The Very Good Food Company Announces Massive Distribution Partnership and Expanded Points of Retail

If you’ve been following along with us on the investor journey of The Very Good Food Co., you’ll know that the team has been hyper-focused on increasing their production capacity over the past year. With the ever-present demand surplus continuing to grow, VERY has brought on experts in Production Engineering, signed leases with new facilities, and primed their distribution channels for massive growth. 

The latest release from The Very Good Food Co. follows suit, highlighting their recent accomplishments in production and distribution. 

Continue reading for the top 3 things to understand about the latest press release from VERY, and what it sets up for the company’s future: 

1. UNFI Canada – Who Are They? 

For those outside of food production and distribution, it may be surprising to learn that a company called United National Food Inc. ione of the largest food distributors and wholesalers in North America. The corporation has massive reach and owns some of the premier grocery and distribution chains across the United States, including SuperValu, US FoodsSysco, and more. With over $20B US revenue, 40,000 retail partners, and a market cap just under $1B USUNFI represents a major partner for VERY. 

UNFI Canada is the Canadian subsidiary of the company, which has established distribution channels across the country and, for VERY, equals access to the East Coast. The establishment of UNFI as a partner could represent scalable wholesale distribution as The Very Good Food Co. expands its production capabilities in the near future. 

This partnership adds to the impressive grocery roster that VERY has continued partnerships with, including Whole Foods and Sobeys, as well as many smaller grocers. 

2. Expansion Capabilities 

It’s no secret that demand has been outweighing supply for The Very Good Food Co. since its inception. VERY was selling out at markets and retailers every week prior to the establishment of their flagship “butcher shop” which, itself, garnered a crowd of over 1,000 people on its opening day. 

VERY has been sourcing additional growth capital since the early days, with the IPO and consecutive financing’s chief purpose being to expand productionWith a team in place and both the facilities and capital necessary to exponentially expand, VERY is poised for explosive growth once their new facilities come online in spring/summer of 2021. 

With signed leases in Vancouver, BC, and Patterson, California, these new locations will allow VERY to increase their current production capacity from 11,000 lbs. per week to at least 686,000 lbs. per week (as the Vancouver facility is expected to be able to produce 125,000 lbs. per week; Patterson facility, 550,000 lbs. per week). As this represents an increase of more than 62x production, the company will finally be able to meet current demand and focus on sales and expansion once more. 

As The Very Good Food Co. enters a period of sales and expansion, its retail partners will become extremely important. By having partnerships established before they are in another growth phase, they will be able to sustain their trajectory using existing systems (and thus, decrease friction throughout the process). With only 275 current wholesale partnerships in place (which is already a 34% increase from the previously reported figure in July 2020), UNFI’s 40,000 retail partners could elevate The Very Good Food Co. to a much higher level within the industry. 

3. Increased Efficiencies Within Supply Chain 

For those considering that additional distribution points only serve to exacerbate the production capacity issuesour team picked up on a subtle change that helps to address this. On The Very Good Food Co.’s website, a banner on their store showed that there was a 5-6 week delay on direct-to-consumer orders. Recently, this banner has begun showing that the delay decreased to 2-3 weeks amidst increased holiday demand. 

The previous release from VERY noted that increased throughput at the Victoria facility allowed capacity to increase from 8,000 lbs. per week to 11,000 lbs. per week. As this is a continual process and central focus for the company, we can assume that additional efficiencies have been achieved by the team to decrease wait time for consumers. 

As we get further into the holiday season, it will be crucial to see how the company fulfills demand and if they can maintain this lead time. 

Read the Full Press Release Below

The Very Good Food Company Announces Distribution Partnership with North America’s Leading Wholesale Distributor and Expanded Points of Retail 

Vancouver, British Columbia, October 22, 2020 – The Very Good Food Company Inc. (CSE: VERY) (OTCQB: VRYYF) (FSE: 0SI) (“VGFC” or the “Company”) is pleased to announce a new wholesale distribution partner in Canada and an overall increase in the number of existing retail points of distribution in Western Canada. 

New Distribution Partner

The Very Good Food Company recently entered into a new distribution agreement with UNFI Canada to distribute The Very Good Butchers line up of products across Canada, first focusing on the East coast. This agreement represents a significant milestone for the Company. UNFI Canada is a subsidiary of United Natural Foods, Inc. (NYSE: UNFI), which is the largest publicly traded wholesale distributor in North America delivering healthier food options to people throughout Canada and the United States. UNFI has expected annual sales in excess of $21 billion USD, 40,000 retail partners and 10,000 suppliers. 

CEO Mitchell Scott stated:

“The distribution agreement with UNFI is a particularly exciting achievement for us, as it opens up the potential for significant expansion across North America utilizing UNFI’s vast distribution network. We are thrilled to have the support from this leading wholesale distributor as we continue to significantly scale our production.” 

Under this new agreement, the Company will be sending its first shipment of product to Eastern Canada within the coming weeks, officially expanding its retail distribution across the entire country.  

Expanded Points of Distribution

Through its ongoing effort to bring The Very Good Butchers brand to more consumers, the Company is also pleased to announce a significant increase in the number of points of distribution within its existing wholesale partnerships to 275 stores; in addition to the new distribution agreement with UNFI. This represents an increase of 34% above the previously reported figure in July 2020. 

The increase in distribution is limited to the production volume out of the current operational Victoria facility; with additional volume coming online in 2021 from the two recently announced facilities in Vancouver, Canada and Patterson, California. The willingness of existing wholesale partners to expand the reach of The Very Good Butcher’s line up of products across their networks represents the significant increased demand the Company is experiencing from consumers. 

CEO Mitchell Scott commented:

“With two production facilities coming online in 2021, the recent partnership with a third party logistics partner and now our distribution agreement with UNFI, we continue to build the infrastructure necessary to scale our operations to the next level. I am incredibly proud of what our team has accomplished to date and look forward to an exciting end to 2020.” 

Debt Settlement Agreement

VGFC today also announced that it has entered into debt settlement agreements with Axe Communications Inc. and Market IQ Media Group Incorporated (together, the “Creditors”) to settle an aggregate of $130,834 in debt (the “Debt”) for services provided by the Creditors to the Company. In settlement and full satisfaction of the Debt, the Company will issue to the Creditors an aggregate of 47,866 common shares in the capital of the Company (the “Debt Shares”) at a deemed issue price of $2.13 per Debt Share. All of the Debt Shares will be subject to a restrictive period of four months and one day from issuance. 

DisclaimerThe Very Good Food Company is a communications client of Edge Investments, and we own shares in the company.

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