FREQUENTLY ASKED QUESTIONS
IS THE MAIN INVESTMENT THESIS OF BUILDING A BAKERY SAVING ON TRANSPORTATION COSTS?
Our vertically integrated flour mill, bakery, and wheat delivery system delivers significant cost efficiencies. However, the most substantial savings—approximately 35%—stem from our innovative warehouse model, which outperforms traditional Direct Store Delivery (DSD) distribution. This cost-effective approach is enabled by our proprietary bread and bun formulations, which extend shelf life, ensuring superior product quality and operational efficiency.
WHAT IS TECHNOLOGY THAT EXTENDS SHELF-LIFE BREAD TO 50-60 DAYS?
The primary challenges to extending the shelf life of bread and buns are mold growth and staling. GWG's proprietary technology overcomes these hurdles through advanced formulations and processes that significantly delay starch retrogradation (staling) and prevent mold growth. Our innovative approach leverages naturally occurring enzymes in a unique, proprietary formulation, ensuring superior freshness and quality.
WHY IS IT A KEY DIFFERENTIATOR? PRICE? TASTE? OR HEALTH?
GWG's primary competitive advantage lies in delivering premium-quality bread and buns at a lower price point than current market offerings, while maintaining strong profit margins. This strategic balance of cost leadership and profitability positions GWG as a disruptive force in the bread and bun industry, driving value for customers and sustainable growth for the company.
WHY DO YOU THINK YOUR BREAD IS BETTER THAN WONDER BREAD? HOW DO THEY COMPARE IN TASTE?
Golden Waves Grain (GWG) redefines excellence in the bread and bun market through a compelling combination of innovation, quality, and value. Unlike conventional products that rely on outdated enzyme technology, resulting in an undesirable "gummy" texture, GWG’s proprietary enzyme technology prevents staling while maintaining a superior, non-gummy soft crumb. This ensures an exceptional eating experience throughout our products’ impressive 60-day shelf life.
What sets GWG apart is our unique value proposition: enhanced traceability through identity preservation methods, cutting-edge innovation, and unparalleled taste. Our optimized distribution model enables highly competitive pricing, but it is the superior flavor and quality of our bread and buns that we believe will captivate consumers and drive demand. While we make no health claims, our products stand out on grocery store shelves, offering a consistently delightful eating experience. This commitment to quality was validated by a panel of AWG representatives, who unanimously praised GWG’s bread as the best-tasting they had ever experienced.
OPERATIONALLY WHY DO YOU THINK A SINGLE MILL CAN OUTPERFORM/ACHIEVE ECONOMIES OF SCALE AGAINST THE ESTABLISHED PLAYERS?
Golden Waves Grain (GWG) revolutionizes the bread and bun industry through a highly efficient, vertically integrated model that combines a 3,500-cwt/day wheat mill with a state-of-the-art commercial bakery under one roof. Unlike standalone mills that struggle to compete with larger, established competitors, GWG’s co-located mill and bakery create significant cost savings by eliminating transportation and storage expenses. This streamlined approach is further enhanced by our Identity Preservation (IP) program, which ensures traceability and quality control, supported by our dedicated network of producer wheat farmers.
While traditional bakeries grapple with razor-thin margins, relying on high-volume, low-margin production to cover fixed costs, GWG breaks this cycle. By controlling the wheat supply chain, we focus on crafting premium-quality bread and buns that deliver exceptional taste and maintain robust profit margins. At GWG, we transcend the conventional divide between millers and bakers, uniting both disciplines to create a synergistic, innovative, and highly competitive business model that redefines industry standards.
DOES THE MANAGEMENT TEAM HAVE THE SKILLS TO RUN THIS MILL? HAVE THEY DONE IT BEFORE?
Golden Waves Grain is powered by a team of seasoned professionals with extensive expertise in mill and bakery operations. Our key personnel, including Brend King, Rob Kissick, Brian Stevenson, Jon McCormick, and Angie Singer, bring proven track records of successfully managing facilities significantly larger than our current project. Their collective experience ensures operational excellence and positions GWG for success in delivering high-quality, innovative bread and bun products. For detailed qualifications, please refer to their attached resumes.
HOW MUCH HAS BEEN RAISED TO DATE?
Golden Waves Grain has been focused on producer investors first to establish a guaranteed supply of 2M bushels of identity preserved wheat required for annual operation of our mill. Each producer unit includes an agreement to sell GWG 10,000 bushels of wheat annually. We are well on our way to $10M in Producer investments and the required 2M bushels of wheat.
BESIDES WHEAT, WHAT ARE THE LARGEST INPUTS?
Golden Waves Grain optimizes operational efficiency through strategic cost management of key inputs: flour, labor, packaging, natural gas, and electricity. A pivotal partnership with the City of Goodland further enhances our financial model, with the city’s commitment to construct a dedicated power substation for our facility, resulting in approximately $6 million in capital expenditure savings. This collaboration underscores our ability to deliver high-quality bread and bun products while maintaining a competitive cost structure.
DEMAND AND SUPPLY
IS DEMAND BIG ENOUGH TO ADD MORE BREAD SUPPLY?
Golden Waves Grain (GWG) is poised to transform the bread and bun market by revolutionizing the outdated and costly traditional delivery model. Unlike conventional approaches, GWG’s innovative, vertically integrated facility—combining a state-of-the-art mill and bakery—sets a new standard for efficiency and cost competitiveness. GWG has secured a pivotal partnership with AWG, a leading cooperative wholesaler serving 4,000 retail stores across 36 states, to replace Flowers’ private label bread with our superior, cost-effective products. While some retailers may retain Flowers’ branded products, the reduced delivery volumes will significantly increase their distribution costs, making GWG’s model increasingly attractive. The endorsement of AWG’s private label program not only validates the exceptional quality of our bread but also highlights its unmatched cost efficiency. By leveraging economies of scale and our optimized warehouse distribution model, GWG renders the traditional delivery system uncompetitive, positioning us as the preferred choice for Co-Op retailers following their wholesaler’s lead.
WHAT IS BREAKEVEN QUANTITY?
Golden Waves Grain is strategically positioned to achieve financial breakeven at an estimated production volume of 26 million 20-ounce equivalent loaves. This milestone underscores our efficient, vertically integrated model, combining a state-of-the-art mill and bakery to deliver high-quality bread and buns at a competitive cost. Our focused approach ensures robust margins and scalability, paving the way for sustainable growth and market leadership.
ARE YOU BUYING THE WHEAT FROM FARMERS AT MARKET PRICE? WHY SELL IT TO YOU VS OTHERS?
Golden Waves Grain secures a reliable, high-quality wheat supply by offering a premium above the Goodland market price. This strategic investment ensures access to the finest wheat, guaranteeing consistent milling quality and reinforcing our commitment to producing superior bread and bun products. By prioritizing quality and supply chain stability, GWG strengthens its operational foundation and market competitiveness.
Golden Waves Grain will source wheat from our producer investors (Class B Units). The 200 units offered will supply the 2 million bushels needed for the mill. The typical producer investor will have B-unit bushel commitments near 20% of their average annual wheat production. This creates a producer group of 50-70 producers. At 20% of average annual production this becomes a significant portion of these producers' marketing plan, while also allowing Golden Waves Grain flexibility to source wheat from other producers in the group if there is a localized production loss. This is an integral part of our ability to identity preserve our wheat source.
Our model with Golden Waves Grain is to eliminate legacy systems in the current model and that includes the first originator. Wheat will often go through multiple originators before arriving at the mill, taking a margin at each stop along the chain. We will be able to pass on a portion of these cost savings, offering our producer investors a premium for their wheat. Our team understands grain origination and will provide traditional marketing tools to our producer investors to market grain; like forward contracting, basis, hedge to arrive, etc. The producer has the opportunity to receive a strong dividend from their investment in the company, a premium for their commodity, and the same flexibility marketing their commodity seen in the traditional system.
IN ADDITION TO ASSOCIATED WHOLESALE GROCERS (AWG) WHO ARE OTHER BUYERS? THERE IS A RISK OF ONLY ONE BUYER.
GWG will not operate under an exclusive supply arrangement with AWG. Instead, GWG is committed to pursuing a diversified sales strategy by exploring all viable retail channels for its bread and bun products. Priority will be given to underserved stores and markets that align well with a warehouse delivery model, maximizing reach and efficiency.
IN TERMS OF NEW BUSINESS DEVELOPMENT, SEVERAL POTENTIAL PARTNERS FALL WITHIN THE DELIVERY RANGE OF THE GWG MILL AND BAKERY:
• Affiliated Foods – Amarillo, TX: A strong prospect for flour sales, with potential to complement their existing operations.
• Associated Grocers – Salt Lake City, UT
• C&S Wholesale Grocers – Keene, NH: Servicing over 7,500 independent grocery stores nationwide.
• Banner Wholesale Grocers – Chicago, IL
In addition, GWG sees meaningful opportunities within the convenience store (C-store) sector. Many of these chains operate centralized distribution systems, making them ideal candidates for bulk deliveries. GWG is equipped to supply bread products either by direct delivery to their distribution centers or by facilitating pickups at our bakery for inclusion in their regular store supply routes.
This diversified approach positions GWG to expand its customer base, increase market penetration, and drive long-term growth.
HOW ARE CURRENT PURCHASE AGREEMENTS FOR BREAD? HOW STICKY ARE BREAD BUYERS? ARE THEY GOING TO SWITCH TO GOLDEN WAVES?
The grocery industry operates on extremely thin margins—every penny saved contributes directly to profitability. In this context, Ben Franklin's wisdom holds especially true.
Grocers are highly focused on sourcing high-quality products at the most competitive prices. By consistently delivering both superior quality and cost efficiency, GWG positions itself as a valuable and reliable partner. This combination not only attracts grocers but also fosters long-term loyalty.
When grocers can rely on GWG to maintain quality while preserving their margins, the relationship becomes "sticky." The bread program evolves into their program, seamlessly integrated into their warehouse operations, reinforcing trust and commitment to GWG as their preferred supplier.