The document summarizes options for Natureview Farm to increase revenue. It produces refrigerated cup yogurt in Vermont. To meet its $20 million revenue goal, it considers: 1) Expanding 8oz cups into supermarkets, 2) Expanding 32oz cups nationally, or 3) Adding children's multipacks to natural foods stores. A decision matrix shows option 1 has the highest projected revenue, gross profit, and net profit, so it is recommended.

1. NATUREVIEW FARM
Harvard Business Case Analysis
Increasing the revenue

2. INTRODUCTION
TO THE
COMPANY

3.  Manufacturer of refrigerated cup yogurt
in Cabot, Vermont.
 Founded in 1989 under Natureview Farm brand name.
 Major Brands in the market segment: Dannon, Yoplait
and Breyers.
 In 10 years the revenue has grown from less than
$100,000 to $13 Million.
INTRODUCTION

4. INTRODUCTION
 The company has strong market reputation.
 Longer shelf life of 50 days compared to other brands
with average shelf life of 30 days.
 Developed supply chain and distributors.
 Strong relations with brands like Whole foods and
Wild oats.

5. Company’s
Present
Revenue
Generation

6.  Today the company has 12 flavours in the 8-oz cups
and 4 flavours in the 32-oz cups.
 Started exploring multipacks in yogurts.
86%
14%
REVENUE GENERATION
8-oz cups (86%) 32-oz cups (14%)
REVENUE

7. REVENUE
Heading Value ($) Percentage (%)
Revenues $13,000,000 100%
Cost of goods sold $ 8,190,000 63%
Gross Profit $ 4,810,000 37%
Expenses
Administration and
Freight
$ 2,210,000 17%
Sales $ 1,560,000 12%
Marketing $ 390,000 3%
R&D $ 390,000 3%
Net Income $ 260,000 2%

8. Yogurt
Market
analysis

9. YOGURT MARKET ANALYSIS
Different packaging
74%
8%
9%
9%
Sales of different packs
8-oz cup 32-oz cup Children's multipack others

10. YOGURT MARKET ANALYSIS
Different regions
26%
22%25%
27%
Dollar Share
Northeast Midwest
Southeast West
25 30 33
17
Distribution of retailers
No. Of retailers

11. YOGURT MARKET ANALYSIS
Different market channels
Supermarket
97% of total sales
3% annual growth
Natural Foods
3% of total sales
20% annual growth
Manufacturer
Company wholesaler
Company Distributor
Public/Customer Public/Customer
Retailer Retailer
Distributor
Company

12. YOGURT MARKET ANALYSIS
Pricing in different channels
Natural Foods
channel
Supermarket
channel
Manufacturing
costs
8-oz Cup $0.88 $0.74 $0.31
32-oz Cup $3.19 $2.70 $0.99
4-oz multipack $3.35 $2.85 $1.15

13. YOGURT MARKET ANALYSIS
Market Shares
33%
24%
15%
5%
23%
Supermarket channel
Dannon Yoplait
Private label Columbo
others
24%
15%
19%
7%
35%
Natural Foods Channel
Natureview Farm Brown Cow
Horizon Organic White wave
Others

14. Company’s
Issues
And Options

15. ISSUES
 The Venture Capital (VC) firm needs to cash
out of its investment in Natureview.
 The company has to determine if it wants to
expand in the Supermarket channel.
 The Company needs to increase it’s revenue by
50% ( to a total revenue of 20 million) by the end
of 2001.
The company has come up with 3 options.

16. To expand Six SKUs of the 8-oz product line into one
or two selected supermarket channel regions as
suggested by Walter Bellini (Vice President Sales).

17. PROS
 The 8oz yogurt cup size has the highest share of
market.
 Food items of natural category have higher chances of
expanding in the supermarket channel.
CONS
 The company has no experience of dealing in
supermarket channel.
 Level of competition is very high compared to natural.

18. Channel Cost Price Selling Price
Natureview $0.31 $0.46
Distributor $0.46 $0.54
Retailer $0.54 $0.74
Year 2000 Year 2001
Unit sales 35,000,000 units 42,000,000
Revenue 35,000,000*0.46 = $16,100,000 42,000,000*0.46 = $19,320,000
Cost $ 10,850,000 $13,020,000
Gross Profit $ 5,250,000 $ 6,300,000
Advertisement $2,400,000 $2,400,000
SG&A $ 320,000 $640,000
Slotting Fees $1,200,000 -
Broker’s Fee $644,000 $772,800
Net Profit $ 686,000 $2,487,200

19. To expand Four SKUs of the 32-oz product line
nationally as suggested by Jack Gottlieb (Vice
President Operations).

20. PROS
 Less competition and lower advertising cost in the
segment of 32oz yogurt cups.
 Generate high levels of profit margins.
CONS
 Time constraint to get national popularity for the
product line.
 High level of initial expenses.

21. Channel Cost Price Selling Price
Natureview $0.99 $1.67
Distributor $1.67 $1.97
Retailer $1.97 $2.70
Year 2000 Year 2001
Unit sales 5,500,000 units 5,500,000
Revenue 5,500,000*1.67 = $9,185,000 5,500,000*1.67 = $9,185,000
Cost $ 5,445,000 $ 5,445,000
Gross Profit $ 3,740,000 $ 3,740,000
Advertising $480,000 $480,000
SG&A $ 160,000 $320,000
Slotting Fees $ 2,560,000 -
Broker’s Fee $367,400 $ 367,400
Net Profit $ 172,600 $2,572,600

22. To introduce two new SKUs of children’s multi-pack
into the natural foods channel as suggested by Kelly
Riley (Assistant Marketing Director).

23. PROS
 No time constraint as in option 2.
 Food items of natural category have higher chances of
expanding in the supermarket channel.
CONS
 The company will not be able to expand to super
markets which has high market share.
 Higher chances of expansion in 8oz segment.

24. Channel Cost Price Selling Price
Natureview $ 1.15 $ 1.84
Wholesalers $ 1.84 $1.98
Distributor $ 1.98 $2.18
Retailer $ 2.18 $3.35
Year 2000 Year 2001
Unit sales 1,800,000 units 2,070,000
Revenue 1,800,000*1.84 = $9,185,000 2,070,000*1.84 =$3,808,800
Cost $ 2,070,000 $ 2,380,500
Gross Profit $ 1,242,000 $ 1,428,300
Advertising $250,000 $250,000
Comp. case $ 82,800 $95,220
Net Profit $ 909,200 $1,083,080

25. Decision
matrix

26.  The decision matrix here consists of 3 headings here,
1) Revenue
2) Gross Profit
3) Net Profit
Option 1 Option 2 Option 3
Revenue $19,320,000 $9,185,000 $3,808,800
Gross Profit $ 6,300,000 $ 3,740,000 $ 1,428,300
Net Profit $2,487,200 $2,572,600 $1,083,080

27. Recommended Option 1
considering the decision matrix.
THANK YOU

28. DISCLAIMER
This Presentation was designed by Raghav Jalan IIT Kharagpur
under the marketing internship with Professor Sameer
Mathur IIM Lucknow.