US – US-based beverage company Barfresh Food Group has announced the launch of an environmentally friendly 7.6oz Smoothie Cartons.
In addition to being economically and ecologically friendlier, the new ready-to-drink packaging is claimed to generate higher margins than the company’s original bottle format.
It is designed for use in schools, particularly in larger school districts and districts with no access to single-use plastics.
Barfresh said that it now has enough Smoothie Carton capacity to expand into new regional markets and increase its market presence in existing regions.
The company has started transferring some smoothie bottle volumes to Smoothie Cartons after losing capacity from one of its Twist & Go manufacturers.
It expects to switch the majority of the lost volume in the first quarter of next year.
Barfresh CEO Riccardo Delle Coste said: “I’m excited to announce that after successfully completing all testing and trials in the third quarter, we began shipping product to school customers in October.
“The feedback we received during the trials was very encouraging and we are excited about our ability to convert existing bottle customers where needed to also be carton customers, as well as win new customers.
“The product also fits nicely with the emerging trend in schools to move towards more environmentally friendly products and showcases how we are constantly working to meet our customer’s changing needs.
Mr. Delle Coste continued: “As part of our initiative to lower costs and improve margins, the Smoothie Cartons deliver on this promise by providing significantly increased margins that are more in line with our 2021 margin profile. As a result, this will accelerate the path to sustainable profitability and positive cashflow.”
The launch of the Smoothie Carton is part of Barfresh’s wider cost-saving efforts and comes on the back of the company’s announced Q3 of FY22 sales results.
The company’s revenue for the third quarter of 2022 increased 25% to US$2.4 million, compared to US$1.9 million in the third quarter of 2021.
“We were on track to deliver another record quarter with sequential top-line growth and improved margins before we experienced quality issues with one of our Twist & Go™ bottle manufacturers,” noted Delle Coste.
The increase in revenue is the result of higher growth in Twist & Go sales in the school channel, as well as the gradual return in sales of the Company’s single-serve and bulk products.
Net sales for the third quarter of 2022 include a US$1.2 million unfavorable impact related to expected customer credits and lost revenue resulting from the voluntary product withdrawal of Twist & Go.
Gross margins for the third quarter of 2022 were negative 30%, compared to 37% for the third quarter of 2021.
Gross margins for the third quarter of 2022 tracked with the Company’s year-to-date second quarter of 2022 performance, exclusive of the unfavorable impact related to the product withdrawal, including customer returns, fees, unsaleable inventory and other product withdrawal related costs.
The Company expects gross margin improvement with the launch of the Twist & Go carton product.
Net loss for the third quarter of 2022 was US$2.7 million, as compared to a loss of US$508,000 in the third quarter of 2021.
Selling, marketing and distribution for the third quarter of 2022 increased to US$815,000, compared to US$480,000 in the third quarter of 2022.
The increase is a result of increased sales and marketing personnel costs and outbound freight, elevated as a result of increased shipments, including those that were ultimately not recognized as revenue due to the product withdrawal.
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