Stryve Foods, Inc. (NASDAQ:SNAX) Q4 2022 Earnings Call Transcript

Christopher Boever: Actually, I’ll say that I think you’re going to see that shift in Q2 because as we get distribution gains, the pipeline to fill that distribution is pretty substantial, especially when you’re talking about national retailers that have thousands of stores where we’ll be gaining multiple SKUs in. It’s those distributors and wholesalers where they have inventory already, if they’re currently serving area that need to work through their inventory in a first in, first out basis, right? So I think you’ll see it spattered through the transition. We’re going to be closely watching the ones that get there quickly. We will be working with, certainly, the retailers that are transitioning to their other third-party service providers and ensuring that we monitor and mitigate the speed of the transition.

So I think it’s going to be a mixed bag, but I believe that you’ll start to see our shipments greatly exceed consumption as we fill the pipeline and build inventory with lots of new distribution points and expanded distribution with customers that currently carry us. So it’s going to be, I think, a catch-up in Q2.

Alex Fuhrman: Okay, thanks very much for that Chris.

Operator: The next question comes from Mike Grondahl from Northland Securities. Please go ahead.

Mike Grondahl: Hey guys. Good morning. You talked a lot about new packaging, and I think you kind of described that a little bit, but you also mentioned new products and improved product quality. Can you talk about some details on those two fronts?

Christopher Boever: Absolutely. Thank you for the question. First, from a packaging standpoint, we are obviously excited about what this presents. It also afforded us the ability to look at our capabilities without increasing any type of investment in capital to be able to produce products in different forms and packages. With that being said, we’ve now been able to unlock the ability to manufacture and sell steaks, which is half the category of sales. We traditionally only had steaks under the Stryve brand, we now have steaks under the Vacadillos brand. You’ll see that in market, the Vacadillos redistribution on steaks starting to take place in Q2 as well with a major leading convenience store operator. One example, perfecting our steaks to make it a viable investment grade portion of the business, reformulation of Stryve and launch of Vacadillos.

Second, taking our steaks and putting them into the most consumer-friendly ways that’s most consumer-friendly way that they shop and continue snacks in multiple categories. We’re probably into popable bites that are quarter inch a piece that are shareable. You can grade, you can return, and you can get a very, very good experience. So positioning that that way. The third way is to take those bites and utilize Folds of Honor and creating a SKU balance between slice and bites that offers us a lot of exciting generation in the stores. And then finally, we talked a lot about waste and utilizing our waste. We’ve created a human grade, Pet Treats for training under a brand called Two Tails, but we are now selling online, and we’re starting to present to retailers across many different channels.

So that’s all the innovation to complement renovation, and it’s all tied together. We’re going to be way more efficient and effective as well in our conversion cost because all of our bags will have a standard lift. All our bags will have a foil wrap to it, which delivers a much better consumer experience that we tested and learned from Vacadillos brand. And unquestionably, that — that is unquestionably no doubt now that oxygen goes through, penetrates and comes out and drives out our product throughout an aging shelf life stage. That does not have the same impact with the foil pouch. So by using food photography, expressing the deliciousness of what’s in the bag, being very clear whether it be thinly sliced steak or Carne Seca, whatever the brand has and represents delivers us that opportunity to express it and then deliver a better quality experience.