Laird Superfood Inc. Q1 2023 Earnings Call

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I'd now like to hand over to Steve Ritchie.

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Thank you and good afternoon, welcome to <unk> Super Foods first quarter 2023 earnings conference call and webcast on today's call are Jason B Super grids, President and Chief Executive Officer, Hamill, Our Chief Financial Officer, and Energize, our Chief commercial officer by now everyone should have access to the company's first quarter 2023.

<unk> press release filed today after market close it is available on the Investor Relations section of layered Super Foods website at Www Dot layered superfood dot com before we begin. Please note that during 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.

Patients and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward looking statements. Please refer to today's press release 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 in any forward looking statements made today.

And now I'll turn the call over to Jason.

Thanks, Steve Hello, and welcome everyone. Thank you for joining us today.

Our results in the first quarter demonstrate that we have built the right strategic plan for our business and that the team is capable of executing it.

So it remains a challenging operating environment to be growing at mid size food brand.

Im pleased to report that we are nevertheless, making strong progress against our key strategic goals of improving our cost structure growing our brand and wholesale and improving our portfolio behind taste and packaging innovation.

And just a few short weeks at the beginning of the year, we were able to transition our supply chain to an asset light manufacturing and third party distribution model that is already operating with far greater efficiencies and what we were able to achieve when we operated our own facilities in Oregon.

We are not only up and running in those facilities, but we are already producing greater volumes at lower cost with increased flexibility and responsiveness across a wider range of packaging sizes and formats, our new partners have proven to be highly supportive and adaptive and true partners in every sense of the word.

As Andy will detail shortly excluding onetime costs associated with our product withdrawal, we have already increased our Q1 gross margin by more than eight points year over year at the same time, we have continued to make dramatic progress in reducing our marketing spend in the DTC channel and as a result continue to see a significantly higher return on our AD <unk>.

<unk>, a lower consumer acquisition cost and a vastly improved margin structure.

We have now largely worked our way out of the inefficient marketing contracts that were set up over the last years and have finally been able to shift our investment to the strategies and tactics that we believe we will have more meaningful impact in the marketplace.

A great example of this is in our re targeting against our existing customer database, where we were able to restore subscription growth for the first time in over a year during Q1 within the conventional and natural grocery channel. We are seeing strong growth in same store sales for our dollar sales velocity growth remains positive for both our liquid and powder creamers.

In the conventional and natural channels. This growth is being fueled by our new branding and packaging that largely rolled out during the first quarter and by the continued progress and improving our pricing and availability at the shelf.

As mentioned on our fourth quarter call, we experienced a quality issue due to a poor tasting raw material received from one of our suppliers and decided to withdraw multiple cream of products from the market.

While we identified the issue relatively soon after production and we're able to retrieve the majority of the products before they reach consumers.

Withdraw it did have an outsized impact on our Amazon business as we had to clear all inventory from their distribution warehouses before we could begin to sell on the platform again.

As a result, we fell behind our goals for the Amazon business this quarter.

Thankfully, we are now back to full speed at Amazon and are already seeing our metrics returned to pre withdrawal levels.

Despite this quality setback, our net promoter score remains at an extremely healthy 69 points and our customer satisfaction score is a $4 9 million a five point scale.

Financially, we continue to strengthen our business versus prior year metrics as Daniel will share during today's call. We have increased our go forward gross margin, while significantly reducing our operating expenses and marketing costs.

We continue to make strides toward achieving a cash flow positive position.

And I am pleased to be able to report that a key ingredient supplier of our business is working with us to help to recoup the Q1 loss from a quality event.

At this point, we project that we will have cash to operate into at least the second quarter of 2024 and that we will be in a much improved financial position from which to raise capital when that time comes.

There is no doubt that this team has made tremendous progress in turning around our company and I want to thank our talented and dedicated layered superfood employees for their ingenuity and persistence and delivering these improvements.

Our journey is far from complete but each quarter has demonstrated steady progress against our goal of breakeven profitability and we expect more of the same as we go forward from here.

With that I will hand, it over to Andy.

Thank you Jason when we began our journey of brand transformation last year. We knew we had significant work to do to rebuild our go to market Foundation.

A year later I am pleased to see the scale of the changes that we have executed and before I jump into the details I want to thank the entire organization for their diligence and dedication to set our incredible brand up for future success for years to come in the first quarter, we launched updated packaging and executed a new campaign to reposition.

Our layered supercooled brand around fueling optimal daily performance.

Though these changes have only been in market for a few months, we are already seeing improved sales velocities in retail and better conversion on our website. We have also launched some of our most successful innovation to date behind new Adaptogenic protein bars, and prebiotic daily Greens.

To address what we called out as inefficient historical spending levels, we've completely overhauled our marketing model and our DTC business, we have reduced total spend by 70% in Q1 versus year ago.

While simultaneously improving our return on AD spend by 280%.

Importantly, we are simultaneously decreased our consumer acquisition cost.

And with our high lifetime value and gross margin improvements such that we are now delivering a positive ROI smart TTC customers.

Also returns net subscribers to positive growth for the first time since 2021 with sequential improvement in each month of Q1, as we rebalanced our value proposition and drove the conversion of repeat consumers to our subscription offerings.

It is important to note that all of this was achieved despite the product withdrawal that Jason discussed earlier.

As Jason mentioned, the Q1 product withdrawal had its largest impact on Amazon, which led to a nearly 12 week blackout of our powdered creamer products on Amazon.

Which obviously slowed our growth in that channel. However, I'm happy to report that we are now back in stock on Amazon and that we are seeing our conversion rate return to the levels that we had planned for 2023.

Nevertheless, Amazon has become an expensive pay to play business model and we are currently assessing the right levels of spend in growth to drive through this channel.

The biggest change in our go to market model is taking place in our wholesale business, where we still have significant opportunity to expand distribution.

During the last few months, we have added important leadership and capability and are seeing our efforts produced both velocity growth and incremental confirmed placements with new doors starting in Q1.

This distribution is taking place with great retail partners across all channels at key retailers like whole foods sprouts and target.

And the 12 weeks ending March 26, 2023, we saw a 42% increase in dollar velocity growth and our liquid creamer business in the natural channel.

In total consumption for layered super food for all items in measured channels was up 23% during this period.

Looking forward I'm excited about the innovation expansion that we have ready for the balance of this year our.

Our planned growth. During 2023 includes the continued expansion of our retail footprint.

The launch of new innovation platforms, like a reformulated hydration beverage products.

Launch of our oat milk Creamers to include functional Adaptogen and a new line of Super premium products called <unk> Reserve.

We're also looking forward to the execution of our best seasonal program to date with a new lineup of products, including Pumpkin Spice Super food instant latte with adaptor Jones with.

We also have initiatives underway to grow our brand awareness drive continued sales velocity growth and further enhance our margin through surgical pricing actions and the launch of our <unk> liquid creamer.

In summary, it has indeed been a very busy first few months of 2023 layered super food and.

And we are pleased by the progress that we're already seeing our team's resolve for future success has never been stronger and Im looking forward to continuing to share details behind our commercial initiatives on subsequent quarterly calls.

Now, let me turn the call over to Anya to further discuss first quarter results.

Thank you Andy net sales of $8 1 million in the first quarter of 2023.

In line with our annual operating plan and decreased 12, 7% as compared to $9 3 million in the prior year period.

Given the level of pullback in marketing spend this decline was expected.

Speaker 1: and a new line of super premium products called Layered Reserve.

Given by lower sales volume and E Commerce and club channels specifically.

Speaker 1: We are also looking forward to the execution of our best seasonal program to date with a new lineup of products, including pumpkin spice, superfood, instant latte with adaptogens.

E Commerce sales decline was driven primarily by DTC due to a 70% year over year reduction in media as we've got inefficient spend and reduced our customer acquisition costs in order to build a more sustainable direct to consumer business and improve our profitability in this channel.

Speaker 1: We also have initiatives underway to grow our brand awareness, drive continued sales velocity growth, and further enhance our margin through surgical pricing actions and the launch of our Aseptic Liquid Creamer.

The decline in DTC was partially offset by growth in our retail channel driven by both higher velocity and liquid and shelf stable creamers and distribution expansion in the natural channel.

Speaker 1: at Laird Superfood.

Speaker 1: and we are pleased by the progress that we are already seeing. Our team's resolve for future success has never been stronger. I'm looking forward to continuing to share details behind our commercial initiatives on subsequent quarterly calls.

As reported gross margin was 23, 1% compared to negative four 6% in the fourth quarter of 2022 and 29% in the prior year period.

Speaker 1: Now, let me turn the call over to Anya to further discuss first quarter results.

First quarter margins were negatively impacted by a onetime cost.

Speaker 2: Thank you Andy. Net sales of $8.1 million in the first quarter of 2023 were in line with our annual operating plan. Andy increased 12.7% as compared to $9.3 million in the prior year period.

Related to product withdrawal that Jason and E&E, both talked about earlier.

Excluding those one time charges I am pleased to report that we achieved 27% adjusted gross margin, which is an improvement of over eight points from the sequential quarter and prior year periods. This margin expansion came from.

Speaker 2: Given the level of fullback in our marketing spend, this decline was expected, driven by lower sales volume in e-commerce and club channels.

Result of our supply chain transformation to third party co manufacturing and fulfillment model that was completed in the beginning of the first quarter and is in line with our expectation for that transition.

Speaker 2: Specifically, our e-commerce sales decline was driven primarily by DTC due to a 70% year-over-year reduction in media as we cut inefficient spend and reduced our customer acquisition costs in order to build a more sustainable direct-to-consumer business and improve our profitability in this channel. We hope you enjoyed this video and if you did, please like, share and subscribe to our channel.

Expect our gross margin to continue to improve throughout the year as we see the full benefit of the transformation to a variable cost model as well as other margin improvement initiatives planned for the second half of the year.

Operating expenses totaled $6 2 million, a decrease of $9 7 million compared to $15 9 million a year ago period.

Speaker 2: cell channel driven by both higher velocity in liquid and shell stable creamers and distribution expansion in the natural channel.

The decrease was primarily due to the lapping of 8 million impairment of goodwill and intangible assets in the first quarter of 2022, as well as reduce people costs and other general and administrative expenses following the exit activity in the fourth quarter of 2022 marketing expenses also contributed.

Speaker 2: As reported, gross margin was 23.1% compared to negative 4.6% in the fourth quarter of 2022 and 20.9% in the prior year period.

Speaker 2: First quarter margins were negatively impacted by a one-time cost related to product withdrawal that Jason and Ian Zee both talked about earlier. Excluded those one-time charges, I am pleased to report that we achieved 27% adjusted gross margin, which is an improvement of over eight points from the sequential quarter and prior year period.

It is 0.9 million reduction in overall operating expenses.

Net loss as reported was $4 1 million, a decrease of $10 million versus the prior year period.

On an adjusted basis net loss was $3 8 million, which was approximately $3 million lower than a year ago, driven by expanded gross margin and lower marketing and G&A spend.

Speaker 2: This margin expansion came as a result of our supply chain transformation to third-party manufacturing and fulfillment model that was completed in the beginning of the first quarter. In the end, the margin was our expectation for that transition. I expect our growth margin to continue to improve throughout the year.

A detailed reconciliation of non-GAAP adjusted net loss is included in our earnings release.

Turning to our balance sheet and cash flow, we ended the quarter with $11 9 million of cash and no debt and we continue to conservatively manage our balance sheet.

Speaker 2: as we see the full benefit of the transformation to variable cost model, as well as other margin improvement initiatives planned for the second half of the year.

Cash used in operating activities was $6 1 million in the quarter as compared to $3 6 million during Q1 of 2022.

Speaker 2: After expenses, total $6.2 million, a decrease of $9.7 million compared to $15.9 million in a year ago period.

The elevated cash burn this quarter was driven by one time payments related to the facility.

Speaker 2: The decrease was primarily due to the lapping of $8 million impairment of goodwill and intangible assets in the first quarter of 2022, as well as reduced people costs and other general and administrative expenses following the exit activities in the fourth quarter of 2022. The increase in expenses also contributed $0.9 million reduction in overall operating expenses.

And sisters, Oregon, severance and bonus payments and the delayed timing of accounts receivable collections, which was the result that early Q2.

For the balance of the year, we expect our ongoing cash burn to be reduced to $2 million to $3 million per quarter.

Moving onto our outlook, although we anticipate that an uncertain economic environment with historically high inflation rate impact in consumer spending will continue into the balance of the year.

Speaker 2: Net loss, as reported, was $4.1 million, a decrease of $10 million versus the prior year period.

Speaker 2: On an adjusted basis, net loss was $3.8 million, which was approximately $3 million lower than a year ago, driven by expanded gross margin and lower marketing than G&A spent. A detailed reconciliation of non-GAAP adjusted net loss is included in our earnings release.

We are encouraged by our first quarter results.

The strategic actions, we took last year and continued to take this year I've taken hold as.

As such we reaffirm our guidance for gross margins in excess of 30% for the year, excluding any onetime charges and anticipate mid to high single digit net sales growth with that I will turn the call back to Jason. Thanks. Tanya. This concludes our prepared remarks, operator, we're now ready to open up.

Speaker 2: The estimated quarter was 11.9 million of cash and no debt, and we continue to conservatively manage our balance sheets. Cash use and operating activities was 6.1 million in the quarter as compared to 3.6 million during Q1 of 2022.

Our call to questions.

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Speaker 2: The elevated cash burn this quarter was driven by one-time payments related to the facility lease exit in Sisters, Oregon, severance and bonus payments, and a delayed timing of account receivables collection, which was resolved in Early Q2. For the balance of the year, we expect our ongoing cash burn to be reduced.

When preparing to ask a question. Please ensure your devices on mute.

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Okay.

Okay.

Speaker 2: encouraged by our first quarter results, as the strategic actions we took last year and continue to take this year are taking hold. As such, we reaffirm our guidance for growth margins in excess of 30% for the year, excluding any one-time charges, and anticipate mid-to-high single-digit SNAP sales growth.

Speaker 2: With that, I'll turn the call back to Jason.

Speaker 3: Jason. Thanks, Sonja.

Speaker 1: This concludes our prepared remarks. Operator, we are now ready to open the call to questions.

Speaker 1: Thank you. If you would like to ask a question, please press star followed by 1 on your telephone keypad. If you would like to withdraw your question, please press star followed by 2.

We have a question from J P volume from Roth Capital Partners. Your line is open.

Speaker 4: When preparing to ask a question, please ensure your device is unmuted locally. As a reminder, that's star 1 in telec...

Great. Thanks for taking the question.

Maybe if we could just start it sounds like the Amazon issue may have caused some sales during the quarter, but.

Maybe from a high level. If we just think about where we are here at the end of Q1 and relative to you know.

The performance of the last year.

What sort of gives you confidence around the maintained guidance and sort of thinking about.

Whether demand has has trough than it is on the upward slope at this point, maybe just if you could talk to how you're thinking about that as we go through the remainder of the year.

Yeah, Hey, J D and it's a great question.

And one that we wrestle with quite a lot.

The reality is it dead.

As you know very well in a number of others do as well we're in the Mr. A pretty nascent business transformation right now is really in the rear view in the last 12 months. The majority of that has taken place.

Really is as we move through those 12 months, where we did strategically was to.

Speaker 4: We have a question from JP Wallen from Roth Capital Partners. Your line is open.

Pullback DTC media spend.

You heard that today, and we had a significant pullback executed in Q1, but that's been ongoing for the last few quarters.

Speaker 1: Maybe if we could just start, you know, it sounds like the Amazon issue may have cost some sales during the quarter, but maybe from a high level, you know, if we just think about where we are here at the end of Q1 and relative to, you know, kind of the performance of the last year, what sort of gives you confidence around?

Because that particular channels just become incredibly inefficient for most companies that are operating in the DTC space, especially for companies like ours and consumer goods that don't have as large of an LTV and has some other industries and so we pulled back on that and strategically made the pivot.

Speaker 1: The maintained guidance and sort of thinking about, um. Whether demand has has trough and is on the upward slope at this point, maybe just if you could talk to how you're thinking about that as we go through the remainder of the year.

Words, Amazon and our wholesale.

And chief pursuant to your question that you asked Amazon was hit by the quality issue in Q1, we feel very bullish about our opportunity with Amazon is not an inexpensive channel to play in and so we continue to hone our model really look at our media spend and all of the support that we give to that channel.

Speaker 3: Yeah, hey JP, it's a great question and one that we wrestle with over here quite a lot. The reality is that, as you know very well and a number of others do as well, we're in the midst of a pretty massive business transformation right now.

Relative to the sale of them that are returned and we'll continue to do that as we go forward as well but.

But we see a lot of really significant opportunity to grow our Amazon business, which frankly had not been.

Speaker 3: is really in the rear view of the last 12 months, the majority of that has taken place.

A priority for the layered superfood organization until some time less than a year ago and his team came in.

Speaker 3: Really, as we move through those 12 months, what we did strategically was to pull back BTC media spend. You heard that today. We had a significant pullback executed in Q1, but that's been ongoing for the last few quarters.

So strategically we're looking at pulling in a really throttling back DTC spend until.

That model.

<unk> itself and we see some signs of that taking place within the market.

The iOS changes that took place from Apple really changed the game about a year and a half ago and Facebook has been finding a way to resettle that as have others and we'll continue to watch and monitor it and make investments where we see that we can but getting to the Amazon is important for US you know that is a fish where the fish are type of strategy.

Speaker 3: because that particular channel has just become incredibly inefficient for most companies that are operating in the DTC space, especially for companies like ours in consumer goods that don't have as large of an LTV as some other industries. And so we pulled back on that and strategically made the pivots towards Amazon.

And then getting a wholesale frankly is our most important strategic imperatives and we're going through the review cycle here in the course of the next few months, where most of the retailers in that in the conventional and natural channels.

Speaker 3: and a wholesale. And to pursue into your question that you asked, Amazon was hit by the quality issue in Q1. We feel very bullish about our opportunity within Amazon. It's not an inexpensive channel to play in. And so we continue to hone our model, really look at our media spend and.

We are assessing the various products and brands that are a bit bubble for their categories. We have a number of meetings that are coming up over those months and are continuing to.

Speaker 3: all of the support that we give to that channel relative to the sales that are returned and we'll continue to do that as we go forward as well. But we see a lot, you know, a really significant opportunity to grow our Amazon business, which frankly had not been a priority for the Laird superfood organization until sometimes less than a year ago when this team came in.

Be out in the in the marketplace driving for expansion in that space.

Obviously, it's a bigger answer probably than there were you know what you were looking for but I think the way to think about it is if for US it's very clear, which is hold onto the DTC channel, especially through lower cost re marketing towards our subscribers and our repeat consumers and then really use Amazon to acquire.

Speaker 3: So strategically we're looking at pulling, you know, really throttling back DTC spend until that model corrects itself. And we see some signs of that taking place within the market. You know, the IOS changes that took place from Apple really changed the game about a year and a half ago. And Facebook has been finding a way to re-

Our new consumers and retail to acquire more placement for eyeballs as consumers pass.

Hi.

Great I think that's that's very helpful and maybe that segue a little into my second question, but just as you think about you know maybe more clarity on the online side, but.

Are there any trends you can point out as it relates to both your repeat customer orders, whether that's average order value coming down or or getting higher.

Speaker 3: imperative and we're going through the review cycle here in the course of the next few months where most of the retailers in that in the conventional and natural channels are assessing the various products and brands that are available for their categories We have a number of meetings that are coming up over those months and are continuing to

And then maybe also compare that to anything you see in terms of new customers and their orders relative to maybe a year or two ago.

Thanks for the question Jamie This is Andy.

We are seeing a nice improvement in our a O be largely as.

Jason mentioned, we've gone through a transformation and rebuild those are our portfolio approach to improve a lot of our products.

Cross the board without adding functionality, improving chase and even launching into new spaces like adaptogenic protein bars or most recently at the end of the quarter, We launched a prebiotic daily Greens products all of those pieces are contributing to increases in <unk> and maintaining a really high.

Speaker 3: lower cost remarketing towards our subscribers and our repeat consumers. And then really use Amazon to acquire new consumers and retail to acquire more placement for eyeballs as consumers pass by.

Speaker 1: Great, I think that's very helpful and maybe that segues a little into my second question, but just as you think about, you know, maybe more clarity on the online side, but are there any trends you can point out as it relates to both your repeat customer or your repeat customer?

Hi repeat level across the board. So I do think we are seeing.

A nice stabilization behind a great product and proposition we did make a change in Q1 is also improve our subscription our value offering which is helps move high frequency promotion repeat users into a more stabilized subscription model, which will which will help bolster that channel overall.

As it relates to new customers.

Per the commentary, we did reduce significant spend by almost 70% to the channel in the quarter.

Speaker 5: Thanks for the question, JP. This is Andy. We are seeing a nice improvement in our AOB largely as Jason mentioned, we've gone through transformation and rebuilt both our portfolio approach to improve a lot of our products.

Which was largely against a highly inefficient CAC in Q1 of 2022, we are still seeing.

A good amount of new consumers come into the portfolio and their E. O V is higher than the a O V of new consumers a year ago, largely driven by a reduction in the frequency of the promotions that we had been running so overall there is a reconciliation of our.

Speaker 5: across the board with that adding functionality, improving taste, and even launching into new spaces like adept genic protein bars, or most recently at the end of the quarter we launched a pre-batic daily greens product. All of those pieces are are contributing to increases in an AOV.

Our value proposition and how we price more efficiently and to the overall model itself and I think those are some of the components, Jason mentioned earlier about where we see progress moving in the right direction for the channel and now we're going to go look for new acquisition from Amazon.

Speaker 5: a nice stabilization behind a great product and proposition. We did make a change in Q1 to also improve our subscription value offering which has helped move high frequency promotion repeat users into a more stabilized subscription model which will help bolster that channel overall.

Where the CAC is much lower or has been historically much lower than our DTC model and in retail.

And J P. I'll, just add that while we've got the opportunity on that I'll add just one more point to frame up what Andy just indicated which is we're bringing down our acquisition cost at the same time that we're taking up our E. L F.

Speaker 5: As it relates to new customers, per the commentary, we did reduce significant spend by almost 70% to the channel in the quarter, which was largely against a highly inefficient CAC and Q1 of 2022. We are still seeing a good amount of new consumers come into the portfolio.

And our gross margin and or LTV, so that equation going to start working in our favor. It's obviously working in our favor already relative to where we've been.

But we're very focused on making it work.

In our favor in terms of profitability as well and pushing us towards that breakeven point much more quickly than where we were headed.

Speaker 5: and their AOV is higher than the AOV of new consumers a year ago, largely driven by a reduction in the frequency of the promotions that we had been running. So overall, there is a reconciliation of our value proposition and how we price more efficiently and to the overall model itself.

A couple of quarters ago.

That sounds great. That's very helpful and if I could just slide one last quick one in there just in terms of velocities.

I was wondering you know I know you made a comment about kind of the spike you saw post the rebrand and I was just wondering if you could give us a little more color around how that trended.

Following the initial spike in not sure whether or not you would want to make any comments about since quarter end, but even if just during the quarter could you maybe talk a little bit more about how that trended following the rebrand.

Yes of course, yes, we were very pleased with the immediacy.

Speaker 5: and in retail.

Of the incremental or accelerating velocities that we saw our rebrand sorry rollout in the natural channel primarily R. R.

Speaker 3: is we're bringing down our acquisition cost at the same time that we're taking up our AOV and our gross margin and our LTV. That equation's going to start working in our favor. It's obviously working in our favor already relative to where we've been, but we're very focused on making it work in our favor in terms of profitability as well and pushing us towards...

First with our shelf stable creamer.

<unk> then it was followed by Costco.

And then rebranding online relative to our whole wholesale redo of our website and then subsequently our liquid creamers surge rollout towards the end of the quarter at each of those windows, we saw almost an immediate acceleration.

Speaker 3: That break even point much more quickly than where we were headed, you know, a couple quarters ago.

Speaker 3: much more quickly than where we were headed a couple quarters ago.

Speaker 1: That sounds great, very helpful. And if I could just slide one last quick one in there. Just in terms of velocities, I was wondering, you know, I know you made a comment about kind of the spike you saw post the rebrand. And I was just wondering if you could give us a little more color around how that trended.

Across each of those segments, which was which is really exciting.

The complication came with the quality issue that Jason referred to where we did then immediately pull back some of those products out of the marketplace, particularly the shelf stable creamer powder cream products, but since they've gone back and we've seen that acceleration return and velocity growth continuing so to your direct question around are trending.

Speaker 1: Following the initial spike and not sure whether or not you would want to make any comments about. Since quarter end, but even if just during the quarter, could you maybe talk a little bit more about how that trend did following the rebrand?

One of it.

While not consistent but we've had two moments where it did show up at the shelf and the acceleration of velocity has happened in both instances. So we're really pleased overall with how it's trended our liquid creamer business in the natural channel.

Speaker 5: Of course, we were very pleased with the immediacy of the incremental or accelerating velocities that we saw. Our rebrand sort of rolled out in the natural channel primarily at first with our shelf stable creamer products.

Velocity over 40% are wholesale.

Wholesale our club store sales on a velocity level were up 30%. So we're really pleased with the overall performance of the brand at this point.

Speaker 5: Then it was followed by Costco and then rebranding online relative to a wholesale redo of our website and then subsequently our liquid creamers started to roll out towards the end of the quarter. Each of those windows we saw almost an immediate acceleration.

Great really appreciate all the help best of luck going forward.

Thanks, Jamie.

We have no further questions. So this concludes our Q&A on today's conference call.

Thank you for your participation you may now disconnect your lines.

Speaker 5: But since they've gone back in, we've seen that acceleration return and velocity growth continuing. So to your direct question around the trending component of it, while not consistent, but we've had two moments where it did show up the shelf and the acceleration of velocities happened in both instances. So we're really pleased overall with how it's trended.

Speaker 5: Our liquid creamer business and the natural channel velocities are over 40%. Our club store sales on a velocity level are up 30%. So we're really pleased with the overall performance of the brand at this point.

Speaker 1: Great, really appreciate all the help. Best of luck going forward.

Speaker 6: Attach heavy.

Speaker 4: We have no further questions, so this concludes our Q&A and today's conference call. We'd like to thank you for your participation. You may now disconnect your lines.

Speaker 6: Thanks, JB.