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Business Observer Sunday, Jul. 12, 2020 3 weeks ago

Foodservice firm grows online services, profits take a hit

Online activity is up 70% at Innovative Food Holdings.

BONITA SPRINGS — Innovative Food Holdings, a specialty food company that provides chefs and consumers direct access to specialty food products as well as gift boxes and other curated products, saw a big boost in online traffic in the first quarter, which led to revenue growth.  

For the 2020 first quarter, igourmet and Mouth, the company’s e-commerce subscription services, had over 40,000 active unique customers — an increase of over 70% from the same period last year, according to a statement. Deferred revenue associated with those services, the release adds, was up 30% year-over-year. That helped the Bonita Springs-based company grow quarterly revenue year-over-year 3.5%, from $12.9 million in the 2019 first quarter to $13.3 million in the most recent quarter.

“We experienced strong e-commerce growth in the 2020 first quarter, which accelerated during the second quarter, as our e-commerce assets have been uniquely positioned to benefit from disruptive trends underway in our markets,” Innovative Food Holdings CEO Sam Klepfish says in the release. “Our in-house chefs and curation teams are working with our procurement, logistics and marketing departments to create new products including high-quality specialty grocery products, themed specialty food kits, curated gifts, and monthly subscriptions. We are also investing in our platform to further increase customer engagement and conversion rates.”

Klepfish, in the release, also recognizes “foodservice revenues have experienced unprecedented declines starting in the second half of March and the impacts of the COVID-19 pandemic continue to affect foodservice customers. Related to these declines, we recorded a non-cash $1.7 million impairment charge during the first quarter. In addition, we experienced reduced profitability in the first quarter, which included higher expenses related to the COVID-19 crisis and a less profitable mix of foodservice business due to the COVID-19 crisis, as well as continued investments in our rapidly growing e-commerce platform. Despite these near-term impacts to profitability, we saw a ($600,000) year-over-year improvement in operating cash flow during the first quarter.” 

During the third quarter, the company, the release states, expects to move into its new Pennsylvania distribution center, launch the new igourmet website featuring a modern user interface supported by Shopify and further expand digital marketing efforts.

Founded in 2002, Innovative Food Holdings has $58.2 million in revenue in 2019.

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