Chobani is the maker of America’s #1 selling Greek Yogurt, founded in 2005 by Hamdi Ulukaya with a vision to provide better food for more people. Chobani produces high-quality authentic strained Greek Yogurt products with only natural ingredients and supports local farms and communities. Chobani has over $1 billion in annual revenues and donates 10 percent of its profits to charities worldwide.
Chobani announced a $750 million investment from TPG Capital, a leading global private investment firm and TPG Opportunities Partners, its dedicated credit platform, which will help fund future growth, expansion and innovation at the company.
See more at bestpitchdeck.com/chobani
1. TPG HIGHLY CONFIDENTIAL — NOT FOR DISTRIBUTION
Investment: $671 Million (TPG VI - $336M; TOP II - $168M; TOP III - $168M)
Total Valuation: $728 Million (1.1x Gross MoM)
– $17M Realized; $711M Unrealized
35%1
April 2014
Market leader in the fast-growing US Greek yogurt category
1. TPG ownership includes controlled co-investment vehicles and is fully diluted based on the treasury stock method
Note: Valuation and ownership as of September 30, 2014 is estimated, unaudited and subject to change
Date Closed
TPG Investment
TPG Ownership
Company
2. TPG HIGHLY CONFIDENTIAL — NOT FOR DISTRIBUTION 2014 Investors Meeting 2
Chobani
Greek Yogurt Primer
Semi-liquid, runny texture
–1 cup of milk makes 1 cup of yogurt
Less protein, more calories
Traditional Yogurt Chobani Greek Yogurt
Greek is marketed as more natural and better for you
Thick, creamy texture
–3 cups of milk make 1 cup of yogurt
More protein, fewer calories
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Chobani
The Yogurt Category Undergoes Tremendous Change
$2.3
$2.5
$2.7
$2.9
$3.2
$3.5
$3.8
$4.0
$4.3
$4.5
$4.3
$3.8
$3.4
$0.1 $0.2
$0.2
$0.6
$1.4
$2.2
$3.1
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Greek Yogurt % of Spend (Nielsen)1 2% 4% 5% 12% 24% 36% 48%
Total US Yogurt Spend (Retail)
$ Billions
Chobani was the category innovator in Greek yogurt
1. Based on Nielsen estimate of Greek yogurt retail spend as % of total yogurt retail spend
Note: Past performance is not an indicator of future results
Source: Euromonitor, Nielsen, Mintel, Analyst Estimates, Company Projections as of April 2014
Traditional
Introduced
-2%
9%
9%
Traditional Yogurt Era Greek Yogurt Era
77%
Greek
All Yogurt
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Chobani
Chobani’s Start-up Story
Incubation in Abandoned Kraft Factory Explosive Growth to >$1B in Sales
Founder secures an $800K Federal SBA loan to
buy an abandoned Kraft yogurt factory in NY
First cup of yogurt sold in 2007
2009
2005 2007 2011 2013
$86
$439
$150
$265
$550
$1,000+
$71
$244
$629
$915
3 4 5 6 7
Google Facebook Chobani
Annual Sales
$ Millions
Note: Past performance is not a guarantee of future results
Source: Company financials and public filings as of September 30, 2014
Tremendous growth to $1+ billion revenue
# of Years After First Sale
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Chobani
Growth Through Leverage
Refusal to Take Outside Investment Leverage Funded Growth Capex
“Chobani’s Founder on Growing a Start-up
Without Outside Investors”
– HBR
“US Hunger for Yogurt Leads to Gigantic
Factory – Chobani opens $450M Idaho facility”
– NY Times
Chobani largely financed its growth through debt
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Chobani
‘Perfect Storm’ in 2013
$18
$50
$131
2011 2012 2013
Danone / Yoplait / Fage
Combined Media Spend
$ Millions
US Milk Prices
$ / CWT; Median Class II Prices
2013 Production
Millions Pounds
Intensifying Competition Milk Prices at All-time Highs Facility Start-up Challenges
$16.77
$19.18
$23.73
2012 2013 2014 YTD
370
129
New York Idaho
89%
Utilization
Capacity = 420
Capacity = 644
20%
Utilization
Competition, milk price, and Idaho start-up created a ‘perfect storm’ in 2013
1. 2014 YTD is through April (pre-TPG investment)
Source: Company financials and public filings as of September 30, 2014
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$21 $20
-$28
-$87
Q1 Q2 Q3 Q4
7
Chobani
In Need of a Partner to Continue Growth
$ Millions
$534
$579
$643
$708
Q1 Q2 Q3 Q4
Earnings declines forced Chobani to restructure its balance sheet
2013 Quarterly EBITDA
$ Millions
2013 Quarterly Net Debt
Source: Company financials as of April 2014
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Chobani
TPG’s Relationship
Power of our global network
Hamdi Ulukaya Cuneyd Zapsu David Bonderman
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Chobani
The Deal… and its Iterations
February April
March
Structured creative deal with lots of iterations along the way
One of three parties contacted by
BAML for a minority equity deal
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Chobani
The Deal… and its Iterations
February April
March
Structured creative deal with lots of iterations along the way
Submitted first term sheet for convertible
preferred equity with minority protections
Selected as 1 of 2
parties to continue
Firm B
Firm C
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Chobani
The Deal… and its Iterations
February April
March
Structured creative deal with lots of iterations along the way
Liquidity becoming tight – clock was ticking
– and shifted to structured security
Liquidity
Deadline
45-60 days
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Chobani
The Deal… and its Iterations
February April
March
Structured creative deal with lots of iterations along the way
Re-indicated as secured debt
and preferred equity deal
Liquidity becoming tight – clock was ticking
– and shifted to structured security
Liquidity
Deadline
45-60 days
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Chobani
The Deal… and its Iterations
February April
March
Structured creative deal with lots of iterations along the way
Selected as final party to finish
negotiations – but leaked to the press
Liquidity
Deadline
30-40 days
14. TPG HIGHLY CONFIDENTIAL — NOT FOR DISTRIBUTION 2014 Investors Meeting 14
Chobani
The Deal… and its Iterations
February April
March
Structured creative deal with lots of iterations along the way
Noise in the press
Selected as final party to finish
negotiations – but leaked to the press
Liquidity
Deadline
30-40 days
15. TPG HIGHLY CONFIDENTIAL — NOT FOR DISTRIBUTION 2014 Investors Meeting 15
Chobani
The Deal… and its Iterations
February April
March
Structured creative deal with lots of iterations along the way
Re-indicate with numerous
added protections and rights
Liquidity
Deadline
20-30 days
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Chobani
The Deal… and its Iterations
February April
March
Structured creative deal with lots of iterations along the way
Hamdi calls Kevin – and he
picks up – during Easter Mass
INCOMING CALL
Hamdi Ulukaya
Liquidity
Deadline
10-15 days
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Chobani
Then… the Napkin
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Chobani
Intersection of TPG Core Competencies
TPG uniquely positioned
Structuring
Expertise
Industry & Brand
Knowledge
Ops
Capabilities
Chobani
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Chobani
Downside Protected
Structural downside protection…
$405¹
$750
Chobani Capital Structure Downside Protection and Key Terms
Secured investment
$1 billion of capex in the ground
2nd lien with teeth
L + 400 cash, 800 PIK interest
6 year maturity, non-call 2
Equal board representation with
Founder
$ Millions
1. $405 million represents amount of revolver when fully-drawn, plus $18 million of priority debt
Source: Company financials as of April 2014
Bank: First
Lien Debt
TPG: Second Lien
Term Loan
TPG / Founder:
Equity
20. TPG HIGHLY CONFIDENTIAL — NOT FOR DISTRIBUTION 2014 Investors Meeting 20
Chobani
Upside Opportunity
Recent Healthy Food Transactions Public Healthy Food Comparables
1. Public valuations as of 9/17/2014
Source: Company filings and press releases
… with breakout potential
Multiple of LTM Revenue
2.7x
3.7x
2.9x
3.9x
Plum Organics
– 5/13
Kind Bar –
4/14
SkinnyPop –
7/14
Annie's –
9/14
2.4x 2.4x
2.7x
4.6x
Pinnacle WhiteWave Hain Celestial Keurig Green
Mountain
Multiple of LTM Revenue1
Implied
Chobani
Valuation
$ Billions
$2.9 $4.1 $3.2 $4.3 $2.7 $2.7 $3.0 $5.1
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Chobani
Good News and Bad News
What We Loved What We Needed to Fix
Leading brand
Great tasting product
World-class facilities
Exciting innovation pipeline
Enthusiastic, motivated, “hip” culture
Lots to do on Day 1
Little focus on cost and productivity
Large amounts of waste in the plants
Poor customer service
Under-developed sales team
Poor share trend
22. TPG HIGHLY CONFIDENTIAL — NOT FOR DISTRIBUTION 2014 Investors Meeting 22
Chobani
Five Priorities
Go after cost
Stop the waste
Fix customer service
Build sales capacity
Get focused on growth
1
2
3
4
5
23. TPG HIGHLY CONFIDENTIAL — NOT FOR DISTRIBUTION 2014 Investors Meeting 23
Chobani
Procurement Savings
Chobani Spend Base1 Savings by Category
Saved $10 million on procurement to date – target of $30 million savings
Additions to the Team
Chief Procurement Officer
Director – Indirect
Director – Milk and Dairy
Manager – Milk and Dairy
Manager – Fruit
More to come
1. Spend Base based on annualized 1H 2014 (point at which Chobani launched TPG-supported improvement initiatives)
Source: Company financials as of September 2014
$68
$255
$91
$179
$84
$131
$140
$404
Chobani Spend Base
$ Millions
Milk
Capex
SG&A
Warehousing & Logistics
Other Plant Operations
Indirect Procurement
Packaging
Fruit
$1,352
$18
$20
$3
$15 $15
$2
Blueberry Fruit Tote Sleeves for Cups Business Insurance
Baseline
After Savings
$ Millions
-23%
-25%
-20%
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Chobani
Five Priorities
Go after cost
Stop the waste
Fix customer service
Build sales capacity
Get focused on growth
1
2
3
4
5
25. TPG HIGHLY CONFIDENTIAL — NOT FOR DISTRIBUTION 2014 Investors Meeting
Largest yogurt plant in the world
Highly automated, state-of-the-art facility
Opened in December 2012
Nearly 2x the capacity of South Ed, NY plant
with ~6 million pounds / day milk intake
Total capital spend of $530 million
25
Chobani
Twin Falls, Idaho Facility
1. Based on management’s original model provided during diligence
Source: Company financials as of March 2014
Chobani has the facility – but needs help to operate
Original Mgmt. Volume Projections1
Twin Falls – Key Facts
372
508
651
804
943
2014 2015 2016 2017 2018
Millions of Pounds Mgmt. Expected to Be Produced at Twin Falls
26%
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Chobani
Measuring Waste
We expected to find some waste but…
Yogurt making is complicated…
… so we expected some waste, but…
27. TPG HIGHLY CONFIDENTIAL — NOT FOR DISTRIBUTION 2014 Investors Meeting 27
Chobani
Measuring Waste
TPG Ops has identified $76 million of waste across the company
Yogurt making is complicated… Total Waste – Twin Falls
… so we expected some waste, but…
$ Millions
$33
$18
$12
$13
Product
Donations
Milk Yield
Raw Material
Finished Goods
$76
Source: Company data as of June 2014
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Chobani
Reducing Waste
Sanitation Changes
Initiatives across the company to reduce waste – already seeing results
81
61
26
21
12
47
50
10
7 8
Week 36 Week 37 Week 38 Week 39 Week 40
Cases Sent to Quarantine Cases Scrapped
Twin Falls Plant - Thousands of Cases (Case = ~12 cups)
Source: Company data as of October 2014
Old vacuum
pump with
mold
Couplings
with
Sediment
$56
$49
$70
$350
$329
Value of
Scrap
($ K)
Scrapped Yogurt Cases by Period
29. TPG HIGHLY CONFIDENTIAL — NOT FOR DISTRIBUTION 2014 Investors Meeting 29
Chobani
Five Priorities
Go after cost
Stop the waste
Fix customer service
Build sales capacity
Get focused on growth
1
2
3
4
5
30. TPG HIGHLY CONFIDENTIAL — NOT FOR DISTRIBUTION 2014 Investors Meeting
Cho Item
Number Desc
10/14/14
In Stock
10/15/14 In
Stock
10/16/14 In
Stock
Days on
Jack's
Report
Cho Item
Number Desc
8/11/14
In Stock
8/12/14 In
Stock
8/13/14 In
Stock
Days on
Jack's
Report
228 CHO FLP CO/AL/CH 5.3 72% 66% 61% 10
308 CHO STRAW/BLUE 8PK 80% 74% 71% 29
293 CHO COCO 2% 5.3OZ 84% 82% 80% 15
463 CHO KID VAN CHOC 8PK 81% 77% 75% 43
450 CHO INDL BAN&CHC 4PK 65% 66% 55% 43
475 CHO GRK Watermelon 5.3OZ 85% 85% 87% 43
476 CHO GRK Grapefruit 5.3OZ 90% 90% 91% 43
451 CHO INDG MNT/CHC 4PK 83% 82% 79% 43
279 CHO FLIP BAN NUT 5.3 89% 89% 84% 3
300 CHO ST/BAN 2% 4PK n/a 94% 93% 2
277 CHO APR 2% 5.3OZ n/a 93% 94% 2
295 CHO KL 2% 4PK n/a n/a 91% 1
229 CHO FLP VAN/FLK 5.3Z n/a n/a 93% 1
30
Chobani
Jack’s List
We don’t want to be on Jack’s list
Source: Company data as of October 2014
Jack’s List – Before Jack’s List – Today
Jack Sinclair
Executive Vice President, Grocery Division, Walmart US
Oversees Grocery merchandising at 4,000 US Walmart stores
Maintains list of “problem products” with customer service
issues like cancelled Purchase Orders
32. TPG HIGHLY CONFIDENTIAL — NOT FOR DISTRIBUTION 2014 Investors Meeting 32
Chobani
Five Priorities
Go after cost
Stop the waste
Fix customer service
Build sales capacity
Get focused on growth
1
2
3
4
5
33. TPG HIGHLY CONFIDENTIAL — NOT FOR DISTRIBUTION 2014 Investors Meeting 33
Chobani
Sales Team Upgrade
Number of FTEs
41
52
68
July Today End of Year
Revamp of Chobani sales team underway
July End of year
2 4
1 4
0 4
0 3
Source: Company data as of October 2014
Chobani Sales FTEs Major Account Sales Coverage
66%
34. TPG HIGHLY CONFIDENTIAL — NOT FOR DISTRIBUTION 2014 Investors Meeting 34
Chobani
Account Leads
Recruited experienced sales leads for major accounts
Source: Company data as of October 2014
Jane Block Sean Blackmore Rick Simington John Perugini
Name
Coverage
Prior
Experience
Director, SC Johnson
(Walmart account)
Director, Frito Lay
(Kroger account)
Director, Kellogg’s
(Target account)
Director, Kellogg’s
(Costco account)
35. TPG HIGHLY CONFIDENTIAL — NOT FOR DISTRIBUTION 2014 Investors Meeting 35
Chobani
Five Priorities
Go after cost
Stop the waste
Fix customer service
Build sales capacity
Get focused on growth
1
2
3
4
5
36. TPG HIGHLY CONFIDENTIAL — NOT FOR DISTRIBUTION 2014 Investors Meeting 36
Chobani
Case Studies: Walmart & Kroger
Deal Close Jan 2015
SKU count 55 75
ACV 62% 74%
SKU count 45 47
ACV 70% 81%
Deal Close Jan 2015
Continuing momentum at Walmart and stimulating growth at Kroger
Chobani Share1 at Walmart (%) Chobani Share at Kroger (%)
Growth Plans @Walmart Growth Plans @Kroger
5
10
15
20
Jan 15
Jul 14
Apr 14
Jan 14 Oct 14
Oct 13
5
10
15
20
Jan 14 Jul 14
Apr 14 Oct 14
Oct 13 Jan 15
Distribution points 3,423 5,542 Distribution points 3,142 3,799
Projection
Projection
1 Share equals Chobani dollar-share of yogurt market
Source: Nielsen (4 weeks ending 9/27/14), company data as of October 2014
37. TPG HIGHLY CONFIDENTIAL — NOT FOR DISTRIBUTION 2014 Investors Meeting 37
Chobani
Market Share Recovery
Beginning to recover market share vs. big incumbents Dannon and Yoplait
1 Share equals Chobani dollar-share of yogurt market
Source: Nielsen (4 weeks ending 9/27/14), company data as of October 2014
Chobani Market Share1
Share of Yogurt Sales in Dollars
18.3%
18.9%
17.2%
18.4%
18.1%
18.4% 18.2%
18.9%
18.2% 18.3%
18.7%
18.2%
17.5%
17.1%
16.3%
16.8%
Jul 13 Aug 13 Sep 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14
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Ops Engagement – Summary Thoughts
Chobani 38
Improvement opportunities are real
GM: <20% 30%
EBITDA: <5% 15%
Relatively simple business model to fix
–2 plants, mostly US, simple product offering
Revenue / margin / cash – priority 1
Mix of quick wins and sustainability
Very good Chobani receptivity and TPG engagement
39. TPG HIGHLY CONFIDENTIAL — NOT FOR DISTRIBUTION 2014 Investors Meeting 39
Chobani
Shift Toward Healthy Eating
Favorable category tailwinds are foundational to the brand
40. TPG HIGHLY CONFIDENTIAL — NOT FOR DISTRIBUTION 2014 Investors Meeting 40
Chobani
NPS By Brand
Percent of Responses (0 = Not at All Likely, 10 = Extremely Likely)
31
30
27
33
33
54
45
34
31
35
27
27
17
17
-3
-1
-8
6
6
37
28
Niche player with
premium, exclusive focus
Source: McKinsey yogurt survey as of March 2014
Clear NPS advantage over all but Fage, a premium niche player
Attractors
(9–10 Rating)
Detractors
(0–6 Rating)
NPS score
Customer Likelihood to Recommend Yogurt to Friend
TPG/McKinsey consumer survey
41. TPG HIGHLY CONFIDENTIAL — NOT FOR DISTRIBUTION 2014 Investors Meeting 41
Chobani
Velocity and Distribution
Velocity and Total Distribution Points
Latest 24 Weeks 5/17/14
5,500
3,150
4,042
6,309
3,472
5,865
4,828
1,048
2,582
3,691
Velocity Total Distribution Points
Chobani Dannon Yoplait Fage Private Label
14% higher
velocity than
closest competitor
Source: Company data as of May 2014
But much
lower
distribution
Chobani has the highest velocities, with distribution upside
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Chobani
Innovation
Source: Company data as of October 2014
Chobani’s innovation pipeline is getting rave reviews
43. TPG HIGHLY CONFIDENTIAL — NOT FOR DISTRIBUTION 2014 Investors Meeting 43
Chobani
Pumpkin Spice Mania
Pumpkin Spice Volumes
Pumpkin Goes Viral
Thousands of Cases Sold
1
18
30
21
25
51 51
47
Launch Week
2
Week
3
Week
4
Week
5
Week
6
Week
7
Week
8
Fastest-selling product launch in company history
Source: Company data as of October 2014
44. TPG HIGHLY CONFIDENTIAL — NOT FOR DISTRIBUTION 2014 Investors Meeting 44
Chobani
Key Takeaways
1. Collaborative effort to get here
2. Operational turnaround with the hard work
just beginning
3. Potential upside – we’re excited by brand and
growth prospects
1
2
3