Nepra Foods Update
InvestorSarfari Comments: A definite read on this update for Nepra Foods!
Nepra Foods ( OTCMKTS: NPRFF - CSE: NPRA ) is a vertically integrated food company with an operating production facility just south of Denver, Colorado. Nepra was formed in 2016-2017 and was the union of 2-3 different projects.
The CEO of Nepra, Chadwick White, created Udi’s Gluten Free bread in 2008. After building the Udi's from the ground up, he sold it in 2013 for 125 million dollars to Boulder Brands. Boulder Brands subsequently sold it to Con Agra Brands.
Udi’s Gluten Free Bread is still one of the top 3 selling gluten-free breads, although many other new brands have hit the market with updated formulations.
Chadwick has developed a line of bread (5 different products) and licensed its production to a 3rd party bakery. It “will be initially distributed through KrogerTM, PublixTM, and Meijer representing over 2,600 retail locations across the country.”
https://www.marketscreener.com/quote/stock/NEPRA-FOODS-INC-127080841/news/Nepra-Foods-Inc-Announces-Partnership-with-the-Cloud-Boys-Bakery-to-Revolutionize-Gluten-Free-Bread-44315124/
For what it's worth, it seems like Chadwick is much more excited about the egg replacement than the bread – and for good reason. The “egg” replacement part of the product is a little more nuanced. You see, regular bread does not require eggs – however – when you remove the gluten from the mix, the bread will not be bread. Gluten gives bread the structure and air pockets.
Gluten-free bakers have used eggs to try and add structure, (without great effect) and other undesirable ingredients.
Here is an excerpt on gluten-free bread from Wikipedia:
“Gluten-free breads are made using flours from a variety of ingredients such as almonds, rice, sorghum, corn, legumes such as beans, and tubers such as cassava. Since these foods lack gluten, dough made from them may not hold its shape as the loaves rise, and their crumb may be dense with little aeration. Additives such as xanthan gum, guar gum, hydroxypropyl methylcellulose (HPMC), corn starch, or eggs are used to compensate for the lack of gluten.[16][17][18][19]”
In gluten-free bread, egg is really being used as a gluten substitute. So, to call what Chadwick has created an egg substitute would be similar to it a “GUAR GUM SUBSTITUTE.” Both things are actually – gluten substitutes.
Nepra has proprietary rights for this gluten-substitute, and is currently licensing it to other, existing, gluten-free bakeries.
Here’s the thing – Nepra’s products works better than any of the above mentioned ingredients. Read the news release, understand how quickly this product has made it to market, look at Nepra’s other products and pedigree. This is the real deal – Nepra has beaten teams of food scientists working at major brands, who are still using hydroxypropyl methylcellulose.
It’s a better product. Nepra has proprietary rights. There are other bakeries it is being licensed to.
In gluten-free baking – the most important thing to have is something that acts like gluten…..very important. Lol.
In addition to this amazing product, Nepra has produced and started selling a gluten free pasta. (ProPasta) This pasta was recently awarded a gold medal by the American Masters of Taste panel, and it is being sold on the Nepra website.
ProPasta has also been served at a high-caliber Denver restaurant for the past 3 months. (this is all happening very fast)
Virgillio's has posted multiple times about Nepra's pasta - and you can read user comments on their Facebook or Instagram.
Virgilio's Pizza has won A TON of awards, it seems like they have an eye for quality. https://www.ilovepizzapie.com/media
This is an award winning pasta, being served in an award winning restaurant.
According to the investor conference call and other communication with Chadwick, a much larger distribution deal for ProPasta is being worked on.
On top of that….. Nepra is vertically integrated into their sector, and actually, the core of their business is not even selling gluten free bread or ProPasta – Nepra is an ingredient development and wholesale business. They sell flour and other baking products - specificly formulated and protected products - to a variety of companies.
Again - if creating and nationally selling a new gluten free bread doesn't make you think that maybe the company is undervalued, that’s okay. That's not even the bulk of their business.
They currently supply many different companies - they are not at liberty to discuss all of their clients. One of the early ones, however, was Quinn Snacks, who is having great success with gluten free pretzels.
To validate the importance of this vertical integration, and the future size and potential profitability of the company, Nepra recently signed a contract with Scoular, the 47th largest private corporation in America.
Chadwick and other company leadership own a decent percentage of the company's shares, and we all know how important that is. Nepra has the shareholder's best interest in mind - because they have their own best interest in mind..... That's how this works, in case you don't know.
Oh – here’s his investor conference call - I'm pretty sure the dude works weekends, lol, he's pretty engaged and knowledgeable about the company and industry. I like the part where he's talking about Udi's and says that by the time they would finish building a factory, it already wasn't big enough.
https://drive.google.com/file/u/0/d/1Ioc53HC5PsGJ9V4a9DQnXcXRi7O2nap5/view?usp=share_link&pli=1
He has had a lot of success and has business knowledge. (besides being able to create products and get them through all the regulatory hoops to bring them to market) - Building factories, zoning permits, hiring and employee management, equipment acquisition and operation, sales, marketing, corporate taxes, payroll and employee taxes, insurance, OHSA and safety regulations, FDA, SKU’s, warehouse management, distribution and logistics chains, etc.
So, proprietary rights on a “well-received” gluten replacement, an award winning pasta being served in an award winning restaurant, a production and distribution agreement with the 47th largest corporation in the USA – this is a good situation to be in.
Disclosure: I have not been paid for this article and I do not work for Nepra or any associated entity - In fact, I am solely employed by the US Government, of all things. I do own Nepra shares, and I have been lucky enough to accumulate a decent position over the past few months.