To: Christine Walker, Vice President of Marketing
From: Cristian Lopez, Marketing Consultant
Subject: Natureview Farm Options for 2000
Natureview is challenged with a changing consumer purchasing behavior and desire to
expand its customer base while faced with a decision to shift their distribution channel towards
supermarkets with two product size options or staying in the natural food channel by
introducing new children’s multi pack. Natureview holds a large market share of 24% in the
natural food channel and have never considered supermarket channel. Expanding to
supermarket channel presents an attractive opportunity to be a key player in the organic yogurt
market segment and having first mover advantage. Option 1 is the best option to move forward
with to increase our profit to $20M in 2001, beat the competition in expanding to the
supermarket channel, and diversify the distribution channel portfolio.
Natureview has positioned itself as a premium brand that only uses high-quality natural
ingredients, and having a longer product shelf life than its competitors. The brand is known for
being truly organic and has a strong brand loyalty. By expanding six SKUs of the 8-oz. product
line (the size that has the highest incremental demand) into two selected supermarket channel
regions we can penetrate a new market. This has a significant revenue potential because 46%
of organic food customers bought organic products at supermarkets compared to 29% at
natural foods stores. The supermarket channel has 97% of all yogurt sales which will support
our sales increase. 58% of US households expressed that they would buy more organic products
if it were less expensive. This could be achieved through saving on cost from an additional step
in the distribution system. Supermarket chains have an interest in selling organic food to attract
customers with higher income and we must be the first to expand into the supermarket
channel, obtaining first mover advantage. Some potential drawbacks are customer alienation,
high costs to expand into new distribution channel.
beginning such as a package that has all 6 flavors to help with the introduction of the yogurt.
We will also have discount coupons when consumers register for our mail-distribution list.