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Copy of Natureview Farm
Transcript of Copy of Natureview Farm
Case Analysis By: Alex Charen, Brae Kriever, Stefanie Ritter, Jill Jakubowicz, Alex Weinstein RECOMMENDATION PROS CONS Largest dollar value and unit share
Most popular item
Other natural food brands (Silk and Amy's Organic) increased revenues by over 200%
20% market growth for organic yogurt from 2001-2006
could beat out one of their competitors to enter the supermarket channel
1.5% share of supermarket yogurt sales Charge for each SKU is $10,000
Production would have to be increased
Not experienced in supermarket distribution
Would have to hire new marketing team
Would have to hire additional sales staff
SG&A costs would increase Pros Cons Large gross profit margin (43.6% : 36% 8oz.)
Fewer competitors for segment
Longer shelf life than competitors
45% share of natural segment and size within it
Low advertising costs Smaller dollar share of market
Smaller unit share of market
Increase in slotting fees
More supermarket retailers are needed
Large size containers are risky because people do not buy bulk items until they know they like a product
SG&A will increase $160,000
Hiring sales people Pros Cons Strong relationships with leading natural foods channel retailers
All-natural ingredients provide perfect positioning to cater to mothers seeking healthier alternatives
Multipack segment growing at 12.5% per year
sales and marketing expenses would be lower
Natural foods channel growing 7x faster than supermarket channel
No additional SG&A costs to introduce the multipack product Allowing other brands to enter channel first and gain first mover advantage
Natural food stores only sell 3% of all yogurt consumed
Would need to generate an additional $7million with just two skills
R&D and operations would still need to develop multipack product After analyzing the opportunities presented by each option, we suggest pursuing option #3. Focusing on the natural food segment builds off of current company and distribution channel strengths. Based on our financial analysis Natureview Farms will undertake less financial risk if it implements option #3, and does not enter supermarket distribution channels at this point in time. And will meet its goal of $20,000,000 in revenue by the end of 2001.