TSX:BABY | OTCQX:BABYF
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ABOUT THE COMPANY
Else Nutrition Holdings Inc. (TSX:BABY) (OTCQX:BABYF) is a food and nutrition company that specializes in developing innovative, clean, and plant-based products for infants, toddlers, children, and adults. The company’s plant-based formula is a dairy-free alternative without soy. Else’s Plant-Based Complete Nutrition for Toddlers made from whole foods like almonds, buckwheat, and tapioca, has received positive feedback from parents, gained support from national retailers, and seen rapid growth in sales.
Else Nutrition's journey began in 2012 out of a pressing need for a healthier alternative to dairy and highly processed baby nutrition. Chief Executive Officer Hamutal Yitzhak, along with co-founders Uriel Kesler and Michael Azar, recognized the shortcomings of traditional formulas after witnessing numerous infants, including Uriel's granddaughter Roni, suffer from intolerances and allergies. Determined to offer a better solution, they embarked on creating a plant-based formula free from soy, dairy, harsh chemicals, and excessive processing. After rigorous development and testing, the almond- and buckwheat-based prototype proved not only effective but life-saving for Roni. In 2019, Else launched its Plant-Based Complete Nutrition for toddlers, marking a significant milestone in the company’s mission. Today, Else continues to lead the charge in plant-based infant and children's nutrition, expanding its product offerings and distribution channels while maintaining a commitment to clean, sustainable alternatives for consumers worldwide.
RECENT NEWS
Recent milestones include a product licensing collaboration agreement with Danone S.A., expanding the company’s market presence by entering major retail chains, including over 7,000 CVS stores, more than 1,100 Walmart locations, and numerous other outlets across North America. In response to consumer demand, Else Nutrition recently introduced kids' ready-to-drink products in the U.S. and Canada. To support this growth, Else has tripled production capacity by establishing new facilities in the U.S. and Europe. More specifically, geographic footprint expansion efforts are focused on entry into the Western European market, beginning with a launch in the U.K., further inroads into Europe, and plans to enter the Australian market.
Else Nutrition plans to present the company’s whole-food, plant-based, dairy-free, and soy-free kids Ready-to-Drink (RTD) nutritional shakes at Natural Products EXPO WEST® 2024 in Anaheim, California from March 13 to March 15, 2024. Additionally, Else plans to soft launch the company’s Adult RTD nutritional product at the event, aiming for a commercial launch in the latter half of 2024. The Natural Products EXPO WEST event attracts over 60,000 participants annually, offering a platform to showcase the latest in natural and organic products. Else Nutrition sees the conference as an opportunity to expand the company’s market presence in the U.S. and Canada.
FDA Review
Else Nutrition has achieved key milestones in the development of the company’s plant-based infant formula, including successful preclinical safety studies demonstrating proper growth and nutrient bioavailability similar to dairy-based formulas. Institutional Review Board approval for an infant growth study has been obtained, and preclinical study results and protocols have been submitted to the FDA for review. These steps represent progress toward regulatory approval.
Q32023 FINANCIAL OVERVIEW
In the third quarter of 2023, Else Nutrition reported total revenues of CAD $1.7 million, a decrease from CAD $2.2 million in the previous year due to a shift away from e-commerce channels in favor of new retail outlets. However, Else anticipates a strong return to growth in the fourth quarter, as manufacturing expands and retailers fulfill initial stocking orders, and subsequently placing follow-on orders. The revenue outlook for the fourth quarter ranges between CAD $2.7 million and $3.0 million, representing a substantial growth rate of 58%-75% compared to the third quarter of 2023. Sales to brick-and-mortar retailers in the U.S. and Canada increased by 8% during the third quarter of 2023 compared to the same period in 2022.
As of September 30, 2023, Else products were available in nearly 13,000 stores in North America, a significant increase from 3,000 stores the previous year. E-commerce sales saw a decline of 40% in the third quarter of 2023 compared to the previous year due to the inventory diversion strategy. However, the company is focused on rebuilding sales velocity on platforms like Amazon and its own e-commerce store, with growth across these channels expected in 2024. As of September 30, 2023, Else Nutrition maintained a cash position of CAD $4.2 million, inclusive of restricted cash and short-term bank deposits.
CONCLUSION
Else Nutrition Holdings Inc. has demonstrated significant progress in the realm of infant and children's nutrition with the company’s innovative plant-based products. Stemming from a commitment to provide healthier alternatives to traditional formulas, the company has earned widespread recognition for its clean and sustainable offerings. Recent collaborations and expansions into major retail chains across North America mark key milestones for the company. Moreover, advancements in the FDA review process underscore Else’s focus on growth and regulatory compliance. Else Nutrition remains positioned for continued success, bolstered by a strong financial position and a steadfast focus on meeting consumer demands while driving sustainable growth.
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