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Nepra Foods is grounded in a passion for food. We believe eating healthy shouldn't be difficult. Everybody deserves food options that are truly nutritious and taste good. Food should not contain allergens that might prevent everybody in the family from enjoying it together. People shouldn't have to compromise quality and taste in what they eat even if they are trying to cut down on carbs, don't tolerate gluten or dairy very well, or don't want to eat food produced from animals. Nepra Foods is on a mission to make healthy, enjoyable food for everybody.
Webinar Transcript:
First of all I wanted to thank all of you for logging in just to take a listen.
I hadn't had a chance really to reach out to our investors so I just wanted to go through a few points. That's something I hope to do a little bit more often. This one will kind of kick it off and then we'll go through a few highlights of some things that happened during 2022, where we're at today and what 2023 is going to look like.
Things are really looking up for us. I'm super excited about it.
I just want everybody to know that I really, to the best of my ability, try to make myself available. We have a couple of emails that you can reach us at. We have an investor relations website that you can get onto through neprafoods.com. You can post questions there. And then we have a PR email address, PR at neprafoods.com.
You can leave questions there and I'll do my best to keep up with that and get back to you.
I love taking calls. If you're interested in talking and learning more, some of the behind the scenes going on, just feel free to reach out, leave your phone number. I'll get back to you as soon as I possibly can.
I took over as CEO of Nepra Foods in December of 22. I'm a Certified Master Baker and I've been in the industry for 35 years. I started off as a conventional baker working with gluten based foods.
In 2003, I met a woman with severe food allergies and she introduced me to the gluten free and free from (free from allergens) markets.
She really dropped 40 years of research on my lap that she had been doing. She herself had celiac disease and a few other food allergies. Her diet was very, very limited. I got to see some of the products that they, that her and her daughter and son were eating gluten free products. They were not very good, especially in 2003. They really were a little bit lacking. So that's a good way to put it. Dry and crumbly, tasted like a overbaked dry pound cake.
I started developing formulations for the gluten free market. And in 2008, fast forward a few years, I found a couple of business partners that were willing to take a risk and jump in and we started a company called Udi's Gluten Free Foods and Udi's did quite well.
We started in January or so of 2008. Four years later, we were at a run rate of 125 million. It was in 2012 that we sold that company to Boulder Brands for $125 million. We were actually at $85 million in total sales for the year. We were at $125 run rate and we sold it for about, 1.5x sales. I learned a tremendous amount during that process. That business was a bit of a unicorn. It was like filling a vacuum. We were seeing 30% increases month over month. Really, really a fun, a fun time, but very challenging, very stressful.
To fill the pipeline was, every time we built a factory, I'll say this, every time that we built a factory, it was too small by the time we got into it. So my biggest takeaways from that experience, aside from the business side and really just the wonderful aspects of the experience, I saw that there was a massive need for ingredient innovation. And at that time, the formulations that we developed for Udi's, they were utilizing ingredients that were commonly available.
Some of them were new and I was repurposing them for gluten free applications, but most of the ingredients were just off the shelf and they were used for meat applications. We used a pre gel tapioca starch that was actually designed for the meat industry as a filler and binder for ground beef patties.
We didn't really have a lot of ingredients that were readily available or that were created specifically for gluten free. So a good example of that is enzymes. All of the enzymes at that time were designed for wheat based applications. And so they all had gluten as a carrier. They were all plated on a, either on a corn syrup or wheat based substrate. And so we didn't have the applications that were necessary for the gluten free. We had to be very inventive and very pushy with the companies that we were buying from. And we we ended up really starting to develop our own ingredients.
So post Udi's, I jumped in with a couple of guys. One is a, starch chemist, his name's Alan Caldwell. He lives in Thailand. He's originally from the UK and grew up in Australia and went to work for George Weston. George sent him to Thailand to build a starch facility for him. And he met his wife and never left. So he's still in Thailand today.
Alan has developed a whole line of starches that are really quite remarkable. They're tapioca based, but they function like wheat starch. And so they allow me as a baker to create gluten free bread that looks just like wheat bread. So as I was out looking for new starches and new blends and looking to connect again with other professionals in the industry to help to start creating ingredients specifically for gluten free, I found Alan and I found some of his base starches.
He and I partnered together and started tinkering further and creating blends. And so this company that we started was called gluten free baking solutions (GFBS). The real intention was to bring better consistency and nutritional value to the gluten free market. We jumped in right away to distributing these products globally.
We also, as a second course of business started a sprouting and malting company (GFSM - Gluten Free Sprouting and Malting) . That sprouting and malting company was really an effort to bring about better nutrition and place better quality flours in these gluten free formulations. Gluten free products historically are actually not very good for you. They're high in carbohydrate and they're typically empty carbs. I really wanted to feature a lot of flours that had a more robust nutritional profile. And sprouting really unlocks the nutrients in the grains and creates a more bioavailable product.
We really jumped into this in earnest, we started a blending company as well (TBS - Total Blending Solutions). The purpose of that was to, as we developed formulations for our customers globally, we wanted to be able to protect their IP. Most of our customers use, if they don't have their own manufacturing facility, they'll use a co manufacturer. And those co manufacturers, oftentimes they have access to your IP and the non disclosures are not really the all that bulletproof. It's, very hard to keep a bakery formula under an NDA, if you change it just a very little bit, they can basically rob you of your formula. So the blending opportunity was just really for the protection of our customer's recipes.
We work with brands globally to develop formulations. We do that today. We're in development right now today with dozens of formulations. And I'll go through some of those. What we really decided to do and really how Nepra came about is we took these three companies (GFBS, GFSM, TBS) and we rolled them together. Along the way we realized that we were coming up with some really cool formulas, things that were completely unique. And we were developing not just the formulation, but we were developing the ingredients behind it. We didn't want to just give everything away.
It's fantastic that we work with Quinn snacks and that we developed their pretzels for them. Now they're at a $25 million run rate, it's a fun project. I love Christy Lewis, the owner of Quinn. And I love seeing her success, but we really felt that we could have that success internally with certain formulations.
As we tinker and we play and we come up with new formulas, we wanted to take advantage of some of these and have a vehicle that would allow us to bring these formulas to market through a brand. And that's one of the things that those three first companies did not really have the ability to do was to spin off a brand.
So we decided to put the three entities (GFBS, GFSM, TBS) under one umbrella, Nepra foods. And Nepra in the language Esperanto means absolutely essential. That's really how we view most of our ingredients. When we develop a formulation, we sell ingredients into that formula. And it's really an essential component of the formula and its success at market. So without going into details on every single ingredient, the short of it is, is that they form the backbone of these formulations.
In many cases, just to really help you understand, there's no substitution for these ingredients because they're so completely unique and not just their functionality, but in their nutritional profiles and everything else. Many times our customers cannot take them out. This is a real problem because in the bakery industry and the food industry at large, you need redundancy.
If, for instance, if I'm using a native tapioca starch, I don't want to just lock in with one person. I want to be able to pull that product from multiple sources. Well, in our case, we can't offer that redundancy. The ingredients are completely unique. So we really make sure that on our side, on the manufacturing side, that we have more than enough channels to produce these products.
Alan, his company is called Starch Products. I'm a bit jumping the gun here, but it is really our intention down the road to acquire Starch Products. And Alan is in a hundred percent agreement with that. He is really is looking forward to that.
So we're a little ways away, but at some point, we will actually own all of that IP that Alan today owns.
The formulations, I will say this though, the formulations that Alan and I have come up with are owned by Nepra. So we have a certain set of ingredients that we're moving out. A couple of dozen really unique, interesting ingredients. And they all use components that are Alan's, but the formulation of these ingredients as a blend belongs to Nepra. What we end up doing, because Alan owns the, the actual modification process to these, he's set up in multiple manufacturing channels. That's really how we offer that redundancy to our customers is that we can get these products made in several different locations. We're not locked into one manufacturing spot. We can go into Cambodia. We can go into Vietnam. We're primarily placed in, in Thailand, but we can move anywhere we would like to.
With our customers being locked in the way that they are, they really essentially become partners. And we offer a full support system behind their efforts to bring products to market. We're doing this also for ourselves, which is really cool about the formulations that we are looking at is rolling up under a CPG play, like ProPasta for instance.
We own the vertical. Some of these ingredients, we have them manufactured to our specifications. And in many cases, they can't be replicated. So this will become apparent as I move through into the 2023 outlook and I start talking about some of these customers that we're partnering with.
So one thing I wanted to do to, besides kind of the introduction was to kind of give you a real quick 2022 recap and kind of explain some of the pains that we endured during 2022.
I think the biggest issues were the shipping issues that we had. Shipping containers went from $4,000 up to $24,000. So we lost some pretty extensive margin in the early parts of that price action, and we, we ended up having to pass a lot of those costs through to our customers. In turn, some of our customer's customers, they couldn't bear the price increases.
There was a lot of fallout from this. There were not just a few brands that went under in 2022. And it really hit hard as a consequence of this. We lost, if you looked at our core customer base, we lost a significant amount of that. We kept the primary customers. One of our biggest customers, for instance, is BCI, British Canadian Importers in Canada. They are distribution partners up there. They had many, many, many customers under them that they distribute to, and they lost several customers.
Here in the States, we distribute ourselves. We have several customers that we sell to. One of our biggest customers is the Rotella's in Omaha. By the way, I will mention many of our customers because I've had their approval to do so. But I do have several customers I can't talk about per our non-disclosures. So I'm going to kind of pick and choose which ones I choose to share. But in this case, Rotella's not only manufacture their own brand, they also act as a co-manufacturer for other brands. Rotella's were anticipating sales to us. They were anticipating a certain run rate. For us, it was around a little over $200,000 a month in business. And they lost half of that.
Another big customer that we had up in Boulder was Rudy's Organic. And Rudy's ended up getting acquired by another company out of Ireland called Promise Gluten Free. And during that merger, they got rid of all of the modified starches. So we ended up losing that business.
BCI, I mentioned that they were down. Quinn was down a little bit. They made some moves that affected our sales. We had another big customer in Pennsylvania, Savor Street. They got flooded and ended up having to shut their factory down and we lost that business. So it was all these issues popping up.
But at the same time, we were gaining more and more and more customers. So we gained another customer called Fit Joy Nutrition, Unreal Snacks, the Cloud Bread Company that I'll talk a lot more about because we have some really amazing developments there and maybe a half a dozen other customers.
So if you look at the total losses that we took from lost customers that were really kind of out of our control, we gained many, many more. And so if you look at our sales from 2022 to 2023, they look flat. But really, we had on the one hand several going out and on the other hand, many, many more coming in.
And so we're actually, just to speak to that, we're in a fantastic position for 2023 because the amount of business that we pulled in far, far exceeds what we did lose. And I'd like to address some of those too because where Rotella's kind of slid backwards. Looks like in the next few months, they're going to be gaining a lot more momentum. And they're going to be not just where they were before. They're going to be far ahead of that. And so those translate directly to sales for us.
During 2022, we added significantly to our manufacturing. And I think this is really one of the reasons that 2023 is going to be so great for us. We have four lines of manufacturing. We manufacture a hemp heart flour, that hemp heart flour is 55% protein. We have built our capability to produce $135,000 a month worth of revenue on that line. That line is really split into two channels. Half of it is the hemp heart flour and the other half is hemp oil.
Our hemp, our golden hemp oil, it's been very, very well received. We are actually just about to sign some agreements with a company in California that is going to be making a hemp mayonnaise. So this hemp mayonnaise is made from all components that we manufacture internally at Nepra.
So we've got the hemp oil. We have our egg replacement system. We have three egg replacement systems. This is our version number three. I'll talk a little bit more about some of those.
So it's got our egg replacement number three and then it's got our hemp aminos in there. And so we take those three ingredients plus some vinegar and a little bit of lemon juice and just a couple of other smaller minor ingredients and we come up with a mayonnaise that is absolutely phenomenal, on par with any normal mayonnaise that you would buy at the store. And so this company is going to be rolling this out nationally and our hemp oil sales are really going to expand because of it.
The other manufacturing that we have is our ProPasta line.
In early 2022, we were trying to roll out our frozen meals. And of course, this CPG is expensive and rolling out frozen meals is even more expensive, not just from the distribution model, but also just manufacturing. There's a lot more that goes into these types of meals, building a meal internally, keeping it at the proper temperatures. And we wanted to do all this internally. We didn't want to just necessarily move it out to a co-manufacture because some of the components that we're adding in are so novel and interest and different that we didn't want to just educate other companies on how to do it.
So we were really looking to do it internally. And with 2022 being as rough as it was in some in some ways, we decided, let's just make a hard pivot here and let's produce a dry pasta. So we did that.
This dry pasta is absolutely fantastic. And it's it's macros are really unmatched in the industry. We have, oh, let's see, finger of the best way to describe it. So first of all, it's a gluten free, allergen free pasta, but it eats like a wheat pasta. It has that same al dente chew that you would expect in a pasta, very neutral flavor, really tastes for all intents and purposes, like a wheat pasta, especially when you've got sauce on it. What's unique about it is that it is 30 grams of protein, only 30 net carbs, and has 20 grams of prebiotic fiber. So it's really healthy. It's very, very good for you. It really exemplifies that evolution of eating that Nepra, that we promote that balanced carbohydrate versus and when we talk protein, we're talking quality protein.
I get asked this all the time by customers who say, oh, we want a high protein bar, we want a high protein cookie or whatever it is. Most of the time they're looking for the cheapest protein that they can find to put in it. And we don't believe in that. If you're going to eat protein, you want your protein to be as high a quality as possible and to be as digestible as possible. And so this posture really exemplifies that. And today that manufacturing, we can manufacture internally 70,000 pounds a month. Actually, let me, let me rephrase that.
Today, today we can produce about 25,000, but we have equipment on order that will allow us to produce 70,000 pounds a month within within just the next few months. At 70,000 pounds a month, if you look at our general price, that equates to about $290,000 a month in sales. I'll get into ProPasta a little bit more, some more updates there, but the rollout of this product is looking fantastic. I am super excited. It's going to take over. It really will.
The response that we're getting within the celiac community and I have a lot of friends that are pro athletes, pro snowboarders, skateboarders, triathletes. And they are all just ecstatic over the pasta and I'll explain some more components that really kind of make it so cool.
The last manufacturing piece that we've got, or the last two that we have in the facility is our THP, our textured hemp protein. This is not that dissimilar from the textured vegetable protein that's usually soy based, except that it's way better.
I'll explain why most of the products that we're producing are actually better than what's on the market and how they're better. That textured hemp protein, we can manufacture about $650,000 a month worth of product. So it's a significant amount. We are in the stage, we're building that business. We have several interested parties coming to the table. We've got some big customers lined up for that.
One we're working with is a major fast food chain out of Europe, and we're actually producing a custom product for that. If that takes, there's going to be a lot of development there. If that takes, they're looking at close to 400,000 pounds a month of this product. So not a small amount, not something we'd be able to produce internally either. This would actually be a product that gets pre-blended at our facilities in Thailand, where we have adequate capacity. And then it would be moved into Europe, where individual co-manufacturers would then take that blend and utilize it. It'd be making a “chicken” nugget.
The last manufacturing piece that we have in our Colorado warehouse is blending. Again, we do all of the blending for our customers. And we've been doing a lot more blending. It's been slowly ramping up. We're adding more equipment.
And we are going to be, we charge about 35 cents a pound for blending across the board. It puts us in a just under about a 40% margin, keeps us very competitive in the open marketplace, too, so we can take on additional blending if we need.
But it looks like by June, we will be producing blends for at least five different companies. And the total output per month in blending, if we were to fully maximize it, would be about $1.18 million in revenue per month, just on that end of the business. So it's pretty extensive.
All in, in our 31,000 square foot facility, we can produce about $28 to $35 million worth of product per year. Actually one of the other things that we did early in 2022 was that we hired all of the personnel that we would need to do this. And so we've got staff enough on hand. We're really kind of staff heavy. So if you look at our burn rate, our burn rate's about $170,000 a month right now. The burn rate is really just labor. I mean, it's people. We really invested heavily in the correct people to come on board. People that I actually worked with at Udi's, kind of putting the band back together, so to speak, in some cases, and in others, we've found some amazing people that we've added to this team. I'm super proud of all of them, they're absolutely fantastic.
We can easily get beyond $35 million in sales with our current staffing. So I mentioned that I took over to CEO in December. And there was a little bit of, not just a little bit, there was a lot of reorganizing that I did internally. I feel that what we've really done well in the last few months is kind of lay the groundwork for a massive influx in business. We've really got everybody kind of geared up to an expectation of what's coming.
We're poised to absolutely take off. So my goal right now, for 2023, first and foremost, is profitability. With the business that we have coming in, we should be cash positive by, I'd say, December at the latest. If everything goes as planned, it'd be between October and December. Some of these accounts that all kind of go through, they're going to take off a little bit faster than that. So really optimistically, we could be at positive cash flow by sometime around August. The worst case scenario would put us like one or two months into 2024. But the sales cycle on ingredients is anywhere between 12 months and 18 months and so much of the business that we started putting together in early 2022 has really started to land.
I mentioned Fit Joy Nutrition before, they're right now today about $127,000 worth of sales a month and ramping. We're expecting them to do quite well. They're being very very well received in the marketplace with products that we've developed for them.
I mentioned those ingredients that we've developed that Allen owns the technology on the his based starch.
We came over the blend called EV 30, essential base 30. And essential base 30 allows me to make gluten free bread that looks just like we bread as a 28 day ambient shelf life stays soft and flexible. Doesn't stale very quickly. And uses our egg replacement system. And so we've partnered with a company called the cloud bread company to bring that to North America and beyond. They're actually looking at possibly taking it across the ocean as well. So we, this is really exciting for a few reasons.
One, it's a tremendous amount of bakery sale of ingredients sales. It's also our first placement of our egg replacement system. Again, we have three of those. So this, in this case, this is our egg replacer number one. It's a product that's been specifically designed for gluten free baking for gluten free breads. And in some cases, cookies, muffins and other things.
And the the egg replacers at about 10% bakers percent. So true percent, that'd be about 5% true in the formulation.
So it's a significant amount, but it's still less than egg whites. And egg whites today, in some parts of the country are upwards of 20, $25 a pound. We come in on these egg replacers at about 10 bucks a pound. We're making a really great margins at that level. So in some cases upwards of 55%.
Going back to my goals for 23 and getting to that level of profitability I'm really trying to get our margins across the board up to a higher level. Ingredients we run about a 25 margin, 25 to 30% margin. We've really been kind of trying to get a little bit more out of them. Those are pretty fixed. , we can only charge what we can charge. We have to be price competitive at the same time. And I, as a formulator, I need the price to be at a certain level. I know exactly what it takes to get to market, what price point you have to be at to do that so I built those into my models and then we just make sure that we can make enough money on the ingredients on the back end.
On those things that we manufacture, we have the opportunity to do a much higher margin. So as we get into more manufacturing, you'll see that our margins are going to start to really go up as they blend. So they getting back to the Cloudbread Company, they are, these guys are bakery professionals. After Udi's, I always said, I did not want to own another bakery. It is a lot of work and you become just completely married to it. And I had a much bigger vision in mind of what I wanted to do. Owning a bakery would really strongly impede that, in my opinion. So I would rather partner with guys that that's their life. That's what they do. And so these guys were all fantastic, long-term bakery, they're bakery guys.
They've had successful exits in the past. They are, they've jumped in and have a new facility down in Dallas, Texas.
And this facility is, man, it's gorgeous, absolutely gorgeous. And so they're now putting in a 5 million cap X to build out that facility and get it brought up online. And we are going to be rolling our gluten-free bread out through them, essentially.
They're really fantastic, fantastic partners. They've been aware of some of our challenges and they've really stepped up to help us when we needed it. So it's really looking to be a fantastic relationship. They know how to build volume and they know how to build it quickly. So we they're looking at 10, they're looking to be in 10,000 doors by the end of the year or shortly thereafter. If they're in 10,000 doors by the end of the year it just keeps going from there. So they really are looking to deeply penetrate the entire market.
Now, what's interesting about the bread is not just the fact that it's gluten-free and stay soft and flexible. The nutritional aspect of it is really fantastic as well. Again, it's using that, that egg replacement system. It's really cool about our egg replacement system. And the reason that we have so much, so many people coming to the table looking at it is that it actually outperforms egg whites. Egg whites we use those powdered egg whites specifically, we use those in the bakery industry for to build structure in a baked good supplemental structure. If it's a gluten-free product or the full amount of protein structure in the case of a gluten-free product.
So the hemp not only produces that structure, the same structure that you would get from egg whites, it does something else that's really interesting. Hemp protein is mostly globulin and those globulins retain moisture. And they also seem, we're really digging into this and understanding more all the time, but it looks like they're actually encapsulating the starch complex at the same time. So what's really cool about that is that if you were to add egg whites into this formulation
that we've developed for these guys, that formulation would actually get dry in about 15, 16 days but because we're using our egg replacement system, it stays soft and moist for 28 plus days. And it's really the hemp protein that's responsible for that.
Hemp protein, and the reason that we've really gone after this in a major way is that it is hands down the king of all plant-based proteins. There is no equivalent. There just isn't. Nutritionally speaking, it has all 20 amino acids. It, of the nine essentials, they're all very high. The first limiting amino, if you're familiar with the amino complex in a PD-Cas score,
protein digestibility and adjusted, I'm sorry, corrected amino acid score. The PD-Cas is really a means that we use to identify the quality of a protein. So hemp comes in at about a.67 on the PD-Cas score. It's a scale of zero to one. And the only reason that it comes in a little bit low is that it's missing some of the lysine that we need.
The nine essential aminoes, we don't make in our bodies. We need to get those from the foods that we eat. And so lysine is one of those important aminos. However, the lysine is still at significant enough volumes to be completely within the needs of the average human. So literally you can live on hemp.
The other fantastic part of the hemp protein is that it has a bioavailability of 98 plus percent. So that globular form that does a great job at protecting the starches from retrograding in our bread also happens to be one of the most highly digestible proteins available. And the those globulins go immediately to rebuilding red blood cells, white blood cells, and hormones and enzymes and those other necessary functions within the body. So we're really enhancing the nutrition of the products that we're putting it into.
At the same time that we're introducing a product that has not been introduced to the marketplace previously, we're really setting up our supply chain in a meaningful way. We are really setting ourselves up to be the cornerstone for hemp food products globally, not just in the United States, but truly globally. And so talking about those goals for the year beyond profitability, it's really to build the business as big as we possibly can, not just on the starch side, but on the protein side where we've really started jumping in and in earnest.
The hemp protein and the vertical on that is really a strong play for us this year. We have an opportunity today to build a business that, think of it this way, like we're on the ground, imagine being on the ground floor of soy 60 years ago, and what the soy industry has done, and specifically the soy industry as it pertains to food. If you look at just the billions of dollars that are made in that industry today, that we're on the ground floor of that with a product that will replace soy, because it's more nutritious and because it's better tasting.
Hemp protein is not green, it's white, like bone white, and it's slightly sweet and nutty, so it has no weird off flavors.
So we're able to really transform this ingredient into any type of food. Really is, it's got an incredible, incredibly broad application throughout the food industry. Because we're positioning ourselves as that cornerstone in understanding how to
use it, and because we're working so diligently on the vertical, we are going to, in effect, capture the first elements of growth in this industry. It's going to be, I'm very excited about it. As a matter of fact, if I look at my my two year, my five year, my 10 year plan, all of this really kind of encompasses what we're going to be doing with hemp. And not just the nut, and then how to incorporate the hemp into food products. And then we're going to, of course, be looking at continuing to capitalize on the brands that we launch ourselves.
So for this year, going back to our goals and the 2023 outlook, where I see things going.
We've got a few more customers that customer I mentioned before, Savor Street, they got flooded out, they have rebuilt, and now their business is coming back in an even stronger way. We've got a lot of increased sales that are going to be coming through them to the tune of about $1.75 million a year.
That bakery, the Cloud Bread company that I talked about, I mean, in the short term, there'll be a two, two and a half million dollar business. For the long term, they could be as high as six to eight million a year for us.
We have another bakery that we're talking to. And likewise, these guys will be a two to three million dollar a year business for us. And over the long term, they could be an eight to 10 million dollar business, really a huge, huge factory.
We've got some, global customers. Several customers in Australia that we're implementing our egg replacement systems in. One of those by themselves will be about 1.3 million dollars in sales for us.
We're working with another big bakery in Colorado that's a very well known gluten free bakery, and we've developed a new bread that fits within their brand guardrails, but looks, it'll be their next generation of bread. I'll just leave it at that. That could very easily be two to three million dollars in sales for us.
Really beyond that, I'm trying to be super conservative here. We're working with another big big gluten free bakery in Vancouver that will be a couple of million dollars in sales for us. All these things really kind of add up. I can see us by the end of the year, as all of these really start to take, I can see us by December being at a 20 plus million dollar run rate.
I don't think it'd be very hard for us to get there. We're really trying to take on as many customers as we could possibly fit into our R&D schedule. And we've just expanded that capability.
I partnered with a good friend of mine, her name's Lin Carson. Lin Carson is the CEO of Bakerpedia. Bakerpedia is an online baking encyclopedia. Lin has her doctorate in cereal science and is very well known in the industry. What she's doing because she's such a fantastic formulator herself, she's taking many of our ingredients and not just featuring them on her website, but also directly going out and meeting with potential customers and formulating products for them using our ingredients. And so we've got a handful of customers there that we're developing a sales channel for.
Those products alone, just three big customers have come to the table so far. And we've only been working with her for about a month and a half going into two months. And just in that short period of time, she's brought three very large bakeries to the table.
One of those, the biggest of the three will be easily a nine million dollar a year account for us. The other two combined will be about four and a half give or take. And so if we land all three of these, we're going to be in a really great shape, especially as we start moving into 2024. And she's got a couple more that she's wanting to introduce me to.
So I expect this just to keep going the way it is. So I wanted to wrap it up by, by giving an overview of what's going on with ProPosta. We went out to natural products Expo West in March. It's a, huge CPG trade show that allows brands to get in and really present themselves. We had a 20 foot booth for Nepra Foods. And we put up a display for ProPasta. We actually made pasta the morning before the show every single day and let potential customers taste that. This trade show is really designed to allow buyers to come and shop the brands. This show, by the way, is four days and 85,000 people. So it's, it's not a small event. It's really quite busy. We presented incredibly well.
We are in discussions with Wegmans with Loblaws, with Albertsons. We're talking to Kroger. We're talking to some of the big distributors like KeHE. Everyone who came by the booth and tasted the pasta was blown away. They couldn't believe number one that it was gluten free. And then when they read the macros on it, they were just, they were completely taken aback. And, I mean, that literally, we had a couple of celiacs come by and they were actually afraid that they had put a gluten pasta in their mouth, even though we had told them it was gluten free ahead of time.
So we really had some great responses. And we're, we're very close. We have our boxes ready. We're in the process of ordering some sales samples, basically, the for the boxes. And what we're looking to do is get in front of, we're looking to get in front of Kroger within the next few weeks with the finished boxes. We are right now today scaling our pasta up and we're moving into the Colorado region. We've gotten into a couple of restaurants already and the response has been fantastic. We've, of course, been sending all of our friends to go eat it. So the restaurants are appreciative of that. The response from their normal clientele has just been phenomenal. I think we're poised to take over the Colorado region here pretty quickly. We're getting into a an Italian restaurant distributor very quickly within the month and we've got ingredients on order today that will allow us to, to really in earnest start ramping up.
And so the last thing I want to say about ProPasta other than the fact that we are really expecting with the ProPasta is that we'll launch it into Colorado region first. And we're going to continue the discussions with all of those interested parties and we're going to start making a strong play for for a national rollout. And I think it's going to happen very quickly, especially once we're able to produce the 70,000 pounds a month, I think it's really going to take off from there.
We intend really to keep this internal. We do not plan on moving the manufacturing piece out. So , as we do scale this, we're going to be doing so in a way that allows us to keep manufacturing. We will end up ultimately building a factory that's dedicated to the pasta. I think that's really the direction we're going. So, super excited about it. We make a really great margin on this product. And the price point that we've set it out for the greater market, looks like the market will bear it. It doesn't look like there's going to be any problems with that. So again, just I can't emphasize enough how excited I am about it. I think it's just going to be, it's going to take off in a meaningful way.
So we're in a capital raise, many of you on this call probably got word of our placement. I think that it's easy enough for me to explain that the, the capital that we're putting in is going, number one, is to support each one of these projects that are going to immediately turn around and yield results. So as quickly as we can possibly get to that level of profitability, that's really the goal. And , we're going to feed a little bit of that capital into ProPasta, get some of the secondary needs that we have.
We set up some trade finance. So we've got a lot of help there. We're going to start that off relatively small, but we should be able to grow that up to about a million pretty quickly and utilize that service. We've got some loans that we've got some really firm contracts that we're putting in place that will allow us to to basically get banked, something that we've not really been successful at up to this point. We're finally able to start taking some loans. We're becoming bankable. That's a very exciting thing being told by a bank. Sorry, you don't qualify. It's not a, not a great thing. So the fact that we're able to take advantage of that's fantastic. Really allows us to focus more on just raising the, the smaller amount of capital that we need and then working on those things that are directly going to raise the stock price.
That's really the other goal for 2023 is see how, to the best of my ability to get this thing, not just turned around from a profitability standpoint, but really key people in on where we're going and what what's coming down the pipe. So I expect all of those things. We've got a couple of things in play right now that, that I haven't mentioned that if I can pull them off, I think they're going to have a very positive effect on the stock price.
And we're really getting more and more into the public sector. My friend, Lin Carson, that's doing some marketing for us.
She is really doing a fantastic job of getting us hooked up with some of the big guys. I can speak to that really briefly.
We are actually in discussions with all of the majors. So we're talking ADM, General Mills, we had discussions with Nestle a couple of months ago that are ongoing, a lot of major players. So , where this ends up is that we become a cornerstone of the hemp industry and we really key these bigger players in on not only how to use the ingredient, but, we become their source for it. So lots of lots of exciting things coming.
I do plan to do this more often, a little more regularly. And so if any of you have any questions that I didn't address here, that you'd like to get a specific answer to, please feel free to reach out to me. I am more than happy to respond and jump on a call and talk through everything. I won't do this every month, but maybe at least every quarter I can kind of give some quick updates, maybe do a shorter call, 15, 20 minutes where I can just expound on the progress that we're making. So again, thank you very much. I appreciate you all. Reach out and the more involved that you, please be as involved as you would like to be.
Any suggestions and feedback, please share. And I'll circle back with a time for the next one. So thanks.
