Q1 2021 Vital Farms Inc Earnings Call
[music].
Good day, and thank you for standby and welcome to vital farms Inc's first quarter 2021 earnings conference call.
This time all participant lines are in a listen only mode. After the speaker presentation.
And there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone and if you require any further assistance. Please press star zero on that.
And I like to hand, the conference over to your speaker today, Matt for either Vice President of Investor Relations. Please go ahead.
Okay.
Thank you good morning, and welcome to vital farms first quarter 2021 earnings conference call and webcast.
Im pleased to be joined on today's call by Russell and Seiko, President and Chief Executive Officer, and Bill <unk> Chief Financial Officer.
By now everyone should have access and company's first quarter 2021 earnings press release filed this morning.
Is available on the Investor Relations section of Biopharma website at investors got vital farms Dot com.
Through the course of this call management may make forward looking statements within the meaning of the federal Securities laws.
These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described and these forward looking statements.
Please refer to today's press release and the company's quarterly report on form 10-Q for the fiscal quarter ended March 28, 2021, each filed with the SEC earlier today and other filings with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied and any forward looking statements.
Made today.
Please note that on today's call management will refer to adjusted EBITDA, which is a non-GAAP financial measure while the company believes this non-GAAP financial measure provides useful information for investors. The presentation of this information is not intended to be considered and isolation or as a substitute for the financial information presented in accordance with GAAP. Please.
For to our earnings release for a reconciliation of adjusted EBITDA to its most comparable measure prepared for and in accordance with GAAP.
I'd also like to note that we're conducting our call today from our respective remote locations as such there may be brief delays cross talk or other minor technical issues. During this call. We thank you for advance for your patience and understanding.
And now I'd like to turn the call over to Russell can takeout, President and Chief Executive officer of vital farms.
Thanks, Matt and good morning, everyone on today's call I'll briefly review our quarter, one 2021 performance and provide an update on our growth strategy. Bill will then review our financial results in more detail and discuss the updated guidance, we announced on our press release. This morning. We then look forward to taking your questions for.
First a review of our first quarter results.
We had a strong start for the year and exceeded expectations on all key financial metrics net revenue and the first quarter of 2021 was $58 5 million or 23% increase from the first quarter of 2020.
Additionally, we increased retail distribution and 13% year on year to over 16005 hundred stores as of March 21.
And we and the second leading AG brand in the U S by retail dollar sales with four 7% market share.
We believe that our results both this quarter and historically validate the strength of our brand and the quality of our products and our leadership within the growing specialty AG segment and broader retail egg category.
Next I'd like to talk about <unk>.
Capitalism, and our approach to doing business. So before I provide an update on each pillar of our growth strategy I want to share a few highlights related to our farmers community and crew that reflect how we practice conscious capitalism and manage the business and the best interest of our stakeholders who include farmers suppliers employees, whom we call crew members.
And customers consumers communities, the environment and stockholders specifically after.
After nearly a year of planning we welcomed the first block of girls to our new learning and development farm and Missouri. This was an exciting milestone as we continuously challenge ourselves to raise the standards of food production and the United States.
The new farms, which we affectionately named Onion Creek after the 27 acre plot of land on which vital farms was founded.
We used to test and optimize methods that enable us to raise our production standards further and provide even more guidance and support to our farmers.
Next we continue to attract outstanding talent to our leadership team.
Last month, we welcome Joanne ball as our general Counsel, corporate Secretary and head of environmental social and governance.
And this newly created role Joanne will be responsible for legal strategy and compliance as well as leading our ESG initiatives building on our strong foundation of the public benefit Corporation certified B Corp, and the brand that is practice conscious capitalism since its founding.
This includes publishing concrete achievable and measurable ESG goals and reporting on progress to our stakeholders.
Joanne brings 25 years of legal experience and joins us from Levi Strauss and company.
And with a strong reputation and ESG.
We conducted an extensive search for this role and are thrilled to welcome Joanne who we believe is the perfect mission driven leader to oversee these critical functions for vital farms.
Next we are listening to our crew members and doing what we can support their individual needs. This includes providing educational resources on the COVID-19 vaccine for our frontline crew.
We also made the decision to support the preference of those crew members, who have been working remotely during the pandemic and allow them to continue to do so and definitely we.
We made this decision and collaboration with our crew members, who provided overwhelming feedback on how much they value a flexible work environment.
We believe this also opens a much broader talent pool as we seek to fill open positions going forward, we will keep our headquarters in Austin and staying true to our stakeholder model. Our crew members are working together to re imagine our office is a space to foster culture and collaboration.
Finally, we're continuing to invest and the communities around us with a focus on our diversity equity and inclusion commitments.
As part of our ongoing relationship with the boys and Girls Club a partnership we formed last year, we virtually hosted the St. Louis Springfield, and Austin chapters to teach their members about ethical food production and we think we gained just as much from the experiences they did and our hope is that we inspired a curiosity and passion for the food system and niche on lines.
These are just a few examples of how we're always making decisions that prioritize for long term sustainability of our stakeholders because of our stakeholder driven business model I'm often asked about the tradeoff between purpose and profit. We believe purpose and profit are not mutually exclusive when we sit on the same side of the table as our stakeholders to problem solve.
And co create with them, we all benefit and gross.
Now for an update on our growth strategy, which includes increasing household penetration expanding retail distribution and growing our foodservice footprint and innovating new products.
So first household penetration and retail distribution.
At the end of the first quarter, our household penetration was for 1% and increased from two 9% and the first quarter last year.
We've seen positive growth and household penetration both year over year and sequentially since the third quarter of 2019 on.
On slide 10 of the corporate presentation. We published this morning, you can see how we have consistently delivered growth and household penetration driven primarily by investments, we've made and our brand and.
And increased retail distribution, where we've seen similar sequential growth and the growing number of consumers seeking food selections that our honest transparent and trustworthy.
We're pleased with the number of consumers we've retained once they initially try our products and remain loyal which we believe is because of our mission values and commitment to stakeholders and 2020, we saw the most significant acceleration of new buyers introduced to our brand and we now have 5 million households that purchased our pasteurized eggs at 33%.
Movement over the $3 7 million households, a year ago.
We intend to carry this momentum forward into the rest of 2021 and remain confident and our ability both to attract new households, and to retain current consumers as we make investments and marketing and as the consumer and category trends that have historically propelled our growth remain relevant.
Finally across both channels, we have increased product placement by 28% compared to the first quarter of last year, demonstrating that we are increasing the breadth and depth of our distribution and retailers across the country.
Turning to foodservice I mentioned during our last call that we invested and our partnership with the cost for foodservice, our U S foodservice sales and marketing agency that specializes in consumer packaged goods.
Costa will represent our national U S foodservice distribution with a focus on increasing our broad line distribution and expanding into more national and regional restaurant chains.
We launched the partnership and January and have since successfully educated hundreds of our cost of sales representatives across the country, notably on how our high quality ethically produced products and premium brand resonate with today's diners and we've been impressed with the doors. They have opened for us and a relatively short period of time.
We continue to see and opportunity for long term growth and the foodservice channel. We believe the trends we are seeing at shelf mirror, what consumers are attracted to when they dine outside their home.
They are looking for trusted ethically produce food that reflects their values.
We look forward to further developing our relationship for the Costa and the months and years to come.
Finally, and update on innovation, where we are preparing to launch our newest product breakfast bars.
We're continuing to innovate for snacking occasions, because we know consumers are actively seeking wholesome protein pack solutions that fueled them throughout the day.
Breakfast bars are a first to market opportunity. They are warm egg based bars that can be prepared and less than a minute and features savory flavor combinations that are reminiscent of classic comfort foods like a hardie quiche breakfast cash or casserole, they're convenient are made with clean recognizable ingredients and adhere to the ethical production.
Standards to which we hold ourselves accountable for all of our pasture based product.
Breakfast bars will be available nationwide beginning in early August.
As we continue to test research and launch innovations and new and existing categories. We're confident that the strength of our brand and reputation for ethical food production will attract new and existing consumers to our products.
In conclusion, we had a strong start for the year and I'd like to conclude with a few final comments on our positioning for the future for.
First our business is at the intersection of several trends that have propelled our growth historically, and we believe will endure and one.
One of these trends is a growing interest among consumers to first know where their food is from second and know how their food is produced and third vote with their dollars for products that reflect their values.
We believe these needs which are unrelated to the pandemic combined with the significant increase and at home consumption. We saw in 2020 will only grow and relevance and the years ahead.
<unk> are becoming more discerning about what they consume a theater loved ones.
And important pillar of our brand strategy has been to educate consumers on ethically raised production practices and to build awareness and misleading animal welfare claims and the market. We believe investing and this education through marketing and can be a catalyst to accelerating these underlying consumer trends.
Next.
We're building capacity and deepening competencies across the business to meet our aggressive growth targets. We're on schedule for 2022 capacity plans for our farmer network and on track to complete our AG Central station facility expansion, which will double our current and capacity by the middle of 2022.
We're investing and third party relationships like our partnership with the cost debt to expand our national footprint, and we're attracting new highly experienced talent to our crews.
Next we have a strong differentiated brand.
We know, we're not going to win and the AG segment or any other category purely on functional product benefits for us. These attributes are table stakes and obvious outcomes when food production is done right.
We're focused on building a brand that represents much more than high quality ethically raised free when consumers see vital farms at the grocery store on a restaurant menu on their television or on social media. They see a brand and they trust one that evokes feelings of pride and confidence and our ethical production practices and <unk>.
For our stakeholders.
We are improving the lives of people animals, and the planet through food and showing the world what it means to produce ethical food at scale I believe there are tremendous opportunities ahead for vital farms I don't want to thank our stakeholders for their passion and perseverance and value partnership.
I'll now turn the call over to book.
Thank you Russell.
Hi, everyone and thank you for joining us today.
Reviewing our financial results for the first quarter ended March 28, 2021, and provide an update on our full year outlook.
As Russell mentioned, we achieved net revenues of $58 5 million and increase of 23% compared to the first quarter of 2020, which.
This was driven by an increase in egg and butter sales to our retail customers and distributors and new distribution at both new and existing customers.
Gross profit for the first quarter was $21 3 million or 36, 4% of net revenue compared to $15 9 million or 33, 3% of net revenue for the first quarter of 2020.
The 300 plus basis point expansion was attributable to improved <unk> utilization.
Lower material costs for butter and.
And volume leverage over our direct labor and overhead costs.
This was partially offset by higher promotional spending and material cost on conventional eggs.
SG&A for the first quarter was $13 2 million compared to $9 7 million and the first quarter of 2020.
The increase in SG&A was driven by higher public company costs greater.
Greater employee related costs, as we grew head count and slightly higher marketing expenses.
Shipping and distribution increased $1 8 million relative to the first quarter of 2020, driven by higher sales volume and outbound freight rates.
Adjusted EBITDA for the first quarter was $4 7 million compared to $3 8 million for the first quarter of 2020.
Now shifting to our capital structure as of March 28, 2021, we had total balance cash and investable securities of $102 9 million and we have no long term debt outstanding.
With respect to our forecast for 2021, we expect net revenues and the range of $246 million to $253 million representing growth of 15% to 18% over 2020.
And 2020, which was bolstered by COVID-19, driven demand that added roughly 20% to last year's top line growth rate.
Our top line performance in Q1 and gives us even greater confidence that we won't be able to deliver revenues within this range.
Additionally, we continue to expect the second half of the year will produce stronger net revenue growth rates on the first half as retailers returned to a more normal or pre pandemic cadence of distribution reset for this year.
Additionally, given our strong Q1 results we.
And we feel confident and raising our forecast for adjusted EBITDA to $7 million to $9 million for fiscal year 2021.
I want to thank you for your time and interest and vital farms.
But before we take any questions I want to reinforce our confidence and the year ahead.
We have a strong brand and portfolio of high quality products that millions of households across the country Trust for ethylene produced food.
We believe this foundation and leaves us well positioned for a successful 2021 and beyond.
And with that I will turn the call back over to Russell.
Thanks, everyone for your interest and vital farms, we'll now turn it over to the operator for questions.
And as a reminder to ask a question and you will need to press star one on your telephone and to withdraw your question.
Okay.
Please stand by or just part of the Q&A line.
Our first question on comes from the line of debt.
You may begin.
Great. Thanks, a lot.
And it's just a couple of quick.
A quick question.
Okay.
I heard you say.
You mentioned and innovation and haulers that should be launched more nationwide and time August.
But what's the visibility to feel kind of how quickly that business can ramp and if you kind of size that against how you view the egg bite and a reason that day.
Kind of a similar opportunity little bit different activities, and just kind of being a little bit more color on that please.
Yes sure Thanks, Rob.
Yes, we're really excited about this because.
As you know, we launched egg bites very successfully last year against the backdrop of several competitive offerings and while we've emerged as the number one egg bites brand and the natural channel and number two and conventional.
It's still.
It's still a street fight out there frankly and we.
To get our egg bites into more and more stores, which we are and then and then more and more people's mouth, frankly, because we think we've got the superior product what we've seen.
So far around bars is that it's truly unique and differentiated and the channel is very excited about it and so we believe this product hits potentially a different day part of different kind of need state and so potentially very complementary tagged bites and I'm excited to see where it goes.
Alright, Super and then I guess.
Second question and I'll pass it on is just the.
The comment around second half revenue growth faster relative to the first.
Parts, and driven by retailers and I guess being a bit more proactive.
On the shelf resets.
Debt to the pandemic.
Obviously, we would only make that comment.
And as if you actually feel like Youre going to do well on those rates and so maybe explain.
Why do you believe you'll be well incredibly.
Kind of free to why the retailer when looked at you favorably.
So you start to think about resets and the back half for the year debt that day.
Yes, I appreciate that very much so and.
A very important part of our gross journey and our right to win and the marketplace has been developing.
I would say very high quality long term and trust based relationships with the important stakeholders that our retail partners and we communicate very well with them we collaborate.
And we're very transparent.
And as a result, I think we enjoy very good relationships and I think.
We we generally have a pretty good sense of of.
How how things are going for their business and how we can continue to support their success, we bring superior price points superior growth and we believe superior economics for our retail partners and so when we've got new items to present, they generally give us a fair a fair shake in terms of hearing us out and and.
Looking for ways to partner and we will continue to to bring great.
And products that help develop the economics of our retail partners and.
And Thats.
That.
That recipe for success seems to be working.
Thank you so much.
Thank you.
On a final comes from the line of.
Flow from Stifel you may begin.
Hi, good morning.
Hey, Chris and good morning, Hi, I just had a question for you on input cost and just to understand.
And sort of how to think about that for the second quarter versus the first quarter get some sense of the increase that you're expected to two vs to achieve and then just how that's changed and in recent weeks. We've seen continued inflation and some key inputs just to understand that ask for if I could please.
Sure.
We anticipate that Q2 and Q3, we're going to see.
The highest commodity cost for the year and again, that's driven by the one quarter lag with which we adjust egg cost and feed costs for our farmers.
And so you can expect a little more commodity pressure in Q2 and Q3.
Within the guidance that we've given the updated guidance for $7 million to $9 million. We believe that we have covered the current outlook for commodity costs for the balance of the year.
And so as long as there's not significant changes from where we are we're comfortable with the guidance that we have that commodity exposure.
Okay.
And then just to think about the ways that you can offset this.
I really.
And at this point, you're not taking any pricing and so I wanted to verify it was there any pricing adjustments you've made or changes you've made and you and your business and then also just low because the other levers you have.
Promotional spending and our cost containment efforts anything else you can you could cite that youre using to help offset some of this inflation.
And Chris one thing I would say upfront for but what gives you the more detailed answer and then.
As you'll recall, we've got a pretty diverse portfolio of products and were primarily and eggs thats. The bulk of it but we also have some some exposure and in the dairy side as well and sometimes those cost and puts don't all move and the same direction at the same time and so one thing that may influence our results. This year is simply.
It's not all about corn and soy being fed to chicken.
And it makes.
For us.
So do you want on yes, and yes and on the.
Sure on.
The pricing front Chris.
Hi.
One other things that we're constantly looking at and the level of and depth of our promotional activity and.
And that's one of the levers that we have to.
So look as commodity prices continue to increase and see if there was something we wanted to do with the depth of promotions that we have on the marketplace.
And we continue to look at that.
The other.
Thing that helps us and helps us in Q1.
Our ability to sell off by the eggs and the outside day utilization, we did our sales team did a great job and Q1 to.
And to maximize the sale of oxides eggs and.
If we can continue that that provides us with some.
Potential offsets as well for incremental commodity costs.
Okay, and just one follow on to that in terms of the promotional spending.
Pulling back on promotional spending last year, so that would be up I would imagine, but you're still is that right and like in Q2, and Q3 and particular the quarters and we will see promo spending and maybe just not perhaps at the level at which you were prior to that is a fair way to look at it.
That's a fair way to look at it Chris Yeah. Okay. Okay. Thanks, so much for your time today.
Thank you Chris Thanks.
Thanks, Chris and thanks.
Our next question on comes from the line and on.
And then central Goldman Sachs you may begin.
Hi, Thanks, good morning, everyone.
Good morning.
Hi, So maybe just following up.
On the point on the first quarter gross margins.
And came in and kind of.
For nicely up year on year and we.
And feed cost inflation, and there and hoping for.
And can you maybe disaggregate some of the key contributors for so.
And we can think about.
And how that flows through the balance of the year, obviously layering in incremental inflation on top of that.
Yes, I think one other key things.
That really helped us and Q1 was our ability to really sell all of our oxide day.
As we've talked about on prior calls and.
And if we're not able to sell them and the retail market and shell eggs.
On a significantly lower revenue per dozen by having to sell them to a breaker plant so that was a.
A significant contributor to the Q1 margin and we have no guarantee that we'll be able to do that go forward, but the sales team is doing everything they can to maximize the sale of those outside day.
Again, and the other thing that we saw and although we had pricing pressure on.
Cost pressure on conventional a feed costs, we did see some decreases within our butter portfolio because of what the CME butter prices debt. So there was a partial offset there but again for the last couple of quarters for the year were anticipating that the commodity cost for butter are going to increase and our.
Current forecast based on the internal forecast that we have for some of those tailwind as we saw on Q1 won't continue.
Okay. That's really helpful and then just.
And thinking about the trajectory on sales over the balance of the year and obviously right now or we're lapping kind of some of the kind of extreme kind of pantry loading and COVID-19 and the second quarter last year.
Has your sell through and your sell in and through the second quarter, how would you characterize that relative to your expectations and.
Especially.
As you say as consumer habits, maybe evolving and.
Anything you're seeing that's notable and your and your scanner data and the near term.
Well I think well I think what I'd say there.
Oh did you want to chime in.
Yes, I mean I think.
There is nothing unexpected and the results that we're seeing I mean, one other things that we did see that helped Q1, a little bit as we saw a shift in sales at the end of Q1 from what we expected to ship in April and.
March was a little bit of that.
But from a consumer point of view I mean consumption still remains very strong and.
I think.
We're still seeing the retention of consumers that we believe is going to continue to drive us towards the guidance, we have for the fiscal year.
The interesting thing to note if you look at Q1 gross.
For.
2019, Q1, or two year CAGR on sales growth is above 33%. So that takes that a little bit of the noise that we've.
And with COVID-19 and that first quarter and still talks about the strength.
The consumer model and our business and what it's contributing to our sales.
Alright, great Thats really helpful I'll pass it on thanks.
Our next question on comes from the line of Pamela Kaufman from Morgan Stanley You may begin.
Hi, good morning.
Good morning, welcome back thank you.
And I wanted to see if you could talk about where you've gained incremental distribution in the quarter and in particular geographies or retailers and how are you thinking about further opportunity for distribution expansion over the next several quarters.
So some of the distribution that we saw and the first quarter.
We saw and some of the change of Albertsons and Safeway.
And so that's been a.
Big change that we're very happy to continue to grow our distribution book.
Okay.
And.
Is that driven by the partnership with our cost out or kind of your internal efforts.
Yes, that's and the retail segment not in the foodservice and the cost is really helping us grow the foodservice channels. So it's really the efforts of the sales team.
Okay.
And I guess, how are you thinking about the runway for distribution expansion over the next couple of quarters.
Well I think there's so much room in front of us Pamela as we continue to work with our value retail partners. We're in over 16005 hundred stores today and there is a tremendous opportunity to continue to bring more products to those doors and so.
So that's a big part of.
The conversations we're having throughout the year.
And we feel great about the responses, we're getting from the meetings, we've already had and and we will continue to have those meetings throughout the next couple of quarters.
Got it.
And obviously top line was strong and the Florida I guess can you discuss your decision to maintain top line guidance for the rest of the year.
And obviously.
Any particular dynamics that youre seeing that and.
Not to increase the items and.
I guess, how are you thinking about stickiness and behavioral changes that we've seen.
And from consumers.
It begins to return to normal.
Yeah. Thanks for the question Pam.
We're very happy with Q1 results.
As I mentioned a minute ago I mean, there was a.
A slight shift and some sales that we expected to occur in the beginning of April that shifted into Q1 into the end of March.
But the delivery and Q1 really gives us.
Much higher level of confidence debt.
Delivery of the day net sales range that we provided for the year is very achievable.
Alright, and I guess last can you just.
Talk about what Youre seeing from net promotional landscape and what your expectations are.
Over the coming quarters.
You mentioned that and do you expect to see a more normalized level.
And on activity.
Yes.
What does that mean for you.
So if you think of 2020.
We pulled back on promotional activity because of COVID-19.
Was impacting the sales force dramatically.
Most of the work required so relative to 2020, we would anticipate that we'll see.
Overall for the fiscal year, a higher investor and trade spend and as we're trying to attract more consumers.
And to try the product et cetera, so when we speak of a more regular cadence.
There will be higher than 2020, where we're able to pull back on promotions.
And it will be spread fairly evenly throughout the year, perhaps a little bit more back weighted just as we are getting new distribution and retailers and trying to set up promotional activity at that at those new retailers as we get into their stores.
Okay. Thank you.
For you.
Our next question comes from line.
And as low from bank of Montreal, and you may begin.
Good morning, guys.
Good morning.
A couple of questions. One is what would be the initial.
On mission for the ESG officer.
She asked to do right away.
Sure.
So first of all Joanne ball. If she has got a really long title XI is our general counsel corporate Secretary and our head of ESG and.
So much of that ESG function is going to be about for.
Frankly doing a better job of communicating a lot of things, we're already doing but frankly, I've just been doing and maybe not talking enough about but ultimately the core piece of work. This year will be to do two things one is to build a small team around that function to is to work with some outside consultants to.
Do a materiality matrix or assessment to understand the critical ESG factors that.
Our most meaningful for our long term sustainability and then to set some goals for 2022 that we can all be held accountable for.
Okay great.
And the question is how do you continue the momentum in the medium size eggs ensure that continuous because thats been a.
We will benefit from the COVID-19.
Experience.
And we maintain that.
Well a lot of it has to do with it.
Sort of telling the story of the great economics for retailers that they provided.
Over the last year I think what we saw even when the full array of.
AG options came back to retail shelves, we still saw some very strong velocities for medium eggs. They provide a unique value to consumers. One interesting aspect about <unk> is that the yolk is consistent with the size of the yoke and a larger AG, it's the albumin or the white that changes so for <unk>.
People that are looking for and even stronger.
Protein and healthy fat con.
Contribution to their diet, a media Mag is actually really at nutrient packed nutrient dense. So we'll continue to tell that story to consumers via our marketing efforts will continue to offer a great opportunity to our retailers in terms of their own economics and.
We will continue to bring that to market.
Mmm and last question is on foodservice.
I am sure it got off to a little bit slower.
And you expected can you talk about the ramp in the foodservice channel and then.
Do you expect it to be in one to two years relative to the rest of the portfolio on a composition.
Yeah, I would say that.
Our ramp and foodservice is meeting our very modest expectations. This year and so I think we've been.
We didn't have very strong.
Expectations for for a big ramp this year.
As the economy cautiously returns to dining out.
Costa is helping open doors, it's helping get us the right kinds of meetings and we are learning a lot from those meetings about what the right products in the right mix with the right pricing works for potential foodservice partners, there's definitely opportunity and the midterm.
Call it beyond 2021.
And we're going to use 2021 to work with a cost to develop our and our winning strategy and the out years.
Do you have you had any early wins in terms of distribution or any sort of beyond the learning experience that you've been able to kind of points and more of a tangible.
Execution, and then I'll leave it there and I appreciate it.
Yes.
I don't we.
We absolutely have had wins since we started working with a cost and I don't know that Ive got specific names to tell you about generally there their regional comps.
Concepts.
Great. Thank you would be well guys.
Thank you.
Thank you Kim.
Our next question on comes from the line Jackie <unk> from Credit Suisse. You may begin.
Hey, Thanks for the question good morning, guys.
And good morning for me here.
And just one for me here have you seen any new data on consumer adoption or I guess on the understanding of pasture raised in general the overall category growing in line with you is it growing faster and I guess from a competitive standpoint have you seen private label or any other smaller competitors accelerating and shelf space.
That's my first question. Thanks.
Yeah, there's a lot to unpack there I would say at a high level.
And the outdoor access portion of eggs and which we play is definitely growing faster than eggs overall, and we've seen substantial share gains period after period.
As a result again, we're really I think.
Providing the products that the consumers and America increasingly want.
And where the puck is headed in a sense.
There have been a variety of both private label and branded specialty eggs on the shelf for.
For for many years.
<unk> pasture based options and we continue to grow our share of eggs overall and of pasteurized eggs, which I think speaks to the to the value of our brand and our consumer driven approach to bringing <unk> to market.
Got you understood and then just one big.
Picture question here, you mentioned that you're building out that learning and development farm and Missouri, The Young and Creek farm you just provide a little bit more detail and I guess, what you what you expect to get out of that I guess near term and long term.
Yeah, Thanks for that.
We worked with over 200 small family farms and.
It's really important to us that we set them up for success. We want we believe we work with the very best farmers.
In this country and.
And we want to bring them tools insights information to help them be the very best that they can be so we have a vital farms.
And sort of approach to raising pasture raised birds and producing pasteurized eggs and this farm will be and opportunity for us to.
Really see how high is up in terms of bird health in terms of the economics for the farmer in terms of producing the high quality eggs that we all want.
And there are lots of best practices that we get from those 200 small family farmers and we want to put them all in one place and see what can happen.
Okay.
Gotcha understood. Thank you.
Thank you.
Thank you.
And there are no further questions and the queue and I'd like to turn on the call back over to Matt <unk> for any clearer.
And remarks.
Just wanted to thank everyone for their time this morning, and your interest and vital farms.
Great day.
And.
Thanks, everyone.
Take care.
And as soon as conference call. Thank you for participating you may now disconnect.
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