YE 2017 - Investor Update

2017 Highs

  • Financial Summary – Sales grew by over 50% and our gross margin more than tripled. Despite this growth, operating expenses remained flat versus 2016. Margin was and continues to be a big focus for us.
  • Category Trends – Within natural grocery, the overall cold cereal category grew 4.7%, granola grew 8.1% and muesli grew 15% in 2017, according to SPINs data. Seven Sundays was once again the fastest growing muesli brand by far, with 60% growth!
  • Costco Expansion – The success of the Costco Midwest regional test one year ago has allowed Seven Sundays to expand into an “everyday” item in 21 locations and secure a test in the Northeast region. To give a sense for the enormity of Costco, our sales from just 16 locations last year contributed over $600,000 in profitable sales.
  • Sustainability & Product Improvements – Hopefully you have had a chance to read through our blogs on the move from cultivated blueberries to wild blueberries (Finding Wild) and our support of organic buckwheat farming in Minnesota (For the Love of Buckwheat). We have much more in store for 2018 as we look to become a leader in the sustainable agriculture movement.
  • New Office Space & Commercial Kitchen – Seven Sundays has found the perfect “home” as the first tenant in a new commercial kitchen and food hub space in south Minneapolis. We welcome any of you to come and visit us – it is the perfect place for a muesli breakfast and coffee.
  • New Partner – And our personal favorite highlight of 2017 is developing a strategic partnership with Katjesgreenfood. We feel incredibly lucky to have found a partner who can help get us to the next level and who shares our values.

2017 Challenges

  1. Flat Traditional Retail Business – Our focus on margin, operations and Costco, in addition to decisions and factors out of our control, resulted in our traditional retail business remaining flat.
  2. Quality Issues – We experienced several quality issues after changeover to our new co-packer in Connecticut. The most significant was our first ever FDA recall in August on our Vanilla Cherry Pecan muesli due to undeclared almonds. We have implemented all new procedures with our co-packer as well as hired an outside firm to ensure 100% quality going forward.

2018 Sneak Peek

  1. Unique Amazon Opportunity – We have been presented with a highly unique opportunity to replace the current #1 muesli SKU on Amazon. Seven Sundays is taking over the “subscribe and save” business for this SKU beginning in March. It is a new SKU for us – Almond Date Everyday Muesli. We would love your help in reviewing this item – expect an email from us in March with further instructions.
  2. Grain Free R&D – The fastest growing segment within cereal right now is grain free. Unfortunately, nearly all grain free products being introduced are granolas which are laden with oils and sugar. We are launching a Banana Berry Grain Free Muesli in March that has no added sugar and tastes amazing. Stay tuned…
  3. Welcome to Steph! Beginning in January, we hired our first regional sales director to focus on growing our distribution on the west coast.
  4. Welcome Carrie! We also hired a long time family friend to help with special projects, like tradeshows and a new mobile pop-up shop concept launching mid-2018 (stay tuned)!
  5. Welcome Baby #3! On a personal note, we are excited to announce that our family is also growing. We are expecting #3, so stay tuned for a boy/girl announcement in early May!