Barfresh Food Group (BRFH 0.66%) reported second quarter 2025 results on August 13, 2025, highlighting 11% year-over-year revenue growth to $1.6 million (GAAP) in Q2 FY2025 and milestone achievements in manufacturing capacity. The company executed key strategic steps to address prior supply constraints, updated its revenue guidance for FY2025 to $12.5 million to $14 million, and signaled expected margin improvement in the second half of FY2025. The following analysis distills fundamental factors affectingBarfresh Food Group(BRFH 0.66%) long-term trajectory, including manufacturing upgrades, product pipeline progress, and inventory dynamics.
Manufacturing upgrades expand Barfresh capacity
Completion of equipment installations at a second co-manufacturing partner capped a multiquarter transition, enablingBarfresh Food Group(BRFH 0.66%) to build inventory and adjust for seasonally high education channel demand. Starting January 2026, a new high-capacity bottling manufacturer will replace an existing partner, increasing bottle production capacity by approximately 400% and enabling the company to produce 20 million to 25 million bottles annually once the new manufacturing comes online next year.
"I am pleased to report that we have reached an important milestone with our second co-manufacturing partner, completing its equipment installations during the second quarter. While this addresses a key component of the production challenges that have impacted our revenue and margins, we continue to work on building consistent operational capacity, and we now have two term manufacturers producing product as we enter the third quarter. In addition, we continue to work on solidifying our overall long-term supply chain. As an example, in January 2026, we are adding a higher capacity bottling manufacturer for our Twist and Go bottles, which will replace one of our current manufacturers at the end of 2026. The current manufacturer will continue to produce product through February 2026, and then our relationship with them will end. The new higher capacity manufacturer is currently producing our Twist and Go smoothie cartons, so this is a natural progression to have them also be a part of our bottling manufacturing team. This additional capacity is expected to exceed the volume of the manufacturing we are replacing by approximately 400%."
-- Riccardo Delle Coste, CEO
This transition reduces operational risk tied to supply bottlenecks and positions the company to scale rapidly and recover lost distribution, especially as previously removed menu placements are expected to be reinstated.
Barfresh broadens product mix with positive market response
The company introduced Pop and Go 100% juice freeze pops targeting the lunch segment, which expands its historical breakfast daypart presence and broadens its reach in school meal programs. The bidding cycle for the 2025-2026 school year is seeing formal approvals from large school districts for both core and new offerings, validating broader market acceptance.
"We have seen some good pickup on the on the POPs. We've actually got some large school districts that have approved this already. The bidding process is, you know, completing. There are some schools that are still updating their final bids that haven't come through just yet that we're waiting on that we are on the bids, they just haven't been confirmed. So overall, we've had a good response. Generally. And then in addition, the pops have had a a very positive start to the year. So that you know, from that perspective, it's a it's a good start to the year."
-- Riccardo Delle Coste, CEO
Strong early adoption of new products in the education channel supports the company’s strategy to diversify its portfolio and capture additional meal occasions, which could drive incremental revenue growth as school districts finalize their menu decisions.
Inventory build supports Barfresh’s education channel recovery
At June 30, 2025, the company held $1.8 million in inventory, primarily Twist and Go bottles, marking the first significant inventory build in several quarters and offsetting prior inability to fully supply certain clients. This shift follows customers temporarily removing Barfresh products from menus in early Q2 FY2025 due to supply limitations related to equipment installation delays.
"No. It's actually mostly bottle because, you know, we are able to build over the summer. So we you know, to compensate for the lack of, capacity that we've experienced, We've built a lot of inventory to prepare for the school year."
-- Lisa Roger, CFO
Building inventory enables prompt fulfillment as school districts resume menu planning, reducing the risk of lost sales during the critical back-to-school period and supporting the company’s efforts to regain menu placements.
Looking Ahead
Management revised its revenue guidance for FY2025 to $12.5 million to $14 million, with margin improvement expected in the second half of FY2025 and full normalization as manufacturing partners reach optimal output. Strategic investments in co-manufacturing are projected to provide sufficient capacity for future growth, particularly as new high-capacity bottle production commences in January 2026. Management also highlighted continued expansion opportunities, with current education channel penetration of only 5% and additional growth expected as new bids are finalized.
