Taking a sip at Keytone Dairy, page-96

That's a really good point about moats.

What I find in microcaps is that generally companies swimming in the kiddie pool don't generally have a moat. And if they did have some super awesome IP, you need to pay up for it.

So execution is very important. What you want to see is a trend towards building a "moat". So investment in marketing and brand is one. Economies of scale is another.

That said, the contract manufacturing side has such a low ROIC that nobody is really that keen to compete against them. They are also vertically integrated in terms of brand and manufacturing so I'd say maybe they have a cost advantage over someone that relies on 3rd party contract manufacturing.

On the brands side, they have a bit of a first mover in specific niches (so plant based, vegan, gluten free, ready to drink), so they need to capitalise on that & build a bit of a moat with brand power.

There's moderate barriers to entry, and really, not much reward.

Better to be the next SaaS superstar, than the next milk powder king! Find me a kid that says, "mum I want to grow up to supply UHT milk to Coles".

But in summary, it all depends on execution. And if these young puppies continue to execute the way they have, I sleep pretty well at night with my investment here.