Natureview Farms Case Summary

The first alternative that Natureview Farm can take in an attempt to increase revenues is to expand six SKUs of the 8-oz yogurt cup product line into one or two selected supermarket channel regions. It is important to note that this option is strongly advocated by the vice president of sales, Walter Bellini. The 8-oz cups represents almost 86% of Natureview Farms revenues and the segment is growing at an annual rate of 3% per year. In respect to customers, the 8-oz cups represent the most popular cup size, producing almost 74% of total category supermarket sales in U.S. dollars. This product is most commonly bought by women who describe the cup size as an easy to eat and healthy snack or lunch alternative and by people who are more educated and have a higher income. The streamlined distribution system in the supermarket channel allows for lower prices; a supermarket would charge $0.74 whereas a natural food store would charge $0.88 for the same cup.
PROS: The advantages associated with this alternative is that the 8-oz cups characterizes the greatest dollar and unit share of the refrigerated yogurt market, which in turn provides compelling revenue potential. Additionally, other brands such as “Silk Soymilk” and “Amy’s Organic Foods”
Advocating this cup size will require a substantial marketing budget and quarterly trade promotions. The advertising plan alone would cost almost $1.2 million per region per year. Additionally, SG&A expenses would increase by $320 000 annually. Moreover, Christine Walker is worried that this option will not capture the essence of Natureview Farms’ brand. The natural foods channel has contributed to Natureviews success. Long-term partners can also react negatively to the decision and may drop the brand from its traditional channel or adjust prices that have already been agreed