BranchOut Food Closes IPO, Adds New Walmart, Costco Stores

Hot off the closing of its IPO on the Nasdaq Capital Market last week, Oregon-based dehydrated produce snacks maker BranchOut Food Inc. is expanding its business with new distribution and a U.S. Army contract to aid in the production of MREs (Meals Ready-to-Eat).

The Oregon-based food brand and technology platform company announced Wednesday that it has closed an underwritten initial public offering of 1.19 million shares of common stock at a price of $6 per share. According to a press release, the gross proceeds from the offering – before underwriting discounts and commissions – was $7.1 million. Underwriters have also been granted a 45-day option to purchase up to 178,500 additional shares at the IPO price.

BranchOut began trading shares on the Nasdaq market on June 16. In a press release, the company said it intends to use the net proceeds from the IPO “for repayment of indebtedness, working capital and general corporate purposes, including operating expenses and capital expenditures.”

Founded in 2017 by CEO Eric Healy, BranchOut produces a line of dehydrated fruit chips and powders produced using a proprietary process called GentleDry. According to the company, GentleDry uses a “combination vacuum chamber and radiant energy, resulting in a rapid, gentle drying process” that removes the air around produce in order to eliminate oxidation and browning as the ingredients are dehydrated.

The brand’s product offerings include Avocado Chips, Banana Bites, Bell Pepper Crisps and Crispy Brussel Sprouts, as well as avocado, banana and blueberry powders for use in smoothies and other recipes.

In a filing with the U.S. Securities and Exchange Commission (SEC), BranchOut reported $752,178 in net revenue last year, up 5% from $715,553 in 2021. The company attributed the growth to “brand recognition and new retail partners.”

However, its net losses increased year-over-year, from just over $660,000 in 2021 to more than $4.6 million in 2022. In the filing, the company noted that its gross margins were “significantly affected” by slotting fees and discounts associated with its expansion into new big box retailers, as well as port costs. The company noted its existing manufacturing partner in Chile “uses small batch machines making manufacturing inefficient” and a shift to a new partner in Peru will help to “improve efficiency and reduce our cost of goods sold in 2023 and beyond.”

Beyond its IPO, BranchOut also made several announcements this past week regarding new retail gains and other business partnerships. On Tuesday, the brand said it will begin selling its dehydrated fruit products in around 2,250 Walmart stores nationwide – roughly half of the retailer’s total U.S. stores – and the rollout is already underway.

“This contract not only represents a significant milestone for our company, but it also highlights the growing demand for our healthy, convenient snacks,” Healy said in a release. “We are proud to be offering Walmart’s customers our premium dehydrated fruit products, and we look forward to continuing to build on this success.”

The company also announced last week that it will expand its Costco business in Los Angeles, its fourth region with the club retailer in addition to Pacific Northwest, Northern California and Texas.

On Thursday, BranchOut announced it is partnering with the U.S. Army Combat Capabilities Development Command (DEVCOM) to help enhance its MREs via its GentleDry technology. According to a release, BranchOut will develop “a range of snack items specifically to be incorporated into future MREs” for Army soldiers.

BranchOut did return email requests for comment for this story.