Innovative Food Holdings, Inc. Expands Portfolio Through Strategic Acquisition

Innovative Food Holdings, Inc. Expands Its Market Reach

Innovative Food Holdings, Inc. (OTCQB: IVFH) has recently made headlines with its strategic acquisition of the assets of LoCo Food Distribution LLC, a company well-known for delivering locally produced products. This acquisition, valued at $357,699 and finalized through the Company’s subsidiary, Golden Organics, marks a significant milestone in IVFH's growth trajectory.

A Closer Look at LoCo Food Distribution LLC

Founded in 2011 by Elizabeth Mozer, LoCo Foods originated from a personal commitment to local and sustainable eating. The journey began with a simple minivan and the determination to source locally produced foods for their family and community. Over the years, the company expanded its reach, ultimately generating sales of approximately $4.7 million in the past twelve months and establishing a customer base of over 200 in the Rocky Mountain region.

Details of the Acquisition

The acquisition includes essential assets such as refrigerated delivery trucks, warehouse racking, and much more, effectively facilitating a smooth transition. Furthermore, the closing of this transaction has ensured that all long-term debts have been settled, positioning LoCo Foods for a brighter future.

Operational Benefits and Cost Savings

The relocation of LoCo Foods’ operations to Denver is anticipated to deliver significant cost savings. The consolidation of logistics operations and cessation of unnecessary lease expenses will allow for better resource management and decreased delivery costs, especially considering that 80% of its customer base is located in Denver. This strategic move is expected to enhance the profitability of both LoCo Foods and IVFH.

Enhancing Customer Base and Product Offerings

With this acquisition, Innovative Food Holdings will tap into LoCo Foods’ extensive customer network, comprising a mix of retailers, hotels, schools, and hospitals. This enriches IVFH's product catalog by integrating more than 500 local Colorado items, ultimately fostering a more diverse offering for their clients.

Cross-Selling Opportunities

The merging of Golden Organics and LoCo Foods provides ample opportunities for cross-selling. With minimal customer overlap, there is great potential for IVFH to offer their gourmet products to LoCo’s established clientele, enhancing both customer satisfaction and revenue.

Leadership and Management Strategy

The management structure post-acquisition will see Taeshaud Jackson, President of Golden Organics, guiding LoCo Foods, alongside key employee Sam Novotny. The continuity in leadership will help uphold the brand's integrity while integrating IVFH's resources efficiently. Moreover, a consulting agreement with Elizabeth Mozer ensures that the company continues to benefit from her experience and local insights.

Future Growth Plans

CEO Bill Bennett expressed his optimism about this acquisition, highlighting that it aligns perfectly with the strategic goals set forth for IVFH. The marriage of innovative products and a robust distribution network positions the company for significant growth in the gourmet food market. The plans include expanding sales channels and leveraging back-office synergies to enhance operational efficiency.

Financial Implications

Despite upfront costs associated with the acquisition and initial integration, IVFH anticipates that this deal will be financially accretive to earnings per share in the near future. This reflects the management's confidence in their new strategy and growth potential within existing markets.

Commitment to Quality and Ethics

At the heart of IVFH's philosophy is the commitment to quality and ethical sourcing. Leveraging LoCo Foods’ reputation will enhance IVFH's ability to provide well-regarded, locally-produced culinary products to chefs and food enthusiasts alike.

Frequently Asked Questions

What is the significance of the acquisition for IVFH?

The acquisition allows IVFH to expand its market presence, diversify its product offerings, and tap into LoCo Foods' extensive customer base.

How does this acquisition align with IVFH's strategic goals?

This strategic move aligns with IVFH's goal of enhancing operational efficiencies, broadening its gourmet food marketplace, and driving long-term growth.

Who will manage LoCo Foods post-acquisition?

LoCo Foods will be managed by Taeshaud Jackson, the President of Golden Organics, and key employee Sam Novotny, ensuring a smooth transition and continuity.

What kind of products does LoCo Foods bring to IVFH?

LoCo Foods adds over 500 locally sourced Colorado items to IVFH’s catalog, enhancing its gourmet product offerings for professional chefs.

What are the expected cost savings from this acquisition?

Anticipated cost savings will come from reduced logistics expenses and the cessation of lease payments as operations are consolidated in Denver.

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