Jacob Henry

Jacob Henry asked for an update on Vital Farms' progress in building retailer confidence to secure more shelf space. He specifically questioned if there's visibility into plans for expanding SKU placements or if it remains a longer-term discussion.

Answer

Russell Diez-Canseco, Executive Chairperson, President, and CEO, reported very fruitful conversations with retailers, citing improved service levels and Vital Farms' role as a category leader. He indicated that these discussions are leading to long-term growth plans and expanded distribution.

Jacob Henry inquired about Vital Farms' progress in building confidence with retailers to secure more shelf space, asking for an update on any visible plans for additional SKUs or if this remains a long-term discussion.

Answer

Russell Diez-Canseco, Executive Chairperson, President, and CEO, reported that conversations with retailers are progressing very well. He highlighted the company's high service levels and its role as a category leader, which makes for fruitful discussions about long-term growth plans.

Jacob Henry asked for insight into when and why Premier Protein's fifth pallet at the large club customer is transitioning out.

Answer

Darcy Davenport, President and CEO, BellRing Brands, clarified that the fifth pallet was always intended to be a temporary SKU and is transitioning out in Q2.

Jacob Henry inquired about the transition out of the fifth pallet at the large club customer, seeking insight into when and why this is occurring.

Answer

President and CEO Darcy Davenport clarified that the fifth pallet SKU was always intended to be a temporary item and is scheduled to phase out in Q2.

Jacob Henry inquired about the pricing of contracts signed this quarter, asking how they aligned with expectations and if Lamb Weston is offering more discounts than anticipated to secure new business.

Answer

CEO Mike Smith stated that North America pricing was in line with expectations, reflecting customers' focus on service, quality, consistency, and innovation, not solely price, despite supporting customers in a challenging environment. He noted that international markets continue to experience more competitive dynamics due to new capital, raw pricing, and normal competition, but this was also as expected. CFO Bernadette Madarieta added that there's a mix shift in the retail channel towards private label volume.

Jacob Henry, on behalf of Rob Moskow, asked for additional details on the pricing of contracts signed this quarter, specifically how they aligned with expectations and if the company is resorting to more discounting than anticipated to win new business.

Answer

CEO Mike Smith stated that North American customers are focusing on service quality, consistency, and innovation, not solely on price, and pricing in North America has been in line with expectations. He acknowledged supporting customers in a challenging environment and noted that 75% of contracts are finalized, with the remaining 25% expected by calendar year-end. He added that international markets continue to exhibit more competitive dynamics due to new capital, raw pricing, and normal competitive pressures. CFO Bernadette Madarieta highlighted a mix change in North America, particularly in the retail channel, with a shift towards private label volume over branded volume.