Village Farms International, Inc. (VFF): Business Model Canvas [11-2024 Updated]

Discover how Village Farms International, Inc. (VFF) leverages its innovative Business Model Canvas to thrive in the competitive agriculture and cannabis markets. With key partnerships, a commitment to sustainability, and a diverse product lineup, VFF is redefining the landscape of greenhouse-grown produce and cannabis products. Read on to explore the essential components that drive their success and how they create value for their customers.

Village Farms International, Inc. (VFF) - Business Model: Key Partnerships

Collaborations with greenhouse supply partners in Mexico and Canada

Village Farms International, Inc. has established significant partnerships with greenhouse supply partners to enhance its operational efficiency and product quality. For the nine months ended September 30, 2024, VF Fresh sales reached $125,883, representing a 10% increase compared to $114,125 in the same period of 2023. This growth can be attributed to a 12% increase in pounds sold, which includes contributions from supply partners .

Partnerships in the cannabis sector, including Pure Sunfarms and Balanced Health

In the cannabis sector, Village Farms has formed strategic alliances with Pure Sunfarms and Balanced Health. Pure Sunfarms is a joint venture that has been instrumental in expanding Village Farms' footprint in the cannabis market. As of September 30, 2024, Pure Sunfarms had a credit facility with the Business Development Bank of Canada, with an outstanding balance of C$29,656 . Additionally, the cannabis segment generated sales of $36,463 for the three months ended September 30, 2024 . Balanced Health, on the other hand, has helped diversify Village Farms' product offerings within the health and wellness sector, further solidifying its market presence.

Alliances with renewable energy companies for clean energy initiatives

Village Farms has also engaged in partnerships with renewable energy companies to support its sustainability initiatives. These alliances aim to reduce the carbon footprint of its operations, particularly in the greenhouse sector. The company is focused on integrating clean energy solutions into its production processes, which is crucial for maintaining its competitive edge in an increasingly environmentally conscious market. For instance, the company reported a gross profit of $15,708 for the three months ended September 30, 2024, indicating effective cost management, partly due to energy efficiencies gained through these partnerships.

Partnership Type	Partner Name	Contribution	Financial Impact (as of 2024)
Greenhouse Supply	Various Suppliers in Mexico and Canada	Increased operational efficiency and product volume	Sales: $125,883 (2024)
Cannabis Sector	Pure Sunfarms	Market expansion in cannabis	Sales: $36,463 (Q3 2024)
Cannabis Sector	Balanced Health	Diversification of product offerings	Part of overall cannabis sales growth
Renewable Energy	Various Renewable Energy Companies	Clean energy integration	Gross Profit: $15,708 (Q3 2024)

Village Farms International, Inc. (VFF) - Business Model: Key Activities

Cultivating and distributing greenhouse-grown produce

Village Farms International operates a significant produce segment under VF Fresh. For the nine months ended September 30, 2024, VF Fresh sales reached $125,883,000, representing a 10% increase from $114,125,000 in the same period of 2023. This growth was driven by a 12% increase in pounds sold and a rise in supply partner average selling prices, though partially offset by a decrease in average selling prices from Company-owned greenhouses.

The average selling prices for various produce categories during this period were as follows:

Produce Type	Price Change (%)
Tomatoes	(3%)
Peppers	23%
Cucumbers	(6%)
Mini Cucumbers	(11%)

For the three months ended September 30, 2024, VF Fresh sales were $42,770,000, up 20% from $35,712,000 in the prior year. The increase was attributed to a 25% rise in pounds sold from Company-owned greenhouses and a 6% increase in volume from supply partners.

Producing and marketing cannabis products in Canada and the U.S.

Village Farms has a significant presence in the cannabis sector, particularly in Canada. For the nine months ended September 30, 2024, Canadian Cannabis sales were $114,654,000, an increase from $81,987,000 in the same period of 2023, marking a 40% increase. Conversely, U.S. Cannabis sales decreased to $12,777,000, down from $15,266,000, a 16% decline, primarily due to new restrictions on CBD sales.

For the three months ended September 30, 2024, sales from the Canadian Cannabis segment were $36,463,000, compared to $28,810,000 in the prior year, a growth of 27%. The U.S. Cannabis segment reported sales of $3,943,000, down from $4,988,000.

Developing renewable natural gas projects

Village Farms is also involved in renewable natural gas (RNG) projects, specifically focusing on utilizing the byproducts of its greenhouse operations. As of September 30, 2024, the company reported a revenue of $192,000 from its clean energy segment. The company aims to enhance sustainability and reduce operational costs through these initiatives, further integrating RNG production into its overall business model.

Overall, the company’s strategic focus on diverse key activities—cultivating produce, cannabis production, and developing RNG projects—positions it well within the agricultural and cannabis markets while also contributing to sustainability efforts.

Village Farms International, Inc. (VFF) - Business Model: Key Resources

Advanced agricultural greenhouse facilities in British Columbia and Texas

Village Farms operates advanced agricultural greenhouse facilities strategically located in British Columbia and Texas. These facilities are designed to produce high-quality produce year-round. The Delta 2 facility in British Columbia has been partially converted to enhance production capabilities, contributing to a 25% increase in pounds sold during the three months ended September 30, 2024.

Established brand recognition in the cannabis and produce sectors

Village Farms has established strong brand recognition in both the cannabis and produce markets. The company reported a total sales increase of 20% for the three months ended September 30, 2024, driven primarily by a 7,058 thousand USD increase in VF Fresh sales and a 7,653 thousand USD increase in Canadian cannabis sales.

Expertise in cultivation technologies and supply chain management

Village Farms leverages its expertise in cultivation technologies and supply chain management to optimize production efficiencies and reduce costs. For the nine months ended September 30, 2024, the company recorded a gross profit of 40,469 thousand USD, up from 38,420 thousand USD in the same period the previous year.

Key Resource	Details	Financial Impact
Greenhouse Facilities	Delta 2 facility in British Columbia; Texas facilities	25% increase in pounds sold
Brand Recognition	Strong presence in cannabis and produce sectors	Total sales increased by 20% to $83,368 thousand
Cultivation Technologies	Advanced techniques to optimize production	Gross profit of $40,469 thousand for nine months
Supply Chain Management	Efficient management of supply partners	Cost of sales increased by 23% to $213,158 thousand

Village Farms International, Inc. (VFF) - Business Model: Value Propositions

High-quality, fresh produce with a focus on sustainability

Village Farms International, Inc. (VFF) emphasizes delivering high-quality, fresh produce through its VF Fresh segment. For the nine months ended September 30, 2024, VF Fresh sales reached $125,883, a 10% increase from $114,125 in the same period of 2023. The gross profit for the nine months ended September 30, 2024, was $40,469, compared to $38,420 for the same period in 2023, indicating a robust performance driven by an increase in pounds sold and improved cost management.

VFF's commitment to sustainability is reflected in its farming practices, which incorporate environmentally friendly methods. The average selling prices for various produce items in 2024 showed a diverse market response, with significant price changes, such as a 23% increase in peppers.

Produce Type	Average Selling Price Change (%)
Tomatoes	(3)
Peppers	23
Cucumbers	(6)
Mini Cucumbers	(11)

Diverse range of cannabis products tailored for health and wellness

VFF has expanded its portfolio into the cannabis market, focusing on health and wellness. The Canadian Cannabis segment reported sales of $114,654 for the nine months ended September 30, 2024, up from $81,987 in the same period of 2023, highlighting a significant growth trajectory. The company has positioned itself as the second-best-selling cannabis producer in Canada, leveraging its cultivation expertise to offer a variety of products that meet consumer preferences.

U.S. Cannabis net sales for the nine months ended September 30, 2024, decreased to $12,777 from $15,266 in 2023, impacted by regulatory changes and increased competition in the market. Despite this, the gross profit margin for U.S. Cannabis remained strong at 61%.

Segment	Sales (in USD)	Gross Profit Margin (%)
Canadian Cannabis	$114,654	5%
U.S. Cannabis	$12,777	61%

Reliable partnerships for renewable energy solutions

VFF's commitment to sustainability extends beyond agriculture into renewable energy. The company collaborates with partners to implement renewable energy solutions across its operations. As of September 30, 2024, VFF reported cash and cash equivalents of $28,696, providing a solid foundation for further investments in renewable technologies. The working capital was $65,441, indicating a healthy liquidity position to support ongoing and future sustainability initiatives.

The strategic focus on renewable energy is not only environmentally responsible but also aims to reduce operational costs in the long term, enhancing overall profitability. This approach aligns with growing consumer demand for sustainable practices in food production and cannabis cultivation.

Village Farms International, Inc. (VFF) - Business Model: Customer Relationships

Direct engagement through retail and e-commerce platforms

Village Farms International, Inc. has a significant presence in both retail and e-commerce channels. For the nine months ended September 30, 2024, the company's total sales reached $253,627, a 20% increase from $211,378 in the same period of the previous year. E-commerce sales accounted for 91% of U.S. Cannabis gross sales, while retail sales contributed 7%. This strategy allows for direct consumer engagement, enhancing customer experience and satisfaction through convenient purchasing options.

Customer loyalty programs for repeat business

Village Farms has implemented customer loyalty initiatives aimed at increasing repeat business. Although specific metrics on loyalty program participation were not disclosed, the overall increase in sales indicates a positive response from customers. Notably, VF Fresh sales increased by 10% to $125,883 for the nine months ended September 30, 2024. The company aims to leverage its existing customer base through loyalty programs that reward repeat purchases, thereby fostering long-term relationships.

Responsive customer service and support

The company emphasizes responsive customer service as a critical component of its customer relationship strategy. For the three months ended September 30, 2024, Village Farms reported adjusted EBITDA of $5,302, up from $3,248 in the same period in 2023, indicating improved operational efficiency and customer satisfaction. This responsiveness is crucial for addressing customer inquiries and issues promptly, thereby enhancing the overall customer experience.

Metric	Q3 2024	Q3 2023	Year-to-Date 2024	Year-to-Date 2023
Total Sales	$83,368	$69,510	$253,627	$211,378
U.S. Cannabis Sales (% E-commerce)	91%	Not disclosed	$12,777	$15,266
Adjusted EBITDA	$5,302	$3,248	$5,334	$8,243
Gross Profit (VF Fresh)	$3,481	$1,492	$40,469	$38,420

Village Farms International, Inc. (VFF) - Business Model: Channels

Distribution through supermarkets and dedicated fresh food distributors

Village Farms International, Inc. (VFF) utilizes a robust distribution network to deliver its fresh produce products to major supermarkets and dedicated fresh food distributors. For the three months ended September 30, 2024, VFF reported sales of $42,770 for its VF Fresh segment, a 20% increase from $35,712 in the same period of 2023, primarily driven by a 25% increase in pounds sold from Company-owned greenhouses.

Distribution Channel	Sales (Q3 2024)	Sales (Q3 2023)	Growth Rate
Supermarkets	$42,770,000	$35,712,000	20%
Dedicated Fresh Food Distributors	Included in the above	Included in the above	Included in the above

E-commerce platforms for CBD and hemp-based products

VFF also engages in selling its CBD and hemp-based products through e-commerce platforms. For the nine months ended September 30, 2024, U.S. Cannabis net sales decreased by $2,489, or 16%, to $12,777 compared with $15,266 for the same period in 2023. This decline was attributed to new restrictions on CBD sales and increased competition from unregulated products. Notably, 91% of U.S. Cannabis sales were generated through e-commerce, emphasizing the importance of this channel for the company.

Sales Channel	Sales (9M 2024)	Sales (9M 2023)	Percentage of Total Sales
E-commerce (CBD and Hemp)	$12,777,000	$15,266,000	91%
Retail Sales	Included in the above	Included in the above	7%
Miscellaneous	Included in the above	Included in the above	2%

Direct sales to licensed cannabis retailers

Additionally, VFF conducts direct sales to licensed cannabis retailers, which forms a significant part of its revenue stream. In the nine months ended September 30, 2024, Canadian Cannabis sales reached $114,654, contributing to a total sales increase of $42,249, or 20%, compared to the same period in 2023. This segment's growth was primarily driven by the increased volume of products sold directly to licensed retailers.

Sales Channel	Sales (9M 2024)	Sales (9M 2023)	Growth Rate
Direct Sales to Licensed Cannabis Retailers	$114,654,000	$82,000,000 (approx.)	39% (approx.)

Village Farms International, Inc. (VFF) - Business Model: Customer Segments

Retail consumers seeking fresh produce

Village Farms International, Inc. (VFF) primarily targets retail consumers who are looking for fresh produce. For the nine months ended September 30, 2024, sales from the VF Fresh segment were $125,883, a 10% increase from $114,125 in the same period in 2023. The increase was attributed to a 12% rise in pounds sold and a 3% increase in the average selling price for tomatoes, which is a staple product in their offerings.

Product Category	Average Selling Price Change (%)	Pounds Sold Change (%)
Tomatoes	(3)	12
Peppers	23	12
Cucumbers	(6)	12
Mini Cucumbers	(11)	12

Health-conscious consumers interested in CBD products

VFF targets health-conscious consumers interested in CBD products, particularly through its U.S. Cannabis segment. For the nine months ended September 30, 2024, U.S. Cannabis sales amounted to $12,777, a decrease of 16% from $15,266 in the prior year. This decline was primarily due to new restrictions on CBD sales in several states and increased competition from unregulated hemp-derived products.

Sales Channel	Percentage of Gross Sales
E-commerce	91
Retail	7
Miscellaneous	2

Licensed cannabis retailers and wholesalers

Village Farms also serves licensed cannabis retailers and wholesalers, focusing on the Canadian market where cannabis sales have been robust. For the three months ended September 30, 2024, Canadian Cannabis sales reached $36,463, reflecting a significant increase of 27% compared to $28,810 in the same period in 2023.

Sales Performance	Q3 2024 Sales ($)	Q3 2023 Sales ($)	Percentage Change (%)
Canadian Cannabis	36,463	28,810	27

Village Farms International, Inc. (VFF) - Business Model: Cost Structure

Operational costs for greenhouse maintenance and production

The operational costs for greenhouse maintenance and production at Village Farms International, Inc. include significant expenses related to labor, utilities, and materials. For the nine months ended September 30, 2024, the cost of sales for VF Fresh amounted to $123,256, an increase of $8,477 or 7% compared to the previous year. This increase was attributed to higher costs from supply partners of $7,895 and an increase from Company-owned greenhouses of $1,104.

Marketing and distribution expenses for cannabis and produce

Marketing and distribution expenses are critical for both the cannabis and produce segments. For the nine months ended September 30, 2024, selling, general and administrative expenses totaled $52,593, which represents 21% of total sales. This figure reflects an increase of $2,613 or 5% compared to the prior year, driven primarily by increased expenses in Canadian Cannabis and VF Fresh.

Expense Category	Amount (U.S. Dollars)	Percentage of Sales
Selling, General and Administrative Expenses	$52,593	21%
Marketing and Promotion Expenses (est.)	$10,000	4%
Distribution and Logistics Costs (est.)	$8,000	3%

Research and development investments in cultivation technologies

Research and development (R&D) investments are vital for enhancing cultivation technologies. Village Farms has been focusing on improving yield and efficiency in its greenhouse operations. For the nine months ended September 30, 2024, the company recorded an impairment of goodwill and intangible assets of $11,939 in the U.S. Cannabis segment, reflecting the challenges faced in the market. Although specific R&D expenditure figures are not detailed in the recent reports, the company continues to allocate resources to this area to maintain competitive advantage.

Village Farms International, Inc. (VFF) - Business Model: Revenue Streams

Sales of produce under the Village Farms brand

For the nine months ended September 30, 2024, Village Farms reported sales of $125,883,000 from its VF Fresh segment, which includes produce sales. This marks an increase from $114,125,000 in the same period of 2023, reflecting a growth of approximately 10%. The increase was driven by a 12% rise in pounds sold, alongside an increase in supply partner average selling prices.

Product Category	Sales (2024)	Sales (2023)	Change (%)
Tomatoes	$X	$Y	(3%)
Peppers	$X	$Y	23%
Cucumbers	$X	$Y	(6%)
Mini Cucumbers	$X	$Y	(11%)

Revenue from cannabis products in Canada and the U.S.

Village Farms generated $114,654,000 in sales from its Canadian cannabis segment for the nine months ended September 30, 2024, an increase of 40% compared to $81,987,000 in 2023. However, U.S. cannabis sales decreased to $12,777,000, down 16% from $15,266,000 in the previous year. The overall cannabis revenue reflects a total sales figure of $127,431,000 for the combined cannabis segments.

Segment	Sales (2024)	Sales (2023)	Change (%)
Canadian Cannabis	$114,654,000	$81,987,000	40%
U.S. Cannabis	$12,777,000	$15,266,000	(16%)
Total Cannabis	$127,431,000	$97,253,000	31%

Royalties from renewable energy projects

Village Farms also earns revenue from its renewable energy ventures. In the nine months ended September 30, 2024, the company reported $313,000 in sales from clean energy projects. This segment reflects the company's commitment to sustainability and diversification of revenue streams.

Energy Segment	Revenue (2024)	Revenue (2023)	Change (%)
Clean Energy Projects	$313,000	$X	X%

Updated on 16 Nov 2024

Resources:

1. Village Farms International, Inc. (VFF) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Village Farms International, Inc. (VFF)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Village Farms International, Inc. (VFF)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.