Core Insights - Where Food Comes From, Inc. (WFCF) has launched RaiseWell Certified, a new third-party verification standard aimed at enhancing animal care, responsible raising practices, and supply-chain transparency in North America's protein markets [1][2] Group 1: Certification Framework - RaiseWell Certified establishes a structured framework requiring responsible animal raising at every life stage, with strict production rules including no antibiotics and no added growth hormones [2] - The standard emphasizes traceability, ensuring livestock and poultry are source-verified and tracked through the supply chain, thereby enhancing confidence for retailers and consumers [2] Group 2: Market Demand - The launch of RaiseWell Certified addresses the rising market demand for clear and verifiable food claims, particularly in responsibly raised protein categories [3] - The certification helps businesses differentiate themselves based on integrity and certified production methods, which is increasingly important as consumers seek products that align with their values [3][4] Group 3: Retail Support - RaiseWell Certified provides retailers and restaurants with certification assets that support premium positioning, including third-party verified claims and source-verified traceability [5] - The program includes on-pack seals that comply with USDA FSIS requirements, enhancing claim integrity and providing consumers with clarity about food origins [5] Group 4: Integration with Existing Standards - RaiseWell Certified integrates with WFCF's existing CARE Certified standard, which focuses on sustainability across animal care, environmental stewardship, and community [6] - This integration allows producers and retailers to bundle claims into a single, audit-ready package, supporting a unified verification strategy tailored to premium markets [6] Group 5: Strategic Goals - With RaiseWell Certified, WFCF aims to expand its portfolio to support growth in value-added protein markets and meet the rising demand for traceable, ethically raised products [7] - The certification is designed to strengthen trust for retailers, increase clarity for consumers, and help brands build loyalty through verified integrity [7]

Financial Data and Key Metrics Changes - The company reported an approximate 6% year-over-year decline in total revenue for Q1 2025, primarily due to a decrease in the Verification and Certification Services segment, which saw revenue drop by $252,000 compared to Q1 2024 [4] - Net income for the quarter was $31,000 or $0.01 per diluted share, down from $178,000 or $0.03 per diluted share in the same quarter last year, with more than half of the decline attributed to a $76,000 non-cash charge on digital assets [6] Business Line Data and Key Metrics Changes - The Verification and Certification Services segment, which represents roughly 50% of total revenue, was significantly impacted by fewer cattle moving through the system due to cyclical herd size reduction and severe drought conditions [4] - Despite the challenges, gross margins remained stable at 41.6%, attributed to disciplined cost management [6] - The Upcycled Certified program, the fastest-growing service offering, saw total certifications grow 70% year-over-year in 2024 and 10% growth in Q1 2025 [10] Market Data and Key Metrics Changes - The global food market for upcycling is currently valued at $46 billion and is expected to grow to nearly $75 billion by 2029, indicating a significant market opportunity [10] - The company is experiencing increased demand for biosecurity services due to disease outbreaks affecting poultry operations [6] Company Strategy and Development Direction - The company is focusing on expanding its Upcycled Certified program and fee-based retail labeling program for protein products, targeting mass market and high-end regional retailers [10][11] - The CARES certified program aims to meet growing consumer expectations for responsibly sourced products, enhancing visibility and brand recognition among retail consumers [12] Management's Comments on Operating Environment and Future Outlook - Management views the herd size reduction as a cyclical issue that is expected to reverse in the future, despite current challenges [5] - The company remains optimistic about customer retention rates, which are in the high 90% range, despite the disruptions in verification activities [5] Other Important Information - The company continues to buy back shares, having repurchased 376,000 shares at a cost of $383,000 during the first quarter [7] - The company has faced challenges in communicating its digital asset performance due to media policies, which have affected the visibility of its financial news [8][9] Q&A Session Summary Question: What are the impacts of the current cattle market on the business? - Management noted that the decline in cattle movement is due to cyclical herd size reduction and drought conditions, but they expect this to be temporary [4][5] Question: How is the company addressing the challenges in poultry verification? - The company is seeing increased demand for biosecurity services as a response to avian influenza outbreaks affecting poultry operations [6] Question: What is the growth outlook for the Upcycled Certified program? - The Upcycled Certified program is experiencing significant growth, with a 70% increase in certifications year-over-year and continued expansion expected [10]