Natureview Farm Case
Natureview Farm Case
Natureview Farm is a small yogurt manufacturer with annual revenues of $13 million. It produces three different size cups – 8 oz. cup, 32 oz. and 4 oz. cup multipack. However, Natureview’s goal is to increase its annual revenue to $20 million in two years. With a solid relationship with its current, successful strategy in the natural foods channel it is considering expanding into the supermarket channel. Conversely, it does not want to hurt the company brand it has created as a premium yogurt brand in the natural foods market and betray those loyal, natural foods customers who made their business what it is today.
In the case, Natureview is considering three options to expand its operations to reach its $20 million annual goal: 1. Expand six SKUs of the 8-oz. product line into one or two selected supermarkets. The reasons behind this option are: A) Eight-ounce cups represent the largest dollar and unit share of the refrigerated yogurt market, providing significant revenue potential. B) Other natural food brands had successfully expanded their distribution into the supermarket channel. As a leading natural foods brand for yogurt, they can capitalize on the growing trend in natural and organic foods in supermarkets. C) A major Natureview competitor plans to expand into the supermarket channel. Supermarket retailers would likely only have one organic yogurt brand. Therefore, there is a first-mover advantage. 2. Expand four SKUs of the 32-oz. size nationally. The reasons behind this option are: A) Currently generated an above-average gross profit margin for Natureview (43.6% vs. 36.0% for the 8-oz. line). B) Fewer competitive offerings in this size and Natureview had a strong competitive advantage in their product’s longer shelf life. C) Although slotting expenses would be higher, promotional expenses would be lower since the 32-oz. size was promoted only twice a year. 3. Introduce two SKUs of a children’s multi-pack into natural
Natureview Farm is a small yogurt manufacturer with annual revenues of $13 million. It produces three different size cups – 8 oz. cup, 32 oz. and 4 oz. cup multipack. However, Natureview’s goal is to increase its annual revenue to $20 million in two years. With a solid relationship with its current, successful strategy in the natural foods channel it is considering expanding into the supermarket channel. Conversely, it does not want to hurt the company brand it has created as a premium yogurt brand in the natural foods market and betray those loyal, natural foods customers who made their business what it is today.
In the case, Natureview is considering three options to expand its operations to reach its $20 million annual goal: 1. Expand six SKUs of the 8-oz. product line into one or two selected supermarkets. The reasons behind this option are: A) Eight-ounce cups represent the largest dollar and unit share of the refrigerated yogurt market, providing significant revenue potential. B) Other natural food brands had successfully expanded their distribution into the supermarket channel. As a leading natural foods brand for yogurt, they can capitalize on the growing trend in natural and organic foods in supermarkets. C) A major Natureview competitor plans to expand into the supermarket channel. Supermarket retailers would likely only have one organic yogurt brand. Therefore, there is a first-mover advantage. 2. Expand four SKUs of the 32-oz. size nationally. The reasons behind this option are: A) Currently generated an above-average gross profit margin for Natureview (43.6% vs. 36.0% for the 8-oz. line). B) Fewer competitive offerings in this size and Natureview had a strong competitive advantage in their product’s longer shelf life. C) Although slotting expenses would be higher, promotional expenses would be lower since the 32-oz. size was promoted only twice a year. 3. Introduce two SKUs of a children’s multi-pack into natural