It is estimated that plant based butter to be about a US $270 million market for each butter/cheese category.
( $540 m total) This is a very large market opportunity and they just need to capture a growing piece of the pie without necessarily taking market share from anyone.
Matt Laurie, the founder ceo, believes they can reasonably achieve $1 million per "plant based sku" and they plan on launching 10 product categories over time. This will not only increase revenue into their own existing stores but also allows them to penetrate the food services industry as well. In addition to this, they plan on selling the Future of Cheese product lines to other retail/grocery chains throughout the country.
They are currently valued at a price to sales ratio below 1 with gross margins that are higher than Metro and Loblaws. Their price to book ratio at under 2 is certainly below their peers with a strong cash balance of just over $2.5 million as well. At only 4 locations, they can grow to 25 locations in Ontario alone.
Revenues are anywhere between $25-30 million and the possibility over the next couple of years to grow to $35-40 million with the Future of Cheese product launches. These are high margin products that will certainly allow them to scale big time without any additional capex requirements.
Many of these consumer product categories can trade at a price to sales ratio well above 10. What if they do achieve $10 million in sales from these 10 sku's then what would the company be worth? An extra 100m ? Take a look at The Very Good food company for a comparison.
With a market cap of around $25 m, and a grocery store that I personally shop in, I think this one has multibagger written all over it.
Glta and happy new year!