viewElse Nutrition Holdings Inc

Else Nutrition Holdings is seeing its sales momentum accelerate with its plant-based toddler foods


Else has a first-mover advantage with its patented non-diary, non-soy baby and toddler nutritional products

Else Nutrition

Quick facts: Else Nutrition Holdings Inc


Price: 1.9595 USD

Market Cap: $188.31 m
  • First-mover advantage with its plant-based baby and toddler nutritional products
  • Wide-reaching distribution agreements
  • Experience management and advisory team

What Else Nutrition Holdings does:

Good nutrition begins at birth and Else Nutrition Holdings Inc (CVE:BABY) (OTCMTKS:BABYF) (FRA:0YL) has a first-mover advantage with its patented 100% plant-based, non-diary, non-soy baby and toddler nutritional products.

The Israel-based company’s food items are 100% organic, vegan, natural and gluten-free, about 92% of which is made from three plants: almonds, buckwheat, and tapioca. Its products are sold under the brand name Complete Nutrition for Toddlers.

Else Nutrition won the "2017 Best Health and Diet Solutions" award at the Global Food Innovation Summit in Milan.

As well, its Complete Nutrition for Toddlers was recently ranked as the #1 Top seller in the baby and toddler formula category on Amazon.com.

Else Nutrition also has strong Intellectual Property (IP) protection, with patents granted in 22 countries plus patents pending in another 44 nations.   

The company is led by CEO Hamutal Yitzhak, the former head of Infant Nutrition at Abbott Labs Israel.

And, many of Else’s advisory board members had past executive roles in companies such as Mead Johnson, Abbott Nutrition, Plum Organics and leading infant nutrition Societies, while some of them currently serve in different roles in leading medical centers and academic institutes such as Boston Children's Hospital, Pediatrics at Harvard Medical School, Tel Aviv University, Schneider Children's Medical Center of Israel, Rambam Medical Center and Technion, Israel and University Hospital Brussels, Belgium.

How is it doing:

Else Nutrition has been busy entering into new partnerships and boosting sales in 2021.

On August 27, Else released its 2Q quarterly financial update. In it the company reported second-quarter revenue increased more than five-fold as it makes significant progress in executing its go-to-market plan for the US market.

For the three months ended June 30, 2021, the company generated C$1.11 million in revenue, versus C$210,000 million in the same quarter a year earlier, a 430% increase.

The plant-based baby, toddler and children nutrition company said its products are already on-shelf at 700 of the more than 1,000 US natural food and grocery retail stores it has achieved a presence in.

Earlier in the month, the company said it will be expanding online sales of its plant-based toddler nutrition products into owned online marketplaces by the fourth quarter of 2021.  

The expansion will begin at Vitacost.com, an e-commerce healthy/organic foods site owned by US grocery chain giant Kroger.  

Else Nutrition noted it is currently onboarding with Kroger Ship (of the Kroger Company), with plans to ship to Kroger customers through the Kroger.com and Vitacost.com grocery websites.  

Earlier in the month, the company announced it will be expanding its reach into the western US and mountain regions with its expected new listing in all 19 Harmon’s Grocery locations by September 2021.

Based out of Utah, Harmons is a leader in the grocery space in Utah, with its upscale, family-oriented approach and Harmon’s Grocery is one of the few remaining locally-owned and operated grocery chains in Utah.

Also in August, Else reported that after months of R&D and trials, it had successfully completed a full-scale commercial trial manufacturing run of ready-to-drink (RTD) liquid version of its Plant-Based Complete Nutrition for Toddlers and Kids products.  

Else said it intends to further use this capability to drive growth in the Kids and Toddler RTD markets across several geographies and sets the stage for being able to offer its planned infant formula in liquid format, upon receipt of FDA approval.

The capacity to offer Else products in liquid format further enables the brand to penetrate hospitals with a long-awaited, Plant-Based liquid formula alternative, therein creating a critical competitive advantage for the Else brand. The hospital channel is of paramount importance in a parent/caregivers’ decision-making process when it comes choosing a formula for their baby/child, it added.

Meanwhile in July, the company launched a clinical study with the Children's Hospital Colorado and University of Colorado Denver School of Medicine to validate its toddler and kids products support growth benefits in healthy young children as compared with cow-milk-based formula. 

Else said the study is part of its overall efforts to establish the scientific basis for the safety and tolerance of Else Nutrition products. 

Previously that month, the company said it had entered into the baby food space with the introduction of a nutritional plant-based baby cereals line suitable for those six months and older. 

Else noted the cereals are aimed to further help those families struggling with dairy intolerance, as well as those embracing plant-based living, and those unwilling to accept the overly processed formulas/nutrition products currently available.  

The porridge-like products, in original, banana, and mango flavors, will be available soon exclusively on elsenutrition.com, Amazon.com and other retailers. New cereal flavors are expected to be added in the future.

Also in July, Else announced it will be expanding into Rouses Markets retail locations. Rouses Markets are a chain of grocery supermarkets in the US states of Louisiana, Alabama, and Mississippi with nearly 7,000 employees. Founded in 1960, the family-owned company operates 65 supermarkets.

On the corporate front, Else Nutrition recently appointed Simeon Saunders as its vice president of global medical marketing and scientific affairs and Mike Glick as the company’s general manager and vice president of Else North America, both of whom are former executives with Abbott Laboratories (NYSE:ABT).

Inflection points:

  • New product line launch
  • Additional distribution agreements
  • Potential acquisitions

What the broker says:

In an August 30 note, Canaccord Genuity (TSX:CF, LSE:CF) maintained a ‘SPECULATIVE BUY’ rating for Else Nutrition with a price target of C$5.75.

 Analysts cited the company’s 2Q financials and robust expansion plans as catalysts to the rating despite a 1.9% quarter-over-quarter decline.

“The revenue miss was driven primarily by weaker-than-expected toddler formula sales of $800,000 (-3% Q/Q) versus our $1.3M estimate,” the analysts said. “Meanwhile, baby feeding accessories revenue of $100,000 was slightly below our $200,000, while baby snacks revenue was in line at $100,000.”

 The three-month period also featured a rise in sales.

“During the quarter, Amazon.com sales increased by 50% and elsenutrition.com sales increased by 34%,” the note stated. “While the online channel has been strong and steady, retail sales have been lumpy as they depend on the timing of orders received from distributors.”

Looking ahead, Else recently announced that it will be launching its toddler formula on Walmart.com and Kroger.com at the end of Q3/21 or the beginning of Q4/21 which could be a performance catalyst.

“Depending on how sales perform online, there is then an opportunity to expand into these retailers' brick-and-mortar channels. This is in addition to various other new retail and online channel announcements made in the past few months.” 

What the boss says:

Commenting on the company’s 2Q 2021 financial results, Else Nutrition Holdings CEO Hamutal Yitzhak said in a statement: “I am very proud of our achievements this quarter. We continued to demonstrate rapid growth in our online business while we successfully launched many more retail stores, reaching 1,000 listed stores."

“We successfully launched our second product line and grew our product range, and we expect growth to continue and accelerate throughout the remainder of the year,” she added.

Contact the writer at georgia@proactiveinvestors.com

Follow her on Twitter @MissInformd

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Else Nutrition achieves 430% increase in year-over-year Q2 revenue as more...

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