BEND,
Ore., July 26, 2023 /PRNewswire/ -- BranchOut
Food, Inc. (NASDAQ: BOF) is on record saying they intend to change
the narrative around dehydrated food. And according to Eric Healy, BranchOut Food CEO, they leverage
the exclusive technology to support that ambitious goal. The
company recently went public, completing its June IPO and having
its shares listed on the Nasdaq market.
Shortly after its listing, BranchOut announced three deals
steepening its growth trajectory. Those include deals with two of
the country's largest retailers and a product development program
with the U.S. Army evaluating its products for MREs (Meals Ready to
Eat). Although the company is moving fast, BranchOut CEO
Eric Healy took time to respond to
investor questions. His responses indicate that while the past few
weeks have been exciting for the company, the best is yet to come.
Here's what he said:
Q. Some companies are timely to opportunities, some are
ripe to exploit opportunities, and some are both. BranchOut checks
both boxes for different reasons. Explain why Branch Out, from a
technology perspective, is a game changer to the food
industry?
A. You've hit on two excellent points. BranchOut is a different
kind of food company, changing the dynamic of getting fresh food to
market, often from farm to package, in 10 days or less. We're
timely because, more than ever, the global population needs a
consistent and reliable food supply. With the Russia-Ukraine conflict creating enormous fertilizer
product disruption, people must turn to alternative ways to stay
nourished.
Now, BranchOut certainly isn't a narrow niche player. I'm saying
that we can be valuable in that area. At the same time, we can feed
millions through traditional retail, evidenced by announcing two
deals that put us into over 2,250 stores across the country. They
see the value, and as important, as the nation's top retailers are
confident of our product's sell-through rate.
That results from having a better product, which results from
having better processes to dehydrate food. For example, the global
conventional drying methods such as air drying and freeze-drying
use hot air or freezing and long process times. The result is
low-quality products that are brown and leathery or have muted
color and a chalky texture. During our GentleDry process, our fresh
fruits and vegetables are never frozen, oxidized, or excessively
heated.
Combined with a very short process time, these attributes leave
the dried fruits and vegetables as close to "raw" as possible. That
results in noticeable vibrancy, natural colors, intense flavors,
and unique textures. Considering our process also locks in most of
the original nutritional value, we are a game-changer to
dehydration.
Q. That technology does more than what you mentioned. In
addition to getting food from farms to package in 10 days or less,
I've read that you are giving farmers worldwide a second chance at
marketing opportunities, correct?
A. Absolutely, and at a time when it's needed most. In addition
to farmers worldwide getting squeezed by supply chain disruptions,
something that gets little coverage is the pressing issue of food
waste and its impact on farmers' livelihoods and the environment.
Specifically, foods with tiny blemishes, misshapes, or
discoloration often get trashed or made into animal feed. That
leads to millions, even billions of pounds of food, wasted
annually. BranchOut Food is changing that dynamic. We value all the
food grown and can ensure it gets to consumers rather than the
landfill.
To make an impact, we have forged partnerships directly with
local Peruvian farmers to source imperfect fruits and vegetables
that do not meet USDA aesthetic standards. The company provides
farmers an additional income stream for produce that would
otherwise go to waste. This mutually beneficial relationship
ensures that farmers receive fair compensation and have a reliable
market for their surplus of aesthetically imperfect
produce.
Simultaneously, this practice helps reduce the environmental
impact caused by food waste. Our agreements in Peru will be the first of many. Our
dehydration technology can utilize fresh fruit and vegetables no
matter their appearance, making them a useful, nutritional, and
tasty product.
Q. An ingredient to the secret sauce of your business is
your GentleDry technology, which you discussed earlier. You
announced opening a facility in Peru to capitalize on its ability to provide
better food to potentially millions of people. Explain why
GentleDry is so valuable to people across the world?
A. It's valuable for several reasons. Foremost, our GentleDry
Technology is capitalizing on producing food and vegetable products
from the vast growing regions in Peru, whose conditions provide an ideal
combination of climate and access to provide better food for
millions of people. There's another advantage to
GentleDry.
It can appreciably eliminate waste. Before GentleDry technology,
many fruits and vegetables could not be dehydrated in a delicious
or editable way. We have changed that potential. Today, with
GentleDry, we can dehydrate foods that were impossible with
previous technologies. Not only have we introduced potentially
hundreds of new foods to dehydration, but we are also doing it
while providing better flavor, nutritional value, color, and
texture. Simply stated, we are opening up a whole new world of
healthy food products to consumers worldwide.
Q. Supplying a global opportunity presents a lucrative
proposition for BranchOut and its investors. How significant is the
market opportunity, and where can BranchOut use its marketing
muscles to its best advantage?
A. The opportunity is enormous, and for BranchOut, it can
transform us into one of the world's Flargest food dehydrators. The
U.S. snack food market is valued at $108.50
billion in 2023, expected to grow annually by 6.1% from 2023
to 2030. Additionally, the total U.S. dried fruit category reached
$1.2 billion in the last 52 weeks,
showing year-over-year growth of 2.9%. That's just a part of the
opportunity.
The U.S. plant-based category, estimated at $8.0 billion in 2023, is projected to grow at a
CAGR of 12.2% from 2023 to 2033. Moreover, the U.S. private-label
food and beverages market was $229
billion in 2022 and is expected to experience a CAGR of
11.3% from 2022 to 2027. These markets align with significant
trends in the food industry, including increasing demand for
healthier and sustainable options, awareness of the environmental
impact of animal agriculture, and the growth of private-label
products driven by lower cost and quality awareness.
With our branded and private label offerings, BranchOut can
capitalize on these market trends in the U.S. and internationally.
In fact, our deals with two of the country's largest retailers,
which we recently announced, could help open the doors wider to
international market opportunities. With a footprint in
Peru, we are well-positioned to
move quickly.
Q. Ironically, while many emerging companies want to own
the market with their own label, BranchOut's strategy takes a
different tack. Your investor presentation shows that the road to
potentially exponential near-term growth is through partnerships
and private labeling. Why?
A. We see value in two categories- the BranchOut Food label and
private label for our customers. Currently, we see the more
excellent value in the latter and have strategically chosen private
labels as our primary business strategy, believing it's the fastest
path to exponential growth. One key reason is that private label
offers a better bottom line compared to branded products. With
branded products, substantial spending is required on in-store
marketing, fees for shelf placement, coupons, promotions, samples,
and more. This can significantly impact profitability.
On the other hand, private label operates under predictable,
contract-based arrangements where retailers pay and build their own
brands. This results in a more practical and cleaner bottom line
for BranchOut. Focusing on private labels can streamline
operations, reduce marketing expenses, and enhance our
profitability. It aligns with our goal of delivering high-quality
products while optimizing financial performance.
Moreover, that model gets us to bottom line EPS faster. As a
public company, we believe the multiples given from achieving
profitability can generate substantial shareholder value for
investors. That's a target in our crosshairs.
Q. Utilizing GentleDry, BranchOut has provided slides
showing you can impact fruit and vegetable harvests by making
products that the USDA deems unsellable into viable, great-tasting
products- even in powder form. On a macro level, by extension, is
BranchOut helping revitalize lost farms, boost economies, and
revive shrinking food option markets?
A. We touched on that earlier. However, I would add that even
the USDA would appreciate putting good food, while slightly
blemished, to good use. And yes, we are already helping revitalize
farms and communities in Peru and
expect to expand our presence to benefit other geographies.
Notably, you mentioned "powder" forms of dehydration. That's a
market we are penetrating as well, for excellent reasons.
Foremost, the dried fruit powder market presents a significant
revenue-generating opportunity, and BranchOut is well-positioned to
dominate market share. The U.S. dried fruit powder market is
projected to reach USD 5.4 billion by
2030, with a robust compound annual growth rate of 6.7% between
2023 to 2030 (Source: marketdataforcast.com). This growth is driven
by factors such as increasing demand for functional foods and
beverages, rising health consciousness among consumers, and the
growing popularity of natural and organic products.
BranchOut's competitive advantage lies in our superior
technology, South American supply chain, and in-house powder
milling capabilities.
Additionally, we have the exclusive license to produce
high-quality avocado powders and fragments, which have never been
offered as ingredients before. By leveraging these strengths, we
expect our dried fruit powder products to play a significant role
in our expected revenue equation. We are confident in our ability
to capture a substantial market share and capitalize on the
increasing demand for innovative and natural food products.
Q. Your management and Board comprise a Who's Who list of
food industry executives. Here's a question that puts you in an
unenviable predicament to answer. Are they the value driver behind
the expected growth in 2023, or is the BranchOut
technology?
A. It's a combination of dependency on each other. Our
management and Board of Directors, comprising esteemed individuals
from the food industry, play a crucial role in driving the expected
growth of BranchOut in 2023. Their extensive industry experience,
strategic insights, and valuable connections contribute to the
overall success of our company.
However, it is essential to note that the BranchOut technology
itself is a significant value driver. Our unique technology
platform, including our licensed dehydration technology and
in-house powder milling capabilities, enables us to deliver
innovative, high-quality products to meet the evolving needs of
consumers.
The combination of our exceptional team and cutting-edge
technology positions us for growth and success in the competitive
food industry. Remember, while our products are best-in-class, it
took people to score the major retail deals we recently
announced.
Q. BranchOut's success results from timeliness in serving
a huge need and opportunity. But it may be more appropriate to
describe BranchOut as a company ideally positioned and capable of
changing a global food supply narrative. How will BranchOut invest
to ensure that the future remains bright for investors and
consumers?
A. Many great points. Yes, we are timely. Yes, we have excellent
technology. And, yes, our food can feed potentially millions. And
we will continue to invest our resources to sharpen an already
successful business strategy. Without exception, BranchOut is
committed to investing strategically to allow expedited growth for
the company.
That includes allocating resources to research and development,
expanding our production capabilities, and optimizing our supply
chain to meet growing demand. Additionally, we will prioritize
sales and marketing initiatives to increase consumer awareness and
engagement while also focusing on sustainability efforts such as
upcycling and reducing food waste. By making these investments,
BranchOut aims to drive growth, deliver value, and positively
impact the lives of millions through sustainable and healthier food
options.
Keep in mind that since our IPO, we have signed major retail
deals, including one with the U.S. Army, to evaluate our foods for
MREs. While we think the scale to date is impressive, I would say
that we are just getting started. The back half of 2023 will be an
exciting time for our company. And results will benefit farmers,
consumers, and investors. The best way to phrase what's in store is
to say: Stay tuned, learn about BranchOut Food from our website,
and watch the news wires. We should have plenty to say.
End Interview
About BranchOut Food Inc.
BranchOut is an international food-tech company delivering truly
great natural snacks and real superfood ingredients enabled by
their licensed dehydration technology. The Company is a leading
provider of high-quality dehydrated fruit and vegetable-based
products and its commitment to quality and innovation sets it apart
as a trusted brand and private label supplier.
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SOURCE BranchOut Food, Inc.