William Blair initiated research coverage of BRC Inc. (BRCC $17.43), the parent company of Black Rifle Coffee Company, a rapidly growing omnichannel premium coffee brand across the direct-to-consumer (DTC), wholesale, and retail channels.
Analyst Sharon Zackfia estimated the company would generate 30%-plus annual revenue growth through 2023, forecasting revenue of $230.2 million in 2021, $312.6 million in 2022, and $418.6 million in 2023.
“Founded in 2014, Black Rifle Coffee Company has built a loyal, diverse, and passionate customer base, with the company’s mission of supporting the veteran, active military, and first responder communities driving both customer loyalty and employee retention,” Zackfia said. “We estimate BRC grew its revenue nearly threefold between 2019 and 2021, while garnering an impressive Net Promoter Score of 78.”
Zackfia continued, “We estimate more than 70% of BRC’s 2021 revenue came from DTC given its original coffee subscription model, and BRC has a promising early track record of successfully extending the brand through wholesale (bagged coffee, merchandise, and RTD coffee) and retail (Outposts). As a result, we project revenue will increasingly skew toward the company’s fast-growing wholesale and retail channels, yielding a more balanced revenue mix by 2023, with over half of sales stemming from wholesale and Outposts combined. We expect an increase in marketing spend over the next two years to bolster both brand awareness and sales, while the company’s planned investments should create a centralized customer experience that provides better insight into purchasing behaviors.”
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William Blair or an affiliate received compensation for investment banking services or non-investment-banking services from BRC Inc. within the last 12 months. BRC Inc. is or was, within the last 12 months, an investment banking client of William Blair and/or one or more of its affiliates.
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Outperform (Buy): 77%
Market Perform (Hold): 23%
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Outperform (Buy): 29%
Market Perform (Hold): 6%
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