Natureview Farm, Inc., a small yogurt manufacturer of Cabot, Vermont, was started in 1989 using the founders family yogurt recipe. The yogurt is unique in that it lacks artificial thickeners thatmajor brands do, as well as uses milk from cows that are not treated with artificial growth hormones,all contributing to a 50-day shelf life in comparison to its competitors 30-day shelf life. Natureview is now, in 2000, producing 12 flavors in 8-oz. cups, which equates to 86% of its revenues, and 4 flavors in 32-oz. cups (14% revenues), with total revenues equaling $13 million. Because of its guerilla marketing strategies and strong brand reputation for using natural ingredients and selling high quality, great tasting yogurt, Natureview raised its total revenues from less than $100,000 to $13 million in just 10 years and simultaneously secured powerful relationships with natural foods retailers, such as Whole Foods and Wild Oats, in the Northeast, Midwest, Southeast, and West regions of the United States. In 1999, natural food stores sold around 3% of all yogurt consumed in the U.S., but according to the case, the organic foods market, worth $6.5 billion in 1999, was predicted to grow to $13.3 billion in 2003. 40% of the U.S. population consumed yogurt (over 70% of which is women), and 6- and 8-oz. cups were the most popular sizes to purchase. Again according to the case, forty-six percent of organic food consumers bought organic products at a supermarket, 25% at a small health foods store, and 29% at a natural foods supermarket. For national yogurt sales, supermarkets were growing by 3% per year while natural foods stores were growing by 20% per year. Once again, it is February 2000, and a Venture Capitalist firm that funded Natureview in 1997 needs to cash out its equity infusion so Natureview must either locate another investor or position itself for acquisition to make up for the loss. To be most successful in this endeavor, Natureview needs to achieve a high valuation, which it should do by increasing revenues. The company is deciding how to meet its goal of growing by over 50% of revenues by the end of 2001, an increase that will push their total up to over $20 million in total revenue. A major debate among Natureview decision-makers at the time of this case is whether or not to expand into the supermarket channel, a sizeable step away from Natureviews channel strategy, as a means of meeting its lofty revenue goal. Natureviews objective is to grow its revenues to at least $20 million (by over 50%) and achieve maximum revenue growth to increase its valuation before the end of 2001 while still maintaining its strong brand reputation among its customers.Natureviews Price Difference between Supermarket and Natural Food Stores To view Natureview Yogurts exact price differences between supermarket and natural food stores, see Exhibit 1 below. Overall, going through the supermarket channel results in lower retail prices than the natural food channel; $0.74 each for the 8-oz. cups and $2.70 each for the 32-oz. cups in supermarkets and $0.88 each for the 8-oz. cups, $3.19 each of the 32-oz. cups, and $3.35 for the prospective kids multipack in natural foods stores.These price differences exist because of several factors that differentiate supermarkets from natural food stores. First, the distribution chains for supermarkets do not involve a wholesaler like natural food stores do, so less marginal costs are incurred and thus those savings can be translated into a lower retail price. The distribution chains are also more efficient for supermarkets; suppliers to supermarkets typically sent products to a large distribution center, which in turn shipped directly to the supermarket chains warehouse. According to Exhibit 1, Supermarkets themselves incite a lower retail margin (27% compared to 35%), in part due to scanner technology that allows them to know which products are profitable by tracking the SKU codes, and in part due to the fact that they will only purchase products from suppliers as large cases Natural Foods Channel Multipack Retail Price Retail Margin Retail Cost Natural Foods Distributor Margin Natural Foods Distributor Cost Wholesaler Margin Wholesaler Cost Manufacturer Sales Price (MSP) Cost Per Unit (to the mfgr) Unit Contribution Forecasted units 1,800,000.00 Sales Growth Please show working and use the Nature View case study