With new milestones, PlantX (CSE: VEGA) doubles down on revolutionizing the plant based industry

Background on PlantX (CSE: VEGA)

PlantX Life Inc. is a vegan company based in Canada that seeks to be a one-stop shop for plant-based products and a plant-based lifestyle. Through its own website and partner e-commerce channels including thebay.com, amazon.com, Walmart.com, and Walmart.ca, the company connects with a community of like-minded consumers. PlantX currently sells over 10,000 plant-based products in North America, including meal and indoor plant delivery services, and is slowly expanding into Europe. It has acquired high-quality businesses and created strategic partnerships with well-known brands and celebrity chefs to raise awareness about the benefits of a plant-based lifestyle and strengthen its market position. Not only is the company at the forefront of the sustainable lifestyle movement, but it is also encouraging healthy competition and lowering the barriers to entry for new and established brands in this market. It launched the “Vegan Popup by XMarket” initiative to help both new and established plant-based products by giving its Venice Beach retail space as a pop-up installation. As it expands into new markets, the company has seen excellent growth and significant financial success in recent quarters. This demonstrates that PlantX’s efforts are yielding results, and the company’s vision is becoming a reality, which will benefit its stock as well.

Exhibit 1: PlantX stock price (YTD)

The plant-based industry

Plant-based products are becoming increasingly popular, with the industry witnessing a shift in consumer eating habits and an increase in veganism as buyers become more aware of how their lifestyle choices affect their health and the environment. Following the emergence of COVID-19, people have become increasingly concerned about their health, and the food industry has seen a variety of new trends arise. The growing demand for vegan products has encouraged several well-known companies to boost their investments in plant-based products. Consumer behavior is changing as they grow more familiar with plant-based products and scientific advancements. Furthermore, due to limited resources, rising population, and the growing threat of climate change, certain countries are making considerable moves toward sustainable and ecologically friendly products. The pandemic has spurred a long-term transition in the food business toward healthier, more environmentally friendly products, and this trend shows no indications of slowing, with demand projected to remain robust. Statista predicts that the plant-based food business will be worth $161.9 billion by 2027. The increasing number of cases of animal protein intolerance, as well as considerable R&D investments, are also driving market expansion, with the market value expected to double by 2030.

Exhibit 2: Value of the plant-based food market worldwide fFrom 2020 To 2030

New milestones

PlantX continues to make considerable investments in improving the quality of its existing offerings, as well as expanding its user base by entering new markets. Last year, the company released an app to improve consumer engagement and satisfaction, as well as XFitness for XVIP members, an online fitness service that provides a selection of live and on-demand fitness classes offered by experienced instructors. It recently announced the expansion of its XMeals online platform to the United States, allowing customers to access plant-based menu items and meal plans through the company’s new website, xmeals.com. The company entered the $284 billion alcoholic beverages industry after gaining a license to sell and distribute alcoholic beverages in its retail stores in Chicago, Illinois, and Venice Beach, California.

As PlantX’s acquired brand Little West, a cold-pressed juice brand, grows in popularity, the business has entered a wholesale distribution arrangement with KeHE Distributors to carry the brand’s cold-pressed juices. Little West offers a varied assortment of beverages and products manufactured from locally sourced, high-quality, and fresh ingredients, and is a popular choice for healthy and delicious beverages. KeHE is one of North America’s largest pure-play wholesale distributors of natural and organic, specialty, and fresh food products, representing 8,500 brands and serving over 30,000 natural food stores, chain and independent grocery stores, e-commerce retailers, and other specialty product retailers. This collaboration will help in Little West’s expansion strategy by increasing its market reach.

Furthermore, the company is aiming to reduce food waste, which is one of the most essential strategies to encourage a sustainable lifestyle. In August, PlantX announced a collaboration with Too Good To Go, the world’s largest marketplace for selling excess food. Too Good To Go works with over 160,000 stores in 17 countries to prevent food waste, and through this relationship, PlantX is trying to develop a channel for food goods that are about to expire, decreasing food waste, feeding people, and helping the environment. Too Good To Go has been integrated into XMarket stores in Chicago, Toronto, and Ottawa, with more locations to be announced.

On September 19, the company also announced that it will acquire the online domain www.veganessentials.com, as well as certain associated intellectual property and assets, from Veji and Essentials for a total acquisition price of C$900,000. Vegan Essentials has a great reputation as an online superstore, having been named the best online vegan store from 2005 to 2018 and the best online vegan grocery from 2018 to 2021 by VegNews Magazine. The veganessentials.com domain performs incredibly well in organic search due to its strong brand name and comes with an extensive customer database, thus the acquisition is expected to expand PlantX’s significant portfolio of e-commerce websites and better serve customers.

With its investment in growth and expansion, PlantX also promotes other plant-based brands and recently announced a new partnership with Future Farm, a plant-based food innovator, and lifestyle brand, to exhibit its product at PlantX’s Venice Beach Vegan Popup by XMarket location. Future Farm items, such as meatballs, burgers, and sausage, are prominently displayed around the Venice Beach store and the store will feature weekly events, such as monthly pizza evenings highlighting Future Farms products, and the Venice Beach Vegan Popup by XMarket retail store was painted to serve as a billboard for Future Farms.

Impressive monthly growth

The company is experiencing substantial revenue growth year over year due to high demand for its products and services and recorded rapid growth in recent months as it moved into new markets such as Austria and the Republic of Ireland. The company’s collaboration with BESTIES Vegan Paradise (“BESTIES”) resulted in a 30% increase in sales revenue in the first month following the rebranding of PlantX’s Venice branch to mirror the BESTIES model. PlantX achieved $1.2 million in monthly total sales in July, a 35% increase over July 2022 driven by Little West’s strong growth. PlantX recorded $1.381 million in monthly gross sales in August 2022, a 32% increase year over year driven mostly by the expansion of its distribution networks and retail footprint. In August 2022, gross profit was $525,000, or 38% gross margin, compared to $367,000, or 35% gross margin, in August 2021.

Conclusion

PlantX’s year-over-year growth is being driven by a good market response to its brand portfolio. This year, the company has reached significant milestones in terms of product and partnership expansion. PlantX is on its way to becoming a market leader, performing well despite challenging market conditions. Companies that do well during a depression have historically done quite well. This fast-growing company’s future seems promising, thanks to its rapid expansion and development strategy.