Chobani Reveals Sales Gains and Plans for Expansion in IPO Filing
Chobani Inc. filed for an initial public offering (IPO) with the U.S. Securities and Exchange Commission (SEC) yesterday, listing the maximum size of the offering as $100 million, subject to adjustment. The yogurt and beverage company did not disclose how many shares it plans to offer and when the listing would take place.
According to the filing, Chobani Inc. plans to list on the NASDAQ under the symbol CHO and will consolidate under the name Chobani Global Holdings.
The company announced in July it had registered for an IPO with the SEC but did not disclose a proposed valuation, potential stock price or timeline for an IPO at the time of the announcement. The company’s valuation could be up to $10 billion, according to a Reuters report earlier this year.
Why an IPO?
The company said it will use a portion of the net proceeds from the offering to pay down debts and will also undertake a corporate reorganization in connection with the offering. The proceeds will also go towards growing innovation and capacity.
In the filing, Chobani refers to itself as a “anti-traditional consumer packaged goods company,” creating products that are “delicious, natural, nutritious and accessible,” or DNNA. Since its founding in 2005 by CEO Hamdi Ulukaya and subsequent launch in 2007, the New York-based company has fueled innovation in Greek yogurt as well as across the dairy and alt-dairy categories with the launch of coffee creamers and cold brews, plant-based yogurts and low-sugar and lactose-free multi-product lines.
According to the filing, following its public offering, Chobani will be better positioned to drive category innovation toward clean-label products that use natural ingredients and become a leader in the oat milk category despite its fairly recent entry into the space. Additionally, Chobani plans to increase its presence in the probiotic functional food and beverage markets and continue expanding distribution into “underpenetrated channels” such as convenience stores, drug stores and college campuses.
“We have built Chobani for the long-term. We have made significant investments in the past few years to ensure we control our innovation capabilities, our production, our distribution, and our marketing,” Ulukaya said in a letter included in the filing. “This makes us different from other food companies. We continuously invest in our people and our infrastructure so that we never lose the ability to develop, launch, and scale our products very fast.”
While Chobani received a $750 million investment from TPG Capital in 2014, TPG exited the business in 2018 as part of a deal with Healthcare of Ontario Pension Plan (HOOPP), who acquired a minority stake in the company.
Chobani is among several food and beverage companies turning to the public markets to fuel growth, including competitor Oatly, which went public in May and raised $1.43 billion. Coconut water maker Vita Coco filed for a $100 million IPO in September and began trading on the NASDAQ last month, while Real Good Foods announced its IPO last month, seeking to raise $86.25 million, and began trading earlier this month. Other recent IPO filings include Sovos Brands, VMG Consumer Acquisition Corp and The Plant Hope Company.
How Has Chobani Performed?
Chobani’s products are sold at approximately 95,000 retail locations in the U.S., including Walmart, Whole Foods, Target, Kroger, Publix and Costco, along with Canada, Mexico and Australia. The filing revealed that two of its customers account for approximately 10% of its net sales, though did not disclose which.
According to the filing, the company reached $1.1 billion in net sales within its first six years in operation, and generated net sales of $1.4 billion in 2020, up 5.2% year-over-year, with a net loss of $58.7 million. For the nine months ending September 25, the company secured $1.2 billion in net sales — a 13.8% year-over-year boost — with $255 million in profit, but saw net loss climb just over 12%. North American sales make up approximately 91% of its total net sales.
While Chobani has expanded into several adjacent categories, its yogurt products continue to lead, bringing in $1.05 billion in sales during the nine months ending September 25. Still, its new innovations, including those in the yogurt category, made up 39% of its sales during this period.
Chobani has been the top brand in the yogurt category since June 2020, with 20.2% market share, the company said, citing Nielsen numbers. Since launching its Chobani Oat oatmilk product in 2019, the company has captured 15.1% of the U.S. oat milk market share. Its coffee creamers have grown 99.4% year-over-year, while the Chobani Probiotic line — now sold in 12,500 retail locations nationwide — has grown 56% in the 13 weeks ending October 16.
Chobani’s national brand awareness also climbed to 79% in 2020, the company said.
Its owned R&D resources and manufacturing facilities have allowed the company to innovate quickly, it said, operating two production plants in New Berlin, New York and Twin Falls, Idaho, the latter of which also houses its Innovation and Community Center, as well as a facility in Melbourne, Australia. The company has invested $1.3 billion in this infrastructure, and it has been “a key strategic asset” that has “allowed us to disrupt an industry crowded by legacy food companies,” and said it has planned capacity expansion that will allow it to scale production in new categories.
Beyond its products, the company says it has a “people-first culture” that includes employing refugees and immigrants and increasing its average hourly wage to $19 a hour last year. It also says it supports entrepreneurship and education through its Chobani Incubator, Chobani Scholars program and Community Impact Funds.
What Are The Company’s Plans for The Future?
With yogurt serving as its key growth driver, the company sees “significant runway for continued growth” within this category across new product platform innovation, product platform expansion, increased brand awareness, and channel and shelf-space expansion. It particularly aims to grow in foodservice, which currently represents less than 10% of its overall distribution.
The company also believes it is well-positioned for growth within its categories outside yogurt by working to “naturalize” historically unhealthy product categories, improving accessibility of functional foods, and growing its channel presence, shelf space and use occasions. Channel expansion within yogurt and beyond will also include an ecommerce push, the company said.
In terms of new innovations, Chobani sees opportunity in introducing plant-based, lactose-free alternatives into large categories, while also targeting “newer, high-growth categories that are in high consumer demand.”
Chobani said it aims to improve operational efficiency and expand capacity, reduce its resource use and seek new opportunities for renewable electricity sources and increase the amount of sustainable packaging across its portfolio.
While it has largely focused its business in the U.S. to date, Chobani will also look to build out new geographies, growing its business in Mexico, Canada and Australia.
“As I think about the next stage of this incredible journey, I am excited to partner with new shareholders who share our mission to provide good food for all while improving our communities,” Ulukaya said. “Our goal is lofty—but achievable: we will recreate the way food is made and consumed all over the world and be a new model for how a next-generation company should operate responsibly.”
