Is Laird Superfood Stock A Buy?

Laird Superfood Inc (NYSE:LSF) is an Oregon-based food company that focuses on healthy, whole-food ingredients. It creates plant-based alternatives to coffee creamers and sells the coffee to go with them too.

LSF share price was on the rise in 2021, thanks to interest in plant-based meats fueled by companies like Beyond Meat Inc (NASDAQ:BYND). Plant-based dairy alternatives like Silk and Almond Breeze already pioneered the dairy aisle.

Where Laird found its niche is the other grocery aisles, where it creates snacks, creamers, coconut waters, and protein products that are vegan, non-GMO, and all the other things people need.

It’s time to take a bite out of Laird Superfood to see if it can fuel investor profits?

Laird Superfood Checks The Sustainability Box

Laird Superfood is a Sisters, Oregon-based company creating plant-based alternatives to common products. It started in 2015 with coconut-based superfood creamers and sports drink alternatives.

Products like Gatorade, Powerade, and Vitamin water may look appetizing, but they’re not natural. Most juices in grocery stores are filled with sugars, and sports drinks are often synthetic.

The company tackled the issues with functional mushroom powders like Chaga, Lion’s Mane, Cordyceps, and Maitake. These are mixed with coconut milk and sugar, along with superfoods like algae, to create a variety of products meant for recovery.

Not only is the product inside sustainable, but so is the packaging.

It’s reaching for every niche it can find in the crowded drink space, and because it’s using all-natural ingredients in dry form, shipping costs are drastically reduced. These days, it has a variety of drinks, like hot chocolate and matcha, and foods, like pili nuts, along with all the “swag” you could imagine.

Oregon companies have a solid track record, with giants like Nike and Columbia, alongside rising stars like FLIR Systems headquartered in the state. Tillamook, Rogue, and other popular food brands hail from Oregon too.

With so many tailwinds, bullish analysts are researching whether now is the right time to buy in.

Is Laird Superfood Stock A Buy?

Laird Superfood has a market capitalization nearing $500 million heading into Q2 2021. The company just started trading publicly in September 2020, when share prices dipped as low as $31.00 before doubling over the subsequent two quarters.

Analysts generally recommend to buy the stock, although little long-term track record is very turbulent.

In the third quarter of 2020, the company increased net sales 118 percent year-over-year to generate $7.6 million. The company earned $1.9 million in gross profit from that, representing a gross margin of 24.7 percent.

Nearly half of those sales came from its ecommerce channels, including the direct line from the company website.

The company shipped liquid creamers to over 1200 Whole Foods (owned by AMZN) and Kroger (KR) locations in the quarter as its new SKU rollout. Each is sustainably sourced and packaged, just like everything else the company makes.

Coffee creamers make up nearly 70 percent of revenues, although the company has a broad spectrum across most drink categories. And only one percent of its customer base is food services – 50 percent comes from wholesale and the other 49 percent is online.

It’s the wholesale side of the business that’s growing, and if the company continues expanding its availability and market recognition, it could experience another banner year in 2021. 

Laird Superfood: “Flies In The Ointment”?

Anyone invested in Beyond Meat (BYND) or Laird can already tell you the health food market is volatile. There’s nothing necessarily proprietary about any of its products, and whatever is protectable can still be easily worked around.

That’s the biggest issue in any food play – they’re all about marketing. Coke (KO) and Pepsi (PEP) spend billions every year convincing people to buy sugar water. That’s why sodas were in fashion compared to natural, plant-based solutions in the first place.

Laird needs to spend a lot of money to grow its presence beyond the dedicated “Whole Foods crowd” that it has. And a certain percentage of people will never accept the vegan alternatives, potentially limiting the market.

Let’s not overlook the competition either.

Can Laird Superfood Competitors Win?

Each of the companies mentioned above is competing with Laird Superfoods on some level. And brands like Nestle, Danone, and Coffee-mate are engrained specifically in coffee creamers. As soon as other alternatives find traction, these food giants change their game plan to retain market share.

As Laird grows, it needs to work hard to maintain shelf space. This is especially true because it’s not located in the same place as its competitors. A shopper looking in the refrigerated aisle may easily miss it, as the liquid creamers are relatively new.

These issues make the possibility of scaling difficult. But Tillamook did it, and it could also find success via acquisition.

Is Laird Superfood Stock A Buy? The Bottom Line

Laird Superfoods is an Oregon company that makes plant-based alternatives to everything we drink. From coffee creamers to sports drinks, we often add animal-based products that aren’t friendly to the health conscious. These products are vegan, non-GMO, and more.

The company has a big presence in Whole Foods and is expanding its Kroger relationship. Altogether it’s in 1200 stores and has a growing ecommerce side too.

While health foods continue to trend, this could be a long-term investment play. But it’s also competing for shelf space with a lot of established companies that don’t want to lose. If it doesn’t remain innovative, it could get cannibalized by a larger competitor.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.