NatureView Farm produces organic yogurt and needs to increase revenues from $13 million to $20 million within 2 years. It has three options to pursue this growth: 1) Expand its 8oz yogurt line into supermarket channels, 2) Expand its 32oz yogurt nationally, or 3) Expand its multipack children's yogurt into natural food stores. The document recommends option 1 to capture the large 8oz cup market, prevent competitors from entering, and benefit from the growing yogurt sales in supermarkets. This option is estimated to sufficiently meet the revenue goal and position NatureView as the first organic yogurt brand in supermarkets through promotions.

1. NatureView Farm
Harvard Business Case | Selection of business strategy

2. The Problem
Natureview has to increase its revenues from $13Million to $20Million
within 2years as itsVCs needed to cash out and position itself
financially for alternative investment options.

3. The Company
▪ Found in 1989.
▪ Increased its revenues from $100,000 to $13,000,000.
▪ Manufacturer of refrigeratedYogurt.
▪ Operates only through natural food channel.
▪ CEO Barry Landers.

4. Product offerings
▪ Initially offered 8oz and 32oz,each with two flavours.
▪ Added fruit puree at the bottom and advertised as fruit at the bottom to increase its
product offerings
▪ As of 2000, it sells 8oz cups in 12 flavours and 32oz cups in 4 flavours.

5. Points Of Parity
▪ The original recipe which was made by its owner was unique and different.
▪ Used natural ingredients.
▪ Used milk from cows that were not given rGBH hormone.
▪ All the above resulted in smooth texture for the yoghurt and gave a shell life
of 50 days(avg shell life 20 days).

6. Yogurt
▪ Yogurt is a dairy product made in controlled conditions.
▪ 40% of the population consume yogurt.
▪ $1.8 Billion dollars in retail sales.
▪ Major players include Dannon ,Yoplait , Breyer and Columbo.
▪ Supermarket contribute to 97% of sales and natural food stores 3%.
3%
97%
Sales
Natural Supermarket others

7. The Organic market
▪ 46% of customers buy through supermarket and 29% Natural food stores.
▪ There is a high chance of heavy organic consumers buying dairy products(74%).
▪ Surveys tell 67% do not buy because of the price barrier and 58% would buy if prices are
lowered.

8. Products Packaging and their Growth
▪ People prefer the 8oz cups as they are seen as alternatives for a snack and eat them
with their own additions.
▪ Multipacks are growing at faster rate as they are being targeted at children and are
easy to eat.

9. Supermarket channel vs Natural food channel
▪ Supermarkets offer the same products at lesser prices.
▪ Supermarket channels require brokers who manage all the retailers and wholesaler
and require 4% of the manufacturer’s sales.
▪ Supermarkets charge yearly for SKUs depending on their performance and also
require the products to be part of trade promotions.

10. Supermarket channel vs Natural food channel

11. Management’s 3 options
▪ Expand 6 SKUs of the 8oz product line into one or two selected supermarket channels.
▪ Expand 4 SKUs of the 32oz product nationally.
▪ Expand 2SKUs of the multipack children product into natural foods channel.

12. Option 1
Pros
▪ 8oz cups represent largest dollar share.
▪ Not allow its competitor to move into this segment.
▪ Growth of yogurt in supermarket by 20% each year from 2001 to 2006.
Cons
▪ Existing channel might come in conflict.
▪ High cost of promotions and marketing spend.

13. Option 2
Pros
▪ Higher gross profit margin.
▪ Fewer competitive offerings.
▪ Lower promotional expenses.
Cons
▪ Higher slotting fees
▪ National distribution difficult in 12 months.

14. Option 3
Pros
▪ Usage of existing channel
▪ All natural positioning would be effective for children products.
▪ Natural food industry is growing at higher pace.
Cons
▪ R&D costs

15. Financial analysis

16. Conclusion and recommendation
Choose option 1 as,
▪ It sufficiently compensates for the revenue requirement.
▪ Be the first to capture market space as an organic yogurt product.
▪ Cheaper rates for an everyday customer.
▪ More exposure to customers through trade promotions.

17. Disclaimer
Done by Siddharth JP as a part of a marketing Internship under Prof. Sammer Mathur IIM
Lucknow.