BranchOut Food Inc. (NASDAQ: BOF) had initially surged by 12.80% to $2.82 during the morning trading session, spurred by a recent strategic partnership announcement. However, the stock is now facing a downturn, declining by 3.34% to $2.42 as of the last check. This correction is coming after an upward momentum in BranchOut’s stock price yesterday that followed a strategic partnership recently established by the company.
The announcement from BranchOut (BOF) reveals an expansion of its collaboration with the nation’s largest retailer, culminating in a newly inked agreement valued at an approximate $7.6 million annually. Under this agreement, BranchOut has not only extended its existing contract with the retailer for two products but has also embarked on a fresh contract for an additional pair of products.
As part of the contract extension, BOF has secured a 12-month renewal for two private label dried fruit items, initially introduced in 2023. Anticipating enhanced margins, the company foresees an annual valuation of approximately $5.2 million from this renewed agreement. Moreover, the freshly forged contract entails two new private label dried vegetable items, surpassing initial expectations with an order set for roughly 3,300 stores, valued at around $2.6 million annually.
Shipments for these products are slated to commence in May 2024, underscoring the commendable attributes of BranchOut’s proprietary GentleDry technology, renowned for its ability to preserve flavor, color, and nutritional integrity, thereby ensuring an unparalleled taste experience. The successful debut of BranchOut’s products within the retail outlets of the nation’s largest retailer has paved the way for the extension of existing contracts and the acquisition of new agreements, covering a broader spectrum of stores than initially envisaged.
BranchOut recognizes its private label business as a pivotal growth driver, with these recent contracts representing merely a glimpse of the potential envisaged for this business segment. In a parallel development, BranchOut has formalized a toll manufacturing arrangement with its existing royalty partner, EnWave Corporation, aimed at interim production of vegetable snack products.
This agreement secures two months of single-shift manufacturing, commencing in early March 2024, with provisions for additional toll manufacturing as necessitated by market demands.
