Above Food Ingredients Inc. (Nasdaq: ABVE, ABVEW) (“Above Food” or
the “Company”), an innovative food company leveraging its
vertically integrated supply chain to deliver differentiated
ingredients and consumer products, today announced its plans to
expand its market share across high-growth sectors, strengthen its
North American footprint, and optimize production capabilities in
connection with its recent announcement to acquire The Redwood
Group, LLC (“TRG”) a Montana-based specialty crop food ingredient
division (the “Assets”). The acquisition, which was initially
announced on August 9, 2024, was completed for consideration of
US$34 million plus working capital, subject to final closing
adjustments.
“This acquisition represents a transformative
step for Above Food, perfectly aligning with our ‘Seed-to-Fork’
approach and significantly enhances our capabilities across
multiple dimensions,” said Lionel Kambeitz, Founder, President,
Chief Executive Officer, and Executive Chairman of Above Food.
“Beyond the scope of what we shared previously, we expect this
acquisition to enable an improvement in the utilization rate of our
Saskatoon-based Ingredient Center and generate improved margins
through transitioning the Assets’ operations to our advanced
facilities. Further, this transaction strengthens our exposure to
high-growth customer segments, particularly in the pet food market,
which accounted for approximately 40% of the acquired Assets’
US$164 million revenue in fiscal year 2023, immediately positioning
Above Food as a leader in this rapidly expanding sector. Together,
we believe this transaction will generate long-term value for our
shareholders and reinforce Above Food's position at the forefront
of the plant-based food industry.”
Significant Expected Improvement in
Facility Utilization with Existing Ingredient
Center
The integration of the acquired business with
Above Food's existing Ingredient Center in Saskatoon, Canada
presents substantial opportunities for operational synergies and
cost savings. The Company's specialty ingredient facilities in
Saskatoon offer state-of-the-art cleaning, optical color sorting,
polishing, milling and blending capabilities, increased capacity
for value-added processing, enhanced quality control measures, and
improved efficiency in logistics and distribution.
The acquisition is set to optimize Above Food's
operational efficiency by increasing the utilization rate of its
existing ingredient processing facility in Saskatoon. Notably, this
improved utilization is expected to result in enhanced production
capacity without significant capital expenditure, lower per-unit
production costs leading to improved gross margins, greater
flexibility in meeting varying customer demands, and optimized
inventory management and reduced waste. The Company anticipates
that these improvements will contribute to a more robust and agile
supply chain, better positioning Above Food to respond to market
fluctuations and evolving customer needs, while enhancing Above
Food's ability to deliver high-quality, traceable products to its
customers.
Bolsters Asset Base with High-Quality
Montana-based Ingredient Processing Facilities
The Assets included in the previously announced
transaction include two strategic processing facilities in
Montana's "Golden Triangle," North America's premier pulse growing
region. The addition of these facilities significantly increases
the Company's processing capacity by a combined 56,000 metric tons.
Beyond capacity, these modern assets offer advanced processing
capabilities including air cleaning, color sorting, and dehulling.
The facilities feature 72 additional silos for advanced ingredient
separation and storage, and both have direct access to rail and
offer railcar storage capacities, similar to the Company’s existing
capabilities in Canada. The facilities’ strategic positioning in
the heart of the U.S. pulse growing region enhances Above Food’s
ability to serve high-margin human food end-markets while
capitalizing on opportunities to grow the pulse crop acreage in
surrounding areas.
Leadership in High-Growth Pet Food
Market
The pet food segment represents a significant
growth opportunity for Above Food. With the newly acquired division
generating approximately US$65 million in pet food-related revenue
in fiscal year 2023, the Company is well-positioned to capitalize
on this expanding market. Key advantages contemplated in the
acquisition include immediate market share in a rapidly growing
sector, diversification of revenue streams, opportunity to leverage
Above Food's expertise in plant-based ingredients for pet food
applications, and potential for greater penetration with existing
customers.
The US$26 billion global plant-based pet food
market is projected to grow at a compound annual growth rate
(“CAGR”) of 9% through 2032, according to Future Market Insights,
driven by increasing pet ownership and a growing focus on pet
health and nutrition. Above Food is now strategically positioned to
capture a significant portion of this growth, leveraging its
expanded capacity and expertise in plant-based ingredients such as
chickpeas and flaxseed, which are increasingly being incorporated
into premium, health-focused pet food formulas.
Chickpea Market Leadership
The Assets significantly bolster Above Food's
position in the US$15 billion chickpea market, which Zion Market
Research estimates will grow at a 7.4% CAGR through 2032. Chickpeas
represented approximately 34% of the acquired Assets’ 2022 total
sales volume. Chickpeas are a key ingredient in the plant-based
protein sector and the Company’s U.S. footprint provides
unparalleled access to the highest quality chickpeas, solidifying
its position as North America’s largest chickpea manufacturer.
Chickpeas are increasingly recognized for their nutritional value
and versatility in food applications, and align with current
consumer trends towards healthy eating and sustainability. The
Company's enhanced leadership in this area is expected to yield
several benefits, including increased market share in the global
chickpea trade, enhanced ability to meet growing demand for
chickpea-based products within the human and pet food markets,
opportunity to drive innovation in chickpea processing and product
development, and strengthened relationships with chickpea growers
and suppliers.
About Above Food
Above Food Ingredients Inc. (Nasdaq: ABVE,
ABVEW) is a differentiated, regenerative ingredient company that
celebrates delicious products made with real, nutritious, flavorful
ingredients and delivered with transparency. Above Food’s vision is
to create a healthier world — one seed, one field, and one bite at
a time. With a robust chain of custody of plant proteins, enabled
by scaled operations and infrastructure in primary agriculture and
processing, and proprietary seed development capabilities that
leverage the power of artificial intelligence-driven genomics,
Above Food delivers nutritious foods to businesses and consumers
with traceability and sustainability. Above Food’s consumer
products and brands are available online and in leading grocers
across Canada and the United States.
Cautionary Statement Regarding
Forward-Looking Statements
This press release may contain “forward-looking
information” within the meaning of the United States federal
securities laws and applicable Canadian securities laws. These
forward-looking statements generally are identified by the words
“believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,”
“strategy,” future,” “opportunity,” “plan,” “may,” “should,”
“will,” “could,” “will be,” will continue,” and similar expressions
and include, without limitation, statements about the ability of or
expectations regarding the future performance of our business and
operations; expectations regarding revenues, expenses, gross
profit, gross profit margin and anticipated cash needs;
expectations regarding cash flow, liquidity and sources of funding,
including the ability to raise additional capital; expectations
regarding capital expenditures; expectations regarding Above Food's
ability to execute its growth strategy; expectations regarding our
ability to maintain and enhance our platform and synergistic
portfolio of ingredients and consumer products; and expectations
regarding our ability to differentiate ourselves from
competitors.
Forward-looking statements are based on the
current expectations of Above Food's management and are not
predictions of actual performance. These forward-looking statements
are provided for illustrative purposes only and are not intended to
serve as, and must not be relied on, by any investor as a
guarantee, an assurance, a prediction or a definitive statement of
fact or probability. There may be risks that Above Food presently
does not know or that Above Food currently believes are immaterial
that could also cause actual results to differ from those contained
in forward-looking statements. In addition, forward-looking
statements provide Above Food’s expectations, plans or forecasts of
future events and views as of the date of this communication. Above
Food anticipates that subsequent events and developments will cause
Above Food’s assessments to change. However, while Above Food may
elect to update these forward-looking statements in the future,
Above Food specifically disclaims any obligation to do so. These
forward-looking statements should not be relied upon as
representing Above Food’s assessments as of any date subsequent to
the date of this communication. Accordingly, undue reliance should
not be placed upon the forward-looking statements. Nothing herein
should be regarded as a representation by any person that the
forward-looking statements set forth herein will be achieved or
that any of the contemplated results in such forward-looking
statements will be achieved. You should not place undue reliance on
forward-looking statements in this communication, which speak only
as of the date they are made and are qualified in their entirety by
reference to the cautionary statements herein.
Contacts
Media:media@abovefood.com
Investors:investors@abovefood.com
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