Details
1 | $1.2M in revenue in first 15 months. |
2 | 35K+ customers served last year. |
3 | Over 50% of our customers aren't vegan. Vegan foods have wide appeal! |
4 | Launched our own private label, with Vegan Fine Wines as first product launch in Dec. 2018. |
5 | This raise will support launching VFF franchises, an online store, expanding our private label and our in-store offerings. |
6 | Forbes and The Economist named 2019 "The Year of the Vegan." |
7 | Beyond Meat's 2019 IPO was the most successful IPO in 10 years. |
We started in 2018. It's been an amazing journey and we have barely scratched the surface of the potential of the exploding natural plant-based foods market. Here's the story of Vegan Fine Foods, from concept to creation, from an idea to reality.
We opened our flagship store in Fort Lauderdale, Florida in March 2018, but the journey began long before that. It started in May, 1997. After years in graduate school, I gained a lot of weight and my health was failing. That led to the decision to take control of my health, cleanse my system, and get back on track. It led to the decision to change from a fast-food, meat-based diet to a plant-based, vegan diet.
The change turned out to be more difficult than I realized. While searching for plant-based alternatives, I had to go to multiple stores to find the products I wanted. On top of that, I spent an incredible amount of time reading product labels to make sure all the ingredients were plant-based. Doing this every week turned out to be a problem. I knew others were experiencing the same challenges in finding quality vegan products in traditional grocery stores.
The seed was planted. I knew the solution: an all-vegan grocery store where customers would find a variety of products that were certified vegan, providing a sense of relief and comfort to vegans, vegetarians, and flexitarians. That was the birth of Vegan Fine Foods. It was time to develop the plan.
By early 2016 I had the first draft of a business plan but I needed to do more research. I wanted to study vegan markets that were already succeeding. I found out quickly that there weren't many to choose from. In the U.S., I went to Gary Null's Uptown Whole Foods in NYC and Food Fight in Portland, Oregon. Then I traveled to Europe to see Veganz in Berlin andVBites in London. I learned from all of them. Then I blended in what I learned at traditional specialty stores, such as Whole Foods and Dean & Deluca, and completed the plan.
The next step was to find a special location with lots of character. I found the perfect retail space in downtown Fort Lauderdale. The buildout took almost a year. Then I assembled a passionate team and finally, in the Spring of 2018, we opened!
Over a thousand customers came to celebrate with us on our Grand Opening Weekend!
We had an amazing first year, even with all the challenges a startup brings. We managed to do $1 million in sales, and served over 35,000 customers! We also learned a lot. Now we are laser focused on growing the business strategically. Based on the overwhelming feedback we received from customers and fans across the country, in addition to extensive market research, we decided that franchising would be the cornerstone of our growth strategy.
We began to implement another central part of our strategy by launching our own line of wines, called Vegan Fine Wines. It was the first rollout of our new "Vegan Fine" brand of high quality, private-label products that we plan to expand significantly in 2019 and 2020.
In addition to our line of products, we actively promote vegan startup brands and businesses. Our customers love that they are able to find products on our shelves that are not found in mainstream grocery stores. This is one of our key differentiators. We will always be on the cutting edge of new and innovative plant-based products as this market continues its amazing growth
We have discovered that over 50% of our customers are not vegan or vegetarian. They are often occasional plant-based eaters or others curious to see what vegan food is all about. We are a very inclusive and look forward to sharing our alternatives to traditional fair with customers and communities throughout the country and around the world. Our motto is: Strictly vegan but not just for vegans. So far in our cafe, Vegan Mac & Cheese with Chorizo is our number one seller, and everyone loves our delicious Acai Bowls.
Now that we have tested our concept and proved that it works, we are preparing to franchise. We have three franchise options that we will offer to prospective franchisees: 1) Vegan Fine Foods, which includes groceries, prepared foods, and health & beauty care products; 2) Vegan Fine Cafe, which is our branded prepared foods division. We believe it has great potential as a stand alone Fast-Casual, Quick Service Restaurant, which is the fastest growing category in food franchising; and 3) Vegan Fine Body, our health, body, & beauty care division.
We believe these distinctive franchise offerings will be instrumental in 1) appealing to a larger group of entrepreneurs, 2) growing the brand, 3) introducing Vegan Fine Foods in communities across the United States and beyond, and 4) achieving our mission of making high-quality, vegan products accessible to everyone.
We will also be launching an e-commerce platform as part of our expansion plans. The first phase will involve taking online orders and fulfilling them at night. This model will allow us to dial in our online offering while we look at different fufillment strategies. We are a bricks & mortar store that uses social media to promote our products to a large audience that will have the option to buy online. We have followers all over the country that will have access to our products, just like our local customers.
After many years in obscurity, veganism has gone mainstream. We're witnessing explosive growth in the vegan food space. This is the result of a convergence of factors. Movie makers and Netflix have influenced many people to "go vegan" by producing documentaries such as What The Health, Fork Over Knives, Food, Inc. and Hungry for Change.
Social media influencers are also taking up the vegan mantle. This is a true sea change. Even major corporations are jumping in, Burger King is now offering an all-vegan Impossible Whopper! Suddenly, there are vegan options on almost every chain restaurant menu. We are fortunate to be going into our second year of business with the positive momentum in this market. This vegan wave shows no signs of slowing down. It's an exciting time for vegans and vegan businesses!
At Vegan Fine Foods, we are seeing the same explosion of growth in number of customers, sales per customer, and total sales at the store level. For example, in the first quarter of 2019, the average number of customers per day has increased over 20%. Between February and March alone, total store sales have increased 20.2% and the average number of paying customers visiting our store daily increased 22.3%. We are seeing growth across the board, including deliveries, which increased 11% in the same time period.
As we continue to expand our product and service offerings, and execute on our 2019 strategic initiatives, we anticipate even more impressive growth in our key performance indicators, in-line with the dramatic growth in this exciting new market for natural, plant-based foods.
The triple bottom line is our commitment to doing our part to make the world a better place. We support our mission of making vegan options and awareness available to everyone by providing education about plant-based eating and providing transitional foods that appeal to vegans and non- vegans. We are in business to make a profit, but in so doing, our products and sustainable practices can also help the environment. We hope that you share our vision that good business and being a good corporate citizen go hand-in-hand. Thanks for your interest in Vegan Fine Foods. We hope you join our team!
Vegan Fine Foods has financial statements ending December 31 2019. Our cash in hand is $50,000, as of April 2019. Over the three months prior, revenues averaged $75,000/month, cost of goods sold has averaged $58,000/month, and operational expenses have averaged $28,000/month.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
We are an all-vegan market and cafe, with our flagship location in Fort Lauderdale, Florida. We carry one of the largest selection of plant-based retail products in the country. We have an in-store cafe, called Vegan Fine Cafe, that offers a full menu of vegan meals, smoothies, juices, bowls, and more. We have a body shop, called Vegan Fine Body, that features the best vegan supplements, body care, facial care and cosmetics.
In five years we would like to be preparing our IPO with over 100 franchises, covering every major market in the US, with international expansion as well. We would also like to have the most successful vegan e-commerce website, providing our own "Vegan Fine" brand of products, as well as startup and national brands. We will also be leader in providing information and education on health, wellness, and nutrition.
Milestones
Vegan Fine Foods LLC was incorporated in the State of Florida in July 2017.
Since then, we have:
Historical Results of Operations
Our company was organized in July 2017 and has limited operations upon which prospective investors may base an evaluation of its performance.
Related Party Transaction
Refer to Question 26 of this Form C for disclosure of all related party transactions.
Liquidity & Capital Resources
After this Offering concluded, we did not hit our funding target of $1 million. Our projected runway was 12 months before we needed to raise further capital. That has changed, especially with recent developments and the significant downturn in the economy as a result of the COVID-19 pandemic.
We planned to use the proceeds as set forth in this Form C under "Use of Funds". We don’t have any other sources of capital in the immediate future. We did not raise enough to fund the activities listed under "Use of Funds".
We will require additional financing in excess of the proceeds from the Offering in order to perform operations over the next 9-12 months. We plan to raise capital in 3 months. Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, we now know that the proceeds of this offering will not be sufficient to enable us to implement our strategy. The Company intends to raise additional capital in in 2020 from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.
Runway & Short/Mid Term Expenses
Vegan Fine Foods LLC cash in hand was $100,640, as of December 2019. Over the first two months of 2020, revenues were growing and averaged between $75,000 to $80,000 per month, Our intent is to be profitable in 6 months, based on our historical performance and future plans. We raised over $700,000 through Wefunder. We are exploring a larger financing round in the near future.
In six months, we hope to have monthly revenues of between $150k - $200k. We are in the process of completing the launch of our e-commerce platform, which we expect to drive a significant amount of revenue. We have also improved the internal operations of the business and expect a reduction in operating costs and we realize improved efficiencies
We do have two lines of credits that we can access if needed, but there are no additional sources of capital beyond that.
1 | Market. Our business model is based on an assumption that the natural foods and vegan trend will continue to grow. If that is untrue, our business revenues may be negatively impacted. |
2 | Competition. We are in competition with larger, better capitalized grocery stores such as Whole Foods, Trader Joes, and The Nugget. Should they offer the same products we do we may struggle to compete. |
3 | Grocery sales. Margins in grocery sales are tight. Consumers tend to be price-sensitive, and especially if there is a down-turn in the economy, consumers may buy less of our products or shop elsewhere entirely. |
4 | Supply chain. The demand for plant-based products is sometimes very high, causing our distributors to go out of stock. If our distributors are out of stock and we cannot secure inventory, our business may be negatively impacted. |
5 | Scott Schotter is a part-time officer. As such, it is likely that the company will not make the same progress as it would if that were not the case. |
6 | Rainford Knight is a part-time officer. As such, it is likely that the company will not make the same progress as it would if that were not the case. |
7 | Iselgis Garcia is a part-time officer. As such, it is likely that the company will not make the same progress as it would if that were not the case. |
Director | Occupation | Joined |
---|---|---|
Sara Sherbondy | Chief Operating Officer @ Vegan Fine Foods, LLC | 2019 |
Iselgis Garcia | Director of Operations @ Florida Atlantic University | 2018 |
Rainford Knight | Co-Founder & Managing Partner, Florida Institute of Finance @ Florida Institute of Finance | 2018 |
Scott Schotter | CEO of Meta Group Media @ Meta Group Media | 2018 |
Steven Smith | CEO of Vegan Fine Foods @ Vegan Fine Foods | 2017 |
Scott Alter | Physician @ Hospital | 2019 |
Officer | Title | Joined |
---|---|---|
Sara Sherbondy | Chief Operating Officer | 2019 |
Rainford Knight | CFO | 2018 |
Scott Schotter | Chief Marketing Officer | 2018 |
Steven Smith | President CEO | 2017 |
Holder | Securities Held | Voting Power |
---|---|---|
Steven Smith | Membership Interests | 100.0% |
Date | Amount | Security |
---|---|---|
02/2020 | $711,381 | Convertible Note |
12/2017 | $164,992 | Loan |
12/2018 | $100,225 | Loan |
11/2018 | $20,000 | Convertible Note |
10/2018 | $60,000 | Loan |
01/2019 | $100,000 | Loan |
01/2019 | $100,000 | Loan |
08/2018 | $75,000 | Loan |
12/2018 | $100,000 | Loan |
Issued | Amount | Interest | Discount | Valuation Cap | Maturity |
---|---|---|---|---|---|
11/28/2018 | $20,000 | 20.0% | 10.0% | None | 11/28/2019 |
Lender | Issued | Amount | Oustanding | Interest | Maturity | Current? |
---|---|---|---|---|---|---|
Vegan Market Inc. | 12/31/2017 | $164,992 | $164,992 | 5.0% | Yes | |
Loan Builder | 08/07/2018 | $75,000 | $0 | 9.21% | 12/28/2018 | |
Funding Metrics | 10/02/2018 | $60,000 | $0 | 6.53% | ||
LoanBuilder | 12/28/2018 | $100,000 | $67,522 | 8.26% | 01/03/2020 | Yes |
Vegan Market Inc. | 12/31/2018 | $100,225 | $138,290 | 5.0% | Yes | |
Scott Alter | 01/26/2019 | $100,000 | $133,676 | 11.0% | 01/25/2023 | Yes |
Scott Alter | 01/26/2019 | $100,000 | $94,950 | 11.0% | 01/25/2023 | Yes |
Name | Scott Alter |
Amount Invested | $100,000 |
Transaction type | Loan |
Issued | 01/26/2019 |
Outstanding principal plus interest | $133,676 as of 05/2019 |
Interest | 11.0 per annum |
Maturity | 01/25/2023 |
Outstanding | Yes |
Current with payments | Yes |
Relationship | Company Director |
Name | Vegan Market Inc. |
Amount Invested | $164,922 |
Transaction type | Loan |
Issued | 12/31/2017 |
Outstanding principal plus interest | $164,922 as of 05/2019 |
Interest | 5.0 per annum |
Outstanding | Yes |
Current with payments | Yes |
Relationship | Parent Company |
This is a related party loan with no set maturity date. It is intended to be repaid as the company becomes profitable. | |
Name | Scott Alter |
Amount Invested | $100,000 |
Transaction type | Loan |
Issued | 01/26/2019 |
Outstanding principal plus interest | $94,950 as of 05/2019 |
Interest | 11.0 per annum |
Maturity | 01/25/2023 |
Outstanding | Yes |
Current with payments | Yes |
Relationship | Company Director |
Name | Vegan Market Inc. |
Amount Invested | $100,225 |
Transaction type | Loan |
Issued | 12/31/2018 |
Outstanding principal plus interest | $100,225 as of 05/2019 |
Interest | 5.0 per annum |
Outstanding | Yes |
Current with payments | Yes |
Relationship | Parent Company |
This is a related party loan with no set maturity date. It is intended to be repaid as the company becomes profitable. | |
$50,000 | 60% -- Marketing and promoting franchise opportunity (build a section on the website about it, social media campaign, franchise-based conference attendance)
32.5% -- Complete implementation of inventory management system
7.5% -- Wefunder Intermediary fee |
$1,070,000 | 20% -- Marketing and promoting franchise opportunity (build a section on the website about it, social media campaign, franchise-based conference attendance)
27.5% -- Complete implementation of inventory management system
10% -- Implement new ERP (enterprise resource planning) system
10% -- Explore and potentially implement new POS system (ideally one designed for specialty stores, or franchises)
15% -- Build an e-commerce platform (web development)
10% -- Hiring (mostly on the business side, also on the technical side)
7.5% -- Wefunder Intermediary fee |
The Securities and Exchange Commission hosts the official Form C on their EDGAR web site.
Victoria Moran of the Main Street Vegan Podcast interviewed Steven Smith, founder of Fort Lauderdale's all-vegan market and Claire Smith, founder of the firs...
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