John Joseph Baumgartner

John Joseph Baumgartner inquired about the expected elasticity of forthcoming price increases, considering consumer health, and whether current absolute prices for Atkins bars impede consumption or if lower price points are needed for new, middle-income households.

Answer

President and CEO Geoff Tanner stated that pricing actions are in the mid to high single-digit range, with initial elasticity expected to be slightly higher before normalizing, contributing to the first-half/second-half inflection. He noted that the category has historically been resilient to pricing. For Atkins, he explained that a new four-pack at a lower absolute price point was introduced to attract new users, as the previous five-pack created a higher shelf price compared to competitors.

John Joseph Baumgartner asked about the expected elasticity of Simply Good Foods' forthcoming price increases, questioning if it might be higher than historical levels given the current consumer health. He also sought clarification on the strategic focus behind the new entry price point for Atkins bars, specifically whether it addresses price as an impediment for existing buyers or aims to attract new, potentially middle-income, households as the category mainstreams.

Answer

President and CEO Geoff Tanner stated that the company expects elasticity for the mid-to-high single-digit price increases to be in line with historical trends, though initial impact might be slightly higher before normalizing, contributing to the first-half/second-half inflection. He noted that the category has historically been resilient to pricing in the long run. Regarding Atkins, Tanner explained that the new four-pack at a lower absolute price point addresses the issue of Atkins' previous five-pack having a higher shelf price than most competitors' four-packs, and early indications suggest it is attracting new users to the brand.