Investor Presentation - CSOC
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Investor Presentation
1
The Pet Food Industry
Pet Food Sales
• Global sales surpassed $103.6 billion
in 2020
• Global sales increased 6.7% over 2019
Recession-Proof
• Sales increased consistently from
2008 – 2010
• Consistent annual growth for total
U.S. pet sales over past 10 years
2
($ billions)
75
Total U.S. Pet 73
Industry 67
70
Expenditures:
10 Year Trend 58
60
56
Source: American Pet Products 53
Association's 2019-2020 51
National Pet Owners Survey
48
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
3
Industry Driving Forces
Increased pet ownership
Growth of middle class and disposable income
Pet Humanization — Treating pets as family members
Increased spending for well-being treatments (food, grooming, vets, toys)
Pet food quality is at the forefront of pet owners’ minds
Buzzwords on pet food labels are natural, organic, grain free, and human grade
4
Pet Ownership Distribution
Millennials account for most pet
ownership, followed closely by
Baby Boomers
Industry trends reveal Millennials
with pets tend to use technology to
purchase products and services
This has helped form a robust
market for new pet-related
business ventures
5
Pet Food Market Overview
• U.S. pet food market valued at over $40 billion, 4% CAGR forecasted over
next 5 years
• Freeze-dried food is the fastest growing category within the pet food sector,
growing at an estimated 40% CAGR
6
Pet Food Market Growth
The U.S. Freeze-Dried Pet Food Market @ 40% CAGR The Expected Changes in Pet Food Structure
90% 850 900 40
85%
80% 800 35
70% 700 30 0.32 8
600
60% 600 25 7
50% 49% 50% 500 2.8 10
46% 40043% 20
40% 40% 33% 42% 400
15
280 6
30% 24% 300
210 10 20
20% 144 200
103 40%
83 CAG
R 5 10
10% 55.6 100
0
0% 0
2019 2030
2014 2015 2016 2017 2018 2019 2020E 2021E 2022E
Kibble Dehydrated Kibble+ Freeze-dried
mm $ % Growth
Source: petfoodindustry.com
7
8
Problems in Pet Food
• Many pet foods sold in the market today cause health issues, such as skin
problems, joint deterioration, excess weight gain, tumors, allergies, and
digestive upset.
• Even with many brand choices out there, healthy pet food alternatives are
expensive.
9
The Solution and Opportunity for the Pet
Food Industry
• The Solution
• Stronger emphasis and consciousness to provide pet owners healthier foods
for their pets at a competitive price
• The Opportunity
• McLovin’s high-quality, nutrient rich pet food is provided at an affordable
price for the average pet owner
10• McLovin’s uses healthy, natural, often human consumption
grade ingredients, using a freeze-drying process.
• Freeze drying is the most nutrient preserving, least
damaging ways of processing food, whereas heat in the
conventional food processing destroys 20%-30%
McLovin’s nutritional value.
Food Product • Retains the natural flavor of beef, chicken, fish, and
vegetables. Pets love the tastes of McLovin’s products.
• Meal products are designed by experts of the most
respected teams in pet care (BSM), and the foods are
nutritionally balanced.
11Freeze Dry Food Competitors
Company Brand Brand Position Est Capacity (ton)
Stella & Chewy's Stella & Chewy's 5 1,500
Champion Orijen 5 1,000
Open Farm 4.5 500
Primal Primal 4 600
Instinct Instinct 4 1,000
Champion Acana 4 1,000
Backcountry 3.5 600
Dr. Marty 3.5 800
Bravo 3 500
Vital Essentials 3 1,000
PureBites 3 1,000
12Key Business Strategy
(Food Unit)
• Affordability and Availability
• Affordable - Reducing production costs through large
orders and bulk purchasing; fine tunning the
manufacturing process to maximize output efficiency
• Available - Partnered with large retailers to make our
products ubiquitous. Large volume provides an
economy of scale. With lowered costs, McLovin’s
products become more affordable and available. These
two are self supporting complementary to each other.
13Products
(Treats)
• 100% proteins such as beef liver, chicken breasts, and cold-water salmon and other
varieties.
• Packed with vitamins and minerals that pets need for energy and vitality. No chemicals.
• Freeze-dry processed for max nutrient and taste preservation.
• No preservatives used and no refrigeration necessary.
14Products (Meals & Toppers – Coming Soon)
HEALTHY PROMISE
We use only grass-fed beef liver, free-range chicken and wild-caught fish to provide
amino acids and essential fatty acids. Balanced with organic fruits and vegetables that
provide vitamins A, B-complex, D, & E. Flaxseed also added to aid in healthy digestion.
INGREDIENTS
Beef, Chicken, Salmon, Beef Liver, Beef Heart, Chicken Liver, Chicken Gizzard, Fresh
Sweet potato, Flaxseed, Chickpeas, Chicken Heart, Salt, Rosemary Extract, Natural
mixed Tocopherols, Sunflower oil, Carrot, Apple, Tomato, Broccoli, Orange,
Cranberry, Pumpkin, Spinach, Beet, Strawberries, Blueberries
Guaranteed Analysis
Crude Protein ....................................... 36% min
• Vet designed meal products for all breeds. Crude Fat .............................................. 26% min
• Meats mixed with fruits & vegetables. Crude Fiber ............................................ 5% max
• Balanced for pets daily nutritional needs Moisture ................................................. 7% max
Calorie Content (Calculated)
4900 kcal/kg 420 kcal/cupMcLovin’s Cost Competitiveness
Fish Costs Comparison Illustration Competitors McLovin's
Sourced USA/Canada USA
Grade Farmed (Salmon) Wild Caught
Natural Inhabitant Ocean Fresh Water
Health & Nutritional Value High High
Costs(all inclusive) $1.95/Oz $0.5/Oz
Gross Margins (Mark Up) 30% 100%
Wholesale Price $2.54 $1.00
16Our Strength in Sales – Food Category
• xAOC sector - We have a long history of business dealings and have built strong relationships with many large
retailers. This sector contains 44% of the petfood distribution in the U.S., and this is our strongest suit.
• Big Pet Retail (Pet Specialty Stores)
• Pet Supermarket is the 3rd largest pet retailer in the U.S. We are in their stores, and there are additional order
flows in place.
• Petsmart is the #1 pet retail store in the U.S. They have invited us for a long-term supply arrangement
• eCommerce – 5-star reviews, current monthly sales of 500 packs reached in 2 months from inception and now
Amazon’s Choice.
• On target to have 400 independent pet stores carrying our products. We aim to reach 1k+ stores by Q1 2022.
17McLovin’s Supply Unit (Toy & Accessories)
• Industrywide Problem
• Sourcing Challenges – 90% of pet supply products are sourced overseas (China),
and U.S. retailers often receive poor quality, designs, packaging, and missing
shipments.
• Many Chinese manufacturers of toys and accessories are small businesses that are
ill equipped to serve U.S. retailers.
• Opportunities
• We offer superior products and a turnkey, headache free supply service to the U.S.
market
• U.S. retailers are eager to use our services, instead of dealing with small,
numerous manufacturers in ChinaPet Supply –
Products
• High-quality, fashionable pet
supplies
19McLovin’s Branding & Pricing Mix
Product Price
Orijen
Stella & Chewy's Brand Specialty eCommerce Grocery Discount
Open Farm
Dr. Marty Primal Stella & Chewy's ✓ ✓
Orijen ✓ ✓
Instinct
Open Farm ✓
Acana Primal ✓ ✓
Bravo
Instinct ✓ ✓
BackCountry Acana ✓ ✓
PureBites Backcountry ✓ ✓
Vial Essentials Dr. Marty ✓
Bravo ✓ ✓
Vital Essentials ✓
PureBites ✓ ✓
McLovin’s ✓ ✓ ✓ ✓
Low High
Brand PrestigeTop 6 Customers & What-Ifs
Customers Channels Stores Total Pet Rev Current Opps WhatIf: x% WhatIf $
PetSuperMarket Pet Specialty 200 $500 $500 In store 5% $25
Stores
PetSmart 1,650 $5,307 $5,307 In store 1% $53
Kroger Grocery Stores 2,200 $122,286 $12,229 Online+Store 1% $61
Supermarket
Tractor Supply Co 1,980 $10,620 $531 Online 1.5% $8
Walmart 5,000 $523,960 $5,240 Online 0.30% $16
Philips Pet Distributor 16,000 $700 $700 Exclusive 6% $42
Potential Businesses from Top 6 Customers
$24,506 $205mm
21Team • Founder & CEO/David Ji, built Apex Digital Inc from ground up to a $2b annual sales, ranked # 1 for DVD player and TV sales in the U.S., named “Most Influential People” by Times Magazine in 2002, bought, managed, and sold Brookstone — a well-known chain retailer operating at malls and airports around the U.S. • VP/Alex Chen, Veteran CFO on multiple public companies after worked in CPA firms as corporate advisors. Prior to McLovin’s, Alex was an investment banker on Wallstreet, has helped companies through IPOs, and helped with funding needs for businesses. • Acting Sales VP/Tony Romero, over 30 years of business dealings with Walmart, Sam’s Club, Targets, and more as a top-level executive. • Sales Manager (key accounts)/Mike Knell, having worked in sales for pet business all his life, from Philips (industry giant) to PETIQ (Nasdaq listed), managing accounts at thousands of stores.
What Are You Investing In
• Pet business is a +$100b industry with strong growth and is recession/pandemic proof
• Multifaceted business: Food & Supply Units
• Strong retail customer base
• Publicly traded on the OTC company
• Stock performance @ 5-6x trending
• McLovin’s corporate goal is to trade on Nasdaq in 24 months or less, achieving a +40x ROI to
investors
• Potential market drivers:
• Big retailers supply agreements
• Sizable POs
• Strong sales performance
• Export to overseas market
• Launch of online program
23Recent IPOs and ROIs
Pet Stocks Listing
Avg
Co Name Ticker Stock Price Market Cap IPO IPO Raising IPO Price Growth/Yr Comments
Chewy CHWY $98 40.7b 2019 1b $22 345% Owned by Petsmart
Freshpet FRPT $144 5.8b 2015 156m $15 172% Refrigatered pet food
Zoetis ZTS $167 79.6b 2013 2.2b $25 81% Pet Drug manufacturer
Trupanion TRUP $118 4b 2016 122m $10 270% Pet Insurance
PetIQ PETQ $35 1b 2017 115m $16 40% Vet service
ADR, Underwriter's IPO price too
Boqii BQ $10 400m 2020/Dec 70m $10 0% high
PetMed Express PETS $33 687m 2000 83m $11 200% Amazon owned 40% at one time
WOOF PetCo $27 5.8b 2021 940m $18 50% Petco
PETCARE ETF PAWZ $73 2019 $40 41% Outperformed S&P 500 by 30%
24Thank You!
Contact: Alex Chen, alex@mclovinspetfood.com
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