Plant-based stocks have been on a tear in recent months as a wave of health and environmentally conscious consumers seek out an alternative to meat consumption. In fact, the US plant-based retail market is worth a massive US$4.5 billion and it’s growing at five times the pace of total food sales. Meat alternatives have never been more in vogue than they are now.
Plant-Based Potential
Naturally, a host of plant-based stocks have popped up recently, such as Beyond Meat (NASDAQ:BYND) which rocketed over 250% in just three months following its IPO last year. However, Beyond Meat was subsequently brought back to earth as consumers never really warmed up to its product. This hasn’t stopped other companies attempting to seize on the potential of meat alternatives and the market is starting to look a little bit crowded.
Tofutti Is A Well Established Hidden Gem
However, there is one well established yet almost unknown nano-cap stock, which has generated revenue that exceeds its own market cap. Tofutti Brands (OTCQB:TOFB) was founded way back in 1981 by caterer David Mintz as a means to address a niche but regular problem facing people all across the US – a lack of dairy-free alternatives. Specifically, Tofutti initially targetted observant Jews who cannot consume dairy and meat products at the same meal, but seeing his opportunity, Mintz saw his brand quickly expand to a much broader market.
Tofutti’s first invention was a dairy-free alternative ice cream, which Mintz developed the idea for after reading an article about the nutritional benefits of protein-rich tofu. He soon found ways to use tofu in a host of other dishes, from cookies and cake to tuna casserole and beef stroganoff. Initially based solely in New York, news of Tofutti quickly went national in the pre-internet age of the mid-80s, and by 1985 the company’s products were on shelves in 18,000 stores in the US with deals in place in Canada, Japan, Australia, and more.
Big Demand and Broad Appeal
Fast forward to today, and despite Tofutti’s fledgling market cap, it remains at the cutting edge of plant-based alternatives with revenue topping US$13 million last year driven by an impressive portfolio of over 25 dairy-free products. Tofutti doesn’t just appeal to the Jewish community, but answers the call of millions of consumers with a variety of dietary needs, whether it be lactose intolerance, diabetic, veganism, or even just those seeking a healthier low-fat diet.
TOFB released its Q3 2019 Earnings on November 12, 2019, with revenue of US$3.12 M, up over a quarter-million from Q3 2018. Tofutti stock is currently trading for US$1.80 over-the-counter, but don’t let its nano-cap status fool you. The company’s broad and expanding product range is in hot demand, with net sales increasing by 10% in the most recent quarter following strong sales in its vegan cheese product category.
Could the new plant-based wave see TOFB stock’s record high of US$7.36, hit again? Tofutti will release its next earnings report on Friday, April 3, 2020, so maybe this is one penny stock to watch. Where other plant-based stocks look to be stuttering at the moment, this hidden gem could be hot property soon enough.
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