The Long Way Home dontknowmuch wrote: omylord wrote: hay dkm , so early january is start up for the
production first
packaging line , so the products are good as we know , is there a chance they land a sobeys space . or head farther east .
Hey “omylord”,
I have a few things left to do before heading off to enjoy Christmas Eve with the family (didn’t get to do that last year) so for now I will give you a short(er) answer. But be warned… since you asked the question
there will be a long answer for sure when I have some down time
;<) You should make note of the change I made in your question.
From the
News Release about the 1st tranche of the PP:
“The first packaging line will be operational in January 2022, with the second packaging line coming on-stream shortly thereafter, creating new opportunities specifically for the retail market.” Short answer: IMO once the
manufacturing equipment is installed/operational I believe they can definitely land a Sobey’s type contract
AND will head east.
Sherlock Holmes would say
The Game is Afoot :<) *****
Hey “omylord”,
The draft of my long answer was a couple paragraphs compared to the one sentence short answer I posted on Dec 24
th. I am home from a month long family visit, had a chance to review my notes – never a good thing for brevity – and ended up adding stuff to the draft. I always
take the long way home when I can
;<) “RetireAt55” gave me a good laugh about
my patience with NSP; well many times I have said that I am here long term – that doesn’t mean I haven’t been frustrated with the way things have gone at times – there have been some bad decisions. My business partner and I spent 15 tough years building the company that we sold which allowed me to retire at age 54. At the time we started the business we got this advice
“If you don’t make any bad decisions you are not making enough decisions”. My patience comes from my personal experience (good & bad decisions) which may be the reason I have the patience/perspective about NSP that I do
:<) For a long time now
dufus has been suggesting that NSP jumps on every new bandwagon that comes along, he continues doing that – IMO that’s pretty far from the truth.
“Naturally Splendid and its partners are building a portfolio of high quality hemp and plant-based products.” May 02,
2016 -
Post# 24833678 If you are a long time reader of this board – several years pre-Covid – you might remember some of my posts about my drop in visits to the NSP warehouse – first Burnaby and then Pitt Meadows. Occasionally I had the opportunity to sit and chat with management (Goodwin/Carson). Hemp seeds/protein, South Korea & HempOmega® were some of the popular topics of the day; however, the desire to get into more
plant based foods was discussed at that time. No details of course and I doubt if they even knew then how or what
path they would take to get there. During that time I suspect more than dufus himself wondered why I started posting items like this “
Plant based proteins.....” September 27,
2016 -
Post# 25281487 – articles about shifting from animal protein to plant based protein/meat to plants.
Paths change:
NSP appoints new CEO – November 29,
2016 then
NSP CEO, Steps Aside For New CEO –January 3,
2018 until
NSP Appoints Craig Goodwin as CEO - August 27,
2019. A review of the quarterly financials during this time period shows that NSP did not thrive financially with the changing paths.
******************************************************************************************************** I digress briefly from discussing Natera Plant Based meat alternatives to the bars and bites as it fits the time line here. Pre-Covid times the bars and bites 100% subsidiary Prosnack Natural Foods was gaining traction -
November 26, 2019 - the Company has in fact already begun manufacturing plant-based energy bites for an international, plant-based sports nutrition and healthy lifestyle company (the "Client"). Further on
December 16, 2019 - Following the standards set out by the Canadian Institute of Chartered Business Valuators, RwE Growth Partners, Inc., determined that given the assumptions provided by management, the fair market value of Prosnack is in the range of $11.1 million.
The pandemic (March
2020) with business restrictions/closures (gyms, fitness centres, etc.) and people out of work has significantly reduced the bars and bites business as can be seen by the numbers in the quarterly financials/MD&A. Production has been reduced but can be ramped up when demand comes back. It doesn’t/shouldn’t take a lot of heavy thinking to understand that. I will come back to the bars and bites topic further along in this post.
***********************************************************************************************************
I am not sure exactly when the relationship between NSP and Bettalife began but I suspect that it was in late 2016/early 2017 which led to
NSP Begins Exports of NATERA (tm) Products to Australia - November 9,
2017. There were shipments of hemp product to Australia however the market for Natera products did not grow as planned.
**********************************************************************************
And sometimes paths come back full circle:
NSP CEO, Mr. J. Craig Goodwin states (6 Oct 2020): For over a decade, Naturally Splendid has been involved in the development of
plant based products with a particular focus on the hemp plant. "The journey that we (Goodwin/Carson) started a decade ago, was, in fact, the right path. We see all the right trends and all the right market indicators to keep on this path," said Goodwin.
As part of this strategy, Naturally Splendid recently partnered with one of Australia’s most popular plant-based manufacturers, BettaLife Global Food Solutions,
to arrange for sale and distribution of the company's plant-based products in North America. Naturally Splendid intends to market the BettaLife product line under its NATERA™ brand. According to Goodwin, Naturally Splendid's
aim is to leverage BettaLife's manufacturing experience and processes in order
to establish similar facilities in its target market. So as of Oct 6
th, 2020, NSP was essentially a distributor of BettaLife’s products in Canada with the hope of establishing manufacturing facilities in Canada.
Naturally Splendid Receives First Container of NATERA Plant Based Foods - October 22,
2020 “The initial supply of products will originate from Australia, with plans being made to develop manufacturing facilities in Canada.” Sixteen days after the Oct 6
th comments it was clear that discussions were happening with BettaLife regarding the manufacturing of the product here in Canada.
From the arrival of the first container significant time and effort was expended on setting up relationships with distribution companies and potential clients for the plant based products and eventually
Naturally Splendid Secures 10-Year Exclusive Manufacturing and Distribution Rights To Popular Plant Protein, Meat Alternative Line - June 3,
2021 – “pleased to announce a
Letter of Intent (LOI) with Flexitarian Foods Pty. Ltd., a division of Australia's largest plant-based manufacturer, to
become the exclusive manufacturer for an extensive line of plant-based, meat-alternative products for the Canadian market.”
Efforts made to raise funds
Naturally Splendid Announces $2,500,000 Private Placement - July 7, 2021 were not successful. At the time of the PP announcement the shares were trading ~.045->.055
Previously, Naturally Splendid had agreed to terms with BettaLife Global Food Solutions of Australia for the exclusive sales and distribution rights for Canada for these plant-based, meat-alternative products.
The company has also been granted sales and distribution rights to access the United States market with these products. Further discussions/negotiations led to
Naturally Splendid Signs Definitive Agreement - August 17,
2021 – “pleased to announce the signing of the
Definitive Agreement with Flexitarian Foods Pty. Ltd., a division of Australia's largest plant-based manufacturer, to become the
exclusive Canadian manufacturer and distributor for an extensive line of plant-based, meat-alternative products.
The exclusive manufacturing and distribution rights are for an initial 10-year term with a 10-year renewable term.” I suspect that between the June 3
rd LOI and the August 17
th Definitive Agreement the “Australians” did significant DD on NSP prior to agreeing to the exclusivity of manufacturing and distribution for essentially a 20 year period. They would certainly be privy to a great deal more information than us. It would appear that nothing deterred the Australians from moving forward.
The Australians are not some new start up company; they are a successful well established long time operating group of private companies that are Australia’s largest plant based manufacturer among other things. On
November 12th I suggested checking out the
Plantein website specifically the map to “Find Stores Near You” to see how widely accepted the product is in Australia.
November 29, 2021 News Release:
- "The Company has announced a private placement Nov 23rd (to replace the one announced July7th) of which funding will be directed towards the purchase and installation of a high output manufacturing line that will be capable of initially producing a ton an hour output of a wide variety of plant-based entrees.”
- This line has been selected for the ability to manufacture our plant-based foods to the exacting standards of our Australian partners, Flexitarian Foods. Selection and installation of this manufacturing line is being assisted directly by key members of the Flexitarian Foods team who have travelled from Australia and are currently in the process of their onsite evaluations in order to optimize efficiencies of manufacturing line. Key members of Flexitarian Foods will then also be instrumental in the training of the Naturally Splendid production team to assure our clients that they will be receiving the same high-quality products that are currently produced in Australia".
- Manufacturing of bars and bites had been a priority up until the pandemic. The bars and bite business has been negatively affected due in part to ingredient supply chain challenges. Challenges related to supply chain logistics needed to be reviewed which required an in-depth evaluation of this division. The Company is developing strategic plans around this opportunity that will allow the Company to begin the recovery of this division.
The Australians were in town from approximately Nov. 23
rd to Nov 28
th, 2021.
After 19 business days
the company announced the closing of the first Tranche of the PP of
$2,150,515. This represents 71.7 % of the $3 million objective (86% of the previous $2.5 million objective).
89.4% of this Tranche was from investors who are not officers or considered insiders of the company. The Form 45-106F1 Report of Exempt Distribution shows that
out of the 33 unique purchasers, 19 (57.5%) used the Accredited Investor exemption. I suspect that a large percentage of the 1
st Tranche came from
Accredited Investors (people with money) regardless of the exemption used.
Back to the bars and bites topic briefly:
*********************************************************************************************************
The November 26
th, 2019 announcement about an international, plant-based sports nutrition and healthy lifestyle company was just one of several unnamed clients at the time. I think two of the larger unnamed companies were outed on this bull board without much discussion at all. Quite some time after the Nov 26
th announcement above I heard about NSP being approached mid 2019 by a large American multinational company involved in the QSR business with thousands of locations wanting NSP to produce a specific product for them. NSP at the time did not have the resources or ability to scale up to the production level desired by this client and ultimately had to decline the opportunity. IMO it was unfortunate but the right decision, it would have been disastrous had they taken on this client.
**********************************************************************************************************
To date four containers of product have been received from Australia. At the time of the
Denny’s announcement about the launch across Canada I asked management if there would be any issues supplying Denny’s and was told they didn’t believe there would be any problem. As much as I like the Denny’s agreement and am happy that it is in place I don’t think it is comparable to a Sobey’s type contract.
My short answer was
“once the manufacturing equipment is installed/operational I believe they can definitely land a Sobey’s type contract AND will head east.” There has been some discussion/comment on the various forums about NSP not getting the product into a national grocery chain so far. I don’t know if any national grocery chains have been approached yet or not. I do believe there were some valuable lessons learned/reinforced by having to decline the opportunity to produce a specific product for the large American multinational in 2019. November 23
rd Goodwin states:
“As we engage with larger food service and retail clients, it is essential to be able to meet their demands in packaging options as well as scalability to meet volume demands and this system allows us to do exactly that.” I for one would not want to be the one telling a Sobey’s type client that we can’t get you any product until our next container arrives from Australia. On the other side I suspect a Sobey’s buyer would want some security of production/supply before entering into any agreement.
NSP now has:
It may sound like “
Field of Dreams” to some – that’s their prerogative.
I believe:
- that the current share price does not represent the fair value of the company and hasn’t for many years
- that 2022 will prove that out
- NSP will finally meet the desired goal of producing plant based food products
The Game is Afoot :<) *****
Be safe! *****
“Living in the sunshine” Always DYODD DKM