HUMANITEA

HUMANITEA

Early Stage

A Great Tea With A Great Cause

A Great Tea With A Great Cause

Overview

Raised to Date: Raised: $52,514

Total Commitments ($USD)

Platform

StartEngine

Start Date

12/10/2023

Close Date

02/12/2024

Min. Goal
$15,000
Max. Goal
$1,235,000
Min. Investment

$200

Security Type

Equity - Common

Series

Pre-Seed

SEC Filing Type

RegCF    Open SEC Filing

Price Per Share

$2.00

Pre-Money Valuation

$7,814,936

Rolling Commitments ($USD)

Status
Funded
Reporting Date

02/28/2024

Days Remaining
Funded
% of Min. Goal
Funded
% of Max. Goal
Funded
Likelihood of Max
Funded
Avg. Daily Raise

$834

# of Investors

139

Momentum
Funded
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Year Founded

2016

Industry

Food, Beverage, & Restaurants

Tech Sector

Non-Tech

Distribution Model

B2B/B2C

Margin

Medium

Capital Intensity

Low

Location

Irvine, California

Business Type

Growth

HUMANITEA, with a valuation of $7.81 million, is raising funds on StartEngine. The company makes delicious organic teas and lemonade and offers them to customers in sustainable packaging. HUMANITEA products are freshly brewed and packaged and are all-natural, all-GMO, and organic. The business sells its products through 3,000 stores across the country and has relationships with national store chains, including Sprouts Farmers Markets, college campuses, grocery stores, and convenience stores. Jeff McClelland founded HUMANITEA in February 2016. The current crowdfunding campaign has a minimum target of $15,000 and a maximum target of $1.24 million. The campaign proceeds will be used for hiring, marketing, shelving costs, innovation, and new SKUs.

Summary Profit and Loss Statement

FY 2022 FY 2021

Revenue

$389,589

$213,768

COGS

$864,916

$495,707

Tax

$0

$0

 

 

Net Income

$-856,883

$-554,918

Summary Balance Sheet

FY 2022 FY 2021

Cash

$5,294

$12,935

Accounts Receivable

$173,628

$109,174

Total Assets

$401,561

$359,746

Short-Term Debt

$14,251

$0

Long-Term Debt

$1,660,994

$893,831

Total Liabilities

$1,675,245

$893,831

Financials as of: 12/10/2023
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Analyst Report

Synopsis

Ready-to-drink (RTD) teas are a rapidly growing beverage industry segment. They offer the convenience of portability and a healthier alternative to sugary soft drinks. However, many RTD teas today are not organic, contain genetically modified organisms (GMOs), and are packaged in non-sustainable materials.

HUMANITEA addresses these issues by producing organic teas and lemonades that are all-natural, non-GMO, and packaged in sustainable materials. But HUMANITEA is not just about creating great teas. The company is also committed to making a positive impact on the world. HUMANITEA partners with charities like the American Foundation for Suicide Prevention and Foster Love, aligning the company's success with its mission to help make the world a better place.

HUMANITEA's products are sold in over 3,000 locations across the United States, including national store chains such as Sprouts Farmers Markets, college campuses, grocery stores, and convenience stores. This wide distribution network and the growing demand for healthier and more sustainable beverage options position HUMANITEA well for future growth.

Next Section: Price

Price

HUMANITEA is raising funds on StartEngine at a valuation of $7.81 million. The company operates in the US Ready-To-Drink Tea market. It has gained traction by being available in over 3,000 stores nationwide, including well-known locations such as the Nike and SpaceX campuses. HUMANITEA offers a range of delicious organic teas and lemonades in sustainable packaging.

With an annual revenue of $389,589 and a revenue-to-valuation multiple of 20, HUMANITEA is slightly overvalued compared to the food and beverage industry. However, it is important to note that the valuation of similar companies in the Food, Beverage, and Restaurant industry on equity crowdfunding platforms is typically higher. This suggests that HUMANITEA is raising funds at a fair valuation relative to its peers in the crowdfunding space.

Next Section: Market

Market

HUMANITEA operates within the US ready-to-drink (RTD) tea market, valued at $40.2 billion. This market is experiencing slow but steady growth, with an annual growth rate of 5.37%.

One key trend driving this market growth is convenience. RTD tea offers a quick and easy option for refreshment on the go without the need for preparation, appealing to increasingly busy consumers. HUMANITEA, with its RTD tea and lemonade products, is well-positioned to cater to this consumer need.

The growing awareness and interest in health and wellness also propel the demand for RTD tea. As consumers become more health-conscious, they search for healthier alternatives to sugary sodas and other beverages. This trend could favor HUMANITEA significantly, given its focus on organic and all-natural ingredients.

However, the RTD tea market faces stiff competition from other beverage markets, including soft drinks, energy drinks, and bottled water. This intense competition could limit HUMANITEA's market share and growth. Despite the competitive landscape, the company's presence in over 3,000 locations nationwide and relationships with national store chains indicate a high market acceptance of its products.

HUMANITEA's emphasis on organic, all-natural, and conveniently packaged beverages positions it well within the growing US RTD tea market. Its continued success will depend on its ability to differentiate its products within a competitive market and respond effectively to evolving consumer preferences.

Next Section: Team

Team

HUMANITEA is led by CEO Jeff McClelland, who brings 29 years of industry experience to the company. McClelland has a strong background in RTD beverages, working at many large RTD beverage brands. He co-owned a can facility plant providing co-packing for energy drinks for brands like Rockstar Energy, Monster Energy, and Arizona Teas. His expertise and leadership skills position him well to drive the growth and success of HUMANITEA.

Assisting McClelland in operations is his brother and Vice President of Operations Lance McClelland. With 24 years of relevant industry and supply chain experience, Lance brings valuable knowledge and expertise to the team. His high-level managerial skills and warehouse management experience contribute to the company's efficient functioning.

The McClelland brothers are dedicated founders who have built a team of professionals with a combined experience of over 100 years in RTD beverages, supply chain, distribution marketing, and finance. This diverse team is well-equipped to navigate the challenges of the food, beverage, and restaurant industry and drive the growth of HUMANITEA. It should be noted that the pair did not found the company but rather purchased it to apply their industry expertise and grow the brand. 

Overall, the experienced and dedicated team at HUMANITEA, led by CEO Jeff McClelland and VP of Operations Lance McClelland, is well-positioned to execute the company's vision of creating delicious organic teas and lemonade while positively impacting the world. Their expertise in the industry and commitment to sustainability and social causes will contribute to the company's success in the global market.

Next Section: Differentiation

Differentiation

The tea market is very crowded. HUMANITEA attempts to differentiate itself in the ready-to-drink tea market by offering organic teas and lemonades that are packaged sustainably. The company's commitment to using all-natural, non-GMO, and organic ingredients helps to set it apart from competitors. There are, however, many other organic and non-GMO teas on the market, and much of the food and beverage industry is influenced by personal taste preferences, which can be out of the company's control. 

With its wide distribution network of over 3,000 stores nationwide, including national chains like Sprouts Farmers Markets, HUMANITEA has established a strong presence in the US ready-to-drink tea market. The company's products are also available at prominent locations such as the Nike and SpaceX campuses, further enhancing its visibility and reach.

Additionally, what sets HUMANITEA apart is its mission to positively impact the world by partnering with charities like the American Foundation for Suicide Prevention. This socially responsible approach resonates with consumers who prioritize supporting brands that align with their values.

Overall, HUMANITEA's commitment to quality, sustainability, and social impact, combined with its strong distribution network, positions the company as a compelling choice for consumers seeking organic ready-to-drink teas and lemonades.

Next Section: Performance

Performance

HUMANITEA has achieved notable traction in the market, positioning itself as a successful player in the ready-to-drink tea industry. The company's products, including organic teas and lemonade, are available in over 3,000 stores nationwide, including national store chains such as Sprouts Farmers Markets, Albertson's, and 7-Eleven. HUMANITEA has also established partnerships with major distributors, including KeHE, UNFI, and McLane, further expanding its reach and distribution capabilities.

HUMANITEA has experienced impressive revenue growth, with an annual revenue of $389,589, up 82% from the previous fiscal year. This growth is a testament to the company's early ability to capture market share and meet consumer demand for high-quality and socially conscious products. The company must continue on this growth trajectory to justify the current valuation. The company is still in the very early stages of revenue generation and must continually prove product demand.

Next Section: Risk

Risk

Investing in HUMANITEA comes with several risks that potential investors should consider. Firstly, HUMANITEA operates in a very competitive market. While the company has established relationships with national store chains and has its products in over 3,000 locations, it still faces competition from 50+ other ready-to-drink tea brands. This competition could result in pricing pressures and impact HUMANITEA's market share and profitability. 

Another risk is the company's financial position. HUMANITEA has a negative net income, $1.6 million in long-term debt, and a high monthly burn rate, indicating a reliance on external funding to sustain its operations. Additionally, while HUMANITEA has experienced growth in recent years, its revenue base is still relatively small. The company must continue expanding its sales and distribution channels to reach a larger customer base and generate sustainable revenue growth. Scaling production and distribution may require significant investments in infrastructure, inventory, and marketing.

Furthermore, the barriers to entry in the food and beverage industry are relatively low, which means HUMANITEA may face increased competition from new entrants with similar products and value propositions. 

Next Section: Bullish Outlook

Bullish Outlook

HUMANITEA is well-positioned in the ready-to-drink tea market, offering organic teas and lemonade in sustainable packaging. The company's commitment to using all-natural, non-GMO, and organic ingredients can set it apart from some competitors. With products available in over 3,000 stores nationwide, including prominent national chains like Sprouts Farmers Markets, HUMANITEA has established a strong presence in the market.

One of the key differentiators of HUMANITEA is its mission to impact the world positively. By partnering with charities that benefit humanity, the company has built a loyal customer base that aligns with its values. This unique approach sets HUMANITEA apart from its competitors and resonates with socially conscious consumers.

Furthermore, HUMANITEA's experienced leadership team, with over 100 years of combined industry experience, positions the company for future success. The team's expertise in RTD beverages, supply chain, distribution, marketing, and finance provides a strong foundation for growth and expansion. The team is led by the McClelland brothers, who have spent over 20 years in the industry.

Next Section: Bearish Outlook

Bearish Outlook

HUMANITEA operates in a very competitive industry, with numerous established players in the ready-to-drink tea market. While the company differentiates itself through its commitment to sustainability and social causes, it will inevitably face challenges in standing out from the competition. Regardless of differentiation, HUMANITEA may struggle to capture a significant market share and maintain sustainable growth in this crowded market.

Furthermore, HUMANITEA's financials raise concerns about its ability to generate sustainable profits. The company reported a net loss of $856,883 in its most recent fiscal year, indicating that it has not yet achieved profitability. With a monthly burn rate of $71,406.92, HUMANITEA will have to rely on external funding to sustain its operations. This reliance on continuous fundraising poses a risk to investors, as the company may face difficulties securing additional capital.

Additionally, given its current financial performance and competitive landscape, HUMANITEA's valuation of $7.81 million may be considered overvalued. Investors should carefully evaluate the company's growth potential and the likelihood of achieving a return on their investment.

Next Section: Executive Summary

Executive Summary

HUMANITEA is a ready-to-drink tea beverage company committed to making a positive impact. Their products are all-natural, non-GMO, and organic and in sustainable packaging. HUMANITEA products are available in over 3,000 locations nationwide, including national store chains such as Sprouts Farmers Markets, college campuses, grocery stores, and convenience stores.

The company operates in the growing ready-to-drink tea market, driven by consumer interest in convenience, novel flavors, and health and wellness. However, the market also faces competition from other beverage categories such as soft, energy, and bottled water. Despite this, HUMANITEA has seen steady revenue growth of 82.24% and has managed to secure its products in high-profile locations such as the Nike and SpaceX campuses.

With a team boasting over 100 years of combined experience in ready-to-drink beverages, supply chain, distribution marketing, and finance, HUMANITEA is well-positioned to navigate the competitive landscape. 

However, potential investors should note that while HUMANITEA is making strides in revenue growth and market penetration, the company is not yet profitable and faces stiff competition in a crowded market. 

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HUMANITEA on StartEngine 2023
Platform: StartEngine
Security Type: Equity - Common
Valuation: $7,814,936
Price per Share: $2.00

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