Nature View Farm

OverView:-Company

-Natural/Organic Market Trends-Yogurt Market Trends

-ChallengeOPTION 1OPTION 2OPTION 3

Financials Recommendations

Agenda

COMPANY:Founded in 1989

Manufacturer And Marketer of refrigerated cup yogurt.Differentiators:

-Natural Ingredients-Longer Shelf Life

-Reputation for high quality & great tasteKey Successful Factors:

-Strong Brand-Effective, low cost “guerrilla marketing”

-National distribution in Natural foods channel-Strong relationship with distributors

• Organic foods market predicted to grow from $6.5 billion to $ 13.3 billion over 4 years

• Generally organic products customers tend to be more educated, earn higher incomes, be older and live in Northeast and West.

• 67% of households consider price as a barrier to purchase of organic products.

• 44% of consumers would like a wider selection of organic products in supermarkets.

• Supermarkets are moving towards attracting new customers by offering more organic products.

Market TRENDS of Organic Farm:

• Concentrated- 4 competitors control over 50% share.

• Supermarkets=97% of total sales(3% annual growth).

• Natural food stores= 3% total sales(20% annual growth)

• Factors in purchasing decisions:Package type, flavours, price,

freshness, ingredients, organic

Yogurt Market Trends:

Challenge: Identify path to grow revenues by over 50% within 23 months.

Goal: Attain highest possible valuation in order to secure new investors or

position itself for acquisition.

NATUREVIEW

PROS 8-oz cups represents largest dollar and unit

share of market Supermarkets fear losing market share to

natural food competitors Other natural foods brands have successfully

expanded to supermarkets First-Mover advantage Supermarkets may only authorize 1organic

yogurt manufacturer

CONS Highest level of competitive trade

promotion and marketing spend Possible channel conflict between

supermarkets and natural food stores Promotion and lower price at supermarkets

may hurt the brand Little experience in dealing with

supermarket chains Balance between shelf presence and

slotting expense

OPTION 1!

Expand 6 SKU’s of the 8-oz product line into one or two selected supermarket channel regions

PROS 32-oz cups generate an above-average

gross profit margin (43.6% vs 36% for 8-oz line)

Fewer competitive offerings in this size. Competitive advantage due to long shelf

life of product. Lower promotional expenses than Option 1

CONS Higher slotting fees due to national

distribution National Distribution will be challenging

within 12 months. No guarantee that consumers awareness of

the brand would grow. Possible channel conflict between

supermarkets and natural food stores. Promotion and lower price at supermarkets

may hurt the brand.

OPTION 2!

Expand 2 SKU’s of the 32-oz product line nationality

PROS Natureview already has strong relationships

with leading natural foods channel retailers. More time to prepare the company for

moving into supermarkets Natureview Product positioning is ideal for

a children’s multi pack product launch Financially attractive High Margins-37.6% Low sales and marketing expenses

CONS Fast growth of natural foods channel will

lead to demands equal to those of supermarkets

Miss opportunity to enter supermarkets before competitors.

OPTION 3!Expand 2 SKU’s of a children’s multi-pack into the natural foods channel.

Sales price $0.78

Retail margin ($0.21)

Price to retail $0.57

Distribution Margin ($0.09)

Price to distributor $0.48

Mfc cost $0.31

Gross profit NV $0.17

Gross Profit Margin 35.95% Financials of OPTION 1

Financials of OPTION 2

Sales price $2.83

Retail margin ($0.76)

Price to retail $2.07

Distribution Margin ($0.31)

Price to distributor $1.76

Mfc cost $0.99

Gross profit NV $0.77

Gross Profit Margin 43.6%

Sales price $3.35

Retail margin ($1.17)

Price to retail $2.18

Distribution Margin ($0.20)

Price to distributor $1.98

Mfc cost $1.15

Gross profit NV $0.69

Gross Profit Margin 37.60%

Financials of OPTION 3

• Financials• Only regional distribution instead of

national which should make it easier to implement

• Competitors are going to move into the supermarket space and we may miss a huge opportunity by not taking the risk.

• Higher slotting fees, but more visibility of the product.

Recommendation

Option 1