Natureview Farm Case study Analysis

1. Natureview Farm:
Case study Analysis

2. A Brief History

3. Founded in Year 1989 in Cabot, Vermont.
Entered market with 8-oz and 32-Oz cup size with
plain and vanilla flavours.
Company’s revenue increased from $ 100,000 to $13
million by year 1999.
By 2000, twelve refrigerated yogurt flavors in 8-oz.
Cups , four flavors in 32-oz. Cups and multipack
yogurt products (4-oz. cups and yogurt packaged in
tubes)

4. Barry Landers
Chief Executive Officer
Jim Wagner
Chief financial officer
Christine Walker
Vice President of
Marketing

5. Situation Analysis

6. Finding a path to grow revenues by
50% before end of 2001.
Whether Natureview should expand
into the supermarket channel in
order to meet its revenue goal ?

7. PRODUCT CHARACTERSTICS
Key to the Natureview yogurt flavour and texture was the family
yogurt recipe developed by the company’s founder.
No Artificial Thickeners
Shelf Life of 50 DaysLow cost
The recipe used natural ingredients and a special process
that gave the yogurt its unique smooth, creamy texture

8. POINT OF DIFFERENCE
High storage Life All Organic
Affordable Prices
Variety of sizes in different flavours

9. Market Trend for Yogurt Product
Packaging type/Size Taste Flavour
Price Freshness Ingredients
Organic or not

10. Options and Dilemma

11. OPTIONS:
• Expand in
Northeast
and west
supermarket
region
• Bring in 6
SKUs of 8-oz
size.
• Expand in
supermarket
nationally
• Bring 4 SKUs
of 32-oz size
• Stay in
natural food
channel
• Introduce 2
children’s
multipack.

12. Option1:
PROs
• 8 oz have highest
incremental
demand
• Highest potential to
increase revenue
• First organic yogurt
brand to enter
supermarket
CONs
• High risk and cost
investments
• High Advertisement
cost $ 1.2 million
• One time slotting
fees

13. Option2:Pros
• Generate higher profit
margin than 8-oz size
• Strong competitive
advantage: longer shelf life
• Lower promotion expenses
Cons
• Doubt on claim of new users
would readily “enter the
brand” via a multi-use size
• Doubt on sales team’s ability
to achieve full national
distribution in 12 months
• Needs to hire sales
personnel and establish
relationships with
supermarket brokers

14. OPTION 3:PROs
• The sales team was confident
that they could achieve
distribution for the two SKUs.
• The financial potential was
very attractive.
• It would yield the strongest
profit contribution of all the
strategies under consideration.
• The natural foods channel was
growing almost seven times
faster than the supermarket.
CONs
• There were many potential
conflicts and other uncertain
factors that the manager could
not determine.
• Can not achieve the target
objective of Natureview farm

15. Comparison of Options
Option Option1 Option2 Option3
Gross Margin 33% 41% 38%
Unit Sales 42,000,000 5,500,000 2,070,000
Revenue Projection 44,080,000 27,850,000 29,934,500
Cost $13 020 000 $5 445 000 $2,380,500
Gross Profit 31,060,000 22,405,000 17,554,000
Expenses:
SG&A 640,000 160,000 0
Marketing 2,400,000 480,000 250,000
Broker’s fee $772,800 367,400 0
Complementary
Cases
0 0 173,363
Net Profit $ 27,247,200 $21,397,600 $17,130,637

16. Final Decision
• Go for option 1
• Reach beyond the target objective of 20 million
revenue by end of 2001 with projection of $ 31,
060,000
• A bit risky but in long term will generate
revenue of 200%.

17. Summary
History Situation Analysis
Options and dilemma
Final Decision

18. DISCLAIMER
Created by Monika Kadyan, DTU Delhi,
During a marketing internship by
Prof. Sameer Mathur, IIM Lucknow