Introduction

A leading regional beverage manufacturer approached Ken Research to evaluate the financial and operational feasibility of establishing a state-of-the-art bottled water manufacturing plant in Laguna, Philippines. The plant aimed to produce 15,000 bottles/hour, focusing on premium products such as alkaline and electrolyte-rich water, packaged in environmentally friendly biodegradable materials. 

Amid increasing competition and rising operational costs, the client sought actionable insights to ensure their expansion was cost-efficient, sustainable, and profitable. This case study outlines how Ken Research employed data-driven methodologies and industry expertise to help the client achieve their strategic goals. 

Who

The client, a well-established beverage manufacturer with over 15 years of industry expertise, is renowned for its commitment to innovation and sustainability. They target mid-to-premium B2B and B2C segments, aiming to capitalize on the rising demand for health-focused beverages in Southeast Asia. 

Ken Research played the pivotal role of a strategic consultant, tasked with delivering end-to-end feasibility analysis and identifying market opportunities while addressing operational challenges. 

What

The client faced several challenges while planning their new venture: 

• Finding the right supplier with competitive pricing and conducting a demand-supply analysis to ensure a stable and cost-effective supply chain. 
• Intense competition from established global brands in the premium bottled water market. 
• Uncertainty surrounding the ROI, payback period, and break-even timelines. 
• Aligning the plant's production with growing consumer demand for sustainable and health-centric products. 

The client engaged Ken Research to analyze these issues, deliver actionable recommendations, and align the project with their strategic vision. 

When

The project was undertaken over a 5-month engagement period: 

1. Month 1: Hypothesis development and market research. 
2. Months 2-3: Stakeholder interviews, operational assessments, and CAPEX/OPEX modeling. 
3. Months 4-5: Financial modeling, risk mitigation strategies, and final recommendations.

Where

Laguna, Philippines, was chosen as the plant’s location due to its abundant water resources and proximity to high-demand markets like Metro Manila, Cebu, and Davao. The region’s infrastructure and government support for sustainable projects offered additional incentives. 

Why

The bottled water market in the Philippines, valued at USD 2.5 billion in 2023, is projected to grow at a CAGR of 8.2% over the next five years. 

The client sought to: 

• Leverage the rising demand for alkaline and electrolyte water, which represents 18% of total bottled water sales in the region. 
• Differentiate through biodegradable packaging to align with consumer preferences and regulatory trends. 
• Tap into B2B partnerships with hotels, gyms, and e-commerce platforms. 

Despite these opportunities, the client needed clarity on financial sustainability, operational feasibility, and market competitiveness to move forward. 

How

Ken Research approached the project through a structured 5W1H framework: 

1. Financial Feasibility Analysis 

• Developed a 5-year financial model projecting setup costs at USD 15.6 million and annual revenues of USD 36 million by Year 5. 
• Identified a break-even point in the 15th month with EBITDA margins stabilizing at 22% by Year 5. 
• Projected ROI at 28%, exceeding industry benchmarks for similar ventures. 

2. Operational Cost Optimization 

• Highlighted raw materials and utilities as key OPEX components, suggesting procurement partnerships to reduce material costs by 15%. 
• Recommended renewable energy systems to cut utility costs by 10% over 5 years, enhancing sustainability. 
• Proposed automation for packaging lines, reducing workforce-related costs by 20% in the long term. 

3. Market Opportunity Identification 

• Analyzed regional demand for premium bottled water, forecasting sales of 50 SKUs annually across B2C and B2B channels. 
• Identified partnerships with 100+ supermarkets, hotels, and online platforms, projected to contribute 35% of revenue. 

4. Competitive Benchmarking 

• Conducted a comparative analysis of pricing, branding, and distribution strategies of market leaders. 
• Recommended focusing on eco-conscious branding and unique selling propositions like biodegradable packaging and health-focused product benefits. 

5. Risk Assessment and Sustainability Focus 

• Addressed operational risks such as supply chain disruptions and resource shortages through contingency planning. 
• Conducted a cost-benefit analysis of biodegradable packaging, showcasing a 12% premium offset by increased consumer preference. 
• Proposed implementing water recycling and solar energy systems to align with global sustainability standards. 

Outcome

Ken Research’s intervention resulted in clear, data-driven insights that empowered the client to move forward with their expansion plans confidently. Key outcomes included: 

• Accelerated Decision-Making: The feasibility study enabled the client to finalize investment decisions within 5 months, reducing the evaluation timeline by 40%. 
• Financial Clarity: A detailed 5-year financial model showcased robust profitability with ROI exceeding 28% and break-even achieved in 15 months. 
• Strategic Partnerships: Early engagement with distribution channels and eco-friendly suppliers secured 45 long-term contracts, ensuring market penetration. 
• Sustainability Leadership: The client positioned itself as a pioneer in health-focused, eco-friendly bottled water, aligning with emerging consumer trends.

Conclusion

Ken Research’s tailored approach and industry expertise enabled the client to seamlessly transition from planning to execution. By addressing financial, operational, and market challenges, Ken Research helped the client establish a solid foundation for growth in a competitive and dynamic market.

As the plant construction commences in Q2 2024, the client is poised to become a key player in the Philippine bottled water industry, catering to a growing base of health-conscious and environmentally aware consumers.

Call to Action

Are you looking to evaluate the feasibility of your next big project or expand your market footprint? Ken Research provides comprehensive, data-driven consulting solutions to help businesses achieve their goals with confidence. Contact us today to explore how we can assist you in unlocking your potential!