Edible Garden is raising a Crowd SAFE at a $18.5 million valuation with no discount. This valuation does represent a reasonable revenue multiple of a little over 3x. However, there is little operating history to evaluate given that Edible Garden transitioned to new management earlier this year. Therefore, Edible Garden’s price rating is low. 

The organic market is good-sized and growing — it’s projected to hit more than $100 million from organic fruits and vegetables alone by 2025. Consumers are increasingly interested in making the switch to organic produce as the harmful effects of fertilizers and pesticides on both our planet and our bodies are made more widely known. Organic produce is also becoming more wide-spread and closer in price to conventionally-grown produce. 

That being said, Edible Garden relies on local markets where it can operate hydroponic greenhouse centers and ship products to supermarkets that are relatively close by. Edible Garden’s business model is very different than that of mainstream agricultural facilities, which operate central farms that ship produce nationwide. While this business model is somewhat distinctive and has good potential, it does mean that Edible Garden’s market is small by conventional measurements. Therefore, the company’s market rating is relatively low.

Edible Garden was acquired in March 2020 and supposedly underwent a change in management. However, Edible Garden’s two current C-suite executives were also executives pre-acquisition. The company does not share additional details on how the acquisition created a “new management team.” 

Since that transition, the company has been led by CEO Jim Kras, an executive with almost 20 years of experience in executive marketing positions at various companies. Before being promoted to CEO during Edible Garden’s acquisition, Kras served as the company’s President and CMO for the last four years. The company’s leadership team also includes Mike James, CFO, who has previous experience as a financial executive. He served as Edible Garden’s CFO pre-acquisition and was also the CFO for another firm for 10 years. 

It is a bit unclear what happened to previous Edible Garden managers, but current C-suite executives have significant business experience and history with the company’s business model. Therefore, Edible Garden’s team rating is middle-of-the-road.

Edible Garden proposes a new model of farming in which produce is grown in sustainable, hydroponic greenhouses managed with technology. These greenhouses are located close to local supermarkets, delivering fresh produce and living plants to area stores for maximum freshness. This business model contrasts with the traditional agricultural process, in which a large farm grows acres and acres of produce to ship nationwide, using preservatives and freezing techniques to overcome spoilage 

So far, this business model seems effective. Edible Gardens still partners with the nation’s largest supermarkets (including Walmart, Target, Market Basket, etc.), just like larger agricultural incumbents, but farms sustainably and locally to deliver high-quality produce products to consumers. To scale, Edible Gardens will lean on a franchise-esque model (it is not clear whether the business will operate legally-defined franchises), partnering with local growers to bolster its national supply chain and serve more stores. 

This business model is distinct from that of the broader produce market, so Edible Garden’s differentiation score is its highest.

Edible Garden was acquired by a shell company in March 2020 and now operates under this new entity, so financial information is not available. The company does share in narrative raise materials that revenues hovered around $5 million for 2017-2019. Edible Garden projects $11 million in revenue for 2020, a major increase from previous years. 

This year aside, though, revenue growth was apparently stagnant for several years, and prospective investors cannot evaluate burn rate, path to profitability, and other key financial metrics. Therefore, Edible Garden’s performance score is low.

Prospective investors have reason to be bearish about Edible Garden simply given lack of information about the company’s operating history. This year’s acquisition is somewhat mysterious. Edible Garden does not share anything about the company’s previous struggles that may have led to an acquisition by new management. Additionally, the company’s financials are not given because technically the Edible Garden shell company did not conduct business prior to March 2020. 

Therefore, investors might assume that Edible Garden’s seemingly distinctive business model is actually not viable. They may also worry that current managers are now attempting to turn around a company that does generate significant revenue, but might be losing even more money. It’s too soon to tell whether this new season of Edible Garden leadership can stabilize and grow the business into the future. 

Edible Garden has been in business for five years, and the company is already generating $5 million in yearly revenue (with up to $11 million projected for 2020). That’s a significant accomplishment for any early-stage business. Furthermore, it is a signal that the Edible Garden business model of local farming has some promise. 

Whatever the company’s previous issues were, Edible Garden’s “new” management team seems to lend several decades’ of business experience and an insight into how the company can improve and grow. It seems that turnaround measures are already working, given that revenue will grow almost 100% year-over-year if projections for 2020 play out. Investors may have the opportunity to build equity early in a company that has long-term potential to become a major produce player nationwide.

Edible Garden is reinventing the produce supply chain by operating local hydroponic farms that ship lettuce, herbs, and living plants to nearby stores. Consumers enjoy fresh produce grown in their own backyard, and retail partners potentially benefit from produce sourced without high transit mark-ups. Edible Garden is on track to generate $11 million in revenue this year, and the company’s new management team seems to be implementing innovations that are building nationwide scale. 

Edible Garden was acquired earlier this year, and as a result, prospective investors cannot evaluate financial statements to compose a holistic understanding of the company’s performance. However, Edible Garden’s business model is distinctive from that of other agricultural players, and the company’s leadership team offers solid business experience and in-depth insight into this brand and market. Therefore, Edible Garden has been rated a Deal to Watch. 

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com. 

Analysis written by Katy Dolan.