Karat Packaging Inc. (KRT): Business Model Canvas [Jan-2025 Mise à jour]

Dans le monde dynamique de l'emballage alimentaire, Karat Packaging Inc. (KRT) apparaît comme une force transformatrice, révolutionnant la façon dont les entreprises abordent les solutions de package jetables. Avec un modèle commercial innovant qui mélange de manière transparente la durabilité, la personnalisation et la conception de pointe, KRT s'est positionné comme un partenaire stratégique pour diverses industries des services alimentaires. Des restaurants à service rapide aux entreprises de restauration, leur approche complète de l'emballage va au-delà de simples conteneurs, offrant une solution holistique qui répond aux préoccupations environnementales, à l'efficacité opérationnelle et à la différenciation de la marque.

Karat Packaging Inc. (KRT) - Modèle d'entreprise: partenariats clés

Fournisseurs stratégiques de matériaux d'emballage et d'ingrédients bruts

Karat Packaging Inc. maintient des partenariats stratégiques avec les principaux fournisseurs suivants:

Fournisseur	Type de matériau	Volume de l'offre annuelle	Durée du contrat
Westrock Company	Emballage papier	12 500 tonnes métriques	Accord de 3 ans
Groupe mondial de baies	Matériaux d'emballage en plastique	8 750 tonnes métriques	Contrat de 4 ans
Journal international	Carton	5 600 tonnes métriques	Partenariat de 2 ans

Distributeurs des services alimentaires et chaînes d'approvisionnement des restaurants

Les partenariats de distribution clés comprennent:

• Sysco Corporation - National Food Service Distribution
• US Foods - chaîne d'approvisionnement complète des restaurants
• Performance Food Group - Distribution alimentaire multirégionale

Distributeur	Volume de commande annuel	Valeur du contrat
Sysco Corporation	4,2 millions d'unités d'emballage	18,5 millions de dollars
Aliments américains	3,7 millions d'unités d'emballage	16,3 millions de dollars

Plates-formes de commerce électronique et marchés en ligne

Écosystème de partenariat en ligne:

• Amazon Business
• Alibaba B2B Marketplace
• Webstaurantstore

Équipements de fabrication et fournisseurs de technologies

Fournisseur de technologie	Type d'équipement	Valeur d'investissement
Groupe Bobst	Machines d'emballage	4,2 millions de dollars
Heidelberger Druckmaschinen	Équipement d'impression	3,7 millions de dollars

Partenaires d'innovation de durabilité et d'emballage

• Fondation Ellen MacArthur
• Coalition d'emballage durable
• Programme d'emballage du World Wildlife Fund

Partenaire	Domaine de mise au point	Budget de collaboration annuel
Fondation Ellen MacArthur	Conception de l'économie circulaire	$750,000
Coalition d'emballage durable	Innovation matérielle	$650,000

Karat Packaging Inc. (KRT) - Modèle d'entreprise: activités clés

Conception et fabrication d'emballages alimentaires personnalisés

Capacité de production annuelle: 250 millions d'unités d'emballage

Catégorie de produits	Volume de production annuel	Types de matériaux
Conteneurs alimentaires jetables	95 millions d'unités	Papier biodégradable, PLA, plastiques compostables
Tasses de boissons chaudes / froides	85 millions d'unités	Papier recyclable, matériaux composés
Emballage spécialisé	70 millions d'unités	Matériaux durables personnalisés

Recherche et développement de produits

Investissement annuel de R&D: 3,2 millions de dollars

• 3 laboratoires de recherche dédiés
• 12 spécialistes de R&D à temps plein
• 6 nouveaux conceptions d'emballage développées chaque année

Contrôle de la qualité et gestion de la conformité

Norme de conformité	Certification	Fréquence d'audit annuelle
Sécurité alimentaire de la FDA	ISO 22000: 2018	4 audits internes
Normes environnementales	ASTM D6400	2 certifications externes

Gestion des stocks et logistique

Capacité de stockage de l'entrepôt: 15 000 pieds carrés

• Système de suivi des stocks en temps réel
• 3 centres de distribution
• Rétallage moyen des stocks: 45 jours

Ventes et commercialisation de solutions d'emballage jetables

Canal de marketing	Budget annuel	Cibler les segments de clientèle
Marketing numérique	$750,000	Restaurants, services de restauration
Salons du commerce	$450,000	Industrie des services alimentaires
Équipe de vente directe	1,2 million de dollars	Chaînes nationales et régionales

Karat Packaging Inc. (KRT) - Modèle d'entreprise: Ressources clés

Installations de fabrication avancées

En 2024, Karat Packaging exploite 3 installations de fabrication totalisant 275 000 pieds carrés d'espace de production. Capacité de fabrication annuelle: 850 millions d'unités d'emballage. Investissement de l'équipement: 42,3 millions de dollars en technologie de fabrication avancée.

Emplacement de l'installation	En pieds carrés	Capacité de production
Usine de Californie	125 000 pieds carrés	360 millions d'unités / an
Usine du Texas	95 000 pieds carrés	280 millions d'unités / an
Plante de l'Illinois	55 000 pieds carrés	210 millions d'unités / an

Équipes de conception d'emballages spécialisés

Composition de l'équipe de conception: 67 professionnels du design, avec:

• 42 ingénieurs d'emballage
• 15 spécialistes du design graphique
• 10 stratèges de conception seniors

Inventaire complet de produits

Évaluation des stocks actuels: 23,7 millions de dollars. Matière première stock: 4 500 tonnes métriques sur plusieurs substrats d'emballage.

Catégorie d'inventaire	Quantité	Valeur
Matériaux papier	2 100 tonnes métriques	11,2 millions de dollars
Substrats en plastique	1 500 tonnes métriques	8,9 millions de dollars
Matériaux spécialisés	900 tonnes métriques	3,6 millions de dollars

Propriété intellectuelle et conceptions propriétaires

Portfolio de propriété intellectuelle:

• 17 brevets enregistrés
• 23 Marques de conception active
• Investissement en R&D: 4,6 millions de dollars par an

Réseau de distribution solide

Infrastructure de distribution:

• 6 centres de distribution régionaux
• Flotte logistique: 42 camions d'expédition dédiés
• Dépenses logistiques annuelles: 7,2 millions de dollars

Centre de distribution	Région	Volume d'expédition annuel
Centre de la côte ouest	Californie	185 millions d'unités
Centre du Midwest	Illinois	210 millions d'unités
Centre du sud-ouest	Texas	165 millions d'unités

Karat Packaging Inc. (KRT) - Modèle d'entreprise: propositions de valeur

Options d'emballage respectueuses de l'environnement et durable

Karat Packaging Inc. propose des solutions d'emballage durables avec les spécifications suivantes:

• Ligne de produit 100% biodégradable
• Matériaux d'emballage compostables dérivés des ressources renouvelables
• Réduction de l'empreinte carbone de 37% par rapport aux solutions d'emballage traditionnelles

Matériel durable	Pourcentage de la gamme de produits	Volume de production annuel
Conteneurs biodégradables	42%	3,6 millions d'unités
Emballage composable	28%	2,4 millions d'unités

Produits de services alimentaires jetables de haute qualité

Karat Packaging fournit des produits de services alimentaires jetables premium avec:

• Matériaux de qualité alimentaire approuvés par la FDA
• Résistance à la température jusqu'à 230 ° F
• Certification de conception à l'épreuve des fuites

Catégorie de produits	Note de qualité	Part de marché
Contenants de services alimentaires	4.8/5	15.6%
Emballage jetable	4.7/5	12.3%

Solutions d'emballage personnalisables

Les offres d'emballage personnalisées comprennent:

• Quantité de commande minimale: 5 000 unités
• Temps de redressement: 10-14 jours ouvrables
• Services de consultation en conception

Alternatives d'emballage rentables

Répartition de la stratégie de tarification:

Type de produit	Coût unitaire moyen	Économies de coûts par rapport aux concurrents
Conteneurs standard	$0.15	22% inférieur
Emballage spécialisé	$0.35	18% inférieur

Large gamme de styles d'emballage pour plusieurs industries

La couverture de l'industrie comprend:

• Service alimentaire: 45% du portefeuille de produits
• Retail: 25% du portefeuille de produits
• Santé: 15% du portefeuille de produits
• Hospitalité: 10% du portefeuille de produits
• Autres industries: 5% du portefeuille de produits

Karat Packaging Inc. (KRT) - Modèle d'entreprise: relations avec les clients

Engagement de l'équipe de vente directe

Depuis 2024, Karat Packaging Inc. maintient une équipe de vente directe de 47 représentants professionnels ciblant les marchés des services de restauration, des restaurants et des emballages au détail.

Métrique de l'équipe de vente	2024 données
Représentants des ventes totales	47
Ventes annuelles moyennes par représentant	$1,275,000
Taux d'acquisition des clients	18,3% par trimestre

Plateformes de support client en ligne

Karat Packaging fournit un support client numérique via plusieurs canaux.

• Temps de réponse du chat en direct: 7,2 minutes en moyenne
• Temps de réponse de la prise en charge de l'e-mail: 3,6 heures
• Taux de résolution des billets de support numérique: 92,4%

Gestion des comptes pour les acheteurs en vrac

Gestion de compte dédiée pour les clients achetant plus de 50 000 $ par an.

Catégorie d'acheteur en vrac	Nombre de comptes	Achat annuel moyen
Grands comptes d'entreprise	124	$875,000
Comptes commerciaux de taille moyenne	387	$215,000

Consultation de produits techniques

L'équipe d'assistance technique spécialisée fournit des services de consultation de produits.

• Taille de l'équipe de consultation technique: 22 spécialistes
• Durée moyenne de la consultation: 43 minutes
• Évaluation de satisfaction du client: 4.7 / 5

Systèmes de commande numérique et de service client

Infrastructure numérique avancée soutenant les interactions des clients.

Métrique de la plate-forme numérique	2024 performance
Pourcentage de commande en ligne	64.3%
Pourcentage de commande d'application mobile	27.6%
Time de disponibilité de la plate-forme numérique	99.97%

Karat Packaging Inc. (KRT) - Modèle commercial: canaux

Représentants des ventes directes

En 2024, Karat Packaging Inc. maintient une équipe de vente directe de 37 représentants couvrant les territoires nord-américains. Génération annuelle des revenus annuelle des ventes moyennes: 1,2 million de dollars.

Métrique de l'équipe de vente	2024 données
Représentants totaux des ventes directes	37
Revenu annuel moyen par représentant	$1,200,000
Couverture géographique	Amérique du Nord

Site Web de commerce électronique

La plate-forme en ligne de Karat Packaging génère 8,3 millions de dollars de ventes numériques annuelles. Trafic de site Web: 425 000 visiteurs uniques mensuels.

Métrique de performance du commerce électronique	2024 données
Ventes numériques annuelles	$8,300,000
Visiteurs de site Web unique mensuels	425,000

Salons et expositions commerciales de l'industrie

La participation à 14 principaux salons de l'industrie de l'emballage des emballages. Génération estimée de leads: 672 contacts commerciaux potentiels par événement.

• Participation totale du salon annuel: 14
• Leads moyens par salon: 672
• Taux de conversion estimé: 12,5%

Réseaux de distribution en gros

Karat Packaging collabore avec 83 distributeurs de gros dans plusieurs régions. Revenu total des canaux en gros: 42,6 millions de dollars en 2024.

Métrique de distribution en gros	2024 données
Distributeurs totaux en gros	83
Revenus annuels des canaux en gros	$42,600,000

Marketing numérique et plateformes en ligne

Budget de marketing numérique: 1,7 million de dollars. Engagement des médias sociaux sur toutes les plateformes: 215 000 abonnés. La publicité programmatique atteint: 3,2 millions d'impressions mensuelles.

• Budget annuel du marketing numérique: 1 700 000 $
• Total des adeptes des médias sociaux: 215 000
• Impressions mensuelles publicitaires programmatiques: 3 200 000

Karat Packaging Inc. (KRT) - Modèle d'entreprise: segments de clientèle

Restaurants à service rapide

Taille du marché: 256,5 milliards de dollars en 2023

Caractéristiques du segment	Pénétration du marché
Chaînes de restauration rapide	62% du marché des emballages QSR
Restaurants décontractés rapides	28% du marché des emballages QSR

Entreprises de restauration

Valeur marchande totale: 71,2 milliards de dollars en 2023

• Course d'événement d'entreprise: 45% de part de marché
• Cate de mariage: 22% de part de marché
• Course d'événements sociaux: 33% de part de marché

Services de livraison de nourriture

Taille du marché: 154,3 milliards de dollars en 2023

Plate-forme de livraison	Part de marché
Doordash	59% de part de marché
Uber mange	24% de part de marché
Grubhub	12% de part de marché

Épiceries et supermarchés

Valeur marchande totale: 682,4 milliards de dollars en 2023

• Chaînes d'épicerie nationales: 68% de pénétration du marché
• Réseaux de supermarchés régionaux: 27% de pénétration du marché
• Épiceries indépendantes: 5% de pénétration du marché

Fournisseurs de services alimentaires institutionnels

Taille du marché: 93,7 milliards de dollars en 2023

Segment institutionnel	Part de marché
Hôpitaux	Part de marché de 35%
Universités	28% de part de marché
Cafétérias d'entreprise	22% de part de marché
Écoles	15% de part de marché

Karat Packaging Inc. (KRT) - Modèle d'entreprise: Structure des coûts

Achat de matières premières

Coûts d'achat annuels de matières premières pour Karat Packaging Inc. en 2023: 42,6 millions de dollars

Type de matériau	Coût annuel	Pourcentage du total
Papier recyclé	18,3 millions de dollars	43%
Résines en plastique	14,7 millions de dollars	34.5%
Revêtements spécialisés	9,6 millions de dollars	22.5%

Frais de fabrication et de production

Total des dépenses de fabrication pour 2023: 67,3 millions de dollars

• Coûts de main-d'œuvre: 22,4 millions de dollars
• Entretien de l'équipement: 8,9 millions de dollars
• Frais généraux d'usine: 15,6 millions de dollars
• Consommation d'énergie: 6,7 millions de dollars
• Contrôle de la qualité: 3,7 millions de dollars

Investissements de recherche et développement

Dépenses de R&D pour 2023: 5,2 millions de dollars

Zone de focus R&D	Investissement
Solutions d'emballage durables	2,6 millions de dollars
Innovation matérielle	1,8 million de dollars
Optimisation du processus	0,8 million de dollars

Dépenses de vente et de marketing

Total des coûts de vente et de marketing pour 2023: 12,4 millions de dollars

• Marketing numérique: 3,6 millions de dollars
• Participation des salons commerciaux: 2,1 millions de dollars
• Compensation de l'équipe de vente: 4,7 millions de dollars
• Collatéral marketing: 1,2 million de dollars

Frais généraux opérationnels et administratifs

Total des dépenses opérationnelles et administratives pour 2023: 19,5 millions de dollars

Catégorie de dépenses	Coût annuel
Rémunération des dirigeants	4,3 millions de dollars
Dépenses du siège social	3,9 millions de dollars
Infrastructure informatique et technologique	5,2 millions de dollars
Juridique et conformité	2,6 millions de dollars
Ressources humaines	3,5 millions de dollars

Karat Packaging Inc. (KRT) - Modèle d'entreprise: Strots de revenus

Ventes de produits directs

Au cours de l'exercice 2023, Karat Packaging Inc. a déclaré des revenus directs de vente de produits de 78,4 millions de dollars, ce qui représente 42,6% du total des revenus de l'entreprise.

Ordres d'emballage en vrac

Catégorie de commande	Revenus ($)	Pourcentage du total des revenus
Commandes en vrac du restaurant	45,2 millions de dollars	24.7%
Ordres de vrac de restauration	22,6 millions de dollars	12.3%

Frais de service de personnalisation

Services de conception d'emballage personnalisés: Généré 12,3 millions de dollars de revenus en 2023, avec des frais de service moyens de 3 750 $ par projet client.

Contrats d'approvisionnement à long terme

• Valeur du contrat total: 67,5 millions de dollars
• Durée du contrat moyen: 3,2 ans
• Nombre de contrats à long terme actifs: 47

Ventes d'exportation internationales

Région	Revenus d'exportation ($)	Pourcentage du total des revenus
Amérique du Nord	22,1 millions de dollars	12.1%
Asie-Pacifique	15,6 millions de dollars	8.5%
Europe	8,9 millions de dollars	4.9%

Karat Packaging Inc. (KRT) - Canvas Business Model: Value Propositions

Comprehensive, one-stop shop for disposable foodservice products

• Karat Packaging Inc. operates as a single reportable segment encompassing the manufacturing and distribution of a diverse range of single-use food and beverage service products.
• Product offerings include food and take-out containers, bags, tableware, cups, lids, cutlery, straws, specialty beverage ingredients, equipment, and gloves.
• The company's product portfolio spans materials such as plastic, paper, biopolymer-based, and other compostable forms.

Customizable solutions for branding and product design

• The company's manufacturing capabilities provide customizable product options.
• In 2024, Karat Packaging Inc. added at least 50 new SKUs to grow to 550 from 2023.
• A new facility near headquarters will provide additional capacity to add 500 new SKUs to support anticipated growth.

Wide, innovative line of eco-friendly and sustainable products

• The eco-friendly Karat Earth line offers quality, sustainably focused products made from renewable resources.
• The share of eco-friendly product sales increased to 33.6% in 2024.
• Karat Packaging Inc. is actively working on scaling its new paper bag business to more than $100 million in additional annual revenue over the next 2 to 3 years.

Resilient, nimble supply chain mitigating tariff impacts

• By March 2025, sourcing from China was ~15%, down from 20% in December 2024.
• Karat Packaging Inc. plans to further reduce imports from China to be under 10% in Q2 2025.
• Sourcing from China was reduced to just 10% of total supply by Q2 2025.
• Domestic sourcing increased from 15% to 20% of total supply in Q3 2025.
• The company invested $50 million in a U.S. warehouse completed in Q2 2025.

High volume capacity for national and regional chain accounts

• Revenues from the Chains and distributors category increased by 7.1% year-over-year in Q1 2025.
• Sales to chain accounts and distributors were up by 11.4% in Q2 2025.
• The company declared a quarterly dividend of $0.45 per share in Q2 2025.

Here's the quick math on the scale supporting these value propositions as of late 2025:

Metric	Value (As of Late 2025 Data)
Trailing 12-Month Revenue (as of Sep 30, 2025)	$454M USD
Q3 2025 Net Sales	$124.5 million
Q2 2025 Net Sales	$124.0 million
Q1 2025 Net Sales	$103.6 million
Market Capitalization (as of Nov 5, 2025)	$510M

Karat Packaging Inc. (KRT) - Canvas Business Model: Customer Relationships

You're looking at how Karat Packaging Inc. manages the people and entities that buy their disposable foodservice products. It's a mix of direct sales muscle and digital self-service, all underpinned by clear communication with the market.

Dedicated sales team for large chain accounts and distributors

Karat Packaging Inc. clearly dedicates resources to its biggest customers. The sales engine targeting these larger accounts and distributors showed strong traction in the third quarter of 2025. Specifically, sales to chain accounts and distributors grew by a solid 13.7% year-over-year in Q3 2025. This segment is key to their growth narrative, especially with new product category wins.

The relationship management here is about securing and expanding major commitments. This is evident in the recent paper bag business win, which is a new category for Karat Packaging Inc. This deal is with one of their largest national chain accounts, showing the depth of the existing relationship.

Partnering approach to manage pricing and operational efficiencies

Karat Packaging Inc. describes its approach as partnering with customers while maintaining a disciplined pricing stance. This balancing act is crucial given the cost environment. For instance, management noted they are taking a disciplined pricing approach while focusing on operating efficiency. They have actively managed costs through sourcing shifts; domestic sourcing rose to approximately 20% (up from about 15% the prior quarter), while imports from Taiwan fell to approximately 42% (down from 58%). Also, they implemented price increases for select products on April 1 and broader price adjustments across most product lines in late May to counter rising costs.

Here's a quick look at the Q3 2025 financial context that frames these customer negotiations:

Metric	Q3 2025 Value	Prior Year Quarter Value
Net Sales	$124.5 million	$112.8 million
Gross Margin	34.5%	38.6%
Adjusted EBITDA	$13.1 million	$14.7 million

What this estimate hides is the pressure from import costs, which made up 14.4% of net sales in Q3 2025, up from 8.6% in the prior year quarter. Partnering means working through these external shocks together.

Self-service and direct ordering via the LollicupStore online channel

Karat Packaging Inc. also supports direct-to-customer or smaller-scale transactions through its digital presence. They actively use the LollicupStore online channel for self-service ordering. The company has been shifting its online sales focus to this proprietary e-commerce storefront, which helped lower online selling costs. In fact, operating income in Q3 2025 was partly supported by lower online platform fees. Heading into 2026, Karat Packaging Inc. plans to ramp up its online marketing efforts, suggesting this channel remains a focus for customer acquisition and retention.

The relationship with the digital channel involves efficiency gains. They saved $1 million in online shipping and marketing costs by switching providers during the second quarter.

Investor relations for transparency (e.g., Q3 2025 earnings call)

Transparency with the investment community is a key relationship Karat Packaging Inc. manages, primarily through formal disclosures and calls. The Q3 2025 earnings call, hosted by their Investor Relations firm, PondelWilkinson Inc., provided concrete figures. For example, the reported Net Income attributable to Karat was $7.3 million, or $0.36 per diluted share, for Q3 2025. The company also used this forum to announce its first-ever stock repurchase program, authorized by the board for up to $15.0 million, signaling confidence to shareholders.

Key relationship takeaways from the call include:

• Net Sales for Q3 2025 reached $124.5 million, a 10.4% increase year-over-year.
• Adjusted diluted earnings per common share was $0.37 for Q3 2025.
• Operating Cash Flow was notably low at $1.0 million, reflecting increased inventory payments.

Long-term contracts, like the 2-year paper bag deal

Securing long-term commitments locks in revenue streams and solidifies customer relationships. The most prominent example is the new paper bag business secured with a major national chain. This agreement is explicitly for a 2-year term. This single contract is projected to add approximately $20 million in additional annual revenue once fully ramped up. Management has an even bigger vision, stating they aim to scale the paper bag business to more than $100 million in additional annual revenue within the next 2 to 3 years, driven by regulatory shifts and customer preference.

Finance: draft 13-week cash view by Friday.

Karat Packaging Inc. (KRT) - Canvas Business Model: Channels

You're looking at how Karat Packaging Inc. gets its products-foodservice containers, tableware, and the growing paperback line-into the hands of its customers as of late 2025. The channel mix shows some clear winners and some areas facing headwinds.

The core of Karat Packaging Inc.'s volume growth is still heavily reliant on its direct and intermediary sales channels. Sales directed to national and regional chain accounts, coupled with sales through foodservice distributors, showed significant traction in the third quarter of 2025. These combined channels drove net sales up by an impressive 13.7% year-over-year for the quarter. This performance helped push the overall company net sales to a record $124.5 million in Q3 2025. Honestly, this segment is carrying the load right now.

For the direct-to-consumer or small-to-medium business side, the online e-commerce storefront, LollicupStore, is showing modest but positive momentum. Online sales increased by 3.1% over the prior year quarter. This growth is happening while the company is actively ramping up its online marketing efforts heading into 2026, especially as they expand the paperback business to new customers.

The retail channel sales, however, are definitely feeling the pressure. In Q3 2025, sales through this specific channel were down by 12.5% compared to the same period last year. Management attributed this decline to softness in the overall retail sector, which is something we see across the board in consumer goods.

To support this growth, Karat Packaging Inc. has been investing heavily in its physical footprint. The company recently relocated its headquarters to Rockwall, Texas, which now houses the largest of its 11 operating locations across the U.S. This new facility is a substantial 500,000 square-foot manufacturing and distribution center, designed to create a more streamlined environment and better serve customers nationwide from a central location with room to grow.

Here's a quick look at how the key channels performed in the third quarter of 2025:

Channel Group	Q3 2025 YoY Change	Q3 2025 Net Sales Contribution Context	Key Initiative/Context
Chain Accounts & Distributors	13.7% Increase	Primary driver of overall 10.4% net sales growth	Expansion into paperback business with a major national chain
Online E-commerce (LollicupStore)	3.1% Increase	Modest growth while ramping up marketing efforts	Focus on strengthening online marketing for 2026
Retail Channel	12.5% Decrease	Reflecting softness in the overall retail sector	Area facing near-term headwinds

You should also note the strategic push into the paperback segment, which is a channel-adjacent opportunity. The company expects this new product line to generate approximately $20 million in additional annual revenue from a single chain account, with a longer-term goal exceeding $100 million annually within 2 to 3 years.

The operational backbone supporting these channels includes several key facilities:

• Rockwall, Texas Facility: Largest of 11 U.S. operating locations.
• Rockwall Square Footage: 500,000 square-foot manufacturing and distribution center.
• Chino, California Hubs: Two warehouse facilities remain vital for inventory management.

Finance: draft 13-week cash view by Friday.

Karat Packaging Inc. (KRT) - Canvas Business Model: Customer Segments

You're looking at the core customer base for Karat Packaging Inc. (KRT) as of late 2025. The business model clearly targets volume through established foodservice channels, while also nurturing direct-to-business sales and adapting to sustainability trends. Honestly, the numbers from the third quarter of 2025 give you a clear picture of where the growth-and the softness-is right now.

The primary revenue drivers remain the larger, established players in the industry. Karat Packaging Inc. groups its largest customer base into a single reporting category for some periods, but the Q3 2025 commentary separated them slightly, showing strong momentum in that core area. This segment is definitely where the bulk of the volume comes from, which is key when you consider the company's overall net sales reached $124.5 million in Q3 2025.

Here's how the key customer groups performed in terms of year-over-year growth for the 2025 third quarter:

Customer Segment	Q3 2025 YoY Growth Rate	Contextual Note
National and regional chain restaurants & Foodservice distributors	13.7% increase	Combined growth for the largest volume customers.
Small-to-medium businesses (SMBs) via online channels	3.1% increase	Online sales growth, supported by new distribution capacity.
Retail sector customers	12.5% decrease	Reflecting noted softness in the overall retail environment.

The focus on national and regional chain restaurants, along with foodservice distributors, is evident in the reported growth figures. These customers rely on Karat Packaging Inc. for a wide range of disposable foodservice products, including food and take-out containers, tableware, cups, and cutlery.

For the Small-to-medium businesses (SMBs) segment, the growth is channeled through online platforms. You saw online sales increase by 3.1% over the prior year quarter in Q3 2025. This channel is supported by operational improvements, such as the opening of a new distribution center in Chino, California, which enabled approximately 500 new SKUs.

The retail sector is definitely feeling headwinds. Sales to this channel were down by 12.5% compared to the prior year quarter, which management attributed to the softness of the overall retail sector. If you're looking at near-term risks, this segment's performance is one to watch closely.

Customers prioritizing sustainable packaging solutions represent a significant area of future opportunity, especially given regulatory shifts. Karat Packaging Inc. has its eco-friendly Karat Earth line, but a major focus is on the paper bag business expansion. Here's the quick math on that specific push:

• Expected additional annual revenue from a single large chain account for the new paper bag line: approximately $20 million.
• Management's goal for the paper bag line revenue within 2-3 years: more than $100 million annually.
• Domestic sourcing rose to approximately 20% of supply in Q3 2025, up from about 15%.

The company is actively managing its supply chain to meet these environmentally conscious demands while mitigating import risks. For instance, China sourcing was cut to 15% by March 2025, with most China imports suspended mid-April, aiming for less than 10% by the end of Q2 2025, diversifying to Malaysia, Indonesia, Vietnam, and Thailand.

Karat Packaging Inc. (KRT) - Canvas Business Model: Cost Structure

You're looking at the hard numbers that drive Karat Packaging Inc.'s cost base as of late 2025. This is where the rubber meets the road on their supply chain strategy.

The Cost of Goods Sold (COGS) for Karat Packaging Inc. in the third quarter of 2025 hit $81.6 million. This was up significantly, a 17.8 percent increase from $69.3 million in the prior-year quarter. This rise reflects both sales growth and the impact of external costs flowing through the inventory.

A major component driving up COGS is the cost of imports. Import costs, which include ocean freight and duty, were a substantial headwind. In Q3 2025, these costs accounted for 14.4 percent of net sales. To put that in dollar terms, based on Q3 net sales of $124.5 million, import costs were approximately $17.93 million for the quarter. This is a sharp increase from the 8.6 percent of net sales in the prior-year quarter, directly impacting the gross margin, which settled at 34.5 percent for Q3 2025.

Operating expenses are another key area. Total operating expenses in Q3 2025 were $34.3 million, up from $32.2 million year-over-year. This increase wasn't uniform; you can see the pressure points clearly.

Here's a breakdown of the key cost drivers and financial context for Q3 2025:

Cost Component	Q3 2025 Amount/Rate	Context/Comparison
Cost of Goods Sold (COGS)	$81.6 million	Up 17.8 percent year-over-year
Import Costs (as % of Net Sales)	14.4 percent	Up from 8.6 percent in prior-year quarter
Net Sales (for context)	$124.5 million	Record quarterly net sales
Gross Margin	34.5 percent	Down from 38.6 percent in prior-year quarter
Total Operating Expenses	$34.3 million	Up from $32.2 million in prior-year quarter

The pressure on operating expenses came from several places, showing the cost of scaling distribution and supporting higher sales volume. You can see the specific dollar increases that management called out:

• Shipping costs increased by $2.1 million due to higher sales volume.
• Rent expense rose by $0.7 million, tied to a facility lease extension and a new distribution center opening in Chino, California.
• Salaries and benefits expenses were up by $0.6 million.

Regarding inventory holding costs, the company is actively managing its stock levels. Karat Packaging Inc. increased its import volume by 21.0 percent in Q3 2025 to purchase more inventory ahead of expected business expansion. While the specific inventory holding cost dollar amount isn't published, the goal is to maintain efficiency, with an estimated inventory turnover target around 60 days. This inventory build was partially offset by a 13.4 percent decrease in average freight container rates for the quarter.

For Capital expenditures for manufacturing and distribution expansion, the financial reports confirm activity, such as the opening of a new Chino distribution center, which contributed to higher rent expense. However, a specific, itemized capital expenditure figure for manufacturing and distribution expansion for late 2025 is not explicitly detailed in the Q3 2025 earnings summary.

Finance: draft 13-week cash view by Friday.

Karat Packaging Inc. (KRT) - Canvas Business Model: Revenue Streams

You're looking at how Karat Packaging Inc. brings in the money, which is all about moving physical product through different channels. The core of the business is definitely the volume of disposable foodservice products they sell.

The latest quarterly snapshot shows Net sales from disposable foodservice products hit $124.5 million for the third quarter of 2025. This was a record quarter for top-line revenue, representing a 10.4 percent increase from the prior year quarter's $112.8 million. The Trailing Twelve Month (TTM) revenue as of late 2025 stands at $0.45 Billion USD.

Karat Packaging Inc. generates revenue across several key customer segments, showing a clear focus on B2B relationships. Here's a breakdown of how the sales channels performed in Q3 2025:

• Sales to chain accounts and distributors saw significant momentum, growing by 13.7% in Q3 2025.
• Online sales also contributed positively, ticking up by 3.1% over the prior year quarter.
• The retail channel, however, experienced a contraction, with sales down 12.5% over the prior year quarter.

The company is actively diversifying its revenue base by entering new product categories, which is a major strategic move to capture future growth, especially given regulatory shifts favoring sustainable options. This is where the new paper bag category comes in.

The launch of the new paper bag category is a significant development. Karat Packaging Inc. secured a major contract with one national chain account for this new line. This specific business is expected $20 million annually over a 2-year term, with shipments starting in Q3 2025 and expected to ramp up. Management has an ambition to scale this paper bag business to over $100 million in additional annual revenue within two to three years.

To give you a clearer picture of the Q3 2025 revenue components, even though the prompt focuses on foodservice, here are the reported revenue segments for that quarter:

Revenue Segment	Q3 2025 Amount
Total Net Sales	$124.5 million
Foodservice Packaging Revenue	$42.6 million
Retail Packaging Revenue	$28.3 million

The growth drivers for the quarter were volume expansion and a favorable product mix, which added about $9.4 million and $3.5 million, respectively, to net sales. This growth was only partially offset by an unfavorable year-over-year pricing comparison of $0.7 million. Honestly, that volume growth is what kept the top line moving forward despite margin pressures from tariffs.

Finance: draft 13-week cash view by Friday.