- Revenue increased 156 per cent in Q2 2021 compared to Q2 2020
- Products sold increased 132 per cent in Q2 2021 compared to Q2 2020
- eCommerce sales increased 161 per cent in Q2 2021 compared to Q2 2020
- Production line 1 was fully commissioned at the Rupert production facility in BC
- Line 2 is planned to be commissioned in Q4 2021
- The company introduced a new brand, The Very Good Cheese Co.
- The Very Good Food Company Inc. is an emerging plant-based food technology company
- The Very Good Food Company Inc. (VERY) opened trading at C$2.97 per share
The Very Good Food Company (VERY) is pleased to announce its financial results for its second quarter ended June 30, 2021.
“The fact that we have achieved year-over-year triple digit growth in revenue is a direct result of the robust demand for our premium plant-based food products coupled with our expanding production capacity,” said Mitchell Scott, co-founder and CEO of VERY GOOD.
“While I am very proud of our progress over the past year, we still have a lot of runway in front us. Growing our production capabilities to meet the strong demand for our products continues to be a priority for us.
In April, we commissioned Line 1 at the Rupert facility and started producing limited saleable products as we continued to test our SKUs ensuring that we reached our high standards of quality and taste. Production volume at our Rupert Facility is rapidly increasing week over week and later this year we will start to commission Line 2.
Even with the changes in Apple’s privacy settings and Facebook’s advertising tools in April, both of which impacted the effectiveness of targeted ad campaigns, our eCommerce sales continue to steadily grow quarter over quarter.
Wholesale sales are also increasing due to higher distribution points achieved. Just last week, we announced that The Very Good Butchers products are available in more than 750 outlets across North America as we are now listed in over 100 stores in the US. We expect to be on the shelves of many more stores by the end of the year, but more so in the first quarter of 2022, after the major retailers’ fall 2021 product category review period.”
Q2 financial highlights
- Revenue increased 156 per cent to $2,780,681 in Q2 2021 compared to $1,087,790 in Q2 2020 and increased 5 per cent from $2,643,083 in Q1 2021 primarily driven by an increase in eCommerce sales and increase in wholesale revenue.
- Product units sold increased 132 per cent to 307,745 units in Q2 2021 compared to 132,869 units in Q2 2020 and from 265,702 units in Q1 2021.
- eCommerce sales increased 161 per cent to $2,206,403 in Q2 2021 compared to $846,134 in Q2 2020; and increased 1 per cent from $2,185,095 in Q1 2021.
- eCommerce sales as a percentage of revenue remained at ~80 per cent in Q2 2021 compared to Q1 2021.
- eCommerce orders fulfilled increased 115 per cent to 24,025 in Q2 2021 compared to 11,194 orders fulfilled in Q2 2020 and increased 4 per cent from 23,181 in Q1 2021.
- Wholesale revenue increased 168 per cent to $455,055 in Q2 2021 compared to $169,859 in Q2 2020; and increased 32 per cent from $345,905 in Q1 2021.
- Wholesale distribution points increased 147 per cent to 1,869 at the end of Q2 2021 compared to 757 at the end of Q2 2020 and increased 38 per cent from 1,356 in Q1 2021.
- Adjusted Gross Margin was 38 per cent of revenue YTD Q2 2021 compared to 32 per cent of revenue YTD Q2 2020.
- Adjusted General and Administrative Expense was $2,208,555 in Q2 2021 compared to $497,697 in Q2 2020 and remained relatively flat compared to $2,200,836 in Q1 2021. The increase in adjusted general and administrative expense year-over-year is due to the Company becoming public in June 2020 and the related expenses, and building out the team and functions to meet VERY GOOD’s strategic growth objectives.
- Adjusted EBITDA was a loss of $(5,673,109) in Q2 2021 compared to $(1,197,813) in Q2 2020; and $(5,391,936) in Q1 2021.
Corporate and operational highlights
Enhanced production capabilities & scaled distribution
- Completed the commissioning of Line 1 at our Vancouver-based production facility, the Rupert Facility. Line 1 will initially produce 7+ SKUs of its popular The Very Good Butcher’s product line. While the production of saleable products is now underway, during this testing phase, saleable product was manufactured in limited quantities in Q2 2021. Over the course of the next few months, the production team will continue to ramp up the production from Line 1 and will be targeting 40,000 lbs per day on average starting in Q4 2021; gradually increasing to an average of 60,000 lbs per day in early Q1 2022 assuming we are able to get the production labour needed which has been challenging due to COVID restrictions lighting creating a highly competitive environment for hiring. The capacity targets will support the increasing demand for VERY GOOD’s products which have an average sales price of CDN$14 per lb in e-Commerce and CDN$7 per lb in wholesale.
- Commissioning update on Line 2 at the Rupert Facility. Line 2 is planned to be commissioned in Q4 2021 with food production starting in early Q1 2022 and will initially produce 6+ SKUs of our newly announced gluten-free and soy-free Butcher’s Select Line of plant-based meat alternatives meant to compete on taste and texture with the likes of some of our competitors. Select SKUs of the Butcher’s Select line will be available this summer online with the full suite hitting retailers’ shelves in the months to follow.
New wholesale retail distribution points & growth opportunities
- Expanded product placement with Horizon Grocery + Wellness, where the Company signed on with Save-On-Foods, Canada’s largest Western-based grocery retailer, to carry The Very Good Butchers suite of products in 184 of its retail stores across Canada.
- New wholesale brokerage selected to expand U.S. retail. During the second quarter of 2021, VERY GOOD entered into a contract with Boulder, Colorado-based natural food and beverage brokerage, Green Spoon Sales, to accelerate the company’s reach into grocery and retail across the US.
- New wholesale distribution partnerships with United Natural Foods and KeHE Distributors. During the second quarter, we entered into two new distribution agreements with United Natural Foods (“UNFI”), the largest publicly traded wholesale distributor of health and specialty food in North America, and KeHE Distributors, LLC (“KeHE”), a top pure-play U.S. wholesale food distributor of natural, organic, specialty and fresh food brands across North America. Together, these two distribution partners represent over 15,000 food suppliers and distribute to more than 60,000 natural food stores, chain and independent grocery stores, eCommerce retailers and other specialty product retailers throughout North America.
- Entry into food services and meal kit services. In early June 2021, we announced a collaboration with Vancouver-based homegrown meal kit company, Fresh Prep, to add VERY GOOD’s innovative plant-based food products to its extensive menu of recipes and meal kits. Later that same month, the company also announced a business venture with Copper Branch, the world’s largest plant-based restaurant franchise with over 40 locations across North America. Copper Branch will make The Very Good Butchers’ delicious and nutritious plant-based products available to its customers to purchase from branded in-store freezers.
- New 3PL distribution partner to facilitate U.K. eCommerce launch. We announced a distribution partnership with Peter Green Chilled, a leading 3PL logistics provider with over 19,000 points of distribution throughout the UK and Europe, to support the Company’s recent UK eCommerce launch in August 2021.
New brand launch
- VERY GOOD announced its new brand, The Very Good Cheese Co., and its lineup of five newly re-introduced plant-based cheese products from its acquisition of The Cultured Nut, Inc. in February 2021. These new SKUs will initially consist of: “Bold Cheddah”, a white cheddar style vegan cheese; “Cheedah”, a medium cheddar style vegan cheese; “Dill’ish”, a garlic and dill-Havarti style vegan cheese; “Goud AF*”, a smoky gouda style vegan cheese; “Pepper Jack”, a Monterey jack style vegan cheese and “Sharp and Sassy”, a sharp flavour white cheddar style vegan cheese. The Very Good Cheese Co. products were made available in the U.S. and Canada in June 2021 through the Company’s eCommerce platforms and will be available in retail stores in Q4 2021.
Debt financing
- The Very Good Food Company Inc. closes $70 million credit facility with Waygar Capital and Ninepoint Partners. On June 7, 2021, the company announced that it has entered into a loan agreement for a senior secured credit facility with Waygar Capital Inc., an agent for Ninepoint Canadian Senior Debt Master Fund L.P. The Credit Facility consists of a C$20 million revolving line of credit and a C$50 million senior secured asset-backed term loan. All amounts drawn under the Credit Facility are subject to specific borrowing requirements and will pay interest at a rate of 9.95 per cent per annum and will be repaid in full upon maturity. The Credit Facility has a term of 24 months with an option to renew, upon mutual consent, for another 12 months and is primarily secured by the Company’s current and planned production equipment.
The Very Good Food Company Inc. is an emerging plant-based food technology company that produces nutritious and delicious plant-based meat and cheese products under VERY GOOD’s core brands: The Very Good Butchers and The Very Good Cheese Co.
The Very Good Food Company Inc. (VERY) opened trading at C$2.97 per share.