Trilliant

Manufacturer of high-quality beverage solutions

Roasted to perfection in Wisconsin since 1979, Trilliant is renowned for its high-quality, specialty coffees and offers a broad array of high-quality beverages, ranging from coffee to cappuccinos, hot cocoas and much more.  Trilliant is one of a few vertically integrated coffee manufacturers in the market, meaning it sources (from over 25 countries), roasts, grinds and packages its own coffee beans, primarily in the single serve K-Cup format. Trilliant provides high quality and consistent coffees with its state-of-the-art precision roasting system and time-tested roasting procedures. Along the way, Trilliant tastes the coffee five times before it goes into the market, ensuring a high-quality, consistent product that is affordable. The Company also provides a full suite of beverage solutions to retailers throughout North American under its own brand and retailers’ brands.

The Value Creation Opportunity

The partnership with Trilliant and its CEO, Mike Upchurch, resulted from the Kainos investment thesis related to the growing demand for functional, convenient foods at attractive price points. We were focused on opportunities within the $10 billion single serve coffee market (K-Cups), where there was a need for high quality products at value price points for more price conscious consumers that were underserved by more expensive branded alternatives.

We had a strong relationship with Mike Upchurch dating back to our team’s prior investment in Sturm Foods, a manufacturer of private label sugar free drink mixes and hot cereal, where Mike was also the CEO. The investment thesis for Sturm Foods was very similar to the investment thesis for Trilliant, albeit in a cold beverage delivery format versus hot beverages. Together, we significantly increased the size of Sturm Foods during our ownership and embarked upon an aggressive expansion strategy before we sold the business to Treehouse Foods in 2010.  We maintained a strong relationship with Mike after the sale of Sturm Foods, and in the fall of 2014 began discussions to make an investment in Trilliant. Mike wanted a partner to help him rapidly grow Trilliant, invest in significant expansion capacity and replicate the success that we had enjoyed together at Sturm. We shared an entrepreneurial spirit focused on one thing:  exceeding consumer expectations.  We wanted to offer our retail partners and consumers the highest quality single serve branded coffee products in a variety of packaging formats that provided significant value versus the traditional competitors.

Change Capital At Work

The most transformative initiative we undertook with Mike and the Trilliant team from day one of our partnership was a $100 million capital project plan. This capital plan expanded Trilliant’s manufacturing facility and added new K-Cup lines, nearly tripling production capacity.  A key focus for growth was to pursue whitespace opportunities in non-traditional food retailers including discounters, convenient stores, home improvement, sporting goods and dollar stores that also leveraged the Kainos team’s relationships. This increase in capacity enabled Trilliant to aggressively add new customers in these alternative channels by offering a broad array of coffee and other hot beverage in a wide variety of packaging formats that are attractive to value retailers and consumers. The capital plan also expanded Trilliant’s new product capabilities through the addition of equipment that helped develop a larger range of cocoas and cappuccinos, as well as the capability to become one of the first domestic manufacturers of Nespresso-compatible drink pods.

The Kainos Effect

We sold Trilliant in 2017, approximately two years into our partnership, after more than tripling the profitability of the business. We are proud of accomplishing the vision we set out for Trilliant, creating a scale, low cost manufacturer of quality beverages that provides a great value proposition to its customers.

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