The plant-based food movement has been gathering steam in recent years as consumers focus more on their health as well their impact on the environment.
According to a Bloomberg Intelligence report, the global plant-based foods market could see five-fold growth from US$29.4 billion in sales during 2020 to $162 billion by 2030.
Vejii Holdings Ltd, which is a British Colmbia-based company, has created a unified digital marketplace and fulfillment platform, featuring more than 3,000 plant-based and sustainable-living products from a growing list of hundreds of vendors. The platform offers an easy-to-use, omnichannel experience for both vendors and buyers, leveraging big data and artificial intelligence to connect brands with a targeted consumer base, both organically and through specialized marketing programs.
Vejii CEO Kory Zelickson has over 15 years of demonstrated technology experience, launching successful eCommerce and technology start-ups that include the multivendor platform Namaste Technologies.
Zelickson told Proactive how Vejii has built its extensive online plant-based marketplace and outlined the company's growth plans and timeline to profitability.
Proactive: How does your company plan to increase its market share in what is becoming an increasingly crowded plant-based food space?
Kory Zelickson: That's a really interesting question, and I have a good answer for it too. It’s because we are not a consumer packaged goods (CPG) company, we're not a brand -- we're a marketplace. We service customers by providing access to thousands of plant-based products and we service brands by providing them with access to a national audience of ethically-aligned consumers
We also support brands by providing everything from digital marketing resources, which includes marketing packages to drive traffic to the website, as well as giving brands access to our distribution network. Over the last two years, we've seen literally hundreds of new brands coming to market. And, just in the past year, we've onboarded over 130 independent brands to our website, and we have a queue of about 200 brands that are in some type of process for onboarding to the site today.
So the simple answer is that while there's an increase in competition from brands coming to market, all these companies are competing on taste and texture profile, and everybody's competing for the same shelf space in retail box stores. More brands are starting to turn towards online channels to gain awareness, and Vejii provides the distribution backbone needed to support our brand partners launching D2C (direct to consumer) sales online.
In contrast, our platform thrives on competition coming to the market, because we have the ability to endlessly scale our platform and onboard thousands to millions of products, which at the end of the day benefits the consumers because when you go to a grocery store, you might have 5 to 20 plant-based brands available. Grocery stores are always limited to a physical footprint and a limited amount of shelf space. Today, we have over 500 brands on the website. So we provide consumers with a much larger variety of products than you could ever get in a traditional grocery store and we are price competitive.
So how, then, are you building awareness of your platform?
We drive traffic to the website organically and through paid ad spend. A lot of the companies coming to market today are within the plant-based protein space, such as meats, dairy, seafood, egg and cheese alternatives, and those companies lack resources from a digital marketing perspective, or they may need resources from distribution. And so we actually have brands that come to our site and list and they contribute to advertising dollars that drive traffic to their landing pages on our website. Our cold-chain logistics network that we’ve built, with five distribution centers across the US, plays a key role in opening the door for major brands to access the D2C market.
For example, if you had your own brand of plant-based snacks, or plant-based chicken nuggets, you can participate in our fulfillment platform. Typically what we'll do is take some of your product, get it out to social media influencers and then create user-generated content, such as unboxing videos or reviews of the product. We then leverage that content to create impactful ads that are funded by our brand partners.
Thus, if you're looking in Canada and you're seeing ads for Boosh Foods or Nabati, for example, there’s a good chance we’re running the ads, which is driving traffic to our website on that company’s product landing page. So the benefit for the brand is that it gets exposure to new consumers, and the customer’s first point of contact is with their product. The benefit for us is that people usually end up buying more than one product in order to hit that minimum threshold for free shipping and we acquire a new customer.
We've also acquired two companies as well. We acquired VeganEssentials.com in November, which is an award-winning vegan grocery store that has a database of approximately 300,000 consumers. We also recently acquired VEDGEco.com, which is an online platform that provides plant-based foods, B2B and services the restaurants and independent grocers. So we have quite a bit of exposure already through our acquisitions and with the traffic we drive to the website through our brand partnerships.
What's your company's overall growth strategy and how do you plan to increase shareholder value?
We're focused on continued growth through customer acquisition. With our marketplace model, we have a broad range of categories from sustainable cosmetics to personal care products and we plan on continuing to scale and expanding into new product categories such as sustainable fashion or even furniture. And since we have an audience of ethically-aligned consumers, the same person who wants to buy plant-based burgers might also be interested in sustainable cosmetics or fashion.
We will also continue to grow and scale our website and platforms, focusing on customer acquisition and expanding our product categories. As a company focused on M&A, we also have a pipeline of opportunities that we're looking at to expand our revenue channels into new categories as well as into new geographical regions.
In January, your company announced revenue guidance for 2022 of between $10 million and $12 million. Do you have a timeline to be consistently cash-flow positive and how do you intend to reach that goal?
When we released our 3Q financial results, we reported a gross margin of 23%. And we recently announced our January sales, where our gross margin jumped to 37%. Through the acquisitions we've completed, we've acquired additional distribution centers. For a business like ours, one of the biggest cost impacts is shipping and packing material. And so by continuing to regionalize our distribution centers in key strategic areas we’re able to drive down costs and improve margin by getting products closer to the consumer. This strategy impacts our cost structure, and also allows us to launch same-day delivery on a regional basis, improving the customer experience and our carbon footprint.
We have also started to develop direct relationships with some of the larger brands, where purchasing direct has a significant impact on gross margin. We use consignment inventory from brands, and our distributor relationships to launch and test new products in the marketplace, and when we see traction we have the ability to go direct to the brands for purchasing. And our goal is to reach operational profitability in 2022 and achieve full corporate profitability in 2023.
Finally, what do your shareholders have to look forward to in the next 12 months?
In the next 12 months, we’ll be focused on continued scaling of customer acquisition, vendor onboarding, expanding on synergies with our subsidiaries, implementing regionalized same-day delivery and expansion of our platform into new categories and geographies.
Contact Sean at sean@proactiveinvestors.com