Already been to Australia ...exited not that long ago ‘to focus on the NZ market’
Must have been an expensive exercise
Printable View
Watch for huge forecasted growth into Chatham and Stewart Islands then :D (bad dog... back into your kennel)
You read it here first:
"As a market leader in New Zealand, My FoodBag is well positioned to take advantage of market growth(population driven growth and increasing per capita consumption).In addition, MyFoodBag will seek to leverage its brand strength, marketing investment, and capabilities in new product development to maintain or grow it smarket share.
MyFoodBag continues to leverage its established relationships with customers, driving growth through innovation and marketing programmes to deliver additional export sales growth in existing export markets.In addition, MyFoodBag continues to work with new potential customers and is seeking to diversify its sales channels in existing markets and enter new international markets.
MyFoodBag continues to innovate in the value added space to increase revenue in this segment. MyFoodBag will continue to develop new, bespoke, products with its customers to grow value added product sales.
My FoodBag manages its ingredient costs through a combination of commodity and currency hedging and active raw material ingredient sourcing strategies.My FoodBag seeks to be one of the lowest cost producers of in-home food globally and continually implements initiatives to reduce costs and improve efficiency across its operations."
I might live on the wrong side of the tracks or similar because i don't know of anybody who partakes in what MY FOOD BAG offers.
Never understood it myself, are people attracted to them being delivered at home or are people just lazy to get a recipe and pick the items they require. Its what I have always wondered, whats stops Countdown setting up an aisle with all the recipes for people to just grab a packed meal solution. 10x different meals all in one aisle, just pick n go or better get deliver. Anyways I love food shopping so dont see myself or family using the service.
I've seen exactly that sort of thing at PaknSave, prepackaged food kits etc. Always struck me as a lot more expensive than just buying the ingredients separately, but I can see the convenience. Really there's a very low cost of entry to this sort of thing and there are competitors like World on our Plate or Jess Underground Kitchen if you can't be bothered even doing the cooking. I can see either Foodstuffs or Progressives making a push in this space and combining it with their online supermarket shopping offering.
I subscribed to the "classic" option for 2 weeks. My opinion is likely tainted by the lamb they sent me which smelt like it had been dragged through a sewer - and they also ignored my request for a refund!
Other than the above I found the meals to be pretty basic ...it worked out to be about $30 for 300g of beef rump (or other cheap protein cut) and a few salad/vegetables per meal. Allegedly portioned for 2 people - maybe I am greedy but id say enough for 1.5 people for an evening meal.
And as it only provides 4 or your 21 meals per week it didn't feel overly convenient as a supermarket trip is still required (and you can pick up 4 meats and veges during the same trip for about half the price).
I didn't get the impression it would have any long term appeal. Although some people obviously enjoy it (maybe they received better lamb!).
I have friends that use it. They love it, but they are yuppies, on big salaries so like supper convenient things. You get a weeks worth of food or so many meals. By the sounds of it, no recipe is the same, they have a huge folder with recipes in it. Most of the recipes use out of the norm ingredients, which is all in the box, but she said to replicate it would not be easy, as most people wouldn't carry those in ingredient in their pantry. I thought it was quite expensive also. So surely there is only a certain part of the market that would subscribe.
New World trialled meal kits in a few places a couple of years back. Don't know if they still do them.
I agree with minimoke above about saturation in NZ. MFB have extended their range a lot but I suspect the new offerings cannibalise each other to a large extent. Maybe their Bargain Box less so.
MFB is not cheap but that is obviously not a barrier for a lot of households that are time poor and juggling too much.
One aspect not often mentioned is that MFB is a great way for kids to learn to cook. Easy to follow recipes, everything right there and mostly measured ready.
Can't agree with your friends unless their pantry contains only tinned tomatoes and chickpeas. Certainly there are pantry ingredients such as freekeh that might be a tad unusual to some, but actually are readily available at the supermarket and not expensive.
Wrt the last sentence fortunately investors can decide on investments without having to personally experience them.
Huge numbers of families are time poor these days with both parents working long hours but the fact is there's a wide range of cheap takeaways available for most people within a short drive that is FAR easier and more time efficient than cooking yourself and it often works out cheaper with no wastage and no power.
Highly likely MFB has already hit or very close to peak saturation and I agree with others comments this is something that supermarkets could very easily replicate.
Anyone noticed how the supermarket chains are rapidly expanding their house brands ?
Foodstuffs owns Pams, so it's really not hard for them to get into this area of the market if they want to.
If you cant even be bothered cooking there is also Uber Eats. $12.90 for a Royal Roast Served with potatoes, pumpkin, kumara, and mixed veggies. Choice of sauce gravy, mint sauce, apple sauce, and horse radish .sauce. Or something from one of dozens of outer food outlets.
I could see a similar sort to trajectory to TME after IPO. Good service, but really stuck on our own little island as there are PLENTY of other companies that are working at scale offshore. Little ability to grow the pie, other that eat at the current food spend c.f. supermarkets (and how far have they accessed this market?). Any guesses at what their NP% will be....?
We use MFB, I work nigh on 60 hours per week and my partner is studying all day 7 days a week, so time is the main thing this saves, plus not having to come up with interesting new things to cook. Groceries (there is still a quick weekly shop) plus MFB is about the same as what we used to spend all up, but the time/mental currency saved is good. The food has been great and there is usally some leftover for lunch. It is a bit of a luxury though and I'd be skeptical how much more this business could scale up...
I've been a dedicated MFB subscriber basically every week since they first began. I would never go without it! The time saving is the best part, and not having to go to the supermarket (except for non food items). Another great feature is getting kids involved in cooking, especially once they start cooking at school as well, they can follow MFB recipes. Essentially all you are doing is basic assembly of some fancy items.
I get the Gourmet Bag every second week and we enjoy fancy meats with ridiculously fun accompaniments and garnishes, and the other weeks we get the Bargain Box (when we have 4 fussy children). The Gourmet selection was a bit too much for my partner's children with limited palates ("what are these vegetables called?", so I 'downgraded' to Bargain Box which is much more basic, and with cheaper meats so you get way more. Lots of mince and pasta and potatoes etc. But still, recipes that are all extremely nutritious, quick to prepare, and filled with vegetables.
I also get the MFB Lunch Box which I subscribe for my own children, and also to provide the afternoon tea at my after school care programme I run. Then I've got dinners sorted, school lunches sorted, and quite often, leftovers for adult lunches too.
I would not do without this service, but I feel I've maxxed out my spending and will remain at this level. I'm probably at the higher end of the subscriber scale, getting a large meal box and multiple lunch boxes every week. I imagine most people would subscribe to one thing. Their growth has been so fast and strong throughout multiple cities in NZ, and I think they are the third largest grocery store after the supermarkets. I'm not sure how much more NZ growth there could be in an IPO, unless they tackle international markets - but that comes with logistical difficulties and all sorts. Possibly someone could buy them out eventually? I'm not sure what the long play would be? A subscription model for groceries doesn't suit everyone, and surely the people who it does suit are already doing it.
I'm in two minds about what to do if they list... I absolutely love their product and will continue to support them because it suits my lifestyle.... but from an investment perspective, I'm not sure what the future returns are likely to be. Has it already peaked?
Agree Blendy. And enjoyed you description of MFB in your household. I am a semi regular user, find it especially useful when there are people staying. Easy. Last lot were vegetarian which is a bit challenging for me, so veggie bag was simple. And recipes lend themselves to helpers in the kitchen.
Lets hope MFB doesn't perform as well as similar businesses overseas have on IPO: https://www.recode.net/2017/11/13/16...rming-ipo-2017
All this talk about food and yet somehow i would prefer baked beans on toast.
Agree with that, current discussion seems more interested in whether they'd buy the product than whether the company is a good investment. All this anecdotal experience is interesting but not helpful in making an investment decision. There's plenty of companies that one can invest in that one chooses not or cannot to be a customer of.
I know a few people at my workplace who use MFB and swear by it. Mostly, young, busy and health conscious fits the profile. I think the people that get into it really have to love it, and they are really doing well to pull at idealistic peoples heartstrings. The whole angle with Nadia Lim as well has a cult following by the sounds of my co-workers.
To me I thought the meals were overpriced. The portion sizes aren't great by the looks of their meals and I feel as though I could buy and cook better but like I said about idealists.
The subscription model is the way to go, I mean who doesn't like a recurring revenue stream but I'm just not sure how they scale this model out, you really have to buy into it. Also not sure what their margin would be in NZ just based on how difficult logistics is. For me, that is what stops me from buying into it if it does go listed. My cynicism wouldn't let me.
Mrs Raz was an early adopter, the cuts of meat were never great quality although we had fun preparing with our daughter when she was young. They limited the variety back then and we did get bored of the offerings. I suspect from what i know urber eats is starting to eat their market share..its it fast growth and big. All our friends that were MFB now mix it up with uber eats and I know some larger take aways and restaurants where evening turnover is made up of over 30% uber eats...they are are serious competitor to all in this space.
Could well be an IPO where those who 'love the product so much, buy the company'.
I like the product but not tempted to buy a stake at the mo. They do have first mover advantage, have the logistics in place and have a lot more locations to add for delivery. Not big ticket urban areas though.
The Trademe IPO set aside an allotment for members which was a good look.
IPO back on the menu for My Food Bag
Private equity Waterman know how to make a buck or two ...timing could be right (for them)
articles says $25m earnings
https://www.stuff.co.nz/business/122...listing-on-nzx
i opened this page and started reading the first message thinking "yeah, i agree with this!" and then realised it was my own post from 2018 LOL
I still think that investment growth with their current model would be challenging as surely they've tapped out the majority of new clients, plus there's competition from other companies splintering the available customer base.
we use "hello fresh". my wife says they have more menu choices available than MFB. which surprised me, I'd have thought being the earlier-mover, MFB would have tried to make it harder for competitors by having more choices. We love hellofresh ... been with them a few months ... can see us as staying regular customers. My wife also thinks hellofresh might be a little cheaper.
I really don't get what competitive advantage MFB would have. I don't think it would be that hard to replicate the offer and business ... a bunch of menus, buy ingredients in bulk, place ingredients into a box, ring the courier ... spend the cash. Yes, having large existing customer base is a plus, but a lot of people like to experiment with food, and all it would take would be a bad experience or two, to try something new. Plus, I don't think there are a lot of fixed costs, or scale benefits from being larger. So what is MFB's competitive edge?
with the uplift in sales they have had from COVID, and as more competitors may enter or strengthen, I can see why Waterman think this is a good time to get out ...
Good we have meal kit company choices, but as for menu choices I doubt there is much difference between Hello Fresh and My Food Bag. Check out My Choice for example (10 dinners to choose from each week) plus their MADE range of ready to heat (or freeze or give to family) can be added.
MFB has made quite a few changes this year, responding quickly and nimbly to events, which bodes OK for an IPO.
From what I once got told - MFB was the equivalent in sales as a mid-size New World. Although when supermarket owners appear on the rich list, then there may be something in it.....
In terms of competition, they don't really have a moat I can see, unless it is Nadia. Given the number of Countdown trucks on the road, their commencement of dark stores etc - they could easily offer something similar (if not already) - plus deliver all those little extras you need, like the missus' wine......
It was reported last year that MFB is the third largest food retailer in New Zealand. The first two are the supermarket chains. I think they used to deliver wine as well but no longer. They have added Allpress to their range.
Had a couple of WOOP boxes during lockdown ...they were pretty good
Hellofresh is German, and I think the largest in the US (Blue Apron really got squeezed) so they have a wide range of recipes (literally thousands) that they can draw of, and specialty stuff like spices for NZ are shared with Aus from a supply perspective.
I'm surprised by how well MFB has done to maintain their market share, but always wonder how sustainable the business model is. NZ is really only big enough for two or three such businesses to operate in that space. Credit to them so far.
My Food Bag always makes me think of a horse's nosebag. Not an appealing association for me.
I've tried all the meal kits available in my area, need something to persuade me to step away from the toaster. And to feed the family when they come over without having to think or shop. The thinking is the worst.
Keep coming back to MFB.
Not necessarily investing in an IPO though, it depends.
One step closer , although this might fish out a Private Equity offer , or one from a competitor .
https://i.stuff.co.nz/business/12394...in-the-company
Business Desk saying today "All Star Board", with all of the founders stepping down, with Tony Carter as Chair, Jon McDonald (ex Trade Me CEO), Jen Bradbury (ex THL CFO). Also Sarah Hindle and Chris Marshall. Lot of changes yesterday to their board!!
AFR have said earnings about $25m, turnover reported about $130m.
That probably puts it about the turnover of a reasonable sized New World. Founders have about 27% left.
Got my invite to register for priority shares ....valued customer I am
Only need to make 1 purchase before March to get them if IPO.goes ahead
When you put it like that, one wonders what we're being asked to consider buying in to, is it worth it, what growth potential does it have. Looks more like an exit payout strategy than a decent investment. Not the only game in town either, just might have a better brand profile.
Thinking thinking.
If anyone wants to sign up to My Food Bag so they can take part in the "priority Foodies Offer" you can use my referral code (it'll get you $50 off your first purchase). The priority registration process is open till 5pm on 29 Jan 2021 and you'll need to purchase at least once between 15 Jan and 1 Mar to qualify.
I think if I was to have food delivered I’d want it already cooked and if I was going to cook myself I’d go out and buy the ingredients being a DIY kiwi. NZ doesn’t have a big enough population to scale up enough.
What’s stopping uber eats from delivering the ingredients you might need anyway, if you wanted to actually cook.
You simply don't get it, do you?
We get MFB every third week during the winter when our own veges are finished.
Yes, we could buy them ourselves and mostly we do, but once in a while it's fun to cook a new Nadia recipe using supplied ingredients.
But Nadia is the key. If she's not involved, we won't be into the IPO.
Even if she is involved, how scalable is the business? How many people want to cook Nadia’s recipes? I would say not very many. Not an investment for me, period.
I think these types of business appeal to the time poor as you say artemis, and those who can be bothered/find it hard deciding what they want for dinner over a week but don't mind cooking. Makes it easy- ingredients and recipe supplied.
I think Nadia continuing to be the front person is a key to the on going success in the medium period.
I notice they have 'introduced' another person(s) that are coming up with recepies, albeit vegetarian(??) I think they are, in the latest ads
Been in food industry for 20 years....to be honest the margin is so small.
Wastage...on going increase of produces....meat etc.
In winter... tomatoes is like $10 perkg...
https://www.eatl8r.co.nz/
We order their meals.Delicious.Just microwave 2 minutes .
Hahha... funny u
To be fair MFB , has ready to eat options as well , come on Percy give it a try ...
https://www.myfoodbag.co.nz/extras/my-heat-and-eat
Warehouse does stock a lot of grocery items, but pantry / cleaning / personal care. Not fresh stuff though in store they do stock milk. I would say that's a good add on for them both for personal and online shoppers. If people are buying online shipping is dirt cheap and can be worth while adding a few grocery items to the order.
I was also thinking about this when I heard about the potential offer. Unless they expand to Australia (which itself already has established players), I see MFB having a very limited market.
Though consistently earning at least $20m - $30m per annum is still profitable.
I kind of (wrongly or rightly) compare MFB to diet and workout fads. They get a lot of people subscribing initially, but over time, they start to lose interest. Would be interested on what their customer churn is like and how many new subscribers they have been getting in the past year...and what the average ongoing spend of those new subscribers are etc...
Hi Metal storm they already were in Australia and retreated ......
Why doesn't NZ work alone ?How many companies have failed going into Ausssie .... plenty of things like general groceries etc they could add into the boxes .
I think of this like Trade Me,everyone thought it was a hell of a price to start with , but after it's sale it went to IPO then it has been taken out . So was plenty in it for everyone along the way ....
You mention fads ,whatever the latest diet one is they can supply ......
With the possability of IFT going ,MET last year it's about time something decent listed that the average person understands.
Wasn't Harmoney good enough ? ;)
Or were too many better Interest rate seeking punters on here left seeking a new home when the
Corporate participants commandeered the show for their own goals excluding everyone else .. ? ;)
Agreed though -- the depth of worthwhile company NZX listings is fairly light & diminishing ..
Eliminate all the ETF's and other NZX sponsored fundies etc & the true state of things becomes obvious ..
IPO confirmed. Applications open 19 Feb.
Big hitters on the Board
The much revered Tony Carter is Chairman
Jon MacDonald no slouch (TradeMe fame)
Offer details: https://myfoodbagshareoffer.co.nz/Share-Offer-P2/
Looks pretty average at best... Hellofresh launched in NZ just a few years ago and has smashed MyFoodBag aside (already having $194m revenue in FY20 compared to MyFoodBag at $153.3m - no growth on FY19). Looks like a nice pump for FY21 numbers to try make IPO look better... but the numbers have confirmed growth story is a ??? that is for sure.
The way they've named/referred to the senior leadership team might make some a bit more excited I suppose
Who wouldn’t want to join in the action with numbers like this
I’m always wary when none of the proceeds of an IPO go directly to the company when they are touted as a high growth business.
After the $17m of IPO costs the rest of the $342m cash goes to lenders and current shareholders
Pretty much how I see it too. Very little growth until Covid came along and some extra people started ordering because they were too scared to go out and source food themselves.
Projecting a similar level of sales in FY22 as to Covid boosted FY21 looks "very optimistic" at best and priced at 22 times what appears to be a very creative forecast of eps for FY22. Hardly looks like a "banquet" opportunity to tuck into, in my opinion. Maybe more like "fine dining" when you eat but go home and are still hungry.
And being marketed very heavily to unsophisticated "investors" (mums and dads) who may not have bought a share in their life. Hope they don't get burned.
In fact, to be eligible to participate, we got a notice (as former customers) that we had to have ordered in the last 60 days.
A PE guy once told me most advances made to them to buy businesses get laughed out the door (metaphorically) ....or if they show promise screw the price to hell.
If somebody fronted up to Waterman with a glossy brochure like the current MFB one they’d probably be laughed out the door
Old timer once said to me that anyone buying a company from a PE seller at an IPO is like being a hooker who is paying to get screwed.
Feltex, CBL, Wynyard, MPG, Intueri, Evolve but to name a few.
But the promoters will always tell you that this one is different.
The IPO numbers clearly sell this at a premium with partial ideas for expansion. Seems very slow going in terms of growth, but their prize asset is their platform which they could on sell many other products, which they haven't done so yet. So far theres not really a strong moat around this and thats pretty threatening when you pay for a high valuation and potentially lose value when someone else might come and eat their lunch (or dinner), its my food bag till the school bullies come along. Though I hope it does well because the lack of quality NZ companies coming on the NZX is very slim and boring for me.
I see the promoters have paid themselves a $13m for the year ended March 21 ...(effectively being paid out IPO money?)
Can’t miss out on the profits already made
Suppose that’s the way private equity works.
And many usually leveraged up to the hilt before things hit IPO
with the hefty prescribed Intangibles to balance the heist..
Many if not all of the examples in Balance's earlier post fit this mode operandi:
"Feltex, CBL, Wynyard, MPG, Intueri, Evolve but to name a few."
Hellofresh seeem pretty keen on telling people/press their sales numbers.
Herald article quoted 2020 Hsales $194m - up 159% from $75m prior year
And Hellofresh seem rapt in the last quarter sales being up 143% to $51.8m
Apparently Hellofresh spent $11m/$12m on advertising last year v MFB $5m odd - commentators say they have unlimited funds (accessing parents billions that means) to keep growing.
A couple of options have been dropped (wine and coffee) in the past, and various changes to offerings were made over the early covid period. Good to try out new things, even better to drop if not working. Indicates the company is open to ideas but watching carefully.
One aspect not too obvious from the outside is the impact MFB has on their suppliers, especially high end suppliers. Both from supplying product and exposure to a market with high disposable income. Culleys, for example, probably doing well. And top range meat suppliers.
I see this as an income stock but the world is seriously weird these days so who knows...
https://myfoodbagshareoffer.co.nz/Share-Offer-P2/
If anyone is prepared to invest in this company at the sort of multiples (high enterprise multiple, humongous PER & just about all goodwill on the balance sheet) being asked and scratchy pro-forma financial information being provided, I would suggest that there's plenty more value in the market already in some of the proven performing stocks.
EBITDA X F21 16.7X F22 13.9X
PER 28.7X 22.4X
Good on Waterman & other shareholders for supporting the business and taking it to where it is now - we need new businesses ideas and good people to be supported - so Congratulations to them but thanks, no thanks to this IPO.
Good to see Harbour Asset, Milford and ISG committing to 5% or more
Plenty of chatter about this great IPO ... that's good as well
Crystal ball still here, somewhere
This IPO is going to be a real goer - thousands of 'foodee' shareholders will get the hype going
Looking forward to the ringing of the bell at the NZX at open on the day - that'll be exciting
Good timing as well - come May when they announce their first result they'll be able to say 'exceeded PDS forecasts' and even more exciting will be able to say 'new year sales are ahead of last year and we expect this to continue with F22 sales being ahead of forecast' -- see being tricky in forecasting F22 sales to be less than F21 allows you to look good.
All that hype and good news will see share price about $2.25 by end of June
And then ....... Metro Glass come to mind
Ouch ... but I recon you well might be right :):
Maybe we should already earmark some cash to buy into My Food bag around 18 to 19 cents per share? Based on the Metro PG Experience one tenth of the IPO price (IPO I think around $1.75, Rock bottom between 15 and 16 cents) seems to have been a good price ;);
Good of them to show some half year numbers
Sales April to September last year up 36% on pcp
But forecast sales October 20 to March 21 only up 11% on pcp
Was April/September increase covid stay at home impact they talk about
Boost hasn't carried over post lockdown
If so H121 sales could be a challenge to meet last years numbers ....hmmm