The success of the By Manu brand nationally across Woolworth’s stores to create a new category has enabled it to engage actively with other major retailers. In February, Coles launched the By Manu sauce brand in its NSW Coles Local’ format stores. If the rollout is successful, we believe the products will be expanded to cover additional Coles stores nationally. The Coles opportunity has the potential to see revenue nearly double over the nex 1-2 years should the store footprint be similar to that of the current Woolworths channel. Engagement with other major retailers continues to progress as we continue on our journey to turn By Manu into one of Australia’s most loved food brands.

Whilst there is still tremendous growth in the Australian market, By Manu is looking to expand across the region. Preparation is underway to launch in New Zealand in 2023. Woolworths has a strong presence in New Zealand through its Countdown stores, and with the success of the By Manu brand in Australian stores, it will be launching to 300+ Countdown stores across NZ starting in late 2023. Manu has a strong brand presence in NZ with My Kitchen Rules Australia & previous series of MKR NZ. Manu has just completed filming for My Kitchen Rules in NZ, and this provides an incredible opportunity to capitalise and push brand awareness for the By Manu brand.

In FY20 By Manu launched initially into 330 Australian Woolworth stores. During that period it generated just under $400k in revenue. The launch into Countdown will see a similar store footprint, and hopefully provide a similar uplift in revenue over the first 12 months from launch. This also opens the potential for additional New Zealand retailers. It is the intention that the By Manu sauces sold in New Zealand will be made locally from fresh similar produce, true to the ethos of the brand. Our current manufacturer in Queensland has operations and facilities in New Zealand that would allow us to replicate our current production in New Zealand for that market. This would also remove any international freight and logistics costs and greatly reduce any environmental impact from trans-tasman shipping.

We truly believe that once you taste our sauce, you won’t go back. However, customers are used to buying their sauces from the ambient shelf in the ‘sauce’ aisle. Made from real food with no added preservatives, our sauces need to be kept refrigerated within the grocery store. This requires us to educate consumers and slightly shift

their shopping behaviours. We have previously run successful in-store tastings nationally and have seen significant increase in sales in those stores following the tastings.

To ensure we acquire customers we will be investing in above the line marketing and in-store tastings. Our initial plan is to do quarterly tastings across 900+ Woolworths stores. This may be adjusted depending on funds raised. Should other retailers be brought on, the strategy may also be adjusted to incorporate these new stores.

In addition, we plan to leverage our strong relationships with Woolworths to roll out additional in-store marketing campaigns to drive awareness amongst shoppers, including POS and digital campaigns.

By Manu is constantly investing in NPD, with Manu himself spending time creating recipes. The team has been working with our manufacturer to take these recipes and prepare to roll nationally. New products currently under development include a new range of By Manu Soups and By Manu Stocks.

As we expand our product range and distribution to other retailers at the beginning of 2023 we launched our new packaging for our products. The new pack designs are brighter giving a more appealing look on the shelf. New packaging also includes QR codes that will give consumers direct access to the By Manu website in order to access a variety of different recipes, cooking videos with Manu for serving suggestions, tips and meals etc. in relation to that product.

The commercial channel provides a strong opportunity for the brand. This includes selling our sauces to hotels, restaurants and pubs that require restaurant quality finishing sauces at a cost effective price. The channel is already providing strong promise. We have secured a major hotel client, Laundy Hotels, and have our sauces in 24 of their venues. To really leverage this channel we will need dedicated sales staff, with funds from the raise used to bring on a dedicated team.

The fresh, no-nasties finishing sauce category is nascent in Australia. By Manu one of the first brands to develop this category and as such holds a strong position in the market. As the market grows, new entrants will provide greater competition, possibly impacting market share and margins.

Mitigation

The By Manu team strongly believe that new entrants into the space further validate the commercial viability and opportunity the segment presents. By Manu will look to build its defensibility through consistent, quality products. Beyond this, By Manu is firmly committed to becoming more than a sauce brand, diversifying its product range, further insulating it from new entrants into the segment.

By Manu currently has 80% of revenue coming through its contract with Woolworths to distribute to 900+ stores. Should this relationship be impacted, the Company’s revenue and operations may be significantly impacted.

Mitigation

Woolworths is strengthening its relationship with the By Manu brand as it looks to expand the range across 400 Countdown stores in New Zealand. The By Manu team are also looking to further diversify its revenue stream through a 7 store pilot with Coles which may lead to a more comprehensive store rollout in the latter half of 2023. Furthermore, the commercial kitchen market currently holds 15% revenue share and is on schedule to grow strongly with several new venues coming on-board in the coming months.

By Manu sauces are made from real, natural and locally grown ingredients. Impacts to local food security and supply may impact availability of ingredients and put upward pressure on input costs, eroding margins which may lead to price increases for consumers.

Mitigation

By Manu works incredibly closely with its manufacturers to ensure ingredients are seasonally sourced from around Australia. As the brand moves overseas, initially into New Zealand, it will set up similar local manufacturing arrangements in that region. Ultimately By Manu customers are comfortable paying a slight premium to ensure they are eating real, locally sourced ingredients. Any impact to price will be a last resort.

By Manu relies on a sole Queensland based manufacturer to produce its products. Any issues with respect to that manufacturer or unforeseen delays may result in the unavailability of stock and loss of sales opportunities.

Mitigation

Although By Manu relies on a sole manufacturer they are part of a larger parent company based in New Zealand. If needed production could be moved to this facility in an emergency as they have the same equipment and have been a part of the development process.

The team is currently a very lean, founder led business with long-term employee and Managing Director, Natalie Street. Given their strong operational involvement in the day-to-day operations of the business, anything that would see them abruptly removed from the business may have a negative impact on operations.

As the Company continues to grow, the Company may also need to hire additional key personnel. A delay or inability to recruit such key personnel may have an adverse effect on the management and financial performance of the Company.

Mitigation

Part of this raise is bringing in key personnel across sales, marketing and operations to set the team up for growth and reduce the reliance on the current team members to drive every aspect of the business.

The Company is aware that the strength of its brand and reputation is critical to its short term success. Accordingly, the Company must maintain consistent levels of quality and service in its product offering.Similarly, as the Company is closely associated with Manu Feildel, Manu must ensure that he continues to grow and maintain his own personal brand. If either the Company or Manu are unable to achieve the above, the Company’s brand and reputation could be damaged.

Mitigation

A part of the raise plan is to increase brand awareness to grow the profile of the brand as a stand alone company. Manu’s profile is still growing due to his current media contracts and he will commit to maintaining his brand for the company.