Barfresh Dramatically Expands its Production Capacity by Adding Two New Third Party Locations

Rhea-AI Summary

Barfresh has significantly expanded its production capacity by adding two new co-manufacturing locations.

These facilities are strategically situated in the Mid-West and East Coast, enabling the company to better serve its growing clientele across various channels. The new capacity includes the ability to produce 25 million additional bottling units annually for Barfresh's Twist & Go products, effectively more than doubling the company's overall production capacity.

CEO Riccardo Delle Coste emphasized that the increased capacity will support recent and upcoming customer acquisitions, particularly in the education sector. Delle Coste also highlighted the addition of new management team members and the introduction of new products as key factors for anticipated sales growth and improved profit margins in fiscal year 2024 and beyond.

Positive

• Barfresh has more than doubled its overall production capacity.
• Added 25 million annual bottling units for Twist & Go products.
• Strategic locations in the Mid-West and East Coast improve customer service capabilities.
• Increased capacity supports recent and upcoming customer acquisitions, particularly in the education sector.
• New management team members and new product offerings expected to drive sales growth and profit margins.

Negative

• None.

Insights

Market Research Analyst

Barfresh's expansion of its production capacity is a significant development that highlights the company's growth trajectory. By adding two new co-manufacturing locations, strategically positioned in the Mid-West and East Coast, the company can better serve its broadening customer base. This strategic positioning is important for logistics and distribution efficiency, reducing lead times and potentially lowering transportation costs.

Furthermore, the addition of 25 million annual bottling units particularly for the Twist & Go product line is noteworthy. This product line's success indicates strong market demand and the increased capacity allows Barfresh to capitalize on this momentum. Also, the production increase for various packaging formats such as single-serve pouches and gallons suggests that Barfresh is catering to diverse market needs, enhancing its market penetration capabilities.

For investors, this move shows Barfresh's proactive approach in scaling operations to meet demand, which is a positive indicator of potential revenue growth. However, the actual impact on profitability will depend on how efficiently the new capacities are utilized and how well the company manages operational costs. Given the competitive nature of the ready-to-drink market, maintaining product appeal and securing long-term contracts will be key to sustaining growth.

Financial Analyst

From a financial perspective, doubling production capacity is a bold move that can lead to significant revenue growth. The announcement mentions that this capacity increase aligns with recently acquired significant customers, particularly within the education channel. This suggests a strong pipeline of demand, which is important for justifying the increased production capacity.

However, it is important to monitor the cost implications of this expansion. While increased capacity can lead to higher sales, it also comes with increased fixed costs. These include potential increases in labor, raw materials and overheads associated with running additional production facilities. The financial success of this expansion will hinge on the company’s ability to efficiently manage these costs and achieve economies of scale.

The CEO's statement about aiming for record revenue performance and expanded profit margins will need to be scrutinized against actual quarterly earnings reports. Investors should keep an eye on the company's gross margin trends and how they are impacted by these new capacities.

The New Capacity Will Cover the Company’s Full Range of Product Offerings, Including Approximately 25 Million of Additional Bottle Capacity for the Twist & Go Offerings

These New Co-Manufacturing Locations More than Doubles our Overall Capacity

LOS ANGELES, July 08, 2024 (GLOBE NEWSWIRE) -- Barfresh Food Group Inc. (the “Company” or “Barfresh”) (Nasdaq: BRFH), a provider of frozen, ready-to-blend and ready-to-drink beverages, adds two co-manufacturing locations. These locations are strategically located in the Mid-West and the East Coast to better provide a full range of offerings to our rapidly expanding clients in all Channels. This includes manufacturing for single serve pouches, 1:1 gallons and 5:1 ½ gallons. In addition, this new capacity adds 25 million annual bottling units for our highly successful Twist & Go Products. Overall, the Company now has the ability to more than double its overall annual unit capacity.

Riccardo Delle Coste, the Company’s Chief Executive Officer, stated, “These new locations more than double our overall capacity covering all of our product offerings including an additional 25 million bottling capacity. We have recently announced many new significant customer acquisitions within the education channel and this capacity will enable us to more than provide for these customers and many more in all channels. Barfresh is now in a tremendous positioned to dramatically increase sales in the coming years due to many factors including the capacity announced today, new members of management including the Vice President of Supply Chain & Co-Manufacturing and new Vice President of Sales, new customers in all channels and new product offerings. The appeal of our better-for-you product portfolio, combined with our acquisition pipeline of new customers that also has numerous bids underway to onboard additional schools as Barfresh customers for the 2024-2025 school year. This accelerated pace of new customer acquisitions strategically positions us for record revenue performance and expanded profit margins in fiscal year 2024 and beyond.”

About Barfresh Food Group

Barfresh Food Group Inc. (Nasdaq: BRFH) is a developer, manufacturer and distributor of ready-to-blend and ready-to-drink beverages, including smoothies, shakes and frappes, primarily for the education market, foodservice industry and restaurant chains, delivered as fully prepared individual portions or single serving and bulk formats for on-site preparation. The Company’s single serving, on-site prepared product utilizes a proprietary, patented system that uses portion-controlled pre-packaged beverage ingredients, delivering a freshly made frozen beverage that is quick, cost efficient, better for you and without waste. For more information, please visit www.barfresh.com.

Forward Looking Statements

Except for historical information herein, matters set forth in this press release are forward-looking, including statements about the Company’s commercial progress, success of its strategic relationship(s), and projections of future financial performance. These forward-looking statements are identified by the use of words such as “grow”, “expand”, “anticipate”, “intend”, “estimate”, “believe”, “expect”, “plan”, “should”, “hypothetical”, “potential”, “forecast” and “project”, “continue,” “could,” “may,” “predict,” and “will” and variations of such words and similar expressions are intended to identify such forward-looking statements. All statements, other than statements of historical fact, included in the press release that address activities, events or developments that the Company believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made based on experience, expected future developments and other factors the Company believes are appropriate under the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. The contents of this release should be considered in conjunction with the Company’s recent filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including any warnings, risk factors and cautionary statements contained therein. Furthermore, the Company expressly disclaims any current intention to update publicly any forward-looking statements after the distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise.

Investor Relations
John Mills
ICR
646-277-1254
John.Mills@icrinc.com

Deirdre Thomson
ICR
646-277-1283
Deirdre.Thomson@icrinc.com

FAQ

How has Barfresh expanded its production capacity?

Barfresh has added two new co-manufacturing locations in the Mid-West and East Coast, more than doubling its overall production capacity.

What is the new annual bottling capacity for Barfresh's Twist & Go products?

The new capacity includes the ability to produce 25 million additional bottling units annually for Twist & Go products.

How will the new capacity impact Barfresh's sales and profit margins?

The increased capacity is expected to support new customer acquisitions and drive sales growth, leading to expanded profit margins in fiscal year 2024 and beyond.

What channels will benefit from Barfresh's new manufacturing capacity?

The new capacity will enable Barfresh to better serve clients across all channels, including single serve pouches and gallon-sized offerings.

How does the new capacity position Barfresh for the future?

The expanded capacity, along with new management team members and product offerings, strategically positions Barfresh for record revenue performance and increased profit margins in the coming years.