NATUREVIEW FARM HARVARD BUSINESS CASE

1. NATUREVIEW FARM
By: Meghna Khandelwal

2. COMPANY
ORGANIC MARKET TRENDS
CHALLENGES
OPTIONS
FINANCIALS

3. • Founded in 1989
• Manufacturer and marketer of
refrigerated cup yogurt.
COMPANY

4. DIFFERENTIATORS:
• Natural Ingredients
• Longer Shelf Life
• Reputation for high quality and great
taste

5. KEY SUCCESS FACTORS:
• Strong Brand
• Effective, low cost “guerrilla marketing”
• National distribution in natural foods
channel
• Strong relationships with distributors

6. NATURAL/ORGANIC MARKET TRENDS
• Organic foods market predicted to grow from
$6.5 billion to $13.3 billion over 4 years.
• Generally organic products customers tend to be
more educated and earn higher incomes.
• 67% of households consider price as a barrier to
purchase of organic products.
• 44% of consumers like wider selection of organic
products.

7. YOGURT MARKET TRENDS
• 4 competitors control over 50% share
• Supermarkets= 97% of total sales
• Natural Food Stores= 3% total sales

8. FACTORS IN PURCHASING DECISIONS
Package
size/type.
Price.
Flavour,
Ingredients
and
Freshness.
Organic.

9. CHALLENGE:
Identify path to grow revenues by over 50%
within 23 months.
GOAL:
Attain the highest possible valuation in order to
secure new investors or position itself for
acquisition.

10. OPTION 1
Expand SKU’s of the 8-oz product line into
one or two selected supermarket channel
regions.

11. PROS:
• 8-oz cups represent largest dollar
and unit share of market.
• Supermarkets fear losing market
share to natural food competitors.
• Other natural food brands have
successfully expanded to
supermarkets.
• First-mover advantage.
• Supermarkets may only authorize 1
organic yogurt manufacturer.
CONS:
• Highest level of competitive trade
promotion and marketing spend.
• Possible channel conflict between
supermarkets and natural food
stores.
• Promotion and lower price at
supermarkets may hurt the brand.
• Little experience in dealing with
supermarket chains.
• Balance between shelf presence
and slotting expense.

12. OPTION 2
Expand SKU’s of the 32-oz product line
nationally.

13. PROS:
• 32-oz cups generate an above-
average gross profit margin.
• Fewer competitive offerings in
this size.
• Competitive advantage due to
long shelf life of product.
• Lower promotional expenses
than option 1.
CONS:
• Higher slotting fees due to
national distribution.
• National distribution will be
challenging within 12 months.
• No guarantee that customer
awareness of the brand would
grow.
• Possible channel conflict
between supermarkets and
natural food stores.
• Promotion and lower price at
supermarkets may hurt the
brand.

14. OPTION 3
Expand 2 SKU’s of a children’s multi-pack
into the natural foods channel.

15. PROS:
• Natureview already has strong
relationships with leading
natural food channel retailers.
• More time to prepare the
company for moving into
supermarkets.
• Natureview product
positioning is ideal for a
children’s multi-pack product
launch.
• Financially attractive.
• High margins.
• Low sales and marketing
expenses.
CONS:
• Fast growth of natural foods
channel will lead to demands equal
to those of supermarkets.
• Miss opportunity to enter
supermarkets before competitors.

16. FINANCIALS OF OPTION 1

17. FINANCIALS OF OPTION 2

18. FINANCIALS OF OPTION 3

19. LET’s RECAP
• Company
• Differentiators
• Success Factors
• Natural/Organic Market Trends
• Yogurt Market Trends
• Factors in purchasing decisions
• Challenge and Goal
• Options
• Financials