Innovative Food Achieves Record Sales in Fourth Quarter and Prepares for Additional Growth

Innovative Food Holdings, Inc. (IVFH – $1.23), reached record sales in its fourth quarter and full year 2014, ending December 31, 2014. The results for the first time included the impact of the Company’s August 2014 acquisition of The Fresh Diet, Inc.

Fourth quarter 2014 revenues were approximately $10 million, up 64% compared to revenues of $6.1 million in the fourth quarter of 2013. Revenues attributed to The Fresh Diet in this quarter were $3.1 million. For the year ended December 31, 2014 total revenue was $30.8 million, an increase of approximately 37% compared with fiscal year 2013.

The Company enables, through a fully managed specialty food platform, the distribution of direct from source specialty food products in the United States. It’s active in two distinct market segments.

In the professional foodservice channel, Innovative Food Holdings’ platform manages the nationwide sales, sourcing and procurement, logistics, customer service and distribution of over 7,000 specialty food products. Many of Innovative Food Holdings’ products are used on a daily basis by some of the approximately 40,000 leading professional chefs across the United States. Customers include restaurants, hotels, country clubs, national chain accounts, casinos, hospitals and catering houses.

And in the direct to consumer channel, The Fresh Diet is the nationwide leader in freshly prepared gourmet meals delivered directly from kitchen to consumer doorsteps in 12 states, 44 metropolitan areas and over 570 cities and towns across the United States.

The Fresh Diet Acquisition and Integration

On August 15, 2014 Innovative Food acquired The Fresh Diet, America’s No. 1 fresh gourmet specialty daily meal delivery company, which operates the industry leading direct to consumer specialty meal platform. The total purchase price for the acquisition was 10 million shares of the Company’s common stock plus the assumption of debt.

Since then, The Fresh Diet was able to attract Bryan Janeczko as new CEO. In 2003, Mr. Janeczko co-founded NuKitchen, a provider of premium, fresh prepared meals designed to promote weight management and healthy living. NuKitchen was the first of its kind, operating on a proprietary technology platform to deliver a complete days’ worth of fresh, made-to-order meals on the day customers required them. After raising approximately $2 million in venture capital with NuKitchen and driving 100% year over year revenue growth for five years, NuKitchen was subsequently acquired by NutriSystem Inc. in 2008.

In addition to Mr. Janeczko’s successful exit in the freshly prepared meal space, he has vast experience in developing and advising early stage food and foodtech companies in executing successful, scalable business initiatives. Mr. Janeczko’s most recent success was leading the development and commercialization of Crock-Pot Cuisine, a direct to consumer, subscription-based, meal delivery service for Jarden Corporation, a Fortune 500 consumer products company.

Mr. Klepfish CEO of Innovative Food Holdings commented: “The Fresh Diet team had built a solid and growing business prior to the acquisition by Innovative Food Holdings; at the same time, it had faced significant challenges as it transitioned from a fast growing startup company, with a focus on revenue growth at all costs, to a data driven, process driven business, with a focus on profitable long term revenues. With that in mind, I believe that Innovative Food Holdings’ ability to recruit and retain top talent with the domain expertise and reputation of Bryan Janeczko, has created the long term potential to grow sales and profits of The Fresh Diet, even beyond our initial expectations. In the few short weeks that Bryan has been on the team there has been a strong focus on growing The Fresh Diet brand, employing data-driven, short and long term revenue focused decision making, and bringing in high caliber marketing, sales, and culinary talent to The Fresh Diet leadership team.”

2014 Financials

Revenues increased by $8,288,929 or approximately 36.8% to $30,800,858 for the year ended December 31, 2014 from $22,511,929 in the prior year. Approximately $4,917,130 of the increase was attributable to revenue associated with The Fresh Diet and approximately $3,371,799 of the increase was due to organic growth of the Company.

Selling, general, and administrative expenses increased by $5,341,719 or approximately 94.0% to $11,025,083 during the twelve months ended December 31, 2014 compared to $5,683,364 for the twelve months ended December 31, 2013. The increase is primarily due to costs associated with The Fresh Diet, including several accounting, legal and other charges.

For this reason, the Company had a net loss for the twelve months ended December 31, 2014 of $3,732,132 which is an increase of $2,245,875 or approximately 151% compared to a net loss of $1,486,257 during the twelve months ended December 31, 2013.

Innovative Food Holdings’ revenues for the professional foodservice segment grew to $25.8 million in 2014, an increase of approximately 15% compared to 2013.

Three Months Ended
December 31
Twelve Months Ended
December 31
Amounts in $000’s
Net Sales
Net Income (Loss)
Earnings (Loss) Per Share
Most important income statement data for the quarters and twelve months ending December 31, 2014 and December 31, 2013. Source: Company Filings

The Company paid down $666,667 of its commercial loan with Fifth Third Bank, and ended the year with over $3.0 million in cash. In addition the Company had the full availability of its $1 million line of credit with Fifth Third Bank.

Moreover, in March 2015 Innovative Food completed a non-brokered private placement of 943,829 restricted shares at $1.30 per share, raising approximately $1.2 million from accredited investors and institutions.


According to The Specialty Food Association, specialty food sales during 2013 grew to over $88 billion, with 3 year sales growth averaging 18%.

This specialty food service, or professional foodservice channel, continues to offer significant growth opportunities with little infrastructure spend in multiple markets. We view this service as a key driver for Innovative Food’s business. In addition, there are multiple expansion and acquisition opportunities.

The Company’s second target market, the meal delivery space, is one of the biggest foodtech trends in the market today, and The Fresh Diet is the nationwide leader in freshly prepared gourmet meals.

As consumers seek out new ways to maintain and improve their personal health, they are increasingly aware of the ingredients contained in, or absent from, their food. In addition, certain consumers seek out products to satisfy specific need states, such as gluten free need states.

As a result, the medical community, restaurants, food service providers and food and drink manufacturers are increasingly responding to these demands. So we’re confident that The Fresh Diet is uniquely positioned to capitalize on various emerging consumer foodtech trends.

The Company’s financials are currently being impacted by the Fresh Diet acquisition, but we feel confident that in the coming quarters this situation will be rectified. Hold on to your shares.

Sign up for our weekly e-mail newsletter and be the first to receive our best ideas and updates.
For important disclosures, please read our disclaimer.

Leave a Reply

Your email address will not be published.