Actual Good Meals recordsdata for $86.25M IPO

Dive Transient:

  • The Actual Good Meals Firm, a producer of grain-free and better-for-you frozen entrees, plans to go public, in accordance with paperwork filed Tuesday night with the U.S. Securities and Alternate Fee. The corporate plans to boost $86.25 million in its IPO, after having initially filed a confidential registry assertion in July.
  • The corporate, based in 2016 with the mission of creating consolation meals that buyers can be ok with consuming, touted its merchandise’ large attraction and dietary qualities in its submitting. Its merchandise are at the moment in 170,000 complete distribution factors nationwide, together with Walmart, Kroger and Costco. The corporate generated practically $39 million in gross sales in 2020, and $35.5 million within the first six months of 2021, in accordance with the submitting.
  • The Actual Good Meals Firm is the newest in a protracted parade of meals and beverage corporations making their IPO this yr, together with Oatly, Zevia, Dole and Sovos Manufacturers. Vita Coco is slated to start buying and selling subsequent week, and Chobani confidentially filed a registry assertion in July.

Dive Perception:

The Actual Good Meals Firm was based 5 years in the past to create better-for-you and gluten-free variations of frozen consolation meals. The corporate’s merchandise, branded as “Realgood,” embody gluten-free pizzas, enchiladas, breakfast sandwiches, and entrees corresponding to lasagna and stuffed rooster. The model has been well-liked amongst folks with diabetes looking for low-carb choices, and it matches into the gluten-free meals area of interest.

Actual Good Meals has currently seen an excessive amount of development. In line with the submitting, the corporate elevated its retail distribution by 80% within the two years ending Dec. 27, 2020. Gross sales have additionally skyrocketed, with the greenback quantity within the first half of this yr including as much as virtually twice the gross sales of first six months of 2020. Final week, the corporate introduced a brand new pizza that includes plant-based Past Sausage. Earlier this yr, the corporate launched its Grande Enchilada product, which makes use of rooster and cheese to make a grain-free tortilla.

In 2019, Actual Good Meals obtained a minority funding from Strand Fairness for an undisclosed quantity. It obtained $35 million in Might by way of a debt funding.

The corporate has by no means made a revenue, and has posted fairly important losses since its inception, in accordance with the submitting. Final yr, the corporate’s internet loss was about $15.6 million. Within the first six months of 2021, the web loss has been $10.3 million. Actual Good Meals plans to make use of the funds raised by the IPO to additional broaden capability and distribution, which is one thing it acknowledges in its submitting might be costly and will preserve the corporate from being worthwhile within the foreseeable future.

The submitting talks quite a bit about Actual Good Meals’ potential. The frozen meals area noticed $58 billion in U.S. gross sales final yr, in accordance with SPINS information cited within the submitting. Over the last two years, the frozen phase has had a compound annual development charge of 11%. Well being and wellness manufacturers, like Actual Good Meals, made up 16% of frozen meals, the corporate says in its submitting, that means there may be a variety of runway for development. The corporate additionally talks about distribution factors in its submitting, however there are various extra precise shops it might get into. In a current press launch, the corporate stated its merchandise had been in additional than 16,000 shops nationwide.

Actual Good Meals additionally brings up its on-line fan base within the submitting, which it describes as “one of many largest social media followings of any model inside the frozen meals class at present.” About 500,000 accounts observe the corporate on numerous social platforms. From its earliest days, Actual Good Meals has seen its on-line fan base as a big asset. In 2018, CEO Bryan Freeman informed Meals Navigator that the model’s success in e-commerce had quite a bit to do with social media, which it used as a device to gauge what customers had been fascinated about and pay attention on to their issues.

However potential for future earnings would not add as much as gross sales, and even probably the most engaged social media followers usually are not the identical as buyers. The model has grown shortly, however exponential development charges are simpler to publish when an organization is small. Whereas Actual Good Meals might have all the proper substances for development, what it wants for a profitable IPO are people who find themselves keen to place their cash into the corporate’s future success.

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