Natureview Farm
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Natureview is a yogurt company founded in 1989 that has grown steadily through the natural foods channel. It is now considering expanding into supermarkets to meet a revenue goal of $20 million by 2001. The document analyzes Natureview's history, strengths, weaknesses and options for growth. It recommends expanding the top-selling 8oz cup line into select Northeast and West supermarkets (Option 1) which is expected to generate $25.9 million in revenue and leverage Natureview's first-mover advantage in organic brands in supermarkets. Implementing the plan would involve contacting target supermarkets, paying slotting fees, and launching advertising campaigns.
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Natureview Farm
- 1. Natureview Farm Group 2 Nicole Cannon, Ina Choi, Dan Guzman, Jessica Hickey, Lyndsey Petrofsky,
- 2. Agenda
- 3. Company History 1989 1996 1997 1999 2000 ➔ Natureview founded ➔ Limited product offering ➔ Steady profitability achieved ➔ Equity infusion with VC firm ➔ Revenue growth ➔ Product lines expanded ➔ VC firm seeks to cash out ➔ Product lines further expanded ➔ Feb 2000 - current time of case Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates
- 4. Must have revenue of $20 M by end of 2001 Strategic Decision Making ○ Expand into supermarket? ○ If not, how does Natureview reach that goal Decide between 3 options or propose another Problems Natureview is Facing Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates
- 5. Issues of Channel Management Issues on Entering into Supermarket Unstable sales promotion and price for premium brand positioning More demanding than natural foods channel (Not prepared for the demands and staffing) High cost, change, and trauma from entering Issues on Staying in Natural market Less profit through the limited distribution Longer distribution process on channels than supermarkets Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates
- 6. Natureview SWOT Weaknesses ● Highly dependent on brokers ● No constant financing ● Small company ● Only dominant in natural food channel/not supermarket ● Small share in the full yogurt market Opportunities ● Sales had grown 20% per year ● Price of product could be lower ● 12.5% growth rate ● First mover for natural yogurt entering Threats ● No sufficient capital and financing options ● Might not be able to compete in the supermarket channel ● Being dropped out of traditional channel Strengths ● Strong and trusted brand ● No artificial thickeners ● Natural ingredients ● Longer shelf life ● Uses low-cost “guerilla marketing” ● Market leader ● Strong relationships natural foods retailers Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates
- 7. Natureview Financials Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates
- 8. <Yogurt Market Share by Brand> Marketing Research & Competitors Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates
- 9. Horizon SWOT Strengths ● Organic and natural ingredients ● Known as a national brand ● Largest supplier of milk Weaknesses ● Limited product variation ● Shorter shelf life Opportunities ● Target toddlers and children Threats ● Potential acquisitions ● Competition from other organic brands Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates
- 10. Danone SWOT Strengths ● Market leadership ● Globally recognized brand ● Innovator in dairy industry ● Product differentiation ● Good quality and healthy Weaknesses ● Limited market share ● Presence of many players Opportunities ● Product line extension ● Acquisitions and mergers Threats ● Emergency of grocery brand dairy, “bargain brand” ● Greek Yogurt ● Competition Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates
- 11. Dannon Financials Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates
- 12. Yoplait SWOT Strengths ● Brand positioning ● Distribution networks ● Natural ingredients Weaknesses ● Low shelf life ● High inventory costs Opportunities ● Educate consumers about health benefits ● Expand operations to developing markets Threats ● Highly fragmented market ● Local brands account for increasing share of sales Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates
- 13. Yoplait Financials Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates
- 14. Consumer Trend in Yogurt Market Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates
- 15. Consumer Trend in Yogurt Market Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates “In recent years, U.S. consumers have embraced not only Greek yogurt, but also authentic, clean-label and organic versions, as well as yogurt drinks, which are becoming more accepted with sales growing rapidly.” <”Yogurt Sales Approach $9 billion,” Richard Tursik>
- 16. Recipe from Founder Longer shelf life Proprietary All natural Competitive Advantage of Natureview Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates
- 17. Competitive Advantage of Natureview Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates
- 18. Advantages Risks *Option 1 “Let’s expand six SKUs of the 8-oz. Product line into one or two selected supermarket channel especially in Northeast and West Region” Suggested 3 Options by Senior Management Team ● Most preferred size by consumer demand ● Hugely potential revenue ● First mover advantages entering into supermarket (ex.Silk Soymilk, Amy’s Organic Foods) ● High risks and costs ● Quarterly trade promotions ● High Advertising and marketing expenses ● Slotting fee once Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates
- 19. *Option 2 “Let’s expand 4SKUs of the 32-oz. Size into supermarket nationally” Suggested 3 Options by Senior Management Team ● High gross profit margin compared to 8-oz line (43.6% vs. 36%) ● Fewer competitors ● Longer shelf life ● Low marketing expenses ● High slotting fees based on many retailers ● Uncertainty to be distributed nationally in a year ● Competitors having heavy users on 32-oz yogurt Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates Advantages Risks
- 20. *Option 3 “Let’s introduce 2SKUs of a children’s multi-pack into the natural foods channel” Suggested 3 Options by Senior Management Team ● Children’s multipack connected to natural markets ● Total yearly revenue&incremental unit volume 1.8M ● Gross profitability 37.6% ● Low sales expenses and marketing expenses ● Uncertain factors that the company can’t anticipate ● Can’t attain target Advantages Risks Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates
- 21. Option 1 ○ Expected revenue growth of $25,900,000 causing a total revenue of $38,900,000 ○ 8-oz cups represent the largest dollar and unit share ○ First mover advantage ○ Fellow organic brands have experienced a 200% growth in revenue within first two years Recommendation Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates
- 22. Recommendation Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates
- 23. ● Add new flavors ○ Provides variety for the health conscious consumer which can increase market share ● Add Greek yogurt line ○ Healthier, aligns with brand image ● Add Gluten Free, Gelatin Free ○ Aligns with health conscious image ● If 18 month window were given, go for Option 3 Alternatives Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates
- 24. Implementation Strategy Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates Contact supermarkets in the Northeast and West regions Pay slotting fee Start advertising campaigns
- 25. ● Natureview is not a real company, but based off of Stonyfield Organic ● In 1999, Stonyfield launched the first yogurt on the market for babies and toddlers called YoBaby. This product was also the company’s first product that was introduced nationally in supermarkets ● In 2001, 40% of Stonyfield Organic was purchased by Groupe Danone. This was followed with additional purchases that led to Danone owning the entire company in 2014 ● In July 2017, Danone agreed to sell Stonyfield to Lactalis, the second French dairy giant Natureview Today Company History Problems Analysis Advantage Options Recommendations Alternatives Implementation Updates
Editor's Notes
- Lyndsey
- Lyndsey Mention Competitors specifically - Dannon, Yoplait, Horizon Organic
- Lyndsey
- Lyndsey
- Jess 1.Unstable sales promotion and price for premium brand positioning 2.More demanding than natural foods channel=>Natureview’s marketing department is not ready for the demands and staffing 3. High costs, change, and trauma to enter =>need a strategy to occupy more shelf space
- Nicole Strengths: Strong and trusted brand that was highly recognized by its customers Natural ingredients without artificial thickeners. Milk was from cows that were untreated with rGBH, an artificial growth strategy→ yogurt’s average shelf life was 50 days vs. its competitors’ 30 day shelf life Uses low-cost “guerilla marketing” → aims for maximum exposure Market leader with 24% share in Natural Foods Channel Strong relations with leading national foods retailers like Whole Foods and Wild Oats Weaknesses Highly dependent on brokers led them to their current financial problem previously mentioned Small company→ hard to compete against larger brands such as Dannon and Yoplait Only dominant in natural food channel Small share in the full yogurt market Opportunities Yogurt sales in the Natural Foods market had grown 20% per year Price of product could be lower 12.5% growth rate with multi-packaged products for children Potential first mover of natural yogurt to enter the supermarket Threats No sufficient capital and financing options Might not be able to compete in the supermarket channel due to strong competition and no experience Potential to be dropped out of their traditional channel and lose customers if they decide to move towards the supermarket channel
- Dan
- Nicole
- Dan Prior to being acquired by (now former parent company) Dean Foods, Horizon was a public company and owner of the organic dairy brands: Juniper Valley Farms, and the Organic Cow Now, WhiteWave Foods (owner of the Horizon brand) became an independent company from Dean Foods 2016, French company Danone purchased WhiteWave Foods
- Nicole
- Dan - From 2001 groupe danone annual report Dan
- Nicole Fragmented market- an industry in which no single enterprise has large enough share of the market to be able to influence the industry’s direction
- Dan - 2007
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- Lyndsey 50 days opposed to 30
- Lyndsey https://www.youtube.com/watch?v=7YNezYffvhw 50 days opposed to 30
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- Jess
- Dan
- Jess
- Jess and Dan
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