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Shares in food supplement specialist Rritual Superfoods up over 25% from IPO


Shares in food supplements specialist Rritual Superfoods [CSE: RSF] rose 40% on the company’s s debut on the Canadian Securities Exchange this week. 

The Rritual stock price was already moving fast in trading this week, up from C$0.40 to trade at close to C$0.66 at the time of writing (up over 25% in less than five days). The company is coming to the market when interest in food supplements is intense.

Next generation food supplements: adaptogens

Based in Canada, Rritual Superfoods represents an opportunity in the next generation field of adaptogens, food supplements that are used as part of health and wellness diets and which are gaining in popularity with top level athletes and film stars.

In the case of Rritual, the company is focused on developing the market for premium branded fund supplements using organic mushroom compounds. It draws on mushroom mycellum grown on gluten free whole oats and organic brown rice. It is selling into a very exacting organic food supplements market which prizes the qualities of functional mushrooms, ingredients used in ancient medicines and India and China but now finding increasing traction in the West.

Supplements like chaga powder can support the body’s immune system, while lion’s mane powder can be used to counteract the inflammatory response in the brain.

Rritual is valued at more than C$20m, and is going to be distributing its products in the Canadian and US markets initially, with plans to eventually look at overseas markets. At the helm is CEO David Kerbel, who was formerly part of the successful team that took Celsius Holdings [NASDAQ:CELH] from $400,000 to a multi-million dollar figure. Much of Celsius’ distribution success in the US is attributed to him.

The market for superfoods is growing fast

The market for super foods and especially these sorts of supplements is forecast to grow strongly over the next five years. Historically, the big players in this market are based in China and India where they serve large domestic populations. The global superfoods market was valued at $137bn in 2018, but much of that was in Asia, and the real growth for this market is going to be in North America and Europe in the next five years.

The growth in the uptake of high quality food supplements is being compared to the growth in the market for vitamin supplements in the 1970s.. The adaptogenics market is projected to grow by about 8.55% a year over the next five years. We think that might be a conservative estimate and once you strip out the more mature Asian market, 8.55% starts to look conservative. Rritual is well placed to tackle the growth in demand in North America and is already developing its strategic distribution partnerships for regional markets.

The offering was comprised of a combination of one common share of Rritual at $0.40, and a one half common share purchase warrant that entitles the holder to purchase Rritual stock at a price of $0.60 per common share for a period of 36 months from the closing of the offering, subject to an acceleration provision.

The IPO was underwritten by Clarus Securities and Canaccord Genuity Corp.

The Armchair Trader is adding Rritual Superfoods to our long term growth stock watch list and we will be following it regularly going forward.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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