BranchOut Food Inc. (NASDAQ: BOF), a food technology company specializing in natural fruit and vegetable snacks through its proprietary GentleDry™ process, provided a business update on first quarter 2026 operations and ongoing production ramp activities. The company expects Q2 2026 to be a record revenue quarter, driven by major customer deliveries and record production levels.
While Q1 revenue was below the record Q4 2025 results, this was primarily due to shipment timing. Q1 served as a production and inventory build quarter ahead of the expected record Q2. During Q1, the company built substantial inventory to support large committed customer deliveries scheduled for Q2 2026. To support these deliveries, production was ramped to record levels of approximately 46,000kg in March and into Q2, marking the highest production months in company history. The increase was driven by preparation for the company's largest order to date to the nation's second largest warehouse club retailer, continued industrial ingredient growth, and ongoing shipments to the nation's largest warehouse club retailer.
BranchOut delivered the largest order in company history during Q2 to the nation's second largest warehouse club retailer. The product, Crunchy Fruit Chips, a mix of pineapple, strawberry, banana, and apple, is now on shelves nationwide in more than 600 club locations. The company is extremely encouraged by the initial sales data, which indicates the product is performing exceptionally well and currently exceeding the retailer's internal thresholds for potential everyday placement. BranchOut estimates that an everyday program for this item could represent approximately $15 million in annual recurring revenue. Management also noted that the retailer has been very pleased with the early partnership and is expected to evaluate additional innovative products from BranchOut in future periods.
BranchOut is currently in final negotiations with a large scale household name brand regarding a potential long-term tolling partnership. Following successful market validation and strong early consumer response, the customer is now preparing for a full-scale national rollout. Management expects to finalize commercial terms and potentially sign the customer during Q2 2026. Under the proposed structure, the arrangement would operate primarily as a tolling agreement, whereby the customer supplies the raw materials while BranchOut provides the drying and manufacturing services. The scale of the opportunity is significant and could potentially utilize the company's newly installed fourth large scale REV line on a nearly continuous 24/7 basis. Management estimates the program could generate approximately $6–7 million in annual revenue once fully ramped in H2. Importantly, because the customer would provide all the raw materials, the program would carry minimal associated cost of raw material relative to traditional retail programs, potentially resulting in substantially higher gross margins, improved facility utilization, and stronger operating cash flow generation.
BranchOut continues expanding its partnership with the nation's largest warehouse club retailer through additional regional programs, new product launches, and expansion into new departments. During Q2, the retailer placed another large Pineapple Chips order for the Southeast region and has already committed to an even larger follow on order scheduled for Q4. The company also secured its first regional launch of Mango Chips into the Bay Area market during Q2, further expanding its dried fruit snack platform with the retailer. Management believes Mango Chips have the potential to outperform the company's current top selling Pineapple Chips product. In addition, BranchOut is seeing significant interest in its new multipack product lines targeted toward moms and the back-to-school season during Q3 and Q4. Management noted that four regions are currently showing high intent to move forward with the program as they finalize second half planning.
BranchOut recently conducted a large-scale innovation and tasting meeting in Bentonville, AR with the world's largest retailer, showcasing more than 35 product concepts spanning multiple categories and departments. The presentation included the company's full fruit and vegetable snack platform, crunchy dried cheese products in multiple formats, shelf stable cheesecake bites, chocolate covered fruit products, and cheese and fruit snack mixes developed specifically around the growing GLP-1 and high protein/high fiber consumer trends. The meeting included buyers and merchants from more than six different categories, with management noting strong interest across multiple product lines and several potential SKU opportunities. The company believes this level of engagement from the world's largest retailer further validates the strength and versatility of BranchOut's GentleDry™ technology platform.
BranchOut's ingredient and bulk supply channel continues to strengthen and is emerging as a major growth driver. During March 2026, the head of MicroDried, BranchOut's largest ingredient customer and strategic partner, visited the company's Peru facility and expressed strong enthusiasm regarding the scale of the operation. Following the visit, MicroDried committed to additional orders for the second half of 2026 and communicated its expectation for the partnership to continue growing significantly. As a result, BranchOut now expects its ingredient and bulk supply channel to generate approximately $6–7 million in revenue during 2026, compared to nearly $2 million in 2025.
BranchOut is also expanding into the European private label market through a partnership with a prominent German based private label snack company that packages and distributes products to many of the largest retail chains across Europe, including Aldi, Lidl, Tesco, Carrefour, and Edeka. The company recently received confirmation that it expects to receive its first commercial order this month consisting of approximately 3–4 containers, representing roughly $500,000 in revenue, with management expecting the opportunity to expand significantly over time.
In support of the company's accelerating growth, Kaufman Capital has provided approximately $2.25 million in new capital during April and May 2026 through a combination of non-dilutive working capital loans and early warrant exercise. All working capital loans were provided on favorable terms at 8% interest and are non-dilutive to existing shareholders. Management believes Kaufman Capital's continued willingness to provide capital on these terms reflects strong alignment between the company's largest investor and its growth strategy.
