Q1 2026 Edible Garden AG Inc Earnings Call

May 15, 2026

Operator: Good morning, welcome to the Edible Garden Incorporated 2026 Q1 Business Update Conference Call. At this time, all participants are in a listen-only mode, and the floor will be open for questions following the presentation. If anyone should require operator assistance during the conference, please press star zero on your phone keypad. Please note this conference is being recorded. I will now turn the call over to your host, Ted Ayvas, Investor Relations at Crescendo Communications. Ted, the floor is yours.

Speaker #2: If anyone should require operator assistance during the conference, please press star zero on your phone keypad. Please note, this conference is being recorded. I will now turn the call over to your host, Ted Ayvas, Investor Relations at Crescendo Communications.

Speaker #2: Ted, the floor is yours. Thanks, Jenny. Good morning, and thank you for joining Edible Garden's 2026 first quarter earnings conference call and business update.

Ted Ayvas: Thanks, Jenny. Good morning, and thank you for joining Edible Garden's 2026 Q1 earnings conference call and business update. On the call with us today are Jim Kras, Chief Executive Officer of Edible Garden, and Kostas Dafoulas, Interim Chief Financial Officer of Edible Garden. Earlier today, the company announced its operating results for the 3 months ended 31 March 2026. The press release is posted on the company's website, www.ediblegardenag.com. In addition, the company has filed its quarterly report on Form 10-Q with the U.S. Securities and Exchange Commission, which can also be accessed on the company's website as well as the SEC's website at www.sec.gov. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications, LLC at 212-671-1020.

Speaker #2: On the call with us today are Jim Kras, Chief Executive Officer of Edible Garden, and Kostas Dafoulas, Interim Chief Financial Officer of Edible Garden.

Speaker #2: Earlier today, the company announced its operating results for the three months ended March 31, 2026. The press release is posted on the company's website, www.ediblegardenag.com.

Speaker #2: In addition, the company has filed its quarterly report on Form 10Q with the US Securities and Exchange Commission, which can also be accessed on the company's website as well as the SEC's website, at www.sec.gov.

Speaker #2: If you have any questions after the call and would like any additional information about the company, please contact Crescendo Communications at 212-671-1020. Before Mr. Kras reviews the company's operating results for the quarter ended March 31st, 2026, and provides a business update, we would like to remind everyone that this conference call may contain forward-looking statements.

Ted Ayvas: Before Mr. Kras reviews the company's operating results for Q1 ended 31 March 2026 and provides a business update, we would like to remind everyone that this conference call may contain forward-looking statements. All statements other than statements of historical facts contained in the conference call, including statements regarding our future results of operations and financial position, strategy and plans and our expectations for future operations are forward-looking statements. The words aim, anticipate, believe, could, expect, may, plan, project, strategy, will, and the negative of such terms, in other words and terms of similar expression, are intended to identify forward-looking statements. These forward-looking statements are based largely on the company's current expectations and projections about future events and trends that it believes may affect its financial condition, results of operations, strategy, short-term and long-term business operations and objectives, and financial needs.

Speaker #2: All statements other than statements of historical fact contained in the conference call, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations, are forward-looking statements.

Speaker #2: The words "aim," "anticipate," "believe," "could," "expect," "may," "plan," "project," "strategy," "will," and the negative of such terms in other words in terms of similar expressions are intended to identify forward-looking statements.

Speaker #2: These forward-looking statements are based largely on the company's current expectations and projections about future events and trends that it believes may affect its financial condition, results of operations, strategy, short-term and long-term business operations and objectives, and financial needs.

Speaker #2: These forward-looking statements are subject to several risks and uncertainties, and assumptions as described in the company's filings with the SEC, including the company's annual report on Form 10-K for the year ended December 31, 2025.

Ted Ayvas: These forward-looking statements are subject to several risks, uncertainties, and assumptions as described in the company's filings with the SEC, including the company's annual report on Form 10-K for the year ended 31 December 2025. Because of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in the conference call may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statement. You should not rely upon forward-looking statements as predictions of future events. Although the company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, level of activity, performance, or achievement. In addition, neither the company nor any person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The company disclaims any duty to update any of these forward-looking statements except as required by law.

Speaker #2: Because of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in the conference call may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statement.

Speaker #2: You should not rely upon forward-looking statements as predictions of future events. Although the company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results level of activity, performance, or achievements.

Speaker #2: In addition, neither the company nor any person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The company disclaims any duty to update any of these forward-looking statements except as required by law.

Speaker #2: All forward-looking statements attributable to the company are expressly qualified in their entirety by these cautionary statements, as well as others made on this conference call.

Ted Ayvas: All forward-looking statements attributable to the company are expressly qualified in their entirety by these cautionary statements, as well as others made on this conference call. You should evaluate all forward-looking statements made by the company in the context of these risks and uncertainties. With that, I would now like to turn the call over to Jim Kras, Chief Executive Officer of Edible Garden. Jim?

Speaker #2: You should evaluate all forward-looking statements made by the company in the context of these risks and uncertainties. With that, I would now like to turn the call over to Jim Kras, Chief Executive Officer of Edible Garden.

Speaker #2: Jim?

Speaker #3: Thanks, Ted. And good morning, everyone. The first quarter of 2026 reflected continued progress across the business as we began seeing stronger traction from many of our many of the investments and strategic initiatives we put in place over the past year.

Jim Kras: Thanks, Ted, and good morning, everyone. The first quarter of 2026 reflected continued progress across the business as we began seeing stronger traction from many of the investments and strategic initiatives we put in place over the past year. Revenue increased approximately 22.9% year over year to approximately $3.3 million, supported by continued retail expansion and growth across multiple categories. One of the strongest contributors during Q1 was our cut herb business, where sales increased approximately 46% year over year, driven by continued growth within existing accounts as well as new account contributions from Kroger and Weis Markets. That momentum also extended beyond our core produce categories. Vitamin and supplement sales increased approximately 27% year over year, while condiment sales increased approximately 51%.

Speaker #3: Revenue increased approximately 22.9% year over year, to approximately 3.3 million dollars, supported by continued retail expansion and growth across multiple categories. One of the strongest contributors during the quarter was our cut herb business, where sales increased approximately 46% year over year, driven by continued growth within existing accounts, as well as new account contributions from Kroger and Weiss Markets.

Speaker #3: That momentum also extended beyond our core produce categories: vitamin and supplement sales increased approximately 27% year over year, while condiment sales increased approximately 51%.

Speaker #3: We also continued seeing strong growth internationally, with sales increasing approximately 50% year over year, reflecting continued expansion of our distribution footprint and our growing demand for clean label, better-for-you products across multiple markets and categories.

Jim Kras: We also continued seeing strong growth internationally, with sales increasing approximately 50% year over year, reflecting continued expansion of our distribution footprint and our growing demand for clean label, better-for-you products across multiple markets and categories. As a result, we continued expanding distribution with both existing and new retail partners during the quarter, including Target, Safeway, The Fresh Market, Hannaford, Busch's Fresh Food Market, and Woodman's Market. At the same time, we broadened distribution across our branded consumer product portfolio, including Pickle Party, Pulp, Kick. Sports Nutrition, Vitamin Whey, and Jelousy GLP-1 support products. We believe this momentum reflects the broader platform we have been building over the past years, leveraging the controlled environment foundation, vertically integrated infrastructure, retail relationships, operational capabilities, and product development expertise established through our core business. We continue expanding into adjacent higher margin and shelf-stable categories.

Speaker #3: As a result, we continued expanding distribution with both existing and new retail partners during the quarter, including Target, Safeway, The Fresh Market, Hannaford, Bush's Fresh Food Market, and Woodman's Market.

Speaker #3: At the same time, we broadened distribution across our branded consumer product portfolio, including Pickle Party, Pulp, Kick, Sports Nutrition, Vitamin Way, and Jealousy GLP-1 support products.

Speaker #3: We believe this momentum reflects the broader platform we have been building over the past years, leveraging the controlled environment foundation vertically integrated infrastructure retail relationships, operational capabilities, and product development expertise established through our core business.

Speaker #3: We continue expanding into adjacent higher-margin and shelf-stable categories. As we continue evolving beyond our traditional greenhouse and fresh herb business, one of the areas we are most focused on is the ready-to-drink, or the RTD, category.

Jim Kras: As we continue evolving beyond our traditional greenhouse and fresh herb business, one of the areas we're most focused on is the ready-to-drink or the RTD category. We believe RTDs represent a compelling long-term opportunity, with the global market projected to grow from approximately $842.5 billion in 2025 to roughly $1.26 trillion in 2033, according to Phoenix Research. More importantly, through ongoing discussions with both existing and prospective retail partners, we continue seeing increasing demand for scalable domestic production solutions that can deliver clean label, shelf-stable, functional nutrition products with consistency, transparency, and operational reliability. We believe this reflects a meaningful unmet need as retailers and brands continue searching for reliable US-based partners across functional beverage and wellness-focused nutrition categories.

Speaker #3: We believe RTDs represent a compelling long-term opportunity with the global market projected to grow from approximately $842.5 billion in 2025 to roughly $1.26 trillion in 2033, according to Phoenix Research.

Speaker #3: More importantly, through ongoing discussions with both existing and prospective retail partners, we continue seeing increasing demand for scalable domestic production solutions that can deliver clean-label, shelf-stable, functional nutrition products with consistency, transparency, and operational reliability.

Speaker #3: We believe this reflects a meaningful unmet need, as retailers and brands continue searching for reliable, US-based partners across functional, garbage, and wellness-focused nutrition categories.

Speaker #3: To support that opportunity, we continue advancing our Iowa Midwest RTD initiative during the quarter, which includes ongoing work related to the integration of Tetra Pack processing and packaging solutions.

Jim Kras: To support that opportunity, we continue advancing our Iowa Midwest RTD initiative during the quarter, which including ongoing work related to the integration of Tetra Pak processing and packaging solutions. Tetra Pak is a globally recognized leader in food processing and aseptic packaging solutions, we believe this relationship significantly strengthens the operational foundation of our RTD platform. Our retail footprint now exceeds 6,000 locations across the United States, Caribbean, and South America. During Q1, we added new retail partners including Target, Safeway, Busch's Fresh Food Market, and The Fresh Market. This expanding distribution network is not only driving current revenue growth, but also represents the foundation for our future RTD product placement. These are relationships that are already in place that we will nurture and look to leverage.

Speaker #3: Tetra Pack is a globally recognized leader in food processing and aseptic packaging solutions, and we believe this relationship significantly strengthens the operational foundation of our RTD platform.

Speaker #3: Our retail footprint now exceeds 6,000 locations across the United States, Caribbean, and South America. During Q1, we added new retail partners, including Target, Safeway, Bush's Fresh Food Market, and The Fresh Market.

Speaker #3: This expanding distribution network is not only driving current revenue growth, but also represents the foundation for our future RTD product placement. These are relationships that are in place, that we will nurture and look to leverage.

Speaker #3: More broadly, our foundation in controlled environment agriculture has allowed us to build deep expertise in traceability, sustainability, operational discipline, supply chain management, and retail execution.

Jim Kras: More broadly, our foundation in controlled environment agriculture has allowed us to build deep expertise in traceability, sustainability, operational discipline, supply chain management, and retail execution. We believe those capabilities naturally support a broader farm to formula strategy and zero-waste inspired initiative while supporting our continued expansion into shelf stable and functional nutrition categories. While we're in the early stages of this evolution, we believe the foundation is firmly in place through expanding retail network, growing branded product portfolio, and continued advancement of our RTD manufacturing initiative. At the same time, we remain focused on improving operational execution, scaling higher margin categories, strengthening margins over time, and positioning the company for long-term scalable growth and value creation. With that, I'll turn the call over to Costas to review the financials. Costas?

Speaker #3: We believe those capabilities naturally support a broader farm-to-formula strategy and zero-waste-inspired initiative while supporting our continued expansion into shelf-stable and functional nutrition categories. While we are we're in the early stages of this evolution, we believe the foundation is firmly in place through expanding retail network, growing branded product portfolio, and continued advancement of our RTD manufacturing initiative.

Speaker #3: At the same time, we remain focused on improving operational execution, scaling higher-margin categories, strengthening margins over time, and positioning the company for long-term scalable growth and value creation.

Speaker #3: With that, I'll turn the call over to Kostas to review the financials. Kostas?

Speaker #2: Thanks, Jim. And good morning, everyone. Revenue for the three months ended March 31, 2026, increased approximately 22.9% year over year to approximately $3.3 million, compared to approximately $2.7 million in the prior year.

Kostas Dafoulas: Thanks, Jim, good morning, everyone. Revenue for the 3 months ended 31 March 2026 increased approximately 22.9% year-over-year to approximately $3.3 million, compared to approximately $2.7 million in the prior year period. The increase was primarily driven by continued growth across the company's cut herb portfolio, which increased approximately 45.9% year-over-year. That growth was supported by expansion within existing customer accounts, along with new account contributions from Kroger and Weis Markets. We also saw broad-based growth across hydroponic basil, wheatgrass, vitamins and supplements, and condiments. International sales increased approximately 50% year-over-year, and condiment sales grew 51%, reflecting expanding demand for our branded product portfolio across the retail footprint that now exceeds 6,000 locations.

Speaker #2: The increase was primarily driven by continued growth across the company's cut herb portfolio, which increased approximately 45.9% year over year. That growth was supported by expansion within existing customer accounts, along with new account contributions from Kroger and Weis Markets.

Speaker #2: We also saw a broad-based growth across hydroponic basil, wheatgrass, vitamins, and supplements, and condiments. International sales increased approximately 50% year over year, and condiment sales grew 51%, reflecting expanding demand for our branded product portfolio across the retail footprint that now exceeds 6,000 locations.

Speaker #2: Operating expenses were $10.0 million for the three months ended March 31, 2026, compared to $5.6 million for the three months ended March 31, 2025.

Kostas Dafoulas: Operating expenses were $10 million for the 3 months ended 31 March 2026, compared to $5.6 million for the 3 months ended 31 March 2025. The increase of $4.4 million was primarily driven by 2 factors. First, cost of goods sold increased as we scaled cut herb distribution through third-party sourcing. It dynamically view as transitional as we work to renegotiate supplier terms. Second, depreciation and amortization increased approximately $2.5 million, primarily reflecting accelerated depreciation of certain fixed assets in connection with the company's pivot to RTD clean nutrition manufacturing at our Prairie Hills facility.

Speaker #2: The increase of $4.4 million was primarily driven by two factors. First, cost of goods sold increased as we scaled cut herb distribution through third-party sourcing.

Speaker #2: The dynamic review has transitional as we work to renegotiate supplier terms. Second, depreciation and amortization increased approximately 2.5 million, primarily reflecting accelerated depreciation of certain fixed assets in connection with the company's pivot to RTD clean nutrition manufacturing at our Prairie Hills facility.

Speaker #2: The company recorded an income tax benefit of approximately $3.4 million for the three months ended March 31st, primarily related to valuation allowance release in connection with the sale of certain tax benefits under the New Jersey Economic Development Authority's Technology Business Tax Certificate Transfer Program.

Kostas Dafoulas: The company recorded an income tax benefit of approximately $3.4 million for the three months ended 31 March, primarily related to a valuation allowance release in connection with the sale of certain tax benefits under the New Jersey Economic Development Authority's Technology Business Tax Certificate Transfer Program. This benefit is a discrete non-recurring item. Net loss for Q1 was approximately $3.7 million, compared to approximately $3.3 million in the prior year period. Turning to the balance sheet and cash flow, cash increased up to approximately $2 million at 31 March from $1.1 million at year-end, the first sequential increase in 5 quarters. That improvement was driven by positive operating cash flow of approximately $251,000, which reflected favorable working capital, including collections on receivables and inventory reductions, as well as net financing inflows.

Speaker #2: This benefit is a discrete, non-recurring item. Net loss for the quarter was approximately $3.7 million, compared to approximately $3.3 million in the prior year period.

Speaker #2: Turning to the balance sheet and cash flow, cash increased to approximately $2 million at the end of March 31st from $1.1 million at year-end.

Speaker #2: First, sequential increase in five quarters. That improvement was driven by positive operating cash flow of approximately $251,000, which reflected favorable working capital, including collections on receivables and inventory reductions, as well as net financing inflows.

Speaker #2: We continue to manage a working capital deficit and are focused on improving the company's capital position as we execute on our growth strategy. Looking ahead, our priorities for 2026 are clear.

Kostas Dafoulas: We continue to manage a working capital deficit and are focused on improving the company's capital position as we execute on our growth strategy. Looking ahead, our priorities for 2026 are clear. Continue scaling revenue through our expanding retail network. Improve our cost structure by transitioning cut herb sourcing and scaling higher margin branded categories. Advance the RTD manufacturing platform with Tetra Pak and maintain disciplined capital management. We're encouraged by the top line momentum and the cash flow improvement this quarter, and we are focused on translating that momentum into margin improvement over the balance of the year. With that, operator, please open the line for questions.

Speaker #2: Continue scaling revenue through our expanding retail network, improve our cost structure by transitioning cut herb sourcing and scaling higher-margin branded categories, advance the RTD manufacturing platform with Tetra Pak, and maintain disciplined capital management.

Speaker #2: We're encouraged by the top-line momentum in the cash flow improvement this quarter, and we are focused on translating that momentum into margin improvement over the balance of the year.

Speaker #2: With that operator, please open the line for questions.

Speaker #3: Thank you very much. We are now opening the floor for questions. If you would like to ask a question, please press star one on your phone keypad now.

Operator: Our first question is coming from Nicholas Sherwood of the Maxim Group. Nick, your line is live.

Speaker #3: We ask that while you're posing your question, you please pick up your handset if you're listening on a speakerphone to provide optimum sound quality.

Speaker #3: You may press star two if you would like to remove your question from the queue. Please wait a moment while we poll for questions.

Speaker #3: Thank you. Our first question is coming from Nick Sherwood of the Maxim Group. Nick, your line is live.

Operator: Our first question is coming from Nicholas Sherwood of the Maxim Group. Nick, your line is live.

Speaker #4: Hi, Jim. Good morning. Thank you for taking my questions. My first question is, across the 6,000 retail locations your products are found in, how many of those stores are carrying the cut herb products?

Nicholas Sherwood: Jim, good morning. Thank you for taking my questions. My first question is, you know, across the 6,000 retail locations your products are found in, how many of those stores are carrying the cut herb products? How many of them are carrying vitamin supplements? You know, how should we conceptualize, you know, what's being held in across those stores?

Nick Sherwood: Jim, good morning. Thank you for taking my questions. My first question is, you know, across the 6,000 retail locations your products are found in, how many of those stores are carrying the cut herb products? How many of them are carrying vitamin supplements? You know, how should we conceptualize, you know, what's being held in across those stores?

Speaker #4: How many of them are carrying vitamin supplements? And, kind of, how should we conceptualize what's being held across those stores?

Jim Kras: Hey, good morning, Nick. It's, you know, it's a combination and a mix, obviously. We're seeing growth come out of cut herbs. That's the preferred form that consumers like based on convenience. That continues to accelerate. You know, we have Target is gonna be coming online in the next week or so. That'll be significant for us as a business, and to blend with the largest percentage being cut herbs, with, you know, with some potted herbs as well.

Speaker #5: So, hey, good morning, Nick. It's a combination and a mix, obviously. We're seeing growth come out of cut herbs, as that's the preferred form that consumers like based on convenience.

Speaker #5: And that continues to accelerate we have target is going to be coming online in the next week or so. That'll be significant for us as a business.

Speaker #5: That's a blend with the largest percentage being cut herbs, with some potted herbs as well. As we start to evolve as a business and get into higher, more shelf-stable opportunities and products, you'll see that mix start to even out where I think you're going to see, especially with the ready-to-drinks down the road, that becoming a larger part of our business.

Jim Kras: As we start to evolve as a business and get into higher, more shelf stable, you know, opportunities and products, you'll see that mix start to even out, where I think you're gonna see, especially with the ready to drinks down the road, that becoming a larger part of our business and, you know, that's at a much higher velocity as well as margin, the RTD business.

Speaker #5: And that's at a much higher velocity as well as margin the RTD business. But near term, let's say the next 6 to 12 months, as we bring on the RTDs it's going to be it's going to be, I think, driven primarily by the vitamin supplements which currently right now I would say is 20% of our business with cut herbs being probably 40 to 50 and then the rest is kind of everything else potted wheatgrass, hydroponic basil, which is also a big player for us at a nice margin.

Jim Kras: Near term, let's say the next six to 12 months as we bring on the RTDs, it's gonna be, I think, driven primarily by the vitamin supplements, which currently right now I would say is, you know, 20% of our business, with, you know, cut herbs being probably 40% to 50%, the rest is kinda everything else, potted, wheatgrass, and hydroponic basil, which is also a big player for us, at a nice margin.

Speaker #5: So I think a lot of top-line growth coming out of cut herbs—even, I think, even more coming out of vitamins and supplements, knowing that the ring for a lot of these products is much higher than a clamshell of cut herbs.

Jim Kras: I think a lot of top line growth coming out of cut herbs, I think even more coming out of vitamins and supplements, knowing that, you know, the ring for a lot of these products is much higher than the clamshell of cut herbs. You know, the rest of it is gonna be some of the other products that are in the mix that have, I think, you know, better margins that will offset some of the top line growth that's coming out of the cut herbs with, once again, the vitamins and supplements, I think, becoming a bigger and bigger part of our business.

Speaker #5: And then the rest of it is going to be some of the other products that are in the mix that have, I think, better margins that will offset some of the top-line growth that's coming out of the cut herbs with, once again, the vitamins and supplements, I think, becoming a bigger and bigger part of our business.

Speaker #4: Understood. And I appreciate the detail in that answer. And then, kind of looking at this new ready-to-drink platform, have you been able to provide some of your retail partners with prototypes?

Nicholas Sherwood: Understood. I appreciate the detail in that answer. Kind of looking at this new ready-to-drink platform, have you been able to provide some of your retail partners with prototypes? Can you kind of talk about the reception from your retail partners? How should we think about that, yeah?

Nick Sherwood: Understood. I appreciate the detail in that answer. Kind of looking at this new ready-to-drink platform, have you been able to provide some of your retail partners with prototypes? Can you kind of talk about the reception from your retail partners? How should we think about that, yeah?

Speaker #4: Can you kind of talk about the reception from your retail partners? How should we think about that?

Jim Kras: The reception's been overwhelming. It's, you know, what's great about being in the food business is people have to eat, right? Ready-to-drinks is in the segment which is just incredibly compelling with the growth in, you know, in protein consumption. You know, you can't turn the television on and not see it, you know, come up, whether in, you know, advertisements or people speaking about just the growing need, whether you're looking to be an active individual and put on muscle mass or to recover or just live a healthier lifestyle, or if you're older and you're looking to keep, you know, weight on or if you may unfortunately be, you know, sick. The protein needs just continue to grow across the full spectrum of consumers.

Speaker #5: The reception's been overwhelming. It's what's great about being in the food business is people have to eat, right? And ready-to-drinks is in the segment which is just incredibly compelling with the growth in protein consumption you can't turn the television on and not see it come up whether in advertisements or people speaking about just the growing need whether you're looking to be an active individual and put on muscle mass or to recover or just live a healthier lifestyle.

Speaker #5: Or, if you're older and you're looking to keep weight on, or if you maybe, unfortunately, are sick, the protein needs just continue to grow across the full spectrum of consumers.

Speaker #5: So, for us—the retailers, many of which we are—and we've already gotten significant commitments with the factory that's going up, I think we're going to be at a point where it's going to become more and more of a negotiation to figure out who we're going to start to bring in post-launch.

Jim Kras: For us, the retailers, you know, many of which that we are in. You know, we've already gotten significant commitments with the factory that's going up. I would think, you know, we're gonna be at a point where it's gonna become more and more of a negotiation to figure out who we're gonna start to bring in post-launch. We are working with a co-manufacturer to start driving the business and servicing the overwhelming demand, and I think we're probably gonna be close to capacity with them probably in the next few weeks. It's really been incredibly exciting. You know, we are focused on the core business.

Speaker #5: We are working with a co-manufacturer to start driving the business and servicing the overwhelming demand. And I think we're probably going to be close to capacity with them, probably in the next few weeks.

Speaker #5: So it's really been incredibly exciting. We are focused on the core business; the greenhouse has got us here. But the RTD business—it's just a monster.

Jim Kras: The greenhouse has got us here, but the RTD business, it's just a monster with, you know, with the product lines that we have in there, both, you know, both a performance high protein drink, and then we'll have an adult nutrition drink that's in there that's, that'll be, you know, launching in, once again, in a tail end of 2027, early 2028 on in our own factory. We'll be launching prior, or servicing business prior, you know, out of a co-manufacturer. Once again, just overwhelming demand, and, you know, we are gonna be seeing this paradigm shift for us as a business, you know, directed more and more towards that.

Speaker #5: With the product lines that we have in there, both a performance high protein drink and then we'll have an adult nutrition drink that's in there—that'll be launching, once again, in the tail end of 2027, early 2028.

Speaker #5: In our own factory, and we'll be launching prior, or servicing business prior, out of a co-manufacturer. So, once again, just overwhelming demand. And we're going to be seeing this paradigm shift for us as a business.

Speaker #5: Directed more and more towards that. And once again, I think we're so uniquely qualified because there's really no one out there that is coming out of the greenhouse business that's doing the innovative things that we're doing and isn't as qualified as we are to really stand for something, whether it's clean label—which is what's driving the thrust of this—or just having an eye on sustainability and working with someone like Tetra Pak, who's been a phenomenal resource for us as we build out this platform.

Jim Kras: Once again, I think we're so unique, uniquely qualified because, you know, there's really no one out there that is coming out of the greenhouse business that's doing the innovative things that we're doing and isn't as qualified as we are to really stand for something, whether it's clean label, which is what's driving the thrust of this, or just having a, you know, an eye on sustainability and working with someone like Tetra Pak, who's been a phenomenal resource for us as we, you know, we build out this platform.

Speaker #5: So, I mean, like I said, we've got probably more orders than we can handle, and we're already—we'll be running our prototype, to get more specific, in mid-July, with product beginning to manufacture at a co-man in September while we build out the factory in Iowa.

Jim Kras: I mean, like I said, we're, we've got probably more orders than we can handle, and we're already, we'll be running our prototype, to get more specific, in mid-July with product beginning to manufacture at a co-man in September, while we build out the factory in Iowa. We're already in the final stages of finalizing the product. We teamed up with McCormick in order to develop the products. Like I said, one is a sports nutrition dairy-based premix, you know, that then gets turned into a RTD in a Tetra Pak, and then the other one is an adult, you know, product, not unlike, you know, BOOST, Ensure, and those types. It's just fantastic.

Speaker #5: And so, we're already in the final stages of finalizing the product. We teamed up with McCormick in order to develop the products. Like I said, one is a sports nutrition, dairy-based premix that then gets turned into an RTD in a Tetra Pak, and then the other one is an adult product, not unlike Boost and Ensure and those types.

Speaker #5: And so it's just fantastic. A joke I said to people: I've always wanted to be in the hotcakes business, and now we're in the hotcakes business, because everything's selling like hotcakes.

Jim Kras: A joke I said to people, I've always wanted to be in the hotcakes business, you know, and now we're in the hotcakes business because everything's selling like hotcakes. It's been pretty cool, in all honesty. Exciting, I think, for the team, the company, investors. I mean, just fantastic.

Speaker #5: So, it's been pretty cool, in all honesty. Exciting, I think, for the team, the company, investors. I mean, just fantastic.

Speaker #4: Yeah, it sounds like there's a lot of momentum there and something to look forward to. And then my last question is: How do you keep, or how do you make, customers sort of loyal to your brand across product categories, so that someone is recognizing that you're the people behind the cut herbs that they buy, and the vitamins, supplements that they may buy, or maybe the condiments that they buy? And ensuring that they're buying across your product categories, as opposed to just kind of buying one of them?

Nicholas Sherwood: Yeah. Sounds like there is a lot of momentum there and something to look forward to. Yeah. My last question is, you know, how do you keep or how do you make customers sort of loyal to your brand across product categories so that, you know, someone is recognizing that you're the people behind the cut herbs that they buy and the vitamin supplements that they may buy, or maybe the condiments that they buy, and ensuring that, you know, they're buying, you know, across your product categories as opposed to just kind of buying one of them?

Nick Sherwood: Yeah. Sounds like there is a lot of momentum there and something to look forward to. Yeah. My last question is, you know, how do you keep or how do you make customers sort of loyal to your brand across product categories so that, you know, someone is recognizing that you're the people behind the cut herbs that they buy and the vitamin supplements that they may buy, or maybe the condiments that they buy, and ensuring that, you know, they're buying, you know, across your product categories as opposed to just kind of buying one of them?

Speaker #5: Sure. Look, it comes down to an exercise in marketing and distribution, right? So, in customer service, both for our retailers and our end user.

Jim Kras: Sure. You know, look, it comes down to an exercise in marketing and distribution, right, and customer service, you know, both for our retailers and our, you know, end user. It comes down to quality and consistency. I mean, you know what, you know, the art of this is, you know, is communicating and hopefully, training consumers, for lack of a better word, to know that when they want the best, and that they only deserve the best, they buy Edible Garden. You know, putting forth the marketing, you know, initiatives that, you know, communicate that is something that I think we do a fairly good job of, whether it's through, you know, advertising and marketing, in-store promotions and reinforcement, or social media.

Speaker #5: It comes down to quality and consistency. I mean, the art of this is communicating and, hopefully, training consumers—for lack of a better word—to know that, when they want the best, and that they only deserve the best, they buy Edible Garden.

Speaker #5: And so, putting forth the marketing initiatives that communicate that is something that I think we do a fairly good job of, whether it's through advertising and marketing, in-store promotions and reinforcement, or social media.

Jim Kras: Once again, I think, you know, if you've got the quality and the consistency and the availability and you're shipping at 98% like we have, I mean, it drives not only, I think, loyalty because people know when they go in, your product's gonna be in there and look for Edible Garden, because you know what you're gonna get. You're gonna get safe, high quality, best quality produce that's super fresh. I think you just continue to give a consumer that experience, and it tastes great, and it makes your everything that you cook taste that much better than, you know, we believe if we deliver on that and we do our job, I think people will continue to be loyal and want our product.

Speaker #5: But once again, I think if you’ve got the quality, and the consistency, and the availability, and you’re shipping at 98% like we have—I mean, it drives not only, I think, loyalty because people know when they go in, the product’s going to be in there, and they look for Edible Garden, because you know what you’re going to get. You’re going to get safe, high-quality, best quality produce that’s super fresh.

Speaker #5: I think you just continue to give a consumer that experience, and it tastes great, and it makes everything that you cook taste that much better. We believe if we deliver on that and we do our job, I think people will continue to be loyal and want our product.

Speaker #5: And we see that through the fact that we have a very stable revenue line, albeit small in comparison to maybe other companies out there.

Jim Kras: We see that, you know, through the fact that we have a very stable revenue line, albeit, you know, small in comparison to maybe the other companies out there. Now with the RTDs and our reputation with the, not only the consumers, but the retailers. Once again, talk about, you know, this notion of farm to formula and what that means. It's harnessing the greenhouses and all the great R&D stuff that we do, and we don't talk enough about it at the company. You know, the universities we're involved in, you know, the partnerships with, you know, the EPA, the USDA, to, you know, things that just help, you know, drive quality, consistency, and elevate us beyond anybody else in the category.

Speaker #5: Now with the RTDs and our reputation with not only the consumers but the retailers, once again, talk about this notion of farm-to-formula and what that means.

Speaker #5: It's harnessing the greenhouses and all the great R&D stuff that we do. I mean, we don't talk enough about it at the company—the universities we're involved in, the partnerships with the EPA, the EU, the USDA—things that just help drive quality, consistency, and elevate us beyond anybody else in the category.

Speaker #5: And there’s not too many people left, because I don’t think people made the investment. And I think the shareholders who are backing us—to allow us to get to where we are, to do the great things that we’re doing.

Jim Kras: There's not too many people left because I don't think people made the investment, and I think the shareholders who's backing us to allow us to get to where we are to do the great things that we're doing. I think all of that goes into building brand loyalty because people know that, hey, this is, you know, if I want the best in herbs, I want the best in condiments, I want great tasting, better for you products and somebody who's got an eye on the environment as well, you know, you should buy Edible Garden. I think we've seen that. Once again, I think what really reflects it is our consistent relationships and the opportunities that it drives for something like the RTDs, where, you know, major retailers came to us and said, Can you do this?

Speaker #5: And I think all of that goes into building brand loyalty, because people know that, hey, if I want the best in herbs, I want the best in condiments.

Speaker #5: I want great-tasting, better-for-you products as someone who's got an eye on the environment as well. We usually buy Edible Garden. And I think we've seen that.

Speaker #5: Once again, I think what really reflects it is our consistent relationships and the opportunities that it drives for something like the RTDs, where major retailers came to us and said, 'Can you do this?'

Speaker #5: We've got a problem. We've got " I mean, the shortfall in the marketplace on this item is tremendous. And to be able to do it better, cleaner, and do it where, like I said, where people are calling us and saying, "Hey, we've heard about what you guys are doing.

Jim Kras: We've got a problem. We've got, you know, I mean, the shortfall in the marketplace on this item is tremendous. To be able to do it better, cleaner, you know, and do it where, like I said, you know, where people are calling us and saying, Hey, you know, we've heard about what you guys are doing. Can you do it for us? It's just, I mean, you work a lifetime to get to this position, and the company's put in 10 years and fought hard to be where we are, and now it's starting to pay off. It's an exciting time, and I couldn't be any more bullish on the business, you know, we're just in a great spot.

Speaker #5: Can you do it for us? It's just, I mean, you work a lifetime to get to this position, and the company's put in 10 years and fought hard to be where we are.

Speaker #5: And now it's starting to pay off, so it's an exciting time. And I couldn't be any more bullish on the business, and we're just in a great spot.

Speaker #5: And I got to think, frankly, the retailers, for their support and because they're excited, they've got a problem. We've got a solution. And they've worked with us to craft a solution that works for all parties and, like I said, it's a huge opportunity that's only accelerating and growing.

Jim Kras: I gotta thank, frankly, the retailers, you know, for their support and, you know, because they're excited. They've got a problem. Well, you know, we're here. We've got a solution, and they've worked with us to craft, you know, a solution that works for all parties. You know, and like I said, it's a huge opportunity that's only accelerating and growing.

Speaker #4: Yeah, thank you for answering all my questions, and it looks like there's a lot of momentum there. I'll return to the queue.

Nicholas Sherwood: Yeah. Thank you for answering all my questions. You know, it looks like there's a lot of momentum there. I'll return to the queue.

Nick Sherwood: Yeah. Thank you for answering all my questions. You know, it looks like there's a lot of momentum there. I'll return to the queue.

Speaker #5: All right. Thanks, Nick. Take care.

Jim Kras: All right. Thanks, Nick. Take care.

Speaker #1: Thank you very much. Just a reminder there, if you would like to ask a question, you can still join the queue by pressing star one on your phone keypad now.

Operator: Thank you very much. Just a reminder there, if you would like to ask a question, you can still join the queue by pressing star one on your phone keypad now. Our next question is coming from Ellen Liczak of Forest Capital. Ellen, your line is live.

Speaker #1: Our next question is coming from Ellen Litvak of Forest Capital. Ellen, your line is live.

Speaker #6: Hey, good morning, guys. Thank you so much for taking my questions. You discussed the growing RTD opportunity and increasing retailer interest in domestic, clean-label, functional nutrition products.

Ellen Liczak: Hey, good morning, guys. Thank you so much for taking my questions. You discussed the growing RTD opportunity and increasing retailer interest in domestic clean label functional nutrition products. As you look ahead, how are you balancing investment between the company's core produce business and the really, like, the larger RTD opportunity? What do you think positions Edible Garden to compete effectively in that market?

Speaker #6: As you look ahead, how are you balancing investment between the company's core produce business and really the larger RTD opportunity? And what do you think positions Edible Garden to compete effectively in that market?

Speaker #5: Well, welcome. Nice to meet you, and thanks for joining the call. We're looking to make—look, the future is going to be the shelf-stable, better-for-you products.

Jim Kras: Well, welcome. Nice to meet you, and thanks for joining the call. We're looking to where the future is gonna be, you know, these shelf-stable, better for you products. We are going to be kind of allocating our resources, you know, along where we see the growth is. The core business, I think I know that we've made a significant investment in the operations, you know, adding greenhouses, you know, tying them to contracts. That's the thing. That's the other thing that's, you know, very unique about, you know, the relationships we have. The distribution platform of 6,000 stores holds steady and is growing, you know, every day that, you know, we're out there selling and working with our retail partners.

Speaker #5: And we are going to be kind of allocating our resources along where we see the growth is, the core business. I think, look, I know that we've made a significant investment in the operations, adding greenhouses, tying them to contracts.

Speaker #5: That's the other thing that's very unique about the relationships we have. The distribution platform of 6,000 stores holds steady and is growing every day that we're out there selling and working with our retail partners.

Speaker #5: But I think you're going to see a shift towards the investment in the RTD and nutrition platforms, because that's the future. And it's the larger opportunity, with the shelf stability, that just the overwhelming demand—I think only if you're lucky, once in your career—I've been fortunate to have it a few times, harking back to my days in nutritional supplements with Nutriboni, where you catch a craze.

Jim Kras: I think you're gonna see a, you know, a shift towards the investment in the RTD and nutrition platforms because that's the future and it's the larger opportunity, with the shelf stability, the just the overwhelming demand. You know, I think, you know, only if you're lucky once in your career, I've been fortunate to have it a few times, you know, harking back to my days in nutritional supplements with Nature's Bounty, where, you know, you catch a craze. Right now, we've got a protein craze. People want convenience. They want liquids. They don't necessarily want to mix powders. They wanna have their nutrition, and they wanna have it on the go. They wanna have it when they need it.

Speaker #5: And right now, we've got a protein craze. People want convenience. They want liquids. They don't necessarily want mixed powders. They want to have their nutrition.

Speaker #5: They want to have it on the go. They want to have it when they need it. And what's great is, everybody from kids all the way to seniors have these nutritional needs and these protein needs.

Jim Kras: What's great is everybody from kids all the way to seniors, you know, have these nutritional needs and these protein needs, and we're just starting there. I mean, there's so many other segments, you know, hydration, whatnot, that we could play in. We're gonna be investing, you know, a good chunk of our resources, our money, in the, in that platform, really backed by the greenhouses and the wherewithal and the reputation that we have for, you know, for being, you know, a supplier that supplies very difficult, highly perishable products at a 98%, you know, ship rate, which is just unheard of. I mean, all of that has driven the retailers.

Speaker #5: And we're just starting there. I mean, there are so many other segments—hydration, whatnot—that we could play. And so we're going to be investing a good chunk of our resources, our money, in that platform, really backed by the greenhouses and the wherewithal and the reputation that we have for being a supplier that supplies very difficult, highly perishable products at a 98% ship rate, which is just unheard of.

Speaker #5: And so, I mean, all of that has driven the retailers. This RTD opportunity came from the world’s largest retailer, who said, "Hey, can you help us out?" I mean, and it wasn’t necessarily something that was on our radar.

Jim Kras: You know, this RTD opportunity came from, you know, world's largest retailer said, Hey, you know, can you help us out? I mean, it wasn't necessarily something that was on our radar. When we started working with them and with their resources, you know, we were able to, you know, partner with a Tetra Pak, partner with a McCormick. When you think about Edible Garden our size and the partners that we're working with, it's, you know, it's a real credit to everybody at Edible Garden who sat there and, you know, made sure the truck left on time in full. You know, that means everything to the retailers. They want availability. If you don't have a product on the shelf, you're missing a sale.

Speaker #5: But then, when we started working with them and with their resources, we were able to partner with a Tetra Pak, partner with a McCormick's.

Speaker #5: I mean, when you think about Edible Garden at our size and the partners that we're working with, it's a real credit to everybody at Edible Garden who sat there and made sure the truck left on time and full, because that means everything to the retailers.

Speaker #5: They want availability. If you don't have a product on the shelf, you're missing a sale. And I think, just boiling it down in simple terms, that's kind of what I think has made us effective.

Jim Kras: I think that's, just boiling it down, in simple terms, that's kind of what I think has made us effective. Like I said, we're gonna be putting our more and more resources towards that. I think I answered your second question, which is, what positioned us for this opportunity. That was really just our commitment. I tell people at Edible Garden, we're a customer service company first that happens to make things or grow things. I think just getting in there and understanding the importance of the retailers and addressing their needs is something that I think we've just done really well as a team. It's paying off. It's paying off.

Speaker #5: And like I said, we're going to be putting more and more resources towards that. And I think I answered your second question, which is: what positions us for this opportunity?

Speaker #5: And that was really just our commitment. I tell people at Edible Garden we're a customer service company first that happens to make things or grow things.

Speaker #5: And I think just getting in there and understanding the importance of the retailers and addressing their needs is something that I think we've just done really well as a team, and it's paid off.

Speaker #5: It's paying off. And it's frustrating because it's been years of investment and managing costs and managing suppliers, and those challenges aren't going to stop.

Jim Kras: I mean, and it's frustrating 'cause it's been years of investment, you know, managing costs and managing suppliers, and, you know, those challenges aren't gonna stop. Now we have such a huge opportunity, and, you know, when everybody's got something in it, you know, to gain, you know, people come to the table with resources 'cause we're all gonna win. I hope I answered your question. Was that enough?

Speaker #5: But now we have such a huge opportunity. And when everybody's got something in it to gain, people come to the table with resources, because we're all going to win.

Speaker #5: So, I hope I answered your question. Was that enough?

Speaker #6: Yeah. No, yeah. No, you definitely did. And obviously, it looks like you run a very tight ship. I mean, I have another question. So, as we continue to evolve toward higher-margin and shelf-stable categories, what specific initiatives are you underway with in the core produce business to improve operational efficiencies and strengthen the margins over time?

Ellen Liczak: Yeah, no, you definitely did, and obviously it looks like you run a very tight ship. I mean, I have another question. like as you-

Jim Kras: Sure, go ahead.

Ellen Liczak: continue to evolve toward, you know, higher margin and shelf stable categories, like what specific initiatives are, you know, are you underway with the core produce business to improve the operational efficiencies and strengthen the margins over time?

Jim Kras: Well, right now, a lot of it is, you know, you know, not only a redeployment of existing resources that we have of people that, let's say, like whether it's in our regulatory department or our food safety, things like that can be deployed across the whole platform, including the RTDs. It's not like you're hiring another person. You know, we'll be looking to probably shift the business around, blend the business with our suppliers, you know, negotiate harder with our suppliers based on the growing demand, which I think puts us in a more advantageous position than we've been in the past to get some price considerations on what we're bringing in the house.

Speaker #5: Well, right now, a lot of it is not only a redeployment of existing resources that we have—of people that, let's say, whether it's in our regulatory department or our food safety—things like that can be deployed across the whole platform, including the RTDs.

Speaker #5: So, it's not like you're hiring another person. We'll be looking to probably shift the business around, blend the business with our suppliers, and negotiate harder with our suppliers based on the growing demand, which I think puts us in a more advantageous position than we've been in the past to get some price considerations on what we're bringing in-house.

Jim Kras: I also think you're gonna see a lot of, you're gonna see a lot of, I think, and I even think, I know we're gonna be looking to focus on the accounts where we make money. You know, and I think we'll start to remove some of the businesses that are maybe too far from the greenhouse with the rising, you know, diesel costs and if we're delivering it that way. We've already begun and have, and have impacted in this quarter, quite a bit of labor reduction just based on the investments that we made in Q1 or the investments we even made in Q4 to bring in more automation and more lines. You know, especially in preparation on what we anticipate to be, you know, a growing business.

Speaker #5: I also think you're going to see a lot of—you're going to see a lot of, I think, not even think. I know we're going to be looking to focus on the accounts where we make money.

Speaker #5: And I think we'll start to remove some of the businesses that are maybe too far from the greenhouse, with the rising diesel costs. And if we're delivering it that way, we've already begun and have impacted, in this quarter, quite a bit of labor reduction, just based on the investments that we made in Q1 or the investments we even made in Q4 to bring in more automation and more lines, especially in preparation for what we anticipate to be a growing business, when you think about it.

Jim Kras: You know, when you think about it, the overall business is up 22% with growth coming out of that core produce business. I don't see that stopping and I think we've got a bunch of opportunities lined up. It's just gonna be a margin play for us, a reduction of some costs and operations, negotiating better with our suppliers and focusing on where we know that we can drive margin and profit. 'cause we've got a lot of the market share now, so that's kind of happened and that investment's paid off. I think it's really a refinement and focus.

Speaker #5: The overall business is up 22%, with growth coming out of that core produce business. I don't see that stopping, and I think we've got a bunch of opportunities lined up.

Speaker #5: It's just going to be—it's going to be a margin play for us. Reduction of some costs in operations and negotiating better with our suppliers, and focusing on where we know that we can drive margin and profit, because we've got a lot of the market share now.

Speaker #5: So that's kind of happened, and that investment's paid off. So I think it's really a refinement in focus on what is traditionally a low-margin business, especially cut herbs.

Jim Kras: One is traditionally a low margin business, especially cut herbs, that drags us down a little bit. Once we start to shift to these higher margin, you know, products and we pick up velocity, you know, that will start to shift. I think we're already starting to see that while we reduce costs because, you know, we've been You know, I appreciate you saying I run a tight ship, but there's more to do, and we gotta continue to refine, you know, our costs so that we can, you know, we can focus our energies, you know, where we need to, that way where we can drive margin as well as drive, you know, top line.

Speaker #5: And so that drags us down a little bit. But once we start to shift to these higher-margin products and we pick up velocity, that will start to shift.

Speaker #5: And I think we're already starting to see that while we reduce costs, because we've been—I appreciate you saying I run a tight ship.

Speaker #5: But there's more to do. And we got to continue to refine our costs so that we can we can focus our energies where we need to, where we can drive margin as well as drive top line.

Speaker #6: Yeah, no, no, that definitely makes sense, and it looks like you guys are on your way. You also mentioned that international sales increased approximately 50% year over year.

Ellen Liczak: Yeah, no, that definitely, that makes sense and looks like you guys are on your way. You also mentioned that international sales increased approximately 50% year-over-year. Can you discuss what's driving that growth and how important international markets could become within the broader business over time?

Speaker #6: Can you discuss what's driving that growth, and how important international markets could become within the broader business over time?

Jim Kras: Yes. A lot of it's driven, you know, or the majority honestly is driven by PriceSmart. You know, they are the major player in big box. So think Costco, except in the Caribbean and in South America. They are continuing to grow. I know that they're opening stores in Chile. They're already, you know, in Colombia and some of the other countries in South America, you know, as well as, you know, throughout the Caribbean. They're NASDAQ listed as well. They're performing extremely well. You know, we've been able to continue. We've been in business with them for almost a decade, and so we've been able to benefit with, you know, from their growth. It's been a phenomenal relationship.

Speaker #5: Yes. A lot of it's driven or the majority, honestly, is driven by price market. They are the major player in big box of think Costco, except in the Caribbean and in South America.

Speaker #5: And they are continuing to grow. I know that they're opening stores in Chile. They're already in Colombia and some of the other countries in South America.

Speaker #5: As well as throughout the Caribbean. They're NASDAQ listed as well. They're performing extremely well. And we've been able to continue we've been in business with them for almost a decade.

Speaker #5: And so we've been able to benefit to from their growth. It's been a phenomenal relationship. They continue to not only drive in an existing product that's been there for a while, but also expand into our kick sports nutrition line.

Jim Kras: They continue to not only drive in an existing product that's been there for a while, but also expand into our Kick. Sports Nutrition line. I think you'll see even more growth out of that over the next year. Like I said, your earlier question about, you know, what does that product mix look like? You're gonna see vitamin supplements, our sports nutrition lines, the clean label products even before we start, you know, benefiting from this tremendous upside that we see on the RTDs. You'll see our existing protein powders, plant protein powders, all clean label.

Speaker #5: I think you'll see even more growth out of that over the next year. Like I said, your earlier question about what does that product mix look like?

Speaker #5: You're going to see vitamins, supplements, our sports nutrition lines, a clean labeled products, even before we start benefiting from this tremendous upside that we see on the RTDs, you'll see our existing protein powders, plant protein powders, all clean labeled.

Speaker #5: Those will start to come online. I would say towards the tail end of this year as well in significant numbers. At a much and a really nice margin.

Jim Kras: Those will start to come online, I would say, towards the tail end of this year as well in, you know, in significant numbers, you know, at a much, you know, and a really nice margin. Once again, as that mixes shifts, you know, the lower margin, you know, cut herb business doesn't become such a. I don't like using the word drag. It's just, it is a little bit of a drag on margin just 'cause it's a lower margin product line that right now, you know, we're getting requests to, you know, whether it's Target or, you know, or others to say, Hey, can you take this business line? You do such a great job for our competitors.

Speaker #5: So once again, as that mix is shifts, the lower margin cut herb business doesn't become such a and I don't like using the word drag.

Speaker #5: It's just it is a little bit of a drag on margin. Just because it's a lower margin product line that right now, we're getting we're getting requests to whether it's Target or others to say, "Hey, can you take this business and you do such a great job for our competitors?

Speaker #5: Can you do it for us? But you're going to start to see a lot of this higher-margin vitamins and supplement type of products, sports nutrition, come online.

Jim Kras: Can you do it for us? You're gonna start to see a lot of this higher margin vitamins and supplement type of products, sports nutrition come online this year, as well as, you know, the high velocity, better margined, you know, RTDs as well towards the tail end of the year.

Speaker #5: This year, as well as the high velocity, better margined RTDs as well towards the tail end of the year.

Speaker #6: Well, that's fantastic. I just got one more question. So you highlighted expansion with several major retail partners during the quarter, right? And as an investor, how should I think about the opportunity to continue increasing distribution within your existing retail relationships going forward?

Ellen Liczak: Well, that's fantastic. I just got one more question. You highlighted expansion with several major retail partners during the quarter, right? As an investor, how should I think about the opportunity to continue increasing distribution within your existing retail relationships going forward?

Speaker #5: Wow, it's going to be a—I mean, we're in an advantageous position, right? When you think about the fact that we're in 6,000 stores, once again, super stable, relationships really based on performance.

Jim Kras: Well, I mean, we're in an advantageous position, right? When you think about the fact that we're in 6,000 stores. Once again, super stable relationships really based on performance. I mean, you know, we're servicing Walmart, we're servicing Target, we're servicing Meijer, we're servicing Wakefern ShopRite, we're servicing, you know, the Hannaford and the Ahold Delhaize family of banners, Safeway. You know, I mean, these are the who's who of people who sell food to, you know, the majority of the country.

Speaker #5: I mean, we're servicing Walmart. We're servicing Target. We're servicing Meyer. We're servicing Wait for and Shop Right. We're servicing the Hannaford and the hotel has family of banners.

Speaker #5: Safeway. I mean, these are the who's who of people who sell food to the majority of the country. We're going to continue to look to go deep.

Jim Kras: We're gonna continue to look to go deep versus while we kinda go wide. Really it's about selling more products across our total portfolio to the existing customers that we have. We will add on new accounts as new accounts make sense. Once again, this whole idea of rationalizing out the relationship, the portfolio, the retailers, and making sure that we're going deep and driving the business at a higher margin while addressing the operational inefficiencies that the business has, that we've continued to improve upon so that we're more efficient.

Speaker #5: Versus while we do while we kind of go wide, I don't want to but really, it's about selling more products across our total portfolio to the existing customers that we have.

Speaker #5: We will add on new accounts as new accounts make sense. Once again, this whole idea of kind of rationalizing out the relationship, the portfolio, the retailers, and making sure that we're going deep and driving the business at a higher margin.

Speaker #5: And while addressing the operational inefficiencies that the business has, that we've continued to improve upon, so that we're more efficient our whole seed to store or cradle to grave or whatever you want to say it, process here is efficient and that we are benefiting from the margin that we need by servicing the retailers in a way that allows them to have the products that sell at an efficient rate for them as well as us and that we're gaining the margin and getting the margin expansion that we need because we have the optimal mix.

Jim Kras: You know, our whole, you know, seed to store or, you know, cradle to grave or whatever you wanna say it, you know, process here is efficient. That we are benefiting from, you know, the margin that we need by servicing, you know, the retailers in a way that allows them to have, you know, the products that, you know, sell at an efficient rate for them as well as us. That we're, you know, we're, you know, we're, you know, we're gaining the, you know, the margin and gaining the margin expansion that we need because we have the optimal mix.

Speaker #5: So I think it's a lot of it's going to be continuing to work with the relation with the retailers that we've been working with for the last decade that we've worked so hard to prove ourselves and that's paying off.

Jim Kras: I think it's a lot of it's gonna be, you know, continuing to work with the retailers that we've been working with for the last decade, that we've worked so hard to prove ourselves and that's paying off. It's selling, you know, more of what we currently have to the existing platform of retailers and distribution that we have, you know, versus, you know, going after necessarily new accounts.

Speaker #5: And so it's selling more of what we currently have to the existing platform of retailers and distribution that we have versus going after it necessarily new accounts.

Jim Kras: We've got a lot of business that we can do better at, I guess, is the best way to do it, and we're gonna focus on that by getting, you know, getting them to take in ideally, you know, the Pickle Party, which has been, you know, gaining momentum, or the, you know, Pulp. Like I said, the Vitamin Whey, you know, is really, you know, probably gonna be, you know, on its own, segmented out and focused on separately. They all kind of dovetail into this better for you.

Speaker #5: We've got a lot of business that we can do better at, I guess, is the best way to do it. And we're going to focus on that by getting them to take in ideally the pickles, which has been gaining momentum and or the fermented hot sauces and then, like I said, the vitamin supplements is really probably going to be on its own not on its segmented out and focused on separately but they all kind of dovetail into this better for you and overall push that we have as a company.

Jim Kras: You know, overall push that we have as a company and that aligns obviously with the, not only with what the consumers are looking for, but what the retailers are looking to do as there's been such a dramatic, an overwhelming, initiative by the retailers to remove artificial colors, artificial sweeteners from products. You know, for us, timing was great. We were already doing it. Not only were we doing it with what we grew and being USDA organic, the first out there with a, with a USDA certified, you know, organic product, with our Hydro Basil, which was incredibly, you know, innovative from the team.

Speaker #5: And that aligns, obviously, with the not only with what the consumers are looking for, but what the retailers are looking to do as there's been such a dramatic and overwhelming initiative by the retailers to remove artificial colors, artificial sweeteners from products.

Speaker #5: And so for us, timing was great. We were already doing it. Not only were we doing it with what we grew and being USDA organic—the first out there with a USDA certified organic product with our hydro basil, which was incredibly innovative from the team.

Speaker #5: But we're just in a position where we've got the right we got the right product at the right time and the retailers are pushing this as they understand the importance of getting it to better for you products because they're getting that pressure from a consumer base that's demanding it and an administration that's pushing it as well in Washington.

Jim Kras: We're, you know, we're just in a position where, you know, we've got the right product at the right time, and the retailers are pushing this as they, you know, understand the importance of getting it to better for you products 'cause they're getting that pressure from a consumer base that's demanding it and an administration that's pushing it as well in Washington. We're in a good spot.

Speaker #5: So we're in a good spot.

Speaker #6: Well, thank you so much for taking my questions. I really appreciate it. And congratulations on the quarter. I'll hop back on the Q if I have any other questions.

Ellen Liczak: Well, thank you so much for taking my questions. I really appreciate it. Congratulations on the quarter. I'll hop back on the queue if I have any other questions. Thanks again.

Speaker #6: Thanks again.

Speaker #5: All right. Thank you.

Jim Kras: All right. Thank you.

Speaker #1: Thank you very much. Well, we appear to have reached the end of our question and answer session. I will now hand back over to the management team for any closing comments.

Operator: Thank you very much. Well, we appear to have reached the end of our question and answer session. I will now hand back over to the management team for any closing comments.

Speaker #5: Thank you, operator. And thanks again to everyone for joining us today and for your continued interest in Edible Garden. We believe the first quarter reflected meaningful progress across the business and continued validation of the broader strategy we have been executing against over the past several years.

Jim Kras: Thank you, operator, and thanks again to everyone for joining us today and for your continued interest in Edible Garden. We believe the Q1 reflected meaningful progress across the business and continued validation of the broader strategy we have been executing against over the past several years. We're seeing encouraging momentum across our retail footprint, branded product portfolio, and operational initiatives while continuing to build a foundation for future growth and opportunities in higher margin, shelf-stable nutrition categories. As we move through 2026 and beyond, our focus remains on disciplined execution. That includes continuing to expand distribution, improve operational efficiencies, strengthen margins over time, advance our RTD initiative, and further leverage the infrastructure and retail relationships we have already established across the business.

Speaker #5: We're seeing a encouraging momentum across our retail footprint, branded product portfolio, and operational initiatives while continuing to build the foundation for future growth and opportunities in higher margin shelf-stable nutrition categories.

Speaker #5: As we move through 2026 and beyond, our focus remains on disciplined execution. That includes continuing to expand distribution, improve operational efficiencies, strengthen margins over time, advance our RTD initiative, and further leverage the infrastructure and retail relationships we have already established across the business.

Speaker #5: While we are still in the early stages of this evolution, we believe Edible Garden is becoming increasingly well-positioned as a diversified clean-labeled nutrition company with expanding capabilities across fresh, functional, and shelf-stable categories and a stronger foundation for long-term growth.

Jim Kras: While we are still in the early stages of this evolution, we believe Edible Garden is becoming increasingly well-positioned as a diversified, clean label nutrition company with expanding capabilities across fresh, functional, and shelf-stable categories and a stronger foundation for long-term growth. We appreciate everyone's continued support and look forward to updating you on our progress in the quarters ahead. Thanks again, and have a great day.

Speaker #5: We appreciate everyone's continued support and look forward to updating you on our progress in the quarters ahead. Thanks again, and have a great day.

Speaker #1: Thank you very much. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. We thank you for your participation.

Operator: Thank you very much. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. We thank you for your participation.