A simple business plan for cheaper oat milk in Taiwan

 We all deserve the freedom of choosing plant-based products.

Oat milk is a kind of plant-based milk derived from whole oat grains by extracting the plant material with water. Oat milk has a creamy texture and oatmeal-like flavor. Oat milk may be consumed to replace dairy milk in vegan diets, or in cases of medical conditions where dairy is incompatible, such as lactose intolerance or an allergy to cow milk. Compared to dairy milk and other vegan milk products, oat milk has relatively low environmental impacts due to its comparatively low land and water needs for production.

However, it is just too expensive compare to dairy milk. In Taiwan, you can buy a bottle of 936ml dairy milk for NT$90. But, it costs you at least NT$189 to buy a 936ml oat milk which is almost twice as much since they are imported from western countries. This is just insane. Therefore, the mission here is to bring much cheaper and but still high-quality oat milk for the people in Taiwan to fill the need of oat milk lovers, vegans, and any other people who want to switch their diets to plant-based. A plant-based should not be a right only for the few. I believe everyone should have the freedom to choose oat milk for their favor or health rather than be limited by their living conditions or income. 

Therefore, the mission of the company is to make much more affordable and high-quality oat milk to make profits. And by sourcing its raw materials from the local suppliers and manufacture locally, I believe the product should be much cheaper than imported oat milk. 

The Needs Should Be Satisfied

We all deserve the freedom of choosing oat milk. High-quality oat milk should also have an affordable price tag. Without the budget constraint, you can choose to drink more oat milk. 

Differentiation

i. The price

Obviously, the products are much cheaper than the competitors. 

ii. The quality

Sacrifice the quality for lower prices? No, it is not what I want and also not what the customers want. By local sourcing, reducing the delivery cost, and manufacture locally, I believe it can be much cheaper than it was without sacrificing any little quality.

iii. Disintermediation, Directly sell to customers online

To save more costs and offer affordable prices, sell products directly to customers from the factories. Many foreign companies cooperate with distributors, dealers, or retailers in Taiwan to sell their products. However, this is one of the major issues why their products are always so expensive. 

In the future, I believe that as I launch this much cheaper product. The competitors may have two choices, trying to reduce the prices or keep the higher prices to spend more on branding and advertisement. Either way does not seem like a long-term strategy. However, they can also build their factories in Taiwan and take advantage of their brand image to sell their products. That increases the opportunities for the local workers and with more and more competitors join this race, I believe will eventually achieve the mission, "We all deserve the freedom of choosing plant-based products." 

The Business Plan

Who is the customer?

The major customer of the products initially will be those who make their purchasing decisions mostly depend on the prices. Then, spread to everyone who loves plant-based drinks, oat milk lovers, especially those who want to buy oat milk but give up due to the high prices. Anyone who likes the taste of oat milk. Oat milk may be consumed to replace dairy milk in vegan diets, or in cases of medical conditions where dairy is incompatible, such as lactose intolerance or an allergy to cow milk. In addition, compared to dairy milk and other vegan milk products, oat milk has relatively low environmental impacts. So, it is also a great choice for environment protectors.

How does the customer make decisions about buying this product or service?

The objective here is to bring cheaper but still high-quality oat milk for those potential customers. Similar to Henry Ford, the founder of the Ford Motor Company, creating the first automobile that middle-class Americans could afford, he converted the automobile from an expensive curiosity into an accessible conveyance that profoundly impacted the landscape of the 20th century. If they are already oat milk lovers, they will love it if they don't have strong branding myths. 

To what degree is the product or service a compelling purchase for the customer?

Except for specific brands lovers, are there any reasons you will buy the same products with higher prices? I believe the answer is obviously a NO. Even though some customers may already have their brand preference, they still can be potential customers in the future. Therefore, apply some marketing strategies and branding, we can do better than just sell to those who are just being attracted by cheaper prices.

How will the product or service be priced?

To achieve the mission of the company, the price will be the same as dairy milk in Taiwan. Otherwise, it would make no sense to sell this product since there are already many brands there. 

How will the product reach all the identified customer segments?

Ages & All Genders: Official website, Regular chain stores

1 - 16 years old, mostly their parents buy the products for them. So, it will be the same as how to reach the age 17 - 80 years old or older. But for those who are over 50 years old, may not be familiar with electronic gadgets, some physical stores are needed. Regular chain stores are considered to open nearby some aging areas. 

Income: Official website and Social media

In the beginning, the cheaper oat milk products are made for those who give up oat milk due to the prices. Sell online is acceptable for those people. 

Education: Official website and Social media

People with higher education may tend to drink healthier. Lower-educated people are also getting the chance to drink oat milk because of the company. Both of them can be reached by the official website. 

Geographically: Official website, Social media, and Regular chain stores

The official website and social media can reach those who do their search for oat milk on Google, frequently looking for anything new on social media, or living in rural areas. Regular chain stores can reach those who live in the urban but desire to have plant-based diets. Since there are much more people live in the urban areas, regular chain stores will gain more attention by shop signs and trademarks standing around the cities.

How much does it cost to acquire a customer?

Advertising costs

In 2021, the average cost per click (CPC) in Facebook ads across all industries is $1.72. Operating a regular chain store costs NT$50,000 to rent on average, but it can reach approximately over 100,000 people in Taipei. So, it is NT$0.5 per person.

Cost of the marketing team

The average cost of hiring a marketing team in Taiwan is around NT$350,000 per month(NT$35,000 each and multiply by 10)

Cost of the sales team

The average cost of hiring a sales team in Taiwan is around NT$330,000 per month(NT$33,000 each and multiply by 10)

Production costs

We need 100g of oat, 1,000L of water, the electricity, the machine, and the workers. It costs approximately NT$40 to produce 1000L of oat milk. With the production of 1,500L per day, the timing cost of each 1 L oat milk is 57.6 seconds.

Inventory upkeep

Oat milk is an extended shelf-life milk. It takes over 10 months to expire. The production should fill the needs within 8 months. 

How much does it cost to produce and deliver the product or service?

It costs approximately 57.6 seconds, NT$40 to produce each 1000L oat milk, and it costs NT$100 to ship each 6000L. 

How much does it cost to support a customer?

Customer support is an investment, not a cost and it also depends on how many of those customers need support. I think my support team will be both online and in the chain stores. Clerks in each store will cost NT$32,000 per month. An online specialist will cost NT$28,000 per month.

How easy is it to retain a customer?

It’s cheaper to get current customers to make a repeat purchase than it is to find new customers. I will launch a loyalty program to retain as many customers as possible. 

The subscription plans: The OatKing, OatDuke, and OatKnight

OatKing(NT$199 per month)

Free delivery(No limits), up to 40% off per month.

OatDuke(NT$129 per month)

Free delivery(No limits), up to 20% off per month.

OatKnight(NT$99 per month)

Free delivery(2 times per month), up to 10% off per month.

The “elevator pitch” in 60 seconds

Hi, I'm Bruce. CEO and founder of TZUYI HUANG'S Group. Honor to meet you here. I am seeking an opportunity to launch cheaper oat milk products to fill the needs of affordable oat milk. Almost every oat milk lover, vegans, or in cases of medical conditions such as lactose intolerance or an allergy to cow milk has one feeling in common. Oat milk is just too expensive. So, what we do is to produce a cheaper oat milk product without lowering the quality. There is a huge potential waiting for us. My company is already on the way to disrupt. So, my question is, will you join us?