Chobani Pushes Into Drinks After Spurning Pepsi Takeover Bid
Chobani LLC, which recently spurned a takeover bid from PepsiCo Inc., is pushing deeper into the territory of its former suitor.
The yoghurt maker will start selling beverages for the first time, along with a line of savory dips, according to a statement on Thursday. Though the products will be made with yoghurt, the move lets the company expand into other areas of the supermarket, pitting it against a range of new competitors.
Chobani’s billionaire founder, Hamdi Ulukaya, is looking to prove the company can go it alone after rejecting an offer earlier this year from PepsiCo, the world’s largest snackmaker. Chobani walked away from deal talks because PepsiCo wanted to buy the whole business, rather than the minority stake Ulukaya was proposing, according to a person familiar with the discussions.
Chobani hired Goldman Sachs Group Inc. last year to seek a partner that could invest in the company and help it expand distribution and production. At the time, the yogurt maker was struggling to handle a rapid expansion, which included a massive new factory in Idaho. Chobani, whose sales grew to $1 billion over its first five years on the market, lost $115 million in the second half of 2013. In 2014, Ulukaya got $750 million from private equity firm TPG in exchange for preferred stock to ease a cash crunch.
The Norwich, New York-based company now sees less of a need for help: it is self-funding an expansion of its Flip line of yoghurt and moving into the Mexican market.
Chobani’s sales have risen 25 per cent so far in 2016 compared with the same period a year earlier, Chief Marketing Officer Peter McGuinness said in an interview. He didn’t give specific dollar figures or discuss profitability.
"We have momentum and rhythm, so we just thought it was a really good time to expand into new areas that frankly could use some better options," he said. The dips and drink lines make up a portion of 24 new products the company intends to put on shelves in July, including many line extensions.
Its new Drink Chobani line will mix fruits with its hallmark Greek yogurt. The Chobani Meze dips, meanwhile, will blend in vegetables, herbs and spices.
"I think Hamdi’s vision was always better food for more people," McGuinness said. "You’re going to see us continue to innovate, and you’ll see new platforms in the future."
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