Investor presentation 06022015
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Overview of Schubros Brewery for Investment Review - Company strategic focus, positioning, performance and forecasts. This document does NOT contain any information specific to our Series B Preferred shares offering, and is NOT a document intended for broad distribution for investment solicitation. Schubros has declared its share issuance to the SEC and the State of California under Regulation D clause 506 authorizing sales ONLY to accredited investors and permitting reasonable targeted solicitation. This document is uploaded in support of such a shares offering and communication.
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Investor presentation 06022015
- 2. •3 year old craft brewery & distributor/ exporter •$20B industry, with $ Sales up 22% (CY 14 vs 13) •USP “Epicurean equality with wine” •Craft brewery NOT targeting Millenials •High end brand with (68%-95% gross margins) •Growth bottleneck is CAPACITY, not demand •Accomplished Blue Chip Management 2 Schubros Bullets In 7 Bullets
- 3. The Craft Brew Subcategory: Large Market; Surging; Room to Grow How is 11 years of double digit-growth still sustainable? ● Natural growth: Correcting 40+ years of legislative interference -- prohibition & ABV laws ● Small base: Still only 11% of beer ● Brand centric image product ● Resilient: Expensive, but still doubled during recession. Wait till recovery…………...
- 4. The Craft Brew Subcatergory: And still room to grow National Operating Assesment: • 8 more years 10%+ growth • Acceleration with economic recovery • Deceleration (still growing) 2023- 2030 SB Ops Area 12 per 1 million Portland, OR 33 per 1 million Japan Beer Times blog – February 2012 •Forcast Industry Maturation •$40-45 billion •~18-20% of beer volume •~28-31% of beer dollars •in 2030-2035
- 5. 5 Competition: Proliferating But Allied ● For the next decade-plus, Anheuser INBEV & Miller’s 1% annual losses are more than enough for all us small guys ● So we work together as much as compete
- 6. 6 X & Boomers vs. Y ● Average Income: 2x-3x ● Disposable Income: 1.5x-2.3x ● Population: 2x ● Brand Loyalty: 3x-6x Consumer Target: Gen X & Boomers, versus everyone else’s Millenials or Gen Y
- 7. •Ian Schuster: CEO/President o Experience: Brand and Retail Sales Management o MBA: London Business School; BS Naval Academy •Mike Johannsen: Chief Brewing Officer o Experience: Brewing & New Product Development o MBA & BS: Cal Poly •Jon Piening: Chief Infrastructure Officer o Experience: IT Systems Architecture 7 Management Team
- 8. 8 Limitation is Capacity. Not Demand: Since startup, we’ve sold every drop we make Sustainable Capacity Goal is to never again have to: - Limit Safeway, Costco, Lucky and others to only so many stores; to so large an order - Say no to a competent, excited, and quality focused distributor - Say no to a good product idea, marketing initiative or event because we simply don’t have capacity
- 9. 9 Operating Profit ● Controlled, predicted, profitability ○ Current Capacity drove Current Sales = Current Breakeven Point ● Tax Managed ○ Will remain LLC at least through 2017 Startup Period Alcosta Brewery Buildout Expenses Infrastructure & staffing buildout for growth Consistent, aggressive Accelerated Depreciation to minimize investor LLC “Paper Profits”/ maximize ‘Paper losses”
- 10. What this capital Raise Will Do 10 Sustainable Capacity Eliminate the capacity ceiling for the next 10 years, allowing us to: - Sell - Contract Brew (receive money to brew private label, individual’s recipes, and other breweries’ beer) - Collaborate (marketing projects to brew beers with other breweries) - Import & Export our own and other breweries’ beer Sustainable Capacity
- 11. 11 Future Growth - Geography; Easier here-out ● Development = Economic Impact (Lobbyist speak for ‘sales’ + ‘taxes’) / consumption ● Opportunity = Low Development ● Done so far in very over-developed area ○ CA: #1 breweries & sales, #16 breweries/capita, #37 gallons/capita ○ Only TX & WA are similar in profile ○ San Francisco DMA 3rd most craft developed in country, next to Portland & San Diego* ● Plus exporting - Europe 7/15; Costa Rica 9/15 DMA = Nielsen “Designated Marketing Area”)
- 12. Future Sales Growth & Margin Levers Driver Starting Time Period Sales Effect Margin Effect 12oz Bottles Q2-Q3 2015 Distributors Q3 2015 Export Q3 2015 Contract Brewing Q3 2015 More Passport & Exotic Styles Q1 2016 Price Increase* Q1 2016 *Q2 2015: Increased price by 4% for draught and 3% for bottles with no sales resistance
- 13. 13 Other Capital Raise Effects Improvement opportunities from Grains to Glass ● New equipment will decrease production costs ~ 10% (gas versus electric) ● Increased hops contracts will decrease ingredients cost 5%-10% ● Process: Infrastructure investment to improve planning, limit waste, minimize Out of Stock, better manage field resources
- 14. Thank You 14
Editor's Notes
- Donut with text inside (Intermediate) To reproduce the donut shape on this slide, do the following: On the Home tab, in the Slides group, click Layout, and then click Blank. On the Home tab, in the Drawing group, click Shapes, and then under Basic Shapes click Donut (third row, second option from the left). On the slide, drag to draw a donut. Drag the yellow diamond adjustment handle to the left to decrease the width of the donut. Select the donut. Under Drawing Tools, on the Format tab, in the Size group, do the following: In the Shape Height box, enter 5.92”. In the Shape Width box, enter 5.92”. Under Drawing Tools, on the Format tab, in the Shape Styles group, click the arrow next to Shape Outline, and then click No Outline. Also under Drawing Tools, on the Format tab, in the Shape Styles group, click the arrow next to Shape Fill, and then under Theme Colors click Olive Green, Accent 3, Darker 25% (fifth row, seventh option from the left). Also under Drawing Tools, on the Format tab, in the Shape Styles group, click Shape Effects, and then do the following: Point to Bevel, and then under Bevel click Soft Round (second row, second option from the left). Point to Shadow, and then under Outer click Offset Diagonal Bottom Right (first row, first option from the left). To reproduce the text on this slide, do the following: On the Insert tab, in the Text group, click Text Box, and then on the slide, drag to draw the text box. Enter text in the text box, select the text, and then on the Home tab, in the Font group, select Consolas from the Font list, enter 27 in the Font Size box, click the button next to Font Color, and then under Theme Colors click White, Background 1 (first row, first option from the left). Tip: To enter the two bullets with the text, on the Insert tab, in the Text group, click Symbol. In the Symbol dialog box, do the following: In the Font list, select (normal text). In the Character Code box, enter 0095 to select BULLET, and then click Insert. On the Home tab, in the Paragraph group, click Align Text Left to align the text left in the text box. Select the text box. Under Drawing Tools, on the Format tab, in the WordArt Styles group, click Text Effects, and then do the following: Point to Shadow, and then under Outer click Offset Diagonal Bottom Right (first row, first option from the left). Point to Transform, and then under Follow Path click Circle (third option from the left). Under Drawing Tools, on the Format tab, in the Size group, do the following: In the Shape Height box, enter 4.78”. In the Shape Width box, enter 4.78”. Drag the text box onto the donut shape so that the text wraps around the donut. If the text does not wrap completely and evenly around the donut shape, select the text box and then do the following: If the text does not wrap completely around the donut shape, on the Home tab, in the Font group, in the Font Size box, enter larger font sizes in 1-pt increments until the text is evenly spaced within the donut shape. If the entire line of text does not fit evenly within the donut shape, on the Home tab, in the Font group, in the Font Size box, enter smaller font sizes in 1-pt increments until the text is evenly spaced within the donut shape. If the text does not wrap completely around or does not fit evenly within the donut shape, also try editing the Character Spacing. On the Home tab, in the Font group, click Character Spacing, and then do the following: To expand the text, in the Character Spacing list, select Loose or Very Loose. To contract the text, in the Character Spacing list, select Tight or Very Tight. For more precise character spacing, click More Spacing. In the Font dialog box, on the Character Spacing tab, in the Spacing list, select Expanded or Condensed. In the By box, adjust the size by 0.1-pt increments until the text is spaced evenly. Press and hold SHIFT, and then select the text box and the donut shape. On the Home tab, in the Drawing group, click Arrange, and then click Group. Select the group. On the Home tab, in the Drawing group, click Arrange, point to Align, and then do the following: Click Align to Slide. Click Align Center. Click Align Middle. To reproduce the background on this slide, do the following: Right-click the slide background area, and then click Format Background. In the Format Background dialog box, click Fill in the left pane, select Gradient fill in the Fill pane, and then do the following: In the Type list, select Radial. Click the button next to Direction, and then click From Center (third option from the left). Under Gradient stops, click Add or Remove until three stops appear in the drop-down list. Also under Gradient stops, customize the gradient stops that you added as follows: Select Stop 1 from the list, and then do the following: In the Stop position box, enter 0%. Click the button next to Color, and then under Theme Colors click Aqua, Accent 5, Darker 25% (fifth row, ninth option from the left). Select Stop 2 from the list, and then do the following: In the Stop position box, enter 54%. Click the button next to Color, and then under Theme Colors click Aqua, Accent 5, Darker 50% (sixth row, ninth option from the left). Select Stop 3 from the list, and then do the following: In the Stop position box, enter 100%. Click the button next to Color, and then under Theme Colors click Black, Text 1 (first row, second option from the left).
- Donut with text inside (Intermediate) To reproduce the donut shape on this slide, do the following: On the Home tab, in the Slides group, click Layout, and then click Blank. On the Home tab, in the Drawing group, click Shapes, and then under Basic Shapes click Donut (third row, second option from the left). On the slide, drag to draw a donut. Drag the yellow diamond adjustment handle to the left to decrease the width of the donut. Select the donut. Under Drawing Tools, on the Format tab, in the Size group, do the following: In the Shape Height box, enter 5.92”. In the Shape Width box, enter 5.92”. Under Drawing Tools, on the Format tab, in the Shape Styles group, click the arrow next to Shape Outline, and then click No Outline. Also under Drawing Tools, on the Format tab, in the Shape Styles group, click the arrow next to Shape Fill, and then under Theme Colors click Olive Green, Accent 3, Darker 25% (fifth row, seventh option from the left). Also under Drawing Tools, on the Format tab, in the Shape Styles group, click Shape Effects, and then do the following: Point to Bevel, and then under Bevel click Soft Round (second row, second option from the left). Point to Shadow, and then under Outer click Offset Diagonal Bottom Right (first row, first option from the left). To reproduce the text on this slide, do the following: On the Insert tab, in the Text group, click Text Box, and then on the slide, drag to draw the text box. Enter text in the text box, select the text, and then on the Home tab, in the Font group, select Consolas from the Font list, enter 27 in the Font Size box, click the button next to Font Color, and then under Theme Colors click White, Background 1 (first row, first option from the left). Tip: To enter the two bullets with the text, on the Insert tab, in the Text group, click Symbol. In the Symbol dialog box, do the following: In the Font list, select (normal text). In the Character Code box, enter 0095 to select BULLET, and then click Insert. On the Home tab, in the Paragraph group, click Align Text Left to align the text left in the text box. Select the text box. Under Drawing Tools, on the Format tab, in the WordArt Styles group, click Text Effects, and then do the following: Point to Shadow, and then under Outer click Offset Diagonal Bottom Right (first row, first option from the left). Point to Transform, and then under Follow Path click Circle (third option from the left). Under Drawing Tools, on the Format tab, in the Size group, do the following: In the Shape Height box, enter 4.78”. In the Shape Width box, enter 4.78”. Drag the text box onto the donut shape so that the text wraps around the donut. If the text does not wrap completely and evenly around the donut shape, select the text box and then do the following: If the text does not wrap completely around the donut shape, on the Home tab, in the Font group, in the Font Size box, enter larger font sizes in 1-pt increments until the text is evenly spaced within the donut shape. If the entire line of text does not fit evenly within the donut shape, on the Home tab, in the Font group, in the Font Size box, enter smaller font sizes in 1-pt increments until the text is evenly spaced within the donut shape. If the text does not wrap completely around or does not fit evenly within the donut shape, also try editing the Character Spacing. On the Home tab, in the Font group, click Character Spacing, and then do the following: To expand the text, in the Character Spacing list, select Loose or Very Loose. To contract the text, in the Character Spacing list, select Tight or Very Tight. For more precise character spacing, click More Spacing. In the Font dialog box, on the Character Spacing tab, in the Spacing list, select Expanded or Condensed. In the By box, adjust the size by 0.1-pt increments until the text is spaced evenly. Press and hold SHIFT, and then select the text box and the donut shape. On the Home tab, in the Drawing group, click Arrange, and then click Group. Select the group. On the Home tab, in the Drawing group, click Arrange, point to Align, and then do the following: Click Align to Slide. Click Align Center. Click Align Middle. To reproduce the background on this slide, do the following: Right-click the slide background area, and then click Format Background. In the Format Background dialog box, click Fill in the left pane, select Gradient fill in the Fill pane, and then do the following: In the Type list, select Radial. Click the button next to Direction, and then click From Center (third option from the left). Under Gradient stops, click Add or Remove until three stops appear in the drop-down list. Also under Gradient stops, customize the gradient stops that you added as follows: Select Stop 1 from the list, and then do the following: In the Stop position box, enter 0%. Click the button next to Color, and then under Theme Colors click Aqua, Accent 5, Darker 25% (fifth row, ninth option from the left). Select Stop 2 from the list, and then do the following: In the Stop position box, enter 54%. Click the button next to Color, and then under Theme Colors click Aqua, Accent 5, Darker 50% (sixth row, ninth option from the left). Select Stop 3 from the list, and then do the following: In the Stop position box, enter 100%. Click the button next to Color, and then under Theme Colors click Black, Text 1 (first row, second option from the left).
- Donut with text inside (Intermediate) To reproduce the donut shape on this slide, do the following: On the Home tab, in the Slides group, click Layout, and then click Blank. On the Home tab, in the Drawing group, click Shapes, and then under Basic Shapes click Donut (third row, second option from the left). On the slide, drag to draw a donut. Drag the yellow diamond adjustment handle to the left to decrease the width of the donut. Select the donut. Under Drawing Tools, on the Format tab, in the Size group, do the following: In the Shape Height box, enter 5.92”. In the Shape Width box, enter 5.92”. Under Drawing Tools, on the Format tab, in the Shape Styles group, click the arrow next to Shape Outline, and then click No Outline. Also under Drawing Tools, on the Format tab, in the Shape Styles group, click the arrow next to Shape Fill, and then under Theme Colors click Olive Green, Accent 3, Darker 25% (fifth row, seventh option from the left). Also under Drawing Tools, on the Format tab, in the Shape Styles group, click Shape Effects, and then do the following: Point to Bevel, and then under Bevel click Soft Round (second row, second option from the left). Point to Shadow, and then under Outer click Offset Diagonal Bottom Right (first row, first option from the left). To reproduce the text on this slide, do the following: On the Insert tab, in the Text group, click Text Box, and then on the slide, drag to draw the text box. Enter text in the text box, select the text, and then on the Home tab, in the Font group, select Consolas from the Font list, enter 27 in the Font Size box, click the button next to Font Color, and then under Theme Colors click White, Background 1 (first row, first option from the left). Tip: To enter the two bullets with the text, on the Insert tab, in the Text group, click Symbol. In the Symbol dialog box, do the following: In the Font list, select (normal text). In the Character Code box, enter 0095 to select BULLET, and then click Insert. On the Home tab, in the Paragraph group, click Align Text Left to align the text left in the text box. Select the text box. Under Drawing Tools, on the Format tab, in the WordArt Styles group, click Text Effects, and then do the following: Point to Shadow, and then under Outer click Offset Diagonal Bottom Right (first row, first option from the left). Point to Transform, and then under Follow Path click Circle (third option from the left). Under Drawing Tools, on the Format tab, in the Size group, do the following: In the Shape Height box, enter 4.78”. In the Shape Width box, enter 4.78”. Drag the text box onto the donut shape so that the text wraps around the donut. If the text does not wrap completely and evenly around the donut shape, select the text box and then do the following: If the text does not wrap completely around the donut shape, on the Home tab, in the Font group, in the Font Size box, enter larger font sizes in 1-pt increments until the text is evenly spaced within the donut shape. If the entire line of text does not fit evenly within the donut shape, on the Home tab, in the Font group, in the Font Size box, enter smaller font sizes in 1-pt increments until the text is evenly spaced within the donut shape. If the text does not wrap completely around or does not fit evenly within the donut shape, also try editing the Character Spacing. On the Home tab, in the Font group, click Character Spacing, and then do the following: To expand the text, in the Character Spacing list, select Loose or Very Loose. To contract the text, in the Character Spacing list, select Tight or Very Tight. For more precise character spacing, click More Spacing. In the Font dialog box, on the Character Spacing tab, in the Spacing list, select Expanded or Condensed. In the By box, adjust the size by 0.1-pt increments until the text is spaced evenly. Press and hold SHIFT, and then select the text box and the donut shape. On the Home tab, in the Drawing group, click Arrange, and then click Group. Select the group. On the Home tab, in the Drawing group, click Arrange, point to Align, and then do the following: Click Align to Slide. Click Align Center. Click Align Middle. To reproduce the background on this slide, do the following: Right-click the slide background area, and then click Format Background. In the Format Background dialog box, click Fill in the left pane, select Gradient fill in the Fill pane, and then do the following: In the Type list, select Radial. Click the button next to Direction, and then click From Center (third option from the left). Under Gradient stops, click Add or Remove until three stops appear in the drop-down list. Also under Gradient stops, customize the gradient stops that you added as follows: Select Stop 1 from the list, and then do the following: In the Stop position box, enter 0%. Click the button next to Color, and then under Theme Colors click Aqua, Accent 5, Darker 25% (fifth row, ninth option from the left). Select Stop 2 from the list, and then do the following: In the Stop position box, enter 54%. Click the button next to Color, and then under Theme Colors click Aqua, Accent 5, Darker 50% (sixth row, ninth option from the left). Select Stop 3 from the list, and then do the following: In the Stop position box, enter 100%. Click the button next to Color, and then under Theme Colors click Black, Text 1 (first row, second option from the left).
- Make sure to point out how rest of US will be easier -- sneak peak of slide 11
- 7 ‘big’ CA microbreweries. 8 smaller players overlapping our area. More teammates than competitors (for now). In fact we’re exporting 4 of them to Europe, & taking 5%.
- Implications: Balanced beers vs Triple IPAs; Facebook vs Instagram; Sports still important; Family Guy vs Gamers on YouTube
- Donut with text inside (Intermediate) To reproduce the donut shape on this slide, do the following: On the Home tab, in the Slides group, click Layout, and then click Blank. On the Home tab, in the Drawing group, click Shapes, and then under Basic Shapes click Donut (third row, second option from the left). On the slide, drag to draw a donut. Drag the yellow diamond adjustment handle to the left to decrease the width of the donut. Select the donut. Under Drawing Tools, on the Format tab, in the Size group, do the following: In the Shape Height box, enter 5.92”. In the Shape Width box, enter 5.92”. Under Drawing Tools, on the Format tab, in the Shape Styles group, click the arrow next to Shape Outline, and then click No Outline. Also under Drawing Tools, on the Format tab, in the Shape Styles group, click the arrow next to Shape Fill, and then under Theme Colors click Olive Green, Accent 3, Darker 25% (fifth row, seventh option from the left). Also under Drawing Tools, on the Format tab, in the Shape Styles group, click Shape Effects, and then do the following: Point to Bevel, and then under Bevel click Soft Round (second row, second option from the left). Point to Shadow, and then under Outer click Offset Diagonal Bottom Right (first row, first option from the left). To reproduce the text on this slide, do the following: On the Insert tab, in the Text group, click Text Box, and then on the slide, drag to draw the text box. Enter text in the text box, select the text, and then on the Home tab, in the Font group, select Consolas from the Font list, enter 27 in the Font Size box, click the button next to Font Color, and then under Theme Colors click White, Background 1 (first row, first option from the left). Tip: To enter the two bullets with the text, on the Insert tab, in the Text group, click Symbol. In the Symbol dialog box, do the following: In the Font list, select (normal text). In the Character Code box, enter 0095 to select BULLET, and then click Insert. On the Home tab, in the Paragraph group, click Align Text Left to align the text left in the text box. Select the text box. Under Drawing Tools, on the Format tab, in the WordArt Styles group, click Text Effects, and then do the following: Point to Shadow, and then under Outer click Offset Diagonal Bottom Right (first row, first option from the left). Point to Transform, and then under Follow Path click Circle (third option from the left). Under Drawing Tools, on the Format tab, in the Size group, do the following: In the Shape Height box, enter 4.78”. In the Shape Width box, enter 4.78”. Drag the text box onto the donut shape so that the text wraps around the donut. If the text does not wrap completely and evenly around the donut shape, select the text box and then do the following: If the text does not wrap completely around the donut shape, on the Home tab, in the Font group, in the Font Size box, enter larger font sizes in 1-pt increments until the text is evenly spaced within the donut shape. If the entire line of text does not fit evenly within the donut shape, on the Home tab, in the Font group, in the Font Size box, enter smaller font sizes in 1-pt increments until the text is evenly spaced within the donut shape. If the text does not wrap completely around or does not fit evenly within the donut shape, also try editing the Character Spacing. On the Home tab, in the Font group, click Character Spacing, and then do the following: To expand the text, in the Character Spacing list, select Loose or Very Loose. To contract the text, in the Character Spacing list, select Tight or Very Tight. For more precise character spacing, click More Spacing. In the Font dialog box, on the Character Spacing tab, in the Spacing list, select Expanded or Condensed. In the By box, adjust the size by 0.1-pt increments until the text is spaced evenly. Press and hold SHIFT, and then select the text box and the donut shape. On the Home tab, in the Drawing group, click Arrange, and then click Group. Select the group. On the Home tab, in the Drawing group, click Arrange, point to Align, and then do the following: Click Align to Slide. Click Align Center. Click Align Middle. To reproduce the background on this slide, do the following: Right-click the slide background area, and then click Format Background. In the Format Background dialog box, click Fill in the left pane, select Gradient fill in the Fill pane, and then do the following: In the Type list, select Radial. Click the button next to Direction, and then click From Center (third option from the left). Under Gradient stops, click Add or Remove until three stops appear in the drop-down list. Also under Gradient stops, customize the gradient stops that you added as follows: Select Stop 1 from the list, and then do the following: In the Stop position box, enter 0%. Click the button next to Color, and then under Theme Colors click Aqua, Accent 5, Darker 25% (fifth row, ninth option from the left). Select Stop 2 from the list, and then do the following: In the Stop position box, enter 54%. Click the button next to Color, and then under Theme Colors click Aqua, Accent 5, Darker 50% (sixth row, ninth option from the left). Select Stop 3 from the list, and then do the following: In the Stop position box, enter 100%. Click the button next to Color, and then under Theme Colors click Black, Text 1 (first row, second option from the left).
- Donut with text inside (Intermediate) To reproduce the donut shape on this slide, do the following: On the Home tab, in the Slides group, click Layout, and then click Blank. On the Home tab, in the Drawing group, click Shapes, and then under Basic Shapes click Donut (third row, second option from the left). On the slide, drag to draw a donut. Drag the yellow diamond adjustment handle to the left to decrease the width of the donut. Select the donut. Under Drawing Tools, on the Format tab, in the Size group, do the following: In the Shape Height box, enter 5.92”. In the Shape Width box, enter 5.92”. Under Drawing Tools, on the Format tab, in the Shape Styles group, click the arrow next to Shape Outline, and then click No Outline. Also under Drawing Tools, on the Format tab, in the Shape Styles group, click the arrow next to Shape Fill, and then under Theme Colors click Olive Green, Accent 3, Darker 25% (fifth row, seventh option from the left). Also under Drawing Tools, on the Format tab, in the Shape Styles group, click Shape Effects, and then do the following: Point to Bevel, and then under Bevel click Soft Round (second row, second option from the left). Point to Shadow, and then under Outer click Offset Diagonal Bottom Right (first row, first option from the left). To reproduce the text on this slide, do the following: On the Insert tab, in the Text group, click Text Box, and then on the slide, drag to draw the text box. Enter text in the text box, select the text, and then on the Home tab, in the Font group, select Consolas from the Font list, enter 27 in the Font Size box, click the button next to Font Color, and then under Theme Colors click White, Background 1 (first row, first option from the left). Tip: To enter the two bullets with the text, on the Insert tab, in the Text group, click Symbol. In the Symbol dialog box, do the following: In the Font list, select (normal text). In the Character Code box, enter 0095 to select BULLET, and then click Insert. On the Home tab, in the Paragraph group, click Align Text Left to align the text left in the text box. Select the text box. Under Drawing Tools, on the Format tab, in the WordArt Styles group, click Text Effects, and then do the following: Point to Shadow, and then under Outer click Offset Diagonal Bottom Right (first row, first option from the left). Point to Transform, and then under Follow Path click Circle (third option from the left). Under Drawing Tools, on the Format tab, in the Size group, do the following: In the Shape Height box, enter 4.78”. In the Shape Width box, enter 4.78”. Drag the text box onto the donut shape so that the text wraps around the donut. If the text does not wrap completely and evenly around the donut shape, select the text box and then do the following: If the text does not wrap completely around the donut shape, on the Home tab, in the Font group, in the Font Size box, enter larger font sizes in 1-pt increments until the text is evenly spaced within the donut shape. If the entire line of text does not fit evenly within the donut shape, on the Home tab, in the Font group, in the Font Size box, enter smaller font sizes in 1-pt increments until the text is evenly spaced within the donut shape. If the text does not wrap completely around or does not fit evenly within the donut shape, also try editing the Character Spacing. On the Home tab, in the Font group, click Character Spacing, and then do the following: To expand the text, in the Character Spacing list, select Loose or Very Loose. To contract the text, in the Character Spacing list, select Tight or Very Tight. For more precise character spacing, click More Spacing. In the Font dialog box, on the Character Spacing tab, in the Spacing list, select Expanded or Condensed. In the By box, adjust the size by 0.1-pt increments until the text is spaced evenly. Press and hold SHIFT, and then select the text box and the donut shape. On the Home tab, in the Drawing group, click Arrange, and then click Group. Select the group. On the Home tab, in the Drawing group, click Arrange, point to Align, and then do the following: Click Align to Slide. Click Align Center. Click Align Middle. To reproduce the background on this slide, do the following: Right-click the slide background area, and then click Format Background. In the Format Background dialog box, click Fill in the left pane, select Gradient fill in the Fill pane, and then do the following: In the Type list, select Radial. Click the button next to Direction, and then click From Center (third option from the left). Under Gradient stops, click Add or Remove until three stops appear in the drop-down list. Also under Gradient stops, customize the gradient stops that you added as follows: Select Stop 1 from the list, and then do the following: In the Stop position box, enter 0%. Click the button next to Color, and then under Theme Colors click Aqua, Accent 5, Darker 25% (fifth row, ninth option from the left). Select Stop 2 from the list, and then do the following: In the Stop position box, enter 54%. Click the button next to Color, and then under Theme Colors click Aqua, Accent 5, Darker 50% (sixth row, ninth option from the left). Select Stop 3 from the list, and then do the following: In the Stop position box, enter 100%. Click the button next to Color, and then under Theme Colors click Black, Text 1 (first row, second option from the left).