Chef Thomas Keller, well-known Napa Valley restaurant owner, along with other sensational chefs like Charlie Trotter have come around to the sous vide method of cooking food; Cuisine Solutions (FZN) is the prime beneficiary. Sous vide is not new; it’s a method of cooking that’s been talked about for years but rarely called upon.
Why is this?
Sous Vide (French for “under vacuum”) involves placing the food in airtight plastic bags and then cooking those bags in a water bath at lower than normal temperatures for long periods of time, often 24 hours or more at a time. You then flash freeze the food until you need it, at which point you simply reheat in water. The result is a more intense flavor than normal methods produce, mostly because the natural juices stay within the body of the food, avoiding the common problem of dehydration. With sous vide, you get moist intense flavors every time without the food tasting mushy, as is often the case with products found in the freezer section of your local grocery store.
The chief knock against this method is it can lead to botulism if the length of cooking time is too short or the temperature is too low. Fortunately, Cuisine Solutions has the scientist who invented the process, Bruno Goussault, on staff, to train both in-house chefs and stars like Keller the system that works flawlessly, time after time. Companies like Chipotle (CMG) use sous vide when cooking braised ribs and retailers like Costco (COST) offer many of the products in their stores. Even the military has got into the act offering soldiers a step up from the usual fare.
I’ve followed this company for some time and up until the end of 2006, I owned its stock. I sold my holdings to pay for some expenses at the end of last year. Otherwise, I’d still own it. The second quarter was strong. Sales were up by 40 percent while operating income doubled. Earnings per share went from $0.04 to $0.09, more than double as well. The most promising number in my opinion was the growth at the retail level; sales were up 66% in the second quarter, representing 41 percent of overall company sales. More importantly, retail sales in the second quarter ($9.4 million) were greater than the total revenue for the company in the second quarter of 2004. In 2002, revenues were $29 million and in 2007, company guidance suggests sales of at least $78 million (22 percent projected growth) and earnings per share of $0.27 (23 percent projected growth). They are heading in the right direction.
Some things, including sous vide cooked food, are worth waiting for. If you have patience, this micro-cap will perform.
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