Q3 2023 Edible Garden AG Inc Earnings Call
Speaker 1: Greetings, and welcome to the Edible Garden third quarter 2023 business update conference call. At this time, all participants are in a listen only mode and a question and answer session will follow the formal presentation.
Greetings and welcome to the edible Garden third quarter 2023 business update conference call. At this time all participants are in a listen only mode and a question and answer session will follow the formal presentation. If anyone should require operator assistance during the call. Please press star.
Speaker 1: If anyone should require operator assistance during the call, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Ted Avis, Investor Relations. Ted, you may begin.
Zero on your telephone keypad.
Note. This conference is being recorded.
I'll now turn the conference over to your host Ted Davis Investor Relations Ted you may begin.
Speaker 2: Thanks, Tom. Good morning and thank you for joining Edible Garden's quarter-ended June 30, 2023 conference call and business update. On the call with us today are Jim Kress, Chief Executive Officer of Edible Garden, and Mike James, Chief Financial Officer of Edible Garden.
Thanks, Tom Good morning, and thank you for joining edible gardening quarter ended June 32023 conference call and business update on the call with US today are Jim <unk>, Chief Executive Officer available Garden, and Mike James Chief Financial Officer of vegetable Garden earlier.
Speaker 2: Earlier this morning, the company announced its operating results for the three months ended September 30th, 2023.
Earlier this morning, the company announced its operating results for the three months ended September 30 of 2023.
Speaker 2: June 30, 2023, excuse me. The press release is posted on the company's website www.ediblegarden.com.
Starting with 2023 excuse me the press release is posted on the company's website Www edible garden Dot Com. In addition, the company will file its quarterly report on Form 10-Q, with the U S Securities and Exchange Commission, which can also be accessed on the company's website as well.
Speaker 2: In addition, the company will file its quarterly report on Form 10-Q with the U.S. Securities and Exchange Commission, which can also be accessed on the company's website as well, at www.sec.gov. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020.
Www SEC dot Gov. If you have any questions. After the call would like any additional information about the company. Please contact crescendo communications at 2126711020.
Speaker 2: Before Mr. Kress reviews the company's operating results for the quarter ended June 30, 2023 and provides a business update, we would like to remind everyone that this conference call may contain forward-looking statements. All statements other than statements of historical facts contained in this conference call, including statements regarding our future results of operations and financial positions, strategy and plans, and our expectations for future operations are forward-looking statements. The words expect, project, plan, believe, may, will, would, should, could, mission, strategy, potential,
Mr. Kim <unk>.
Reviews, the company's operating results for the quarter ended June 32023, and provide the business update we would like to remind everyone that this conference call may contain forward looking statements all statements other than statements of historical facts contained in this conference call, including statements regarding our future results of operations and financial position strategy and plans and our expectations for the future.
Operations are forward looking statements. The words expect project plan believe may will would should could mission strategy potential.
Speaker 2: seek, strive, and the negative of such terms, in other words, and terms of similar expressions are intended to identify forward-looking statements. These forward-looking statements are based largely on the company's.
<unk> strive and the negative of such terms in other words and terms of similar expressions are intended to identify forward looking statements. These forward looking statements are based largely on the companys current expectations and projections about future events and trends that it believes may affect its financial condition results of operation strategy short term and long.
Speaker 2: Current expectations and projections about future events and trends that it believes may affect its financial condition. Results of operations strategy, short-term and long-term business operations and objectives and financial needs.
That business operations and objectives and financial needs.
Speaker 2: These forward-looking statements are subject to several risks, uncertainties, and assumptions as described in the company's most recent quarterly report on Form 10-Q filed with the U.S. Securities and Exchange.
These forward looking statements are subject to several risks uncertainties and assumptions as described in the company's most recent quarterly report on Form 10-Q filed with the U S Securities and Exchange Commission because of these risks uncertainties and assumptions.
Speaker 2: Because of these risks, uncertainties, and assumptions, the forward-looking statements and circumstances discussed in this conference call may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
Looking statements and circumstances discussed on this conference call may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward looking statements you should not rely upon forward looking statements as predictions of future events. Although the company believes that the expectations reflected in forward looking statements are reasonable it cannot guarantee future.
Speaker 2: You should not rely upon solar looking statements as predictions of future events.
Speaker 2: Although the company believes that the expectations reflected in forward-looking statements are reasonable, it cannot guarantee future results, level of activity, performance, or achievements. In addition, neither the company nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements.
Results level of activity performance or achievements. In addition, neither the company nor any other person assumes responsibility for the accuracy and completeness of any of these forward looking statements. The company disclaims any duty to update these forward looking statements except as required by law. All forward looking statements attributable to the company are expressly qualified in their entirety by these.
Speaker 2: The company disclaims any duty to update these forward-looking statements, except as required by law. All forward-looking statements attributable to the company are expressly qualified in their entirety by these cautionary statements, as well as others made in this conference call. You should evaluate all forward-looking statements made by the company in the context of these risks and uncertainties. With that, I would now like to turn the call over to Jim Kras. Jim.
Cautionary statement as well as others made in this conference call you should evaluate all forward looking statements made by the company in the context of these risks and uncertainties with that I would now like to turn the call over to Jim Chris Jim.
Speaker 3: Thanks, Ted. Good morning and thank you to everyone for joining us today. We continue to execute on our growth strategy as evidenced by the 19.4% increase in revenue for the 3rd quarter of 2023. This growth reflects the expansion of our distribution channels. As well, as our growing brand recognition.
Thanks, Ted good morning, and thank you to everyone for joining US today, we continue to execute on our growth strategy as evidenced by the 19, 4% increase in revenue third quarter of 2023. This growth reflects the expansion of our distribution channels as well as our growing brand recognition.
Speaker 3: We continue to be a leader in our industry, setting the standard in terms of both service, excellence, and dependability. As a result, an increasing number of retailers are choosing Edible Garden to fulfill their requirements for organic and sustainable produce.
To be a leader in our industry setting the standard in terms of in terms of both service excellence and dependability as a result of an increasing number of retailers are choosing edible garden to fulfill their requirements for organic and sustainable products.
Speaker 3: Company is growing our distribution network by strengthening ties with current retailers, as well as welcoming new retailers, thereby enhancing our reach. For instance, our collaboration with Woodman's Market has resulted in introducing edible garden produce and products across the 19 stores in Wisconsin and Illinois. Woodman's addition to our
Company is growing our distribution network by strengthening ties with hung retailers as well as welcoming new retailers, thereby enhancing our reach for instance, a collaboration with women's market has resulted in introducing edible garden produce the products across the 19 stores in Wisconsin, and Illinois wasn't into addition to our retail distribution network, we'll start cause.
Speaker 3: Retail distribution network, which are present in the Midwest and allows us to leverage our edible garden facility in Grand Rapids, Michigan, which we launched in April 2023 additionally, we're pleased to welcome top friendly markets as the latest.
In the Midwest and allows us to leverage our edible garden Heartland facility in Grand Rapids, Michigan, which we launched in April 2023. Additionally, we were pleased to welcome tops friendly markets as the latest major retailer to join our distribution network and carry the edible garden, Brad offering a range of a sustainably grown high quality Arps edition of tops friendly markets as Siggi.
Speaker 3: major retailer to join our distribution network and carry the Edible Garden brand, offering our range of sustainably grown high-quality herbs. The addition of top-friendly markets is significant as our products will now be available at all 149 stores across New York, Pennsylvania, and Vermont.
As our products will now be available in all of their 149 stores across New York, Pennsylvania, and Pennsylvania and Remodels.
Speaker 3: In July , as previously reported, the company expanded its relationship with Walmart to provide additional SKUs at Edible Gardens Sustainably Grown Produce in locations across the Northeast, as well as broadening our reach within Walmart's retail locations in the east-south-central region of the United States.
In July as previously reported the company expanded its relationship with Walmart to provide additional skus at edible garden sustainably go on produce in locations across the northeast as well as broadening our reach within Walmart retail locations in the east South Central region of the United States.
Speaker 3: We've also continued with the rollout of our new pulp line, Sustainable Gourmet Sauces. All 16 Morton Williams retail locations across New York metropolitan area have introduced the pulp line, representing the brand's initial venture into the substantial and influential New York City market.
We've also continued with the rollout of our new pulp lines sustainable Gourmet sources, all 16, more Williams retail locations across New York Metropolitan area have introduced the pulp line, representing the brands initial venture into the substantial and influential in New York City marketplace. Northern Williams serves as an excellent partner for our Poplar.
Speaker 3: Morgan Williams serves as an excellent partner for our pulp line, aligning with their customers' demand for flavorful, sustainable, and organic fermented products. The concept best expressed in the pulp tagline, blendable.
The alignment with their customers demand for flavor is more sustainable and organic fermented products.
Constant best expressed in the pack and the pulp tagline blend bolt.
Speaker 3: Building on this momentum, the company also brought Dearburg's Market into its distribution network, introducing pulp gourmet sauce selection to all 26 of its outlets in the greater St. Louis metropolitan area, as well as their location at Missouri's Lake Leozard.
Building on this momentum the company also brought earplugs market into its distribution network, introducing pulp gourmet salsa watched all 26 of its outlets and the greater St. Louis Metropolitan area as well as their location at misery is they believe Ozarks in.
Speaker 3: In the third quarter, Edible Garden launched EG Direct, a new division specifically focused on sourcing produce from partners and supplying these products to the company's retail distribution network.
In the third quarter edible Garden watch EG direct a new division specifically focused on sourcing quotas from partners in supplying these products to the company's retail distribution network.
Speaker 3: The company has consistently outperformed our competitors, as evidenced by order fulfillment rates, which routinely exceed industry averages. We view EG Direct as a strategic move to capitalizing on the company's existing distribution network partners and its expensive network of over 5,000 retail locations, potentially opening up additional revenue streams by distributing essential high-volume produce, such as broccoli, carrots, and potatoes, among others. We believe that EG Direct could have substantial effect on both revenue and profits of Edible Garden by leveraging our established infrastructure.
The company has consistently outperformed our competitiveness as evidenced by order fulfillment rates would routinely exceed industry averages, we view EG directly strategic move to capitalize on the company's existing distribution network partners.
It's expensive network of over 5000 retail locations potentially opening up additional revenue streams by just distributing with central high volume produce such as broccoli carrots, and potatoes, among others, we believe that EG directly to a substantial effect on both revenue and profits available garden by leveraging our established infrastructure.
Speaker 3: Edible Garden began shipping fall ornamentals from our new Edible Garden Heartland facility in Grand Rapids, Michigan just in time for the fall gardening season. These plants are now being shipped to prominent big box retailers across the company's distribution network. Following the acquisition of Edible Gardens Heartland last year, the company integrated cutting-edge technologies like our proprietary and patented Green Thumb greenhouse management system to boost our supply chain efficiency. In addition to implementing our advanced growing
I don't know garden began shipping fall ornamentals from our new edible garden and Heartland facilities at facility in Grand Rapids, Michigan, just in time for the fall gardening season.
I have to now being shipped to prominent big box retailers across the company's distribution network. Following the acquisition of edible guns Heartlands last year, the company integrated cutting edge technologies like our proprietary and patented green thumb greenhouse management.
Supply chain Division in addition to uncle Limping, our advanced growing techniques. These steps were in line with edible gardens philosophy of maximizing all available assets at our disposal.
Speaker 3: These steps were in line with Edible Garden's philosophy of maximizing all available assets that are disposable.
Speaker 3: The company received a notice of allowance from the U.S. Patent and Trademark Office for our innovative self-watering display, underscoring our dedication to innovation.
The company received a notice of allowance from the U S patent and trademark office for our innovative self watering display underscoring our dedication to innovation. The saltwater even display is proving to be a game changer revolutionizing. The way plant license is extended maintaining optimal freshness and greatly reducing spoilage and retail settings implementation of this cutting.
Speaker 3: The soft watering display has proven to be a game changer, revolutionizing the way plant life is extended, maintaining optimal freshness, and greatly reducing spoilage in retail settings. The implementation of this cutting edge technology allows retailers to showcase plants at their freshest, minimizing waste, and delivering superior products to the consumer. Initially introduced at all minor locations, the success of these displays has led to a broader national impact.
This technology allows retailers to showcase plants at their five freshest minimizing waste and delivering superior products for the consumer initially introduced it all Mira locations. The success of these displays have led to a broader national at the plant.
Speaker 3: The company also started distributing two new flavors of our vitamin E product line to Meijer stores across the Midwest.
The company also started distributing two new flavors of our vitamin D product line tomorrow stores across the Midwest.
Speaker 3: These innovative additions, ice cream, cake, and orange creamsicle enhance our flavor-focused vitamin whey line, known for its advanced, high-performance formula that supports muscle recovery and overall well-being while also offering great taste. The product features our proprietary multivitamin, whey protein, and amino acid complex formula.
Innovative additions ice cream cake in Orange claims at Cowen has our flavor focus vitamin way line known for its advanced high performance Formula that supports muscle recovery and overall well being while also offering a great tasting product features a proprietary multi vitamin whey protein amino acid complex formulas vitamin way stands out for its exceptional value provide.
Speaker 3: Vitamin Waste stands out for its exceptional value, providing superior supplementation and recovery benefits at an affordable price. We believe these new flavors will reinforce Edible Garden's image as a flavor maker as we continue to develop innovative, cutting-edge flavors in collaboration with our partner, Nutri.
Superior supplementation and recovery benefits at an affordable price. We believe that we believe these new flavors reinforced edible gardens image is the flavor maker as we continue to develop innovative cutting edge flavors in collaboration with our partner neutral com given vitamin ways success successful history at Myer, we are optimistic that these new flavors will further enhance.
Speaker 3: Given Vitamin Away's successful history at Meijer, we're optimistic that these new flavors will further enhance the brand's appeal.
The brand's appeal. Our aim is to great is to create the highest quality and most flavorful whey protein on the market and we plan to watch it not a nationwide rollout of the product in the near future recently the company was awarded a grant from the USDA organic certification program managed by the farm service agency to cover various expenses related to it.
Speaker 3: Our aim is to create the highest quality and most flavorful whey protein on the market, and we plan to launch a nationwide Lerola product in the near future.
Speaker 3: Recently, the company was awarded a grant from the USDA Organic Certification Program managed by the Farm Service Agency to cover various expenses related to organic crop certification at Belvedere, New Jersey facility.
Crop certification that W. New Jersey facility the support the support is valuable and appreciate it because we continue to lead the controlled environment agriculture industry and prioritized local organic and sustainable produce additionally, fallen grasp them.
Speaker 3: This support is valuable and appreciated as we continue to lead the controlled environment agriculture industry and prioritize local, organic, and sustainable produce.
Speaker 3: Additionally, following grants from West Michigan Works and the specialty crop block program of the Michigan Department of Agriculture and Rural Development, our employees at Edible Garden Heartland Facility will undergo additional leadership and food safety training.
The West, Michigan works and the specialty crop block program of the Michigan Department of Agriculture, and rural development, our employees at edible Garden Heartland facility will undergo additional leadership and food safety training.
Speaker 3: These grants not only demonstrate our dedication to food safety, but also complement our ongoing research collaborations. We're currently working with the New York Institute of Technology, the USDA, and the EPA on how nanobubble technology impacts food safety and processing of fresh produce. Moreover, our partnership with Auburn University's Department of Horticulture is focused on addressing food safety issues related to fresh produce, such as
These grants not only demonstrate our dedication to food safety, but also complement our ongoing research collaborations. We are currently working with the New York Institute of Technology in the U S. D E E and the EPA and how the how nano bubble technology impacts food safety and processing of fresh produce Moreover, a pause.
No ship with Auburn University Department Horticulture is focused on addressing food safety issues related to food produce fresh produce such.
Such as.
Speaker 3: related to fresh produce such as contamination from listeria.
Related to fresh supposed to produce such as contamination for Listeria. These combined efforts reflect our commitment to maintaining the highest standards of food safety and quality in our products in July edible gardening unveiled green thumb to point out the latest iteration of our sophisticated greenhouse management system, representing a major leap forward in automation.
Speaker 3: These combined efforts reflect our commitment to maintaining the highest standards of food safety and quality in our product.
Speaker 3: In July , Edible Garden unveiled Green Thumb 2.0, the latest iteration of our sophisticated greenhouse management system, representing a major leap forward in automation technology. This upgraded system enhances our dynamic forecasting abilities, utilizing real-time data more efficiently. Our goal is to more accurately predict the requirements of our distribution partners and adapt our growing strategies accordingly.
This upgraded system enhances our dynamic forecasting abilities utilizing real time data more efficiently. Our goal is to more accurately predict the requirements of our distribution partners and adapt our growing strategies. Accordingly overall I'm encouraged by the outlook of the business given the growth in our retail networks.
Speaker 3: Overall, I'm encouraged by the outlook of the business, given the growth in our retail network, that expansion of our product offering, and careful management of our expense.
Expansion of our product offering and careful management of our expenses as a result, we expect to maintain strong organic revenue growth and remain laser focused on achieving our target of positive cash flow before year end.
Speaker 3: As a result, we expect to maintain strong organic revenue growth and remain laser focused on achieving our target of positive cash flow before year end. I would like now to turn the call over to Mike James, Chief Financial Officer of Edible Garden, who will review the financial results for the three month period ending September 30th, 2023. Mike.
Now to turn the call over to Mike James Chief Financial Officer, Vegetable Garden, who will review the financial results for the three months period, ending September 32023, Mike.
Speaker 3: Thanks Jim and good morning. The company reported year-over-year revenue growth of 19.4 percent to 3.3 million and the quarter ended September 30 of 2023 compared to 2.8 million reported in the third quarter of 2022.
Thanks, Jim and good morning.
The company reported year over year revenue growth of 19, 4% to $3 3 million in the quarter ended September 32023, compared to $2 8 million reported in the third quarter of 2022.
Speaker 3: The herbs, produce and floral business saw a 22.8% increase primarily due to a net increase in orders received from our existing customer base and a slight increase in orders for herbs received from new distribution partners.
Europe's produced and floral business saw a 22, 8% increase primarily due to a net increase in orders received from our existing customer base and a slight increase in orders.
From four herbs received from new distribution partners.
Speaker 3: Cost of goods sold was $3.3 million for the three months ended September 30, 2023, compared to $2.6 million for the three months ended September 30, 2022.
Cost of goods sold was $3 3 million for the three months ended September 32023, compared to $2 6 million for the three months ended September 32022.
Speaker 3: We continue to use contract growers to grow herbs for our customers as we ramped up production in edible garden heartland, which resulted in higher cost of goods sold.
We continue to use contract growers to grow herbs for our customers as we ramped up production in the edible garden Heartland, which resulted in higher cost of goods sold.
Speaker 3: Additional labor and material cost required to grow the product sold into the retail channel also contributed to the increase.
Additional labor and material costs required to grow the products sold into the retail channel also contributed to the increase.
Speaker 3: Selling general and administrative expenses were $2.4 million for the three months ended September 30, 2023, an increase of $459,000.
Selling general and administrative expenses were two point.
$4 million for the three months ended September 30 of 2023, an increase of 459000.
Speaker 3: compared to $1.9 million for the three months ended September 30, 2022.
Compared to $1 9 million for the three months ended September 32022.
Speaker 3: The increase is primarily driven by an increase in cost incurred as it relates to the ramping up of operations of edible garden heartland facility, which was acquired in August of 2022 as well as an increase in depreciation costs due to the acquisition of the facility.
The increase was primarily driven by an increase in cost incurred as it relates to the ramping up of operations of edible Garden Heartland facility, which was acquired in August of 2022, as well as an increase in depreciation costs due to the acquisition of the facility.
Speaker 3: We also increased production of cut herbs available Garden Heartland and our Belvedere, New Jersey facility for which we purchased equipment intended to increase our efficient.
We also increased production of cut herbs available garden, Heartland, and our bell, but their new Jersey facility for which we purchased equipment intended to increase our efficiency.
Speaker 3: Net loss was $2.4 million, or $0.69 per share, for the three months ended September 30, 2023, compared to a net loss of $2.1 million, or $7.13 per share, for the three months ended September 30, 2022.
Net loss was $2 $4 million for 69 cents per share for the three months ended September 30th 2023, compared to a net loss of $2 1 million or $7 13 per share for the three months ended September 30 of 2022.
Speaker 3: Before turning back the call over to the operator for questions, I would like to take a moment to discuss the successful public offering we completed in September , which generated roughly three million dollars in gross proceeds.
Before turning back the call over to the operator for questions I would like to take a moment to discuss the successful public offering we completed in September which generated roughly $3 million in gross proceeds to.
Speaker 3: The capital raise was an important step that enabled us to obtain the essential financing required to expedite the company's growth strategy.
The capital raise was an important step that enabled us to obtain the essential financing required to expedite the company's growth strategy.
Speaker 3: I would now like to open up the call for questions operator. Could you please assist us with that?
I'd now like to open up the call for questions. Operator could you please assist us with that.
Speaker 1: Certainly, the floor is now open for questions. If you would like to enter the queue to ask a question at this time, please press star one on your telephone keypad. We do ask if listening on speakerphone this morning that you pick up your handset while asking your question to provide optimal sound quality. Once again, you may enter the queue by pressing star one on your telephone keypad at this time. Please hold a moment while we pull for questions.
Certainly the floor is now open for questions. If you would like to enter the queue to ask a question at this time. Please press star one on your telephone keypad, we do ask if listing on speaker phone. This morning that you pick up your handset.
Asking your question to provide optimal sound quality. Once again, you may enter the queue by pressing star one on your telephone keypad at this time, please hold a moment, while we poll for questions.
Speaker 1: And your first question this morning is coming from Anthony Venditti from Maxim Group. Anthony, your line is live.
And your first question. This morning is coming from Anthony Vendetti from Maxim Group Anthony Your line is live. Please go ahead.
Thank you.
Speaker 4: I was just wondering if you could give us a little more color, you've signed up lots of new partners. Thank you.
I was wondering just wondering can you just give us a little more color you've signed up lots of new partners any any highlights from the wall Walmart.
Speaker 4: Any highlights from the Walmart?
Speaker 4: partnership or any of the other recent partnerships that you signed up, what do you think is giving you the ability to get these new contracts?
Our partnership or any of the other recent partnerships that you signed up what do you think is giving you that the ability to get these new new contracts.
Speaker 4: And then, in terms of margins, as you roll out some of the higher margin products, should we start to see that materialize in higher gross margins in the following quarter? Thanks.
And then in terms of margins as you roll out some of the higher margin products should we start to see that.
Materialized and higher gross margins in the following quarters. Thanks.
Speaker 3: Thanks, Anthony. Good morning regards to new distribution. The company has continued to build the momentum of the success that keep partners like Meyer. You know, obviously.
Thanks, Anthony and good morning.
In regards to the new distributions. The company has continued to build the momentum of its success at key partners like Myer.
You know obviously.
Speaker 3: there's syndicated data out there that show the market share that we continue to help drive for our partners. Walmart, I think, has seen that as well as our performance as a top flight.
Syndicated data out there that show the market share that we continue to help.
Helped drive for our partner Walmart I think is seeing that as well.
As well as our performance as a top flight shipper.
Speaker 3: shipper, the, you know, picker, packer, shipper, um, with great in, uh, in stock rates and fill rates, uh, which is a lot of them, obviously that indicate sharing themselves in this category.
Good good Packer shipper.
Great.
In stock rates and Bill rates, which has allowed then obviously that gain share themselves in this category.
Speaker 3: So, you know, we were awarded additional business, as I noted in the script today at, you know, by bringing in more distribution centers. I think, you know, hopefully we'll continue to see that type of commitment from Walmart as I think they look at us as a trusted partner considering our performance. You know, word gets out in these.
So we were awarded additional business as I noted in the script today.
At.
By bringing in more distribution centers I think hopefully we'll continue to see that type of commitment from Walmart as I think they look at us as a trusted partner considering our performance word gets out in these and in this industry and people turn to us to supply their needs I think you'll see that that's evident with tops.
Speaker 3: in this industry and people turn to us to supply their own needs. I think you see that, that's evident with T.O.P.
Speaker 3: Um, you know, there's always the, um, you know, challenge of someone having an existing supplier and longstanding relationships, so.
There's always the.
The challenge of someone having an existing supplier and long standing relationships. So.
Speaker 3: When you're talking about the size of businesses that they are looking to move to, let's say, to an edible garden, that process is well thought out and evaluated before they do so. So it's a real credit to the company when we do pick up new accounts, because usually you're dislodging a competitor, and the buyers do not make money.
They when you were talking about the size of the businesses that they they are looking to move to let's say two inevitable garden, you know that process is well thought out and evaluated before they do so so it's a real credit to the company when we do pick up new accounts because usually.
Your your dislodging.
Uh huh.
Competitor and the buyers do not make it.
Speaker 3: moves that quickly. So, I think just performance, in-stock rates, fill rates, commitment, support, customer service, and we continue to fire on all cylinders and execute. And I think that's why you see the type of growth that you see in the additional.
Moves that quickly so I think just performance in.
In stock rates Bill rates, a commitment support customer service and we continue to fire on all cylinders and execute and I think that's why you see that type of growth that you see in the the.
Additional.
Speaker 3: that we're bringing in from the retailers, I think, and I think that'll continue.
Partnerships that where we're bringing in from the retailers I think and I think that'll continue.
Speaker 3: As far as the higher margin pulp sustainable product.
As far as the higher margin pulp sustainable products.
Speaker 3: Um, you know, sustainable sauces and products like that, you'll continue to see more offerings. New products are always the lifeblood of a consumer package. Goods company. I think you can see this evolution of edible garden go from grower, picker, packer, shipper, grower to more of a, I think, integrated provider of not only living products, but more shelf stable products that we can help grow some of the ingredients and have high quality. All of an eye on sustainability. So this idea or notion of just this EA informed next generation CPG company, which is, which I think is the big, big vision for the company moving forward. And we're already making strides towards that.
Yeah, sustainable sources and products like that you'll continue to see more offerings new products are always the lifeblood of our other consumer packaged goods company.
You can see the evolution of edible garden go from grower, you'll pick up a pack of shipper grower to a more of a I think a integrated provider of not only living products, but more shelf stable products that we can help grow some of the ingredients and have high quality all with an eye on.
Sustainability through this idea of a notion of just this.
Formed next generation CPG company, which is which I think is the big the big vision for the company moving forward and we're already making strides towards that.
Speaker 4: Okay, great. And then, so, Jim, just on the hot sauce, you mentioned that, when you're selling that into your customer base, is there
Okay, Great and then.
So Jim just just on the hot sauce, you mentioned that.
When you're when you're selling that into your customer base.
Is that a different.
Speaker 4: shelf space than your produce and herbs, or how does the negotiation go when you're dealing with hot sauce versus some of the fresh produce?
Shelf space than your than your pro.
And herbs or.
How does the negotiation go when you're when you're when you're dealing with hot sauce versus somebody fresh produce.
Speaker 3: Sure, great question. You know, the strategy here was to continue to, we always focus, Mike and I really focus on leveraging the existing assets that we have to get the most out of that.
Sure Great question.
The strategy here was to continue to you know, we always focus making I really focus on leveraging the existing assets that we have and get the most of them to get the most out of that and this is a great example of that where we when we developed this line of sources scaled it up we need.
Speaker 3: And this is a great example of that, where we developed this line of sauces, scaled it up. We made that investment this last quarter in inventory and sales calls.
That investment this last quarter end and they've been doing inventory and sales calls.
Speaker 3: But that product and the buyer that we call on is the same buyer that buys produce. And so the strategy with this is to have this in the refrigerated salad dressings part of.
But that product and the buyer that we call on is the same buyer that buys produce and so the strategy with this is to have this in the refrigerated salad dressing as part of the produce section and the buyer is.
That is usually the same buyer that's already buying our herbs. So it's a it's a new product. It's an extension from where were rat, obviously peppers or sold and produced so.
Speaker 3: obviously peppers are sold in produce so it's a natural fit and so for us to the barriers of entry to that buyer are kind of wiped away because we're already shipping in so not only we picked up not only not only is it proven to be a door opener with the likes of Dearburg and some of these other areas of the country where it's totally new and they may not necessarily be taking our produce in but with Metro New York and that you know and East of the Mississippi where we're a powerhouse we're able to go in there and present it and you know like a
It's a natural fit and so for us to the barriers of entry to that buyer are all kind of wiped away because we're already shipping and so not only we picked up not only not only has it proven to be a door opener with the likes of deal broke in and some of these other areas of the country, where it's totally new and.
They may not necessarily.
Speaker 3: be taking our produce in, but with Metro New York and, you know, and Eastern Mississippi, where we're a powerhouse, we're able to go in there and present it. And, you know, like I said, the barriers of entry are pretty much eliminated. So, and it's a unique new item that's gotten some pretty good traction. So, we're pretty excited about the future, and we're already, you know, making some pretty great strides on, you know, some new activity.
And taking our produce them, but with the Metro New York and that you know in in Eastern Mississippi, where we're a powerhouse.
We're able to go in there and present it and like I said, the the barriers of entry are pretty much eliminated so and it's a unique new item that's gotten some pretty good traction so.
We're pretty excited about the future and we're already making some pretty great strides on.
Some some some new activity.
Speaker 4: Okay, great. Thanks. And lastly, Jim or Mike, you know, feel free to answer this question. So, in terms of pricing, you know, a number of our companies have taken price increases in this obviously inflationary environment. Have you been able to do that at this point? Are you planning on doing that? Or, you know, do you have to...
Okay, great, Thanks, and lastly, Jim or Mike.
Feel free to answer this question so in terms of pricing.
You know a number of our companies have taken price increases.
Obviously inflationary environment.
Have you been able to do that at this point.
Are you planning on doing that or.
Do you have to.
Do you have to sort of wait.
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Speaker 4: you know, until the reset, you know, how does, how, how does that work for you in terms of taking pricing?
You know until the reset.
How does how does that work for you in terms of taking price increases.
Speaker 3: Do you want me to answer that or do you want Mike? I can answer that. And Mike, feel free to chime in. You know, look, I think we've worked hard this past year to take price increases. We've held our prices. You go back and you look at some of our releases. We've worked hard to hold prices through the pandemic prior to the IPO. And then we held prices through kind of the integration of being a public company as well as
Do you want me to answer that or did you want Mike I can answer that and Mike feel free to chime in you know look I think we've worked hard this past year you take price increases.
We've held our prices go back and you look at some of our releases we've worked hard to hold prices through the pandemic prior to the IPO and then we help prices through you know kind of beaten integration of.
Being a public company as well as <unk>.
Speaker 3: providing that value to our retailers. We started to take price increases really this year, and that was accepted because I know we were a great partner to our retailers. So they were absolutely willing to help us out and make sure.
Providing that value to our retailers Oh, we we started to take price increases really this year and you know that was accepted because I think we I know we were a great partner.
So our retailers. So they were you know obviously willing to to help us out and you know and then.
It should put us in a position to continue to grow.
Speaker 3: put us in a position to continue to grow. I think that food is still, you know,
I think that.
So there's still you know it was.
Speaker 3: still suffers a little bit from inflation. It's calmed down quite a bit, but I think strategically we're warranted. And I think as we become more prominent with the brand, we'll look to try to do what we can on the price increase part. I know we provide exceptional service and that should, I think the profits for what we do to help the retailers sell our product, we should share in some of that. So I think on an account by account basis where we know that certain items can get a little bit more pricing power. Obviously we have volume discounts in place.
Still suffers a little bit from inflation, it's calmed down quite a bit but I think strategically.
Warranted and I think with as we become more prominent with the brand will look to try to do what we can on the price increase part I think our I think we provided I know, we provide exceptional service and that should mean that should I think the the profits for what we do to help the retailers. So our product we should share in some of that so.
I think on an account by account basis, where.
We know that we can we can certain items can you give me a little bit more pricing power, obviously, we have volume discounts in place.
Speaker 3: for the bigger players, but we continue to push to try to get our fair share based on our performance relationship and what the market can shoulder. Mike, do you want to add anything?
For the bigger players, but we continue to push to try to get our fair share based on our performance relationship and what the what the market can shoulder, Mike do you want to add anything to that.
Speaker 4: No, no, I think that kind of sums it up. I mean, you know, some of the price increases started to go into effect at the
No no I think that kind of sums it up I mean, you know some of the price increase is starting to go into effect at the.
Speaker 5: in Q2 and, you know, continued into Q3. So, you know, where the grocery chain will accept it and pass it on to the consumer, you know, obviously we want to see it. I mean, we've had increases in plastic and corrugated and fuel and health insurance wages. So, you know, we've suffered as well as, you know, everybody else out in the industry. And, you know, the retailer does realize that they have to, you know, give us a price increase. So.
In Q2, and you know continued into Q3, so you know.
Where where the grocery chain will accept it and pass it onto the consumer you know obviously, we want to see it I mean, we've had increases in plastic in corrugated and fuel and health insurance wages. So you know we've suffered as well as you know everybody else out in the industry and you know the the REIT.
Taylor does realize that they have to give us a price increase so it's.
Speaker 3: It's an ongoing negotiation, and I think what's nice is, you know, look, I think
They're not going to negotiate it and it's an ongoing negotiation and I think what's nice as you know look I think you know Michael you know Mike is pretty good on the company staying focused on making sure that we're driving towards profitability and it's important for us to once again get what I think we've earned as a partner its an ongoing.
Speaker 3: Mike is pretty good on the company, staying focused on making sure that we're striving towards.
Speaker 3: profitability and it's important for us to once again get what I think we've earned as a partner.
Speaker 3: It's an ongoing negotiation. We have fantastic relationships with our key retailers, probably unlike our competitors in the industry. And so those conversations continue to go on.
Negotiation, we have fantastic relationships with our key retailers, probably unlike you know where our competitors in the industry and so those conversations continue to go on and it's a constant.
Speaker 3: It's a constant negotiation, but we push to get what should be fair. I think the retailer understands that, but obviously, they always want to be best priced and it's a competitive environment for them. But once again, I think we have a good open dialogue, which is kind of rare.
Negotiation, but we pushed it to get what should you know should be fair and I think the retailer owns that understands that but obviously you know they always want to be best priced and there's always a competitive environment for them.
But I think once again I think we have a good open dialogue, which is which is kind of where.
Speaker 5: Okay, great. Thanks very much. I'll hop back in the queue. Appreciate it. All right. Thank you. Thank you, Anthony.
Okay, great. Thanks, very much I'll hop back in the queue I appreciate it thank.
Thank you. Thank you Anthony.
Speaker 1: Thank you, and as a reminder, if you would like to ask a question today, you may press star one on your telephone keypad at any time. Once again, that'll be star one. Enter the queue to ask a question at this.
Thank you and as a reminder, if you'd like to ask a question today you May press star one on your telephone keypad at anytime once again that'll be star one to enter the queue to ask a question at this time.
Speaker 1: And your next question today is coming from Nick Pincus from Forest Capital. Nick, your line is live. Please go ahead.
And your next question today is coming from Nick Pincus from Forest capital. Nick Your line is live. Please go ahead.
Speaker 3: Thanks for taking my call. Congrats on another very strong quarter. I know you've touched on this, but you've clearly built a very robust distribution network and now you start introducing pulp, which appears to be very high margin shelf stable product. Are you planning to introduce any other new products, either your own or 3rd party products through the distribution channel?
Thanks for taking my call. Congrats on another very strong quarter I know you've touched on this but you've clearly built a very robust distribution network and now you've started introducing pulp which appears to be very high margin shape shelf stable product are you planning to introduce any other new products, either your own or third party products through the distribution.
<unk> channel.
Thank you.
So the question Nick.
Speaker 3: Yes, so right now it's really, you know, we've used the produce business to continue to drive
Yes, so right now it's really we've used the produce business to continue to drive.
Speaker 3: The distribution platform, we continue to increase our store account, over 5,000 currently growing. Not only have we been opening new accounts, we've been expanding within the existing accounts that we have.
The distribution platform, we continue to increase our door count for a store count of over 5000 currently growing.
Not only have we've been opening new accounts, we've been expanding within existing.
The accounts that we have.
Speaker 3: So, you know, what you'll see is you'll see an introduction of new products. You know, we have a pipeline, a very compelling pipeline, all of which is sort of tied back to who we are as a company, whether it's, you know, you know, a living good or something that is sustainably grown or packaged, you know, we are, we're really focused on being this, this leader in this, in this kind of next gen space.
So what you'll see is you'll see an introduction of new products. We have a pipeline of very compelling pipeline all of which is sort of tie back to who we are as a company whether it's a.
Living good or something that is a sustainably grown or packaged we are we're really focused on being the leader in this business kind of nextgen space of.
Speaker 3: of, you know, better products for you, you know, with an eye on the environment.
Better products for you either with an eye on the environment.
Speaker 3: And there's really no one else better to do this, in my humble opinion.
And there's really no one else better to do this in my humble opinion of course I'm biased than edible garden. Since we are a go or a bigger package it or we are USDA.
Speaker 3: of course, I'm biased, than Edible Garden, since we are a grower, picker, packer, chipper. We are USDA organic certified. We are a leader of the CEA space. So again, you're gonna see an interesting slate leveraging not only the current relationships but new relationships. We've also set up something called ED Direct.
Organic certified we are leader the CE space, So again, you're going to see an interesting slate leveraging not only our current relationships with new relationships. We've also set up something called <unk> direct which is going to be sourcing commodity items. So when you.
Speaker 3: uh which is going to be sourcing uh commodity items so when you're a when you're a
Or a when you're a.
Speaker 3: company like Edible Garden, and you've continued to deploy your resources in order to develop patented software, and you have an eye on your fill rates, and you achieve some of the industry's highest fill rates in a very tough
Company like edible Garden, and you you continue to deploy.
Your resources in order to develop our patented software and and you'll have an eye on your fill rates and you achieve some of the industry's highest go right in a very tough.
Speaker 3: perishable industry, you leverage those relationships to work with the buyers to supply them with some of these commodities.
Perishable industry.
11 leverage those relationships to two to work with the buyers to supply them with some of these commodities since I have feel to growers and other type of borrowers who come to US all the time, who may not have the relationship that want to work with us to help bring in some of these commodity products. So it's really based on trust and perform.
Speaker 3: I have field growers and other type of growers who come to us all the time who may not have the relationship that want to work with us to help bring in some of these commodity products. So it's really based on trust and performance.
<unk>.
Speaker 3: um to to move some of this product and so you know we've we've just um we've been working on our
To move some of this product and so we've.
We've just.
We've been working on our Oh.
Speaker 3: Our 20,000 square foot packhouse in Belvedere, New Jersey, we just started laying down asphalt and finishing some of the finishing touches on that part of the, you know, part of the facility, having that type of storage processing and cross dock.
<unk> thousand square foot pack house in Belvidere in New Jersey.
Just sort of laying down asphalt and finishing some are putting the finishing touches on that part of the part of the.
Facility having.
Having that type of storage.
<unk> and cross dock.
Speaker 3: Well, it will allow us to leverage that facility to its fullest and so I'm thrilled about that because I think we can really take on quite a bit of business and we have the relationships and the appetite from our customers in order to do so. So you'll see a whole recap, a whole new slate of products.
Well it will allow us to leverage that facility to its fullest and so I'm thrilled about that because I think we can really take on quite a bit of business and we have the relationships and the appetite from our customers in order to do so so you'll see a whole just to recap a whole new slate of products.
Speaker 3: You know, I'm not going to say they're full spectrum. I think they will be focused on what we're good at, as well as some of these commodity items that we know that we can move pretty quickly through the distribution platform. But, you know, the big asset at Edelberg Garden is the distribution platform and the name and the relationships, and I think we're going to, you're going to see a lot coming from us moving forward as it relates to leveraging that, sticking with the strategy that Mike and I have always deployed, which is really working with what we have.
I'm not going to say this will spread spectrum I think there will be focused on what we're good at as well as some of this commodity items that we know that we can move pretty quickly through the through the distribution platform.
But you know the big asset at edible gardening is the distribution platform and the name and the relationships and I think we're going to you're going to see a lot coming from us moving forward as it relates to leveraging leveraging that sticking with the strategy that Mike and I have always deployed which is really working with what we have.
Speaker 3: No, thanks. That's that's definitely helpful. And to follow up on that, can you elaborate specifically on the Walmart relationship and how you intend to expand on that?
No. Thanks, that's that's definitely helpful and Q.
To follow up on that can you elaborate specifically on the Walmart relationship and how you intend to expand on that.
Speaker 3: Yes, thank you. The Walmart relationship continues to grow quite nicely. We put a significant investment in both facilities this past quarter in order to increase our capacity for processing.
Yes, Thank you and the Walmart and the Walmart relationship continues to grow quite nicely. We we put a significant investment in both facilities. This past quarter in order to increase our capacity for processing.
Speaker 3: And we started in, I believe it was in July , we started to ship additional cut herbs to more DCs based on an award that we got from them. We have a very active relationship with the buyer there. They continue to turn to us for more. They've already, you know, started to increase some of their orders over the holidays, you know, from their forecast.
And we started in I believe it was in.
July we started to ship additional cut herbs into more D. C is based on an award that we got from them.
We're very active relationship with the buyer.
They're they continue to turn to us for more they've already.
So did increase some of their orders.
Over the holidays.
From from their forecast.
Speaker 3: Um, and, uh, it's a, it's a nice relationship and we work hard to hit their target. I mean, you're talking about a 98% fill rate in a perishable, uh, multi skew business that could, uh, you know, that always has its challenges.
And it's a it's a nice relationship and we work hard to hit their target I mean, you're talking about a 98% fill rate and a perishable.
Multi SKU business that could you know that always has its challenges.
Speaker 3: just considering how fickle produce can be at times, but we continue to strive forward. The company's been laser focused on servicing Walmart, knowing that.
Considering how fickle produce can be at times, but we continue to drive forward. The company has been laser focused on servicing our Walmart knowing that.
Speaker 3: You know, they are, you know, they're a potential game changer account for.
They are there there are potential game changer account for further business and we treat them as such and they've been they've been they've been a good partner frankly and so.
Speaker 3: for the business, and we treat them as such, and they've been a good partner, frankly. And so, onward and upward. We're excited about what we're doing with them. I only expect if we continue to execute that they will return the favor as they always have, because they work on numbers and performance, and that's what we're focused on. So, once again, nice relationship, and fingers crossed, and we're in the heat of the battle right now with our peak season, but I think we should come out in pretty good shape.
A word and upward.
We're excited about what we're doing with them I only expect that if we continue to execute that they will return the favor as they always have because they work on numbers and performance and that's what we're focused on so.
And once again nice relationship and fingers crossed and we're in the heat of the battle right now with our peak season, but ethical we should come out in pretty good shape.
Oh, Thanks keep up the good work.
Speaker 6: Appreciate it, Nick.
I appreciate it Nick.
Yeah.
Speaker 1: Thank you, and there are no further questions in queue at this time. I would now like to turn the floor back to management for closing remarks.
Thank you and there are no further questions in queue. At this time I would now like to turn the floor back to management for closing remarks.
Speaker 3: Thank you again for joining us today. We are encouraged by the progress we have made at Edible Garden and are enthusiastic about the prospects for the business. We remain committed to maintaining and accelerating our organic revenue growth as well as turning the corner to positive cash flow. We look forward to providing updates on our progress in the coming months.
Thank you again for joining US today, we are encouraged by the progress we've made in edible gardening Uzi asked me about the prospects for the business, we remain committed to maintaining and accelerating our organic revenue growth as well as turning the corner to positive positive cash flow, we look forward to providing updates on our progress in the coming months.
Thank you and have a great day.
Speaker 1: Thank you. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.
Thank you. This does conclude today's conference call. You may disconnect. Your phone lines at this time and have a wonderful day. Thank you for your participation.