Plant-based foods has become a booming business with retail sales of meat, dairy, eggs, and seafood products hitting $5 billion in 2019, an increase of more than 11% year-over-year according to the Plant Based Foods Association. The Good Food Institute says there has been a steady rise in plant-based products year-over-year across regions, which indicates that this is not a bubble or a fad, but a real change in consumer behavior - a tipping point - with so much product innovation yet to hit the market. One of those companies with innovative products is Else Nutrition Holdings Inc. (BABYF).

For nearly 120 years, the infant and toddler formula markets have been based on dairy and soy protein source, and Else prides itself on offering  plant-based alternative food products for toddlers, young children and malnourished adults using a  disruptive manufacturing processes that transforms whole plants - without using highly-processed extracts or derivatives, chemicals or high-fructose corn syrup - into simple-to-use powder ready to drink in just seconds. Its almond-based toddler formula is the first of a planned line of whole-meal nutrition products.

Unique Product Formulations

Traditional baby formulas are mainly produced from either cow’s milk or soy protein, which are both strong allergens. In addition, soy protein is suspected to increase risks in infants due to the high levels of phytoestrogens. As a result, Else Nutrition is currently developing a plant-based baby formula using almonds, buckwheat, and tapioca, rather than dairy or soy, which reaches an equivalent nutritional value to natural breast milk. Two product lines are currently in development for infants 1-2 years of age and children 3-12 years of age.

Unique Sales Approach

Selling direct to consumers through online channels is a major pillar of Else's global go-to-market strategy and it announced in late September that its  plant-based soy-free Complete Nutrition for Toddlers product is now available for U.S customers via Amazon.com. (Canadian consumers can order Else's products at www.elsenutrition.com). In addition to its own e-store and the new  Amazon.com store, the Company says it is aggressively pursuing new channels to bring its novel products to natural food and grocery store aisles and store shelves across the United States.

Marketing/Public Relations Campaign

• One of those channels is via the launch of a social media program using nearly 50 key influencers (covering social channels: Instagram, Facebook, and blogs), with a combined social media following of over 3.5 million followers/fans. The influencers will engage with their respective audience by posting branded partner content videos and photography of their children using Else Toddler Nutrition throughout the duration of the influencer campaign. Hilaria Baldwin has signed on to be a spokesperson.
• Else has partnered with mindbodygreen (MBG), the leading U.S. health and wellness community with an aggregate audience of over 27 million people, and will be featured on paid podcast spots, as well as on MBG's website and newsletter. 
• Else Nutrition is ramping up sampling efforts of the Toddler Nutrition product to over 6,000 moms in key cities across the U.S., via a partnership with the Moms Meet network of mothers.
• Else has signed Dr. Jennifer Trachtenberg M.D. to create branded partner content for Else for distribution on digital platforms, and will provide professional consultation services spanning consumer and medical marketing. 
• Else has hired retail brokers in order to bring the product to the shelves of natural food retailers (independent and retail chains), and to regional grocers and hired a specialized broker for one of the largest U.S. retail chains with 1000 plus stores and a significant share in the baby food space.

To meet the expected product demand Else has commenced a second commercial manufacturing run which will be 300% larger than the initial production run. 

Else Financials

In its most recent quarter, the company reported revenues of C$254,000, a 5% decrease quarter-over-quarter, with a net loss of C$929,000, improving from a net loss of $1.1 million in the prior quarter. Else Nutrition currently has a market capitalization of C$177 million.

Else is well capitalized with approximately C$9 million in its treasury as it raised C$7.5 million last year and C$8 million earlier this year for a total of C$16.5 million in proceeds.

Stock Performance YTD

As illustrated in the chart below, Else has done remarkably well since the beginning of 2020 (+327.5%) which is testament to its management, strategic planning, public relations, social media and sales execution. 

See investor relations information here.

This article is the fifth in a series of exclusive TalkMarket articles on the burgeoning plant-based food industry. The previous four posted articles were on Laird Superfood, Better Plant Sciences, The Very Good Food Company. and Modern Meat.