Buried deep within Flexible Solutions International's (FSI) latest earnings call lies a tantalizing clue, a whisper of a strategy shift that could propel this specialty chemical company into the big leagues. While analysts focus on the company's recovery from a tough 2023, they're missing the bigger picture: FSI is quietly, methodically laying the groundwork for a dramatic expansion into the lucrative food industry.

It's easy to get caught up in the immediate challenges FSI is facing. Lower revenue, compressed margins due to tariffs and rising input costs, the uncertainty in the oil and gas sector – these are all valid concerns. But beneath the surface, a more compelling narrative is taking shape.

Remember those five "seven-figure revenue potential" food products FSI mentioned, the ones currently in the final stages of securing purchase orders? Those aren't just pipe dreams. They represent a calculated move to diversify beyond FSI's traditional markets and tap into a vast, stable, and high-margin sector.

Consider this: FSI's existing food product, a liquid stability agent, is already showing promising signs. Despite weaker sales in Q1 2024, the customer has indicated that their orders for the full year will "substantially exceed" those of 2023. This suggests a potentially significant jump in revenue from just this single product.

Now, let's do some back-of-the-envelope calculations. FSI stated that this existing food product will see a revenue increase of "$1 million to $2 million in gross billings" in 2024. Let's assume a conservative increase of $1.5 million. If two more food products secure purchase orders, and each achieves a similar revenue jump, we're looking at an additional $3 million in gross billings. That's a total of $4.5 million in new food-related revenue in 2024 alone.

But the potential doesn't stop there. Remember those "excellent" margins in the 35% to 45% range? Applying a conservative 35% margin to that $4.5 million in new revenue, we arrive at a staggering $1.575 million in gross profit – a figure that could significantly boost FSI's overall profitability.

This focus on the food industry isn't just a whim. It's a strategic response to the challenges FSI faces in its traditional markets. The company has recognized the need to diversify away from volatile sectors like oil and gas and build a more stable revenue base. And the food industry, with its consistent demand and high margins, offers the perfect solution.

Think of it this way: FSI is like a farmer who, after years of relying on a single crop, decides to plant a variety of seeds to ensure a bountiful harvest, regardless of the weather. The company is hedging its bets, diversifying its portfolio, and positioning itself for long-term success.

And here's the kicker: FSI is poised to become a major player in the food industry. They've already secured their FDA certification, proving their commitment to meeting the stringent standards of the sector. Their Illinois plant is fully food-grade qualified, providing the infrastructure needed to scale production.

This isn't just a story about recovery; it's a story about transformation. FSI is evolving from a specialty chemical company reliant on volatile sectors into a diversified powerhouse with a foothold in one of the world's most stable and lucrative industries.

While other analysts are focused on the short-term fluctuations, smart investors will recognize the sleeping giant that is Flexible Solutions International. They'll see the potential for explosive growth as the company's food-focused strategy begins to bear fruit. This isn't just a company to watch; it's a company to bet on.

Projected Revenue Growth from Food Products in 2024

The following chart illustrates the potential revenue impact of FSI's expansion into the food industry, based on information from the Q1 2024 earnings call.

"Fun Fact: Flexible Solutions International was originally founded in 1991 by a group of scientists who were passionate about developing environmentally friendly solutions to water evaporation. Their first product, HEATSAVR, was a revolutionary pool cover that reduced water evaporation by up to 90%."