Natureview Farm: Background Analysis and Problem Statement
Natureview Farm Case
Eric Ice
Mktg 600
Nov 10th, 2013
Background Analysis
Founded in 1989, Natureview Farm manufacturers and markets refrigerated cup yogurt under the Natureview Farm brand name. It just over 10 years, the company’s revenues have growth from $100,000 in 1989 to over $13 million in 1999. In 1989, they entered the market with two 8oz flavors – vanilla and plain. Based on early success, they continued to launch new 8oz flavors with fruit on the bottom and by the year 2000, they had twelve 8oz flavors (86% revenues) and four flavors in 32-oz cups. (14% revenues) Natureview has strong relationships with leading natural foods retailers, including Whole Foods and Wild Oats. Natureview Yogurt uses a family recipe that uses natural ingredients and a special process that gives the yogurt a smooth and creamy texture, without using the artificial thickeners that many major yogurt brands use. In addition, Natureview Farms has significantly higher shelf life (50 days) than many of its largest competitors. (30 days) Their growth was also spurred on by an infusion of Venture Capital support in 1997. Now the VC’s need to cash out and Natureview Farm is faced with challenging situation to grow revenue by over 50% by 2001 in order to attain the highest possible valuation for the company as it looks to find another investor or position itself for an acquisition.
Problem Statement
Because Natureview Farm’s investor needs to cash out its position, the management team needs to find another investor or prepare the company for acquisition. In order to achieve the highest possible valuation, increasing revenue to $20 million by the end of 2001 is a top priority. Natureview has three options to consider in order to reach their revenue goals. Two of these options require Natureview to enter the supermarket channel, where they currently have no distribution. But moving into the supermarket channel does not come without risks.
How would the long
Eric Ice
Mktg 600
Nov 10th, 2013
Background Analysis
Founded in 1989, Natureview Farm manufacturers and markets refrigerated cup yogurt under the Natureview Farm brand name. It just over 10 years, the company’s revenues have growth from $100,000 in 1989 to over $13 million in 1999. In 1989, they entered the market with two 8oz flavors – vanilla and plain. Based on early success, they continued to launch new 8oz flavors with fruit on the bottom and by the year 2000, they had twelve 8oz flavors (86% revenues) and four flavors in 32-oz cups. (14% revenues) Natureview has strong relationships with leading natural foods retailers, including Whole Foods and Wild Oats. Natureview Yogurt uses a family recipe that uses natural ingredients and a special process that gives the yogurt a smooth and creamy texture, without using the artificial thickeners that many major yogurt brands use. In addition, Natureview Farms has significantly higher shelf life (50 days) than many of its largest competitors. (30 days) Their growth was also spurred on by an infusion of Venture Capital support in 1997. Now the VC’s need to cash out and Natureview Farm is faced with challenging situation to grow revenue by over 50% by 2001 in order to attain the highest possible valuation for the company as it looks to find another investor or position itself for an acquisition.
Problem Statement
Because Natureview Farm’s investor needs to cash out its position, the management team needs to find another investor or prepare the company for acquisition. In order to achieve the highest possible valuation, increasing revenue to $20 million by the end of 2001 is a top priority. Natureview has three options to consider in order to reach their revenue goals. Two of these options require Natureview to enter the supermarket channel, where they currently have no distribution. But moving into the supermarket channel does not come without risks.
How would the long