Business & Financial Plan to Estimate Loss of Profits for a Legal Damages Case

The Situation –

In Q1, 2006, an enterprising female entrepreneur began the launch of a significant range of 9 skin care creams & lotions, focused around an intriguing ingredient called ‘Noni Berry’, reputed to have wide ranging health benefits, particularly throughout the South Sea Island areas through to California. The products were premium formulations, and the packaging highly professional, as well as the associated promotional merchandising & collateral & the web-site. In addition, she was backed by significant funding well in excess of $1+ million. The base products were formulated in NZ and imported in barrels to Sydney. A contract packer was engaged to pack off the base products into packaged containers and merchandising packs. It is alleged that the base product was exposed to extreme heat in the contract packer’s warehouse over the summer period of December, 2005 & January 2006 (approx.) The result was that the product samples prepared by the contract packer & presented to the key Pharmaceutical buyers of the major Banner groups developed mould on the surface of the product within a few weeks of the initial presentation. It is alleged that it was the exposure to extremes of heat, beyond normally expected care, that caused the product deterioration. The test samples grew a black mould on the surface in weeks and were subsequently rejected by the Pharmacy Banner Group buyers. It is also alleged that the mould infected samples were returned to the contract packer, who removed the surface mould and topped up the containers, returning them to the Pharmacy Banner buyers. Naturally, the mould re-grew and the whole range was rejected by the pharmacy Banner Group buyers. The base product was destroyed and the product range never launched.

In 2013, legal action was commenced against the contract packer and their insurance company, by the owners of the Noni Life brand

How Solutions Marketing helped -

Tony Nix was approached by the Noni Life Legal Team, to assist them with an estimate of the loss of profits for the 6 years from 2006/7 to 2011/12. By combining his knowledge of marketing these type of products (as National Marketing manager for Colgate-Palmolive), with his market research knowledge (accessing Euromonitor actual market data), and his finance and capital budgeting background (as Finance Director for Colgate-Palmolive), he was able to produce a complex and accurate profitability model in Excel. Accurate, because most of the assumptions are supported by historical market data and underpinned by his professional experience. In addition the P&L Statement links to the Statement of Assets & Liabilities, and a Cash Flow statement, thereby facilitating a sophisticated Corporate Valuation.

The result –

The ‘Expert Witness’ report is complete and Court Action is pending. The Legal Team is very happy with the depth and quality of the work performed