John Baumgartner

John Baumgartner asked about the composition of Vital Farms' buyers, specifically if the increased buy rate among low-income households (up 50% over three years) might become a drag in 2026 due to financial stress, and if any pressure points are modeled for limiting household growth. He also inquired about other marketing reinvestment, including magnitude and shifts in delivery compared to historical approaches.

Answer

Russell Diez-Canseco, Executive Chairperson, President, and CEO, stated no reason to believe their ability to attract and retain new households is off algorithm. He noted a measured approach to marketing, exploring profitable investments in the 5%-6% range, with a focus on driving repeat and loyalty in addition to top-of-funnel awareness. Thilo Wrede, CFO, added that the plan is to continue increasing total marketing spend to convert brand awareness into trial.

John Baumgartner inquired about the composition of Vital Farms' buyers, specifically if the significant increase in low-income households over the past three years might become a drag in 2026 due to financial stress, potentially limiting the rate of new household acquisition. He also asked about other marketing reinvestment strategies, including magnitude and shifts in delivery compared to historical approaches.

Answer

Russell Diez-Canseco, Executive Chairperson, President, and CEO, stated there's no reason to believe the ability to attract and retain new households will deviate from their normal growth algorithm, though the types of households may evolve. Regarding marketing, he reiterated a measured approach, exploring profitable investments within the 5-6% marketing spend range. He noted a historical focus on top-of-funnel awareness and now an opportunity to also focus on driving repeat and loyalty. Thilo Wrede, CFO, added that the plan is to continue increasing total marketing spend to build the brand and convert awareness into trial.

John Baumgartner noted that the proportion of light, medium, and heavy buyers has remained stable and asked about the company's ability to actively migrate consumers up the frequency curve to more regular purchases.

Answer

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.

John Baumgartner from Mizuho asked Dominic Brisby about the evolving European retail environment, specifically regarding retailers' increased focus on fresh food and private label quality, and how Nomad Foods plans to strengthen retailer relationships and point-of-purchase presence. He also inquired about the necessary reinvestment to drive consumers back to the frozen food aisle. Furthermore, Mr. Baumgartner questioned potential supply chain disruptions in the fish business due to recent reports of issues with IT platforms and digital systems related to illegal fishing catches at European ports.

Answer

Dominic Brisby, CEO, stated that European retailer behavior hasn't dramatically shifted, but existing trends of focusing on private label quality and fresh food continue. He identified opportunities to enhance point-of-sale presence through innovations like Chicken Shop, disruptive displays, and improved packaging, noting significant investment is planned for this. Jason English, Head of Investor Relations, added that the frozen category is already showing robust growth for retailers (2.4% overall, 3% in Italy, 4.5% in Germany). Regarding fish supply chain disruptions, Ruben Baldew, CFO, confirmed no impact on Nomad's supply. Jason English, Head of Investor Relations, clarified that the reported IT platform issues were short-term and temporarily suspended, not affecting their business or the broader category.

John Baumgartner asked Dominic Brisby about strengthening retailer relationships and point-of-purchase strategies, specifically addressing European retailers' increased focus on fresh food and private label quality. He also questioned the required reinvestment to drive consumers back to the frozen food case and inquired about any supply chain disruptions related to illegal fishing catches.

Answer

Dominic Brisby (CEO) noted no dramatic shift in European retailer behavior, but a continuation of trends focusing on private label quality and fresh food. He highlighted opportunities to enhance point-of-sale presence through innovation (e.g., Chicken Shop), disruptive displays, and superior packaging, confirming significant investment is planned. Jason English (Head of Investor Relations) added that the frozen category itself is showing robust growth for retailers. Ruben Baldew (CFO) and Jason English (Head of Investor Relations) confirmed no impact on Nomad Foods' supply from reported short-term IT disruptions related to illegal fishing.

John Baumgartner of Mizuho Securities requested details on new productivity initiatives, like the supply chain optimization program and a facility closure in Sweden, and asked about the strategy for the newly established Future Foods Lab.

Answer

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.

John Baumgartner questioned the nature of the retailer destocking, asking if it was driven by working capital or anticipation of future weakness. He also asked about the source of new consumers from innovation, questioning if they were shifting from private label, other brands, or other food categories like fresh.

Answer

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.

John Baumgartner questioned the driver behind the retailer destocking, asking if it was related to working capital or retailer concerns about future weakness. He also inquired about the source of new consumers for Nomad's innovations, asking if they were shifting from private label, other brands, or other food categories like fresh.

Answer

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.

John Baumgartner asked about the progress of the enterprise-wide transformation, including the timeline for charges and the ramp-up of efficiency benefits. He also inquired about the value perception of frozen foods post-inflation and any changes in cross-category elasticity.

Answer

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.

John Baumgartner asked about programming opportunities and in-center revenue, specifically how underutilized the model is for monetizing kids' programs (e.g., sports-specific training, intro to weightlifting). He also inquired about the confidence in the EBITDA margin floor and its sustainability, asking what has 'broken positively' relative to the 2024 Investor Day guidance of low to mid-20% margins.

Answer

Bahram Akradi, Founder, Chairman, and CEO, acknowledged kids' programs as a significant growth opportunity for engagement and retention, noting continuous efforts to maximize space and grow in-center revenue across all categories, including kids. Regarding EBITDA margins, he explained that clubs matured faster than expected, with most now fully re-ramped, and new clubs are ramping better. He emphasized a conservative guidance approach (27.5% EBITDA margin) to avoid disappointing stakeholders and protect member experience, even if some quarters might exceed it.

John Baumgartner asked about programming opportunities and in-center revenue, specifically how underutilized the model is for monetizing kids' programs (e.g., sports-specific training, intro to weightlifting) and the opportunity to ramp their contribution. He also questioned what factors positively contributed to the EBITDA margin migrating from low-to-mid 20s to 27.5%, and the company's confidence in the margin floor and its sustainability.

Answer

Bahram Akradi, Founder, Chairman, and CEO, acknowledged continuous opportunities to engage parents and kids, noting it's a nice growth and retention area. He highlighted challenges with space utilization but sees opportunities across all in-center fronts. Regarding EBITDA margin, he explained the outperformance was due to clubs maturing and re-ramping faster than expected. He reiterated that 27.5% is an incredible margin and the company aims to guide conservatively to avoid disappointing stakeholders while protecting the customer experience.

John Baumgartner asked about the relative value of Life Time Group Holdings Inc. compared to other fitness concepts, noting rising dues across the industry but potentially stagnant offerings elsewhere. He questioned if this trend is stimulating more interest in Life Time and if the company has historically seen tipping points where it captures more market share of high-quality, engaged consumers. He also followed up on the LTH Nutrition strategy, specifically if recent Consumer Reports investigations into supplement contaminants present an opportunity to more aggressively market Life Time's third-party purity testing to both members and non-members.

Answer

Bahram Akradi, Founder, Chairman, and CEO, confirmed that Life Time is seeing increased interest, especially in urban markets where studios are prevalent, with members trading up to Life Time rather than leaving for studios. He highlighted that clubs are experiencing higher utilization with significantly fewer memberships than in 2019, indicating strong value perception. Erik Weaver, Executive Vice President and CFO, added that the value proposition for couples and families remains very strong compared to multiple studio memberships. Akradi stated that leveraging Life Time's rigorous testing and quality for LTH Nutrition is precisely the strategy for 2026, following recent brand acquisition and product unification efforts. He noted that the company is currently in a methodical development and testing phase within its facilities before a broader marketing push.

John Baumgartner asked about the relative value proposition of Life Time compared to other fitness concepts, particularly if increasing prices at studios are driving consumers to trade up to Life Time. He also questioned if the Consumer Reports investigation into supplement contaminants would lead Life Time to more aggressively market its LTH Nutrition brand, leveraging its third-party purity testing.

Answer

CEO Bahram Akradi confirmed that Life Time is seeing customers trade up from studios, with clubs experiencing higher utilization and members recognizing the value and differentiation. EVP and CFO Erik Weaver added that Life Time's pricing model offers significant value for couples and families compared to multiple studio memberships. Akradi stated that leveraging LTH Nutrition's purity testing is a key strategy for 2026, following internal testing and unified branding efforts, with current growth driven by in-facility recognition of product superiority.

John Baumgartner from Mizuho Securities inquired about the programming strategy amid consumer uncertainty, asking about new rollouts like cold plunges. He also asked about the drivers behind the favorable leverage seen in center operations expense during the quarter.

Answer

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.

John Baumgartner of Mizuho Securities inquired about the company's strategy for "recovery" services, their potential contribution to revenue, and the required capital intensity. He also asked for early engagement data from the digital app.

Answer

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.

John Baumgartner from Mizuho Securities asked Stephan Gratziani about Herbalife's strategy for product-customer fit with its evolving portfolio and personalized technology, specifically whether there's a need to attract higher-income households or more intense supplement users to maximize revenue. He also asked John DeSimone about the India GST benefit in Q4 2025, inquiring if it was a one-off or a sustainable tailwind until it's lapped in late 2026.

Answer

Stephan Gratziani, CEO, explained that Herbalife aims to expand its offerings to attract a more sophisticated customer base in markets like the U.S. and Europe, while also deepening engagement with its current $5 billion customer base. He emphasized the vision for personalized nutrition, including bespoke formulations, and highlighted the Cristiano Ronaldo partnership as aligning with this data-driven, performance-focused approach. John DeSimone, CFO, confirmed that the India GST benefit is expected to be a tailwind until it is lapped in late September 2026, though it may be a declining tailwind.

John Baumgartner from Mizuho Securities asked CEO Stephan Gratziani about the strategic implications of Herbalife's investments in personalized technology and specialized new products, questioning if this 'new Herbalife' necessitates augmenting its legacy customer base with higher-income households or more intense supplement users to maximize revenue. He also followed up on India's volume growth, asking about any one-off benefits supporting the Q4 2025 bounce back and the expected duration of the GST reduction tailwind.

Answer

CEO Stephan Gratziani affirmed that Herbalife aims to attract a more sophisticated customer base with higher expectations, particularly in markets like the U.S. and Europe, through personalized solutions and bespoke product formulations. He emphasized that the strategy involves both expanding to attract new customer types (like with MultiBurn and Baseline, and eventually personalized products) and deepening engagement with the existing $5 billion customer base. Gratziani also highlighted the strategic partnership with Cristiano Ronaldo as aligning with the vision for data-driven, personalized health and wellness. CFO John DeSimone confirmed that the GST reduction in India is expected to be a tailwind until it is lapped in late September 2026, though it may be a declining tailwind.

John Baumgartner asked for details on the strategic intent for the Link BioSciences acquisition, its target audience, and the reasons for the disconnect between distributor growth and volume conversion in the Asia Pacific region.

Answer

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.

John Baumgartner questioned the continued 10% decline in North American preferred customers and its implications for the business turnaround. He also asked about managing structural currency depreciation and the potential for localizing the supply chain.

Answer

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.

John Baumgartner questioned the downside risk to demand in developing markets from macro factors and requested an update on the diabetes prevention program in North America, including the certification process and expected consumer engagement.

Answer

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.

John Baumgartner asked about incremental consumption occasions, noting that snacking peers are increasing their presence during events and seasons to offset weakness in everyday business. He inquired how Utz Brands plans to rise above or capture its fair share in this heightened programming environment, and if it requires increased marketing/pricing investment or a different approach to innovation.

Answer

Howard Friedman, CEO, expressed satisfaction with marketers' ability to leverage seasons and limited-time offers (LTOs), many of which have rotated into core assortment. He stated Utz strategically picks its spots for engagement and doesn't believe it requires a different marketing or promotional strategy, but rather ensuring products are present at the right price points and points of disruption. He expects Utz to capture its fair share if the heightened environment drives more consumer interest into the category.

John Baumgartner asked about incremental consumption occasions and the competitive programming noise from peers ramping up presence during events and seasons. He questioned if this heightened activity requires Utz to invest more in marketing or pricing, or adopt a different approach to innovation, to capture its fair share.

Answer

CEO Howard Friedman expressed satisfaction with the marketing team's ability to leverage seasons with limited-time offers, some of which have become core. He stated that Utz picks its spots for engagement and doesn't believe it requires a fundamentally different marketing or promotional strategy. Instead, the focus is on ensuring products are present at the right price points and disruption points in stores, expecting to gain fair share if heightened activity drives more consumer interest.

John Baumgartner of Mizuho Securities asked for details on DSD investments and the drivers behind the improving momentum in the convenience store channel, questioning the role of new products versus route-to-market changes.

Answer

CEO Howard Friedman explained that DSD investments include building new infrastructure in expansion markets and optimizing routes in core geographies by supporting independent operator (IO) partners. He attributed the C-store improvement to a combination of factors: a more attractive business environment for IOs, distribution gains in large banners, and better product assortment, noting that the trend is expected to continue improving toward flattish by year-end.

John Baumgartner asked about planned investments in display and non-price promotions for 2025, whether retailer allocations for salty snacks were changing, and if there were notable shifts in the company's own promotional activity. He also questioned the M&A strategy, particularly regarding 'better-for-you' brands.

Answer

CEO Howard Friedman reported no change in retailer display allocations and noted that Utz is increasing its own display activity, especially in expansion markets. He said the focus remains on the Core 4 brands and the growing Boulder Canyon brand. On M&A, Friedman expressed strong confidence in the existing portfolio's ability to meet consumer needs, including 'better-for-you' through Boulder, and stated there is no pressing need to acquire a brand to fill a perceived gap.

John Baumgartner asked how much of the current volume softness in salty snacks could be attributed to normalization from an elevated, post-COVID consumption base, rather than just price elasticity. He also questioned how this might influence future price discipline in the category.

Answer

CEO Howard Friedman acknowledged that some normalization in growth rates is occurring after several strong years. However, he emphasized that key metrics like category household penetration and buyer counts are still growing, indicating continued strong consumer engagement. He pointed to Utz's own success in acquiring new buyers who purchase at high rates as evidence of the category's underlying health and consumer enthusiasm.

John Baumgartner inquired if the company could distinguish the impact of bonus packs on new consumer trial versus increased frequency from existing buyers. He also asked what the company could do to accelerate the performance turnaround in the convenience store channel.

Answer

CEO Howard Friedman noted it was difficult to isolate the trial vs. frequency effect of bonus packs but pointed to the company's all-time high household penetration of 49% as evidence of attracting and retaining new users. For convenience stores, he outlined a three-pronged strategy: 1) driving distribution with the correct price-pack architecture, 2) delivering channel-specific innovation, and 3) working with retailers and distributors to ensure proper space and service.

John Baumgartner asked about the improvement of 'softer skills' beyond financial resources, focusing on connecting with consumers and standing out to retailers, including the role of technology, insights, personnel, and culture.

Answer

CEO Steve Cahillane stated that the company has strong capabilities but is lean, requiring supplementation of commercial personnel and continued investment in technology, including AI. He emphasized a consumer-first mindset to drive household penetration and expressed confidence that customers would welcome the reinvestment plan against important brands.

John Baumgartner asked about the investment in 'softer skills' beyond financial resources, focusing on how the company plans to improve consumer connection, retailer relations, technology, personnel, and culture, and the anticipated effort involved.

Answer

CEO Steve Cahillane emphasized bolstering lean commercial activities personnel and investing in technology, including AI. He highlighted a consumer-first mindset to drive household penetration and anticipated that customers would welcome the reinvestment plan against important brands.

John Baumgartner asked about the expectations for North America food service in 2026, specifically regarding progress in outlets aside from the large customer, the introduction of flavored varieties to the U.S., and landing new store doors within the broader coffee shop sector. He also inquired about Oatly's strategy for enhancing protein content in its plant-based beverages, given a competitor's high-protein launch, and how this aligns with Oatly's focus on fiber.

Answer

Daniel Ordoñez (Global President and COO) explained that Oatly is diversifying its food service customer base, seeing double-digit growth outside the large customer, which now represents less than 10% of the segment's revenue. He noted the booming coffee and food service sector in North America and confirmed that innovations like Baristamatic and plant-based Cold Foam would soon be available in the U.S. Regarding protein, Ordoñez stated Oatly remains focused on fiber, citing a Western world fiber deficit and a protein surplus, and highlighted the fiber-maxing trend, especially among Gen Z.

John Baumgartner asked about the expectations for North America food service in 2026, specifically regarding progress in outlets beyond the largest customer and the introduction of flavored varieties to the U.S. market. He also inquired about Oatly's strategy for enhancing protein content in its plant-based beverages, given a competitor's recent high-protein launch, in contrast to Oatly's focus on fiber.

Answer

Daniel Ordoñez, Global President and COO, explained that Oatly is diversifying its food service customer base, with the segment outside the largest customer now representing 30% of total segment revenue and growing at double-digits. He noted the booming coffee and food service sector in North America and confirmed that European innovations like Baristamatic and plant-based Cold Foam would soon be available in the U.S. Regarding protein, Mr. Ordoñez stated Oatly remains focused on fiber, aligning with scientific evidence of a fiber deficit and protein surplus in the Western diet, and plans to leverage its fiber credentials with an enhanced portfolio. Jean-Christophe Flatin, CEO, added context on declining cow's milk volumes and expressed mixed feelings about new U.S. dietary guidelines.

John Baumgartner from Mizuho Securities questioned the North American market weakness, suggesting that after several years of decline, the issue might be consumers leaving the category, possibly due to factors like protein content, which could limit the effectiveness of Oatly's European playbook. He also asked for details on the new SG&A savings, including their source, timing, and whether they risk cutting resources needed for growth.

Answer

Global President & COO Daniel Ordoñez countered that oat milk penetration in the U.S. is stable and Oatly's is growing, reiterating that taste, not protein, remains the primary barrier to conversion. CFO Marie-José David explained the SG&A savings stem from efficiencies identified through prior programs, with most savings coming from the corporate segment via indirect procurement optimization. She assured the group that the cuts are focused on efficiency and will not hurt the business's growth capabilities.

John Baumgartner asked for feedback from foodservice operators on the key drivers for adopting or returning to plant-based offerings. He also inquired about the reasons for the reduction in negative media coverage for the category and whether Oatly sees an opportunity for endorsements from major health organizations.

Answer

Daniel Ordonez, Global President and COO, explained that the foodservice trend is shifting towards cold beverages driven by Gen Z, and Oatly is positioning itself as a key partner in this evolution. Regarding media, he attributed the decline in negative coverage to consumer fatigue with misinformation and Oatly's proactive, science-based engagement with nutritionists. He confirmed the company is actively building alliances and pursuing public education initiatives, including with schools, acknowledging it's a long-term effort.

John Baumgartner sought confidence in the 2025 positive EBITDA guidance regarding reinvestment levels, asked about the potential for OpEx reductions beyond 2025, and questioned the strategy for capturing existing plant-based buyers versus converting new ones.

Answer

CEO Jean-Christophe Flatin and COO Daniel Ordonez confirmed that the 2025 plan is 'fully resourced,' emphasizing that success comes from more precise, intentional investment allocation rather than simply more spending. Flatin stated that the company is 'not done' finding efficiencies and has a 'culture of efficiency obsession' for SG&A. Ordonez explained that while the primary goal is converting dairy users to grow the category, a direct result of this strategy has been steadily taking market share from other plant-based milks.

John Baumgartner asked about Hain Celestial's vision for becoming a true growth business post-divestitures, particularly how it plans to drive sustainable volume given declining fertility rates in baby/kids and stagnant meal prep. He also questioned if this strategy would involve larger price cuts and inquired about any cost basis or tax considerations limiting future asset sales.

Answer

CEO Alison Lewis explained that growth will come from focusing on strengths in North America's flagship categories: tea (top three player, wellness innovation driving share), yogurt (Greek Gods double-digit growth in whole milk), and Earth's Best baby/kid snacks and cereal (double-digit growth, #1 in categories). She highlighted untapped opportunities in meal prep, such as Spectrum coconut oil, and clarified that growth is driven by innovation and value, not necessarily price cuts. CFO Lee Boyce confirmed there are no concerning tax considerations for potential future asset sales.

John Baumgartner asked how Hain envisions becoming a true growth business post-divestiture, considering challenges in some categories and declining fertility rates, and whether this strategy involves larger price cuts. He also questioned potential tax or cost basis limitations for future asset sales.

Answer

President and CEO Alison Lewis stated that growth will be driven by focusing on flagship categories (tea, yogurt, Earth's Best Baby & Kid) where Hain holds top-three positions and can leverage innovation. She cited examples like wellness tea, Greek Gods yogurt, and Earth's Best snacks/cereal showing strong growth. She clarified that growth is about delivering value through innovation, not necessarily price cuts. CFO Lee Boyce confirmed there are no concerning tax considerations for future asset sales.

John Baumgartner asked about the reasons behind distribution losses in the snacks category, whether Hain initiated these reductions, and the performance of private label non-dairy beverages in Europe compared to market trends.

Answer

Interim President and CEO Alison Lewis acknowledged underperformance in snacks but highlighted strong brand equity and the need for continuous innovation. She detailed efforts in product renovation, new packaging, and a shift to digital/social marketing to regain distribution and improve velocity. For European non-dairy, she noted softness early in Q4 but growth by quarter-end, with a focus on value and innovation. CFO Lee Boyce added that Hain is not losing customers in non-dairy and expects continued improvement.

John Baumgartner from Mizuho Securities asked about the distribution losses in Hain Celestial's snacks category, seeking to understand the underlying causes for the shift to declines and the extent to which these were initiated by Hain through SKU reductions or reinvestment decisions. He also questioned the performance of private label non-dairy beverages in Europe, specifically if its underperformance relative to retail takeaway data was due to customer mix or challenges in customer retention.

Answer

Alison Lewis, Interim President, CEO & Director, acknowledged the poor snacks performance but highlighted strong brand equity and attributes. She emphasized the need for 'news' in impulse categories, detailing product renovation, multi-pack expansion, and a shift to 60% digital/social marketing, noting early signs of velocity improvement. For non-dairy beverages in Europe, she mentioned softness early in Q4 but growth by the end of the quarter, with a focus on value and innovation for continued growth. Lee Boyce, CFO, added that Hain is not losing customers in non-dairy and expects continued improvement in 2026 through new contracts, innovations, and high productivity.

John Baumgartner asked about the reasons behind the distribution losses in the snacks category, previously a growth driver, and whether these were Hain-initiated, and also inquired about the performance of private label non-dairy beverages in Europe.

Answer

Interim President and CEO Alison Lewis acknowledged poor snacks performance but emphasized strong brand equity and current efforts in product renovation, multi-packs, and digital/social marketing to regain distribution and improve velocity. For non-dairy, Alison Lewis noted softness early in Q4 but exited with growth, focusing on value and innovation. CFO Lee Boyce added that they are not losing customers in non-dairy and expect continued improvement in 2026 with new contracts and innovations.

John Baumgartner questioned the long-term vision for the portfolio, given recurring challenges with distribution and velocity. He asked if Hain could add more value through its supply chain, such as producing for private label or as a co-manufacturer, and what options are being ruled out.

Answer

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.

John Baumgartner sought clarification on whether macroeconomic headwinds are affecting Hain's high-income shoppers or are more related to retail competition. He also asked how Hain can maintain its clean-ingredient differentiation if larger competitors also improve their ingredient profiles.

Answer

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.

John Baumgartner from Mizuho Securities questioned the renewed optimism for snacks distribution after prior disappointments, asking about potential risks. He also inquired about recent softness in the tea business's baseline volumes and whether factors beyond seasonality were at play.

Answer

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.

John Baumgartner asked about the performance of the new private label business in refrigerated retail (mashed potatoes and mac and cheese), its evolution relative to plan, and expectations for expansion. He also inquired how the side dishes portfolio might compete differently given the emergence of GLP-1 friendly frozen entrees, specifically regarding new lines, demographics, and incorporating protein.

Answer

Matt Mainer, CFO and Treasurer, reported a good early start for private label, playing out as expected, with a nice pipeline for expansion, providing growth and leveraging excess capacity. He confirmed a focus on protein options for side dishes, noting some success with Wonderlish in the club channel, and considering adding protein to dinner side dishes.

John Baumgartner asked about the performance of Refrigerated Retail's new private label business, its evolution relative to plan, and expectations for future expansion. He also inquired how the side dishes portfolio might compete differently, considering the emergence of frozen entrees for the GLP-1 demographic, and if new lines incorporating more protein are being considered.

Answer

CFO and Treasurer Matt Mainer reported a good early start for private label in Refrigerated Retail, playing out as expected with two customers and a strong pipeline for expansion, providing growth and leveraging excess capacity. He confirmed a focus on protein options for sides and some testing with Wunderlich, indicating consideration for adding protein to dinner side dishes.

John Baumgardner asked Rob Vitale about Post Holdings' portfolio strategy, questioning if the historical tilt towards value products should evolve to address premium products and higher-income households, given current consumer headwinds and the strong performance of premium eggs. He also inquired about investment plans for the refrigerated retail side dishes business, focusing on innovation, convenience, and distribution growth.

Answer

President and CEO Rob Vitale clarified that the portfolio is built around 'choice' with an array of price points across segments, rather than solely value. He suggested that current trends dictate innovation towards higher or middle-income consumers. COO Jeff Zadoks explained that the refrigerated retail business is now better aligned to meet both private label and branded demand, allowing the company to pursue attractive private label opportunities while continuing to invest in the brand and play at multiple price points.

John Baumgardner asked Rob Vitale about Post Holdings' portfolio strategy, questioning if the historical tilt towards value products should evolve to address premium products and higher-income households, given current consumer headwinds and the strong performance of premium eggs. He also inquired about investment plans for the refrigerated retail side dishes business, focusing on innovation, convenience, and distribution growth.

Answer

President and CEO Rob Vitale clarified that the portfolio is built around 'choice' with an array of price points across segments, rather than solely value. He suggested that current trends dictate innovation towards higher or middle-income consumers. COO Jeff Zadoks explained that the refrigerated retail business is now better aligned to meet both private label and branded demand, allowing the company to pursue attractive private label opportunities while continuing to invest in the brand and play at multiple price points.

John Baumgartner followed up on the Pet business, asking about portfolio balance and future opportunities in new channels or formulas. He also asked about the performance drivers for the Refrigerated Retail side dishes business.

Answer

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.

John Baumgartner asked about the outlook for the Bob Evans side dish business, including innovation and distribution, and whether there are new structural headwinds in the cereal category, like GLP-1s, compared to past downturns.

Answer

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.

John Baumgartner asked about the long-term strategy for the egg business given recurring avian influenza volatility and questioned if the cereal category's normalized volume decline might settle at a weaker rate than historically seen.

Answer

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.

John Baumgartner inquired about the future strategy for the pet food business, asking about the balance between reinvesting in branded growth versus leveraging manufacturing assets for private label. He also asked for an update on the fundamentals of the refrigerated potato business within Foodservice.

Answer

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.

John Baumgartner asked how Hershey thinks about participating in protein as a theme, particularly as a hedge to retain consumers gravitating to healthier snacks, given the six years since the ONE Bar acquisition and the success of snacking flavors in protein. He also inquired about the feasibility or interest level in using the balance sheet for M&A to expand in protein, similar to how the salty snacks portfolio was built, or if future protein efforts will be anchored more to the ONE Bar brand.

Answer

Steve Voskuil (SVP and CFO) and Kirk Tanner (President and CEO) confirmed a strong outlook for their protein business (ONE and FULFIL), with investments in R&D for protein and fiber, viewing functional snacking as a reality and a focus area for future growth. They stated they are open to both organic growth (seeing potential in existing brands and innovation) and opportunistic M&A to build the portfolio in the 'big white space' of protein, with an immediate focus on growing existing businesses and innovating.

John Baumgartner asked about Hershey's investment in its protein portfolio, specifically how the company views participating in protein as a theme and to what extent it serves as a hedge to retain consumers gravitating towards healthier snacks. He also inquired about the feasibility and interest level in using the balance sheet for M&A to expand in protein, similar to how the salty snacks portfolio was built, or if future protein efforts will primarily be anchored to the ONE Bar brand.

Answer

SVP and CFO Steve Voskuil stated that Hershey has a strong outlook for its protein business, investing in R&D around protein and fiber, recognizing functional snacking as a reality. He noted that the company is building with ONE and FULFIL brands. Regarding M&A, Steve Voskuil indicated that Hershey is open to both organic growth for existing brands and M&A opportunities to build its portfolio in the 'big white space' of protein, with the immediate focus on growing current businesses and innovating.

John Baumgartner asked about the broader retail landscape in convenience stores, specifically how competitive merchandising and promotion have evolved given the rise of smaller brands, healthy snacks, and non-CMG categories. He inquired how competition has changed for high-visibility merchandising and how confectionery is positioned to compete, including potential changes in spend levels or promotion types.

Answer

CEO Kirk Tanner acknowledged the changing landscape in convenience, noting new merchandising strategies and ways to deliver value across multiple categories. He emphasized Hershey's role as a growth driver within the store, leveraging core innovation and delivering value through various transactions. He also highlighted participation in new tools like loyalty programs that drive personalization, expressing passion for the channel and its opportunities for brand and momentum building.

John Baumgartner asked for observations on the convenience store retail landscape, specifically how competitive merchandising and promotion have evolved with the rise of smaller brands, healthy snacks, and non-CMG categories. He inquired how competition for high-visibility merchandising has changed and how confectionery is positioned, asking if Hershey plans any changes in spend levels or promotion types.

Answer

President and CEO Kirk Tanner acknowledged the changing convenience landscape, noting new merchandising strategies and ways to deliver value across multiple categories. He emphasized Hershey's role as a growth driver within the store, leveraging core innovation and delivering value through multiple transactions. He also highlighted participation in new tools like loyalty programs that drive personalization, affirming the channel as a focus point for building brand and momentum.

John Baumgartner asked about the incrementality of BellRing Brands' new innovation slate relative to cannibalization, given the focus on everyday consumers, and the investment strategy for Indulgence versus Coffeehouse and other new lines.

Answer

Darcy Davenport, President and CEO, stated that their innovation strategy is focused on incrementality, targeting new consumers and occasions as the mainstream consumer evolves. She clarified that both Indulgence and Coffeehouse lines have distinct positions within the portfolio, with Indulgence contributing to incremental occasions and Coffeehouse offering a unique caffeine component, resulting in very little overlap.

John Baumgartner asked about the incrementality of BellRing Brands' forthcoming innovation, particularly regarding protein content and differentiated experiences, relative to potential cannibalization of the core product line. He also inquired about continued investment in the Indulgence line versus the new Coffeehouse and other platforms.

Answer

President and CEO Darcy Horn Davenport stated that the innovation strategy focuses on incrementality, targeting evolving mainstream consumers, new consumer segments, and incremental occasions. She clarified that the Indulgence line and the new Coffeehouse line have distinct positions within the portfolio with very little overlap, as Indulgence focuses on incremental occasions while Coffeehouse addresses protein and energy needs.

John Baumgartner asked about the shift towards ultra-filtered milk in the RTD category, inquiring why this is becoming a standard recipe, if it's tied to raw materials, a premium strategy, or a specific consumer, and how this shift positions Premier Protein.

Answer

President and CEO Darcy Davenport explained that the category is maturing with diverse consumer preferences. She noted that ultra-filtered milk offers a thinner, more beverage-like option, targeting a different consumer and occasion than Premier's thicker, meal-replacement shake. Premier's innovation strategy, including almond milkshakes, aims to capture incremental consumer needs while maintaining its core 30-gram shake's strength.

John Baumgartner asked about RTD category segmentation, specifically the shift towards ultra-filtered milk, why it's becoming a standard, and how this positions Premier differently relative to history.

Answer

Darcy Davenport, President and CEO, BellRing Brands, explained that the category is maturing, leading to diverse consumer preferences. While Premier's core 30-gram shake addresses the biggest needs, innovation targets other needs like thinner, beverage-like offerings (ultra-filtered milk) versus Premier's thicker, meal-replacement shake. She noted that Premier's almond milk shake innovation is incremental, bringing in new consumers, demonstrating the strategy of addressing specific, incremental consumer needs while maintaining a strong core business.

John Baumgartner from Mizuho Securities inquired about the consumer appeal of ultra-filtered milk products, asking if they attract specific demographics or new households, and if Premier would consider launching a similar format.

Answer

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.

John Baumgartner asked about soft pricing in the ready-to-mix category and the structural dynamics of Dymatize's U.S. sales, which are declining outside of e-commerce.

Answer

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.

John Baumgartner from Mizuho Securities questioned if a reduced need for deep promotional discounts on shakes could allow for budget reallocation to other drivers like slotting fees, and whether shake success is forcing the powder segment to suppress prices.

Answer

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.

John Baumgartner requested more detail on the fiscal 2025 innovation pipeline and asked if the recent growth in category household penetration is from new users or substitution from other formats like bars and powders.

Answer

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.

John Baumgartner asked about the consumer's inclination to buy more on promotion, whether General Mills needs to embed wiggle room for larger promotions, and the balance between EDLP versus a high-low strategy in the current economic environment.

Answer

Jeff Harmening, Chairman and CEO, noted continued consumer weakness, particularly for lower-income households, leading to more purchases on discount. Dana McNabb, Group President of North America Retail and North America Pet, characterized the promotional environment as rational, with frequency and depth similar to previous periods.

John Baumgartner asked about the consumer's willingness to pay a premium for functional ingredients and health benefits amid a broader value-seeking environment, and whether pricing power for such attributes is changing.

Answer

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.

John Baumgartner inquired about the consumer's willingness to pay a premium for healthier, functional ingredients amidst a broader focus on value, and whether the ability to extract premium pricing for such attributes is changing.

Answer

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.

John Baumgartner asked about the expected resilience of domestic demand for JBS Brazil given higher prices and how export opportunities are evolving, specifically structural opportunities to diversify exports across Asia (Korea, Japan), Mexico, and the EU/Mercosur trade deal. He also inquired about the ability of incremental export demand to support prices and minimize pressure on profit margins from higher cattle costs in 2026.

Answer

Gilberto Tomazoni, Global CEO of JBS, stated that JBS Brazil's beef business (Friboi) expects a strong export market in 2026, with over 100 new markets opened in the last two years, and robust demand more than compensating for increased livestock costs. He also noted strong domestic demand, supported by Friboi's category management program with retailers. He emphasized the huge opportunity for Brazil to grow its beef market through genetic improvement, diet, and herd management, comparing it favorably to the U.S. herd size.

John Baumgartner asked about the expected resilience of domestic demand for JBS Brazil's beef business given higher prices, and how export opportunities are evolving, specifically structural opportunities to diversify across Asia (Korea, Japan) and potentially Mexico, and the impact of the EU-Mercosur trade deal. He also inquired about the ability of incremental export demand in 2026 to support prices and minimize profit margin pressure from higher cattle costs.

Answer

Gilberto Tomazoni (Global CEO, JBS) stated that JBS Brazil's beef export market will remain strong in 2026, with over 100 new markets opened in the last two years, and demand more than compensating for increased livestock costs. He also noted strong domestic demand, supported by Friboi's category management 2.0 program with key retailers, which boosts sales across categories. He emphasized that external market demand is huge with no restrictions.

John Baumgartner of Mizuho Securities inquired about potential white space opportunities in U.S. prepared foods beyond current investments and how marketing might evolve. He also asked for insights into the resilience of U.S. beef demand despite economic pressures.

Answer

Wesley Batista Filho, CEO of JBS Foods USA, noted that current investments target high-demand areas like cooked sausage and bacon. He sees a significant opportunity to build brands in red meat prepared foods, similar to the success of 'Just Bare' in chicken. He attributed resilient beef demand to the high quality and consumer trust in U.S. beef, which maintains preference even at a price premium.

John Baumgartner from Mizuho Securities asked for quantification of customer cancellation rates, the nature of corrective investments (pricing vs. operational), and whether current synergy targets risk being too aggressive.

Answer

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.

John Baumgartner from Mizuho Securities inquired about the sentiment of foodservice and retail partners, asking if consumer volatility is creating uncertainty around new product launch timing. He also asked about the potential need to augment packaging capabilities beyond Tetra Pak to include formats like aluminum cans or plastic bottles.

Answer

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.

John Baumgartner asked about customer sentiment within the new business pipeline, questioning if there was any uncertainty in launch timing due to consumer volatility. He also inquired about the potential need to augment existing Tetra Pak capabilities with other packaging formats like aluminum cans or plastic bottles.

Answer

CEO Brian Kocher stated that based on frequent customer discussions, the company has not seen a slowdown or impact from the macro environment, attributing this to structural health and wellness tailwinds and a versatile portfolio. Regarding packaging, Kocher acknowledged that they continuously evaluate formats but confirmed that the current aseptic pipeline is built entirely on their Tetra Pak capacity, where they see significant runway for growth.

John Baumgartner of Mizuho Securities questioned the sentiment of retail and foodservice partners regarding the new business pipeline, asking about potential launch timing uncertainty due to consumer volatility. He also inquired about the potential need for new packaging formats beyond Tetra Pak, such as aluminum cans or plastic bottles.

Answer

CEO Brian Kocher attributed the company's bullish outlook to frequent customer collaboration, stating they have not seen a slowdown and are benefiting from structural health and wellness trends. Regarding packaging, Kocher confirmed that while they always evaluate options, their current and robust aseptic pipeline is entirely based on the Tetra Pak format, which has a long runway for growth.

John Baumgartner asked about the drivers of SG&A leverage in Q1 and requested more detail on the raw material yield improvements that are expected to benefit gross margin.

Answer

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.

John Baumgartner asked if increasing business mix complexity is driving the need for reinvestment and how the company manages portfolio optimization. He also questioned the components of the $30-35 million CapEx guidance for 2025, noting it's above maintenance levels.

Answer

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.

John Baumgartner of Mizuho Securities inquired about the expected increase in promotions in the second half, asking how it might play out and if retailers might de-emphasize private label. He also asked about the outlook for gross margin evolution for the rest of the year.

Answer

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.

John Baumgartner asked about the innovation strategy for the Atkins brand, questioning whether recent launches are considered 'core' and how aggressive the company plans to be with new products for the brand.

Answer

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.

John Baumgartner inquired about the drivers behind the downward revision of Atkins' full-year sales guidance and what the company is learning about the Atkins consumer. He also asked about the strategic rationale for relaunching Quest shakes, their new positioning, and expected incrementality.

Answer

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.

John Baumgartner from Mizuho Securities Co., Ltd. requested details on the incrementality of new Atkins and Quest innovations and asked about the sales drivers and potential risks for the OWYN brand.

Answer

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.

Speaking on behalf of John Baumgartner, an analyst asked about competitive pressures on the Quest bars business and its FY25 revenue outlook. A second question focused on learnings from the OWYN business, its sources of volume, and its potential to attract new consumers.

Answer

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.

Inquired about the sustainability of Seara's high margins, potential for further cost efficiencies, and future growth investments. Also asked about the company's diversification strategy, specifically its ambitions for the eggs business in Brazil and potentially globally.

Answer

Seara's strong margins are due to operational excellence and mix management, and while grain costs may fluctuate, the business is expected to continue delivering healthy margins. Regarding diversification, the company confirmed aquaculture growth is a priority via M&A. For eggs, the company started in Brazil but has global ambitions to become a leader in the category, similar to its strategy with other proteins.

John Baumgartner asked if higher prices are primarily being paid by existing consumers, risking new user adoption, and inquired about the potential for further operating expense reductions.

Answer

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.

John Baumgartner asked about the company's growth plans and vision for the cakes and pastries category, questioning if Mondelez sees itself as a disruptor and whether the technology from the Evirth acquisition in China could be expanded globally.

Answer

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.