Exhibit 1 Natureview Farm Income Statement, 1999

Revenuesa $13,000,000 10 Base = Revenues

Cost of Goods Sold b
$8,190,000 63%
Gross Profit $4,810,000 37%
Expenses
Administration/Freight $2,210,000 17%
Sales $1,560,000 12%
Marketing $390,000 3%
Research & Development $390,000 3%
Net Income $260,000 2%
 Exhibit 2 Yogurt Market Share by Packaging Segment, 1999 (Supermarket channel, in % U.S. dollars)

Dollar Share Dollar Sales Change vs. Prior Year

8-oz. cups and smaller 74% 3%
Children’s multipacks 9% 12.50%
32-oz. cups 8% 2%
Other 9% NC
100%

Yogurt Market Share by Region, 1999 (Supermarket channel, in % U.S. dollars)

Dollar Share No. of Retailers in the Region

in the Region
Northeast 26% 25
Midwest 22% 30
Southeast 25% 33
West 27% 17
100%
in % U.S. dollars)
 Exhibit 3 Yogurt Production Costs and Retail Prices by Channel

Natural Foods Channel Average Retail Price

8-ounce (oz.) cup $0.88
32-oz. cup $3.19
4- oz. cup multipack $3.35

Supermarket Channel Average Retail Price

8-oz. cup $0.74
32-oz. cup $2.70
4-oz. cup multipack $2.85
 Exhibit 5 Yogurt Market Share by Brand, 1999

Supermarket Channel
Dannon 33%
Yoplait 24%
Others 23%
Private Label 15%
Columbo 5%
100%

Natural Foods Channel

Natureview Farm 24%
Brown Cow 15%
Horizon Organic 19%
White Wave 7%
Others 35%
100%
Exhibit 6 Sales Projections for Natureview's Strategic Options

Option Action
1 Expand 6 SKUs of the 8-oz. size into eastern and western supermarket regions
2 Expand 4 SKUs of the 32-oz. size nationally into supermarket channel
3 Introduce 2 children’s multipacks into natural foods channel
Anticipated Incremental Retail Unit Sales
35,000,000
5,500,000
1,800,000
Exhibit TN-2: Margin Chain for Manufacturere Selling Price (Natureview Yogurt)

Supermarket Channel 8oz 32 oz

Retail Price (SRP) $0.74 $2.70

Retail Margin (SRM) 27.0% 27.0%
Retail Purchase Price (SRPP) $0.54 $1.97
Distributor Margin (SDM) 15.0% 15.0%
Distributor Purchase Price (SDPP) $0.46 $1.68
Manufacturer Sales Price (SMSP) 0.459 1.675
Cost Per Unit (SC) 0.31 0.99
Contribution per Unit Sold (SCPU) 0.149 0.685
Manufacturer Gross Margin (SGM) 32.49% 40.91%

Natural Foods Channel 8oz 32oz

Retail Price (FRP) $0.88 $3.19

Retail Margin (FRM) 35.0% 35.0%
Retail Purchase Price (FRPP) $0.57 $2.07
Natural Foods Distributor Margin (FDM) 9.0% 9.0%
Natural Foods Distributor Purchase Price (FDPP) $0.52 $1.89
Wholesaler Margin (FWM) 7.0% 7.0%
Wholesaler Purchase Price (FWPP) $0.48 $1.75
Manufacturer Sales Price (FMSP) 0.484 1.755
Cost Per Unit (FC) 0.31 0.99
Contribution per Unit Sold (FCPU) 0.174 0.765
Manufacturer Gross Margin (FGM) 35.96% 43.58%

Manufacturer Cost = MSP * (1 - % Manufacturer Gross Margin)

MSP = RPP * (1 - % Distributor Margin) in Supermarket Channel
MSP = DPP * (1 - % Wholesaler Margin) in Nautral Foods Channel
Wholesaler Selling Price = RPP * (1 - % Distributer Margin) in Natural Foods Channel
Distributor Selling Price = RSP * (1 - % Retail Margin)
 Note: $ Figures rounded to 2 decimal places and % to one,
except as noted below
Calculations Input Data Source

Exhibit 3
Text - Supermarkets Page 4 - Last Para
SRP x (1-SRM)
Text - Supermarkets Page 4 - Last Para
SRPP x (1-SDM)
SRPP x (1-SDM) (Rounded to 3 decimal places)
Exhibit 3
SMSP - SC (Rounded to 3 decimal places)
SCPU / SMSP (Rounded to 2 decimal places)

Multipack

$3.35 Exhibit 3
35.0% Text - Nat Foods Page 5 - 3rd Para
FRP x (1-FRM) $2.18
9.0% Text - Nat Foods Page 5 - 3rd Para
FRPP x (1-FDM) $1.98
7.0% Text - Nat Foods Page 5 - 3rd Para
FDPP x (1-FWM) $1.843
FDPP x (1-FWM) 1.843 (Rounded to 3 decimal places)
1.15 Exhibit 3
FMSP - FC 0.693 (Rounded to 3 decimal places)
FCPU / FMSP 37.60% (Rounded to 2 decimal places)
Exhibit TN-3 Market Share Analysis of Yogurt Market

Market Dollar Size % Total Annual

Growth Rate
Total Refrigerated Yogurt Market $ 1,800,000,000 100% 3.5%
Supermarket Channel 1,746,000,000 97% 3.0%
Natural Foods Channel $ 54,000,000 3% 20.0%

Total Refrigerated Yogurt Market $ 1,800,000,000 100% 3.5%

6 oz. & 8 oz. 1,332,000,000 74% 3.0%
32 oz. 144,000,000 8% 2.0%
Children's Multipack 162,000,000 9% 12.5%
All Other $ 162,000,000 9% 0.1%

Total Refrigerated Yogurt Market $ 1,800,000,000 100%

Northeast 468,000,000 26%
Midwest 396,000,000 22%
Southeast 450,000,000 25%
West $ 486,000,000 27%
Input Data Source

Text - Yogurt Category Page 3 - 2nd Para

Text - Yogurt Category Page 3 - 2nd Para
Text - Yogurt Category Page 3 - 2nd Para

Text - Yogurt Category

Exhibit 2 A
Exhibit 2 A
Exhibit 2 A
Exhibit 2 A

Text - Yogurt Category Page 3 - 2nd Para

Exhibit 2 B
Exhibit 2 B
Exhibit 2 B
Exhibit 2 B
Exhibit TN-4 Evaluation of Growth Options

Option 1 (8-oz.) 6 SKU to Supermarket

20 Supermarket Chains
2 Regions
Ad Plan $1,200,000 per region per annum
Sales (Q1) 35,000,000 units per annum
Slotting fees (F) $10,000 per Chain per SKU
Gross Profit (GP) $5,220,950
Less Ad Costs ($2,400,000) 2 Regions
Less Incremental SGA ($320,000) $200K sales + $120K mkt
Less Slotting Fees ($1,200,000) 20 Chains, 6 SKU per Chain
Trade Promotion Expense ($870,000)
Less Broker's Commissions ($642,838) 4% of sales
Profit Contribution ($211,888)

Sales Growth $16,070,950

Option 2 (32-oz.) 4 SKU to Supermarket

64 Supermarket Chains
4 Regions
Ad Plan $120,000 per region per annum
Sales (Q2) 5,500,000 units per annum
Slotting fees $10,000 per Chain per SKU
Gross Profit $3,769,425
Less Ad Costs ($480,000) 4 Regions
Less Incremental SGA ($160,000) Half of Option One
Less Slotting Fees ($2,560,000) 64 Chains 4 SKU
Trade Promotion Expense ($1,024,000) 64 Chains 2x per annum
Less Broker's Commissions ($368,577) 4% of sales
Profit Contribution ($823,152)

Sales Growth $9,214,425

Option 3 (Multipack) 2
Ad Plan ($250,000)
Sales (Q3) 1,800,000 units per annum
Free Cases (slotting) fee ($82,927)
Gross Profit $1,247,073
Less Ad Costs ($250,000)
Less Free Cases ($82,927)
Less Broker's Commissions ($132,683) 4% of sales
Profit Contribution $781,463
Sales Growth Year 1 $3,317,073

Formulae for Option 1

Gross Profit $5,220,950 = 35m units * $0.149 contribution per unit (Ex TN 2)
Sales Growth $16.07m = 35m units * $0.459 MSP (Ex TN 2)
Market Share 1.5% = 35m units * $0.74 RSP / 97% supermarket share * $1.8bn

Formulae for Option 2

Gross Profit $3.769,425 = 5.5m units * $0.685 contribution per unit (Ex TN 2)
Sales Growth $9.21m = 5.5m units * $1.675 MSP (Ex TN 2)
Market Share 10.3% = 5.5m units * $2.70 RSP / 8% 32-oz share * $1.8bn

Formulae for Option 3

Gross Profit $1.247,073 = 1.8m units * $0.69 contribution per unit (Ex TN 2)
Sales Growth $3.32m = 1.8m units * $1.84 MSP (Ex TN 2)
Market Share 11.2% = 1.8m units * $1.84 RSP / 3% natural foods share * $1.8bn
Reference

text, Option 1
text, Option 1
text, Supermarket
formula = units sold * $ contribution per unit

text, Option 1

11 supermarkets in NE ($7500), 9 in West ($15000), 4 times annually

formula = SMSP * units sold * 4%

Market Share
1.5%
2.0%

text, Option 2
text, Option 2
text, Supermarket
formula = units sold * $ contribution per unit

text, Option 2

text, Option 2, Supermarkets ($ 8000)

formula = SMSP * units sold * 4%

Market Share
10.3%

text, Option 3
text, Option 3
2.5% of Manufacturer Sales (net of broker fees)

formula = 1.8m units sold * FMSP * 2.5%

formula = FMSP * units sold * 4%
 Market Share
11.2%

r unit (Ex TN 2)

ket share * $1.8bn

er unit (Ex TN 2)

re * $1.8bn

r unit (Ex TN 2)

ods share * $1.8bn

 Calculations

Q1 x SCPU
GP x 2

SMSP x Q1 x 0.04
GP - Sum of Costs

sales growth = SMSP * Q1

of supermarket yogurt sales (last year) (SY) (Q1 x SRP) / ( 0.97 x 1.8 Billion)
supermarket yogurt 6-8-oz sales (last year) (SY x 1.8 Billion) / ( 0.74 x 1.8 Billion)

Q2 x SCPU

SMSP x Q2 x 0.04
GP - Sum of Costs

sales growth = SMSP * Q2

of 32-oz yogurt sales nationally (last year) (Q2 x SRP) / ( 0.08 x 1.8 Billion)

Q3 x FMSP x 0.025
Q3 x WPP

Q3 x FMSP x 0.025
Q3 x FMSP x 0.04
GP - Sum of Costs
 sales growth = FMSP * Q3
of natural foods channel (last year) (Q3 x FRP) / ( 0.03 x 1.8 Billion)
220000
 Option 1 Option 2 Option 3
$'000 (8 oz.) (32 oz.) (Multipack)
One Year Revenue 16,071 9,214 3,317
One Year Profit (212) (823) 781
Revenue after 2 Years 19,285 11,057 3,815
NPV of Profit over 2 Years 1,436 1,310 1,608
Revenue after 5 Years 33,325 19,107 5,802
NPV of Profit over 5 Years 11,013 10,640 4,798

Assumptions for Option 1 Supermarket Channel - 8oz

Broker Fees 4% of manufacturer's sales
Wholesaler NA
Distributor Margin 15%
Retailer Margin 27%
Retail Price $0.74 per 8oz cup
One Time Slotting Fee $10,000 per SKU per Retail Chain
Free Case ? None per SKU per Retail Chain
Trade Promotions every 3 months
Northeast, Midwest, Southeast $7,500 per ad per retailer
West $15,000 per ad per retailer
National Average $8,000 per ad per retailer
Manufacturing Cost $0.31 per 8oz cup

Number of SKU 6
Regions 2
Predicted Growth 20% per annum - after first year
Marketing Support $1,200,000 per region per year
SG&A Uplift $320,000 per annum
Incremental Sales 35,000,000 additional units
# Chains 11 in Northeast
# Chains 9 in West

Calculations for Option 1 Calculation

Retail Price $0.74 SRP
Retail Margin 27% SRM
Retail Purchase Price $0.54 SRPP
Distributor Margin 15% SDM
Distributor Purchase Price $0.46 SDPP = SRPP x (1-SDM)
Manufacturer Sales Price $0.46 SMSP = SRPP x (1-SDM)
Manufacturing Cost Per Unit $0.31 SC
Contribution per Unit Sold $0.15 SCPU = SMSP - SC
Manufacturer Gross Margin 32.5% SGM = SCPU / SMSP
 $'000 Year 1 2
Incremental Sales (million units) 35.00 42.00
Incremental Sales 16,071 19,285
Less Manufacturing Costs (10,850) (13,020)
Incremental Gross Margin 5,221 6,265
Less Broker Fees (643) (771)
Less Slotting Fees (1,200) 0
Trade Promotions (870) (870)
Marketing Support (2,400) (2,400)
Incremental SG&A (320) (320)
Incremental Profit (212) 1,904

2 Year NPV 8.0% Discount Rate $1.44 Million

5 Year NPV 8.0% Discount Rate $11.01 Million

Assumptions - Option 2 Supermarket Channel - 32oz

Broker Fees 4% of manufacturer's sales
Wholesaler NA
Distributor Margin 15%
Retailer Margin 27%
Retail Price $2.70 per 32oz
One Time Slotting Fee $10,000 per SKU per Retail Chain
Free Case ? None per SKU per Retail Chain
Trade Promotions every 6 months
Northeast, Midwest, Southeast $7,500 per ad per retailer
West $15,000 per ad per retailer
National Average $8,000 per ad per retailer
Manufacturing Cost $0.99 per 32oz

Number of SKU 4
Regions 4
Predicted Growth 20% per annum - after first year
Marketing Support $120,000 per region per year
SG&A Uplift $160,000 per annum
Incremental Sales 5,500,000 additional units
# Chains 64 Nationally

Calculations for Option 2 Calculation

Retail Price $2.70 SRP
 Retail Margin 27% SRM
Retail Purchase Price $1.97 SRPP
Distributor Margin 15% SDM
Distributor Purchase Price $1.68 SDPP = SRPP x (1-SDM)
Manufacturer Sales Price $1.68 SMSP = SRPP x (1-SDM)
Manufacturing Cost Per Unit $0.99 SC
Contribution per Unit Sold $0.69 SCPU = SMSP - SC
Manufacturer Gross Margin 40.9% SGM = SCPU / SMSP

$'000 Year 1 2
Incremental Sales (million units) 5.50 6.60
Incremental Sales 9,214 11,057
Less Manufacturing Costs (5,445) (6,534)
Incremental Gross Margin 3,769 4,523
Less Broker Fees (369) (442)
Less Slotting Fees (2,560) 0
Trade Promotions (1,024) (1,024)
Marketing Support (480) (480)
Incremental SG&A (160) (160)
Incremental Profit (823) 2,417

2 Year NPV 8.0% Discount Rate $1.31 Million

5 Year NPV 8.0% Discount Rate $10.64 Million

Assumptions - Option 3 Natural Foods Channel - Multipack

Broker Fees 4% of manufacturer's sales
Wholesaler Margin 7%
Distributor Margin 9%
Retailer Margin 35%
Retail Price $2.85 per Multipack
One Time Slotting Fee $0 per SKU per Retail Chain
Free Case ? 1 per SKU per Retail Chain
2.50% of manufacturer sales
Trade Promotions every 6 months
Northeast, Midwest, Southeast $7,500 per ad per retailer
West $15,000 per ad per retailer
National Average $8,000 per ad per retailer
Manufacturing Cost $1.15 per 32oz

Number of SKU 2
Size 32 Oz
 Predicted Growth 15% per annum - after first year
Marketing Support $250,000 per annum
SG&A Uplift $0 per annum
Incremental Sales 1,800,000 additional units

Calculations for Option 3 Calculation

Retail Price $3.35 FRP
Retail Margin 35% FRM
Retail Purchase Price $2.18 FRPP
Distributor Margin 9% FDM
Distributor Purchase Price $1.98 FDPP = FRPP x (1-FDM)
Wholesaler Margin 7% FWM
Wholesaler Purchase $1.84 FWP = FDPP * (1-FWM)
Manufacturer Sales Price $1.84 FMSP = FDPP * (1-FWM)
Manufacturing Cost Per Unit $1.15 FC
Contribution per Unit Sold $0.69 FCPU = FMSP - FC
Manufacturer Gross Margin 37.6% FGM = FCPU / FMSP

$'000 Year 1 2
Incremental Sales (million units) 1.80 2.07
Incremental Sales 3,317 3,815
Less Manufacturing Costs (2,070) (2,380)
Incremental Gross Margin 1,247 1,434
Less Broker Fees (133) (153)
Less Free Cases (83) 0
Trade Promotions 0 0
Marketing Support (250) (250)
Incremental SG&A 0 0
Incremental Profit 781 1,032

2 Year NPV 8.0% Discount Rate $1.61 Million

5 Year NPV 8.0% Discount Rate $4.80 Million
 Reference
Case Text - Supermarket Channel

Case Text - Supermarket Channel

Case Text - Supermarket Channel
Exhibit 3
Case Text - Supermarket Channel

Case Text - Supermarket Channel

Case Text - Supermarket Channel
Case Text - Supermarket Channel
Case Text - Supermarket Channel
From Exhibit 3

From Exhibit 6
From Exhibit 6
Option 1 Comment 4
Option 1
Option 1
Option 1
Option 1
Option 1

PP x (1-SDM)
PP x (1-SDM)
 3 4 5
50.40 60.48 72.58 35 Million Units growing at 20% pa Q
23,142 27,771 33,325 Units * $0.46 per unit R = Q x SMSP
(15,624) (18,749) (22,499) Units * $0.31 per unit Q x SC
7,518 9,022 10,826
(926) (1,111) (1,333) Sales * 4% R x 0.04
0 0 0 20 Chains * 6 SKU
(870) (870) (870) Price * # Retailers Per Region * 4 times p.a.
(2,400) (2,400) (2,400) $1.2mm per Region Per Annum
(320) (320) (320) Fixed Annual Amount
3,002 4,321 5,903

Reference
Case Text - Supermarket Channel

Case Text - Supermarket Channel

Case Text - Supermarket Channel
Exhibit 3
Case Text - Supermarket Channel

Option 2
Case Text - Supermarket Channel
Case Text - Supermarket Channel
Case Text - Supermarket Channel
From Exhibit 3

From Exhibit 6
Option 2 (Nationally)
Option 1 Comment 4
Option 2 (Nationally)
Option 2 (Nationally)
Option 2 (Nationally)
Option 2 (Nationally)
PP x (1-SDM)
PP x (1-SDM)

3 4 5
7.92 9.50 11.40 5.5 Million Units growing at 20% pa Q
13,269 15,923 19,107 Units * $1.68 per unit R = Q x SMSP
(7,841) (9,409) (11,291) Units * $0.99 per unit Q x SC
5,428 6,514 7,816
(531) (637) (764) Sales * 4%
0 0 0 64 Chains, 4 SKU
(1,024) (1,024) (1,024) Price * # Retailers * 2 times p.a.
(480) (480) (480) $120,000 per Region Per Annum
(160) (160) (160) Fixed Annual Amount
3,233 4,213 5,388

Reference
Case Text - Supermarket Channel

Case Text - Natural Channel

Case Text - Natural Channel
Exhibit 3
Case Text - Natural Channel

Option 3
Option 2
Case Text - Supermarket Channel
Case Text - Supermarket Channel
Case Text - Supermarket Channel
From Exhibit 3

From Exhibit 6
From Exhibit 6
 Yogurt Through Nat.Foods Stores
Option 3
Option 3
Option 3

PP x (1-FDM)

P * (1-FWM)
PP * (1-FWM)

3 4 5
2.38 2.74 3.15 1.8 Million Units growing at 15%pa Q
4,387 5,045 5,802 Units * $1.84 per unit R = Q x FMSP
(2,738) (3,148) (3,620) Units * $1.15 per unit Q x FC
1,649 1,897 2,181
(175) (202) (232) 4% of sales
0 0 0 2.5% of sales in first year
0 0 0 Not Required for Nat. Food Channel
(250) (250) (250) $120,000 per Region Per Annum
0 0 0
1,224 1,445 1,699
R = Q x SMSP
R = Q x SMSP
R = Q x FMSP
Channel Margins Tool

Costs and Margins Based on Manufacturer Price

C M% SP = C/(1-M%) M = SP - C MUP = M/C
Channels Unit Cost % Margin Selling Price $ Margin % Markup
Manufacturer $1.00 40% $1.67 $0.67 67%
Wholesaler $1.67 20% $2.08 $0.42 25%
Distributor $2.08 15% $2.45 $0.37 18%
Retailer $2.45 20% $3.06 $0.61 25%
Customer $3.06

To See Marginal Effects for Unit Cost, Adjust Manufacturer Price by Desired Amount

To See Marginal Effects for % Margin, Adjust % Margin by Desired Amount--A .01 Increase (Decrease) Equals a 1%
Increase (Decrease(

Costs and Margins Based on Customer Price

C M% SP = C/(1-M%) M = SP - C MUP = M/C
Channels Unit Cost % Margin Selling Price $ Margin % Markup
Manufacturer $1.01 40% $1.69 $0.67 67%
Wholesaler $1.69 20% $2.11 $0.42 25%
Distributor $2.11 15% $2.48 $0.37 18%
Retailer $2.48 19% $3.06 $0.58 23%
Customer $3.06

To See Marginal Effects for Unit Cost, Adjust Customer Price by the Desired Amount

To See Marginal Effects for % Margin, Adjust % Margin for a Channel Participant by the Desired Amount--A .01 Increase
(Decrease) Equals a 1% Increase (Decrease)
 (Decrease) Equals a 1%

esired Amount--A .01 Increase