Once Upon A Farm: Net Sales +42%, Guidance Raised Again — The Cooler-First Strategy Is Working

Volume-led growth and a widening funnel

Once Upon A Farm reported a standout second quarter, with net sales up 42.3% year-over-year to $85.4 million, driven almost entirely by volume. The company raised its full-year net sales guidance to $327–$335 million (36–39% growth) and its adjusted EBITDA outlook to $3–$4.5 million. This is the second upward revision in as many quarters, reflecting momentum that John Foraker described as “high-quality volume-led growth” and a business that is “gaining share in pretty much everything that we're doing.”

The growth is not just top-line — the funnel is broadening. Household penetration rose to 6.2% from 5% a year ago, while repeat rates among households with kids improved 351 basis points to 52.1%. As Foraker put it, “Our funnel is widening, and we are increasing retention and growing spend per household all at the same time.” That combination is the core of the bull story: the brand is attracting new families, converting them into repeat buyers, and then expanding their baskets across baby and kid categories.

The cooler, the club, and the innovation flywheel

The cooler strategy remains the most distinctive element of the model. Management reiterated its target of ~5,000 coolers in 2026, 8,000 in 2027, and at least 15,000 over time. Cooler productivity is rising sequentially, helped by the expansion of the refrigerated assortment — including the new meat-and-legume protein pouches and oat bar minis. Foraker noted that “at one of our larger customers, our cooler velocity increased by over 30% in the quarter compared to last quarter.” Even at a smaller scale today, the coolers act as a powerful entry point, explaining why they are strategically “super important” despite being a minority of sales.

The National Club Program was another major catalyst. In May, a national program at a major retailer drove velocities and volumes “that met our high expectations,” and management plans another, slightly smaller program in Q3 focused on toddler snack products. The hope is that these events pull new household penetration, with repeat rates high enough to retain the incremental consumers.

Innovation is also accelerating. The baby pouch growth was driven by the protein pouch launch, which is 61% incremental to Old Farm and 63% incremental to the total baby category at certain retailers. Meanwhile, kid pouch growth reaccelerated to a 22% year-over-year increase, helped by functional innovation and packaging refreshes that are lifting same-store velocities 10–15%.

We remain on track for approximately 5,000 coolers in 2026, 8,000 in 2027 and at least 15,000 coolers over time.

Margin pressure is real, but the long-term algorithm is intact

Gross margin fell 485 basis points to 35.9%, as expected, due to trade spend (including the club program), product mix, and fuel/tariff costs. SG&A deleveraged as the company invests in IPO-related stock compensation and headcount. Larry Waldman acknowledged that “the second quarter rate” of SG&A is “not representative of our long-term operating model” and that they expect increasing leverage as the business scales.

The margin pressure has led management to take selective pricing in September, but they are confident in the limited volume impact, citing strong elasticity analytics. Waldman also detailed the supply chain productivity initiatives, which he said are “designed to increase capacity, improve service and reduce costs, particularly labor-related costs.” One project “reduces staffing by 75%.” These projects require $25–$35 million in capital, some of which will be shared with co-manufacturers. Management expects initial benefits in 2027 and a larger contribution in 2028, and importantly, they stress that 2027 profitability improvement does not depend on the full benefit of these initiatives.

The financial position is clean — ~$93.5 million in cash and no debt — providing ample flexibility to fund the cooler rollout and automation projects while growing inventory to support the back-to-school and holiday seasons.

Why this matters: a company-unique growth engine

What sets Once Upon A Farm apart is not a macro tailwind like tariffs or interest rates, but the company’s own operating model. The productivity initiatives, cooler economics, and club program are all company-specific and deeply embedded in the execution story. In a global tape dominated by tariff refunds and risk factors, OFRM is a refreshing counter-narrative: a small-cap organic snack brand whose unit economics and household penetration flywheel are improving at the same time.

The second quarter demonstrated that the brand can grow while investing for the future. If the cooler and automation projections hold, the path to structurally higher margins becomes more credible. As Foraker closed, “We're still in the very early innings of building this highly disruptive baby through kid niche nutrition brand.” With guidance again raised, the market is beginning to believe it.