Message Font: Serif | Sans-Serif
No. of Recommendations: 1

Certainly, landing the USF contract will expand Lifeway's distribution, its sales, and its "mindshare" by giving its signature kefir drink greater exposure to the eating-out public. But the press release gives no details on how profitable the deal will be for Lifeway, or whether it expects to earn greater or lesser margins on these sales than it does via more traditional grocery store-based retailing. We'll need to keep a close eye on Lifeway's margin trends -- and watch for additional details on this front in the earnings releases -- to see just how lucrative a contract Lifeway has landed.

My thoughts, exactly.

Two things, though:

- I'm not expecting more disclosure of the details. I'm thinking they don't/won't for competitive reasons. And if this is the case, then I certainly don't blame them.

- True, one could break out the direct numbers. But what about the "indirect" benefit of this deal? Gaining additional exposure to the product and the resulting subsequent sales outside this channel can be difficult to measure, I would imagine.

Anyway, I've said it elsewhere before and I'll say it again: Sometimes all it takes for these small food & beverage companies to experience and sustain explosive growth are one or two nice big distribution deals... and the capacity to handle the volume.

Easier said than done, but it can and does happen.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.