The document analyzes options for expanding the NatureView Farm yogurt business. It considers expanding the 8oz yogurt line into supermarkets (Option 1), introducing a larger 32oz size in supermarkets (Option 2), or focusing on a children's multi-pack (Option 3). Option 1 is recommended as it has the highest potential demand and revenue, allowing the company to surpass its $20 million revenue goal while gaining a first mover advantage in the supermarket channel for natural products. It carries some risk but could generate 200% revenue growth and a strong long-term financial position.

1. NATUREVIEW FARM
CASE ANALYSIS
SUBMITTED BY
RISHAV KAR
JADAVPUR UNIVERSITY

2. Founded in 1989
Yogurt manufacturer
Strong brand
Differentiators
1. Long shelf life
2. Natural ingredients
3. Reputation for high
quality and good taste

3. SUCCESS STORIES
Natural yogurt (organic) and special
process
Affordable according to it’s channel
Average shelf life 50 days
Added flavors to both 8-ounce (oz.) and
32-oz. cup sizes of yogurt
Developed strong relationships with
leading natural foods retailers

4. Raise revenue to $20
million by the end of 2001.
Whether or not to expand
into supermarkets?
Ultimate goal is to maintain
brand image.
GOALS

5. OPTION 1
Bring in the 6 SKUs
of the 8-oz. size
Expand in Northeast
and West
supermarket region
RISKS
Advertising plan
costs $1.2 million per
region per year
Direct competition
with national yogurt
brands
SG&A expenses
would increase

6. Year 2000 Year 2001 Year 2002 Year 2003
Revenue
$ 29,070,950 $ 32,285,140 $ 36,142,168 $ 40,770,602
Costs of Good Sold
$ (19,040,000) $ (21,210,000) $ (23,814,000) $ (26,938,800)
Gross Profit
$ 10,030,950 $ 11,075,140 $ 12,328,168 $ 13,831,802
Admin / Freight
$ (2,210,000) $ (2,210,000) $ (2,210,000) $ (2,210,000)
Sales
$ (1,880,000) $ (1,880,000) $ (1,880,000) $ (1,880,000)
Marketing
$ (3,660,000) $ (3,660,000) $ (3,660,000) $ (3,660,000)
R&D
$ (390,000) $ (390,000) $ (390,000) $ (390,000)
One-Time Slotting Fee
$ (1,200,000) - - -
Brokers' Fee @ 4%
$ (642,838) $ (771,406) $ (925,687) $ (1,110,824)
Total Expense
$ (9,982,838) $ (8,911,406) $ (9,065,687) $ (9,250,824)
Net Income
$ 48,112 $ 2,163,734 $ 3,262,481 $ 4,580,978
Profit Margin 0.17% 6.70% 9.03% 11.24%
OPTION 1 ANALYSIS :

7. OPTION 2
Expand
supermarket with 4
SKUs of 32oz yogurt
Strong competitive
advantage: longer
shelf life
Promotional
expenses will be
lower
RISKS
It would increase
SG&A expense by
$160,000
New users may
won’t purchase
large 32oz quantity
of product
Hiring salesperson
with experience for
sophisticated
supermarket
channel

8. Year 2000 Year 2001 Year 2002 Year 2003
Revenue
$ 22,214,425 $ 24,057,310 $ 26,268,772 $ 28,922,526
Costs of Good Sold
$ (13,635,000) $ (14,724,000) $ (16,030,800) $ (17,598,960)
Gross Profit
$ 8,579,425 $ 9,333,310 $ 10,237,972 $ 11,323,566
Admin / Freight
$ (2,210,000) $ (2,210,000) $ (2,210,000) $ (2,210,000)
Sales
$ (1,720,000) $ (1,720,000) $ (1,720,000) $ (1,720,000)
Marketing
$ (1,894,000) $ (1,894,000) $ (1,894,000) $ (1,894,000)
R&D
$ (390,000) $ (390,000) $ (390,000) $ (390,000)
One-Time Slotting Fee
$ (2,560,000) - - -
Brokers' Fee @ 4%
$ (368,577) $ (442,292) $ (530,751) $ (636,901)
Total Expense
$ (9,142,577) $ (6,656,292) $ (6,744,751) $ (6,850,901)
Net Income
$ (563,152) $ 2,677,018 $ 3,493,221 $ 4,472,665
Profit Margin -2.54% 11.13% 13.30% 15.46%
OPTION 2 ANALYSIS :

9. OPTION 3
To introduce two SKUs of a
children’s multi-pack into
the channel
It would yield the strongest
profit contribution of all the
strategies
Financially attractive and
high margins
RISKS
Ignores the opportunity in
the growing supermarket
channel
Can not achieve the target
objective

10. Year 2000 Year 2001 Year 2002 Year 2003
Revenue
$ 16,317,073 $ 16,383,414 $ 16,451,083 $ 16,520,104
Costs of Good Sold
$ (10,260,000) $ (10,007,640) $ (10,043,993) $ (10,081,073)
Gross Profit
$ 6,057,073 $ 6,375,774 $ 6,407,090 $ 6,439,032
Admin / Freight
$ (2,210,000) $ (2,210,000) $ (2,210,000) $ (2,210,000)
Sales
$ (1,560,000) $ (1,560,000) $ (1,560,000) $ (1,560,000)
Marketing
$ (640,000) $ (640,000) $ (640,000) $ (640,000)
R&D
$ (390,000) $ (390,000) $ (390,000) $ (390,000)
One-Time Slotting Fee
$ (82,927) - - -
Brokers' Fee @ 4%
$ (132,683) $ (135,337) $ (138,043) $ (140,804)
Total Expense
$ (5,015,610) $ (4,935,337) $ (4,938,043) $ (4,940,804)
Net Income
$ 1,041,463 $ 1,440,438 $ 1,469,046 $ 1,498,227
Profit Margin 6.38% 8.79% 8.93% 9.07%
OPTION 3 ANALYSIS :

12. Option 1 Recommended
8 –oz yogurt is the highest demand and
have the largest dollar share
Reach beyond the target objective of 20
million revenue by end of 2001
A bit risky but in a long term will generate
revenues of 200%
Creates a strong long term financial
situation
Will have the first mover advantages of
natural product to enter supermarket

13. Hope you liked it!
Feel free to shoot me a text with suggestions or well,
just say hello :P
Rishav Kar
www.linkedin.com/in/rishav-kar-703b15112?trk=hp-identity-name
Special thanks to Prof. Sameer Mathur, IIML for his guidance.
www.linkedin.com/in/sameermathur