NATUREVIEW FARM

Parthenon
Kumar Shringar
Manish Raj
Mayank Khandelwal
Nand Bhushan
Surbhit Sharma
Vinamra Nanavati
 COMPANY OVERVIEW
 Founded in 1989 in Cabot, Vermont.
 Manufacturer & marketer of natural Yogurt(refrigerated).
 Longer shelf life and high quality product.
 National distribution in Natural Foods Channel
 Strong relationship with distributors.
YOGHURT INDUSTRY MARKET SHARE BY BRAND
(1999)

Market Share By Brand Market Share By Brand

Supermarket Channel Natural Foods Channel

Natureview Farm
Dannon
5%
Brown Cow
15% Yoplait 24%
33% 35% Horizon Organic
Others

Private Label White Wave

23% 15%
Columbo Others
7%
24% 19%
YOGHURT INDUSTRY MARKET SHARE BY BRAND
(1999)
Market Share & Growth
(Packaging Segment)

OTHER

32-OZ. CUPS

Dollar Sales Change vs. Prior Year

Dollar Share

CHILDREN'S MULTIPACKS

8OZ. CUPS AND SMALLER

0% 10% 20% 30% 40% 50% 60% 70% 80%

 4P
Product
- Natural Yoghurt (organic)
- 8-oz. size with 12 flavors (86% revenues in 1999)
- 32-oz. size with 4 flavors (14% revenues in 1999)
Price
- Affordable pricing for natural foods channel
Placement of Product
- Natural foods channel – Whole Foods & Wild Oats
Promotion
- High quality and great taste led to leadership in the natural foods
channel
- Low-cost “guerilla marketing”
GOAL

 Grow in revenues from current $13 Mn to $20 Mn as VCs looking

at exiting the investment.
DECISION DILEMMA

 Whether to expand in Supermarket channel to increase the

revenue or remain in Natural Foods Channel distribution only?
 Options:

Option Action Anticipated

Retail unit
sales
1 Expand 6 SKUs of the 8-oz. size into eastern & western supermarket 35000000
regions
2 Expand 4 SKUs of the 32-oz. size nationally into supermarket channel 5500000

3 Introduce 2 children’s multipacks into natural foods channel 1800000

LENGTH OF CHANNEL MARKET
OPTION 1

 Pros:
 8 oz. cups represent largest dollar & unit share in market
 Can take a first mover advantage in super markets.
 Smaller Channel Length compared to Natural Foods Channel

 Cons:
 High competition.
 Increased advertising & SGA costs.
 Almost no experience in dealing with super markets.
OPTION 1 8-oz. Supermkt channel analysis
Channel Margin Cost price Selling price
Natureview 33% $0.31 $0.46
Distt 15% 0.46 $0.54
Retailor 27% 0.54 $0.74

2000 2001
Unit sales 35000000 42000000
Revenue $16,100,000.00 $19,320,000.00
Cost $10,850,000.00 $13,020,000.00
Gross profit $5,250,000.00 $6,300,000.00

Expenses
Advtt 2400000 2400000
SGA 320000 640000
Slot fee 1200000 Only in 1st year
Broker fee $644,000.00 $772,800.00
Net profit $686,000.00 $2,487,200.00
OPTION 2

Pros:
 32-oz. cups generate high profit margin (43.6% vs 36% for 8-oz.
product)
 Fewer competitors.
 Lower advertisements/promotional expenses.

Cons:
 High slotting fee(national coverage)
 National distribution may pose a challenge within 12 months.
Option 2 32-oz.(4 SKUs) Supermkt channel analysis
Channel Margin Cost price Selling price
Natureview 41% $0.99 $1.67
Distt 15% $1.67 $1.97
Retailor 27% $1.97 $2.70

2000 2001
Unit sales 5500000 5500000
Revenue $9,185,000.00 $9,185,000.00
Cost $5,445,000.00 $5,445,000.00
Gross profit $3,740,000.00 $3,740,000.00

Expenses
Advtt $480,000 480000
SGA $160,000 320000
Slot fee $2,560,000
Broker fee $367,400.00 $367,400.00
Net profit $172,600.00 $2,572,600.00
OPTION 3 (IN NATURAL FOODS CHANNEL)

Pros:
 Good relationship with NFC retailers & distributors.
 High margins.
 Low marketing expenses.

Cons:
 Difficult to reach to goal of $20 Mn revenue through this
approach.
 Competitors would already enter supermarkets.
 Supermkt channel
Option 3 2 Children's multipack analysis

Channel Margin Cost price Selling price

Natureview 38% $1.15 $1.84

Natural foods Wholesaler 7% $1.84 $1.98

Distt 9% $1.98 $2.18
Retailor 35% $2.18 $3.35

2000 2001
Unit sales 1800000 2070000
Revenue $3,312,000.00 $3,808,800.00
Cost $2,070,000.00 $2,380,500.00
Gross profit $1,242,000.00 $1,428,300.00

Expenses
Marketing $250,000 $250,000

Net profit $992,000 $1,178,300.00

CONCLUSION
• Choose option 1 –
 Highest revenue and larger market penetration.
 First-Mover Advantage.
 More visibility of the product, new target customers
To follow through on option 1:
• Partner with more than one VC to minimize the risk.
• Choose the top-selling 6 flavors.
• Leverage the relationship with brokers to strike a
deal with supermarkets.
• Have a sale and marketing function dedicated to
supermarket
• Hire sales persons from among sales brokers who
have worked with Nature view in the past
• Incentivize the perceived loss of retailers and
Work with retailers, distributors and wholesalers to
reduce cost, maintain margins &decrease the
price difference
THANK YOU