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Natureview
- 1. NATUREVIEW FARM By- SUSHANTCHARAYA
- 2. Background 1. Founded andmanufactured in Cabot,Vermont 2. First enter market 8-oz and 32-oz with plain and vanilla flavor 3. Use natural ingredient with longer average shelf-life of 50 days 1. Company revenue growth from $100,000 to $13 million 2. Fruit on the bottom yogurt 1. Expand to 12 yogurt flavors & multipack yogurt (for Children) 1989 1999 2000
- 3. Issues VC needed cashout its Investment Need to find a path to grow revenues by over 50% before the end of 2001 ($20 mil) Should Natureview Farm expand into supermarket channel?
- 4. The 4PS PRODUCTS Natural yogurt (organic) 8-ozsize with 12 flavours 32-oz size with 4 flavors. Affordable according to its channel Natural food channel Wholesale club National retailer channel Convenience and drug store. Its natural flavor with high quality Low-cost guerilla marketing and great taste growth in the national distribution and natural food channel. Low-cost Guerilla marketing PRICE PLACE PROMOTION
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- 6. SWOT Analysis Strong brand Lowcost No artificial thickeners used Unique, smooth and creamy texture of yogurt Usage of natural ingredients Longer shelf life No alternative financing available Lacks potential of taking higher risks and costs Doubt on sales team’s ability Strong relationships with leading natural foods retailers Accumulation of cash by Horizon from IPO Being dropped out of traditional channel S W O T Strengths Weakness Opportunities THreats
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- 8. LENGTH OF CHANNELTO MARKET MANUFACTURER DISTRIBUTOR RETAILER CUSTOMER MANUFACTURER NATURAL FOODS WHOLESALER NATURAL FOODS DISTRIBUTOR RETAILER CUSTOMER SUPERMARKET CHANNEL NATURAL FOODS CHANNEL 15% 27% 7% 9% 35%
- 9. YOGURT MARKET SHAREBY BRAND
- 10. Yogurt Production Costsand Retail Prices by Channel
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- 12. OPTION 1: Expand6 SKUs of the 8-oz into eastern and western supermarket regions PROs: 8-oz have highest incremental demand High potential to increase revenue First mover as organic yogurt brand to enter supermarket channel CONs: 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 $320,000 annually Need to pay one time slotting fee
- 13. SUPERMARKET CHANNEL MARGINANALYSIS
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- 15. OPTION 2: Expand4 SKUs of the 32-oz size nationally into supermarket regions 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 The 32-oz. expansion option would increase SG&A expense by $160,000
- 16. SUPERMARKET CHANNEL MARGINANALYSIS
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- 18. OPTION 3: Introducetwo SKUs of a children multipack into the natural foods channel 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
- 19. NATURE FOOD CHANNELMARGIN ANALYSIS
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- 21. WHICH ONE TOCHOOSE?
- 22. COMPARISON OF OPTIONS: YEAR 2001
- 23. OPTION 1 isthe Best Decision Reach beyond the target objective of 20 million revenue by end of 2001 with projected of $31,060,000 8 –oz yogurt is the highest demand In supermarket, can expose to more range of customers Will have the first mover advantages of natural product to enter supermarket A bit risky but in a long term will generate revenues of 200% (as looking at two other competitors)
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