๐ A Money-Losing Venture Ends
Innovative Food is exiting its business-to-consumer (B2C) ecommerce operations by selling igourmet.com for $700,000, along with $350,000 in gift card liabilities. The sale marks the end of a loss-heavy chapter. CEO Bill Bennett noted that the B2C venture had lost more than $12 million since its acquisition in 2018. For a company with lower margins, these losses were substantial and impacted long-term debt. This move comes as part of a broader shift in focus to more profitable ventures.
๐ง Refocusing on Cheese
With the sale, Innovative Food is returning to its roots in the gourmet food sector, specifically retailing high-end cheese. "The cash from this sale will be used to invest in our new retail business," Bennett said. They aim to streamline operations with automated machinery that cuts and wraps cheese more efficiently. This shift promises to bring significant improvements in cost reduction, which Bennett projects will help the company's profitability. Automated equipment will cut labor expenses, improving both the top and bottom line.
๐ฆ Struggles in Ecommerce
When Innovative Food bought igourmet.com in 2018, they saw a potential synergy between the ecommerce business and their existing foodservice operations. The 65,000 square-foot facility and additional warehouse space were assets intended to boost revenue. However, that vision never fully materialized. By June 2024, ecommerce sales had dropped to $1.05 million, down by 52.2% from the previous year. The segment failed to become a reliable revenue source for the company, making the sale inevitable.
๐ New Opportunities Ahead
Innovative Food now plans to build a more sustainable and profitable business by focusing on food retail. By eliminating their ecommerce losses and automating production, the company expects to regain financial stability. Bennett also emphasized that this shift should help them expand their presence in the high-margin gourmet cheese market. "Weโre excited to leverage our expertise in gourmet cheese to drive impact for the company," Bennett said. By cutting losses, they hope to achieve stronger growth moving forward.
Can selling igourmet.com save Innovative Food's finances?
