As food security becomes more crucial, ensuring companies can grow their business as well as they grow their products is more important than ever.
Focused on high-growth companies in the agribusiness, food tech, plant-based and GPG brands, Eat Well Investment Group Inc. (CSE:EWG) has an extensive record of sourcing, financing, and building successful companies across a broad range of industries and maintains a current investment mandate on the health and wellness industry.
With portfolio investments forecasting $90 to $110 million in revenue for this year, Eat Well Group is one of the largest plant-based foods investment platforms on the Canadian Securities Exchange, with portfolio investment companies selling innovative plant-based products in thousands of stores across 35 countries.
Eat Well’s CEO Marc Aneed joins us now to tell us more about this opportunity, thank you for the time today ….
MH: Investors are just getting a first look at your year-end financial update that was just released. Let’s get everyone up to speed, can you give us some highlights?
Yeah, sure thing. We’re delighted to share with investors and our different stakeholders that Eat Well has delivered on guidance or on expectation for the last number of months and really since we launched the platform in the later portion of last summer, we were forecasting around 60 million in top line revenue and break even or better profitability and even amidst significant challenges in the last portion of the year in the fourth quarter, the calendar year 2021, the team still delivered on expectation around $58 million in revenue and a million and a half dollars or so in positive net earnings. So a testament really across the entire group at the end of July of 2021 is when we made the first two significant investments in our processor, which is a pulse processor, we will talk about that in a moment, as well as one of our food tech investments and then in the fall with Amara our infant nutrition business. So as a group, they’ve done an incredible job working through multiple waves of COVID and global supply chain issues, pricing, weather and yet we’re delighted to say to our investors that we have delivered on expectation and are very enthusiastic about 2022.
MH: One of your investee companies, Amara Organic Foods, recently saw its products added to shelves at major retailers, can you tell us more?
Absolutely. When it comes to CPG investments, we’re very selective Simon about where we look to deploy capital. So in the spaces that you hear a lot about today, the alternative meats or the alternative milks and dairies, they’ve become quite a crowded space. Margins have become challenged. We took a hard look at infant nutrition, not even realizing the timeliness we would have with this investment, given what’s happening in North America with the formula availability, Amara is an organic plant based an absolutely delicious set of baby cereals and toddler melt snacks. Those were founded about four to five years ago by our CEO, Jessica Sturzenegger and her leadership team and those products are now absolutely flying off the shelves. These baby cereals can be mixed with water, breast milk or formula and the toddler melts are very simple kind of handheld melts that toddlers absolutely enjoy on the go and they’re a lifesaver to young parents and currently Amara has launched out in a number of these marque retailers, as you mentioned, and this is a great testament to the leadership team there. The products can now be found in Loblaws, Sobeys, Walmart Canada, in the states at strategic retailers, like Whole Foods, Sprouts and HEB, as well as places in the club channel like Costco and scaling rapidly online. So the team has done a masterful job with a 14 skew portfolio. So a very disciplined portfolio without overextending themselves in high velocity, high margin and very exciting avenues right now and that’s just the North American strategy. Over time we look forward to globalizing that business with that management team.
MH: The company looks set for strong growth in 2022. How are you placed to continue growing your operations?
That’s a great point Simon and I want to underscore that Eat Well investment group is all about growth. We are simply about an ambition that feeds families worldwide. We want to do it at transformative scale and we want to do it through plant-based nutrition. We could not have predicted how important, though we knew that there’s structural behavior change worldwide for plant-based nutrition, whether you’re looking at the policy endorsements, the capital that’s coming into the space, or simply the permission we all now need to be flexitarians like our parents always told us eat more fruit and veg. We simply could not have known that food security is the number one priority across the world today and how does eat well, support that and deliver against it. Our bell processing company, which is processing things like yellow peas and green peas and chickpeas is distributed in 35 countries today.
Amara, as you heard, is now being distributed in thousands more retail distribution points and our food tech outfit Sapientia just launched their first plant-based snack. It’s a plant-based Cheeto in this past December in federated store. So it’s all about channel growth. It’s about new products, which the teams have been working on anything from new flavors and sizes to servicing new markets. What does that mean, in our processing part of the portfolio companies with bell, we service people food, but also pet food. So there are continuing trans and plant based pet food. New markets are continuing to emerge, the unfortunate geopolitical crisis in Ukraine, Russia, while there are only three key places in the world to grow pulses, Ukraine, China, and Saskatchewan, and generally China is growing for themselves. Ukraine has been challenged for all the reasons we know. So Saskatchewan today where it may have been the bread basket of Canada a few months ago, it is now the bread basket of the world and so we have lots of ambitions to continue to globalize the business with new products, new retail outlets, and new geographies.
MH: In the near term, through the rest of the year, what kind of future development and progress can company shareholders and potential investors expect from EWG?
That’s correct is that the near term opportunities are really even more than the groups can keep up with and when we say keep up with, we have been fielding calls from retail customers throughout north America, that as they look to service the needs of young families seeking infant nutrition, we are literally having multiple big box stores come approach the Amara leadership team today and that is something that the team is queuing up production and supply to deliver against for this year and next year as well. So we can look for that imminently as the team continues to grow their retail footprint. With our snack team, they’re working on an e-commerce platform where we’re now finding more consumers are opting even for snacking products to get those through their Amazon or DSC channels that will be happening as well, imminently over the coming months and then as I mentioned, Bell is our scale supply chain solution for plant-based proteins. Those customers include folks like General Mills, Ingredion or Colgate and as I said, people in pet food, those phones are ringing off the hook right now in response to the global demand for better food, quality food and food that sources directly from the Saskatchewan prairies.
MH: Looking further out, in the fiscal quarters and years ahead, what’s the long-term strategy for the company and what should retail, and institutional investors be looking out for?
Our ambition is global and that is a certainty of how we’ve developed the platform and our thesis for the long term. So recently we’ve gotten investments from strategic investors from South America. We also are developing partnerships and additional strategic commercial alliances in the middle east, as well as through parts of Europe. Those will be a critical component of delivering on the long-term aspirations for globalizing the business. Eat Well Group also will continue to develop long-term M&A candidates. And as we’ve mentioned to the markets before making our way onto the NASDAQ.
MH: Environmental, Social, and Governance, or E-S-G, is strongly valued by your team and company, can you give us a rundown on what this means to you, why it is so important to your business?
ESG means one thing today and one thing it means is food security. While we continue to be a business or an investment I should say where stakeholders can consider their environmental stewardship, interests, their purpose driven governance interests, today the world needs more food, real food right now and that is our singular focus is we continue to mature our supply chain, our distribution partnerships, and all the way through to our raw materials and vendor partnerships across these portfolio companies, the teams are squarely focused on getting more food to more people. By the way, these are the actual brass tax quarter to quarter year a year over ESG. ESG is simply an economically viable opportunity to drive margin, to drive top line and do good for the world at a time when the world needs food security.
MH: And finally, is there anything else you’d like to touch base on?
Yes, Simon, the enthusiasm for what the Eat Well investment group is doing is continuing to grow at a rapid pace. So investors in our audiences can look for strategic capital partnerships that we’re working on at a very real pace today. Global partnerships that will enable us to feed more families worldwide. As well we can look for continued growth in this sector. Plant-Based foods has not changed in its importance and today it’s all about the companies that we invest in that have the underpinning fundamentals, the economics, and the leadership and management teams who can bring them to life. So with a forecast of 90 to 110 million dollars of topline revenue this year, continuing to drive break even or better profitability at a time when the fundamentals matter is something that investors can continue to look forward to with Eat Well.
MH: Thank you for your time today.
FULL DISCLOSURE: This is a paid article produced by The Market Herald.
