The Planting Hope Company Inc. announced it has acquired the assets of Argo Tea, formerly headquartered in Chicago.
Argo Tea assets acquired by The Planting Hope Company include:
- Master supplier agreements with Sodexo, Aramark and other managed foodservice operators
- Licenses for eight cafés with ongoing operations at major colleges and universities, unlocking additional access to young, influential core consumers
- Finished goods inventory valued at more than $600,000 (approximately $812,500 CAD) (cost of goods)
- A food product with significant café industry applications that will be transitioned to the Hope and Sesame brand
"We're extremely excited about the partnership with Argo and the ability to integrate the Argo brand and relationships into Planting Hope's go-forward strategy," says Julia Stamberger. "We believe that the acquisition of master contacts and relationships with the largest managed foodservice operators in the United States will effectively accelerate Planting Hope's contract foodservice strategy by up to two years and adds to our revenue and profitability expectations in 2024 and beyond. The Argo university cafés will provide us with direct access to our core Gen Z demographic at a pivotal point in their lives when they are trying new foods and beverages and adopting lifelong choices. In addition to other benefits, these cafés will provide both a test market for Planting Hope's products and an innovation lab to trial and receive feedback on new beverage recipes and Limited Time Offer concepts that we can subsequently roll out to our café partners."
A full café licensing program and eight active Argo Tea café licenses have been acquired by Planting Hope. Planting Hope's responsibilities in managing these licenses include providing the café operators with:
- Menu design and support, including full product selection and menu development, the creation of specialty beverage recipes and promotional LTOs and supporting marketing materials, and menu board design.
- Operational guidelines, including operational manuals and employee training procedures.
- Product support, including providing access to and fulfilling orders for any specialty products not available through standard wholesale distributors (i.e. Sysco).
The company is not operating the cafés and there are no direct operational leases or liabilities that are part of the transaction. The company earns a royalty on gross sales transacted through these cafés, as well as relevant distributor markups on products supplied directly by the company to the cafés.
Beginning in August 2023 with the fall 2023 menu reset, all Argo cafés will add Hope and Sesame Barista Blend Sesamemilk and Mozaics Real Veggie Chips to their menus. In addition to sesame milk being an option for any tea or coffee beverage, each seasonal menu rotation will feature a sesame milk-based Limited Time Offer beverage.
The company plans to continue to expand the café licenses within managed foodservice operators under the master service agreements. The license agreements allow Planting Hope to develop the menus for these cafés, most of which include food offerings as well as tea and coffee beverages, and the company intends to incorporate additional food items like RightRice-based grab + go bowls and Veggicopia snack items in future menu updates.
In tandem with the Argo asset acquisition, Candace Pappas has joined the Planting Hope team as vice president, foodservice business development. A 16-year Argo Tea veteran, Pappas has worked in all areas of Argo Tea, including leading the retail café operations and most recently as President of Golden Fleece Beverages, the former owner of Argo Tea.
Pappas will be partnering with Becky Harrison, Planting Hope's vice president of foodservice operations, to fast-track the development and penetration of Planting Hope Brands into the managed Foodservice channel.