This page provides a typical, proforma profitability analysis for small format bottling. This example illustrates a situation where a royalty is being paid for the use of a special, functional water component, namely oxygen-enrichment of the bottled product.
The example shown is based on the use of a 3000 bottle per hour system, the SpectraPak 3000, and BM600 Blow Molders each capable of producing 600 bottles per hour.
It quickly becomes apparent that the maximum profitability for small format operations lies with the 16 ounce(1/2 liter) bottling operation. This is based on typical profit margins for the various sizes as well as typical expenses for components, labor, packaging, etc.
What is also apparent in the spreadsheets is the fact that for a system capable of operating at 3000 bottles per hour, profitability is limited by production rates for the blow-molded bottles.
This suggests that perhaps where one has ready and economical access to blown bottles, that option should be exercised. On the other hand, where transportation costs for blown bottles becomes a determining factor, blow molding bottles on site is preferred.
A wide variety of other parameters could be considered, including larger margins for other functional water types. However, this configuration is used since it represents most small format operations in place at this date.
From these data and various models of operational growth, once can quickly compute payback period and new profitability for a small format bottling operation starting from scratch.
LINE ITEM 1/2 liter 1 liter 1.5 liter Shipping-incoming bottles/case 24 12 12 cases/pallat 60 55 40 bottles/pallat 1440 660 480 pallats/truckload 24 26 25 Cases/truckload 1440 1430 1000 Bottles/truckload 34560 17160 12000 cases/pallat 60 55 40 bottles/case 24 12 12 bottles/pallat 1440 660 480 Total Water content/case(gal) 3.17 3.17 4.75 Gallonage/pallat 190.2 174.35 190 Bottle Costs(blow molded on site) 0.084 0.09 0.1 Costs w/5% breakage/waste 0.0882 0.0945 0.105 Sports cap w/safety seal 0.05 0.05 0.05 label(qty 70K) 0.015 0.015 0.015 Total Bottle Cost(ea) 0.1532 0.1595 0.17 Total Bottle cost/case 3.6768 1.914 2.04 Water Cost/case(purified)/case 0.0951 0.1585 0.2375 Raw Materials Costs/case 3.7719 2.0725 2.2775 Labor Costs w/box 1.5 1.5 1.5 Royalty Payment/bottle 0.1 0.1 0.1 total Cost to bottler/case 5.2719 3.5725 3.7775 Suggested Retail per bottle 1.29 1.49 1.69 Comparative non-oxy cost/bottle 0.99 1.19 1.39 Suggested wholesale/bottle 0.645 0.745 0.845 Cost of Production/case 7.6719 4.7725 4.9775 Wholesale Price per case 15.48 8.94 10.14 Bottling Profit per case 7.8081 4.1675 5.1625 Spectrapak Bottling thruput rate(max)/hr 3000 2400 2000 Assume Single, 600 PBH blow Molder Max Bottles per 24 hr day produced 14400 14400 14400 Hours/day Bottling Operation To Keep Pace 4.8 6 7.2 Cases/day filled 600 1200 1200 Total Profit/day 4684.86 5000. 6195 Required Water Production System(gal) 2853 5706 8550 ********************* Add another BM600 Blow Molder-24 hr op'n Now, the numbers are... Max Bottles per 24 hour day produced 28800 28800 28800 Hours/day Bottling Operation to Keep Pace 9.6 12 14.4 Cases per day filled 1200 2400 2400 Total Profit/day 9369. 10001 12390 Payback time(days) on add'l BM-600 10.67 9.9 8.07 Total Water Processed/24 hr(gal) 5706 11412 17100 Limiting Case - 24 hour/day bottling Maximum Bottle thruput/24 hours 72000 57600 48000 Pallats of Water Produced(max) 50 87.2 100 Truckloads of Water Produced(max) 2.08 3.3 4 Required Water Production Rate(gal/24 hr) 14265 22824 28500 Required # of Blow Molders @ 24 hr op'n 5 4 3.3 Max Daily Profit for This Configuration 23424.3 20003. 20650 Profit Per Truckload Produced 11243.66 5959.52 5162.50
