Wide Open Agriculture follows up Woolies deal with $22m raise for plant-based food and drinks

Wide Open Agriculture follows up Woolies deal with $22m raise for plant-based food and drinks

The Perth-based company behind the Dirty Clean Food (DCF) and OatUP brands has announced plans to raise $22 million to support its transition into plant-based food manufacturing, building on its position as a regenerative grower of oats and lupins.

Wide Open Agriculture (ASX: WOA) plans to use the proceeds towards building a proprietary facility to create "the world's lowest carbon plant-based drinks", increased capability at its existing plant-based protein facility, and a marketing strategy to support sales of oat milk and new product lines as part of distribution deals in Singapore and with Woolworths.

The Woolworths agreement was announced last week and is WOA's biggest distribution deal to date, with the retail chain set to carry Dirty Clean Food's Oat Milk in approximately half its Australian stores, starting with March 2022 launch at "The Kitchen" Double Bay store in Sydney.

The company has already received binding commitments from institutional and sophisticated investors to raise $20 million at $0.75 per share, representing an 11.8 per cent discount to yesterday's closing price.

This funding alone is equivalent to just under a quarter of WOA's total market capitalisation, while the company will also offer a $2 million share purchase plan (SPP) at the same price as the placement. It has now been more than a year since the group's $7 million raise in October 2020, which came swiftly after a $3 million placement in June of that year.

The group highlights over the past 12 months it has accelerated revenues, signed distribution agreements, developed new products and committed to competing in the plant-based food sector by focusing on regeneratively-grown oats and lupins, describing early feedback as "excellent".

WOA recorded 212 per cent revenue growth in FY21 to reach $4.7 million, although its statutory loss deepened to more than $7.5 million.

"Over the last seven years, we have positioned Wide Open Agriculture to grow rapidly alongside global consumer’s demands for healthy, nutritious food and drinks that regenerate the planet," says WOA managing director Ben Cole.

"In the last 12 months, we have firmly established the Company as the leader in regenerative food and farming in Australia.

"As we increase our plant-based offerings, we know this segment is well-aligned with our regenerative purpose and represents one of the fastest growing and most attractive markets in the food industry."

Cole says the company appreciates the support of existing and new shareholders, with the capital raise set to rapidly advance its oat milk and functional protein business lines and further grow the Dirty Clean Food brand across Australia and South-East Asia.

Dirty Clean Food’s CEO Jay Albany describes 2021 as a "watershed year" for the company.

"We have demonstrated that there is robust consumer demand for premium, regeneratively produced food in Perth. We are now extending our reach nationally and into Asia. Even after nine consecutive quarters of growth, demand for Dirty Clean Food products – led by our carbon neutral oat milk, OatUP – has never looked better," he says.

"As we progress towards 2022, we are excited to realise our commitment to create an advanced green manufacturing oat milk facility, the first in Western Australia.

"The plant will be a best-practice facility for green manufacturing and will provide Dirty Clean Food with scale and operating leverage as we harvest the best regeneratively farmed produce in Western Australia and share it with the world."

WOA's modified lupin protein (MLP) concentrate was used in several successful early-stage food and drink prototypes in an extensive research program led by Curtin University, with the company now "directing all development efforts towards four multi-billion-dollar plant-based food and drink sectors" according to its annual report.

"The first of these sectors is plant-based milk, whereby WOA successfully added Modified Lupin Protein (MLP) concentrate to OatUP which increased the milk’s protein level," the company noted in the report in August.

"This will allow the product to compete more strongly against dairy milks which have elevated protein levels than the majority of oat milks available on the market. A high-protein oat milk would offer a new category in the fast-growing, plant-based milk category."

The second category is plant-based meat alternatives as the MLP concentrate has been able to successfully form an emulsion gel matrix that can be used as a base material for creating plant-based meat products - the first of these will likely be a burger, although sausage, chicken and mince-like options are under investigation.

"Additionally, udon wheat flour noodles were fortified with lupin protein, creating a ready to eat protein enhanced noodle that has a base formula that could transition into pasta products. WOA developed and launched plant-based protein balls using standard lupin protein, providing an initial test product for the plant-based snack sector," the company reported.

"It was also confirmed that the Modified Lupin Protein concentrate can become an instantly soluble powder, which can be used for protein enrichment in hot drinks or as a protein supplement for sports drinks."


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