TSG Consumer Partners identified natural foods as an attractive segment of the food industry based upon its growth and fragmentation. Our Natural Foods Portfolio was formed by the combination of four independent companies. In April 1994, we acquired Arrowhead Mills, a leading branded manufacturer and marketer of organic foods as the platform for consolidation in the category. We then acquired DeBoles Nutritional Foods, a manufacturer and marketer of premium natural pastas. We added Terra Chips, a fast growing manufacturer and marketer of premium vegetable chips and blue corn tortilla chips. Garden of Eatin' was acquired in December 1997. The natural foods industry at the time was growing rapidly, spurred by increasing consumer awareness of the relationship between food and health and concerns over ecological and environmental issues. The trend was aided by the expansion of specialty retailers, increasing retailer allocation of space and dollars to natural products and the proliferation of natural food chains. Natural product manufacturers were also growing more sophisticated in marketing, packaging and quality, focusing increased attention and dollars on the category. Following the acquisitions, we aggressively introduced attractive new products, from cereals, soups, and nut butters, to pastas and specialty snacks, among other items, that gained immediate retailer acceptance. Profitability was significantly increased through aggressive SKU rationalization, utilization of co-packing and quick payback capital investments. TSG Consumer Partners succeeded in building the leading natural foods holding company in the United States with leading market positions in eight food categories, achieving over a four-year period compounded annual growth rates in net sales and EBITDA of 43% and 94%, respectively. Hain Food Group acquired the Natural Foods Portfolio in July 1998 for an aggregate IRR of 47%. Copyright © 2008 TSG Consumer Partners. All Rights Reserved.