4. 1989
Founded and Manufacturing in Cabot.
Entered the market with 8-ounce (oz.) and
32-oz. cup sizes of yogurt in two flavors—
plain and vanilla
1999
• Farm’s revenues had grown from less
than $100,000 to $13 million
• Low cost ‘guerilla’ marketing tactics
• Fruit on bottom yogurt
2000
produced 12 refrigerated yogurt flavors in 8-
oz. cups and 4 flavors in 32-oz. cups
• started exploring multipack yogurt
products (for children)
5.
6. • 8 oz. size with 12 flavors
• 32 oz. size with 4 flavors
• Fruit on the bottom yogurt
• Multipack yogurts
7. beautiful flavor
Unique smooth and creamy texture
Without artificial thickeners
Natural milk from cows, no rGBH
8. Special process and
ingredients
The 8-oz. flavors were developed
by putting fruit puree into the
bottom of the cup and adding
plain yogurt on top
Longer shelf life
(approx 50 days)
9.
10.
11. o The organic foods market, worth $6.5 billion in 1999, was predicted to grow to $13.3
billion in 2003
o Generally, shoppers who purchased organic products, regardless of channel, tended
to have higher incomes, have more education, and live in the Northeast and West
o Forty-six percent of organic food consumers bought organic products at a
supermarket, 25% at a small health foods store, and 29% at a natural foods
supermarket
o Sixty-seven percent of U.S. households indicated that price was a barrier to their
purchase of organic products
o 58% expressed that they would buy more organic product if it were less expensive.
o Forty-four percent of consumers identified the need for a wider selection of organic
product in supermarkets.
20. Quest to find a path to grow revenues by over 50%
before the end of 2001
VC firm now needed to cash out of its investment in
Natureview
Should Natureview Farm expand into Supermarket
region?
21. “We owe it to our customers, our suppliers, and our distribution
partners to make the right strategic choices regarding the
revenue growth objective before us.”
22. to expand six SKUs of the 8-oz. product line into one or two selected
supermarket channel regions
Walter Bellini, vice president of sales
23. 8 oz. cups had largest demand and unit share
Increased revenue growth potential
Other natural food brands gained a lot through such investment
The first brand to enter the channel could therefore have a significant first-
mover advantage
24. High risk and high marketing costs
would require quarterly trade promotions and a meaningful marketing
budget
Comprehensive advertising plan would cost $1.2 million per region per
year
One time slotting fees to be paid
SG&A expenses would increase by $320,000 annually
26. 2000 2001
Unit Sales 35,000,000 35,000,000 X 1.2 = 42,000,000
Revenue Growth 35,000,000 X 0.74 =
$25,900,000
$42,000,000 X 0.74 =
$31,080,000
Projected Revenue $13,000,000+$25,900,000=
$38,900,000
$13,000,000+$31,080,000=
$44,080,000
Cost 35,000,000 X 0.31 =
10,850,000
42,000,000 X 0.31 =
$13,020,000
Gross Profit $28,050,000 $31,060,000
EXPENSES
SG&A $320,000 $640,000
Ads $1,200,000 X 2 region =
$2,400,000
$1,200,000 X 2 region =
$2,400,000
Broker’s fee $16,100,000 X 0.04 =
$644,000
$19,320,000 X 0.04 =
$772,800
Slotting fee 6 X $10,000 X 20 retails =
$1,200,000
NET PROFIT $23,486,000 $27,247,200
27. To expand 4 SKUs of the 32 oz. size nationally into supermarket regions
Jack Gottlieb, vice president of operations
28. Positioning as a product of longer shelf life
Lower promotion expenses
Higher profit margins than 8 oz. cups
29. Doubt that new users would readily ‘enter the brand’ via a multi-use size
Doubt whether the sales team would be able to achieve full national
distribution in just 12 months
would need to hire sales personnel who had experience selling to the
more sophisticated supermarket channel
would need to establish relationships with supermarket brokers. Additions
to sales headcount for the 32-oz. expansion option would increase SG&A
by $160,000.
31. 2000
Unit Sales 5,500,000
Revenue Growth 5,500,000 X 2.70 =
$14,850,000
Projected Revenue $13,000,000+$14,850,000=
$27,850,000
Cost 5,500,000 X 0.99 =
$5,445,000
Gross Profit $22,405,000
EXPENSES
SG&A $160,000
Marketing $1,200,000 X 4 region =
$4,800,000
Broker’s fee (4% revenue) $367,400
Slotting fee 4 X $10,000 X 64 retails =
$2,560,000
NET PROFIT $14,517,600
32. To introduce 2 SKUs of a children multipack into the natural foods channel
Kelly Riley, the assistant marketing director
33. The sales team confident to achieve distribution for 2 SKUs
Good financial potential
Would yield the largest profit contribution out of all the options
The natural food channel growing 7 times faster than supermarket
34. Missed opportunity to establish in the supermarket channel before
competitors
The company won’t see a major expansion in the 8 oz. products, which
have the highest demand.
40. Financial success
Concentration on a region instead of national,
making implementation easier
Missing the chance to establish in supermarket
region would be a risk for the business in the
future
More visibility of the product
41. CHOOSING 6 BEST FLAVORS THAT WERE SOLD THROUGH NATURAL FOODS
HIRING TALENT KNOWLEDGEABLE OF SUPERMARKET CHANNEL
START TO DEVELOP RELATIONSHIPS WITH SUPERMARKET DISTRIBUTORS
