Company Overview and History
Vital Farms, a Certified B Corporation, has established itself as a trailblazer in the natural food industry, dedicated to improving the lives of people, animals, and the planet through its ethical and transparent approach to food production. With a steadfast commitment to Conscious Capitalism, the company has carved out a unique niche, catering to the growing consumer demand for sustainable and traceable food options.
Founded in 2007 in Austin, Texas, Vital Farms' journey began with a small flock of hens on a 27-acre plot of land. The company's founders maintained a strong belief that a varied diet and better animal welfare practices would lead to superior eggs. Their first sales came from farmers markets and restaurants around Austin, and less than a year later, their eggs were discovered by Whole Foods Market, Inc. From the beginning, Vital Farms sought to not simply sell eggs to a few stores, but to build a sustainable company that aligned with the family farming community and was able to profitably deliver quality products to a devoted consumer base.
In 2014, Russell Diez-Canseco joined Vital Farms and led the development of their large and scalable network of family farms. In 2015, recognizing the opportunity to elevate their production process and bolster long-term growth and profitability, Vital Farms began the design process for their Egg Central Station facility in Springfield, Missouri, which opened in 2017. This facility is capable of packing six million eggs per day and has achieved an SQF Excellent rating, the highest level of such certification from the Global Food Safety Initiative.
Demand for Vital Farms' high-quality products has enabled the company to expand their brand beyond the natural channel and into the mainstream channel through relationships with major retailers such as Albertsons Companies, Inc., The Kroger Co., Publix Super Markets, Inc., Target Corporation, and Walmart Inc. As of December 2024, Vital Farms' products were sold in approximately 24,000 stores nationwide.
Over the course of their journey, Vital Farms' founder Matthew O'Hayer has continued to inform the company's strategic vision and remains closely involved with the business as the Executive Chairperson of their Board of Directors.
Strategic Network and Sustainability Commitment
At the heart of Vital Farms' success lies its strategic network of over 425 family farms, which the company has carefully cultivated over the years. By establishing long-term partnerships with these small, independent producers, Vital Farms has created a resilient and reliable supply chain that meets the high standards of quality and animal welfare that the brand is known for. In 2024, the company further strengthened its supply chain by adding more than 125 new family farms to its network, expanding its egg sourcing capacity by over 40%.
Vital Farms' commitment to transparency and sustainability is reflected in its status as a public benefit corporation and a Certified B Corporation. These designations demonstrate the company's dedication to balancing profit and purpose, as it strives to create positive, long-term outcomes for all its stakeholders, including farmers, suppliers, customers, employees, and the environment.
Financial Performance
The company's financial performance has been nothing short of impressive. In fiscal year 2024, Vital Farms reported net revenue of $606.3 million, representing a remarkable 28.5% increase from the previous year. This growth was fueled by a 21.8% volume increase and favorable price and product mix, with the company's fast-growing organic egg portfolio contributing significantly to the top-line expansion.
Vital Farms' profitability has also been on an upward trajectory, with the company reporting gross profit of $229.9 million, or 37.9% of net revenue, in fiscal year 2024. This marked a significant improvement from the previous year's gross profit of $162.3 million, or 34.4% of net revenue. The company's adjusted EBITDA, a key metric for investors, grew by an impressive 79.2% to $86.7 million, or 14.3% of net revenue, in fiscal year 2024.
For the most recent quarter (Q4 2024), Vital Farms reported revenue of $166.0 million, representing a 22.2% year-over-year increase. Net income for the quarter stood at $10.6 million. The company's annual net income for fiscal year 2024 was $53.39 million, with annual operating cash flow of $64.82 million and annual free cash flow of $36.18 million.
Product Segments and Market Position
Vital Farms operates in two primary product segments: Eggs and Butter. The Eggs segment, which includes shell eggs, hard-boiled eggs, and liquid whole eggs, is the company's core business, generating approximately 94% of total net revenue in fiscal year 2024. This segment contributed $580.95 million in net revenue, up from $449.05 million in the prior year, representing an increase of over 29%.
The Butter segment, which includes pasture-raised butter products, accounted for $25.35 million in net revenue in fiscal year 2024, up from $22.81 million in the prior year. This 11% year-over-year increase was driven by continued consumer demand for the company's premium butter offerings.
Vital Farms operates exclusively in the United States, tapping into the large and growing U.S. natural food and beverage industry. The U.S. shell egg market accounted for approximately $12.5 billion in retail sales in 2024 and grew at a CAGR of 14.2% between December 2020 and December 2024. The U.S. pasture-raised retail egg market, in which Vital Farms is a key player, accounted for approximately $994.4 million in retail sales in 2024 and grew at an impressive CAGR of 34.5% between December 2020 and December 2024.
Operational Efficiency and Growth Strategy
The company's strong financial performance has been underpinned by its ability to effectively manage its costs and operations. Vital Farms has made strategic investments in its processing and manufacturing capabilities, including the expansion of its Egg Central Station facility in Missouri and the announcement of a new egg washing and packing facility in Seymour, Indiana. These investments are expected to further enhance the company's production capacity and operational efficiency, positioning it for continued growth.
The Egg Central Station, a 153,000 square foot facility, has the capability to pack up to six million eggs per day and has achieved the highest level of Safe Quality Food (SQF) certification. To support continued growth, Vital Farms plans to install an additional Moba egg grading system at this facility in early 2025, further increasing its overall egg processing capacity.
The new facility in Seymour, Indiana, is expected to be fully operational by 2027 and will further expand the company's already resilient supply chain. This strategic expansion aligns with Vital Farms' commitment to meeting the growing demand for its products while maintaining its high standards of quality and ethical production.
While the company has faced challenges, such as the impact of the highly pathogenic avian influenza (HPAI) outbreak in 2024 and 2025, which resulted in supply constraints, Vital Farms has demonstrated its resilience and ability to navigate these headwinds. The company's proactive approach to supply chain management, including the development of its accelerator farms, has enabled it to mitigate the effects of the HPAI outbreak and position itself for continued growth.
Future Outlook and Liquidity
Looking ahead, Vital Farms remains focused on its long-term goal of reaching $1 billion in net revenue by 2027. To achieve this target, the company has outlined a multi-faceted growth strategy that includes expanding its retail distribution, driving increased household penetration, and continuing to innovate its product portfolio to meet the evolving needs of its customers.
For fiscal year 2025, Vital Farms is forecasting net revenue of at least $740 million, representing a year-over-year increase of at least 22%. The company also expects to generate adjusted EBITDA of at least $100 million, reflecting its commitment to driving profitability alongside its growth initiatives. Capital expenditures for 2025 are projected to be between $50 million and $60 million.
It's worth noting that Vital Farms expects a modest step down in growth rate compared to recent periods, particularly in the first quarter of 2025, due to supply constraints. However, the company anticipates volumes to accelerate as supply improves throughout the year. Additionally, Vital Farms' adjusted EBITDA margin is expected to decline in 2025 compared to 2024, as the company does not expect to repeat the exceptional operational performance at Egg Central Station that was seen in the first half of 2024.
Vital Farms' long-term guidance remains unchanged, targeting $1 billion in net revenue by 2027 with a gross margin of at least 35% and an EBITDA margin of 12% to 14%.
The company's financial position remains strong, with $160.29 million in cash and cash equivalents as of December 29, 2024. Vital Farms has a debt-to-equity ratio of 0.0693, indicating a conservative approach to leverage. The company also has access to a $60 million credit line under the JPMorgan Credit Facility, providing additional financial flexibility. With a current ratio of 3.14 and a quick ratio of 2.81, Vital Farms demonstrates strong liquidity and the ability to meet its short-term obligations.
Vital Farms' success has not gone unnoticed, with the company and its CEO, Russell Diez-Canseco, being recognized for their positive impact on the environment and society. In 2025, Diez-Canseco was once again named to the MO 100 Top Impact CEO Ranking by Big Path Capital, a global impact investment firm, underscoring the company's commitment to its mission of improving the lives of people, animals, and the planet.
As Vital Farms continues to navigate the dynamic natural food landscape, its focus on ethical and sustainable practices, coupled with its strong brand recognition and loyal customer base, position the company as a compelling investment opportunity for those seeking exposure to the growing demand for conscious, responsible consumption.