Juice Company

You are consulting for the director of Juice Company, a large food and beverage conglomerate with a juices division generating $500M in annual sales. Juice boxes and frozen concentrate are profitable, but chilled juices are barely breaking even. The director is considering selling the chilled juices business. The candidate must assess whether divesting chilled juices is the right strategic move — or whether the business can be turned around. This case tests profitability analysis, strategic portfolio thinking, and divestiture decision-making.

The juices division of Juice Company produces three product lines: Juice boxes — profitable. Frozen concentrate — profitable. Chilled juices — barely breaking even. The entire juices division has annual sales of $500 million. The director is evaluating whether to divest the chilled juices business. Before deciding, they want to understand: - Why is chilled juices underperforming? - Can it be turned around? - Is a divestiture the right move?

ou are consulting for the director of Juice Company. The juices division has annual sales of $500M. While juice boxes and frozen concentrate are profitable, chilled juices are barely breaking even. The director is considering selling the chilled juices business. Should they do this?

Step 1 — Diagnose the Underperformance Decompose chilled juices P&L: Revenue − COGS − Distribution − Allocated Overhead = Near-zero profit. Identify whether cost or revenue is the primary driver of breakeven performance. Step 2 — Assess Turnaround Potential Generate 3–4 concrete levers to improve chilled juices profitability. Estimate the magnitude and timeline of improvement for each lever. Determine if a realistic turnaround can deliver acceptable margins within 12–24 months. Step 3 — Evaluate the Divestiture Option Estimate sale value: EBITDA × relevant multiple. Compare to NPV of a turnaround scenario. Assess stranded cost risk: how much overhead remains after divestiture? Identify strategic interdependencies with juice boxes and frozen concentrate. Step 4 — Recommend If turnaround is viable and profitable within an acceptable timeline: recommend retaining and investing in chilled juices. If structural cost disadvantages are insurmountable (cold chain, perishability) and the sale price is attractive: recommend divestiture. Structure the recommendation as: 'Divest if X; turn around if Y' with clear conditions and next steps.