Innovative Food Holdings Inc. is returning to its roots and cashing out of business-to-consumer (B2C) ecommerce.

The U.S. seller of specialty foods to professional chefs is selling its consumer ecommerce business igourmet.com. The sale is for $700,000 in cash, plus the assumption of approximately $350,000 of gift card liabilities, to an unidentified buyer.

The company did not include Innovative Food’s Pennsylvania facility in the transaction. Sampford Advisors Inc. and Erben M&A Advisors functioned as seller agents.

Innovative Food sells D2C ecommerce business

“The cash for this sale will be used to invest into our new retailer business, as we ramp up working capital and install new automated machinery to cut, wrap, and label our gourmet cheese at a fraction of the cost of our previous manual operation,” says Innovative Food CEO Bill Bennett. “We’re excited to leverage our expertise and capabilities in gourmet cheese in a significantly more profitable sales channel and expect to deliver sizable top and bottom-line impact for the company.”

Innovative Food acquired the assets of igourmet.com in 2018.

At the time of the deal, Innovative Foods acquired igourmet.com to “leverage igourmet’s current available capacity, including 19,000 square feet of underutilized space available in the igourmet 65,000 square foot warehouse, as well as capacity available due to the seasonality of the current igourmet business, to drive additional revenue growth opportunities, including additional foodservice opportunities in new geographic markets and locations.”

But consumer ecommerce has been a long-time money loser for Innovative Foods.

“I just wanted to highlight here what an important strategic step forward this is for the company,” Bennett told analysts in a recent earnings call. “In the six years that IVFH has owned our consumer ecommerce business, we’ve lost more than $12 million. To put that in context, that far exceeds our entire outstanding long-term debt as a company. Removing that profit headwind is a critical step in our evolution and turnaround efforts.”

For the second quarter ended June 30, Innovative Food generated sales of $16.65 million. That’s a decrease of 10.1% from sales of $18.52 million in the second quarter of 2023. Innovative Food ecommerce sales totaled $1.05 million. That’s down 52.2% from ecommerce revenue of $2.20 million in the prior year.

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