THEO's Plant-Based | Application Preview
THEO's Plant-Based is seeking $150,000 in government funding to support various critical areas of its business as it aims to expand its product line and market presence. The funding allocation is as follows:
- **Purchases ($113,000)**: This will cover the costs for ingredients, packaging, and manufacturing essential for producing 47,000 units of Beet Jerky and Sweet Potato Jerky in the first half of 2024. The estimated cost of goods sold (COGS) per unit is projected to be $2.43, reflecting significant cost efficiencies achieved through improvements in manufacturing and packaging.
- **Events, Marketing, and Agency Costs ($24,000)**: Funding will be used for marketing materials and event participation to boost brand visibility, including materials for major expos and targeted marketing initiatives for retail launches.
- **Research & Development ($9,000)**: This will support trial runs for new jerky flavors and necessary quality control tests to ensure product standards.
- **USDA Organic Certification ($2,000)**: To comply with organic standards, funding will help finance the certification of the new contract manufacturer, enabling them to produce organic-certified products.
- **Web Development ($2,000)**: These funds are allocated for website updates in preparation for new product launches.
Operating expenses of $37,000 will facilitate growth from $140,000 in revenue in 2023 to an estimated $600,000 in 2024. The company plans to leverage partnerships, especially with Sprouts Farmers Market, and participate in expos to scale from approximately 100 to 500 retail locations.
THEO's Plant-Based is focusing on innovative plant-based products made from regenerative organic vegetables, starting with vegetable jerky. Anticipated growth will come from rolling out new flavors and products, aiming to create a diverse portfolio that includes sausages and condiments in future years. The long-term goal is to achieve over $30 million in revenue by 2028.
The application makes a compelling case for funding based on existing consumer demand for whole plant foods and THEO's superior market performance compared to traditional plant-based products. With a unique value proposition, no direct competitors in the vegetable jerky space, and a strong culinary foundation, THEO's is positioned to reshape the plant-based landscape while promoting sustainability and agricultural diversity.
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General Information
Business Registration Number: 881745929
Location: Chicago, IL, United States
Length of Operation: 1-5
Number of Employees: 1-10 Employees
Annual Gross Income: $100k to $250k
Annual Gross Expense: $100k to $250k
Open to Loans: YES
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Funding Usage
Funding requested: $150,000 $113,000 – Purchases: Cost of Goods Sold $24,000 – Events, Marketing, and Agency Costs $9,000 – Research & Development $2,000 – USDA Organic Certification $2,000 – Web Development Purchases: $113,000 This funding would support the purchase of ingredients & packaging, and finance contract manufacturing fees and fulfillment costs required to manufacture 47,000 units of THEO’s Beet Jerky and Sweet Potato Jerky in Q1 and Q2 2024. With massive improvements to both co-manufacturer efficiency, reduced packaging costs, and fulfillment cost reductions, our estimated COGS per unit of jerky is $2.43. Here is a breakdown of Cost of Goods Sold, per unit: Beets delivered to Marten’s Fresh (Facility #1): $0.39 Process, IQF (pack & freeze), and ship beets to Michigan Brand (Facility #2): $0.48 Ingredients used at Michigan Brand: $0.16 Season, dehydrate, and pack at Michigan Brand: $1.12 Packaging costs: $0.28 Operating Expenses: $37,000 Funding will also support the following operating expenses associated with running THEO’s Plant-Based and scaling from $140,000 revenue in 2023 to an estimated $600,000 revenue in 2024. The funding will primarily go towards manufacturing costs, marketing costs to drive growth, and funding new product development. These expenses have been noted below and will be expanded upon in their own sections. $24,000: Growth: Expos, Marketing, Sales Materials, and Agency Support In preparation for major product expos in 2024, THEO’s will be investing in the design and creation of event marketing banners, table cloths, signs, and displays to showcase our brand and products to buyers and investors. Other expenses associated with these events include travel, lodging, product sample costs, business cards, sales sheets, new product photography, and other materials. $9,000: Research & Development R&D costs including fees for contract manufacturer trial runs of new flavors and new SKUs, ingredient & packaging costs, and testing fees of samples for water activity, pH, and other quality control metrics. $2,000: Co-Manufacturer Transition: Certification Given THEO’s works entirely with contract manufacturers, we rarely need to invest in equipment. However, as a USDA Organic brand, we are required to produce in a USDA Organic facility and help supplement a manufacturer’s cost for acquiring this license in order to partner with us. $2,000: Web Development We will use a portion of the funding to make updates to our website (Shopify) as well as other online channels (Amazon, Faire, Facebook & Instagram) in preparation for the launch of our Sweet Potato Jerky. Breakdown of Operating Expenses Growth: Expos, Marketing, Sales Materials, and Agency Support – $24,000 THEO’s has one major retail launch and two product expos over the next 6 months. The total projected cost to support these marketing efforts is $24,000, as noted in our Operating Expenses above and as detailed in our Financial Model. Here is our timeline for those events: January: Prepare all marketing materials and samples necessary for Expo West, including all product needs, product photography, banners, signs, displays, sales sheets, business cards, follow-up materials, and more. February: Prepare marketing for Sprouts Farmers Market launch, including press releases, influencer marketing collaborations, social media campaigns, and more. Finalize Expo West materials and awareness to drive buyers to the THEO’s Plant-Based booth. March: Attend Expo West in Anaheim, CA on March 12-16 as part of the Hot Products section! Finalize marketing needs for Sprouts Farmers Market launch. Begin lining up sales from the expo for Summer launches. April: On April 1, launch 5 SKUs into 405 Sprouts locations and execute on our marketing plan - influencer marketing, social media campaigns. Prepare marketing materials for Sweets & Snacks expo. Continue sales conversations & onboarding from Expo West leads. May: Attend Sweets & Snacks expo in Indianapolis, IN on May 14-16. Continue sales conversations from Expo West and begin new conversations from Sweets & Snacks. Line up sales pipeline and launches. June: Begin selling into new retailers from product expos and onboarding new distributors. New marketing strategies for new sales launches. Additionally, THEO’s will be investing in a marketing agency to support this growth from 100 to 500 total retail stores. We have identified Social Nature as an ideal marketing partner to support our launch by driving an estimated 1,500 targeted consumers into Sprouts Farmers Market stores to drive trial, gain valuable feedback on the product & packaging by asking survey questions to these customers, and generate awareness by creating over 100 social media posts about THEO’s vegetable jerky launching into new markets. Research & Development – $9,000 THEO’s has a lean R&D budget due to our focus on creating new products within our current category: plant-based jerky. Given we are applying the same manufacturing principles of making THEO’s BEET Jerky to each new vegetable jerky SKU (i.e. Sweet Potato Jerky), we can roll out new products by following a simple R&D system: Product testing in home test kitchen: Theo applies his experiences from Michelin Star kitchens to design new recipes in his test kitchen. By testing ratios of spices, marinades, cooking temperatures, dry times, and other variables, we are able to create delicious, manufacturer-ready recipes without expensive product development costs. R&D Trial Run: Once production steps and ingredient quantities are defined in the test kitchen, the recipe is adapted for our contract manufacturer in 800lb batches (netting about 1,400 units) and requires testing of dry times, oven temperatures, ingredient quantities, and other variables to determine the best recipe at full-scale. Product Testing: Once the product is manufactured at manufacturer-scale, the product and packaging are tested for water activity, water vapor transfer rate, oxygen transfer rate, gluten, soy, and pH levels, as well as its shelf life. Product Ready: After the R&D run and tests are complete, the recipe either undergoes further trial runs or is ready for full-scale production. Funding R&D helps create long-term value for THEO’s Plant-Based by investing in new products and flavors that can appeal to more customers & buyers. The $9,000 projection for R&D costs would help us test and run 2 trial runs over the next 6 months for 4 additional SKUs: Miso Nori, Garlic Herb, and Maple Dijon flavors of Sweet Potato Jerky and Sriracha BEET Jerky. Co-Manufacturer Transition: Certification – $2,000 THEO’s Plant-Based is actively transitioning to a new contract manufacturer, Michigan Brand, based in Frankenmuth, MI that will enable greater scale (from 2,700 to 9,000 units / week), improved quality control, and reduced costs due to the facility’s automated packing. This transition will reduce our costs by $0.41 compared to our current co-manufacturer costs from Green Meadows Foods in Illinois. As part of this transition, we are helping Michigan Brand become USDA Organic certified in order to produce our organic certified vegetable jerky for the market. As a new partner of theirs, we have agreed to supplement this cost with a co-investment into their certification, estimated at $2,000. This investment will pay itself back after just our first 6,100 units are produced. Additionally, with this transition we will need to move one truckload of inventory from Green Meadows in Danville, IL to Michigan Brand in Frankenmuth, MI. The expected cost for this is $2,000 and will enable us to begin producing with Michigan Brand starting in January 2024. Web Development: $2,000 We will use a portion of the funding to make updates to our website (Shopify) as well as other online channels (Amazon, Faire, Facebook & Instagram) in preparation for the launch of our Sweet Potato Jerky. Shopify update: Estimated $1,500 - Funding 15 hours of development to add 4 new SKUs to https://www.theosplantbased.com and improve layouts to work with 7 SKUs of vegetable jerky. This will include updates to our Home and Shop page to show all vegetable jerky offerings. eCommerce update: Estimated $500 - Apply the designs from the THEO’s Plant-Based website to update product listings on Amazon, Faire, Instagram, and Facebook to showcase the launch of 4 new vegetable jerky SKUs. Growth Enabled by Funding over the next 6 months (Jan-June 2024) Gross Revenue: $252,000 Based on our financial model the above Use of Funds will support our growth to a projected $252,000 in gross revenue for the business at a 35% gross margin. The growth in revenues in 2024 comes largely in part from a commitment from Sprouts Farmers Market for the purchase of 23,000 units of Beet and Sweet Potato Jerky for a nationwide 3-month launch (April through June) summing to $105,000 in revenue and growing the number of retail stores we sell in from 95 to 500. This opportunity may lead to an additional order of $55,000-$105,000 depending on our velocities in the 3 month trial (not noted in model) and could lead to planogram placement in Sprouts that would generate an estimated $900,000-$1,300,000 revenue per year based on our projected velocities by Sprouts Farmers Market. And with two upcoming product expos – Expo West in Anaheim, CA and Sweets & Snacks in Indianapolis, IN – in Q1 and Q2 2024, respectively, we expect to bring on a minimum 250 additional retail stores in 2024, which along with our continued growth in Whole Foods Market (currently 60 stores) will result in a projected 51,000 units sold in the first 6 months of 2024.
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Business Plan
Over the next 5 years, we plan on building out a portfolio of innovative plant-based products made with regenerative organic vegetables as the primary ingredient and have THEO's Plant-Based products across the grocery store, from snacks to sausages. To accomplish this vision, we are building our business starting from our first innovation: vegetable jerky. We are currently selling THEO's Beet Jerky in 100 stores, including 60 Whole Foods Markets, and next year will be growing to over 500 stores with a national launch of THEO's Sweet Potato Jerky in April 2024. With vegetable jerky as our foundation for growth, we plan to expand our product portfolio nationally, with vegetable sausages, burgers, condiments, and more in the pipeline. By building a strong brand and loyal customer base, as we are creating with our vegetable jerky products now (currently selling at 2.2X the category average in Whole Foods Market), we can expand our business into new categories and offer customers new, healthy, vegetable-forward products that are currently missing from grocery store shelves. After growing to national scale with our vegetable jerky products (Beet Jerky, Sweet Potato Jerky), we aim to launch our vegetable sausage lines in 2025 to grow our business beyond the snacks section and into refrigerated meats, shaking up the $7B U.S. Plant-Based Market with the first-ever organic vegetable sausages. And beyond 2025 we aim to offer U.S. customers bold vegetable-forward innovations that are truly healthy and sustainable. By 2028, we are aiming to have a product portfolio of over 30 SKUs and have projected sales of over $30M revenue with margins in retail at over 50%. Funding in the near term will enable us to meet the growth opportunities presented to us in 2024 to grow from our current 3 SKUs to 6 total SKUs with a national launch into Sprouts Farmers Market. In a recent survey by Mintel, 83% of plant-based consumers would like to see more plant-based options made from whole plants. Meanwhile, the plant-based category is predominantly made up of products made from pea, soy, and wheat, and sales of plant-based foods have slowed. Our focus at THEO's is to build agricultural biodiversity and highlight regenerative organic vegetables as the primary ingredient in plant-based foods. To date, we have demonstrated this demand by outpacing other plant-based jerky products (that are made with soy, pea, and wheat) by selling over 2X more than our competitors in Whole Foods Market over the past 9 months. And further, we have demonstrated our ability to scale, increasing our capacity with new manufacturing partnerships and improving our margins in just 12 months from 17% to 37% when selling into grocery stores, and there is much more room for improvement. We have the opportunity to grow this vision from the Midwest to a national scale with the support of investors, all while growing U.S. agricultural diversity, supporting regenerative farming, creating jobs, and offering U.S. shoppers food products that don't compromise on sustainability, nutrition, or flavor.
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Self Identified Competition
As the first vegetable jerky on the market, THEO's does not have direct competitors, but there are brands with a similar ethos to ours: 1) Actual Veggies: Based in the U.S., Actual Veggies is focused on creating thick-cut, chef-crafted veggie burgers, and will likely move into new categories in the future. 2) Wholly Veggie: Based in Cananda and selling in the U.S., Wholly Veggie is focused on creating vegetable-based products that are exciting for customers. Products include cauliflower wings and ready-to-eat meals made with vegetables. 3) Rhythm Foods: Based in the U.S., produced in Mexico, Rhythm Foods creates organic vegetable chips. THEO's is the only brand in the U.S. creating vegetable jerky. While there are brands creating mushroom jerky (for example, Pan's Mushroom Jerky), THEO's is the only brand to apply jerky methodology to vegetables. Looking beyond our differentiation in the jerky and snacks category, we are focused on creating new plant-based foods, including sausages, seafood replacements, and sauces all made from organic vegetables. We will use Co-Founder and Chef Theo Mourad's culinary expertise from his time in Michelin Star farm-to-table kitchens in order to create amazing flavor and texture from vegetables, just as we accomplished with Beet Jerky. While other competitors use filler ingredients, we are able to create products made entirely from vegetables by applying innovations in dehydration, fermentation, and extrusion.
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