4 Pages Posted: 7 Apr 2010
This case illustrates the problems of a small hydroponic produce company trying to achieve breadth and depth of distribution for its product. The company is considering bypassing traditional channels and selling directly to stores and restaurants. The economics of the proposition are central to the case.
November 27, 2009
Sunnyside Fields produced and marketed hydroponic Boston and leaf lettuce to retail stores within 300 miles' driving distance of the company's headquarters near Washington, D.C. Those retail stores accounted for 50% of the East Coast retail lettuce market. Current Sunnyside's sales were one-fourth of its 80,000-case annual production capacity (a case contained 24 heads of lettuce), but management thought that new packaging and store-direct distribution might increase sales and profits. Table 1 contains information on the East Coast retail grocery market.
Table 1. East Coast retail supermarkets.
Annual Sales (millions)
. . .
Keywords: cost analysis, distribution channels, distribution strategy, new-product development, small business
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