Barry Landers - CEO

Jim Wagner - CFO

Christine Walker – Vice president of marketing

Walter Bellini – Vice President of sales

Jack Gotlieb - Vice President of operations

Kelly Riley – Assistant Marketing Director

Natural ingredients and organic

Longer shelf life

Milk used is from cows untreated with rGBH

Smooth, creamy texture without the artificial thickeners

Reported a revenue of $ 13 million in 1999.

Strong relationships with leading

natural foods retailers, including the chains Whole Foods ($1.57 billion revenues in 1999) and Wild Oats ($721 million revenues

Dollar share

8 oz

32 oz

Childrens Multipacks

others

$100,000

$13 million

$20 million

To increase Natureview revenues by over 50%by the end of 2001

by the end of 2001

1999

1989

VC firm needed to cash its equity

Need to increase revenues to have good validation during accusation

Natureview management had to find another investor or position itself for acquisition, and increasing revenues was critical in order to attain the highest possible valuation for the company

Need an action plan to reach its target of $20 million by the end of 2001.

The organic foods market, worth $6.5 billion in 1999,

was predicted to grow to $13.3 billion in 2003.

In the previous 5 years, yogurt sales through

supermarkets had grown an average of 3% per year, while sales through natural food stores had grown

20% per year.

Yogurt Sales

Supermarket

Naturalfoods

Organic Products sales

Supermarket

NaturalFoods

Small HeathFood Stores

58% expressed that they would buy more organic product if it were less expensive.

Type Dollar share Dollar sales change vs Prior year

8-oz. 74 +3%

Children Multipack 9 +12.5%

32-oz. 8 +2%

others 9 NC

Brokers fee was 4% of manufacturer sales.

The typical distributor margin in this channel was 15%, and the

typical retailer margin was 27%.

A supermarket would charge $0.74 for the same cup of yogurt priced

at $0.88 in a natural foods store.

The slotting fee averaged $10,000 per SKU per retail chain.

Slotting fee and participation in regular trade

promotions—both uncommon practices in

the natural foods channel

Advertising cost of $ 8,000 on average

The yogurt section in a natural foods store was smaller (4’ wide by 6’ high) than that in a supermarket (8’ wide by 6’ high).

58% expressed that they would buy more organic

product if it were less expensive

Nature view should follow PUSH Strategy to attract more customers to increase its market share.

The typical natural foods wholesaler margin was 7%, the distributor margin was 9%, and the retailer margin was 35%

The retail price of the 8-oz. cup was $0.88.

Good relationships with market chain.

Horizon Organic and Brown Cow are competitors

How much revenue will it generate? Can it

reach its target of $ 20 million

Does it have resources for action plan?

Does Natureview is capable of withholding the

demands of market How does the selected option effect the current

marketing channel of Nature view

Option 1• Expand into 2

super market regions

• 6 SKU’s of 8 oz

Option 2• Expand

nationally

• 4 SKU’s of 32 oz size

Option 3• Stay in

natural foods channel

• 2SKU’s of children multipack

Anticipated Incremental Retail Unit Sales are 35 million units

They produce a revenue of 35*0.74 = $ 25.9 million

1.5% share in supermarket yogurt sales after 0ne year

.

Risks associated

Requires quarterly trade promotions and a meaningful marketing budget.

Crossed target revenues of $20 million

Heavy marketing budget

Stiff competition

Channel conflict will arise

Unpreparedness of marketing department

Advertising(TV, Radio,Print etc.,) $ 2,400,000/year

SG&A $ 320,000

SG&A for additional staff (sales) $ 200,000

Slotting Fees $ 1,200,000( 20 chains)

For additional marketing staff $ 120,000

Broker’s commissions $ 434,000

Total $ 4,674,000

Anticipated incremental retail unit sales in 2001

are 5.5 million*2.70 = $14.5 million

Risks

People might not enter the brand with 32 oz size box.

Sales team might not be able to reach national wide distribution within 12 months.

Launching of Bright visa and private label organic visa

$14+$14=$28 millionReached target revenues

Needs less money for marketing than option 1

32 oz market is growing very slowly at +2%

Marketing expenses $ 120,000

SG&A $ 160,000

Total $ 280,000

1.8 million units are anticipated to be sold in next year.

Anticipated revenues for 2001 are

1.8*3.35 = $6.03 million through Natural Foods

channel.

Marketing expenses were estimated to be $250,000

Gross profitability of the line would be 37.6%.

Just reached target revenues

$ 6.03 +$ 14 million=$ 20 million (approximately)

The natural foods channel was growing almost

seven times faster than the

supermarket channel

0% 5% 10% 15%

8 oz

32 oz

Multi pack

growth projected

growth projected

0

5000000

10000000

15000000

20000000

25000000

30000000

35000000

40000000

45000000

Option 1 Option 2 Option 3

Sales Incremental(units)

Total sales Projection(in$)

Required investment(in$ )

Option 3 would be best

Reaches our 20 million Target

Does not need much investment compared to option 1 and option 2

Unpreparedness of marketing department to handle demands of super market channel

Less Risky

Potential Channel Conflict

Brokers are not favorable for the go Decision

After investment is secured we can revisit our retail options later.

Gives us enough time to prepare for launch into super market channel in future

Created byMohan Krishna Meruva,

NIT Jamshedpur as a part of Marketing management

internship under Prof. Sameer Mathur IIM Lucknow