RECAP: TSX FOOD INVESTOR DAY
The TMX Group hosted a Food Investor Day at their HQ in Toronto in October. Innovative, consumer focused, brand-centric listed and unlisted firms were part of the impressive line up of speakers. As a proud sponsor, irlabs was represented by Principal & Co-founder Alyssa Barry, who reaffirmed our presence in the space and the growing need for IR in helping craft coherent, contemporary investment narratives. The Planting Hope Company Inc. (TSXV:MYLK), an irlabs client, was also presenting.
Events like these are great for becoming familiar with new, up-and-coming brands that are challenging industry expectations and growing quickly. We highly recommend attending events like these to anyone in our industry or those looking to invest in new brands and companies. Overall, the event was a great opportunity for pioneering players in the packaged foods, beverages, commodity and supply chain space to build interest in their respective companies and seek out interested capital market participants.
Aside from compelling post-COVID developments, prominent investment themes included consumer adoption trends, the agility of certain players in meeting demand and the role of technology (processing, manufacturing, and distribution) in driving growth. Other notable developments included cost pressures (primarily supply chain driven for the latest quarter) and the burdens imposed by higher food commodity prices. Even so, the underlying emphasis on sustainability, building resilient supply chains, and providing well-rounded products to increasingly discerning customers remains (many of the presenting companies gave out samples, most were happily consumed). Here are some highlights from the presenting companies:
FlashFoods: Platform to curb food waste
Founder & CEO Josh Domingues shared his firm’s thesis of reducing food waste from spoilage and leftover inventory at US retail stores, a $37bn loss annually. Available in 1,400 stores across the US and Canada, he elaborated on the journey the firm took to hitting the notable landmark of saving 50M pounds of food from landfills.
Grocery stores list high-quality, surplus food to shoppers at steep discounts allowing users to view deals, purchase items at a lower price and pick up the food in-store. Creating strong competitive moats based on a “simple in-store operating model”, a “faster and easier” user experience than existing systems, and the high quality UPC level data collected.
Longstanding CFO Andrew Grilo shared financial highlights, where he highlighted the sizeable earnings potential underpinning this impact driven business, with the firm targeting annual revenue of $100M by 2025, backed by lucrative marketplace SaaS level GMs.
Mid-Day Squares: Clout marketing and functionality meets Chocolate
Mid-Day Squares manufactures real chocolate protein bars filled with protein, fibre, organic sugar, raw, vegan, gluten-free, and organic ingredients aiming to satisfy mid-meal hunger. Mid-Day Squares’ Co-founder Nick Saltarelli shared origins and the goal of becoming “the Nike of food” through disrupting the relatively mature and oligopolistic players in the chocolate industry.
Backed by a robust online first strategy with tailored, integrated manufacturing facility running below capacity, the company intends to ramp-up production as it secures major distribution agreements, latest of which includes Target stores across Canada.
Carving out a significant niche for its product, Mid-Day Squares has strong resonance with millennials, where this active customer base is harnessed directly via social media, with a strong product market fit and 4 variants in the market. Backed by robust financial metrics, Nick elaborated on the potential for growth.
GURU Organic Energy (TSX:GURU)
Montreal-based Founder Carl Goyette highlighted the harmful nature of existing energy drink brands ($16B USD opportunity in the North American Market), with consumer sentiment shunning high intensity messaging. With two large brands dominating 75% of this market, this set the stage for Guru to capitalize on its stated “mission to clean up the energy drink market”.
Carl elaborated on the company’s unique positioning, partnering with PepsiCo, and covered prominent metrics for a cohesive operational picture (selling through 13,400+/12,500+ locations in Canada/U.S.). Showcasing 35% revenue CGAR between 2018-21, Guru’s products are highly ranked in consumer sentiment studies in its home market of Quebec.
Avoiding artificial ingredients and using green tea, matcha, guarana, ginseng, echinacea, monk fruit, and stevia parceled to win consumer acceptance (Guyana flavoured variant #1 innovative SKU in Quebec). In terms of operational updates, expansion to the U.S. (California specifically) and inking of resulting bottling/distribution agreement are developments to look out for.
Agrinam Acquisition Corp. (TSXV:AGRI)
Nicholas Thadaner, Chairman of the Board at Agrinam, spoke about the 2022 listed CPC/SPAC (raised $138M in June 2022), focused on companies in the Agribusiness industry, whose sponsors include Demeter and Maquia Capital. The company is run by entrepreneurs, investment bankers, consultants, and investors with an agribusiness focus.
Drilling down on their target company investment criteria, he highlighted Agrinam's position in the agribusiness value chain. Nicholas expanded on the market forces shaping the North American and Mexican food chains, identifying potential tailwinds their acquisition(s) are expected to benefit from (high GMs, low barriers to entry, strong purchasing power).
He shared their value investment thesis, which is segmented into the primary sector with emphasis on superfoods and specialty products and companies operating in the value-added, food-tech space.
The Planting Hope Company Inc. (TSXV:MYLK)
COO Susan Walters-Flood shared the firm’s track record of successfully riding the 'flexitarian consumer wave', consistently expanding product ranges (four fast-growing food and beverage brands) with a focused distribution approach (emphasis on specialty + food and beverage chains) and substantial retail footprint (9,000+ doors / 50,000+ total distribution points).
She introduced us to Planting Hope’s pantry staple line-up of brands: Hope & Sesame® Sesamemilk, the first commercially available sesame milk that is highly nutritious and a truly sustainable alternative to dairy milk; Mozaics™ Real Veggie Chips, a nutritional snacks line using peas and beans; Veggicopia® Veggie Snacks, a line of single-serve plant-based dip cups and vegetable snacks with a long shelf life; and recently acquired RightRice® Veggie Rice, a shelf-stable, vegetable-based, protein-rich, lower carbohydrate alternative to white rice that’s packed with fibre and complete plant-based protein.
Offering a comprehensive overview of the operational environment, Susan underscored the US$95B global plant-based milk category opportunity up for grabs, where the coalescing of brands backed by breakthrough innovations, scalable business models and channel agnostic revenue streams are a formidable business strategy.
Global Food And Ingredients Ltd. (TSXV:PEAS)
David Hanna from Global Food & Ingredients (GFI) highlighted his firm’s extensive footprint as a vertically integrated farm-to-fork platform, with four Canadian plant-based ingredient facilities, a suite of plant-based consumer brands with 20+SKUs and sales exceeding $120M over the last twelve months.
Integrating local farms with consumers from four main verticals, including selling processed split peas, pea hulls (fibre) and other value-added extractions of lentils, chickpeas, and other high-protein crops to food and pet food manufacturers is at the heart of GFI’s farm-to-fork proposition.
GFI’s line-up of recently acquired plant-based consumer brands includes “Yofiit” in the plant-based dairy category, “Bentilia” a range of gluten-free lentil pastas and the recently launched “five peas in love” in the high-protein ready-to-eat market.
Attending events like these is a great way to quickly get to know up-and-coming brands that are challenging industry expectations and growing fast. This is also a great opportunity for brands to meet investors. We highly recommend attending events like these to anyone in our industry or those looking to invest. We have created an events page which you can follow for industry events. Do you have an event you feel should be added? Contact us at happyinvestors@irlabs.ca!
