this presentation is about how Natureview farm succeeded its goal.

1. NATUREVIEW
FARM
HARVARD CASE STUDY

2. STAGES:
1989
FOUNDED
1999
REVENUES
$1MILLION TO
$13MILLION
2000
DIFFERENT
YOGURT
FLAVOURS

3. STRATEGIES:
LONG SHELF
LIFE(50 DAYS)
rGBH

4. GOAL: 50% growth in revenue
1999
$13m
2001
$20m

6. YOGURT
MARKET SHARE
IN US UNDER
DIFFERENT
FACTORS

7. 97%
3%
Supermarkets
Natural Food Stores
DISTRIBUTION
CHANNELS REGIONS
27
26
25
22
West
Northeast
Southeast
Midwest

8. 74%
26%
Heavy Organic Food Buyers
Light Organic Food Buyers
ORGANIC
PRODUCTS SIZES
74
9
8
9
8-oz.
Multipack
32-oz.
Others

9. LENGTH OF CHANNEL:
SUPERMARKET CHANNEL
15%
27%
NATURAL FOODS STORES
7%
9%
35%
Manufacturer
Distributor
Retailer
Market
Manufacturer
Wholesaler
Distributor
Retailer
Market

10. Market share by brand
Supermarket Channel
33
24
23
15
5
Dannon
Yoplait
Others
Private label
Columbo
Natural Foods Channel
24
15
19
7
35
Natureview Farm
Nbrown Cow
Horizon Organic
White Wave
Others

11. 3
CHALLENGING
OPTIONS

12. OPTION 1:
To expand 6SKUs of 8-
oz. in two selected
supermarket regions.

13. PROS and CONS:
Pros Cons
• 8-oz line, largest dollar and unit
share.
• first organic brand to reach
supermarkets.
• This option has high potential for
increased revenue.
• High competitors.
• High potential but has high risk and cost.

14. Analysis:
YEAR 2000 2001
Unit sales 35,000,000 35,000,000(1+20%)=42,000,000
Revenue 35,000,000*$0.46=$16,100,000 42,000,000*$0.46=$19,320,000
Cost of goods sold 35,000,000*$0.31=$10,850,000 42,000,000*$0.31=$13,020,000
Gross profit $5,250,000 $6,300,000
Expenses
Slotting Fee 6*$10,000*20retails=$1,200,000
Ads & Trade promotions $2,400,000+$870,000=$3,270,000 $3,270,000
Sales & Brokers’ fee(4%) $320,000+$644,000=$964,000 $640,000+$772,800=$1,412,800
Net Income -$184,000 $1,617,200

15. OPTION 2:
To expand 4 SKU’s of
32-oz. size nationally.

16. PROS and CONS:
Pros Cons
• 32-oz. gives higher average
gross profit margin than 8-
oz.
• Lower promotional
expenses.
• Less competitors.
• Difficult to achieve national
distribution.
• Slotting and SG&A
expenses would be higher.
• Need to hire sales
personnel.

17. Analysis:
YEAR 2000 2001
Unit sales 5,500,000 5,500,000
Revenue 5,500,000*$1.67=$9,185,000 5,500,000*$1.67=$9,185,000
Cost of goods sold 5,500,000*$0.99=$5,445,000 5,500,000*$0.99=$5,445,000
Gross profit $3,740,000 $3,740,000
Expenses
Slotting Fee 4*$10,000*64retails=$2,560,000
Marketing & Trade
promotions
$480,000+$1,024,000=$1,504,000 $1,504,000
Sales & Brokers’ fee(4%) $160,000+$367,400=$527,400 $160,000+$367,400=$527,400
Net Income -$851,400 $1,709,000

18. OPTION 3:
To introduce 2 SKUs of
children’s multipack
into natural foods
channel.

19. PROS and CONS:
Pros Cons
• Provide Perfect position.
• No risks.
• SG&A expenses will be low.
• The option cannot achieve
the goal.
• Many potential conflicts
and other uncertain factors
that the manager couldn’t
determine.

20. Analysis:
YEAR 2000 2001
Unit sales 1,800,000 1,800,000*1.15=2,070,000
Revenue 1,800,000*$3.35=$6,030,000 2,070,000*$3.35=$6,934,500
Cost of goods sold 1,800,000*$1.15=$2,070,000 2,070,000*$1.15=$2,380,500
Gross profit $3,960,000 $4,554,000
Expenses
Marketing $250,000 $250,000
Complementary Cases $6,030,000*2.5%=$150,350 $6,934,500*2.5%=$173,363
Net Income $3,559,650 $4,130,637

21. Which
option?
????

22. OPTION 1
• Higher revenue
• Market penetration.
• Accelerating growth rate.

23. STRATEGIC IMPLEMENTATION:
• Choose 6 best flavours that were sold
from natural foods.
• Start to develop relationships with
supermarket distributors.
• Hire talent knowledgeable of
supermarket channel.

24. DISCLAIMER:
This presentation is made by Harsha Priyanka G,
VNIT Nagpur
During an internship under Prof. Sameer Mathur ,IIM
Lucknow.