Natureview Farm – Distribution Channel Strategy Analysis
Summary: Natureview’s goal is to increase revenues by over 50% to $20M before the end of. Expanding
its distribution channel to include top supermarket chains in the West and Northeast while maintaining
natural food retail prices will allow Natureview yogurts to meet its revenue goal. To ensure this,
Natureview will have to act fast, as supermarkets are likely to authorize only one organic yogurt brand.
Natureview has a strong market presence due to its high quality, great tasting, and long-lasting product.
These factors differentiate Natureview and will allow it to thrive in the highly competitive supermarket
distribution channel (Option 1). The following paper analyses the options presented in the case.
Company: Since Natureview was established in 1989, it has experienced high revenue growth. This can
be due to several strengths of Natureview’s product, which includes a great reputation for its all-natural
recipe, high quality and great-tasting yogurt, and 67% longer shelf life compared to most of its large
competitors. Furthermore, Natureview has a strong relationship with leading natural food retailers, and its
yogurts are distributed nationally. In fact, Natureview has 24% market share in the natural foods channel,
making it the market leader of this segment. Having said this, Natureview’s profits have always
fluctuated, suggesting unstable costs. This could be due to the switching costs involved when upgrading
equipment necessary to increase variety in its yogurts. Further, despite its revenue success, Natureview is
not taking advantage of opportunities to maximize profits by selling through other channels, including
warehouse clubs, convenience stores, drug stores, and mass merchandisers. This is because Natureview
does not view itself as developed enough to meet the high-volume requirements, suggesting further costs
will be incurred to optimize Natureview’s production capacity.
Customer: Natureview’s high-price and high-quality yogurts attract consumers who tend to be more
educated, earn higher incomes, are less price-sensitive, and are older than the typical supermarket
shopper. These consumers of organic produce tend to live in the Northeast and West. However, a
