Yogurt maker Chobani’s dream to go public expires for a third time amid rough market conditions

05 Sep 2022 --- Chobani has withdrawn its initial public offering (IPO) efforts and will remain a private company in the near future. The company first attempted to go public in 2021 and for a second time again in January this year. The business was targeting a valuation between US$7 billion and US$10 billion.

“Given the current market conditions, we have decided to withdraw our S-1 Registration Statement currently filed with the Securities and Exchange Commission,” explains a Chobani spokesperson.

“Our focus remains on strong execution and driving profitable growth.”

This has been a complex year for the dairy industry as commodity prices in the sector are 23.5% higher than in August 2021, according to the UN Food and Agriculture Organization. Although milk prices are somewhat stabilizing due to increased supply in countries like New Zealand, world cheese prices, otherwise, marked a tenth consecutive month of rising prices.

Chobani produces non-GMO greek yogurt, oatmilk, dairy, plant-based creamers, ready-to-drink coffee and plant-based probiotic drinks.

Chobani Half & Half is made from locally sourced, farm-fresh milk and cream.Tortuous IPO path
This March, Chobani halted its plans to go public as several executives, including its president, left the company. However, the business was still planning to continue with its IPO either during the end of the year or in 2023.

Nevertheless, the US stock market is in red numbers this year, with major indexes like the NASDAQ, the Dow Jones and the S&P being down in double digit percentages. 

Additionally, Oatly, a Swedish food company that produces dairy products from oats, might have served as a cautionary tale for Chobani, as the stock, which had a momentous IPO in 2021, is down 86.51% since its debut as a public company.

In Chobani’s IPO filings last year, the company disclosed a net loss of US$24 million on net sales of US$1.2 billion in the first nine months of 2021 – compared to a loss of US$21 million on US$1.06 billion in sales during 2020.

However, due to the strengthening of underlying milk commodity prices – by 23.5% year-on-year – the industry’s leading dairy companies exhibited higher turnover growth and strategic activities. Notably, the combined turnover of the Global Dairy Top 20 companies jumped by 9.3% in US dollar terms, following the prior year’s decline of 0.1%.

Low sugar, high protein
Chobani’s yogurt offerings include high-protein and lower-sugar offerings.

 Earlier this year, the company expanded its dairy footprint with high-protein, lactose-free, ultra-filtered milk and half and half coffee creamers, with Chobani Ultra-Filtered Milk being lactose-free and having 2.5 more protein than the market leader, according to the company.

In its dairy-free business, Chobani highlights the excellent performance of its oatmilk segment.

“Oatmilk is one of the fastest-growing segments in the non-dairy milk category, increasing 50.3% YOY. Chobani is proud to be one of the leaders driving that growth, with 56.4% reported net sales growth,” highlights the business.

Pumpkin spice crazeDairy prices are up 23.5% year-on-year.
With Fall and Halloween on the corner, the company is bringing back its seasonal pumpkin products.

Customers will be able to buy pumpkin spice creamers and yogurt, including a zero-sugar offering. Similarly, Starbucks has already started its pumpkin spice season, setting the prices for the seasonal drink at around 4% higher than last year.

Krispy Kreme was the first to the party when it announced a pumpkin spice latte swirl doughnut and a pumpkin spice latte and iced coffee in Early August. 

Although flavor, impulse, and seasonal spirit drive consumption of pumpkin-based foods, opportunities abound to promote pumpkins’ healthy, nutritional benefits.

According to Innova Market Insight, pumpkin spice launches had a 35% average annual growth between 2014 and 2018. 

By Marc Cervera