BranchOut Food Reports Record $3.2M in Q1 Revenue Following Peru Factory Ramp-Up, National Retail Expansion, and $5–6M Ingredient Channel Partnership
Key Highlights:
- Q1 Revenue of $3.2 Million, up 118% with strong growth anticipated throughout the year
- Targeted to be debt-free by YE 2025
- Peru Facility Fully Operational, supporting $40M+ annual production capacity
- Expanded Warehouse Club Partnership, now spanning five U.S. regions with multiple products
- Strategic Ingredient Partnership with MicroDried Signed, with multiple containers shipped in Q1 and projecting $5–6 million in annual ingredient sales.
- DTC & Brand Strategy Bolstered with the appointment of an experienced Chief Brand Officer to focus on launching the channel.
- Tariff Tailwinds Favor BranchOut: With tariffs at 30% on imports from China, BranchOut's Peru-based bulk production combined with U.S. based retail packaging offers a clear cost advantage as retailers scramble to find alternatives.
BEND, Ore., May 15, 2025 (GLOBE NEWSWIRE) -- BranchOut Food Inc. (NASDAQ:BOF), a leading food technology company specializing in its patented GentleDry™ dehydrated snacks and ingredients, today announced record Q1 2025 revenue of $3.2 million, representing a 118% year-over-year increase and highlighting major operational milestones. This performance marks a turning point for BranchOut, as Q1 was the first full quarter of operations at its 50,000-square-foot production facility in Peru. After dedicating much of 2024 to the construction, buildout, and operational ramp-up of the factory, the company is now realizing the benefits of that investment. The facility houses the largest GentleDry™ capacity in the world, supports more than $40 million in annual production, and gives BranchOut full control over product quality, cost structure, and supply chain efficiency.
"We spent 2024 investing heavily in building out the factory. Now that it's fully operational, Q1 shows what's possible," said Eric Healy, CEO of BranchOut. "We're just getting started. As our team settles in and gains momentum, we expect meaningful improvements in efficiency throughout Q2 and beyond."
Retail Acceleration: Warehouse Club & National Retailer Growth
BranchOut's partnership with the nation's largest warehouse club continues to exceed expectations. Following strong sales in 2024, the club has expanded its orders to five U.S. regions and increased its product count, driving nearly $3 million in sales in H1 2025 alone. Flagship products include:
- Bell Pepper Crisps – currently selling in the Los Angeles and Bay Area regions, set to expand into Texas and the Midwest soon.
- Pineapple Chips – back in Southeast clubs with nearly $900K in reorders after continued exceptional sales
- Organic Chewy Banana Bites – launching soon in Southern California and Hawaii
- Brussels Sprout Crisps, Strawberry Halves, Dragon Fruit Chips, Mango Crisps, and several other innovations are currently under consideration by the Warehouse Club, highlighting BranchOut's ongoing ability to develop and deliver innovative, high-quality products.
In addition, BranchOut has five private-label products in the nation's largest retailer, including its innovative Brussels Sprout Crisps and Carrot Sticks, now available nationwide.
Strategic Expansion Into Direct-to-Consumer (DTC)
To complement its growing branded business, BranchOut is expanding into the direct-to-consumer (DTC) channel with a focused strategy centered on e-commerce, subscriptions, and digital marketing. The company sees strong opportunity in this category, as many competing freeze-dry brands are produced in China. With newly imposed tariffs, BranchOut's offers a significant pricing advantage, along with superior texture, flavor, and nutritional retention thanks to its proprietary GentleDry™ technology.
Ingredient Channel & Industrial Expansion
BranchOut has entered into a strategic partnership with MicroDried to lead sales and distribution in the industrial ingredient channel, an initiative expected to generate $5–6 million in annual revenue. Leveraging its deep relationships with major CPG companies, MicroDried is actively expanding market access for BranchOut's high-quality ingredients. The Company successfully delivered its first order to MicroDried in Q1 and is already ramping up production for multiple follow-on orders in Q2. In parallel, BranchOut has begun fulfilling dried cherry tomatoes for leading salad kit producers and e-commerce grocery platforms, further validating the scalability and versatility of its ingredient platform.
Tariff Tailwinds Favor BranchOut
With U.S. tariffs on Chinese imports reaching 30%, BranchOut is uniquely positioned to benefit from a major shift in global supply chains. A lot of freeze-dried retail products sold in the U.S.—both branded and private label—are currently manufactured in China. In contrast, BranchOut's vertically integrated model, combining Peru-based production with U.S.-based packaging, offers a cost-efficient, scalable, and tariff-advantaged alternative.
Several leading freeze-dried snack brands generate $20M+ in annual sales across grocery and e-commerce channels but rely heavily on Chinese sourcing. BranchOut was already poised to compete aggressively with these brands due to its superior ingredient quality, proprietary GentleDry™ technology, and flexible supply chain. With the addition of steep new tariffs, the company sees a powerful opportunity to disrupt the category and gain meaningful market share.
In parallel, BranchOut is in active discussions with multiple national retailers to replace China-sourced private label SKUs with its own domestic-aligned offerings—providing both pricing stability and supply chain resilience.
Financial Context: Near-Term Losses Reflect Factory Ramp-Up and Strategic Investment
While the company reported a net loss in Q1, a significant portion is attributed to non-cash depreciation and interest expenses related to the recent completion of its state-of-the-art Peru facility. Additionally, one of the company's largest Club orders was shifted into Q2 due to customer scheduling, resulting in a shortfall in Q1 revenue relative to internal expectations.
Q1 also carried unique startup dynamics. As the factory came online, BranchOut faced a significant manufacturing backlog from orders placed prior to launch. To meet customer deadlines and maintain service levels, the company fast-tracked fulfillment by purchasing higher-cost raw materials and air shipping multiple large orders—resulting in approximately $160,000 in air freight expenses and $200,000 in excess raw material costs. These elevated costs were driven by compressed timelines rather than structural inefficiencies. With proper lead times, the sourcing team expects to secure materials at more favorable pricing going forward, significantly improving cost of goods sold in future quarters.
Further impacting margins, the facility operated at relatively low utilization throughout Q1, amplifying fixed overhead per unit. As sales continue to ramp, these costs will be more efficiently absorbed. Utilization in Q2 is already up more than 50% compared to Q1, and management expects this trend to accelerate throughout the year.
Despite these initial ramp-up challenges, the company began paying down debt with operating cash flow in Q2 and remains on track to be debt-free by year-end. Substantial improvements in gross margin and cost structure are anticipated beginning in Q2 and continuing throughout 2025.
Positioned for Long-Term Growth
"With production scaled, demand surging, and every revenue channel firing, 2025 is shaping up to be a transformational year for BranchOut," said Healy. "We are building a powerful, profitable, and defensible food platform."
BranchOut remains committed to innovation, operational discipline, and brand excellence across all channels.
About BranchOut Food Inc.
BranchOut Food is a leading international food technology company, specializing in the production of high-quality dehydrated fruit and vegetable-based products through its proprietary GentleDry Technology. This next-generation dehydration method preserves up to 95% of the original nutrition of fresh produce, offering superior quality and taste. Protected by over 17 patents, BranchOut's technology enables it to stand out as a trusted brand, ingredient and a private-label supplier. For more information, visit www.branchoutfood.com or follow us on social media here.
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Forward-Looking Statements
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