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Easy Profitability

Elm Juice Co

#Consumer Goods
ProHub Comment

This is a straightforward M&A profitability case designed to test candidates' ability to brainstorm risks upfront, build a structured evaluation framework, and perform basic financial calculations. The case intentionally presents unrealistic margin targets (70-80% on juice) to pressure-test whether candidates will probe assumptions and challenge the underlying economics rather than blindly accepting the given scenario.

Estimated Time 15 minutes
Difficulty Easy
Source Duke
50 / 100
Elm Juice Co is a leading fruit juice company with several leading brands in its portfolio. Our client is a large international private equity firm looking to expand its food and beverage (F&B) portfolio in North America. How would you begin thinking about this deal? What initial risks come to mind? (Candidate should brainstorm risks before developing framework)

Clarifying Information

  1. Client/Company information: Elm’s portfolio consists of fruit juices and operates primarily in North America; Client is an international PE firm that only focuses on F&B sector.
  2. Industry/Competition information: There is a general health trend away from sugary beverages. Elm’s portfolio currently has various products with refined sugar. The company is currently experimenting with an all-natural juice formula that will offer a “no added sugar” option to consumers. Elm is the industry leader and the risk from competition comes mainly in the form of smaller, up-and-coming brands.
  3. Product information: Fruit juices – leading product is Elm’s orange juice.
  4. Value Chain/Revenue information: $30M; expected revenue growth 40% for Year 1, 16.67% for Year 2, and 14.29% for Year 3
  5. Any constraints on the case: Client needs a margin of >=60% by year 3