is eaten, bliss will come over you. “A Deluxe Blue Cheese” is considered as a caption of the product name which creates the impression that it is of high quality. The positioning of chevre blue cheese is differentiation. This is because the product is locally-made and goat’s milk, which is the main raw material, has many health benefits

compared to cow’s milk. Its position is also through the product’s applications; it can be used on any food as one of its components due to its tangy taste. The price of the product is Php 142.00 for 100 grams which uses going-rate pricing as its strategy. One kilogram chevre blue cheese products have a price of Php 1,990.00 because of its strategy of value pricing. Distribution of chevre blue cheese to institutions is done every month. The allotment of the products would be 60% for restaurants, 30% for supermarkets, and the remaining 10% for the selling area in the production plant. Promotion will use direct marketing as its strategy for contacting institutional buyers. For supermarkets, free tasting would be employed to increase market awareness for the product. Internet would also be used as another promotion strategy so that consumers can have access to information with regards to the business. A networking process is being considered for the production plant’s future plans. Production of chevre blue cheese takes approximately 12 weeks or 3 months. The raw materials used are goat’s milk, rennet, starter, blue mold, and salt. The expected number of units manufactured by the production plant is 270 pieces of 100-gram pack or 27 kilograms of the product. The company will put up its plant in San Jose City, Nueva Ecija which the owner thinks to be strategically located as it intermediate provinces are accessible from this city in all directions. Initial sourcing of its milk requirement will come mainly from JSJ Goat Farm which is located in Gerona, Tarlac; about 45 minutes drive. The business would need a total of three employees: one supervisor and two production/marketing staffs. Hiring would take place within the production plant; this is to make the potential employees feel comfortable in the atmosphere of the plant. A ten-year business plan was considered in its financial analysis. Based on the analysis outcome, it can be said that the venture is feasible and rewarding. The computed NPV is Php 3,208,045.60 and IRR is 79.99%; the payback period is 1.24 years. The potential source of problem leading to the success of the business venture lies in the sourcing of milk. To avert any possible scenario, a backward integration leading to the development of a goat farm is recommended. This will allow the company to get its needed milk resources independently. The farm will be situated in San Jose City that is very near the plant.

Language

English

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2010 M17 C35

Document Type

Thesis

This document is currently not available here.

Share

COinS