Living and eating healthier isn’t just about improving and enriching our lives, it offers investors – both retail and institutional – immense opportunities.
Enter
Billy Goat Brands (
CSE.GOAT,
Forum) – a Vancouver BC-based venture capital platform focused on investments into early-stage, high-growth companies. The company is positioned to identify, incubate, and invest in companies with Environmental, Social & Governance values while providing actionable insights to its partners through the introduction of services and capital.
While contributing to the sustainability of the planet through investing in the functional food space for the better good of the planet and for future generations. Billy Goat Brands has executed three separate acquisitions and investment agreements of which include three core verticals – functional foods, plant-based protein, and food technology.
Stockhouse Media’s Dave Jackson was joined by Tony Harris, Chairman and CEO of Billy Goat Brands, to discuss the company’s unique ESG business model, new company developments, and investment opportunities in the plant-based foods space.
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TRANCRIPT BELOW:
SH: To start off with, Tony, can you tell us a little bit about yourself and the history of the company?
TH: Great. so my name is Tony Harris. I'm from Vancouver Island and a businessperson who's got a background in automotive dealerships, real estate development, and a number of other industries, and I've always been a passionate investor and, and a student of business. And we got together with a group of gentlemen and ladies to form a company, Billy Goat Brands, which is focused on investing in young companies who not only require capital, but they require capital markets guidance, liquidity event planning, and like any early-stage companies. There's always a hole in the human capital side of the business. So we not only invest in our investees, but also, we provide human capital markets guidance, incubation services, and we roll up our sleeves and get to work alongside of our investees. So it's really fun because it's more than just sort of an invest and wait. We, we really get to work alongside of our partners and, and we're really excited about what the future holds for Billy Goat Brands and for our investees.
SH: How does Billy Goat differentiate itself amongst their competitors in the E-S-G space?
TH: I think that you sort of see a lot of this ESG buzz words being thrown around. Fundamentally, our team believes that the ethos of giving back to the communities that we serve, taking care of our people, taking care of the environment, and running businesses for, you know, a multiple bottom-line ethos is crucial to overall business success. And that is inherently part of how we look at companies. So we're looking at the impact that the company can have, and not only what the opportunity for growth and, you know, traditional bottom-line outcomes, which are obviously core to the compass of everything that we're doing. But we, you know, look for those ESG values in our investees, we practice it ourselves. And then in turn kind of like I was just saying, you know we really do get to work alongside our, of our investees and we build real relationships.
We talk with our partners every single day and we identify areas that we can provide assistance and help them build value and then provide a bespoke liquidity event plan for the respective investee because every business is different. Every business has a different set of needs in a different path. And we want to make sure that we reflect what's best for the investee by, truly working with them to create that. And, and ultimately, you know, we say a rising tide lifts, all ships and, and when our investees win, we win, and we can all enjoy that positive outcome together. And I think that that's important for our investors because they want to see that our interests in management at Billy Goat are aligned with creating shareholder value. And we do that by creating real tangible value with our investees.
SH: Can you update our investor audience and your Billy Goat shareholders on any new company developments?
TH: I mean, of course, we had a tremendous support the wind in our sails as we went through our capital raise privately, which the company raised over $10 million has a post money valuation prior to going public of over $45 million. So it really showed us and our investors that, you know, not only is the space that we're focused on really exciting, and there's a lot of opportunities, but also indeed our team is doing a good job identifying the companies that the appropriate valuations and building that out. We are turning our focus to another great area of opportunity within the blue economy, which is a space that we see great opportunities for, you know, ESG emergence to come. So some exciting stuff on the horizon there. And of course we continue to advance our strategic objective of acquiring more of Sophie's Kitchen, which truly is one of our lead assets. And I know, we're going to talk a little bit more about that today. So lots of exciting stuff on the horizon for Billy Goat.
SH: What’s Billy Goat’s targeted investment portfolio and what is the portfolio comprised of?
TH: You talked about it in your intro, but we're focused on plant-based meat alternatives, plant-based proteins. So a lot of people call them we like food technology, which obviously a broad area and functional foods, just sort of the space of nutraceuticals. So you know, we cast a fairly wide net but today Billy Goat Brands has a wholly owned subsidiary, which is cold coffee. The brand is called KOLD, it's owned by a company called Fun Guys Beverage Inc., which was acquired by Billy Goat Brands. And this coffee lineup has been in development for a couple of years in partnership with one of the best formulators, probably the best formulator of cold coffee beverages in the world, Strother Simpson. And Fun Guys has been developing this functional coffee line and fused with chaga and lion's mane and chicory root. So it's not only a world-class beverage, but it also has some functional value as well for the consumer.
And that company is going to be revealed with a direct consumer play coming out later this year, as well as a, in partnership with LOOP, which is probably the globe's most innovative patch, packaging solution, whereby everything that we sell every, every bottle of coffee goes into a glass bottle that can then be returned to LOOP and get washed and come back into our packaging lineups. So we'll never create any microplastics. And it's probably one of the most innovative packaging solutions in the coffee space. So we've partnered with LOOP and that gives us access to Kroger, Walgreens, two of the biggest grocers in the United States, as well as on the LOOP store.com. And we'll also be selling that product direct to consumers through our website. So cold coffees exciting. It's been a great journey building that company, and we're excited to share it with the public.
Later on this year, we made an investment in a company called the Vegetarian Butcher, which is a very dynamic company that has small footprint, brick and mortar locations selling an aggregate of plant-based meat, alternative options for people who are looking for those choices, as well as a ready to eat deli style vegan and vegetarian foods. So fabulous environment in these stores they're compact and very efficient, a really dynamic management team. And they're growing presently they have locations in Kelowna and downtown Vancouver and a number of other locations in developments and really exciting things in the horizon for that company. So we're really pleased with the direction it's going. We talked a bit about Sophie's Kitchen already. Sophie's is a fascinating business. They're a growing American company that's recently moved to Las Vegas and we're expanding manufacturing for this company and its ability to grow Sophie's is the world's leading plant-based seafood company.
So the vegan seafood, which is getting a lot of attention, particularly as you may have seen recently the Seaspiracy documentary came out and people are realizing, you know, the impact of their, their decisions and what they eat. You know, people today are voting, you know, with their, with their mouths, you know, with their wallets and, and a lot of people, you know this isn't a company that's geared towards the vegetarians and vegans it's indeed geared towards the greater population who is looking to make plant-based decisions, part of their diet on a regular basis. And we see this space exploding. You know, I was reading a stat recently that said that the plant-based meat alternative market will be $35 billion US by 2027 compound annual growth rate of 15.7%. You know, those stats are like 50% higher than the same stats six months ago sort of thing.
So the market's exploding, of course, we see, you know, the beyond meat to the world , Impossible, and Oatley. The very good butcher in Victoria sort of paving the way and creating a lot of excitement in the investor space, which is allowing for these businesses to grow and you know, we're delighted to be allowing Sophie's Kitchen to find its next year. And you know, they're already in Walmart, Sprouts, Whole Foods, but we want to allow them to supercharge their business. And they've got an incredible management team and incredible products recently you know, they've been getting lots of different touts from some, some great publications. So very exciting. And we're looking forward to creating liquidity event plans for all of these investees and other businesses that we're looking at going forward.
SH: The company has just acquired the right to up to 33-percent interest in the aforementioned Sophie's Kitchen – including share price warrants – in exchange for providing a credit facility. Can you expand on this initiative for our investor audience and any details as to how Sophie's Kitchen plans to utilize the provided credit facility?
TH: Yeah, you bet. So the company it, like I said, has lots of lots of areas where it's focused on hiring food scientists and developing its sales formula. We we're, you know, building out that team hiring every single day, the manufacturing of the products that needs investment. So capital expenditures are coming down the pipe. There's obviously requirements for inventory marketing branding. It's a, you know, it's a full court press it's Sophie’s Kitchen these days. We made a strategic investment in the company by way of providing them the capital that they require, but not all up front, you know, that they didn't need a fortune dumped on them all at once. You know, they need access to capital and they need to sort of work through it. So we have a steady hand on the wheel with them and we're helping them, you know, through that journey.
And as you said, we have the rights to buy up to 33% of that company to predetermined fixed valuations, which is, which is fantastic. But in fact we've recently been making some steps towards making further investments into the company. So more on that to come, but Billy Goat Brands won't be stopping at 33.3% of Sophie’s kitchen. And as we've sort of talked about, we will be planning an IPO for Sophie's Kitchen sometime in 2022. But the beauty of the situation is it gives Sophie's the time to grow properly. We're not going to rush them towards that situation. You know, they've got you know, work and development to do, and, and we want to help them grow their sales substantially throughout this year. And with a plan to do it again next year. And in the meantime, investors sort of have a proxy to Sophie's Kitchen and our other investees prior to them going public, because they can play the trade with Billy Goat to get exposure to these awesome and exciting companies and then, you know, sort of have access to them when they do go public themselves.
SH: With Sophie's Kitchen recently winning "Best Plant Based Seafood" from Gwyneth Paltrow's influential company Goop and with Sophie's Kitchen engaging Billy Goat to provide capital markets advisory services including assisting them with the review of the structure and process for achieving a public listing on a North American stock exchange, what would a successful public listing for Sophie's Kitchen mean for GOAT shareholders?
TH: Well when that happens, you know, Billy Goat Brands will no longer own shares in a private company it'll own shares in a publicly traded company. So this is when things start to get really compelling for the Billy Goat story, because, you know, we're playing the long game with these investees and we look forward to having you know, marketable securities on our balance sheet. And that just gives Billy Goat Brands that much more flexibility with further creative and organic investments that we can make going forward. So naturally, as I said earlier, like we win when our investees win. So when Sophie's Kitchen does go public or has their own liquidity event, however that plays out then naturally Billy Goat brands will participate in that. And, and therefore our shareholders will, will enjoy, you know, a win and, and, you know, our plan is not to just stop with, with Sophie's Kitchen, FunGuys, and Vegetarian Butcher, as I was saying earlier, we, you know, we are exploring further opportunities in the existing spaces that we've defined as well as some really exciting other stuff.
We are a group of people who are passionate about business love, early-stage companies love working with entrepreneurs, founders, and, you know, management teams that are dynamic. So you know, we're seeing a lot of deal flow, and I think that young companies are starting to find Billy Goat because as we aren't your typical VC, you know, we're just real people that have real experience and great contacts and you know, and, and have enjoyed being able to put together a pool of capital that allows us to, you know, really bring value to our investees. So we're, you know, we're excited about what it means for our shareholders going forward. And I hope that sorta makes sense.
SH: FunGuys Beverages is one of your unique investments that the Company owns 100-percent equity in. Can you expand on FunGuys and any initiatives that are ongoing?
TH: Yeah, so we were sort of, I guess I bled into FunGuys a little earlier talking about their partnership with LOOP is TerraCycles, retail initiative to try and disrupt packaging globally single use packaging. So we you know, thought, well, just because we're an upstart doesn't mean we can't pitch ourselves to loop. So we pitched LOOP and they were all over the cold philosophy because you know, what LOOP primarily is doing is going to the Haagen-Dazs the Tropicana's of the world saying, Hey, you can sell your ice cream or your orange juice and reusable packaging. You buy it from the LOOP store or on the LOOP wall that you'll in Kroger's or Walgreens later this year. And then you can you know, start to make an impact on, you know, your packaging footprint.
Whereas with us, we came to them and said, we just, we want to start right from the outset and have, have that sort of ESG ethos woven into the KOLD philosophy. And we want to work with you to help us do that properly from the outset. So we're not pivoting a year from now, and they love that. And we love that. They love that. So we were selected to work with them, and it's a beautiful thing too, for called being a, you know, a new entrance into the coffee space, obviously great market, but it's a very competitive one. Now we have a segue into some of the biggest retailers and a differentiator that a consumer, you know, who is looking to something that's not so ubiquitous in their daily coffee ritual, something that's going to be a fantastic beverage has functional value, but also is a, you know, a really intelligent approach to, you know, going to market.
And even if you can't return your glass KOLD bottle to the LOOP for us to reuse glasses, the most ubiquitously recyclable material out there, and it weighs a little bit more, but that's okay, our margins are fantastic and the KOLD business and you know, the garden, our investors will be delighted with that. And because we're selling our first product is a concentrate. It's a premium product. You know, a little bit of extra weight is not a big deal. We've solved for all of the, you know, packaging requirements from, you know, drop tests, et cetera. And you know, it's nice to have a glass bottle. I think people sort of likened back to, you know, a time when, when everything wasn’t plastic. So you know, we're excited about that the brand will be launched soon. It's all been done sort of undercover, which is another fun thing about it. It's been developed for a couple of years. We've got an incredible marketing and branding team working on the project, and we're gonna come out of the gates fast with KOLD. And I think there'll be a bit of a Trojan horse for a Billy Goat Brands. People will start to see it later this year and be like, Whoa, I wasn't expecting that. You know,
SH: Can you tell us what the ‘The Vegetarian Butcher’ brand is all about?
TH: Yeah, you bet. So, The Vegetarian Butcher is a is a small footprint deli style grocer. So they aggregate a wide selection of the plant-based alternatives to meat that are available to consumers into a nice tight store that you can, you know, you can shop online, but you also can just pop in and grab whatever it is that you're looking for. That's all plant-based. And if you need something ready to eat, cause you're on the go or you want to take something home for dinner, they have a fantastic menu of ready to eat deli style items that are really delicious. So they have taken this concept and it's very duplicatable and they've proven out their model. They get to a cash flow positive position within a couple of months in each location, and they have great data set with their point of sale.
They're really getting a ton of insights into what consumers are wanting and buying. And of course it varies in location, but that's informing the approach to their expansion plans. The management team, you know, very dynamic and intelligent CEOs ex corporate lawyer and their origin story is really interesting. You know, they fundamentally wanted to make a change in the way that they eat. And they felt like going into a grocery store and walking through the meat aisles, isn't you know, the most pleasant way to shop for your plant-based alternatives. So they, they decided that there's a better way. And this was the concept that sort of spun out of that. And that we like that it's brick and mortar because they're really intelligent with the approach. It's very small footprint locations, high traffic, and you know, and we've seen this you know, this plays out in multiple food retail outlets across the country that have become really successful in in small, you know, in small locations think like cobs, for example. So we we'd like what they're doing, they're, they're rapidly expanding. They have a number of locations that that will be coming online over the next 12 months and a lot of interests from other companies as well. So stay tuned with vegetarian butcher we've, we've got some, some pretty neat stuff happening with that company, as well.
SH: Can you tell investors a little bit more about the plant-based meat alternative space in general?
TH: Yeah, it's an enormous space. Obviously. I think that you know, two years ago, people, you know, the general population, it probably, you know, never had one of these you know, impossible or beyond meat hamburgers nowadays, and people are seeing them in their favorite, fast food chains and in the grocery aisles, and they're trying them and they're realizing, wow, you know, this isn't your vegetarian hotdog or hamburger of 2005. I mean, it's, it's a totally incredible experience eating some of the offerings that are out there now. And, and I think that that's creating normalcy for the person that's you know, says they're never going to be a vegetarian or vegan or whatever. Like, it's a, it's more about how the consumer nowadays is realizing that my decisions are impacting, you know, the world around me and my body.
And I want to, you know, try to make more good decisions whether it's for, you know, for my lifestyle or for the environment, and to be able to do that. And the food that you're eating is delicious. I think it's opening a lot of doors for this industry and as a result you know, there's more and more of those decisions being made. And that's why we're seeing the market explode. Like we talked about earlier. So with you know, with the growth rate of the sort of 15% compound annual growth rate expected for the first foreseeable future, we see this this industry is, is just getting going. And obviously with Sophie's kitchen, being the leader in plant-based seafood, we see, you know, great upside for that company. Seafood is you know, even globally, we have global visions with Sophie's kitchen. And you know, we think that there's just only one way to go with the, with this company and that's up and indeed with the space.
SH: The Company looks set for strong growth in 2021…you’re well cashed up to the tune of 45-million dollars in private equity. How are you placed to continue growing the Company’s investment portfolio?
TH: Yes, thanks. Probably should clarify. We raised about 10 and a half million dollars in private equity and their post money evaluation prior to going public was around $45 million. So with that though, we're well-capitalized to not only take care of all of our commitments to our investees, but also to continue looking for new opportunities, as well as ensure that we, you know, meet all of our capital requirements as a parent company for the foreseeable future, of course you know we anticipate you know, further financing to be achieved for Billy Goat Brands in the future, as well as we have liquidity events with our, investees see our balance sheet will not only grow, but also become liquid. So we can then take our capital and reinvest it in further opportunities. So, you know, Billy Goat Brands is just at the very beginning and our management team is really excited about you know, continuing down this journey for, for years to come. And we just see it being a vehicle that allows us to continue to identify incubate and invest in ESG companies in plant-based proteins, food technology, and functional foods, and indeed the blue economy going forward. So, you know, we feel, you know, the future is bright and are looking forward to it
SH: For company shareholders and potential investors, what kind of future development and progress can we expect from Billy Goat Brands?
TH: Well, I think just more of executing on the same, you know, we have a lot of deal flow. As, as I've mentioned, we continue to look at new opportunities every single day, and that allows us to really have our finger on the pulse in the industries that we're focused on. So we will make further investments, but we don't know what that next investment will look like because, you know, I, I was saying to one of our partners the other day, I think we probably look at 30 to 50 companies before we see one that we're really interested in and then sort of open the hood and do a deep dive on. So I think that gives you a sense of, of the activity that's happening at Billy Goat Brands. You know, we built this company during the pandemic, and that's, it's been an interesting experience because everything has been digital.
Obviously, we're having this interview today digitally, and but that's allowed us to be really dynamic. And our communication is very efficient. It's fluid, it's ongoing, we're, we're able to spend our time with we're working in the business rather than, you know, moving around and going to meetings. You know we're executing every single day. And yeah, we'll just continue to do that and keep our people, our eyes peeled for great opportunities and, and spend the required time with our investees to ensure that we get the most out of these assets that we're already entrenched in.
SH: Your executive team has already executed over five-billion-dollars of various debt and equity transactions with a specific focus on capital structure. That’s impressive. What does this mean from an early-stage investment point of view?
TH: Yeah, so, I mean, this is really important, you know, we can't be playing in, in a game like this without very intelligent and experienced team members who, you know, check the ego at the door and just work together to be creative in getting deals done. And then the hard work starts because, you know, like I've said over and over again, we don't win until our investees win and they need us, they need our team, and none of us have all the answers, but together you know, we're really dynamic and we have huge contact lists and connections and great relationships. And that's what we've seen already is that not only is our team experienced in dynamic, but they're great connectors of people. And as a result, when, when we see an area of opportunity, let's call it rather than a weakness in one of our investees. We know how to pick up the phone and find the people that can solve for that. So that's what I love about our team is we're just a group of problem solvers that are passionate about business and doing the right thing by our investees. And, and as a result of that you know, it has positive outcomes. So yes, our, our team is fantastic. But also, so two are the sort of the support team that surrounds us and, and that will continue.
SH: What’s the long-term strategy for the company moving into 2021 and beyond, and what retail and institutional investors should be looking out for?
TH: There's lots of volatility and uncertainty and everybody's making calls and what's next and what's going to happen. I guess we won't be investing in blockchain. We're going to continue to invest in our core businesses, which, you know, it's not to say anything bad about blockchain, but I'm not Elon Musk. So I don't think anybody's going to care what I have to say about it anyways. I digress, you know, we're going to continue to focus on, on, on this market, you know, on functional foods, plant-based proteins and food technology, as well as the blue economy, which I've talked about a couple of times I'm really excited about some areas in that space because, you know, we have a duty to identify companies that are doing things to save our oceans, because really that is the lungs of this planet.
And I think that that's an area where Billy Goat Brands is going to turn its attention to. So nothing I can really report on at this stage with respect to that, but, you know, I see, I see, as we come out of the pandemic, people are going to be doubling down on their, their health and wellness routines because the explosion in plant-based meat alternatives at retail being so profound, I see just a further expansion and diversification into that space. And we, you know, we feel really good about our functional foods business as well. So, you know, those are kind of the core areas and that's where our team will be focused. And that's where we'll continue to develop our knowledge base and our contact base and our investor investment base.
SH: Can you tell our audience a little bit about your corporate management and board teams, along with the experience and innovative ideas they bring to the E-commerce space?
TH: We, you know, like I said earlier, we have a dynamic management team. Our, our COO Kris Dahl was with TD Waterhouse for, for his career prior to becoming an entrepreneur a few years ago, managed over 30 billion in assets, a team of 50 people. So, you know, bona fide manager of people in business and saw a great cross section of business. And as a result, he's, you know, just brings a great lens. So whether it's because he's got his MBA from Dalhousie, or you know, this is a FinTech certificate from Harvard he's, he's just a fantastic person to have on the team. Carrie has got 23 years of finance and business experience. He's our CFO, Kerry Biggs. He was with Lululemon worked with Enbridge, has overseen massive amounts of capital.
And as a result, you know understands the importance of stewarding capital, but also understands sophisticated and complex deals and transactions in abroad and in a broad array of sectors. But you know, we have we have an incredible bench when it comes to our marketing team as well. We have some, some fantastic executives who you know, work in global branding. And Marcom, we have an investment committee that's dynamic who two of the gentlemen on our investment committee are owners of a similar, but, you know, private company called Aqua Farrah that helps early-stage companies, and they see a ton of deal flow. So these gentlemen are very valuable assets to us. We have a well-rounded board, lots of fantastic advisors. And I guess with some specifically with respect to our digital go-to-market strategy we have deep contacts and making sure that when we do execute on, you know, our proprietary cold coffee brand, when it comes to going direct to consumer that we're going to get it right out of the gate.
So, you know, I can't divest all of our R D divulge all of our trade secrets, but we, you know, we feel like where we really are strong is on overall business management strategy identifying people to, to help us get it right. And you know, and then letting the experts get to work. And I think that's, you know, the critical part of being successful in businesses, you know, just finding the right people to put on the bus, getting them in the right seats and then letting them work and you know, and that's what we've proven to do over. And again,
SH: And finally, Tony, if there’s anything I’ve overlooked please feel free to elaborate.
TH: Sounds good. You know, I really appreciate the time that you've taken with us today. And our team is really proud of the work that's happened at Billy Goat Brands. And we really look forward to the future and you know, helping early-stage companies become everything that they can be. And, and that's really what we're all about is identifying incubating and investing in companies with ESG values in plant-based meat, alternatives, food technology, functional foods, and the blue economy. And if you want to proxy to some of the most exciting young and early-stage businesses in these different markets, then, you know, we can encourage you to take a look at Billy Goat Brands and what we bring to the table. You know, we are a going concern that is, is just getting going. So you know, looking forward to further updates and a bright future ahead for Billy Goat Brands.
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FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.