Bonduelle Expands Royalty Bearing Partnership With EnWave Corporation
A few years ago EnWave Corp (CA: ENW – $1.66 & US: NWVCF – $1.26 & GER: E4U – €1.07) entered into a partnership with Bonduelle, an established multinational frozen food processer and distributor. By removing most of the moisture content prior to freezing, the companies developed an innovative way to preserve frozen vegetables using EnWave’s Radiant Energy Vacuum (REV) technology. This process ensured that the flavor and texture of the vegetables remained intact.
The agreement also involved a long term lease commitment for a commercial 120kW quantaREV machine, and granted exclusivity for the dehydrofrozen process to Bonduelle. Years of work led to the launch of Bonduelle’s InFlavor premium frozen vegetable line. Presented at trade shows and test marketing events, the InFlavor brand was an immediate success and even received prestigious awards acknowledging the appeal of the product line.
Significant Increase in Production Capacity Secured by Bonduelle
After a favorable response from its test audience, several larger orders for the InFrozen products were recently secured from B2B clients, prompting Bonduelle to officially launch its InFlavor dehydrofrozen vegetable product line to its food service customers. Moreover, the multinational has confirmed plans to launch a retail version of the product line late 2019.
This week EnWave reported that the royalty agreement with Bonduelle has been revised, such that exclusivity for the production of frozen vegetables is extended for the North American market. The global exclusivity, which Bonduelle once had in the dehydrofrozen vegetables space, has now been reduced to a more focused market territory. Most likely because Bonduelle didn’t purchase the number of REV machines necessary to maintain its global exclusivity. In order for Bonduelle to retain its exclusive right to produce dehydrofrozen vegetables in North America using REV technology, it must purchase a 400kW REV machine before September 30, 2019.
In exchange for the extension of the exclusivity, Bonduelle has to make a milestone payment to EnWave. The amount of the payment was not disclosed but believed to be meaningful. In addition, Bonduelle has agreed to buy-out the operating lease on the 120kW quantaREV machinery currently operating at Bonduelle’s plant in Sainte-Martine, Quebec. This is all good news for EnWave as Bonduelle’s product line may soon generate a substantial royalty stream for the Company.
Trade Show Participation Enables Enhanced Marketing Opportunities
In the past, EnWave has been successful to present its technology and demonstrate new product developments through a number of high profile trade shows. As such, the Company remains committed to this marketing strategy.
Last week, the Company participated the Fruit Logistica event in Berlin, Germany. A wide-ranging conference featuring companies from across the spectrum in the food processing sector.
This was the first time that EnWave participated in this event and it was considered an amazing success. While also making new contacts and networking with small, medium and international companies, EnWave remains focused on the pursuit of new clients and royalty partners to continue its growth momentum.
The expansion of the relationship with Bonduelle is another indication of EnWave’s successful business model. Now that Bonduelle is ready to launch the InFlavor product line in the vast North American market, it can finally engage its giant marketing machine. It will do so both towards the B2B and B2C market verticals.
In addition, EnWave is actively pursuing opportunities in Europe and Asia with other parties in the frozen vegetables market. Combined with many other partnerships underway, along with new products under development and the worldwide rollout still early in the curve, the growth potential for EnWave is superb. Quarter after quarter, and with each new sales agreement reported, EnWave is delivering on this potential. Smallcaps recommendation: BUY.
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