EnWave Strengthens Its Position in Dried Fruits Market
EnWave Corporation (TSXV:ENW – $0.81 CAD & OTC:NWVCF – $0.64 USD) signed a technology evaluation agreement with Nature’s Touch Frozen Foods, one of the major players in North America’s frozen fruits market.
Nature’s Touch, based in Quebec, Canada, has in fact won the private label frozen fruit accounts of all major grocery chains in Canada. It’s also in rapid growth mode in the U.S., where it’s well known as the private label frozen fruits producer for Welch’s. Also in countries such as the United Kingdom, Australia, Japan and Taiwan, the company has established a significant presence.
Nature’s Touch will evaluate the merits of EnWave’s Radiant Energy Vacuum (REV) dehydration technology for the purpose of producing high quality dehydrofrozen (DHF) fruit products. In return, Nature’s Touch has paid EnWave an upfront fee.
Very interesting is that Nature’s Touch only has a six months option to exclusively license EnWave’s REV technology to produce DHF fruit products. We presume that both companies are confident that tests can be completed within that timeframe.
All of the test and development work will be conducted at EnWave’s facility in British Columbia. We suspect this to become a success, as EnWave already has gained lots of experience in the dehydrofrozen field with Bonduelle.
Similarities With Bonduelle
Dehydrofrozen products may ring a bell, as Bonduelle, in cooperation with EnWave, pioneered this innovative drying method to materially enhance frozen vegetables.
DHF vegetables are partially dehydrated and then quickly frozen. The purpose of this process is to retain nutritional content, color, flavor and most importantly texture when cooked from the frozen state. DHF vegetables can yield product qualities that are similar to fresh product. The lower moisture levels inherent of DHF products reduce the amount of ‘weeping’ that typically occurs when cooking frozen vegetables. Additionally, the reduced water content of DHF product can decrease shipping costs through lower product weight.
Bonduelle, the world’s leading processed vegetable producer, signed a commercial royalty-bearing license with EnWave in November 2013. The license grants Bonduelle the exclusive global rights to develop and launch dehydrofrozen vegetables using EnWave’s REV technology. In July of this year, EnWave installed, and started up the first 120kW commercial quantaREV machine at Bonduelle’s facility.
Before signing the commercial license, Bonduelle conducted an extensive market evaluation of REV-dried DHF vegetables with a number of foodservice and retail food companies, as well as chef clients. The market evaluation results illustrated that the majority of participants could not tell the difference between fresh and DHF products after being cooked. These results, combined with the economic value of DHF products derived from longer controlled shelf-life, more efficient delivery and better product consistency over a calendar year, contributed to Bonduelle’s decision to secure global exclusive licensing rights for REV technology.
In an interview with CBC, Bonduelle Canada CEO Daniel Vielfaure raved about the many virtues of EnWave’s REV dried vegetables. He said, right now, the quality of ”water-heavy’ frozen vegetables when served is not what consumers are expecting to have. Vegetables become mushy because the water in them expands and destroys their molecular structure. But EnWave has the leap on everyone when it comes to the production of dehydrofrozen vegetables.
Similar to Bonduelle, Nature’s Touch aims to establish their dehydrofrozen fruits as the premium option in the global frozen fruits industry. As such, it will be able to significantly distinguish itself even more from its competitors.
Growth Among Fruit Processors
The growing list of fruit processors with whom EnWave has signed an evaluation or commercial agreement is a clear indication that this is a strong market segment for the Company’s applications.
EnWave has signed a technology evaluation agreement with the following companies.
- Ocean Spray Cranberries Inc. is an agricultural cooperative owned by more than 700 cranberry growers in North America. The company is very actively testing market dried cranberries. A commercial license may be signed in 2016.
- Sun-Maid Growers of California is a cooperative, owned by family farmers who grow raisin grapes all located within 100 miles of each other in the Great Central Valley of California. The cooperative is doing specific product development work at the moment.
- California Grape Co is a California based grape producer that has the right to evaluate EnWave’s REV technology to develop dehydrated crispy grape snacks. Intensified test work is ongoing. In fact, a commercial decision could be made early 2016.
In addition, EnWave has a royalty-bearing commercial license in place with these two fruit related companies:
- Natural Nutrition Limited, a fruit processor located in the South American country of Chile. Initial production is going well and they’re actively looking for larger customers to justify purchasing additional REV machinery.
- Milne Fruit Products entered the REV-dried fruits market a couple of years ago positioning MicroDried products as pure, healthy alternatives to sugar-infused offerings. After an extensive product and market development effort, Milne’s MicroDried products have been gaining traction with a growing network of customers. As a matter of fact, the Washington based food processor has recently ramped up its production to satisfy significant orders from several major food companies.
With Nature’s Touch, EnWave again attracted a major company to test the merits of its revolutionary REV technology. Investors mostly neglected the event, which is odd as a technology evaluation agreement is always the first step towards potentially signing a commercial contract.
With a few dozen companies in the technology evaluation phase right now, it’s clear that many additional commercial license agreements will be signed in coming quarters.
The DHF process can produce a superior quality frozen fruit with concentrated flavor, improved color and nutrient retention. Similar to Bonduelle, Nature’s Touch hopes to establish its dehydrofrozen fruits as the premium option for buyers of frozen fruits. And because Nature’s Touch already dominates the private label market, it could introduce these products quickly.
|For important disclosures, please read our disclaimer.||Latest Company Report (pdf)|