The Real Good Food Company launched five years ago looking to disrupt the frozen foods category with products that consumers already love (pizza, Mexican food, and cheesy pasta dishes) but made without processed grains and sugar predominant in many packaged frozen foods brands.
After raising $64m late last Thursday by selling 5.3 million shares at $12 per share, according to Barron's reporting, The Real Good Food Company debuted on the Nasdaq Global Market last Friday under the ticker symbol "RGF" opening at $11.66 (below its original target share price of $14-$16) and slipped to $11 by the end of the day.
'We’re not going to stop eating the foods that we love'
The growing frozen foods brand also wants to help many US consumers who struggle with their diet taking into account the increasing prevalence of obesity in the US and obesity-related conditions including heart disease, stroke, and Type 2 diabetes. According to the CDC, 42% of US adults as of 2018 are considered obese, up from 30.5% in 2000.
"We believe that we’re not going to stop eating the foods that we love, so the path forward to have a huge positive impact on our society, and hopefully some day the world, is by removing the grains, carbohydrates, and sugar from those foods and replacing them with protein," Freeman told FoodNavigator-USA.
"If we can do that in a delicious, craveable way, we’ll grow a very nice large business quickly."
The company's frozen foods portfolio includes classic comfort foods such as cheese enchiladas (wrapped in tortillas made from chicken breast), stuffed chicken cordon bleu, and bacon wrapped stuffed chicken all ranging from 1g to 11g of net carbs and 19g to 32g of protein across its frozen entrée offerings.
Outside of entrées, the company makes frozen breakfast sandwiches and waffles tapping into the burgeoning better-for-you frozen breakfast category, which has registered 21.8% sales growth in 2021 compared to 2019, according to IRI sales data for the 52 weeks ending 9/26/2021.
'We're only in the second inning here'
Freeman said the frozen foods category and the need for a "craveable" low-carb, low-sugar, high-protein brand presents the largest market opportunity for the company.
Many consumers are purchasing more frozen foods than they have in years past. According to IRI, total frozen foods sales for the year ending 9/26/2021 were up +22.6% compared to 2019 figures, ahead of total food and beverages (+15.1%) and total perishables (+14.2%).
Within the broader frozen foods category, meals grew by +24.8% in dollar sales to $1.8bn vs. 2019, driven by dinners/entrées subsegment which registered 31% dollar sales growth over the two-year period hitting $881m, according to IRI data.
"We think that the addressable market is so large and that we’re only in the second inning here," noted Freeman.
Decision to go public, a 'natural next step'
The Real Good Food Company has grown substantially under its own steam, selling into 16,000 stores of major retail chains (Walmart, Costco, Kroger, Publix, and Target) and registering at least 100% year-over-year growth since its founding.
The brand has also reportedly gained the largest social media following of any other frozen food brand (390,000 Instagram followers), an area in which the company will continue to invest to better reach its target consumer, added Freeman.
"When you look at where [we are] after 4.5-5 years compared to high growth disruptive brands like Beyond [Meat], we are far further along in terms of size. It took Beyond close to 10 years to get to where we’re at after only five, and it’s our job to continue the pace," said Freeman, adding that going public was the "natural next" step for the company.
"We enjoy the rigors of quarterly reporting and having large growth oriented institutional investors. Working with those investors is really helpful to our future and growing the business," he said.