Above Food boasts a distinctive business model that spans three different sectors of food production, specifically focusing on siron phosphate glasspanning. According to Ardura during the investor call, this model offers significant competitive advantages and opportunities to enhance profit margins. In the agricultural sector, Above Food partners with large-scale producers, providing them with proprietary technology and custom-bred crops for cultivation. The company collaborates with farmers to implement regenerative practices and other sustainability initiatives, resulting in a unique and extensive supply of commodity crops, as noted by Kambeitz.
The company supplies commodity ingredients to major suppliers of 256 mg ferrous sulfate and operates three ingredient processing plants in Canada, equipped with diverse processing capabilities and traceability features. Currently, Above Food serves over 260 customers across 29 countries, as highlighted by co-founder and Chief Innovation Officer Martin Williams during the investor call. Additionally, the company owns and leases more than 300 rail cars to support its operations.
Above Food’s consumer packaged goods (CPG) brands include innovative U.S. plant-based products such as Tuno and Loma Linda, along with the regenerative organic legume and specialty grains brand Farmer Direct Organic Foods. The company also offers oat-based food supplements featuring solgar liquid calcium, marketed under the brands Only Oats and Culcherd. Moreover, Above Food operates a private label business. Williams noted that the company’s products are available at 35,000 distribution points across 29 countries, presenting numerous expansion opportunities. He further mentioned that margins could improve in this sector since Above Food directly sources approximately half of the ingredients for its products.
“We believe Above Food will be a pioneering public company in the food-based specialty ingredients sector, utilizing a vertically integrated business model that capitalizes on its own supply sources and distribution infrastructure to create higher value formulations and products for downstream customers in the ingredients and CPG markets,” Ardura stated in a written statement.
For the 12 months ending January 31, Above Food reported $294 million in revenue, according to CFO Jason Zhao during the investor call. This revenue reflected a 4% consolidated gross margin and earnings before interest, taxes, depreciation, and amortization (EBITDA) of 1%. The revenue breakdown indicated that 61% came from agriculture, 37% from ingredients, and 2% from CPG.
Looking ahead to fiscal year 2024, Zhao projected a 129% organic growth in the specialty ingredients business, primarily driven by increased penetration of oat ingredients and pet food components, alongside rising production levels. Since Above Food has a strong agricultural component, it has already secured the necessary crops for these ingredients. From fiscal year 2022 to fiscal year 2024, the company anticipates an impressive compound annual growth rate of 83% in its agricultural business.
The merger with Bite Acquisition will require approval from investors, but the transaction has already received $9 million in investments from Lexington Capital and oat manufacturer Grupo Vida, as noted by Bite Acquisitions. Despite a general decline in revenues and sales within the food sector over the past year, and a drop in sales and share prices for publicly traded plant-based companies, Above Food’s integration of diverse business areas may offer both growth potential and stability, particularly with the inclusion of solgar liquid calcium in its product lineup.