SNAX Stock: Stryve Foods Expanding Its Reach in Healthy Snacking
If you are looking to grab a piece of the growing demand for healthy snacks, look no further than Stryve Foods (Nasdaq: SNAX). That said, SNAX stock is down over 80% after peaking at $14 a share as the company continues growing its catalog.
Stryve Foods is an early-stage company focusing on meeting the growing need for healthy food options. So far, the company has two products in its portfolio, including:
- Air Dried Meats
- Nutritional Foods & Supplements.
With this in mind, the global health and wellness food market is worth over $733 billion. Not only that, but it’s expecting to become a trillion-dollar industry within the next four years.
The company is firing on all cylinders with a new distribution deal, expanding portfolio, and in-demand product. Keep reading to learn more about the up-and-coming healthy snack option and what to expect from SNAX stock.
Stryve Foods Competitive Advantage
At first glance, Stryve may seem like any other healthy food company. With Americans spending more than ever on healthy food products, brands are racing to grab a piece of the growing market.
But Stryve has a major advantage in the product it sells. The air-dried meat goes through a process called Biltong, a south-African style of drying beef. The method is 100% natural without added sugar, MSG, or nitrates.
Not to be confused with beef jerky, Biltong is slabbed with vinegar and air-dried in a humidity-controlled room. As a result, the product contains no processing and more protein per serving.
Furthermore, the air-dried meat fits the mold for popular dieting trends like Paleo and Keto.
More importantly, SNAX stock is the largest producer of Biltong in the U.S. According to the U.S Department of Agriculture, you cannot import Biltong from South Africa. So, this gives Stryve a significant advantage here in the U.S with growing demand for natural, high-protein snacks.
As of right now, the company offers several different flavors of sliced, grass-fed, and sticks of Biltong. On top of this, you can also buy a ‘slicer and slab’ bundle, including a blade and dried meat slab.
Why Is SNAX Stock Down?
With all this market potential, how come SNAX stock is still down over 80% from its peak? A large part of why SNAX is falling is because of the broad market selling off. In particular, growth stocks as a group are getting hit the hardest as many startups saw their valuations soar since the pandemic.
With this in mind, Stryve is still early stage and unprofitable as it continues expanding its market. As investors look to reduce risk, profitability is the main concern.
On top of this, a series of earnings misses continues putting pressure on shares of SNAX. Despite significant top-line growth in the past two quarters, supply chain issues and labor costs continue weighing on the bottom line.
The company posted a net loss of $8.7 million in the third quarter, up $4.3 million from last year. Also, record beef prices are cutting further into profits.
At the same time, gross profits increase 104% in the quarter as the company improves its manufacturing ability. In early-stage companies like Stryve, losses are expected as the company invests in growing the company.
High Growth Expectations
After buying out the No. 2 Biltong brand in the U.S, Kalahari Snacks, SNAX stock now owns 85% of the market. Not only that, but with the largest USDA-approved air-dried meat facility, Stryve is way ahead of the competition.
The company estimates consumers shifting to healthy eating will push their addressable market to over $500 billion this year. So far, the company’s growth strategy is paying off.
- Choose a food category in need of disruption for healthy options.
- Enter through acquisition.
- Build various distribution channels across retail and online.
- Use marketing techniques to drive repeat customers.
- Vertically integrate to improve margins.
Its latest distribution deal gives SNAX stock a huge boost in growing its brand. As part of the deal, the company will double its product presence in Costco while more than doubling its SKUs at Walmart.
On top of this, you can find their products just about anywhere with its strong-selling channels.
- Online. Amazon, Stryve.com.
- Grocery. Sprouts, Publix, Kroger, Wegmans, etc.
- Mass. Walmart, Target.
- Club. Costco.
- Convenience. 7/11, Speedway, Wawa, Circle K.
- Dollar and Drug. Dollar General, CVS.
- Misc. Lifetime Fitness, REI Co-op, CIBO.
As you can see, Stryve is getting its products in the right stores. More importantly, as consumers look for healthy snacks, the company expands its product line, and retailers are buying into the demand.
SNAX Stock Forecast: Do We Go Lower?
The big question with investors right now is, will SNAX stock go lower? So far, SNAX is struggling to find any support with growth stocks selling off aggressively.
Having said that, Stryve is making the right moves to position itself for the future. The company researched to find a growing need, and healthy snacking is one of the quickest growing trends right now.
With dominant market control, a superior supply chain, and a hit product, look for Stryve to continue its momentum. As for SNAX stock, this year could be a challenge with the market undergoing major changes with the Fed pulling back support to fight surging inflation.
Although the company is still young, it has big market potential being the market leader by far. At $2.50 share, SNAX is falling into penny stock territory. And in this case, I think Stryve is trading below what the company is worth.
Another company focusing on people looking for healthy alternatives is Celsius Holdings (Nasdaq: CELH). That said, CELH stock is still up over 1,000% in the past two years despite losing over half its value since November. The company makes healthy energy drinks. After the brand caught fire, CELH stock raced from under $5 a share to over $100.
Can Stryve do the same with air-dried meats? So far, it’s proving to be a solid bet. But, look for Stryve products to continue popping up on shelves for clues to how the brand is doing.
About Pete Johnson
Pete Johnson is an experienced financial writer and content creator who specializes in equity research and derivatives. He has over ten years of personal investing experience. Digging through 10-K forms and finding hidden gems is his favorite pastime. When Pete isn’t researching stocks or writing, you can find him enjoying the outdoors or working up a sweat exercising.