Caribou Coffee Company

Transcription

1 Caribou Coffee Company Consumer Conference June 5, 2012

2 SAFE HARBOR STATEMENT Certain statements made in this presentation constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, regarding the company's future plans, objectives and expected performance. Statements that are not historical facts, including statements accompanied by words such as "believe," "expect," "estimate," "intend," or "plan," are intended to identify forward-looking statements and convey the uncertainty of future events or outcomes. We caution you that no forward-looking statement is a guarantee of future performance, and you should not place undue reliance on these forward-looking statements which reflect the view of Caribou s management only as of the date of this presentation. We assume no obligation to update any forward-looking statements contained in this presentation as a result of new information or future events or developments. The trademarks included herein are the property of the owners thereof and are used for reference purposes only. Such use should not be construed as an endorsement of the products or services of the Company. 2

3 CARIBOU COFFEE INVESTMENT HIGHLIGHTS Attractive Coffee Industry Dynamics Highest Quality Product Offering Experienced Management Team Strong Brand Awareness Strong Company Culture Unique Coffeehouse Experience Dynamic Multi- Channel Business Model 3

4 WE ARE A LEADING BRANDED COFFEE COMPANY A Multi-Channel Branded Strategy Caribou is one of the leading branded coffee companies in the United States, with a compelling multi-channel approach to the customer 4

5 COFFEE IS A HIGHLY ATTRACTIVE, SIZEABLE, AND GROWING INDUSTRY Total U.S. coffee market sales are estimated to be over $48 billion annually (1) 58% of adults report drinking coffee at least once during a given day (and 68% at least once during a given week) 80% of consumers report no change in their coffee consumption habits over the last six months 37% of coffee consumed in the U.S. is now premium or specialty coffee Consumers are becoming more educated about coffee varieties and demanding quality 85% of coffee drinkers consume coffee that was prepared at home U.S. Specialty Coffee market is expected to exceed $18 billion in 2012, representing a 31.8% growth rate over 2009 Popularity of overall specialty foods market and newer technologies such as Keurig s K-Cups driving growth Penetration of single-cup brewing systems growing at an average of one percentage point per year (current estimated household penetration of Keurig system at approximately 10%) Source: 2011 National Coffee Drinking Trends survey, Specialty Coffee Retailer report, Wall Street research. (1) Includes foodservice and retail. 5

6 QUALITY AT ITS CORE Come for the Coffee, Stay for the Coffee High quality product with scalable production capacity Only the highest grades of Arabica beans are sourced Connoisseurs prefer Caribou Coffee Produced under some of the industry s most stringent packaging and brewing standards Expanding food and beverage platforms that attract non-coffee drinkers #1 rated Ethiopian coffee, nd place ranking out of 19 ground Columbian coffees, #1 at Roastmaser s Guild tasting competition for its specialty roasts, Consistently high marks in Coffee Review, with five varietals scoring in 90s 6

7 EVOLUTION OF CARIBOU S MULTI-CHANNEL APPROACH Transition to Multi-Channel Business Model Gaining Traction (Evolution of Consolidated Sales Mix) 2005: $198M 2012 Q1 LTM: $335 M Long-Term Commercial 3% Franchise 0% Commercial 23% Commercial Franchise 4% Retail Franchise Retail 97% Retail 73% *Note: Long-term is not an actual projected future mix, but illustrative of more balanced revenues in future LTM data refers to twelve months ended April 1,

8 FIVE KEY LEVERS FOR GROWTH ACROSS OUR DYNAMIC MULTI-CHANNEL PLATFORM Retail Retail coffeehouse drivers: 1. Average Unit Volume (AUV) growth 2. Unit growth (NSO s) Percentage of Total Revenue % LTM % Franchise Franchise drivers: 5. New unit growth domestically and internationally Percentage of Total Revenue % LTM % Commercial Commercial drivers: 3. Consumer packaged goods growth in grocery, mass merchant and club stores 4. Foodservice opportunities Percentage of Total Revenue % LTM % Note: LTM data refers to the twelve months ended April 1,

9 DELIVERING AVERAGE UNIT VOLUME GROWTH Transitioning to a Merchant that Offers Coffee, Food and Retail Products Product and service innovation will continue to drive average unit volume Additionally, achieving density in existing markets will be a significant driver of AUV 2011 $595K AUV 2009 $540K AUV Market density and awareness Incremental revenue through new product & service innovation Reinforce the foundation through product refinement and brand execution Long-term goal for new store openings: $1 million AUV Hot cereal Tea Day- part expansion Bakery Warm sandwiches (AM & PM) Beverage quality Real chocolate Real fruit smoothies Signature iced tea 9

10 EXPANSION OF FOOD PRODUCT OFFERING IS DRIVING TRAFFIC New Product Platforms Build on Caribou s Core Commitment to Quality Built new product development group to drive growth Recent platform introductions in chocolate, specialty teas, cold beverages, oatmeal, baked goods and sandwiches are growing comparable coffeehouse sales Look for our upcoming launch of sparkling juices and teas! Food Offerings Beverage Offerings 10

11 BUILDING BRAND AWARENESS The Caribou brand reflects the Company s culture and values A Higher State of Bean Passion for quality Passion for human connection A Minnesota Vibe and fun, quirky point of view Updated branding in 2010 to improve consistency of the customer experience and brand image Clearly differentiates Caribou iconography from peers Continue to promote our brand as we expand into new markets and drive further opportunities in other channels Evolution of the Caribou Brand Caribouisms A Sampling of Company Philosophies 11

12 OUR CUSTOMER SERVICE IS NATIONALLY RECOGNIZED Achieving Excellence in Customer Service We re in great company: Just 40 companies recognized in 2011 and Caribou was the only foodservice company Significant opportunity remains to elevate the Experience J.D. Power and Associates, Achieving Excellence in Customer Service report,

13 OUR COFFEEHOUSES PROVIDE A LEADING COFFEEHOUSE EXPERIENCE An extraordinary experience that feeds the soul We are committed to delivering the leading coffeehouse experience Serving the highest quality beverage and food products Delivered with authentic human connection between our team members and guests Natural, lodge-like elements provide comfortable environment Encourage quirkiness and fun we take our coffee seriously, not ourselves Each coffeehouse accented by local flair Creating The Community Place I Love The Community Place I Love 13

14 GROWING OUR FOOTPRINT IN MARKETS WHERE WE HAVE STRONG BRAND AWARENESS Our new unit growth strategy is focused on our existing markets where we have a significant coffeehouse presence Eight new coffeehouses opened in 2011 and approximately 20 locations expected in Company-owned Units 12 Caribou has 56 companyowned to Starbucks 500+ company-owned and licensed locations 14

15 TARGETED NEW UNIT GROWTH Real estate strategy Measured expansion in targeted core markets within our existing footprint Favorable demographics Drive-thru and neighborhood locations Senior management visits Drive higher AUVs New units will take advantage of all initiatives driving AUV in our existing portfolio Full beverage and food menu New service platform New design and local market elements Targeted Economics 8 New Coffeehouses in 2011, approximately 20 in 2012, ramping up to 8% to 10% growth annually over time Sales targets consistent with top 1/3 of portfolio by market $450 Average Build-Out Cost targets 30%+ cash-on-cash targets by the end of Year 3 Targeted Expansion Plan 15

16 SIGNIFICANT COMMERCIAL CHANNEL GROWTH OPPORTUNITY Our commercial segment sells high-quality premium whole bean and ground coffee through a variety of channels Grocery stores Mass merchandisers Club stores Office coffee and foodservice providers Hotels Entertainment venues Online customers Commercial presence in 40+ states through Caribou distribution and nationwide including K-Cup sales National Consumer Packaged Goods (CPG) Presence 16

17 FOCUS ON INCREASING SALES VELOCITY THROUGH EXISTING COMMERCIAL CHANNELS Consumer Packaged Goods Sales Growth through Existing Doors Have targeted sales, margin, market share and ACV goals Upgraded packaging to better position our brand Commercial Door Growth 9,000 A strong retail coffeehouse presence helps drive demand for Caribou s CPG products 7,000 7,500 Recently signed national broker agreement with Crossmark, a leading sales marketing service company in the consumer goods industry Overall share of premium category in grocery stands at approximately 4.7%* (40%+ market share in Minnesota*) 1,200 2,300 3,900 Strong Commercial Partnerships in CPG and Foodservice *Per IRI data, 52 weeks ended April 15, 2012 (includes K-Cup). Premium Category includes: Caribou, Starbucks, Peet s, Green Mountain, Seattle s Best Dunkin Donuts and Gevalia as reported through IRI in Grocery 17

18 STRATEGICALLY EXPANDING OUR FOOTPRINT THROUGH FRANCHISING Since opening our first franchised coffeehouse in 2004, we have expanded to 174 franchised coffeehouses and kiosks (as of April 1, 2012) Includes 97 international franchised locations predominately in the Middle East Domestic Franchised Locations International Franchised Locations Jordan (1) Saudi Arabia (5) Kuwait (29) Bahrain (11) Lebanon (3) UAE (32) Oman (1) South Korea (11) Turkey (3) 18

19 FIVE KEY LEVERS FOR GROWTH ACROSS OUR DYNAMIC MULTI-CHANNEL PLATFORM Retail Retail coffeehouse drivers: 1. Average Unit Volume (AUV) growth 2. Unit growth (NSO s) Percentage of Total Revenue % LTM % Franchise Franchise drivers: 5. New unit growth domestically and internationally Percentage of Total Revenue % LTM % Commercial Commercial drivers: 3. Consumer packaged goods growth in grocery, mass merchant and club stores 4. Foodservice opportunities Percentage of Total Revenue % LTM % Note: LTM data refers to the twelve months ended April 1,

20 MULTI-CHANNEL STRATEGY DRIVING GROWTH 20.0% Company Sales Retail Comps 18.8% 15.0% 16.5% 16.1% 10.0% 11.0% 11.8% 11.4% 9.4% 9.2%* 7.8% 5.0% 0.0% (0.3%) 3.0% (0.5%) 4.8%* 0.2%** 5.2% 4.8% 4.4% 3.5%** 4.3% 4.6% 4.1% 5.6% 2.5% (5.0%) (3.3%) Q Q Q Q Q Q Q Q Q Q Q Q * 2009 company sales for 4 th quarter excludes the 53 rd accounting week, including the 53 rd accounting week the company had 12.4% sales growth company sales growth excludes 53 rd week in 2009 ** Retail comp sales in Q compare last 14 weeks vs. comparable 14 weeks on a calendar basis, in Q4 2010, compare comparable 13 week sales to 2009 Graph depicts overall company sales and comparable coffeehouse growth on a comparable quarter basis. 20

21 LONG-TERM EPS GROWTH MODEL Ramping Up to 8% - 10% New Unit Growth 2% - 4% Same Store Sales Growth Commercial Segment Growth of 15% - 20% Franchise New Unit Growth Leverage Fixed and Operating Costs Long-Term EPS Growth ~25% 21

22 A LEADING BRANDED COFFEE COMPANY 22