EFTA Document EFTA01381306

Form S-1 Table of Contra' our revenue per pound by continuing to improve our product mix through our marketing and product development engines. We will also be focused on investing in new growth drivers including entering the Vet channel and select international markets. Reach and Feed More Pets • Convening more pet parents to BLUE. We currently feed less than 4% of the dogs and less than 2% of the cats in the United States. The combination or our focus on building our brand awareness, our commitment to educating pet parents and the breadth of our product portfolio that meets the diverse needs of pets and pct parents forms our powerful, proven new user acquisition strategy. We believe this successful strategy will continue to help us bring more pet parents into the BLUE family. • Being available to more pet parents. Our share in specialty channels outside of national pet superstores is approximately one-third of our share in national pet superstores We believe we have significant opportunity to grow the depth and breadth of our distribution in channels outside of national pet superstores that fit our brand positioning and target consumers, such as the fast growing eCommeree and farm and feed store channels. We believe that increasing our presence in these channels will make BLUE available to a greater proportion of pet parents. Though a relatively new priority for us, in 2014 our sales outside national pet superstores grew at 1.3 times BLUE's overall growth rate. • Growing with our younger pets and younger pet parents. Our share of puppies and kittens is significantly higher than our share of older dogs and cats, which reflects the fact that BLUE is a younger brand with a shorter history in the market. We believe our share of puppies and kittens is a leading indicator of our future market share potential. We expect our total share, as well as our share of older pets to grow over time as we continue to bring future generations of puppies and kittens into our brand and as the current generation of puppies and kittens eating BLUE ages. BLUE also indexes higher among younger pet parents. who generationally tend to be more in tune with health and wellness trends and are more focused on ingredients. We believe that we can realize significant lifetime value from our relationship with this younger generation of pets and pet parents. Feed Pets More of Our Products • Cross-selling more of our products to our broad and growing base of users. Our market shares of wet foods and treats are each currently just over one-third of our market share in dry foods. Only a fraction of our dry foods users buy our wet foods and treats on a regular basis. We actively seek to encourage our use base to purchase our broadening and enhanced portfolio of wet foods and treats through our various marketing touch-points, from our Pet Detective program to cross-promotional activities. We also intend to leverage our core brand equity and relationship with pet parents to continue to extend our brand into adjacent categories. Increase Our Revenue per Pound • Enhancing our product mix. We plan on continuing to drive our marketing and product development engines to enhance our product mix. As a remit, in 2014, our revenue per pound for our pct food products increased 3%, primarily due to improved product mix. We have a wide distribution and a large media budget Therefore, we can increase our advertising and marketing for each of our major product lines and product types. We believe this will allow us to accelerate the growth of our newer product lines, as well as wct foods and treats, and cat foods overall where we have lower relative market share. We also intend to continue to expand our specialized product offerings. We closely monitor the pct food industry and when we sec a promising product or diet type. we pursue it aggressively. Our newer food lines, which include BLUE Wilderness, BLUE Basics and BLUE Freedom, have higher revenue per pound and are growing faster than our overall company average. 88 httplAvww.see.gov/Arehi vestedgar/datat I 609989/000119312515218883/d734898dsl.htm(7/20/2015 10:30:13 AM) CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) CONFIDENTIAL DB-SDNY-0080175 SDNY GM_00228359 EFTA01381306