John Baumgartner • Mizuho Securities

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Wesley Batista Filho, CEO of JBS Foods USA, highlighted a significant opportunity to build brands in the red meat prepared foods space, similar to their success with 'Just Bare' chicken. He attributed the strong beef demand to its quality and consumer trust, noting that consumers continue to purchase it despite a widening price gap with other proteins.

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President and CEO Rob Vitale responded that while many opportunities exist to evolve the Pet portfolio, the immediate priority is to ensure the Nutrish brand is stabilized before pursuing significant portfolio management. For Refrigerated Retail, CFO Matt Mainer attributed strong performance to correcting a prior-year trade overspend, achieving distribution gains, and offering targeted price point alternatives.

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COO Jeff Zadoks explained that the PPI acquisition provides needed capacity to play offense in refrigerated sides, but they now face stronger private label competition. He noted innovation can now resume. An executive confirmed that the impact of GLP-1 drugs on demand is a new structural factor for the cereal category that was not present in previous cycles.

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COO Jeff Zadoks defended the egg business, stating its long-term growth trend remains strong despite recent volatility, and Post has no plans to enter the more volatile shell egg market. For cereal, he acknowledged challenges but said it's too early to declare a new, lower permanent run rate, highlighting a strategy focused on benefit-forward innovation and playing across the value spectrum.

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President and CEO Rob Vitale outlined a dual approach for pet food: a short-term focus on relaunching its existing premium brands, with investment baked into FY25 guidance, and a long-term view that includes evaluating asset use for private label and pursuing inorganic growth. For potatoes, Vitale stated the foodservice business remains a strong growth segment, as its value proposition is converting customers from fresh potatoes, a trend not impacted by dynamics in the frozen category.

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CFO David Hass acknowledged elevated customer 'quits' in June and July as a lagging indicator of service issues but noted that strong digital customer acquisition is helping offset this. He clarified that corrective actions are primarily customer credits and 'win-back' offers, not broad pricing concessions. Hass expressed confidence that the synergy plan is appropriate and that the disruption was caused by the speed of execution, not the plan itself.

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CEO Russell Diez-Canseco viewed the stable proportions as a positive sign of a predictable consumer journey. He explained that the company's primary objective and the highest and best use of its commercial dollars is to drive top-of-funnel awareness and acquire new households, as the migration from trial to heavy user occurs naturally and predictably over time.

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CEO Brian Kocher stated that based on frequent customer discussions, the company has not seen any slowdown or uncertainty impacting launch timing, attributing this resilience to structural health and wellness trends. Regarding packaging, Kocher confirmed that while they always evaluate different formats, SunOpta's current and robust aseptic pipeline is built entirely on its existing Tetra Pak capacity, where they see significant runway for growth.

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Executive Greg Gaba explained that the SG&A leverage was primarily due to the timing of stock compensation, including forfeitures and a tough comparison to the prior year, and should not be expected to continue at that level. Executive Brian Kocher added that yield improvements involve multiple factors like recipe compliance, ingredient substitution, and process optimization, noting it's an area where progress is pacing slightly behind plan.

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CEO Brian Kocher clarified that recent investments are focused on controllable items like yield and uptime, not increased complexity, which was a factor years ago but not recently. CFO Greg Gaba explained the CapEx guide includes spending on maintenance and productivity to unlock trapped capacity, emphasizing that the go-forward run rate will remain below D&A.

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CFO Ruben Baldew confirmed the closure of a smaller factory in the Nordics and mentioned a broader program focusing on procurement and network optimization, with more details to be shared later in the year. CEO Stéfan Descheemaeker described the Future Foods Lab as an early-stage initiative to partner with startups, noting a confidential foodservice partnership is launching soon. He also mentioned the development of pilot plants to accelerate the speed of innovation.

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CFO Ruben Baldew clarified the gap between the company's positive sell-out (+0.2%) and negative sell-in (-3.6%) was primarily due to destocking in their specific categories. CEO Stéfan Descheemaeker addressed innovation, highlighting a strategic push into the snacking occasion with products like Fish Bar in Italy, which is successfully attracting younger, higher-income consumers and creating new consumption moments, aided by the high penetration of air fryers.

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CFO Ruben Baldew clarified that while Nomad's retail sell-out grew 0.2%, its sell-in to retailers was -3.6%, with the difference largely attributable to destocking. CEO Stéfan Descheemaeker explained that innovation is successfully attracting new consumers by targeting new occasions, such as snacking with the 'Fish Bar' sub-brand in Italy. He noted this is a 'white space' for the company, attracting younger and higher-income consumers from outside the traditional frozen meal category, supported by trends like air fryer adoption.

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CFO Ruben Baldew explained the transformation is now proceeding 'slower and simpler' to avoid disruption, with the next phase impacting a smaller part of the business. He noted that many efficiency gains are already being realized. CEO Stéfan Descheemaeker commented that frozen has proven resilient, and the company is now regaining market share from private label as prices stabilize.

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CEO Darcy Horn Davenport explained that consumer research indicates that shoppers do not differentiate based on protein source (e.g., ultra-filtered milk vs. MPC). She stated that brand, taste, texture, and macros are the primary purchase drivers, and new households are entering the category through various product types based on these attributes, not the specific protein ingredient.

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President and CEO Darcy Davenport acknowledged some promotional softness in ready-to-mix, potentially from smaller players, but noted BellRing is taking a small price increase on its powders. Regarding Dymatize, she explained that e-commerce has long been the primary discovery channel for the category and that she still sees significant opportunity for brands to transition into mainstream retail.

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President and CEO Darcy Davenport agreed that display is more important than deep discounts but noted that promotional depth is a negotiation with retail partners who have their own requirements. Regarding powders, she and CFO Paul Rode explained the different cost dynamics, with volatile whey protein in powders versus more stable milk protein in shakes. They believe the powder market has a different P&L reality, and while whey costs remain elevated, it has not yet translated to retail price action.

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President and CEO Darcy Davenport outlined that Premier Protein will see ongoing flavor and pack size innovation, plus two major new platform launches in Q2 and Q4. Dymatize will launch two new platforms outside of traditional protein powder in the first half. She clarified that most growth is from new users entering the category, not from brand switching or substitution from other formats.

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CEO Steven Oakland stated that based on retailer forecasts, he expects continued strong support for private label, noting that current branded promotions are not driving the unit volumes that were feared. CFO Patrick O'Donnell projected gross margin to be flattish in Q3 before improving in Q4, driven by supply chain savings and efficiencies that will offset a minor timing-related drag from pricing net of commodities.

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CEO Geoff Tanner acknowledged that innovation is critical and that the company had previously 'dropped the ball.' He mentioned the 30-gram Atkins Strong platform is performing well, while other recent confection innovations have had mixed results. He stated the next wave of focus for Atkins will be on bringing more 'fun' and 'disruptive' innovation to the bar portfolio.

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CEO Geoff Tanner explained the Atkins guidance change was primarily due to a larger-than-expected distribution loss at a key club customer, which they are working to offset with Quest and OWYN SKUs. CFO Shaun Mara added that this shift is accretive to contribution margin, as Quest's margin is now significantly higher than Atkins'. Regarding Quest shakes, Geoff Tanner detailed that the relaunch pivots from a 'me-too' product to a differentiated offering that 'flips the macros' on indulgent milkshakes, featuring 45g of protein and superior taste from ultra-filtered milk.

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CEO Geoff Tanner reported that new Atkins items are outperforming replaced items 2-to-1 and that the Quest Bake Shop platform is highly incremental to both the brand and the category. For OWYN, he highlighted nearly 70% consumption growth driven by both distribution and velocity, reaffirming the goal to double sales in three to four years.

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CEO Geoff Tanner acknowledged Quest bars have underperformed the category, which is 'unacceptable.' He outlined plans to accelerate innovation and sharpen pricing to defend their leadership. CFO Shaun Mara guided for 'low single digit to flattish' growth for bars in FY25. On OWYN, Tanner explained its success comes from attracting mainstream consumers due to a superior taste profile that is closer to dairy, and stated they plan to apply the 'Quest playbook' to expand the brand beyond shakes.

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Bahram Akradi, Founder, Chairman and CEO, described a steady execution of club modernization, including adding recovery zones and cold plunges, as part of a constant adaptation to member trends. Erik Weaver, Executive Vice President and CFO, clarified that the leverage on center operations expense was not due to timing but was a direct result of the strong flow-through from higher membership revenue and growth in high-margin in-center businesses.

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CEO Bahram Akradi described recovery as a key growth area, with new clubs getting dedicated spaces and older clubs being retrofitted. He highlighted the success of the MIORA longevity business, expecting it to eventually generate revenue equivalent to at least 50% of the personal training business. Regarding the app, he stated it's too early to share detailed engagement metrics but promised a comprehensive update at the summer Investor Day.

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CFO Lee Boyce responded that as part of the strategic review, everything is currently on the table. He stated that it is too early to specify what options might be ruled out, particularly with an interim CEO just stepping into the role, and that all potential value levers will be examined.

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CEO Wendy Davidson clarified that the macro commentary reflects general consumer volatility and a spending bifurcation, with Hain positioned well at the entry-price-point to premium and expanding into value channels. Regarding differentiation, she stated that while she hopes more companies adopt cleaner ingredients, Hain is ahead of the trend and its brands deliver on taste and convenience, with a focus on driving greater availability.

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CEO Wendy Davidson attributed past snacks issues to internal execution, not competition, and outlined a new focus on core assortment, effective promotions, and brand building. For tea, she explained that a packaging change caused temporary shelf disruption and that marketing spend was intentionally shifted from Q4 to Q1 to support a new master brand campaign and innovation launches ahead of the peak season.

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President and incoming CEO Stephan Gratziani positioned Link BioSciences as a strategic asset to attract sophisticated, premium customers and athletes with unique, one-to-one formulated products, creating a long-term competitive advantage. CFO John DeSimone addressed APAC, noting the region grew on a constant currency basis but was impacted by a slowdown in India's hyper-growth, timing of price increases in Korea, and tough comps in Taiwan. Gratziani added that the business is still feeling the tail-end effects of a prior three-year decline in recruiting.

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Incoming CEO Stephan Gratziani explained the preferred customer decline reflects a historical shift to a 'foodservice transactional' model in nutrition clubs, and the company is now focused on balancing this with a 'transformational,' product-result-driven approach. CFO John DeSimone addressed currency, stating most of the impact is translational. He noted that local production offers limited benefits as many raw ingredients are priced in U.S. dollars, making pricing actions a more effective tool to counter local inflation.

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President Stephan Gratziani and CFO John DeSimone addressed macro risks by highlighting the importance of delivering value and testing locally adapted business plans. Regarding the diabetes program, management noted that top leaders are now certified, with plans to scale the certification internally. They see it as a foundational credibility builder, with adoption into daily business models left to individual distributors.

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CEO Jeffrey Harmening responded that value has multiple components, including benefits that consumers will pay for, such as protein. He noted a market bifurcation with growth at both the value and high ends. He reiterated that for General Mills, 'value' means having correct price gaps, which then allows product benefits—whether functional like protein or experiential like taste and texture—to drive purchasing decisions.

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CEO Jeffrey Harmening responded that consumers are still willing to pay for tangible benefits, highlighting the success of new protein-fortified products like Cheerios Protein. He described the market as bifurcating, with demand at both the value and premium ends. He emphasized that 'value' is about correct price gaps, not just low prices, and that taste combined with a functional benefit is a winning formula.

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CEO Ethan Brown asserted that the primary barrier to adoption is consumer misperception about health, not price, which the company is actively addressing. He believes the premium product strategy is correct. On operating expenses, he stated he does not expect an increase and that the company is continuously looking for more efficiencies to drive profitability, with opportunities in 2025.

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CEO Dirk Van de Put described the $95 billion packaged cakes and pastries category as a highly fragmented but significant growth opportunity. He explained the strategy is to leverage iconic brands like Oreo in the category. He highlighted the Evirth acquisition as a major opportunity in China's booming, sophisticated market, noting its proprietary technology produces exceptional quality. While the immediate priority is China, he confirmed the company has begun considering how to expand this high-quality capability to the rest of the world.

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