Seal the Seasons Lays Off Employees In Pursuit Of Profitability
As the macro-economic environment continues to strain the balance sheet of many CPG businesses, numerous brands have been pushed to explore a range of cost-cutting measures and in some cases layoffs while in search of profitability.
Frozen fruit brand Seal The Seasons is one of the most recent to make staff cuts. As it implements additional cost cutting measures, the company expects these actions to bring the business to profitability this quarter.
The company let go of seven employees this past week spanning its executive, marketing, finance, operations and sales teams. The North Carolina-based brand had 13 employees prior to the staff reduction and will now operate as a team of six.
According to founder and CEO Patrick Mateer, the savings will be used to support the brand’s working capital needs. Additional expense reduction efforts included a round of executive pay cuts, reduced marketing budgets, reevaluated operational partner rates and the discontinuation of five low performing SKUs from its portfolio.
“Every line item of every department’s budget was considered,” said Mateer. “The macro-economic environment dictated a shift in overall brand strategy from growth-focus to profitability focus. Inflation, reduced consumer spending and rising federal interest rates are all important factors in the shifting macro-economic environment that businesses need to consider and plan for in 2023.”
Mateer said the brand’s day to day operations will not change, though he noted there may be some lag in response times as “responsibilities and accountabilities” shift for certain individuals.
Founded in 2014, Seal The Seasons currently produces 60 SKUs of frozen fruit and vegetable products, including four smoothie kits launched last Fall, with inputs sourced from a network of small family farms across the country. The company is working with its retail partners to continue “executing appropriate SKU rationalization” and said it will replace discontinued products with higher velocity innovations.
“[Our] supplier network remains the same and will continue to work with family farms across the United States – we remain committed to our national local model and our farm partners,” Mateer stated. “As for product strategy, we are working with our retailer partners to continue executing appropriate SKU rationalization to improve ROI of working capital.”
In addition to its cost cutting plan, the company has restructured its debt in order to rely less on line of credit partners, reduce interest expenses and instead, fund working capital through the business’s EBITDA generation. The company has raised over $7 million to-date, according to CB Insights, including $1.2 million from a bridge round led by FoodFutureCo in early 2022.
“Our north star mission is still making local food available to all Americans and creating supply chains and products that support US family farms,” said Mateer. “Our team is focused on this north star and is taking this shift in strategy as an opportunity to sustainably fulfill our mission for years to come.”
