A. Objectives, Problems, and Options
Natureview Farm, Inc. is a small organic yogurt manufacturer located in Vermont started in 1989. While the company has grown revenues from $100,000 to $13 million in the last decade, it has struggled to maintain a consistent level of profitability. The company is threatened now by an investor who wants to cash out. Natureview must find another investor or position itself for acquisition. In order to achieve this goal, the company needs to grow revenues by over 50% before the end of 2001, from $13 million to $20 million.
Members of the management team have decided that the best way to achieve the revenue goal is to expand into the supermarket channel or to increase their product line in the current channel of natural foods stores. Three options are being considered, two of which involve the supermarket channel and one remaining solely in the natural foods stores. Uncertainties exist with all options. First, how will natural foods stores, long-time partners, react to placing the brand in supermarkets? Second, while placing the brand only in natural foods stores is consistent with the brand, is this enough to meet the short-term revenue goal?
B. Analysis of the Environment
Company and Product
Over the last ten years, Natureview Farm has built a strong brand that has grown to national distribution and shared leadership in the natural foods channels. Its emphasis on natural ingredients has given it a strong reputation for high quality and great taste. The secret behind the product is a family yogurt recipe developed by the founder, which uses natural ingredients and a special process to achieve the unique smooth, creamy texture without artificial ingredients like competitors. The milk is untreated with growth hormones and due to that and other natural ingredients the shelf life is 50 days as compared to 30 for competitors.
The product line has increased from 8-oz. and 32-oz. cups in two...