Interest in plant-based products is hotter now more than ever, and companies in this sector are busy ramping up their efforts to meet the demand from consumers as the switch to more sustainable lifestyles continues to grow.
Eat Well Investment Group Inc. (CSE:EWG, OTC Pink:EWGFF, Forum) is one such company rising to the challenge. Case in point, it is a vertically integrated plant-based food investments company providing consumers the opportunity to invest in the entire plant-based supply chain.
Stockhouse Editorial recently had the opportunity to catch up with Eat Well Investments’ CEO Marc Aneed about some of the company’s recent developments, the current landscape of the plant-based market and what’s in store for the company going forward.
TRANSCRIPT BELOW
SH: Can we first start off with you providing a brief overview of yourself, and the company?
MA: Sure thing. I'm a 20 plus year veteran in consumer products. I joke with the team too many times now. I started my career at the original plant-based foods business, also known as the Quaker Oats company. So, I've worked on really big, iconic global brands like Quaker Oatmeal, like the Gatorade business and through the last 20 plus years, I've worked in close to 30 different product categories, worked in food staples, household storage and in the last eight years for Eat Well was in Value Added Nutritional.
I led one of the largest sports nutrition portfolios of brands in North America brands like Isolate Optimum Nutrition and then a greens based business called Amazing Grass where we were focused on plant based nutrition. For about the last two years that or so I've been involved in developing what is today Rat Well Investment Group, which is really a once in a career kind of opportunity once in a lifetime kind of opportunity where you can catch a secular trend still in its early days.
When you ask me just a brief view and we can dig in on what Eat Well Investment Group is, it is a collective of seasoned professionals in capital markets, plant-based foods, manufacturing, supply chain, and consumer brands that have come together and said, there's still a missing link in the plant-based foods sector. We'll talk about that in a moment but it's the link of vertical integration And so we've created a platform that's the decades in the making, just a few months old, where we established Eat Well Group really around last August and September of 2021, a remarkable year, really of accomplishments with our different businesses, our investments, and our leadership team.
SH: What drew the company’s interest to the plant-based sector, and how does it differ fromsimilar ones in the space?
MA: What folks are starting to see is what those of us have in the industry recognized quite a while ago, which is plant-based foods is not a fad, it's actually a trend and this trend is really kind of multiple wavelengths coming together. What does that mean? That means this is an ESG play but it's not simply environmental stewardship. It's a nutrition, security play but it's not just good food. It's a food tech play with better quality foods, protecting the nutrient density that we get straight from the ground but it's also a general health and wellness play. All these things together add up to billions of dollars of capital that have been deployed in the space just over the last six months and what it also means is we have a structural trend that's going to last decades and decades. Probably everybody listening today has a friend or a family member or even a child of theirs who said, I'm eating more plant-based foods today and that's because we have better technology, better food, better flavor, better price points but the supply chain is still not well developed to support this growth.
That's what eat well investment group said is we want to create a linkage from the farm gate all the way down to retail and what differentiates us is we are one of the very, very few actual platforms where we have what we call the upstream. So, processing of ingredients as we have with one of our investments with pulses, which are plant-based proteins all the way down to the downstream, which is consumer branded products which we have. So that's one critical piece of uniqueness and difference for Eat Well Investment Group is we're a vertically integrated platform. The second critical piece is we're very selective about our investments in the space. So we are into pulses, which create plant-based proteins.
That's what ends up in your Beyond Burger. It's yellow peas, it's green peas, things of that in the nature. We also have food tech focused on snacking, which is the number one trend I would put up right next to plant-based foods is the snacking trend itself and then the third is we're very selective about investing in brands. Our investment today is in Amara, which is an infant nutrition brand. We're not looking wholesale at things like plant-based, for example, which have many great players, but you have already up to the 19th or 20th brand. So very selective in our acquisition or investment thesis, fully vertically integrated platform and a leadership team that's second to none, both in terms of our advisor, our senior executives, you've got about 140 years of experience in this space, which is a very strong, long-term credibility for underpinning this business with growth and operating discipline.
SH: What is the company’s business model and how does it generate revenue?
MA: We've got three key components to our model. It's the upstream, the midstream and the downstream. So today the largest part of our investment portfolio is bell pulses. This is a pulse processor dehull and essentially is the first processing step not to go into too much detail. It's the first processing step, just off the farm with chickpeas or fava beans. Those are then sold to further processors or ingredient companies that make them into end food products, people food, and pet food. We sell that in 35 different countries around the globe. So that's bell pulses today. That's a very strong revenue driver with solid double digit gross margins and 40 years of stream legacy behind it run by some outstanding people in Saskatchewan. Midstream is our food tech play. This is an extrusion-based IP at Eat Well Investment Group. We prioritize investments. We can monetize in 12 to 18 months and so I'm proud to say that we just, this past December launched our first product out of our food tech play.
You may see it called sepia in all of our literature and materials and this is a plant-based Cheeto that plant-based Cheeto is now sold at federated stores over 300 stores in Western Canada. It is a pea protein based baked not fried, strong solid percentage of fiber vegan Cheeto that has all the signature crisp and crunch. So that pushes us into the snack-based space, looking to build it out in e-commerce and then the last revenue mix of our model is Amara organic baby food. This is infant nutrition. It's the cereals that you can mix with water or breast milk or formula as well as snacks and these are yogurt milk type snacks for toddlers, a hundred percent vegan, a hundred percent delicious, a hundred percent organic.
So, our model links all three of these together. Each business is very significant on its own in terms of its addressable market, customer base IP and long-range growth with strong margins. Each of it has a team and so these are investments that we've made, and we'll create linkages over time from our pulse processor to our snacks, which use pulses as their protein source down through to baby foods and baby snacks, which would use a similar extrusion technology. So, you could see all these links come together in a pretty strong business platform that grows across the globe.
SH: The year is still young, but are there any catalysts this year coming up for the company our investor audience should be watching for?
MA: Well, everything is underway is what I'd love to say. So, when investors look at the Eat Well team and what we've done, you can bet on a team that's quite ambitious and quite agile. So within about a six-month time period behind us, we close these three investments in these businesses and we have established eat well as the corporate sort of brand play for us and the CSE. As well we have shared that we are now in distribution in places like Walmart, Loblaws, walmart.com with our Amara baby food business. We've shared that federated just launched the Sapientia plant based Cheeto, which is underway rolling out now and more stores are coming distribution because the early feedback is so good. We're actually running out of capacity. So, we are so excited to continue to grow that distribution footprint. We'll actually look to launch that in e-commerce in the US as well, this coming spring and that's these plant-based Cheetos. We've indeed also started developing some pretty exciting new products that will fill our pipeline for years to come.
That'll be things like pet treats baby snacks, and as well, some meal staples, which will be coming into the next few years and then all the way up to the farm. At Bell, we have relationships with General Mills, Nestle, Colgate and Ingredion to name a few. This is in people and pet food by the way and those businesses are grabbing great tailwinds from market level demand where all these strategic customers have come to us and said, get ready for a big 2022 and beyond the tailwinds are strong. So those are just a few of the handful of things, really business by business. You will see more distribution gains across the mix. You'll see more innovation, you'll see some launches of strong e-commerce platforms, which are great for margin growth, pricing discipline, and some of the operating control we have as well as selective brick and mortars with our brand.
As well you'll see continued new services and offerings with our big strategic customers at be. Now that's the existing businesses we have today. We've also shared publicly that we've engaged Roth capital out of California to evaluate opportunities for us to ramp onto a US listing. We've realized that the addressable market for the company and for investors is very, very large and the US exchange can facilitate that for us. I would also be disappointed but certainly we'll, we keep ourselves balanced here. There will be more investments that eat well will look to make throughout 2022 because we understand the types of businesses to buy where we look for velocity, gross margins and very strong leadership teams.
SH: What kind of companies will Eat Well Investments look to add to its growing portfolio?
MA: As I mentioned, we are very selective about the types of investments we'll make. We're going to be in proteins. We like snacks. If we like meal staples or consumer groups, we're going be very selective about where there's a significant enough market position to be gained. When you consider our Bell Pulse's investment, it's proteins, proteins but it's also whole crop utilization. So, fibers and starches and proteins for our customers, as we look forward, we'd love to see what branded growth does for ourselves as well as for the consumer. There's such a mainstreaming happening right now of plant-based foods. Amara, as an example, participates in a hundred plus billion-dollar category. That's global infant nutrition. It's at the inflection point really of young parents adopting plant-based lifestyles and taking care of their kiddos really fresh from the womb if we like. So, with that, we look at other branded products.
We look at consumer meal staples, where we don't see a tremendous amount of over exposure of existing plant-based businesses. We look for strong gross margins, 40% or higher 50% or higher at scale, we look for solving specific problems in the supply chain. That might be things like refrigeration, which creates some challenges for our friends in the traditional meat space and as well, we would look for businesses that have some omnichannel considerations, e-commerce, strategic brick and mortars, as well as food service and QSR. Here's what we won't be doing I think just to repeat, when investors think about where Eat Well Investment Group will go. We will not buy the 20th brand of plant-based milks. We're going to be very selective about the consumer brands that have a young but very strong growth curve and those brands that we've invested in today have that. So, when I talk about our Amara business, which is at Amazon today, it has its own fast growing B2C platform through its website today. These are hypergrowth categories that we're focused on.
SH: Where do you see the company fitting into the overarching plant-based market?
MA: That's a great question. Jocelyn. What I would tell you is because of its unique aperture, what we call our discipline breadth model. Okay. Eat Well Investment Group is very focused on an agile portfolio that doesn't spread us into hundreds of products and hundreds of customers worldwide, but we have enough agility to leverage new trends. What does that mean? What that means is we service the people and pet food markets at bell pulses. -As vegan pet food continues to grow. We are poised at the farm gate to service the needs of some of the biggest pet brands in north America. That's happening today and will continue to grow. We link ourselves to where there's growth in the most strategic plays with pet, with people and with the big customers, like a General Mills or with a Colgate. We also fit where our customers are looking from some food tech innovation.
We have relationships whereby our food technology with extrusion. So, this is the snacks I spoke about earlier over time, that will be jerkies and pastas and meat alternatives. We can supply that to some of our existing customer relationships or deploy that into our own consumer brand and the last bit, as I mentioned, infant nutrition is an explosive growth space. Amara is one of the fastest growing brands in North America and is distributed in some of the leading retailers like Amazon as well, like whole foods in the club channel and Loblaws and so what that tells you is you want investment group gives investors exposure to B2B, B2C and selective high growth spaces with strong margins and long-term consumption trends that are here to stay
SH: For investors who are new to the plant-based sector, what are your thoughts on the industry this year and beyond?
MA: The industry is such an exciting space because you have innovators, entrepreneurs all coming together, now being fully backed by a capital that 10 years ago, 12 years ago would still have been very hard to come by. Today investors can look at the space and say, listen, it's a secular trend that's not going away. Bloomberg did a piece last August and suggested that nearly 10% of the world's protein consumption will be plant based in the coming decades. That's a $162 billion market. That's happening today with technology, with flavor science, with manufacturing, process efficiency, supply chain, and capital. What this means for the investor is you have an enduring trend with supply chains starting to mature, and that's why we invested in a scale supply chain solution with Bell pulses and at Eat Well Group. The next thing you'll continue to see, I think is consumers all the way downstream taking more and more permission to adopt plant-based lifestyles because they don't have to become vegan.
They can make small, selective choices is, and that's being embraced really globally. It's a policy level. It's even here in the US, we have the new mayor of New York City talking about implementing policies in schools to help kids get healthier habits younger. It's happening in LA; it's happening in Georgia. So, you see it at a policy level. You see it at kind of young consumer ages, and you see it as well as I mentioned in the pet sector, which is growing at triple digit growth rates, what that tells you is you want to be participating in this space and you find the businesses and the platforms that solve those linkages as we've done so far at Eat Well Group.
SH: On that note, what makes Eat Well Investments a good investment right now?
MA: We're just getting the story out. Really. We are just getting the story out. The business is a few months old, so it's a significant opportunity to get in now. We would really be nothing, if not ambitious, about where the entire platform grows, the exposure we have to markets moving on onto a US listing and creating significant appreciation for our investors or stakeholders, our employees and our customers. So, this is a young company with scale revenue. I don't even think I mentioned revenue shame on me, but we finished last year with nearly $60 million in revenue and that's at profitable gross margins. So, Eat Well does not look at significant underwriting. We're not a group that is losing several millions of dollars a year to drive the growth. We are already underpinned with strong gross margins today. We have an ambition of 90 to 110 million in revenue this year in Canadian dollars through all the things I shared about our growth platforms and so it's an opportunity to get in on a growth stock early where the story is brand new.
SH: Is there anything I’ve missed that you’d like to touch base on?
MA: Well, I would just say thanks for all the good questions and the feedback that we've heard overarchingly is why haven't more people heard of you. Well, that's because we're brand new and how can we share the story? So, we've gotten a lot of terrific positive momentum. Our retailers and our customers are excited. Our teams are very, very excited and even through the significant challenges with supply chain and so on last year, the team has continued to drive great momentum, distribution gains are underway. E-Commerce growth is underway. Innovation is underway and that's happening with some of the biggest names today from General Mills all the way through to Amazon and what I would say is Eat Well will continue to have the great stories to come this year.
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing