Innovative Food Holdings (IVFH) is a leading nationwide provider of direct from source specialty foods, healthcare foods, gluten free foods, and artisanal foods. The company’s specialty food platform powers some of the largest food distributors in the country. Innovative Food Holdings has showcased over 50 consecutive months of year over year growth while increasing profitability. A few of us MicroCapClub members visited the company’s headquarters in Florida last summer and came away impressed with how management is positioning itself in the Specialty Food space. The industry is ripe for consolidation. In the month of January alone, there were 21 M&A transactions in the food distributor industry. In the specialty food distributor category The Chefs’ Warehouse (CHEF) and United Natural Foods (UNFI) have been growing rapidly, mostly by way of acquisitions. With Amazon.com (AMZN) now entering the direct to consumer space by way of amazonfresh, we feel Innovative Food Holdings is right in the sweet spot of the industry and also likely in the crosshairs of industry participants.

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Ticker: IVFH
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Forward Looking Statements
This document contains certain forward-looking statements and
information relating to Innovative Food Holdings, Inc. (the
"Company") that are based on the current beliefs of the
Company's management, as well as assumptions made by, and
information currently available to, the Company. Such statements
reflect the current views of the Company with respect to future
events and are subject to certain assumptions, including those
described in this presentation. Should one or more of these
underlying assumptions prove incorrect, actual results may vary
materially from those described herein as “should,” “could,”
“anticipate,” “believe,” “intend,” “plan,” “might,” “potentially” or
“expect.” All Financial and numerical information described in this
presentation are approximations. The Company does not intend
to update these forward-looking statements.
Ticker: IVFH

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Specialty Foods Market Opportunity
Specialty Food (including natural, organic, and health foods)
- $85 billion market1

Retail consumer market: +20% growth 2011-13

Specialty foodservice market: +20% growth 2011-13

Specialty foodservice market size: over $19 billion in 2013

Expected to grow 10% or more in 2014

Highly fragmented and highly segmented

Currently: little consolidation of “mom and pop” suppliers
All Sources – 1. Mitel
Ticker: IVFH
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Broadline Foodservice Distributors

Broadliners distributes a full line of standard food products
and a wide variety of non-food products to their customers.

Full line of standard products: Heinz ® ketchup, potatoes,
Tyson® chicken nuggets etc.

High inventory turn products

Limited capability to serve higher end establishments

Less specialized product expertise

Limited line of specialty and niche products

Not ideally suited to offer small batch products from small
artisanal companies

Broadliners face perception and scale challenges related to
high end specialty foods
Ticker: IVFH
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5. + Specialty Foodservice vs. Broadline Foodservice
Bottom Line:
A typical broadline distributor is not able to
offer a specialty foodservice program with the
high quality products, high quality customer
service, dedicated chef expertise, proactive
procurement and logistics required for a
successful specialty program
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6. Innovative Food Holdings
The Finest Specialty Food
Revenues
$18.6
Innovative Food Holdings,
distributes origin-specific
perishables, artisanal, direct
from source, gluten free,
health food and chef quality
specialty food products.
$11.5
$9.8
$7.5
Products are marketed via
national partnerships and
through In-House customer
relationships.
In Millions
+
6
2009
2010
2011
2012
EBITDA
Subsidiaries & Operating Businesses
$1.1
$0.4
$0.5
$0.2
2009
2010
2011
2012
Ticker: IVFH

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Innovative Food Holdings
Over
7,000
products
Sourcing and product testing
Product shipped from boat,
farm, dock or warehouse
Superior proactive logistics and
Chef provided customer service
Chef to Chef ordering,
menu planning and
customer service
One stop shop
unique specialty
food for chefs
Product ordering and
processing
Delivering to
over 30,000
chefs
Product delivered directly
to Chef
Ticker: IVFH

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Ticker: IVFH

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The IVFH Experience
IVFH Creates Simplicity, Efficiency
Calls Mainline Distributor
Doesn’t carry
Calls Local Distributor
3-day old available
Calls Local Distributor
Not available
Calls Regional Distributor
Can ship
Not fresh
Shipment delayed
Chicago-area
Chef Order:
10 LB Live New England Lobster
25 LB Ahi Tuna
1 LB hand cut Emmentaler Cheese
24 Texas Cross Quail
1 Molecular Gastronomy Kit
1 box cheesecake
Pops
The IVFH Experience
EDI-Calls
Fresh and on-time
+ 2,500 packages out for delivery to chefs in a single day
Shipped direct from source when possible
World-class logistics
Proactive monitoring of any issues
Chef-to-Chef customer service
Ticker: IVFH

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IVFH VS. Competition
Comparison Overview
IVFH
Competition
One Stop Shop for high end specialty food
products
NA
Highest level of freshness: direct from Source
products
NA
Chef to Chef Customer Service
Quick, low cost nationwide new product &
private label launches
True next day delivery : Chef Needs- Chef Gets
Small Batch unique Artisanal products
Farm to Table
Chef Source Service- Source any product in the
world for direct delivery to chef
NA
NA
NA
NA
NA
NA
Ticker: IVFH

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Organic Sales Growth
A Detailed Snapshot

Expand:





Existing partnership sales
In-house direct to chef driven sales:
Warehouse bulk business – market opportunity to
expand role as niche artisanal and specialty food
wholesale distributor
E-commerce business: prudent-low CAPEX approach
Partnerships
Add additional national partnerships

Nationwide private label partnership
opportunities: margin and sales opportunity

E-Commerce
B2B
&
B2C
Proprietary product opportunities: margin and
sales opportunity

Warehouse
Business
In-House
Sales
Expand foodservice relationship business:
margin opportunity
Ticker: IVFH

12. + Top U.S. Foodservice Broadline Distributors
12
Broadline Market Share
Sysco, $35.8
Announced
agreement to
combine on
12/9/13
All Others,- broadline
distributors $89.5 –
highly fragmentedactive consolidation
continues
Broadliners seek to enter into
faster growing specialty
foodservice market
USFS, $18.8
PFG, $10.3
Gordon, $7.2
Costco, $6.2
Ben E. Keith, $2.1
Shamrock, $1.7
Sam's, $5.1
Rest. Depot/Jetro, $4.5
Maines, $3.0
Svcs. Group, $2.6
Reinhart, $4.2
Sysco revenue: FY 2013 10K; US Food, PFG and GFS revenues from 2013 Forbes list of private companies; Jetro
revenue (2010 estimate) from Hale Group/IFMA’S Foodservice 2020 Strategic Issues Series
Ticker: IVFH

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Strategic M&A
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M&A Growth Opportunities
Specialty food distribution remains highly fragmented

High quality acquisition opportunities at below $15 million – as major buyers focus on larger opportunities
Financial strength to execute acquisition strategy


~ $1.4M cash at end of Q3, more at year end 2013 + $1.35M bank line
Additional highly flexible bank lending support for synergistic acquisitions
Target small specialty distributors

< than $10M annual sales; positive EBITDA, local and regional specialty operators
Selected specialty food E-commerce opportunities
Heavily venture capital backed , little profits - market ripe for opportunistic acquisitions
Focus on GM opportunities/expansion

Successful acquisition/integration of Artisan Specialty Foods, Inc.

Geographical synergy: reduces shipping costs, delivery times and additional local program flexibility

GM improvements since Artisan acquisition/integration

14. + Specialty Food Acquisition Landscape
IVFH M&A Model

Hundreds of small “mom and pops”

Prudent acquisition multiple model: 2-3.5X EBITDA target

Operate as stand alone local distributor with staged IT integration

Instill financial discipline and financial reporting to operations

Build out select geographic footprint slowly- synergistic to overall
business

Less competition for quality targets at lower end of market

Artisan Specialty integration complete
Ticker: IVFH
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Online Specialty Foods
Still in Early Stages…

Chefs starting to move towards online purchasing

10% < of consumers buy food online – still overwhelmingly in-store driven.*

Online grocery sales growth expected to increase**

Expect online specialty foods to grow faster than overall e-grocer market

Foodservice/Consumer specialty food - not yet disrupted via E-commerce

Amazon® and Amazon Fresh® likely to be major disrupter and create growth
opportunities in the sector

Highly fragmented specialty E-commerce market

Heavily VC backed and hyped - but still little or no profits

Biggest operational challenge: food logistics, GM sustainability and ability
to scale
*Mitel **Boston Consulting group
Ticker: IVFH

16. The Specialty “Food
Chain” - Current System
Producer/Exporter
+
B
r
o
k
e
r
Importer
Distributor
Retailer
Consumer
Consumer
Ticker: IVFH
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IVFH & E-commerce

Scale and infrastructure available
for potential B2B and B2C Ecommerce sales growth

Partnership & white label models
www.forthegourmet.com and
partners including Amazon, < 5%
of IVFH sales

Acquisition

Challenging costs of customer
acquisition


Low cost, low spend approach and
run as profitable business
Incremental improvements in
customer acquisition

Current perishable ship models
add additional significant ship
costs

Expand E-commerce offerings
targeted to pro chef

Currently-For The Gourmet: home
chef, consumer focused

Ticker: IVFH

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Financial Information
Ticker: IVFH

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Revenue Growth
In Millions
$18.6
$11.5
$9.8
$7.5
2009
2010
2011
2012
Ticker: IVFH

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20
Cash EBITDA
In Millions
$1.1
$0.5
$0.4
$0.2
2009
2010
2011
2012
Ticker: IVIVFH

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Nine Months YTD
Financial Results
Revenues
EBITDA
$17.1
$1.3
In Millions
In Millions
$12.7
9M 2012
9M 2013
$0.7
9M 2012
9M2013
Ticker: IVFH

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Balance Sheet Information

Strong financial profile

Cash at end of Q3 ~ $1.4 million.

$1.35 million bank credit/loan available.

Total: Cash availability – approx. : $2.7 million- additional capital available
for acquisition targets with favorable lending profiles
$1.2 million Artisan acquisition loan has been completely paid down

Total non-bank debt (P & I): Approx. $1.5 mil

Strong first tier commercial banking relationship – enhanced financial
flexibility for future opportunities
Ticker: IVFH

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Financial Ratios
Comparative Analysis
EBITDA Margins
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
*Approximation – 9 months 2013
Ticker: IVFH

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Financial Ratios
Efficient Inventory Model
Inventory Days
41.5
13.6
Year End 2012 Date : Source Company Filings
Ticker: IVFH

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Financial Ratios
Comparative Analysis
Approximate Nine Month EBITDA Growth Rates
120%
100%
80%
60%
40%
20%
0%
Ticker: IVFH
9 months 2013- source company filings
* 12 MONTHS

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Key Financial Metrics Q3 2013

Q3 Sales: $6.0 million vs. $5.1 million (17% growth)

Q3 Adjusted EPS: $0.06 vs. $0.04 (54% growth)

Current Market Cap: Approx. $9.5 million

Q3 Cash EBITDA: $481,000 vs. $293,000 (64% growth)

9M cash EBITDA: 97% growth to $1.3 million vs. $656,000

9M operating income: 141.7% to $1.0 million vs. $433,000

9M adjusted EPS: 86% to $0.17 vs. $0.09

Strongly focused on minimizing future dilution with a goal to
maximize shareholder value; ongoing activities and discussions in
that regard
Ticker: IVFH

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Investment Highlights
$85 Billion
specialty
food market
Low CAPEX
Strong sales,
EBITDA and
cash flow
Trend:
Gourmeting
of America
Organic
Growth:
Partnerships
and In-House
Acquisition
growth:
distributors,
E-commerce
Ticker: IVFH

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Thank You
Innovative Food Holdings, Inc.
Sam Klepfish
Chief Executive Officer
Phone: 239-449-3249
sklepfish@innovativefoodholdings.com
@IVFHCompany
Ticker: IVFH