The Real Good Food Company, Inc. (NASDAQ: RGF) is a leading frozen food brand focused on health and wellness, providing comfort foods that are high in protein and low in sugar. Founded in 2016, the company strives to improve human health by making nutritious foods accessible to everyone in North America. Of late, the brand has become so popular that one in twelve US households uses the products.
AlphaStreet had an opportunity to speak to Real Good Food Company’s CEO Bryan Freeman, who provided valuable insights into the company’s operations. Here’s the full interview:
Can you please give a brief outline of The Real Good Food Company’s business and products?
Our goal at Real Good Foods is to modernize frozen food. Our mission is to replace added carbohydrates and sugars with protein, making everyone’s favorite foods better for you. In doing so, we believe we will have a significant impact on the health and wellness of millions of people while quickly building a large business. The US frozen food market is large and growing, valued at approximately $58B annually.
We provide a highly differentiated product within this large category. Unlike other health and wellness products, we are delivering nutrient-dense foods that typically have a fraction of the carbs of conventional counterparts and 2–3x more protein. This differentiated product design appeals to a large unmet consumer need. Consider that the CDC states 1/3 of the US population is either pre-diabetic or has diabetes. 40% of the US adult population is clinically obese and this is growing. We know lack of protein and too much sugar and carbohydrates contribute to this – Real Good Foods uniquely provides a healthier alternative that people actually want to eat!
Reflecting on the last year, how has your journey as a public company been since your November 2021 IPO?
Shortly after our IPO on the NASDAQ in November 2021, the broader equity market declined significantly, and high-growth companies like RGF have been hit the hardest. When this happened, our management team got together and quickly adjusted our strategy to accelerate our path to positive EBTIDA. Since then we have not only raised our guidance for three consecutive quarters but have pulled forward positive EBTIDA guidance by a full year, as compared to what we originally committed to while going public – a significant achievement.
So while the market has seen significant pressure, the fundamentals of our operations remain strong and our stock has held in much better than our high-growth peers and the broader market.
How significant is the recently launched Asian Entrees platform, in terms of growing sales and improving human health vs. alternatives?
Conventional multi-serve Asian entrees such as orange chicken have as much as 21g of sugar and 40g of carbohydrates per serving – as much as a couple of candy bars! Our Orange Chicken, General Tso’s Chicken, and Sweet & Sour Chicken have only 1g of sugar, less than 4g of protein, and almost 2x the protein by comparison. Given the size of the multi-serve Asian category, we believe this alone could be a $100M business someday. We have the same view of our new breaded poultry line, which has performed incredibly well with product velocities in the top 15% of the category. On a dollar per store per week per SKU basis, our chicken nuggets are outselling the majority of Tyson and Purdue products in one of the largest retailers in the US.
From a strategy perspective, how do you think about expanding the business beyond the domestic market?
Real Good Foods has one of the largest social media communities in the frozen food industry today. In fact, we have more followers than all Nestle and Conagra frozen food brands combined. Due to this, we see significant demand for our products globally. We have started selling in Mexico and have plans to expand into Asia and Canada at some point in the future, as many retailers and distributors in these regions have asked to carry our products. However, the complexity of exporting poultry and cheese-based products is significant, so international expansion will take time.
To what extent is external funding required to meet capital needs considering your continued build-out of the Bolingbrook facility?
We are comfortable with our cash position relative to our burn rate and the reasonable cash needs for the Bolingbrook facility. Again, we expect to reach a positive adjusted EBITDA by year-end and feel good about our ability to service debt with cash from operations.
Looking for more insights on the earnings results? Click here to access the full transcripts of the latest earnings conference calls!
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