Economic analysis of cocoa wine produced from cocoa powder

Author: J. O. Lawal and C. O. Jayeola ^*

Received 17 January 2007, accepted 12 April 2007.

Abstract

Investment into cocoa wine production using cocoa powder is a viable venture that has been proven through its economic analysis in this research. Cocoa wine using cocoa powder was produced in the winery section of Cocoa Research Institute of Nigeria (CRIN). The analysis of physico- chemical and sensory characteristics of the cocoa wine was carried out and it compared reasonably well with commercially sold ones. The economic analysis based on small-scale wine production was carried out and the total cost of production ranged from 1,471,502.1 Naira in Year 1 to 1,422,550 Naira in Year 5 with the selling price of 300.00 Naira per bottle, and the total profit or revenue ranged from 185,760,000 Naira in Year 1 to 198,720,000 Naira in Year 5. The average total revenue over the five years is therefore estimated as 158,112,000 Naira. The average net present value is estimated at 117,651,744 Naira and the benefit cost ratio is 1.27.

Key words: Cocoa powder, wine, net present value, benefit cost ratio, economic analysis.