Like a smaller Pactiv Evergreen, specializing in single-use foodservice disposables and packaging.

Imagine an Office Depot or Staples, but exclusively for all the disposable cups, containers, and cutlery that restaurants use.

Think of it as the B2B version of Dixie or Solo Cup, providing a comprehensive range of disposable packaging, cups, and cutlery for restaurants.

• Food and Take-Out Containers: Disposable containers used for packaging and transporting food items in foodservice settings.
• Bags: Disposable bags for various uses in restaurants and retail.
• Tableware: Disposable plates, bowls, and other dining accessories.
• Cups and Lids: Disposable beverage cups along with their corresponding lids.
• Cutlery and Straws: Disposable forks, knives, spoons, and drinking straws.
• Specialty Beverage Ingredients: Components used to prepare specific beverages.
• Equipment: Various pieces of equipment related to foodservice operations.
• Gloves: Disposable gloves for hygiene and food handling.
• New Product Development Services: Services focused on creating and introducing new disposable product lines.
• Design and Printing Services: Custom design and printing solutions for packaging and products.
• Logistics Services: Management of the distribution and supply chain for products.

• Domestic and regional distributors
• Restaurant chains
• Retail establishments
• Online customers (generally other businesses in the foodservice or hospitality sector)

Alan Yu, Chairman and Chief Executive Officer

Alan Yu co-founded Karat Packaging Inc. (initially Lollicup USA Inc.) in 2000. He began the business as a bubble tea cafe in San Gabriel, California, before strategically shifting to become a supplier for the foodservice industry. He also served as the Chief Executive Officer and President of Lollicup USA, Inc. Yu is a significant shareholder, contributing to the company's high insider ownership.

Jian Guo, Director, Chief Financial Officer, and Principal Accounting Officer

Jian Guo possesses over 18 years of progressive accounting and finance experience. She demonstrated confidence in the company by purchasing shares in November 2025.

Marvin Cheng, Vice President of Manufacturing and Secretary

Marvin Cheng co-founded Karat Packaging (originally Lollicup USA Inc.) in 2000 with Alan Yu. He is recognized as one of the largest individual shareholders within the company. Cheng brings two decades of experience in managing supply chains and overseeing manufacturing operations.

Daniel Quire, Chief Revenue Officer

Daniel Quire is focused on expanding sales in the Eastern U.S. He has over a decade of sales management experience specifically within the food service industry.

Joanne Wang, Chief Operations Officer

Joanne Wang has held positions at Bigzoo.Com, Alaska Premium Beverage and Bottling, and Lollicup USA Inc. Her previous roles include Vice President of Sales & Operations at Pincity.Com and Premiere Telemedia.

The key risks to Karat Packaging's business (symbol: KRT) are:

1. Trade Volatility, Tariffs, and Increased Import Costs: Karat Packaging faces significant and immediate risks from ongoing trade volatility, higher tariff and duty costs, and shifts in U.S. trade policy. These factors directly increase the company's cost of goods sold (COGS) and have materially impacted its gross margins. The company's heavy reliance on global sourcing makes it particularly vulnerable to these external pressures. For example, in the third quarter of 2025 alone, increased import costs due to higher duties and tariffs rose by an estimated $8.2 million compared to the prior-year quarter, leading to a decline in gross margin from 39.2% to 34.0%.
2. Highly Competitive Market and Pricing Pressure: The foodservice packaging industry is fragmented and highly competitive, making it challenging for Karat Packaging to sustain price increases and maintain pricing power. This intense competition can lead to rivals undercutting prices, which can force Karat Packaging to absorb increased costs, such as tariffs, directly impacting its bottom line. The California market, in particular, has been cited as experiencing a "slowdown" with restaurant closures and a "very competitive environment".
3. Supply Chain Disruptions and Cost Fluctuations: Beyond tariffs, Karat Packaging is exposed to risks from general global supply chain disruptions, fluctuating energy and logistics costs, and currency fluctuations, particularly involving the New Taiwan Dollar. These factors can materially impact the company's costs and earnings. Additionally, weather disruptions, such as those experienced in Texas and the East Coast, have temporarily impacted sales and operations.

Increasing governmental regulations and consumer shifts towards reusable packaging systems and outright bans on single-use items (even those made from paper or biopolymer-based compostable materials), driven by environmental sustainability initiatives, posing a fundamental threat to the demand for all disposable products.

Karat Packaging (NASDAQ: KRT) is expected to drive future revenue growth over the next 2-3 years through several key strategies:

1. Expansion of Eco-Friendly Product Lines and Paper Bag Business: Karat Packaging is strategically focused on significantly increasing its eco-friendly product sales, particularly through the expansion of its Karat Earth® line and the paper bag category. This includes adding new SKUs and securing contracts with major national chains, with eco-friendly product sales growing to 37.3% of total revenue in Q4 2025, up from 34.5% in the same quarter of 2024. The paper bag category specifically saw growth from $7.9 million in 2024 to $13.7 million in 2025.
2. Volume Growth and Market Share Gains: The company anticipates revenue growth driven by increased sales volume. In Q4 2024, sales volume rose by 13.9% year-over-year, and in Q4 2025, net sales increased by 13.7% due to volume and favorable pricing. Management explicitly stated that 2026 guidance assumes most growth will come from market share gains, particularly in expanded product categories and by leveraging global sourcing flexibility.
3. Growth in Chain Accounts and Distributor Sales: Sales to chain accounts and distributors represent Karat Packaging's largest sales channel and showed a 17.5% increase in the Q4 2025. Continued growth in this area is a key driver, supported by ongoing efforts to add new customer accounts and expand existing relationships.
4. Favorable Pricing and Product Mix: Pricing contributed positively to revenue growth in Q4 2025 for the first time since early 2023. This favorable pricing, combined with an optimized product mix, is expected to continue supporting revenue expansion.
5. Strategic Operational Expansions and Supply Chain Resilience: Karat Packaging plans significant operational expansions, including a new distribution center. The company is also prioritizing strengthening its supply chain resilience through diversifying its sourcing, with its import mix in Q4 2025 including 46% from Taiwan, 14% from China, 13% from the United States, and 11% each from Vietnam and Malaysia. Additionally, the company is actively evaluating strategic acquisitions to broaden its infrastructure, product offerings, expertise, and supply chain diversity, particularly within the U.S.

Share Repurchases

• Karat Packaging authorized its first share repurchase program of up to $15 million on November 5, 2025.
• During the fourth quarter of 2025, the company repurchased 137,374 shares for a total of $3.0 million.
• As of March 11, 2026, approximately $12.0 million remained available under the authorized repurchase program.

Share Issuance

• In June 2025, a secondary offering of 1.50 million shares was made by certain members of the company's management team at a price of $27.00 per share; Karat Packaging Inc. did not receive any proceeds from this sale.

Capital Expenditures

• Capital expenditures in Q3 2025 were $246K, representing a 47.3% increase from the prior quarter.
• Purchases of property, plant, and equipment totaled $2.5 million in Q4 2025, an increase of 229.1% year-over-year.
• Capital expenditures have supported an expanded U.S. distribution footprint, including new warehouses in Chino, California, and Mesa, Arizona, and the relocation of headquarters to Rockwall, Texas.