Founded back in 2014 in Montreal, Goodfood (TSX: FOOD) is Canada’s leading meal kit delivered to home service. Stocks in the company, which were trading just under $2 per share when the pandemic hit Canada, had quadrupled by the end of last week. Profits are up 77% in the 3rd quarter relative to the same period a year ago and net income was up to just under $2.8 million from a loss of more than $3.6 million a year ago. It is safe to say that Covid-19 has been kind to this business model.
Now the company has launched its new Goodfood Wow service, which allows consumers to order any combination of meal kits or grocery products without a monthly subscription. The service costs just under $10 a month and includes either same day or next day deliveries, with no additional delivery fees for orders over $35. On its website, the company claims that its retail food costs come in close to 15% below current grocery store prices.
The new service appears to be designed to compete directly with grocery store delivery services, many of which have been overwhelmed by massive demand under Covid-19. This allows the business to compete in a new market segment, as the pandemic has forced the grocery and food business in general to adapt to ever changing conditions. It has been reported that the company had over 200,000 subscribers this time last year. Current numbers regarding Goodfood’s subscribers were not immediately available.
The company and its top executives appear to be taking full advantage of this recent explosive growth. On August 5 Goodfood announced a bought deal worth approximately $40 million. A statement released by the company explained that from the proceeds of the offering, approximately $28.8 million has gone to the company in the form of new stock issuance, and approximately $11.5 million to the selling shareholders which the statement lists as “Messrs. Jonathan Ferrari, Chairman and Chief Executive Officer of the Company, Neil Cuggy, President and Chief Operating Officer of the Company, Raffi Krikorian, Vice President, Merchandising of the Company, and Hamnett Hill, a director of the Company, or their respective holding companies.”