Natureview Farm produces refrigerated cup yogurt and aims to grow revenue 50% by 2001. It faces choosing between expanding product lines into supermarkets or natural food stores. Option 1 is expanding 6 SKU's into selected supermarket regions, which offers the largest market but highest competition. Option 2 expands 4 SKU's nationally in 32oz cups with fewer competitors. Option 3 expands children's packs in natural stores with established relationships. The recommendation is Option 1 to pursue higher revenue, investor confidence, and market penetration, starting with top flavors, hiring supermarket expertise, and developing distributor relationships.

1. NATUREVIEW
FARM CASE
STUDY

2. INTRODUCTION
 Founded in 1989
 Manufacturer and Marketer of Refrigerated Cup Yogurt
 Differentiators: - All Natural Ingredients - Longer Shelf Life (50 days) -
Reputation for high quality and great taste
 Key Success Factor: - Strong Brand - Guerrilla Marketing - Strong
Relationship and Distributors

3. NATURAL/ORGANIC MARKET
TRENDS
 Organic Food market is predicted to grow from $6.5 Billion to $13.3
Billion over 4 years.
 Generally Organic Food customers tend to be more educated,
earn higher incomes, be older and live in the Northeast and West.
 67% of households consider price as a barrier to purchase organic
food products.
 44% of customers would like a wider selection of organic products
in supermarket.
 Supermarkets are moving toward attracting new customers by
offering more organic products.

4. YOGURT MARKET TRENDS
 Top 4 Competitors control over 50% market share
 Supermarkets – 97% of total sales (3% annual growth)
 Natural food stores – 3% of total sales (20% annual growth)
 Factors in purchasing decision: Package type/size, flavour, price,
freshness, ingredients, organic

5. CHALLENGE
 Identify path to grow revenue by over 50% from $13 Million in 1999 to
$20 Million at the end of 2001
 Goal: Attain highest possible valuation in order to secure new
investors or position itself for acquisition.

6. OPTION 1
 Expand 6 SKUs of the 8oz product line into one or two selected
supermarket channel regions.
 Pros: -8oz 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.
 Cons: -Highest level of competitive trade promotion and marketing
spend. -Possible channel conflict between supermarkets and
natural food stores. -Little experience in dealing with supermarket
chains.

7. OPTION 2
 Expand 4 SKUs of the 32oz product line nationally
 Pros: -32oz cups generate an above average gross profit margin. -
Fewer competitive offering in this size. -Lower promotional expense
than Option 1.
 Cons: -Higher slotting fees due to national distribution. -National
distribution will be challenging within 12 months. -Possible channel
conflict between supermarkets and natural food stores.

8. OPTION 3
 Expand 2 SKUs of the children’s multi pack into the natural food channel
Pros:
-Natureview has strong relationship with leading natural food channel
retailers.
-Financially attractive.
-More time to prepare the company for moving into supermarket channel.
 Cons:
-Fast growth of natural food channel will lead to demands equal to those of
supermarkets.
-Miss opportunity to enter supermarket channel before competitors.

9. RECOMME NDATION
Pursue Option 1
 Higher Revenue
 Higher investor’s confidence
 Accelerating growth rate
 Market penetration
❖ Choose 6 best flavors that were sold from
natural food.
❖ Hire talent knowledgeable of supermarket
channel.
❖ Start to develop relationships with
supermarket distributors.

10. Disclaimer
 This Case Study was made by Bliss Sinha of BIT Mesra
during a marketing internship by Prof. Sameer
Mathur, IIM Lucknow.