Fun fact: The Very Good Food Company (Canada: VERY) (U.S.: VRYYF) (Europe: 0SI) was the top-performing IPO of 2020, globally. Let’s let that sink in for a minute… it had the best return of any newly public company in the entire world.
The beginning of 2021 has been on trend, with the company moving extremely quickly over the past couple of weeks.
Let’s quickly go over some highlights:
- Strategically expanded into the dairy alternatives market with the acquisition of The Cultured Nut
- Increased production capacity of Victoria facility by 82%
- Assumed custody of Rupert facility, with a production capacity 2960% higher than their Victoria facility
- On the verge of completing the buildout of their new facility and retail store in Mt. Pleasant, Vancouver
- Doubled their ecommerce orders with the help of 3PL Logistics
Continue reading to dive into the updates with a bit more information.
The Cultured Nut
Very has begun a strategic expansion into the plant-based dairy alternatives market, which is expected to grow at a staggering 11.2% compound annual growth rate (CAGR) from 2020 to 2027, to reach US$44.9 billion. Very has signed a letter of intent (LOI) to acquire 100% of the Cultured Nut, in a tranche-style deal. The Cultured Nut, based out of Victoria, specializes in making block style cheese (think of cheddar), cream cheese, and plant-based nut butter. All The Cultured Nut products are dairy free, gluten free and soy free.
As a longstanding retailer of The Cultured Nut’s products (as they’ve been in The Very Good Butchers’ store since 2017), The Very Good Food Company’s due diligence comes in the form of a multi-year historical sell-through analysis that is hard to argue with.
The CDN$3M transaction consists of 3 different parts. $1M is paid in cash by VGF, another $1M is issued in shares, (based on the average share price in a 30-day period ending 2 days prior to the acquisition), and the remaining $1M is paid in cash subject to conditions. $925,000 is subject to milestones of The Cultured Nut’s integration into VGF, and the other $75,000 is subject to indemnification requirements. Indemnification is the liability clause that serves to compensate a party for any harm or loss arising in connection to the other party’s actions or failure to act in correspondence to an agreement.
Record Production & Retail Sales
The Victoria facility has made what seemed impossible, possible. Jumping 82% from its October capacity, it is now producing 20,000lbs. of product per week. This improvement was made possible through continuous in-house improvements, as well as a new Canadian 3PL logistics partnership, which has taken on ecommerce packaging and shipping, at an independent location.
Shipping times on average have been reduced from 5-6 weeks to only 1-2 weeks (even with an increased order quantity), allowing a higher volume of orders to go out from their online channels each month. Thanks to this partnership, this has led to an average weekly ecommerce fulfillment amount of 1800 orders, up from an average of 900 orders fulfilled in September 2020.
After first launching in Thrifty Foods, The Very Good Food Co. has now set foot in another retail staple within the 1500-store Sobeys network – Farm Boy. With over 30 locations across Eastern Canada, Farm Boy will now carry The Very Good Food Products, reaching a new milestone for VGF’s national reach.
The Rupert Facility
The Very Good Food Company has assumed custody of their Rupert facility in Vancouver, BC. Formerly belonging to Daiya Foods, the facility provides with room for production, warehousing, refrigeration, R&D, and office space.
This facility can produce a whopping 37,000,000 lbs. of product per year, which is 35.5x higher capacity than the Victoria facility, even with its recent improvements. Equipment upgrades will take place in January, food testing and production commences in February, and the facility is set to be fully operational in March, progressively scaling up to satisfy unmet demand.
In addition, the upcoming Mt. Pleasant facility, which will double as a retail location and production facility, will allow for another 5M pounds of product to be produced annually. Lastly, summer 2021 brings forth what will be the very first VGF footprint outside of Canada: the Patterson, California facility.
After considering all facilities in their fully operational capacities, VGF will be able to pump out (are you sitting down?) 141,875,000 pounds of product per year. This is an incredible 13,541.80% increase from their current capacity in Victoria.
Talk about a Very Good year…
Follow the Links Below for the Full Releases
The Very Good Food Company Announces Achievement of Production Target, Increase in Ecommerce Order Fulfillment and Expansion into Sobeys Retail Network
Vancouver, British Columbia, January 5, 2021 – The Very Good Food Company Inc. (CSE: VERY) (OTCQB: VRYYF) (FSE: 0SI) (“VERY” or the “Company”), is pleased to announce that the Victoria Facility has met its production target of 20,000 lbs per week on average; an 82% capacity increase.
The Very Good Food Company Announces Strategic Expansion into Plant-Based Dairy Alternatives Market with the Planned Acquisition of The Cultured Nut
Vancouver, British Columbia, January 11, 2021 – The Very Good Food Company Inc. (CSE: VERY) (OTCQB: VRYYF) (FSE: 0SI) (“VERY” or the “Company”) is pleased to announce that it has signed a non-binding letter of intent (the “LOI”) for the acquisition (the “Acquisition”) of all the shares of The Cultured Nut.
The Very Good Food Company Begins Commissioning of its Vancouver-based Production Facility and Announces Changes to Senior Leadership Team
Vancouver, British Columbia–(Newsfile Corp. – January 13, 2021) – The Very Good Food Company Inc. (CSE: VERY) (OTCQB: VRYYF) (FSE: 0SI) (“VERY” or the “Company”), is pleased to announce that it has taken possession of its highly anticipated Vancouver-based production facility.
Disclaimer: The Very Good Food Company is a communications client of Edge Investments, and we own shares in the company.