Sangria Topochico – The Capital Budgeting Decision
In December 2012, María Guadalupe, the owner of Sidral Mundet Sol, had just finished reading a report
done by his general manager, Francisco Javier, about the possible investment in a new product line,
Sangria Topochico. The idea of Sangria Topochico came about three months earlier when María attended
a seminar on youth obesity organized by a local high school that his two children attended. Even though
he had often heard of the rising obesity problem in Mexico, María was still very disturbed by the statistics
indicating how the obesity rate in Mexico had tripled since 1980, and that 69.5% of the people 15 years
and older were either obese or overweight.
Even more shocking to María, based on this statistic, Mexico now had the highest overweight rate in the
world, surpassing the United States.
After the seminar, María discussed the idea of Sangria Topochico, a low-price, zero-calorie carbonated
soft drink, with Francisco Javier, Francisco was excited about the idea, and liked the opportunity to
launch something new, especially given that the company had not introduced a new product in the last
five years. However, Francisco thought a market study should be done to gauge the potential demand
before the firm undertook the investment.