Natureview Farm is a small yogurt manufacturer founded in 1989 that produces refrigerated cup yogurt. It has experienced significant growth in revenues from $100,000 to $13 million from 1989 to 1996. The company is considering options to further grow revenues by over 50% in 22 months to satisfy venture capital investors. The options under consideration are to expand product offerings and distribution channels to supermarkets, increase the size of existing products, or stay within the natural foods channel by introducing new multipacks. Expanding the 8-ounce size yogurt line to new supermarket regions in the Northeast and West is identified as the highest potential option to meet revenue goals and provide first mover advantage for the company in the supermarket channel.

1. Published By:
Harvard Business
Review
:

2.  Founded in 1989, Natureview Farm
manufactured and marketed refrigerated cup
yogurt under the Nature View Farm brand
name.

4. Natureview Farm
Inc. Is a small
yogurt
manufacturer
It manufacturers
refrigerated cup
yogurt
Founded in 1989
Jim Wagner hired
in 1996 as chief
financial
officer(CFO)
Natureview
Farm’s revenues
has grown from
around $100,000
to $13 million

5.  Vice President Christine Walker
 Chief Financial Officer Jim Wagner
 Chief executive Officer Barry Landers
 Vice President of Sales Walter Bellini
 Vice President of Operations Jack Gottlieb
 Assistant Marketing Director Kelly Riley

6.  Good brand reputation
 Strong consumer base
 Affordable pricing strategies
 Nation wide distribution through natural
food channels
 Good relationship with distributors

7.  Natural Ingredients
 Long Shelf Life
 Reputation for high quality and
good taste

8. 1. VC need to cash out its investments so
search for new investor and possibility of
acquisition.
2. Need to find a path to grow revenues by
over 50% within 22 months.
3. Whether or not expand to supermarket?
4. How to achieve highest possible
valuation of the company?

9. 1. Natural Yogurt
8 oz. size with 12
flavors
2. 32 oz. size with
4 flavors
1.Natural Food
Channel
2.Wholesale Club
3.National Retailer
Channel
4.Drug Store
5.Convinience Store
Affordable
according to its
channel
1.Retail Level
2.Wholesale Level
3.Distributor Level
4.Low Cost Guerilla
Marketing

10.  S T R E N G T H :
Strong brand; low cost; no artificial thickeners ; unique,
smooth and creamy texture; longer shelf life
 W E A K N E S S :
No alternative financing available; doubt on sales team's
ability; lacks potential of taking high risks
 O P P O R T U N I T Y :
Strong relationships with leading natural foods retailers
 T H R E A T S :
Accumulation of cash by horizon from IPO; being
dropped out of traditional channel

14.  Packing type/taste
 Flavor
 Taste
 Freshness
 Price
 Ingredients
 Organic or not

15. SUPERMARKET CHANNEL NATURAL FOODS CHANNEL

16.  Manufacturer
 Distributor
 Retailer
 Consumer

17. Manufacturer
Natural FoodsWholesaler
Natural Foods Distributor
Retailer
Consumer

19. OPTION 1
 Expand in northeast and west supermarket region
 Bring in the 6 SKUs of the 8-oz. Size
OPTION 2
 Expand in supermarket nationally
 Bring in the 4 SKUs of 32-oz size
OPTION 3
Stay in natural food channel
Introduce 2 children multipacks

20. PRO's:
• 8-oz have highest incremental demand
• High potential to increase revenue
• First mover as organic yogurt brand to enter into
super market channel
CON's
• 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 $320000 annually
• Need to pay one time slotting fee

22. PRO’s :
 Generate higher profit margin than 8-oz. size
 Strong competitive advantage; longer shelf life
 Lower promotion expenses
CON’s:
 Doubt on claim of new users would readily enter the
brand via multi use size
 Doubt on sales team 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 $160000

24. PRO’s:
 The sales team was confident that they could
 achieve distribution for 2 SKUs
 Financial potential was very attractive
 It would yield the strongest profit
 contribution of all the strategies under
 consideration
 The natural foods channel was growing seven
 times faster than the supermarket
CON’s:
 Many potential conflicts and other
 uncertain factors that the manager could
 not determine
 Can not achieve the target objective of
 Natureview Farm

28. Go with first option
 Reach beyond the target revenue of $20 million by
 end 2001
 8-oz. yogurt is the highest demand of market
 Can expose to more range of customers in
 supermarket
 Will have the first mover advantages of natural
 product to enter supermarket
 A bit risky but in long term will generate revenue of
 200%

29.  reated by Shruti Hurmade,BIST
Bhopal (RGPV University) during a
Marketing Internship with Prof.
Sameer Mathur,IIM Lucknow