The Wallaby Report — June 13, 2024
Issue 4 | Innovative Food Holdings, Inc.
Every Tuesday and Thursday, I share seven key reflections on a new company I’ve recently explored.
Today’s company is Innovative Food Holdings, Inc.
Strong, New Management Team: Bill Bennett appointed as CEO in February 2023, Brady Smallwood joined in March 2023 (COO), Gary Schubert in January 2024 (CFO). Mr. Bennett came from Kroger, Mr. Smallwood from Kroger and Walmart, and Mr. Schubert from Walmart and Tyson Foods.
Profitable Foodservice Platform: The company’s primary focus is on growing its direct-to-chef specialty food service platform, a business with a history of consistent strong cash flow generation.
Direct-to-Consumer eCommerce Ramp Down: The company is scaling back its unprofitable direct-to-consumer eCommerce business.
Strategic Sale of Non-Core Assets: Sold Florida headquarters building, listed Pennsylvania direct-to-consumer fulfillment center for sale (anticipated proceeds to pay off all long-term debt), monetized non-core businesses including Oasis Sales Corp, Organic Food Brokers, and Haley Food Group.
Three-Phased Growth Strategy: Aims to achieve $100 million in revenue and $10 million in adjusted EBITDA — via stabilizing the core business, laying the foundation for growth, and scaling the business.
Return to Profitable Revenue Growth: New management has implemented cost-cutting measures, reduced headcount, and refinanced debt. The company expects to return to revenue growth in the latter half of 2024.
Conservative Acquisition Strategy: The company is considering acquisitions of profitable businesses with clear synergies and reasonable valuations (3-5x adjusted EBITDA) that can be financed without significant new equity or debt.
