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HEALTH AND PLANT PROTEIN GROUP LIMITED - Corporate Spotlight

Health Plant Protein is the largest vertically integrated orchard to retail macadamia nut... Health Plant Protein is the largest vertically integrated orchard to retail macadamia nut processor and marketer in the USA. Macadamia nut contains rich nutrients and beneficial plant compounds, and the Company makes its products from wholesome and unmodified ingredients. The macadamia business forms the basis of the Company’s strategic ambitions in becoming a leading independent participant in health and plant based protein food categories.More

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Corporate Spotlight

Health Plant Protein is the largest vertically integrated orchard to retail macadamia nut processor and marketer in the USA.

The macadamia business forms the basis of the Company’s strategic ambitions in becoming a leading independent participant in health and plant based protein food.
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HPP INVESTS IN LAVVA PRODUCTS

HPP WORTH ITS WEIGHT IN GOLD

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Health and Plant Protein (ASX:HPP) cracks into a market worth its weight in gold

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  • ASX-listed Health and Plant Protein (HPP) is among just a handful of companies to spot the upcoming boom in plant-based food alternatives
  • The Good Food Institute (GFI) estimates that plant-based products are growing at five times the rate of typical food growth in the United States
  • From beverages to dairy alternatives and even plant-based meat alternatives, the industry is booming as vegan lifestyles become more mainstream
  • While HPP is focussing on the plant-based food market as a whole, the company has also made a savvy investment in macadamia nuts
  • Macadamias are the most expensive nut in the world, and HPP helps produce a premium macadamia product through its Hawaiian subsidiary, MacFarms
  • On top of this, HPP has recently taken a controlling interest in the U.S.-based LAVVA brand alongside investment partner S2G Ventures
  • LAVVA sells plant-based yoghurt and milk alternatives and already has its products stocked in several major U.S. retailers
  • Health and Plant Protein is set to profit from an inevitable change in the foods people consume; it's up to investors to seize the opportunity before it's too late

Plant-based food alternatives are quickly taking supermarkets by storm as the industry booms.


From plant-based beverages to dairy alternatives to vegan yoghurt and even plant-based meat alternatives, what once served a small subculture of western society is now becoming more mainstream. 


And as these types of foods grow in popularity, new opportunities for consumers and creators alike are beginning to surface. 

ASX-listed Health and Plant Protein (HPP) is among only a handful of companies to have noticed this trend and the inevitable boom of the vegan food market.


The company's savvy management team has built up a unique range of diverse products to service the plant-based food market.


The future of food

The Good Food Institute (GFI) estimates that plant-based products are growing at five times the rate of typical food growth in the United States. 


In fact, recent data from wellness data provider SPINS suggests that U.S. grocery sales of plant-based foods that directly replace animal products have grown 29 per cent in the past two years alone to create a US$5 billion (roughly A$6.4 billion) market. 

Grand View claims the global dairy alternatives market was worth US$11.9 billion (around A$15.4 billion) in 2017 and is expected to double by 2025. 


As for plant-based beverages, Grand View valued the market at US$12.4 billion (around A$16 billion) in 2019. 

As such, it's no surprise that HPP recently rebranded from Buderim Group to reflect a renewed focus on the health and plant protein food business as a whole. 


Of course, HPP has also made a price-effective investment into macadamia nuts; a niche product, yes, but one that's crucial in the oncoming explosion of plant-based food alternatives. 



Why macadamias?

First and foremost, macadamias are the world's most expensive nut. Fetching around $13 for a one-kilogram bag in 2019, the value of macadamias has consistently been on the rise in recent years. 


This comes mainly from the harvesting process for macadamias, which is typically slow. Each macadamia tree takes between seven and 10 years to begin producing nuts, and once producing, each tree takes up to six months to flower per year. 

This means all tress in a macadamia farm mature at different times of the year. 


But despite the process and their price, macadamias remain a popular import for countries like the U.S., Germany, Japan, and China. 


And HPP, through subsidiary MacFarms, is one of the world's leading processors and marketers of this lucrative snack. 



Hawaii and Australia joint forces

MacFarms is based on the Big Island of Hawaii and has over 250,000 trees across its Kapua Ranch Orchard — making it one of the largest macadamia farms on the planet.


According to MacFarms, the macadamias from the Hawaiian orchard are hand-picked and cracked on-site to create a premium product for exporting across the world. 


With lots of rain, rich soil, and warm weather, Hawaii's growing conditions are perfect for macadamia nuts, which is why Hawaii is one of the top five exporters of macadamias across the globe. 


These tough growing conditions are also why so many regions need to import the nut rather than grow it themselves. 


Of course, many parts of Australia meet these conditions, too, making Australia the world's biggest macadamia exporter. 


For HPP, this means the company not only has access to premium macadamias through the MacFarms orchard but also has strong working relationships with macadamia growers in Australia. 


Yet, to make sure the company doesn't have all its nuts in one bowl, HPP is leveraging the expertise and resources of a booming U.S.-based clean yoghurt and milk business: LAVVA. 



LAVVA's erupting business

Owned by EVR Foods, the LAVVA brand is emerging as a strong competitor in the U.S. plant-based dairy products space. 

The business boasts healthy and wholesome alternatives to conventional dairy products like its dairy-free Pili nut yoghurt and its Plant Milk products. 


The brand's products are already stocked across major retailers in the States, including Whole Foods Market, Sprouts Farmers Market, Good Eggs, and Wegman's. 


After expressing interest in the LAVVA brand with a $300,000 investment in January, HPP this week committed to a US$5 million (around A$6.4 million) investment alongside investment partner S2G Ventures to snap up a controlling interest in the LAVVA brand. 


At the same time, HPP's Executive Director, Dennis Lin, has joined the LAVVA Board of Directors to help drive growth in the business and introduce LAVVA's products to Australian and Asian supermarket shelves. 


"The investment aligns closely with our core strategy, where we can apply our marketing and supply chain capability to the category in one of the largest and most dynamic markets, the U.S., and a provide a stepping stone to other major global markets — Asia in particular," Dennis said.


Given plant-based yoghurt and creamer are the two fastest-growing plant-based food categories in the U.S. — at 31.3 per cent and 34.4 per cent growth over 2018 and 2019, respectively — the LAVVA investment opens up a world of opportunities for HPP


A gap in the market

Health and Plant Protein's management team has spotted an upcoming gap in the Australian market and set itself up to fill it with plant-based products. 


With shares worth 30 cents each a manageable $37 million market cap, there is significant room for HPP to flourish as it grows its brands across local and overseas markets. 


Health and Plant Protein is set to profit from an inevitable change in the foods people consume. 


The question, then, is whether investors will spot the opportunity HPP provides before it disappears.


Read the full article on The Market Herald here.

HPP BUYS CONTROLLING INTEREST IN LAVVA

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Health and Plant Protein Group (ASX:HPP) buys up controlling interest in LAVVA brand

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ealth and Plant Protein (ASX:HPP) - Executive Director, Dennis Lin - The Market Herald

Executive Director, Dennis Lin


  • Health and Plant Protein Group (HPP) is set to snap up a 24 per cent interest in U.S.-based EVR Foods through a US$5 million (roughly A$6.4 million) investment
  • HPP will invest in EVR Foods, which owns the LAVVA clean yoghurt and milk brand, alongside investment partner S2G Ventures
  • The investment was initially flagged in January 2021 when HPP and S2G bought $300,000 worth of convertible notes in LAVVA
  • Now, following some important due diligence, the companies have agreed to a larger investment that gives HPP and S2G a controlling 60.5 per cent interest in LAVVA
  • HPP Executive Director Dennis Lin says the investment is a milestone in the company's transformation into a "plant protein-focused enterprise"
  • Dennis has been appointed to the LAVVA Board of Directors and will help drive growth in the business with plans to expand into Australia and Asia
  • At the same time, HPP Chairman Guy Cowan has flagged his own plans to step down from his position and allow HPP to expand its board experience

Health and Plant Protein Group (HPP) is set to snap up a 24 per cent interest in U.S.-based EVR Foods through a US$5 million (roughly A$6.4 million) investment. 


HPP will invest in EVR Foods, which owns the LAVVA clean yoghurt and milk brand, alongside investment partner S2G Ventures. 

The LAVVA investment was initially flagged in January 2021, soon after HPP rebranded from Buderim Group to reflect a renewed focus on the plant-based food business. 


On January 11, HPP and S2G purchased US$300,000 (around A$389,000) worth of convertible, unsecured, promissory notes, which attracted a 7 per cent interest per year in LAVVA and matured on February 28, 2021. 


As part of this initial investment, however, HPP said it would conduct some important due diligence before making a decision to take control of the LAVVA brand. 


Today, the company revealed it is investing a further US$5 million (roughly A$6.4 million) into EVR alongside S2G. The full investment will take place over three investment stages and, once complete, will give HPP and S2G a combined interest of 60.5 per cent in the LAVVA brand.


The first stage of the investment plan has been completed today, under which HPP converted their US$300,000 of January 11 convertible notes and invested an extra US$1.2 million (roughly A$1.5 million).


The second investment of US$1.5 million (roughly A$1.9 million) will take place upon HPP entering a services agreement with LAVVA, and the final US$2 million (roughly A$2.6 million) investment will take place at HPP's election at a later date. 

HPP Executive Director Dennis Lin said the investment into LAVVA is an important milestone in the company's transformation into a "plant protein-focused enterprise". 


"Our due diligence has confirmed that co-investing with S2G Ventures is a value-add opportunity with considerable synergistic benefit to our existing macadamia business," Dennis said. 


"The investment aligns closely with our core strategy, where we can apply our marketing and supply chain capability to the category in one of the largest and most dynamic markets, the U.S.A., and a provide a stepping stone to other major global markets — Asia in particular," he said. 


A blooming business

HPP said since its inception, LAVVA has grown quickly and its products are now distributed through several major U.S. retail networks — including Whole Foods Market, Sprouts Farmers Market, Good Eggs, and more. 


By investing in LAVVA, HPP can break into the high-growth plant-based yoghurt and milk sector by leveraging the resources of an emerging brand with an established presence in the U.S. 


Moreover, Dennis Lin has today been appointed to the LAVVA Board of Directors following the first-stage investment. On top of this, HPP said it has entered several agreements with LAVVA shareholders outlining the operation of the business.

 

This means alongside its investment, HPP has a hand in the day-to-day business of LAVVA and can help drive growth and introduce the brand into Australia and Asia. 


At the same time, HPP Chairman Guy Cowan has flagged his own intentions to step down from his position and allow HPP to expand its board experience. 


The company will begin looking for a new Chairman, and Guy will hold the role until the new chair is appointed and transitioned into the business.


Read the full article on The Market Herald here.

INVESTOR PRESENTATION

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HPP REFLECTS ON A BUSY DEC QTR

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Health and Plant Protein Group (ASX:HPP) reflects December quarter

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Health and Plant Protein Group (ASX:HPP)- Executive Director, Dennis Lin - The Market Herald

Executive Director, Dennis Lin


  • Health and Plant Protein Group (HPP), formerly known as Buderim Group, has reflected on a busy December quarter
  • The company saw a sales growth rate of 15.7 per cent over 13 weeks due to an increase in digital campaigns for the holiday sales
  • For the quarter, HPP has been able to reduce its debt by $7.7 million
  • Importantly, the company has stated that its orchard production remains on target with a further improved kernel recovery rate

Health and Plant Protein Group (HPP), formerly known as Buderim Group, has reported on a busy December quarter. 


The plant protein company has achieved a sales growth rate of 15.7 per cent over 13 weeks. This was due to the company intensifying its digital campaign for Black Friday, Cyber Monday and the Christmas period. 


Notably, more people were shopping online due to the lockdowns, which is why HPP focused on its online marketing. 

During the quarter, the company completed a $6.2 million capital raise at 17 cents per share. 


With the placement funds and the sale of its Ginger division, HPP has been able to reduce its debt by $7.7 million during the quarter, with $10 million in cash reserves. 


Importantly, the company has stated that its orchard production remains on target with further improved kernel recovery rate. 

Over the quarter the company spent $2.7 million, with the majority of the costs going towards product manufacturing and operating. At the end of the period, HPP had $10 million in the bank. 


Executive Director Dennis Lin says HPP has been able to navigate through volatile trading conditions. 


"This is particularly evident through our ability to grow the overall macadamia category in the U.S., despite material declined sales of our industry peers," he said. 


"Within a short timeframe, the company has completed its corporate function improvements, and the platform is ready to execute its vision of becoming a dominant player in its chosen health an plant protein categories," he added. 


Earlier this month, the company invested in EVR Foods, who is the holding entity of the LAVVA brand and its range of plant-based yoghurts. 


The purchase comes after the ASX-lister changed its name and ticker code at the end of last year to better reflect its new focus on the health and plant protein food business.



Read the full article on The Market Herald here.

HPP INVESTS IN LAVVA PRODUCTS

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Health and Plant Protein Group (ASX:HPP) invests in LAVVA products

Consumer

ASX:HPP    


  • Health and Plant Protein Group (HPP), formerly known as Buderim Group, has invested in EVR Foods
  • EVR is the holding entity of the LAVVA brand and its range of plant-based yoghurts and non-dairy milk and creamer 
  • HPP and S2G have each purchased US$300,000 (around A$389,000) in convertible, unsecured, promissory notes to complete the initial transaction
  • The newly named company recently changed its ticker code to better reflect its new focus on the health and plant protein food business



Health and Plant Protein Group (HPP), formerly known as Buderim Group, has started off 2021 by investing in EVR Foods.

The ASX-lister changed its name and ticker code at the end of last year to better reflect its new focus on the health and plant protein food business.


As part of this new focus, the company announced on Monday that it will invest in EVR Foods, alongside S2G Ventures.

EVR is the holding entity of the LAVVA brand and its associated assets, which includes a range of plant-based yoghurts and non-dairy milk and creamer.


The products are currently sold in U.S. supermarkets, including Whole Foods Market, Sprouts Farmers Market, Good Eggs and Wegman’s.


HPP and S2G have each purchased US$300,000 (around A$389,000) in convertible, unsecured, promissory notes.


The notes attract a 7 per cent interest per annum and will mature on February 28, 2021.


From there, both companies can conduct due diligence before further investing in the company and taking control of the LAVVA brand.


Commenting on the investment, Health and Plant Protein Group Executive Director Dennis Lin said it was a pleasing development.

"The investment in LAVVA is consistent with our core strategy of building HPP including through the high growth categories of plant-based milk and yoghurt," he said.



Read the full article on The Market Herald here. 

ABOUT US

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The Company


Health Plant Protein (ASX:HPP) restructured to a public company on 10 October 1989. The company was previously a Co-operative, established in 1941 by five Buderim farmers. It has since expanded to be one of the world's largest processors, marketers and distributors of confectionary ginger, other ginger based products, and macadamia based products.


Health Plant Protein is the ultimate parent entity, with subsidiaries in Australia, the United States and Fiji. The company employs over 400 people globally with manufacturing facilities in Yandina, Queensland, and Morwell, Victoria Suva, Fiji and Captain Cook on the Big Island, Hawaii; and offices in Milton Queensland and Dana Point, California USA.


The Group's principal activities are the manufacture and distribution of a range of confectionery ginger and other ginger-based products to both industrial, food service and retail operations throughout the world. It is also one of the world's leading processors and marketers of macadamias through its subsidiary: MacFarms LLC, based on the Big Island of Hawaii.


In conjunction with its ginger processing activities and speciality food business, Buderim Group operates one of the Sunshine Coast's most popular and highly awarded tourist attractions, The Ginger Factory at its Yandina site. The Ginger Factory's position as one of the region's most popular tourist destinations is underpinned by innovative attractions including the Taste of Ginger Tour, the Overboard animated puppetry voyage, the Ginger Train and Live Bee Show and Tastings.


Health Plant Protein maintains a strong working relationship with ginger and macadamia growers. The company is committed to the continued underpinning of viable ginger and macadamia growing industries and works with growers for the benefit of both growers and the company.



Strategy


Health Plant Protein's strategic focus is on consolidating the group's global leadership position in food markets in which it chooses to operate, and new markets where we believe demand for our products is strong such as China, while facilitating carefully planned growth in both traditional and non-traditional areas.  These markets currently include the confectionery ginger, premium macadamias, branded speciality food products and agri-tourism in support of these markets.


Whilst the Board believes that the key to achieving prosperity is to maintain growth in profitable areas whilst containing costs, it also recognises that the global environment in which we operate is changing and the company must expand its scope to ensure ongoing success. Any expansion must be carefully planned and consistent with our capabilities and conservative investment philosophy. We must remain focussed, but flexible.


The company is committed to examining opportunities where it believes it possesses synergies with other food industries or companies, and key competencies or competitive advantages which could be utilised.


Operationally, the company's major areas for focus include:


  • Leveraging the company’s strong brand portfolio and the company's international sales and distribution infrastructure to deliver profitable sales growth; and
  • Investing in process improvements designed to deliver substantial productivity gains while never compromising Buderim Ginger's premium position as "The World's Finest Ginger".
  • Investing in the macadamia segment to secure long-term supply supporting profitable sales growth and product development



Programs


The company has adopted a dual focus for its R&D program: New Product Development and Process Improvement. Process improvement encompasses an ongoing program of investment to drive both productivity improvements as well as maintain our product quality leadership position. New Product Development, on the other hand, is one of the engines for our growth.


Health Plant Protein has been the recipient of numerous business, export, tourism, and human resource awards and commendations. It is committed to minimising any adverse impact the industry may have on the environment through constant research and development programs. Its community awareness is demonstrated through financial support of local charities.

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