Dairy Feasibility Studies & Business Planning

What Real Feasibility Looks Like

Most dairy projects that fail were demonstrably going to fail at feasibility stage if anyone had looked hard enough. The supplier capex estimate was missing categories. The operating cost assumptions were copied from the supplier's reference plant in a different country. The market sizing was extrapolation from press releases. The "commitment" from anchor customers was a friendly conversation, not a contract.

Real feasibility work pressure-tests each of those assumptions against the realistic conditions the client will actually face. Where the answer is the project still makes sense, you have a robust case. Where the answer is the project does not stack up, you have saved many multiples of the consultancy cost by not building the wrong plant.

What We Cover

Capex Realism — Where Numbers Mislead

Equipment supplier capex estimates routinely understate the true installed cost of a dairy plant. Common gaps:

• Civils and buildings — often quoted as a notional allowance, not a properly engineered estimate
• Utilities — steam, electrical, refrigeration, compressed air, water and effluent all have substantial capex that suppliers exclude from equipment quotes
• Automation integration — PLCs and SCADA quoted by individual suppliers but the integration cost between them is rarely included
• Engineering, design and project management — the contractor mark-up that disappears in piece-by-piece supplier quotes
• Spare parts strategy — initial spares pack, critical spares, year-1 replacements - typically 5 to 10% of equipment value
• Operator training and commissioning support — the supplier covers their equipment, but the integrated commissioning cost is a different number
• Working capital — raw materials, work-in-progress, finished stock, debtors - frequently missed entirely in capex projections

Adding contingency on top of a flawed base estimate does not fix the underlying gap. The right approach is a full bottom-up capex build, with contingency layered appropriately for project maturity (typically 20% at concept, 10% at FEED, 5% at detailed design).

How We Engage

Frequently Asked Questions

What does a dairy feasibility study include?

Market assessment (size, growth, competition, channels, pricing), product and technology selection, capex appraisal with realistic contingency, operating economics (yields, utilities, labour, overheads), supply chain assessment, capacity and scale recommendation, financial projection, risk register and sensitivity analysis. The output is a stand-alone document suitable for board, investor or lender review.

How is your feasibility study different from a supplier study?

Equipment supplier feasibility studies are sales documents. They show what their equipment can do in conditions that are usually optimistic. Independent feasibility studies test the whole project end-to-end against the realistic conditions the client will actually operate in - including risks the supplier has no incentive to highlight.

Do you cover market and commercial as well as technical?

Yes. A technical-only feasibility study misses the commercial drivers of success. We cover market size, channel strategy, competitor positioning, customer commitment evidence, pricing realism and contract structure alongside the technical content. The two have to work together.

How long does a feasibility study take?

A focused single-product feasibility (e.g. adding a new product line to an existing factory) is typically 4 to 6 weeks. A greenfield multi-product factory feasibility is typically 8 to 12 weeks. We can compress where decisions are time-pressured but real feasibility work cannot be rushed without losing rigour.

What size projects do you cover?

Anywhere from small product additions (low six figures capex) to greenfield factories of substantial scale. Project complexity and technical risk matter more than capex size - a small infant formula project can require more rigour than a large liquid milk extension.

What is your fee model?

Day rate plus expenses, agreed against a scoped brief. No success fees, no commissions, no equipment supplier kickbacks. The value is independent opinion - and that requires fee structure that is independent of the outcome.

Further reading: John Watson publishes articles on dairy industry topics on LinkedIn — from infant formula safety and milk supply to plant design, yield improvement and dairy commodity outlook. Browse all articles by John Watson on LinkedIn →

See our related financial modelling & budgets, investment advice, due diligence, project financing, project management and factory design pages, or browse all consultancy services.