20 Things You Didn’t Know About Karat Packaging
Karat Packaging is an American manufacturing company that offers printing and packaging services to its customers. The company has recently decided to take the business public and begin trading on the stock market exchange. Although the IPO has been postponed, it is still pending. This has created a flurry of interest in its operation from potential investors. To help you know more about the company here are 20 things about Karat Packaging that you didn’t know.
1. The business provides a wide range of packaging products for business to business
Karat Packaging specializes in the production of a huge selection of products for the packaging of a wide range of products. A few examples include containers for a range of beverages, processed foods, dry foods, liquid cleaners, frozen food packaging and much more. If your business manufactures a product, the likelihood is nearly certain that Karat Packaging has a solution. They are a large provider of disposable packages and containers to help processing and other companies operate more efficiently.
2. Karat Packaging products will always be in demand
As long as there are dry, frozen and liquid products being made, there will be a need for the products and services that are provided by Karat Packaging. This gives the company a strong footing in the marketplace. This is one reason why Karat’s products maintain a premium level of quality with fair pricing. These factors make them a strong contender for the business of larger companies that are in need of the products and services that are offered by the company.
3. Karat also serves the restaurant industry
If you’ve ever eaten takeout, you’ll notice that the type of packaging used from one restaurant to another. The need for specific packaging exists to accommodate the type of foods that are placed in them. This is yet another example of the types of products offered by Karat. The company works with businesses to come up with the best solutions to meet their needs and expectations so the containers are suitable for the types of food that will be contained within them.
4. Karat specializes in printing
Businesses using Karat packaging products also have the opportunity to advertise their brands on the packages. Karat offers printing services that are customized to meet the individual needs of each customer served. This allows companies to have brand names printed on the materials ordered through Karat to take their brands to a new level. A few examples of how Karat’s printing services can improve the quality of your company include the use of hot/cold icons printed on beverage cups to let your customers know if it’s hot or cold. Another warns of corrosive materials for use with liquid cleaning products, other printed icons indicate whether contents and containers are microwave safe. There are practically limitless options available to businesses that purchase Karat Packaging products and opt for custom printing.
5. Karat Packaging provides training for businesses
Karat currently has a waiting list for a variety of different training sessions for businesses and their staff. These are certified training services that are scheduled to be offered to teach clients about tehir specialty drinks and to provide them with information on how to operate their businesses. These training sessions are intended for staff of new businesses that have not yet opened and the content ranges from the bubble tea beverage and others to samples of flavors and recipes sold by Karat. They are a comprehensive supplier for food services companies and training will help businesses to get the most out of the products purchased through Karat.
6. The Karat Earth division is eco-friendly
Karat Packaging has a division of products referred to as Karat Earth. The company cares about the environment and is doing their part to help preserve the health and integrity of the planet. Karat manufactures and distributes a variety of disposable products. All products within the Karat Earth brand are compostable and bio-based food and beverage disposables. This helps to cut down on the amount of refuse that will ultimately end up in the landfills around the country.
7. Karat Earth products are certified
There are two major reasons why businesses who are clients of Karat Packaging would want to go with the Karat Earth products. The first is to help do their parts and join in the effort to reduce waste to help protect the Earth’s ecosystem. The second is that the customers that they serve will have greater confidence in using their services because the company will gain respect for offering products that help to protect the planet. Select Karat eath products have been certified by three major agencies including Cedar Grove, BPI, the Sustainable Forest Initiative, and the Compost Manufacturing Alliance. These products come with icons printed on the products which give the consumers helpful information on which items are compostable.
8. The Eco-friendly product line gives Karat Packaging an edge in the market
Investors will find information about the Karat Earth line to be valuable when considering whether to invest in shares of this company. Not all packaging and printing suppliers offer disposable products that are eco-friendly. In a world where more people are becoming aware of the need to cut down on the use of disposable food containers that are not biodegradable, this gives them an edge in the industry. Consumers can appreciate the fact that the disposables which come with restaurant food they order, or the packaging from wholesale/retail companies they do business with are not going to lie in a landfill for years. Compostables such as the paper straws and several other container and packaging types will deteriorate and because of the bio-based composition, the compost that results is actually a useful byproduct for use as fertilizers for plants. It’s a win-win situation for everyone and this is one more reason why Karat Packaging is a unique company within its market niche.
9. Karat Packaging has been in business for 11 years
Potential investors must also investigate how long a company has been in business when determining if it is a worthy risk for their investment dollars. Karat Earth was founded in 2008 under the Karat Packaging company. It’s not a brand new fledgling business. They’ve been in operation for more than a decade.
10. The mission of Karat Earth is strong and the products are sustainable
Karat Earth is an integral part of Karat Packaging and the reason we’re spending time explaining this division is because of the positive impact that it has on the company as a whole. The environmentally conscious division that offers plant-based disposables has a mission to provide products that are made from renewable sources. Sustainability of product sources is an important aspect of a company’s ability to continue production. Two of the resources used in the creation of the disposables are Bagasse and PLA which are both renewable, and these core ingredients used in Karat Earth products help to reduce waste by allowing the products to compost.
11. Karat Packaging is a subsidiary of Lollicup USA
Lollicup USA is the parent company for the Karat, Karat Earth, Tea Zone and Total Clean brands. Alan Yu and Marvin Cheng founded Lollicup USA in 2000 to provide businesses with alternative packaging resources through the four brands that are offered by the business. The products are intended to enhance the quality of client products and services through customized and eco-friendly services and products.
12. They focus on B2B growth
Another interesting aspect of Karat Packaging is that the parent company is reaching out to businesses to help them establish strategies for growth, expansion and brand recognition. They do much more than simply offer packages, containers for food products and printing. Karat Packaging sits with leaders of businesses and assists them in putting together a comprehensive plan and those who buy Karat Packaging products are eligible to receive this specialized assistance. Karat helps businesses to achieve needed growth through specialized training sessions. They are currently revising the training courses but are accepting new businesses on the waiting list for certified training seminars in the near future. This is a highly valuable type of consulting and it enriches the quality of Karat Packaging, which makes it more attractive to investors considering the purchase of shares.
13. There are five locations open
Karat Packaging by Lollicup USA is headquartered in Chino, California. There are four other locations open for customers in Texas, South Carolina, Washington, and New Jersey. These locations provide administrative functions and they also serve as main distribution centers.
14. Karat Packaging, Inc filed its initial paperwork in September 2018
The board of Lollicup USA and Karat Packaging made the decision to take the company public and offer shares for sale on the market in September of 2018. This is when paperwork was filed for the IPO with the U.S. Securities and Exchange Commission. Karat Packaging, Inc. was listed as a holding company for Lollicup USA, Inc. as a manufacturer of cups, lids, tableware, cutlery, straws, and food packaging. The IPO filing also described the compostable products and the training and advisory services offered for businesses and their staff. It is worth noting that although it has been in business for some time, the company
15. Karat Packaging has expanded the operation
The original manufacturing location in Chino, CA. is 300,000 square feet. They opened another plant in Rockwell, Texas comprising 500,000 square feet of space for the plant that went into full operation in 2019. Karat’s recent expansion also includes a 190,000 square foot distribution location in Branchburg, New Jersey, in 2019, and they have existing distribution centers in Avenel, New Jersey, Summerville, South Carolina, and Sumner, Washington. The strategic placement of the locations allows them to move quickly and efficiently serve businesses within these regions.
16. Karat Packaging has some large clients
A few of the customers of Karat Packaging includes the Applebees Grill and Bar restaurant chain, Chili’s Grill and Bar, Chipotle Mexican Grill, In-N-Out Burger, Panda, Express, and Corner Bakery Cafe. These are very large chains and it builds confidence to know that Karat is doing such a high volume of business with larger chain based food suppliers. They also supply products for smaller chains and businesses including pizza parlors, bubble tea cafes, frozen yogurt shops, boutique coffeehouses and more.
17. Karat makes interesting food products
Karat also provides an interesting selection of food products for food services businesses. One of their most highly featured products is Bubble tea, which is also known as boba. It’s the beverage that has tapioca balls within the drink to add flavor. The roots of the company are actually in the bubble tea cafe niche and it at one time operated a network of these locations but has sold most of the physical businesses off to focus on product production versus retail sales.
18. The Initial Public Offering was started with a clear purpose
Karat Packaging filed for its initial public offering to raise $50 million through the sale of its common stock. They listed the intended use for the funds raised as beign for the expansion of the company. They are a fast-growing company within the packaging manufacturing industry and the prospects are favorable for sustainability, continued growth, and profitability.
19. Financial Performance Summary
the Summery of Karat Packaging Inc.’s financial performance shows that there has been a fluctuating operating profit with a swing to negative cash flow from operations at times. However, there is a growing topline revenue with increased gross profit and variable gross margin.
20. Karat Withdrew its filing for IPO
Karat Packaging Inc was officially founded in 2018 when it was incorporated, however, the business has been in operation for many years prior to making KP official as a brand and subsidiary of Lollicup. The company employs 542 workers at the California plant. The prospectus is available on the company’s official website. Karat was to be listed as a publicly-traded company on the Nasdaq Stock Exchange under the ticker symbol KRAT with 5 million common shares for sale with a price range between $7.00 to $9.00 per share and an estimated value of $40 million, downgraded from the original $50m expected. Managers for the IPO were set to be National Securities with co-managers of the IPO Loop Capital Markets with trading commencing on October 16, 2019, but Karat made the decision to withdraw the IPO and postpone going public at this time. The IPO is still considered to be pending and although no date has yet to be determined, it’s believed that it will be offered at a time that is the most advantageous to the company.
