IPO news: The Real Good Food Company will make its market debut this week; here’s what to know

Health and wellness is a key priority for consumers these days and there is a myriad of diets that cater to the various nutritional preferences of people. Food companies are constantly innovating their products to suit the special needs of consumers and to diversify their revenue stream. One such company is the Real Good Food Company which is set to make its market debut this week. Here’s what to know about this branded food company:

IPO details

The Real Good Food Company is scheduled to go public on Friday, November 5. It will start trading on NASDAQ under the ticker symbol RGF. The company will offer 5.3 million shares at a price range of between $14 and $16. The IPO will be managed by a group of underwriters led by Jefferies and William Blair.

Company intro

Real Good Foods is a branded health and wellness-focused frozen food company that manufactures and markets comfort foods that are high in protein, low in sugar, and made from gluten-free and grain-free ingredients. The company aims to provide alternatives to consumers who are either seeking to make healthier food choices or are suffering from conditions such as diabetes or obesity and who want to enjoy their comfort foods but find limited options in the frozen food aisle.

Real Good Foods is focused on creating health and wellness (H&W) products for the frozen foods category, where it believes H&W brands are under-represented. The company currently sells comfort foods such as bacon-wrapped stuffed chicken, chicken enchiladas, grain-free cheesy bread breakfast sandwiches, and various entrée bowls.

The company has sold substantially all of its products under the Realgood Foods Co. brand. It also sells a limited number of private label products to select retail customers. The company’s products are available in a large number of grocery, drug, club, and mass merchandise stores including Walmart, Kroger, and Costco.

Financials

For the six months ended June 30, 2021, Real Good Foods generated net sales of $35.4 million and delivered a net loss of $10.3 million. This compares to sales of $18 million and a net loss of $7.4 million in the same period in 2020. For the three months ended September 30, 2021, the company estimates preliminary net sales to range between $21.2-23 million.

Market opportunity

Real Good Foods sees significant opportunity within the H&W industry, which according to data from SPINS, had a two-year compound annual growth rate of 10.7% during the two years ended December 27, 2020.

According to SPINS data, during the 52 weeks ended December 27, 2020, the total US frozen food category, excluding frozen and refrigerated meat, generated retail sales of approx. $58 billion. Within this category, H&W brands generated approx. $9 billion in sales during the same period. The company believes there is opportunity for its brand to increase its penetration within the frozen food category as well as to move into adjacent categories such as grocery and refrigerated.

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