The Problem
The client is a fruit processing company operating in 28 countries. They are considering starting a new production line for flavored syrups, but they needed to know beforehand if the opportunity in the Egyptian food service industry is worth the investment, and if so, what would be the go-to market strategy to acquire the target market share. The client hired Acumen Consulting to conduct a market study to identify the size of the flavored syrups market in Egypt and to recommend how to translate the opportunity into a feasible, strategic five-year plan.
The Approach
To establish a realistic and accurate sizing of the flavoured syrups market, Acumen tackled the problem by two different approaches supported by desk research activities and on the ground interviews with the top consuming businesses of flavoured syrup in the food service industry. The two approaches are top-bottom and bottom-up.
The top-bottom approach started with a study to find the total revenues of the Egyptian food service industry in the next five years, covering restaurants, fast food chains, coffee shops, hotels, and dessert shops. Based on interviews with leading representatives from each sector, Acumen were able to estimate the percentage of food service revenue generated from beverages only and subsequently the percentage of revenue from flavoured beverages. Based on the average amount of syrup consumed per drink, Acumen were able to come up with an estimate of the total number of 1-liter bottles of flavoured syrup consumed in 2018, and forecasted consumption from 2019-2023 based on inflation, changes in consumer behaviour, population growth and the food service industry growth.
The bottom-top approach follows the opposite path. Firstly, Acumen estimated the flavoured syrups consumption of the average coffee shop, restaurant, hotel, fast food chain, and dessert shop. Then the average for each sector was multiplied by the respective number of outlets. By adding them all together the total consumption of the market will be determined. The two approaches gave close results; hence the average of both approaches was taken to be the final estimate of the market.
