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Easy Profitability Market Entry Break-even Analysis

Protein Bars

#Food & Beverage #Consumer Packaged Goods #Snacks #Health & Wellness
ProHub Comment

This is a straightforward break-even analysis case requiring the candidate to calculate the market share needed to cover fixed costs. The solution involves dividing total fixed costs by the product of market size and gross margin. The case tests fundamental business mathematics and the ability to work backwards from profitability constraints.

Estimated Time 15 minutes
Difficulty Easy
Source PeterK
50 / 100
Vitality Fuel offers a wide range of food and snack products across the U.S., aimed at promoting health and wellness, incl. granola and energy bars. They’re considering launching protein bars. Your manager would like to know the break-even market share for this new product line.

Clarifying Information

  1. Exhibit 1. Protein Bar Market in the U.S., Bn USD
  2. Fixed costs for the new product line “Protein Bars” are estimated as follows:
    • Selling and marketing: $2.8M
    • General and administrative: $2.0M
  3. The projected gross margin for protein bars is 30%