Nature View Farm Case Analysis

ANALYSIS OF NATUREVIEW FARM CASE : SUBMITTED BY: MUZAMIL QUADIR ROLL NO. PB1108 Natureview Farm, a Vermont based producer of organic Yogurt with $13 million in revenues is the leading natural Yogurt brand(24% market share) sold into natural food stores. It has achieved this through its special Yogurt manufacturing process & through cultivating personal relationships with dairy buyers in the natural food channel set in 2000, when the company faces financial pressure to grow revenues to $20 million by the end of 2001, due to a planned exit by its venture capital investors.

The intermediate decision point that the protogonist, Natureviews vice president of marketing, faces is whether to achieve this revenue growyh by expanding into supermarket channel. INCOME STATEMENT, 1999 COST OF GOODS SOLD = 890000 GROSS PROFIT = 4810000 EXPENSES = 4550000 NET INCOME = 260000 YOGURT MARKET SHARE BY PACKAGING 8oz______________________________________74%(3%growth) hildren multipack__________________________9%(12. 5%growth) 32oz__________________________________________8%(2%growth) Other__________________________________________9%(NC) AVERAGE RETAIL PRICE($) PACKAGE| ARP IN NATURAL FOOD CHANNEL| ARP IN SUPERMARKET CHANNEL| 8oz| 0. 88| 0. 74| 32oz| 3. 19| 2. 7| 4oz multipack| 3. 35| 2. 85| GOAL: “Uniquely positioned the product to capitalize on the growing trend in atural and organic foods in supermarket” MARKET NEWS: “Bellini heard rumours that one of the Natureviews major natural competitor would soon try to expand into supermarket channel” MARKET POTENTIAL: A)Industry expert predicting unit volume growth of organic Yogurt at supermarket of 20% per year from 2001 to 2006. B)These predictions were relative to unit growth projection of 2% to 4% of Yogurt category in the supermarket.

DIRECT COMPETITORS| CURRENT PERFORMANCE| STRENGTHS & WEAKNESS| IMAGE| CURRENT STRATEGY| NATUREVIEW| 24% market(natural food channel)$13 million revenues| Longer shelf lifeOnly in natural food stores| QualityHealthyUnique taste| Build relationshipsGenerate revenue| DANNON| 33% market shareMany flavors & products| Market leaderArtificial| High visibilitySomething for everyone| Follow consumer trends| YOPLAIT| 24% market shareMany products & flavors| Brand nameArtifical| Caring brand | Make gains on DannonDifferentiation| COLUMBO| 50% combined market share| National Distribution| Good for you| Motivation|

EXPAND PRODUCT LINE RO INCLUDE YOGURT MULTIPLE PACKS Natureview Farm should expand its already successful organic yogurt product line to include to versions of a Yogurt multipack priced at $3. 35 each. The strategy will allow the company to reach their set revenue goal the quickest due to the fact that the annual growth rate of sales of Yogurt multipacks is 12. % versus only 3% for the 6oz size and 2% for 8oz size The profit margins from multipacks are also significantly higher than those of single servings. Flavors will be chosen from lines most successful flavors but will be given creative names that will be appeal to kids. He multipacks will be positioned as the healthy snack alternative for kids.