BranchOut Food (NASDAQ:BOF) expects to generate approximately $14.5 million in sales this year as it expands production of fruit, vegetable and cheese snacks made using EnWave’s vacuum-microwave dehydration technology, Chief Financial Officer John Dalfonsi said during a company presentation.
Dalfonsi said the company’s Peru processing facility, which opened about two years ago, has secured business with major retailers including Costco, Sam’s Club and Walmart, as well as ingredient customers. He said some anticipated sales were delayed into the following year, reducing the company’s current-year sales outlook from what he said could have been approximately $20 million.
“It is not a matter of whether, it is a matter of when,” Dalfonsi said in response to a question about the roughly $5.5 million in orders that were pushed out. He attributed the delays to lengthy product-development and merchandising timelines at large retailers.
Production Growth and Capacity Plans
BranchOut operates a plant in Peru with approximately 300 employees, where it processes fruits, vegetables and other foods using EnWave’s REV technology. Dalfonsi described the technology as a vacuum-chamber industrial microwave process that lowers the boiling point of water and is intended to preserve flavor, texture and appearance while reducing processing time relative to freeze-drying.
The company believes the technology can serve as an alternative to the freeze-dried snack market. Dalfonsi said BranchOut has spent the past two years refining how different products are prepared before entering EnWave machines, improving output and product consistency.
Monthly production had previously averaged roughly 30,000 to 40,000 kilograms, Dalfonsi said, and the company expects to reach 70,000 kilograms during the current month. The company’s average selling price is about $33 per kilogram, according to Dalfonsi.
The existing plant has estimated annual revenue capacity of $40 million to $50 million, he said. BranchOut also owns property adjacent to the facility that could support an expansion to a $100 million production footprint. Dalfonsi said an additional EnWave machine would cost about $2 million, while a shell for the adjacent facility would cost approximately $150,000.
Break-Even Targets and Working Capital
Dalfonsi said BranchOut’s break-even revenue level is currently about $26 million based on existing costs, though management believes it can reduce that figure to approximately $18 million by improving purchasing and operations. The company sees potential to lower break-even further, to about $14.5 million, through measures including bringing packaging activities in-house.
Raw materials account for about 35% of revenue, Dalfonsi said, while other costs—including tariffs, EnWave royalties, broker commissions, packaging and shipping—represent about 20% of revenue. He said the company is targeting gross margins of 40%, after reporting an expected gross margin in the teens for the third quarter and anticipating improvement into the 20% range.
The company sources produce in Peru, including fruit that may not meet cosmetic supermarket standards but remains usable for processing. Dalfonsi said this sourcing approach provides lower-cost inputs and reduces food waste.
BranchOut has used equity financings to support working capital needs, Dalfonsi said, because its purchasing cycle can extend up to six months. The company has considered receivables factoring and other financing alternatives but has not found them sufficiently attractive. It hopes to secure a revolving credit facility from a major commercial bank in 2027, he said.
Retail, Private Label and Ingredient Business
BranchOut’s revenue mix currently consists of about 50% ingredients, 40% branded club-channel products and 10% private-label products, according to Dalfonsi. He said private-label sales include a Walmart product and smaller customers, while the company sees additional opportunity with retailers such as Trader Joe’s and ALDI.
Ingredients generally carry lower margins than branded snacks, Dalfonsi said, estimating ingredient margins near 30% compared with approximately 40% to 45% for branded products before considering packaging and marketing costs. Club retailers such as Costco and Sam’s Club market products through demonstrations, he noted.
- A Crunchy Fruit Multipack sold in about half of Sam’s Club locations is an estimated $8 million business, according to Dalfonsi.
- A tropical mix pack with approximately $2 million in business is scheduled to enter Sam’s Club toward year-end.
- BranchOut expects its ingredient business to reach as much as $10 million next year, compared with an estimated $6 million to $7 million this year.
Dalfonsi said the company has a revenue base of about $4 million per quarter heading into 2027 and approximately $16 million already in place for next year. BranchOut’s strategy centers on retail, private label and ingredients.
Cheese and New Product Development
BranchOut is also expanding into dried cheese products. Dalfonsi said cheese could become as large as, or larger than, the company’s fruit and vegetable business. Initial dried-cheese products are already being sold in Target stores, and he said the company expects to announce additional cheese business in 2027.
The company’s Cheesecake Bites product is initially being co-packed at another U.S. facility that uses EnWave technology. Dalfonsi said the product retains a creamy cheesecake texture and is expected to have a shelf-stable life of at least two years.
Looking ahead, Dalfonsi said BranchOut has not yet fully entered the broader conventional retail channel and expects further expansion across product categories and customer channels in 2027.
About BranchOut Food (NASDAQ:BOF)
BranchOut Food Inc is a food technology company that develops, manufactures and sells dehydrated fruit and vegetable products. Its portfolio includes shelf-stable snacks, fruit-based products and vegetable ingredients designed for use by consumers, retailers and food manufacturers.
The company uses proprietary dehydration technology intended to preserve the flavor, color, texture and nutritional characteristics of fresh produce while extending shelf life. BranchOut Food offers products under its own brand and works with business customers on private-label and ingredient applications.
BranchOut Food distributes its products through retail, foodservice, e-commerce and industrial channels.
