TBJ Gourmet is offering equity in a priced round at an $8 million valuation ($6 million for early bird investors). All in all, this is a fair price. TBJ Gourmet generated $1.4 million in revenue in 2021, so these valuations represent a 4.4x to 5.8x revenue-to-valuation multiple. That’s a tad high for an early-stage food and beverage brand, but it’s not egregious. TBJ’s traction in generating revenue over several years and its established distribution pathways at grocery stores nationwide justify this price. 

Bacon jam is currently TBJ Gourmet’s only product line, and it fits into a niche (or arguably nonexistent) market. The North American bacon market reached $9.5 billion in 2018, and at a slightly slow annual growth rate of 4.4%, it’s expected to reach an impressive $14 billion by 2027. But TBJ’s bacon jam product captures only a tiny sliver of demand when compared to regular sliced bacon. It doesn’t seem fair to categorize bacon jam in the jam and preserves market, either, since the use cases for those products are almost entirely different. Bacon jam is more savory and intended for use in entrees and recipes, which is different from something sweet like strawberry preserves. 

It’s safe to assume that there is barely any established market for bacon jam, so TBJ Gourmet is facing an uphill battle. It doesn’t help that Americans are transitioning away from many meat products. TBJ Gourmet will likely face a revenue ceiling with its current bacon jam product, so it is imperative for the company to diversify into other product lines. 

TBJ Gourmet was founded by CEO Michael Oraschewsky and President Bruce Kramer. Oraschewsky is a longtime restaurant entrepreneur who opened his first restaurant at age 23. He’s spent the last two decades in the industry as the owner and operator of at least two restaurants. In addition to his role at TBJ Gourmet, Oraschewsky works as the treasurer of Upcycled Food Association, a nonprofit seeking to reduce food waste. 

Kramer had a 30-year career in sales promoting software development solutions and services before pivoting into the food business with TBJ Gourmet. Beyond the two co-founders, the TBJ Gourmet team includes a salesperson and an e-commerce and marketing specialist. 

This team isn’t particularly well-credentialed and doesn’t possess strong competitive advantages that benefit TBJ Gourmet. While Oraschewsky’s background in restaurants is undoubtedly helpful, he is not fully committed to TBJ Gourmet, and the company could benefit from more robust expertise in entrepreneurship, operations, brand-building, and more.

TBJ Gourmet is not the only bacon jam producer on the market. A number of specialty food manufacturers offer bacon jam alongside a range of other niche products, including companies like Stonewall Kitchen and Terrapin Ridge. TBJ Gourmet’s prices are comparable to these competitors’ prices, as are their jam flavors. It would be difficult for a consumer to discern the difference between TBJ Gourmet and any other bacon jam options available online or in the specialty aisle. TBJ Gourmet might have more of an advantage selling directly to restaurants, but eateries could easily whip up their own bacon jam. Consumers could do the same, for that matter, as there are plenty of online recipes for bacon jam. Overall, there are no strong incentives for consumers to choose TBJ Gourmet over competitors’ products or homemade recipes.

TBJ Gourmet has had a solid performance over its nine years of operations. The business seems to have begun humbly as a side project that emerged from a recipe at one of the founder’s restaurants. Only in the last several years has TBJ Gourmet begun generating sizable revenue. Year-over-year growth was strong between 2019 and 2020. The company went from just under $800,000 in revenue in 2019 to $1.3 million in 2020. Even better, the company was profitable in 2020, with a net income of roughly $32,000. In 2019, TBJ Gourmet also earned $136,992 during a previous crowdfunding round. However, 2021 was more lackluster. Revenue increased only a small amount from $1.3 million in 2020 to $1.4 million in 2021. TBJ Gourmet sank just barely back into the red, with a small net loss of $11,000. This sluggish traction is not a positive sign for TBJ’s future growth. 

Other than financials, TBJ Gourmet seems to be doing a decent job at building distribution channels for its products. The company’s bacon jam is sold online via Amazon and its direct-to-consumer website. TBJ Gourmet bacon jam is also available at stores nationwide, including Walmart. However, it’s unclear exactly how many Walmart stores offer TBJ Gourmet products. TBJ Gourmet has also built out a restaurant line of business. Despite its stagnated revenue, the company has overall demonstrated strong traction.

TBJ Gourmet is a medium-risk investment opportunity. The company has been around for nine years and has steadily generated increasing revenue over that time, with $6 million in lifetime sales. TBJ Gourmet has also been profitable or near-profitable over the last two years, indicating that the company could probably sustain itself for a long time without dependence on capital injections. But co-founder and CEO Michael Oraschewsky doesn’t seem to be fully committed to the business, as he’s splitting his time as a treasurer for Upcycled Food Association. Sluggish revenue growth in the last two years is a worrying sign that TBJ Gourmet won’t grow enough to deliver strong returns for investors.

TBJ Gourmet’s last round closed in August 2019. The company was valued at $3 million for that raise. TBJ Gourmet more than doubled its valuation for this round to $8 million ($6 million for early bird investors). It’s not clear that the company has made quite enough progress in the last three years to justify that jump. Revenue has increased substantially from just under $800,000 in 2019 to $1.4 million in 2021. However, sluggish revenue growth between 2020 and 2021 points to a potential plateau. Beyond revenue growth, TBJ Gourmet doesn’t boast any other major points of progress since its last round.

TBJ Gourmet sells a niche product to a niche audience. Meat consumption is becoming less popular, which means the company is working against a powerful food trend. TBJ Gourmet is attempting to position its raise as a climate change impact opportunity, saving the planet by reducing food waste. However, it’s not clear that wasted bacon ends are a major driver of food waste. If TBJ Gourmet could succeed at creating new product lines in other areas of food waste, such as spent grain from brewing, the company could increase its revenue streams. At this point, though, the company doesn’t seem to have made any progress toward achieving that goal. 

In addition, it’s worrisome that TBJ Gourmet’s revenue stayed essentially the same between 2020 and 2021. The company is raising on the premise of growth and opportunity, but it doesn’t seem to be seeing that much growth within this niche, competitive market. If this trend continues, investors may not see substantial returns on their investments.

TBJ Gourmet has been a relatively slow-growing business, This is likely because one of the co-founders is not fully dedicated, and there’s only so much demand for bacon jam. That’s a concerning sign, but TBJ Gourmet has actually done quite well under those conditions. TBJ Gourmet has generated $6 million in lifetime revenue (and achieved profitability) with a single product line and relatively minimal consumer branding and sales efforts, so it seems possible that the company could flourish if it invested more in growth or new product lines. TBJ Gourmet has a vision of introducing new products from wasted food sources, including spent grain from brewing. If TBJ Gourmet can jump-start the business with some innovation and new expansion opportunities, it could continue to bring in increasing revenue and maintain profitability. 

TBJ Gourmet sells bacon jam made from otherwise wasted bacon ends. For TBJ Gourmet, this business is about not only manufacturing delicious products but also helping the planet by reducing food waste. Over the last nine years, TBJ Gourmet has brought in $6 million in lifetime revenue and has achieved profitability or near-profitability for the last two years. Future growth opportunities, namely new product lines, have the potential to continue this sustainable growth. Considering the company’s traction to date, investors are also getting a fair price on the deal.

However, investors should note that TBJ Gourmet is selling a niche product in a very small and competitive market, and there’s nothing stopping consumers from choosing another brand or making their own bacon jam. Revenue growth stalled in 2021, which is a concerning sign that TBJ Gourmet may have hit its revenue ceiling selling bacon jam. New product lines seem essential to keep this business going, but the company doesn’t have a reliable operational history of innovation and savvy marketing. Lastly, neither of the founders have much entrepreneurial experience to support the company’s growth, and one of the co-founders is not fully dedicated to the company. Therefore, TBJ Gourmet has been rated a Neutral Deal. 

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

Analysis written on May 6, 2022.