Arcadia Biosciences, Inc. (RKDA): 5 FORCES Analysis [Nov-2025 Updated]

You're looking at Arcadia Biosciences, Inc. (RKDA) right now, and what you see is a company that has completely swapped its playbook, moving from agri-tech IP to pushing Zola coconut water in a crowded shelf space.

It's a tough spot: while input costs jumped 25% year-to-date through Q3 2025, the competitive rivalry is so fierce that the net margin sits at a staggering -139.36%. Still, the brand is growing, showing 26% revenue growth YTD Q3 2025, but that growth is overshadowed by high customer power and low barriers for new beverage players. This analysis cuts through the noise to show exactly where the pressure is coming from across all five forces, especially as a major business combination looms. You need to see the full force-by-force breakdown below.

Arcadia Biosciences, Inc. (RKDA) - Porter's Five Forces: Bargaining power of suppliers

When you look at Arcadia Biosciences, Inc.'s supplier landscape as of late 2025, you see a company actively managing down the power of specialized input providers while navigating the typical pressures of commodity sourcing for its core consumer product, Zola coconut water.

For the commodity side-the coconut water supply chain-the power seems relatively low, or at least well-managed. How do I know? Well, Arcadia Biosciences, Inc. has reported gross profit margins exceeding 30% for eleven consecutive quarters, ending Q3 2025. That streak suggests they have a firm grip on their product cost structure, even with rising volume. Still, that doesn't mean zero pressure. Cost of revenues specifically for Zola increased by 25% year-to-date through Q3 2025 compared to the same nine-month period in 2024. That 25% jump shows input costs are definitely moving, but the sustained high gross margin implies they are either passing those costs along or absorbing them without collapsing profitability.

The power dynamic shifts significantly when you look at their former high-tech inputs. Arcadia Biosciences, Inc. has strategically exited the biotech IP space, which immediately neutralizes the bargaining power of specialized seed or trait suppliers. They formalized this exit by selling select patents for $750,000 in March 2025. That move streamlines their supply chain to focus on CPG inputs.

Here's a quick look at the cost control versus cost pressure:

The reduction in reliance on those specialized, high-barrier suppliers is a clear strategic win for reducing external leverage. You can see the margin performance has been generally strong, though it can fluctuate based on product mix, as seen in Q1 2025 where the gross margin was 43%, down from 52% in Q1 2024.

To summarize the supplier power shifts, think about these key operational changes:

• Eliminated reliance on seed/trait suppliers via IP divestiture.
• Achieved $750,000 from patent sales in Q1 2025.
• Managed commodity input costs despite a 25% YTD cost increase for Zola.
• Maintained gross margins above 30% for 11 straight quarters.

The current supplier power hinges almost entirely on the coconut water commodity market, which, given the sustained margins, suggests Arcadia Biosciences, Inc. holds the upper hand in negotiations or has locked in favorable terms.

Arcadia Biosciences, Inc. (RKDA) - Porter's Five Forces: Bargaining power of customers

You're assessing the power your major buyers hold over Arcadia Biosciences, Inc. (RKDA), and right now, that power looks significant, especially when looking at the recent quarterly performance. This force is amplified by the structure of the functional beverage market where Arcadia Biosciences, Inc. operates.

The concentration of sales among a small number of large retail or distribution partners definitely tips the scales toward the customer. We saw this dynamic play out clearly in the third quarter of 2025. Zola coconut water revenues were reported as flat year-over-year for Q3 2025. This flat performance directly overlapped with the benefit Arcadia Biosciences, Inc. received from the initial sell-in to its largest customer during the third quarter of 2024.

To put some numbers around that Q3 comparison, total revenue for the three months ended September 30, 2025, was $1.30 million, which was a 15% decrease from the $1.53 million reported in Q3 2024. That Q3 2024 figure included an incremental $165,000 in Zola sales specifically from that large customer sell-in. Still, the year-to-date picture tells a slightly different story, showing Zola revenues grew 26% (an increase of $820,000) for the first nine months of 2025 versus the same period in 2024.

Here's a quick look at the Q3 2025 financial context:

The lack of pricing power is another clear indicator of customer leverage. Honestly, Arcadia Biosciences, Inc. did not implement any price increases during 2024 or 2025. This suggests that the competitive environment, or perhaps the demands of key buyers, prevented the company from passing along any potential cost inflation.

In the crowded functional beverage market, customers face low switching costs. This means if Zola becomes too expensive or a retailer wants to prioritize a competitor's offering, shifting volume is relatively easy for them to do. The power dynamic is further emphasized by the fact that Arcadia Biosciences, Inc.'s gross profit margins exceeded 30% for the eleventh straight quarter, while SG&A expenses were at an all-time low. While operational efficiency is good, the inability to push prices up suggests buyers are holding firm on their cost expectations.

You should watch for any signs of new distribution agreements or changes in the terms with the largest customer, as that relationship clearly dictates short-term revenue stability. Finance: draft a sensitivity analysis on Zola revenue assuming a 5% price reduction in Q1 2026 by Friday.

Arcadia Biosciences, Inc. (RKDA) - Porter's Five Forces: Competitive rivalry

You're looking at a market where Arcadia Biosciences, Inc. has to fight tooth and nail for every dollar of revenue, which is what we see when rivalry is this intense. The consumer packaged goods (CPG) beverage space, where the Zola coconut water brand operates, is defintely commoditized. This means price sensitivity is high, and brand loyalty is hard-won.

To illustrate the pressure this rivalry puts on the bottom line, Arcadia Biosciences, Inc.'s net margin stands at -139.36%. That figure screams intense, unprofitability-inducing competition, even if the company is making operational strides elsewhere. It shows that despite revenue growth in key areas, the overall financial structure is still heavily burdened by market pressures or fixed costs relative to sales.

Still, the management team is clearly focused on cost control as a primary defense mechanism against this rivalry. They have driven Selling, General & Administrative (SG&A) expenses to what is reported as an all-time low. Here's the quick math on that cost discipline:

This focus on expense management is critical when you are fighting competitors across multiple fronts. The broader agriculture and wellness sector also features numerous direct competitors. You have established players in seed technology and specialty ingredients, for example, companies like S&W Seed or Nocera, each vying for shelf space, research dollars, or B2B contracts.

The pressure is evident, but there are bright spots showing market traction against this rivalry. The Zola brand, for instance, is showing real growth, which is a positive sign that their product is cutting through the noise:

• Zola coconut water revenues grew 26% year-to-date for the first nine months of 2025.
• Zola sales increased by 90% year-over-year in the first quarter of 2025.
• The company has not implemented any price increases in 2024 or 2025, relying on volume.

Finance: draft 13-week cash view by Friday.

Arcadia Biosciences, Inc. (RKDA) - Porter's Five Forces: Threat of substitutes

You're looking at the competitive landscape for Arcadia Biosciences, Inc. (RKDA) and the sheer volume of choices facing a consumer looking for a functional beverage is immense. This threat is definitely very high because the market is saturated with alternatives that serve similar hydration, energy, or wellness needs.

The substitutes for Zola coconut water, which is now the core revenue driver for Arcadia Biosciences, Inc., are plentiful and easily accessible:

• Sports drinks with established market share.
• Flavored waters offering low-calorie refreshment.
• Other plant-based drinks like oat, almond, or soy varieties.
• Direct competitor coconut water brands.

The divestiture of patented biotech assets, specifically the GoodWheat brand, which was sold to Above Food Corp. for a net of $4 million in 2024, has fundamentally shifted the product differentiation for Arcadia Biosciences, Inc.. While this move streamlined operations and helped achieve a Q3 2025 net income of $856,000 against a Q3 2024 net loss of $1.6 million, it removed a unique, patented, non-GMO wheat IP-based product line from the portfolio. This means the remaining consumer-facing differentiation rests almost entirely on the Zola brand against a sea of established beverage competitors.

Still, Zola's brand performance shows it is currently carving out space, outperforming the category in year-to-date metrics, which is a critical counterpoint to the high threat level. Here's a quick look at the numbers from the first nine months of 2025 compared to the same period in 2024:

The 26% year-to-date revenue growth for Zola shows the brand is gaining traction, which is impressive when you consider the Q3 2025 revenue of $1.30 million was down 15% year-over-year, largely due to lapping a large customer's initial order in Q3 2024 and the absence of $217,000 in GLA oil sales from Q3 2024. The company's cash balance stood at $1.1 million as of the end of Q3 2025, declining by only $257K during the quarter. This financial discipline, alongside the Zola growth, is what allows Arcadia Biosciences, Inc. to fight against the substitution pressure.

Arcadia Biosciences, Inc. (RKDA) - Porter's Five Forces: Threat of new entrants

You're looking at Arcadia Biosciences, Inc. (RKDA) right now, and the threat of new entrants looks different than it did a few years ago. The focus has clearly pivoted away from high-barrier agricultural biotech toward consumer packaged goods (CPG), and that changes the entry calculus entirely.

Low barrier to entry for the core Zola CPG product line.

The success of the Zola coconut water line shows that a viable, fast-growing CPG product can gain traction, which inherently lowers the perceived barrier for others wanting to enter that specific beverage space. Honestly, if you can scale distribution quickly, you can compete. Look at the numbers; Zola's year-to-date revenues for the first nine months of 2025 grew 26% over the prior year. That kind of growth attracts attention, and attention attracts competition. In Q1 2025 alone, Zola sales surged 90% year-over-year, supported by a 70% increase in new distribution channels. New entrants see that success and know that a strong distribution partner or a unique product proposition can break through, even without deep legacy technology. They don't need to invent a new trait; they just need shelf space. The company didn't even need to raise prices to achieve this; Zola revenue growth in the first half of 2025 was 47% driven purely by volume and distribution gains.

High capital requirements for new biotech/agri-tech development are now mostly irrelevant.

The capital intensity that once defined Arcadia Biosciences, Inc. is largely gone now, making that specific barrier irrelevant to the current entity. You see, the company actively shed those high-cost, long-cycle assets. They sold patents for $750,000 in Q1 2025. That move, plus the earlier sale of the GoodWheat brand for $4 million in 2024, means the massive capital needed for R&D in gene editing or novel trait development is no longer a primary concern for a new competitor looking to challenge Arcadia's current structure. The new Arcadia Biosciences, Inc. is a CPG operator, not a pure-play agri-tech developer.

Pending business combination with Roosevelt Resources, Inc. will fundamentally change the entity.

The pending business combination with Roosevelt Resources, Inc., expected to close as soon as the first quarter of 2025 or thereafter, is the biggest structural shift affecting this force. This isn't just a merger; it's a near-total change of control and focus. Post-closing, the current equity owners of Roosevelt are expected to own approximately 90% of the combined entity's outstanding shares, while existing Arcadia shareholders are projected to hold about 10%. Furthermore, Arcadia Biosciences, Inc. will change its corporate name to Roosevelt Resources, Inc., and the current management team from Roosevelt will take the helm, with Tony Roosevelt serving as chief executive officer. This transition means that any new entrant is competing against an entity with a completely different capital base and strategic direction, effectively resetting the competitive landscape.

The company sold patents for $750,000, reducing its proprietary technology moat.

The proprietary technology moat, once a significant barrier to entry, has been actively dismantled. The sale of select patents for $750,000 in Q1 2025 is concrete evidence of this reduction. While the company still has intellectual property, this monetization signals a strategic decision to rely less on defensible technology and more on market execution for Zola. If you're a new entrant, you know the technology moat isn't as deep as it once was. Also, remember the $4.0 million gain recognized in Q2 2024 from the sale of RS durum wheat patents to Corteva.

Here's a quick look at the structural shifts impacting the threat level:

The current environment suggests that new entrants face a lower technological hurdle but must contend with an established, growing CPG brand in Zola, which is now backed by a merged entity with a different core business. You have to weigh the ease of entry into CPG against the established distribution gains Zola has already locked in.

Key strategic factors influencing the threat:

• Zola distribution grew 70% year-over-year in Q1 2025.
• Gross margins have exceeded 30% for eleven straight quarters.
• Operating expenses (SG&A) decreased by $1.6 million in the first nine months of 2025 vs. 2024.
• The entity is transitioning to a new name and management structure.
• The company is pursuing resolution on a $6 million note receivable related to 2024 asset sales.

Finance: draft pro forma capitalization table reflecting the 90%/10% post-merger split by next Tuesday.