Natureview Farms Case Study Essay

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NATUREVIEW FARMS

Introduction Go big, or go home! This is a saying that is heard in all different fields. Its meaning is far more than the five words it contains. Go big, as in everything you do, do it to the best of your ability. Go home, means that you are throwing in the towel when things get tough, more or less, just giving up. My dad said those words to me when I was too afraid to get on stage at my first ballet recital, and he would say those same words to the management team at Natureview Farm after reading into their current predicament.
History and Company Status Since 1989, Natureview Farm’s yogurt has been known for its unique and creamy texture. The texture was created through a completely organic process. The
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The natural foods channel has a unique distribution system that includes a wholesaler in a four step process; whereas, in the supermarket the distribution system only goes through a three step process. The channels may differ in distribution systems, consumer audiences, business models, and ethics; but, they have one thing in common. They both want to sell products that will make both the market and the manufacturer money.
Option One
The first option is to introduce six SKU’s of the eight ounce cups into 20 supermarkets. The twenty supermarkets have been carefully selected in the northeastern and western regions of the United Stated, where over 50% of all yogurt sales take place. Research shows that 74% of all yogurt sales are from the eight ounce products, thus leading this to be the most popular product size. The only drawbacks to this option are the costs that come with it. As shown in figure 1, the slotting fees, advertising costs, promotion expenses, sales, general, and administrative costs jointly create a larger expense than profits will generate in the first year. Advertising for this option is regulated by the supermarkets; they require quarterly trade promotions and an extensive advertising plan. However, when looking in the future this option can potentially be the most profitable, exceeding $11 million in net profit value in five years.
[Figure 1]

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