We begin coverage of Stryve with a target valuation of $ 12. According to our estimates, in 2020 the company’s share of the meat snack market was 0.5%, while by 2026 Stryve’s market share will increase to 3%. We believe the meat snacks market will grow by 5% CAGR to $ 5 billion by the end of 2026. The company now sells its products through 30,000 stores, including Walmart, Aldi, CVS and 7-Eleven. Since the beginning of the year, the number of points of sale has grown by 8 thousand, while Stryve products hit the shelves of Target, Costco, Dollar General and Wawa. The company is actively developing digital sales channels. Thus, in 1H21 online sales grew by 136% year-on-year.
Stryve’s success lies in its efficient product line, steadily growing demand and high barriers to entry. More and more consumers prefer meat snacks. Thus, the meat snack market is growing faster than the market for snacks as a whole for two main reasons. First, consumers are looking to diversify their diet with high-protein snacks. Second, there are more brands and marketing programs that are increasing interest in this category of products in terms of specialized diets. The USDA maintains a high-quality standard for dried and cured meat production, but the regulator’s classifier lacks an identification standard for biltong, which limits its export opportunities and at the same time creates significant obstacles to competition.
Stryve uses an air-drying method to manufacture its products, which provides 40-50% more protein than traditional jerky, so the company’s products, among other benefits, do not contain sugar. With changing consumer preferences and trends in mind, and the growing market for cold cuts, we see significant growth potential for Stryve’s business. While Stryve’s manufacturing facility can support the business with $ 100 million in annual revenues, management believes it is possible to double the scale with reasonably moderate capital expenditures. We project that Stryve’s revenue in fiscal 2021 will be $ 32.4 million. By the end of fiscal 2022, the figure will double to $ 68.8 million. By 2026, the company’s revenues will increase to $ 139.3 million.
Stryve Foods manufactures, markets, and sells Biltong air dried meat snacks within the broader healthy / convenient snacking categories. Biltong is a process for preserving meat through air drying, originated in South Africa centuries ago, which locks in flavor and nutrients; the company’s products are made of beef and spices, never cooked, contain zero sugar, and are MSG, gluten, nitrate, nitrite, and preservative free. Stryve’s portfolio comprises the Stryve, Kalahari, Braaitime, and Vacadillos brands. The company was founded in 2017, and is headquartered in Plano, Texas.