DAVIS, CALIF. — Recently launched GoodWheat pasta will serve as a driving force behind Arcadia Bioscience’s Project Greenfield three-year growth plan. Company executives explained Project Greenfield along with plans to divest in other areas, including the hemp business, in an Aug. 11 earnings call to discuss second-quarter earnings.
Arcadia launched GoodWheat pasta at retail during the quarter ended June 30. It contains 4 grams of fiber and 9 grams of protein per serving. GoodWheat pasta was in 200 retail stores by June 30, and it is being shipped to 500 stores now, said Stanley E. Jacot, president and chief executive officer of Arcadia.
“We have good visibility for that number to double again by the end of Q4,” he said.
Current retail stores selling GoodWheat are in the East, the Midwest and the West Coast.
“Pasta is the first category for GoodWheat, but there are a number of other categories where our value proposition is poised to break through and win while also clearly aligning with the investment criteria that I outlined: opportunity, scalability and profitability,” Mr. Jacot said. “Our approach will be deliberate and executable and may include a mix of product launches as well as potential acquisitions.”
Growing the brands ProVault topical palm relief and Zola coconut water make up part of Project Greenfield, too.
“These brands have superior product performance in large established categories,” Mr. Jacot said. “So there is compelling upside in improving our small retail footprint. We can grow significantly faster than the category through expanded distribution, trial-driving marketing and targeted innovation.”
A third part in Project Greenfield comes in building future licensing revenue in channels such as business-to-business (B2B) and foodservice.
Arcadia also plans to exit the GoodHemp seed business and the Archipelago business, a joint venture with Legacy Ventures Hawaii focused on hemp extract. Body care production will move to co-packers with plans to divest the manufacturing facility in Los Angeles. Arcadia’s portfolio no longer includes Savvy natural brands.
“We recently reached agreement for the original founders to take over the brand effective Aug. 1,” Mr. Jacot said.
Arcadia in the second quarter had a net loss attributable to common shareholders of $3.78 million, which compared with a loss of $5.26 million in the previous year’s second quarter. Revenues of $3.86 million compared with $1.41 million in the previous year’s second quarter. Sales of Zola coconut water and body care products primarily drove the increase.
“Sales are outpacing units as higher costs are being passed along through price increases, and Zola is no different,” Mr. Jacot said. “We implemented a price increase across our customer base in Q2, which had a negative impact on volumes due to lower promotional activity.”
The impact should be temporary, he said, adding promotions and revenues should return to a more normal level by the fourth quarter.Over the six-month period ended June 30, the net loss attributable to common shareholders was $8.27 million, which compared with a net loss of $3.20 million in the same time of the previous year. Six-month revenues of $7.08 million compared with $2.23 million.