Tampering With My Heart
From unsealed pizza boxes to semi-opened Rice Krispie Squares, I have dealt with my fair share of “tampered” containers. In most cases, I wasn’t concerned about whether someone had actually tampered with my food. I mean, the stickers Dominos uses to seal its pizza boxes are about as good at keeping things closed as water is at keeping things dry. Instead, anytime I notice that the stickers aren’t attached properly, I assume it’s because the heat from the box made them less adhesive.
However, this is why tamper-evident containers exist. Tamper evident containers, or tamper-evident packaging, refers to packaging that alerts the consumer to foul play or damage to a product. When tamper-evident containers are triggered by attempted removal or manipulation, they leave evidence of tampering behind. Off the top of my head, the most common example I can think of is induction seals, those absurdly annoying seals on the inside of pill bottles.
With this in mind, opening tamper-evident containers undetected is like breaking into Fort Knox. Yet the food delivery space is severely lacking in this department. That being said, when I am unable to tip well, I fear for my life. That’s a bit of an exaggeration, but when the only thing standing between my Dominos Medium BBQ Chicken Pizza and a pissed-off delivery driver is a flimsy “tamper-proof” sticker, can you blame me for being a little worried?
Thankfully, things are heading in the right direction. Likely motivated by the onset of the COVID-19 pandemic, food safety and chain-of-custody security are at an all-time high. Furthermore, the importance of food safety and chain-of-custody is expected to increase relative to the growing popularity of grocery and restaurant delivery services like Uber Eats, Instacart, and Door Dash, as well as take-out industries.
In 2020, Assembly Bill 3336 was passed in California, adding on to and amending the existing California Health and Safety Code. The bill requires ready-to-eat food delivered through a third-party food delivery platform to be transported in a manner in which the food is protected from contaminations. More specifically, Bill 3336 requires all bags or containers containing food to be closed by the food facility with a tamper-evident method prior to the food deliverer taking possession of the food.
Sounds intense, however, there is a method behind the madness. According to US Food, 28% of food deliverers surveyed admitted to taking food from an order. Call me crazy, but this suggests that, on average, one in four food orders have been tampered with. In response to this, 85% of customers said they would like to see restaurants use tamper-evident methods to prevent this and ensure peace of mind. Let’s take a look at a company looking to capitalize on this growing demand for tamper-evident packaging.
good natured Products Inc.
- $128.317M Market Capitalization
good natured® Products Inc. (GDNP.V) is an earth-friendly product company committed to offering a wide range of eco-friendly products made from plant-based materials as opposed to petroleum. Furthermore, the Company purposefully eliminates BPAs, phthalates, and other chemicals of concern from its products.
Through wholesale and retail channels, including the Company’s own eCommerce platform, good natured has over 400 products and services available in the sustainable consumer goods market, including home organizational products, compostable food containers, bioplastic industrial supplies, and medical packaging.
To date, good natured boasts 20,000 annual Direct-to-Consumer (D2C) transactions and more than 850 recurring Busssines-t0-Business (B2B) customers. Additionally, the Company has 9 manufacturing and sourcing locations across North America. With this in mind, good natured is looking to position itself in the sustainable segment of the fast-moving consumer goods industry (FMCG).
Latest News
On March 9, 2022, good natured announced that it has filed for patent protection of its novel tamper-evident design, GoodGuard™, optimized for compostable and biobased materials. The Company’s GoodGuard tamper-evident containers will be available in both commercially compostable polylactic acid (PLA) and curbside Bio-PET, a type of bioplastic, both of which utilize plant-based materials.
“With the acquisitions of Shepherd Thermoforming, IPF, and Ex-Tech Plastics, our growing technical team now includes in-house expertise in plant-based materials, tooling technology, and emerging processing capabilities,” stated Michel Labonte, CTO at good natured®.
good natured’s GoodGuard multi-purpose tamper-evident containers will be available in six sizes including 8, 12, 16, 24, 32, and 48 oz. In addition to using plant-based materials, GoodGuard products are also leak-resistant, stackable, and come with enhanced product visibility. Furthermore, the Company’s latest US patent design is free of tear-away strips or small pieces that could escape the waste management process and harm the environment.
Financials
According to good natured’s Financial Statements for Q3 2021, the Company had cash and cash equivalents of CAD$8,720,000 on September 30, 2021, compared to CAD$8,114,000 on December 31, 2020. As of September 30, 2021, good natured had total assets and total liabilities of CAD$82,154,000 and CAD$60,122,000, respectively.
“The team delivered record-setting revenue growth for Q3 2021 and just under 240% growth for the first nine months of the year,” stated Paul Antoniadis, CEO of good natured®.
The Company’s product revenue for the period increased substantially from CAD$4,659,000 for the three months ended September 30, 2020, to CAD$18,005,000 for the three months ended September 30, 2021. For the nine months ended September 30, 2021, good natured achieved product revenue of CAD$38,276,000.
With this in mind, the Company’s gross margin increased, growing from CAD$1,749,000 for the three months ended September 30, 2020, to CAD$4,014,000 for the three months ended September 30, 2021. For the nine months ended September 30, 2020, and September 30, 2021, these numbers translate to CAD$4,486,000 and CAD$10,309,000, respectively.
In total, good natured reported a net loss of CAD$2,923,000 in Q3 2021, up from CAD$1,713,000 in Q3 2020. For the nine months ended September 30, 2021, the Company reported a net loss of CAD$8,524,000. The Company’s net loss can be attributed to increased cash used in operating and investing activities. For example, on May 28, 2021, good natured completed the acquisition of all of the operating assets of Ex-Tech Plastics Inc. for cash consideration of CAD$15,337,000.
As of September 30, 2021, good natured had 8,275,000 options outstanding with a weighted average exercise price of $0.27. In the same period, 5,953,224 options were exercisable at a weighted average exercise price of $0.17. In March 2022, 153,251 warrants at an exercise price of $0.20 will expire.
Despite reporting an increased net loss for the nine months ended September 30, 2021, the Company ended the period cash positive. This can largely be attributed to substantially increased product revenue and cash generated via financing activities. For example, on October 28, 2021, good natured announced the closing of its public offering of convertible unsecured subordinated debentures for aggregate gross proceeds of $17.25 million.
If successful, the Company’s patent filing will position good natured to capitalize on two lucrative markets, namely the FMCG market and the Green Packaging Market, which is expected to reach USD$441.41 billion by 2028. Keep in mind, the demand for tamper-evident containers is also increasing as food safety and security are at an all-time high. That being said, good natured may be a company worth adding to your watchlist.
good natured’s share price opened at $0.58 today, up from a previous close of $0.56. The Company’s shares are up 5.36% and were trading at $0.58 as of 12:36 PM EST.
