Thank you very much. This is the last session of the day. Bringing Ultra Fresh to every grocery store in America, we have a nice story to tell here. Let's get started. Here we are. We have the forward-looking statements. We began in a little coffee shop in Plano in 2014. We put a little fridge in a coffee shop to see if anyone would buy our juice, $12 a juice. We were doing $500 a day, built our own stores, 25 stores, nice brand, beautiful products, great cult following, and losing a lot of money. We got into H-E-B, and it changed our game because all of our—if those of you who don't know H-E-B, they have more people going through H-E-B in one month than going through Disney World in the entire year. It's huge.
We got on the shelves, people buying our products. It's like, what are we doing opening our own stores? We started closing stores, COVID hit, and then we pivoted from our own retail stores to 100% wholesale. It changed our lives, transformed our business. As many of you know, in this day and age, people don't go to the center aisle of the grocery store anymore. They go to the grocery store to buy fresh. We don't believe the center aisle is the place to be in the grocery store. We believe the vision is where fresh is, and that's where we focus. But fresh is very hard to do. We've created a cold chain from farm all the way to the end consumer, which we called Fresh35°, because we keep it at 35 degrees Fahrenheit.
The shelf life, we've got the shelf life now up to 14 to 21 days, and that's our badge of honor. It's very important to have fresh product. Did anyone try the products? You did? Okay, good. Just out of interest, how much do you think this bottle costs retail? I'll tell you, it's $1.28 at Walmart. It's really good value, and I'll come into that a little more later. We started out with juice. It's a $57 billion a year market. We introduced our own products, and some of you tried today. We have the top, which are the beautiful fresh lemonades. We have shots down at the bottom. Basically, the difference, what are we doing that everyone isn't doing? We're doing fresh.
So much so that we had to create a category called fresh because everyone thinks these guys on the left are fresh, and typically they're not. You've got Ultra Fresh, which is pascalized. You've got Naked and Suja and Bolthouse and all these products, and they're on the shelf there, and they're all paying slotting fees, end cap fees. They have long shelf life. Whereas we're down here where the action is, where the fresh is, where the freshly cut fruits, where the freshly cut vegetables are, and where the short shelf life is. We have a different distribution than the guys on the left because they are kept in the warehouse and then the stores order against their products. Where down here, we're doing four deliveries a week to the distribution centers for H-E-B and Walmart and our customers. So they keep everything stocked.
Has to look like that because people are coming by and buying these. Now, these are the big bottles of this little guy, and they're 52 oz, and they sell for $5.98- $5.99. Very good value because those little guys on the left that are not fresh are still selling for $5 , $6 . I don't know if any of you bought the juices there. They're very expensive. We've got a product that not only is fresh, but it's also value. Great value. Our plan right now is we did our IPO in January of this year. We've expanded from 20,000 ft to 40,000 ft in this year in Dallas. We have about a $55 million a year capacity in that plant. We plan next year to open an East Coast plant to be able to basically duplicate what we've already built in Dallas.
In the following year, probably Phoenix or Nevada, we'll build another plant so we can do another, hopefully, capacity of $55 million. Right now, we have 600 stores. What's really key here is we have Executive Chairman Bryan Herr. He took an apple, he sliced it up, he put it on the shelves, and he created a whole new category, where you have freshly cut fruits and vegetables. They have like, what, 15,000 points of distribution, 12 plants around the country, in gas stations, Walmart. We're all over. They have the same cold chain, except they have five days to seven days, and we have like 14 plus or minus days. We're in the same distribution network as they are, and that's our playbook. Bryan is the owner of Country Fresh, and he is also on our board, and he's our Executive Chairman.
The CEO of Country Fresh is also on our board as well. As is Marie Quintana, who's here. She used to be PepsiCo. We have some other great board members, too. We have three customers today. We have H-E-B. We've been there for eight years. Walmart's a new addition, and Kroger as well. We're just in about 246 stores of Walmart now in nine states. We're looking at expanding more products, more distribution, and the same with Kroger. Back to Country Fresh. They're one of the national leader. They have the 35-degree cold chain in place, which is what we have as well. They have the retail distribution. They're kind of the playbook for what's the vision for Buda Juice. It's to be on every grocery store in America and to use the same playbook as Country Fresh. You have an experienced management team.
We have Don Short, who was the former President and CEO of Minute Maid, the largest juice company in the world. We have Marie Quintana, who headed up Tropicana, second-largest juice company in the world. We have great corporate experience there in our category, well, in juice category. We have Doug Burris and Bryan, the entrepreneurial spirit. Mo Hayat, who brings all the corporate governance experience, and my Co-Founder, Bernard. Of course, Clint, our CFO, myself. Why invest in Buda Juice? We have a different platform from everyone else. We have this cold chain, so from picking the fruit all the way through to the end consumer, it's kept at 35 degrees Fahrenheit . That's really critical to be able to have the shelf life.
Because I do not know if you have a squeezed orange at your house, orange juice, and after an hour or two, it does not taste so good. Leave it in the fridge, it is okay. We can deliver fresh orange juice that tastes unbelievably fresh and delicious, 14-day shelf life. This guy has 21-day shelf life. We have nice growth, and it seems to be accelerating more and more. In the first, let us say, six weeks of Q3 of this year, we are experiencing 40%+ growth, of which 20% of that is organic growth, meaning same-store sales and same SKUs. We have eight years of experience at H-E-B, and they are expanding the category, and we are the category. We call it Ultra Fresh. We also have the 30 years' worth of experience of course, Country Fresh with Bryan and Doug helping us expand.
We are looking at a $55 million annual revenue capacity right now in our plant, which we have now expanded since the IPO. We have put in more cooling. We are putting in more automation. We have put in three new lines for a new line of business. What happened is we started out with just these shots on the shelves, and then the customers saw everyone buying them and experiencing this fresh side of the business they did not have before. They say, "Can you do orange juice for us?" We said, "Yes." "Can you do lime juice, lemon juice, lemonades, limeades?" We started expanding, and they started giving us all the fresh business. It is like, "Well, can you do dressings as well?" This is the same customer, same produce department, same logistics, same cold chain, same buyers. It was a natural yes.
That is why we are now building three more lines for this dressing line, which we are very excited about. Then we have the capacity to scale. We have gone through financial strength. We have no debt. We are profitable. We have $20 million in the bank. We have a great, exciting plan where customers want our product. I have left a lot of time, so I am sure I have a lot of questions. Please, fire away. Yeah.
What do you think the strengths of this? You are profitable. You have got a balance sheet. What is that? Why is the stock not reacting the way that you can perform fundamentally?
That is such a great question.
Obviously. Just a lot of opinion out there.
Yeah. This is first time going public, so I am not sure how it all works. All I can tell you is we are delivering on our side. So we are expanding. We have no debt. We are profitable. We have great partners, great board, great management team, superb customers, organic growth, and a great plan forward. So we will see what happens. Maybe a little bit of patience. We also have stock, about 65% of the three founders basically own the company, and there is not a big float out there. So maybe that has something to do with it. But everyone I have asked this question to, all the meetings today and all the experts of being in this for so long, and they all say, "Well, you just have to be patient. It is going to happen sooner or later.
Someone is going to start selling at the right price, and it starts to go up." So we will see what happens. Yes?
For the East Coast facility and the West Coast facility that you're planning, do you think it'll be similar square footage to service those areas as the Dallas facility is servicing the southern part of the U.S.?
Yes. Probably down the road there may be two DCs, two plants on the East Coast, but initially it'll be in the southern part and southeast. It'll be about $55 million capacity in revenue, about 40,000 sq ft. We'll duplicate what we've already built and basically transport it into Orlando, wherever we build the plant.
Okay. So almost like a mimic of Dallas.
Right. Yeah.
And then on the West Coast, similar?
Yeah, similar.
Okay.
Yes.
Where do you source your fruit from, and is there any issues there or potential issues with supply?
Okay, so we have really three fruits. We have the Valencia orange, which we get in California and in Mexico, and we have the lemons and the limes. That's the three ingredients. Yes, sometimes the price of oranges goes up, then it comes back down. With limes, we experienced that, as you may or may not know, in the first quarter, and also a little bit in the second quarter. They went crazy because some cartel guy got knocked off and they started rioting and burning trucks and all that stuff in Mexico. Then it started to normalize. So in Q3, it's been back down to where it was, like $22 a pound or whatever we pay for the limes. So it's back down. It went up to about 60, 70. So, it happened, like, four years ago. And at that time, it actually took longer.
It wasn't the mafia, it was something else. And we passed along those costs to our customer, which because they know the price of produce as well since they sell produce in the grocery stores. So, they accepted our price increase, and then we put it back down when the market normalized again.
You mentioned a 40% kind of growth, 20% same store sales. I guess the other 20% comes from the new product, which I'm assuming is the ranch dressing.
Right.
You also mentioned you're putting in premium lines. Is that just for the ranch dressing?
No, one is for the ranch dressing. One is for normalized dressing that's not as thick, maybe like balsamic vinaigrette and Italian or Caesar. And then we have another one which does cups. So, because we're bottling the ranch in 16 oz and 32 oz bottles, then we'll have one line to do other dressings. And then we have one which can do the cups.
How big is the dressing category?
Well, the ranch alone is about $2 billion a year. It is pretty big. The customer we have doing the ranch used to do it in-house, and now they have outsourced it to us, like what they did with the lime juice and the lemon juice and the orange juice and so on. It is exciting because when people try these products, they really enjoy them and they want to. I mean, did you all like this product here? It is good, right? This is very tasty. There is no aftertaste, right? The magic of it is it is clean, it is fresh, it is great for your kids, your grandparents, your parents. You can mix it with cocktails. You can have family fun with it, whatever. It is very affordable, too, because the big bottles are $5.99, $5.98. The little guy here is $1.28.
I mean, this is less than the price of a Coke or a Fiji water or whatever. What we have done, Fresh, typically people think, "I cannot afford it. It is Whole Foods. That is fresh Whole Foods." So, what we have done is we have now able to introduce fresh juice products to the masses at an affordable price so that there is no resistance. There is no demographic saying, "Oh, no, that is fancy." It is not. It is very affordable now. We feel that the pascalized and the juice category right now is all about marketing in the other fridge that we saw the photo of earlier. Our product, we do not spend any money on marketing. We do not do slotting fees. We do not have to do end cap fees or merchandising this or whatever because it sells itself. The grocery store really wants these products because they are really important to the category.
Because you do not go to the center aisle anymore. You can order that on .com. Basically, you go there for fresh, to see, to feel, to smell, and to choose what looks good for dinner. You go there two or three times a week. I mean, and you know what is getting them in the store? It is this. This is double-digit category in the grocery store, growing now. We are expanding. We are getting more SKUs in. We are expanding our category. We started with two SKUs. We now have 14 in the bigger stores. We have two now in Walmart. Hopefully, we will have more. Hopefully, we will have more stores. We feel that we are at the beginning. This is such an exciting time for us and for the category.
We had to name the category so we could differentiate from everything else that is out there because everything else is basically shelf-stable, pasteurized, gourmet pasteurized, UV'd, HPP, pascalized, whatever. What it has done is basically kills most of the enzymes, nutrients of the juice. Changes the taste profile and gives a nice, easy long shelf life, so it is easy to handle. We are in a different distribution center because they order from the distribution centers, and it can stay on the shelves for months. Whereas in our case, it has to be changed every day. So we are delivering every other day to all our customers so they have fresh product on the shelves.
With such a short shelf life, is there ever sell-through issues or waste issues or things like that?
Well, actually, that is the proof of the concept. We have been eight years at H-E-B, one of the most competitive and successful grocery stores in America, and we have gone from two SKUs to 14 and expanding. They would not keep us on the shelves if there was not very strong sell-through. So they are very happy with the performance. I think that is very important part of it.
Can you explain the differences between, you referenced H-E-B just now.
Right.
The differences between a case study like that and other grocery stores where you feel like you are most successful in and what you are, at least right now, relatively less successful in, and what are those differences? What would you attribute those to?
Well, I can share with you our Whole Foods experience. My dream was to get into Whole Foods when we started out. We were in the stores, and it took us seven years to get in. When we get in, they said, "Well, we want you to do DSD." In other words, we deliver to 55 stores in Texas. "We want you to do merchandising twice a week, and we want you to buy back anything that doesn't sell." It is like, well, if you want a company that is going to lose money, that would be us if we had done that. Now it is like, well, we have H-E-B, we have Walmart, we have Kroger, and we do not have to buy back anything. Obviously the shrink is very small, otherwise they would not have us on the shelves.
We feel that program can be successful wherever there is fresh produce, because produce has a short shelf life. Lettuce, berries, five days, six days, and we have 14, 21 days.
Yeah, I am asking more in terms of penetration and share of wallet. You mentioned you started with two SKUs at this particular H-E-B.
Right.
Now you are going to 14. Ideally, you see in-store sales or growth in just one store-
Right
-continue to grow. I imagine because you guys are still relatively creating this category.
Right.
You have not reached the cap for this one particular store at H-E-B.
Right.
What is the opportunity to grow share of wallet at a store like that versus other stores where the share of wallet or the penetration just is not there right now?
Right.
Do you see a difference between one successful program from one H-E-B to another H-E-B, or even H-E-B versus Walmart, H-E-B versus Publix?
Okay, that's a good question. From H-E-B to H-E-B, yes, we do see differences. There's some old legacy stores, small stores on the Gulf Coast, and they can't have as many SKUs. So they may only have two or three SKUs, whereas the big stores have 14. What we're seeing in the new stores that are opening up, like in our neck of the woods in Dallas, is much, much, much more display of our products. We're seeing 100 facings. Whereas in the legacy stores down in San Antonio, they don't do that because for whatever reason, they don't do it. So there is a difference between the old stores, the new stores. Houston's in between. So, every produce manager in every store really calls what they want.
The buyer gives them what they have to have and the way it looks, but then they can move things around and do it their way as well.
What are the challenges with scaling up manufacturing? Is equipment a challenge? What are some-
Okay. I feel that in this particular department, we're very lucky because we have Bryan and Doug, and they've introduced us to Clint. Not this Clint, another Clint. This new line that we've just put in place was about a $3.5 to $4 million CapEx, and it cost us $1 million. Because there's all these companies, a lot of private equity-backed companies, they have brand new spanking plants, and it's never even been used. You can buy pennies on the dollar, and that's the smart way to do it. That's what we've been doing. So we have an unbelievable looking line, all this magical equipment with a lot of capacity, and it cost us a fraction of what we really needed.
I guess, how likely are you in talks with any. I know Whole Foods was moving on with that, with a little too money deal, but how likely are you in talks to get other retailers at this point, say, Target or someone like that?
Target would be a great customer. Publix, Harris Teeter, Wegmans. There's a lot of customers, Safeway, Albertsons. There's a lot of customers out there we could do which are used to the model we're talking about. Right now, we've got our hands full. We've got a lot going on, a lot in the pipeline, new SKUs coming out, and we've been R&D-ing. We've got other customers in the pipeline. We're going to expand with existing customers hopefully soon too as well. There's a lot going on. We ought to be focused and stay profitable. That's really important for us.
Within your distribution, is there a potential to expand to gas stations through a public distribution chain? Or is that something you have capacity for?
No, there's another vertical, very good one. There's the C-store chains, the convenience stores. There's hotels, bars, restaurants, clubs. There's the clubs, Costco, Sam's Club, all that stuff. We've got so much going on with our existing grocery ecosystem, we can't handle that more. There's a lot going on. We've got a $55 million capacity, which if we expand with one of our customers, could get used up really quickly. Then we're building another one on the East Coast. It's the same thing. I think that's time. Thank you very much.