As the global meat supply chain becomes more precarious, not to mention ethically questionable, consumers are increasingly turning to plant-based products for their diets.
Vegetarianism and veganism is of course nothing new, but plant-based foodstuffs is now one of the fastest growing grocery lines in North America, due to various factors, including the spiraling costs of producing meat.
"Plant-based nutrition is the future," says CEO and a co-founder of the company Craig Goodwin.
He cites figures he’s seen for the sector estimated to grow at a compound annual growth rate (CAGR) of up to an eye-watering 40%.
Interested in their diet
"People are now more interested than ever in their own diet," he says, adding that plant-based foods for peoples' health had been shown to be "more beneficial over the long run".
Add to that the problem of sustaining the animal protein supply chain, along with a "whole generation of consumers who give a damn about their world" and it all seems to add up to big potential for this growing small company.
"Young people do want to make a difference and they are making choices and making choices with their wallets," exclaims Goodwin.
So how does Naturally Splendid fit in? From its over 25,000 sq ft manufacturing SQF2 (Safe Quality Food) factory in Pitt Meadows, the group makes bars, protein bites and balls, under four main brands, including the Natera Sport bar.
The company is North America’s only 100% organic hemp processor, producing proteins and oils, which can then be used in food. It also boasts a biotech division, which is developing and generating new plant-derived ingredients and compounds.
Move into the coronavirus space
Indeed, it is from this strand of the business that the company's recent move into the COVID-19 (coronavirus) treatment space comes.
Naturally Splendid inked a letter of intent with Biologic Pharmamedical Research, a firm it has already worked with, to form a joint venture, to carry out a Phase 2 clinical trial using a version of one of Biologic's patented technologies, which is has been supplying to Naturally Splendid for two years.
The treatment is called Cavaltinib and features a natural product called Curcumin at a high dose.
Research has shown Cavaltinib inhibits cytokines central to the 'cytokine storm' phenomenon seen in COVID-19 in which the body starts to attack its own cells rather than attack the virus.
Naturally Splendid will hold a 16% stake in the venture and be granted a 10% royalty on future gross sales of all products.
Goodwin says it is "absolutely incredible" that Naturally Splendid is now involved in a potential solution to keeping people out of hospital during this global virus crisis. An application for the trial has now been submitted to Health Canada, while preparations are also underway with the US FDA.
The study could start within weeks, and if successful, would certainly be game-changing for the company.
Naturally Splendid was established by Goodwin and Bryan Carson back in 2009, mainly with a focus on hemp as a superfood and selling hemp seeds. It became a public company in 2014 and a major event was the acquisition of bar manufacturer Prosnack Natural Foods.
After several twists and turns along the way, including new management and an attempt to venture into the Cannabis 2.0 market (a market, which hasn’t really materialized as expected, according to Goodwin), the company, having stripped out inefficient divisions, and is now focused solely on the plant-based nutritional foods and ingredients market.
And Goodwin and Carson have been back at the top steering the ship as CEO and CFO for the last nine months or so.
The factory (and therefore the company) now boasts up to around 60 individual SKUs (stock keeping units) under four main brand categories and Naturally Splendid is also a contract manufacturer of food products for 12 companies, seven of which are significant, large players in the industry, says Goodwin.
The firm currently has the capacity to produce 400,000 bars a month and 1.72 million bites.
And with less than C$500,000 of capital outlay, the facility could ramp up to C$5 million worth of product per month, and C$60 million a year, which would send the group's margins up by 32%, highlights the company boss.
What's more, with its position in the food supply chain, Naturally Splendid is in fact regarded as an essential service during the challenging coronavirus pandemic. Canadian Prime Minister Justin Trudeau has directed C$5 billion towards supporting this supply chain.
Goodwin says the firm is strategically positioned in a rapidly expanding sector and has a perfect balance of its own plant-based goods and contract manufacturing clients, which it can use to scale the business.
With the coronavirus treatment potential added into the mix, for the investor, it would be hard to disagree with his assessment.
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