Case Study of Natureview Farm Published by Harvard business review

1. Published By:
Harvard Business
Review
:

2.  Founded in 1989, Natureview Farm
manufactured and marketed refrigerated cup
yogurt under the Nature View Farm brand
name.

4. Natureview Farm
Inc. Is a small
yogurt
manufacturer
It manufacturers
refrigerated cup
yogurt
Founded in 1989
Jim Wagner hired
in 1996 as chief
financial
officer(CFO)
Natureview
Farm’s revenues
has grown from
around $100,000
to $13 million

5.  Vice President Christine Walker
 Chief Financial Officer Jim Wagner
 Chief executive Officer Barry Landers
 Vice President of Sales Walter Bellini
 Vice President of Operations Jack Gottlieb
 Assistant Marketing Director Kelly Riley

6.  Good brand reputation
 Strong consumer base
 Affordable pricing strategies
 Nation wide distribution through natural
food channels
 Good relationship with distributors

7.  Natural Ingredients
 Long Shelf Life
 Reputation for high quality and
good taste

8. 1. VC need to cash out its investments so
search for new investor and possibility of
acquisition.
2. Need to find a path to grow revenues by
over 50% within 22 months.
3. Whether or not expand to supermarket?
4. How to achieve highest possible
valuation of the company?

9. 1. Natural Yogurt
8 oz. size with 12
flavors
2. 32 oz. size with
4 flavors
1.Natural Food
Channel
2.Wholesale Club
3.National Retailer
Channel
4.Drug Store
5.Convinience Store
Affordable
according to its
channel
1.Retail Level
2.Wholesale Level
3.Distributor Level
4.Low Cost Guerilla
Marketing

10.  S T R E N G T H :
Strong brand; low cost; no artificial thickeners ; unique,
smooth and creamy texture; longer shelf life
 W E A K N E S S :
No alternative financing available; doubt on sales team's
ability; lacks potential of taking high risks
 O P P O R T U N I T Y :
Strong relationships with leading natural foods retailers
 T H R E A T S :
Accumulation of cash by horizon from IPO; being
dropped out of traditional channel

14.  Packing type/taste
 Flavor
 Taste
 Freshness
 Price
 Ingredients
 Organic or not

15. SUPERMARKET CHANNEL NATURAL FOODS CHANNEL

16.  Manufacturer
 Distributor
 Retailer
 Consumer

17. Manufacturer
Natural FoodsWholesaler
Natural Foods Distributor
Retailer
Consumer

19. OPTION 1
 Expand in northeast and west supermarket region
 Bring in the 6 SKUs of the 8-oz. Size
OPTION 2
 Expand in supermarket nationally
 Bring in the 4 SKUs of 32-oz size
OPTION 3
Stay in natural food channel
Introduce 2 children multipacks

20. PRO's:
• 8-oz have highest incremental demand
• High potential to increase revenue
• First mover as organic yogurt brand to enter into
super market channel
CON's
• High risk & high cost marketing
• Require quarterly trade promotions
• Advertising plan would cost $1.2 million per region
per year
• SG&A expenses increase by $320000 annually
• Need to pay one time slotting fee

22. PRO’s :
 Generate higher profit margin than 8-oz. size
 Strong competitive advantage; longer shelf life
 Lower promotion expenses
CON’s:
 Doubt on claim of new users would readily enter the
brand via multi use size
 Doubt on sales team ability to achieve full national
distribution in 12 months
 Needs to hire sales personnel and establish
relationships with supermarket brokers
 The 32-oz. expansion option would increase SG&A
expense by $160000

24. PRO’s:
 The sales team was confident that they could
 achieve distribution for 2 SKUs
 Financial potential was very attractive
 It would yield the strongest profit
 contribution of all the strategies under
 consideration
 The natural foods channel was growing seven
 times faster than the supermarket
CON’s:
 Many potential conflicts and other
 uncertain factors that the manager could
 not determine
 Can not achieve the target objective of
 Natureview Farm

28. Go with first option
 Reach beyond the target revenue of $20 million by
 end 2001
 8-oz. yogurt is the highest demand of market
 Can expose to more range of customers in
 supermarket
 Will have the first mover advantages of natural
 product to enter supermarket
 A bit risky but in long term will generate revenue of
 200%

29.  reated by Shruti Hurmade,BIST
Bhopal (RGPV University) during a
Marketing Internship with Prof.
Sameer Mathur,IIM Lucknow