Good day, ladies and gentlemen, and welcome to the B&G Foods, Inc. Q2 2023 Financial Results Conference Call. Today's call, which is being recorded, is scheduled to last about one hour, including remarks by B&G Foods management and the question and answer session. I would now like to turn the call over to Michael Bauer, Director of Corporate Strategy and Business Development for B&G Foods. Please go ahead. Good afternoon, and thank you for joining us. With me today are Casey Keller, our Chief Executive Officer, and Bruce Wacha, our Chief Financial Officer. You can access detailed financial information on the quarter in the earnings release we issued today, which is available at the investor relations section of bgfoods.com. Before we begin our formal remarks, I need to remind everyone that part of the discussion today includes forward-looking statements. These statements are not guarantees of future performance, and therefore undue reliance should not be placed upon them. We refer you to B&G Foods annual report on Form 10-K and subsequent SEC filings for a more detailed discussion of the risks that could impact our company's future operating results and financial condition. B&G Foods undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. We will also be making references on today's call to the non-GAAP financial measures, adjusted EBITDA, adjusted net income, adjusted diluted earnings per share, and base business net sales. Reconciliations of these financial measures to the most directly comparable GAAP financial measures are provided in today's earnings release. KC will begin the call with opening remarks and discuss various factors that affected our results, selected business highlights, and his thoughts concerning the outlook for the remainder of fiscal 2023. Bruce will then discuss our financial results for the Q2 2023 and our guidance for fiscal 2023. I would now like to turn the call over to KC. Good afternoon. Thank you, Michael, and thank you all for joining us today for our Q2 2023 earnings call. Q2 results continued strong profit and margin recovery. Adjusted EBITDA increased +26.4% versus last year to $68.5 million. Margins improved significantly, with Adjusted EBITDA as a percentage of net sales at 14.6%, increasing 330 basis points from Q2 2022. Base business net sales, which excludes net sales from the recently divested Back to Nature brand, were up slightly at 1.1%+ versus Q2 2022. On a two-year stack, base business trends remain strong, up 0.38%+ versus Q2 2021. Some of the key drivers of the results. Pricing recovery. In total, Q2 pricing realization, including product mix, contributed $54.1 million versus Q2 last year. Pricing flowed through to offset higher costs and inflation, with Q2 gross profit as a percentage of net sales, excluding items affecting comparability, at 21.9%, up from 16.5% last year. Almost all pricing actions have been implemented to recover total inflation in fiscal year 2023, which is currently tracking at roughly 4% to 5%, well below fiscal year 2022 levels. Volume sales. Q2 volumes were down versus last year, offset by higher pricing. The major volume drivers were Crisco, Green Giant, price elasticities, and to a lesser extent, retail inventory reductions. Excluding Crisco and Green Giant, which have unique factors impacting net sales performance, net sales of the remainder of our brands in the aggregate increased plus 3.6% in Q2 versus last year. Specifically on Crisco, price elasticities remain high, greater than one above the key $5 and $6 per bottle price point. We are reducing our net prices to reflect lower commodity oil costs and expect to drop back below key price thresholds on shelf during baking season this fall and project volumes to improve at lower price points. As previously discussed, the objective on Crisco is to maintain gross profit dollars and margin in a volatile commodity market. Second, Green Giant. Volume declines continue to reflect the discontinuation and rationalization of lower margin innovation in the frozen portfolio, which we will begin to lap at the end of Q3. For shelf-stable products, we have also seen Del Monte and others become very aggressive on pricing and promotion to work down higher prior season pack inventories. Supply and service. On a company-wide basis, customer service and fill rates improved during the quarter, reaching over 97% in June. We are on track to deliver above 98% CFR, our long-term target, before year-end. Inventory. Total inventory decreased by $25 to 675 million in Q2 from the ending position in Q1, and down $52 million from fiscal year 2022 year-end. We are well on track to reduce inventories year-over-year at the end of Q4 2023. The major drivers are unit efficiencies, lower soybean oil costs, and a smaller seasonal pack on Green Giant shelf stable versus last fall. For the balance of the year outlook, we expect a more modest year-over-year margin in adjusted EBITDA recovery in Q3 and to be relatively flat in Q4 against the strong last year. Last year, pricing actions began to partially offset inflation in Q3 and fully recover higher costs in Q4. We remain on track to deliver within the communicated guidance of adjusted EBITDA in the range of $310 to 330 million. We expect second half base business net sales to be between 0% and 1.5%+ versus last year, an improvement from the first half trend of -0.6%. Cash flow generation was very strong in Q2. Net cash from operations was $662.9 million in Q2, increasing from negative $4.1 million last year, with year-to-date net cash from operations of $132.4 million. Pro forma net leverage came down to 6.74x from 7.2 times in Q1. We are on track to continue to reduce leverage by the end of 2023, driven by adjusted EBITDA recovery, lower working capital and inventory needs, and debt reduction from available cash flow. Through June, we have reduced the principal amount of our debt by $147.9 million as compared to year-end. Further, the new business unit organization is becoming fully operational, with multifunctional teams accountable for and driving P&L performance for their portfolio responsibility. Finally, we continue to evaluate exiting businesses that have lower margin and cash flow, higher working capital complexity, or do not fit with our core capabilities and BU structure, with Back to Nature as the first step last January. There is a target list being worked to reshape the portfolio with no specified time frame. We expect that any proceeds from divestitures would primarily be used to reduce long-term debt. Thank you. I will now turn the call over to Bruce for more detail on the quarterly performance and outlook for the year. Thank you, KC. Good afternoon, everyone. Thank you for joining us on our Q2 2023 earnings call. As you can see, we had another strong quarter. For the Q2, gross profit as a% of net sales increased by more than 500 basis points. Adjusted EBITDA as a% of net sales increased by more than 300 basis points. We also had strong net cash from operations, an improved balance sheet, including a continuing reduction in our net leverage, as well as a slight uptick in our base business net sales when compared to the Q2 of last year. In the Q2 of 2023, we generated $469.6 million in net sales, $68.5 million in adjusted EBITDA, adjusted EBITDA as a percentage of net sales of 14.6%, and adjusted diluted earnings per share of $0.15. Base business net sales, which excludes net sales from the Back to Nature brand, increased by approximately $0.4 million, or 0.1% in the Q2 of 2023, compared to the year-ago period. Base business net sales remained robust despite our pricing activity, was up by $17 million, or 3.8% on a two-year stack basis. Pricing was obviously the big driver of our sales performance and contributed just over $54.1 million to our base business net sales. Volume declines, largely different by pricing-related elasticity and timing, negatively impacted base business net sales by $52.1 million. FX drove the remaining $1.6 million of decline. We continue to watch our volumes closely, particularly for brands where we have taken the most pricing. We expect the pace of our volume declines to continue to moderate as we head into the back half of the year and lap the majority of our price increases. Driven in part by our pricing initiatives, our Q2 2023 adjusted EBITDA increased by $14.4 million, or 26.4% compared to the Q1 of 2022, to $68.5 million. Adjusted EBITDA as a percentage of net sales increased by approximately 330 basis points to 14.6% in the Q2 of 2023, compared to Adjusted EBITDA as a percentage of net sales of 11.3% in the Q2 of 2022. While the levels of Adjusted EBITDA increases are staggering, this is exactly what we said would happen as pricing would finally catch up to costs across the portfolio, particularly with brands that had major cost increases like Clabber Girl and Crisco. Supply chain disruption and logistics costs are continuing to normalize this year. While we are seeing inflation across much of our portfolio, the pace of inflation has slowed, which is what allowed pricing to catch up with costs and restore margins to our P&L. Net sales were mixed across the portfolio. Amongst our largest brands, Clabber Girl was once again one of the top performers in the Q2. Net sales of Clabber Girl were up by $8.3 million, or 43.7% compared to the year ago period. Clabber Girl is continuing to see strength across all product lines, including baking powder, baking soda, and cornstarch, and channels, including branded retail, private label, and industrial. Victoria recovered nicely from some of the pricing-related elasticity and promotional timing headwinds that it faced in the Q1. Net sales of Victoria were up by approximately $1.6 million, or 16.1% compared to last year. We feel very strongly about Victoria's position as one of the leading premium, authentic pasta sauces in America.... Net sales of New York Style were up by $1.3 million, or 18.5% in the Q2 of 2023 compared to last year. With improved performance in our Yadkinville facility, we also think that this business will continue its recovery with a lot of upside. Net sales of Maple Grove Farms were up $0.6 million, or 2.9%. Net sales of Cream of Wheat were up by $0.3 million, or 1.9%. Ortega, which had a challenging Q1, recovered in the Q2. Net sales of Ortega were essentially flat for the quarter, or down just $0.2 million, or 0.5% compared to last year. While net sales of Crisco and Green Giant were both lower in the Q2 compared to the year ago period, the pace of declines has moderated significantly for both brands when compared to their Q1 performances. Net sales of Crisco were down $4.8 million, or 6.7% in the Q2 compared to the prior year, but were up $8.6 million, or 14.6% compared to the Q2 of 2021. More importantly, contribution and contribution margins for Crisco were up in the Q2 of this year compared to last year, just as they were in the Q1 of this year compared to the prior year. Net sales of Green Giant were down $4.9 million, or 4.4% in the Q2 compared to the prior year period, but were up $1.9 million, or 1.8% compared to the Q2 of 2021. Following a very strong Q1, net sales of our spices and seasonings business were down in the Q2 by approximately $6.4 million, or 6.7% compared to last year. However, net sales of our spices and seasonings business have increased by $2.1 million, or 1.1% on a year-to-date basis. Base business net sales of all other brands in the aggregate increased by $4.6 million, or 5.8% for the Q2 2023, as compared to the Q2 2022. Gross profit was $102.3 million for the Q2 2023, for 21.8% of net sales. Excluding the negative impact of $0.4 million of acquisition, divestiture-related expenses and non-recurring expenses included in cost of goods sold during the Q2 2023, the company's gross profit would have been $102.7 million, or 21.9% of net sales. Gross profit was $76.5 million for the Q2 2022, or 16% of net sales. Excluding the negative impact of $2.3 million of acquisition, divestiture-related expenses, and non-recurring expenses included in cost of goods sold during the Q2 of 2022, the company's gross profit would have been $78.8 million, or 16.5% of net sales. Gross profit as a percentage of net sales, excluding the impact of acquisition, divestiture-related and non-recurring expenses, was up by approximately 540 basis points in the Q2 of 2023 compared to last year's Q2. The improved margins were driven by increased pricing and a moderation in input costs and logistics inflation, representing a continued turnaround compared to the first three quarters of fiscal 2022, where we suffered from severe input cost inflation that was seen industry-wide and which led to large declines in our gross profit and margins. Selling general and administrative expenses increased by $3.7 million, or 8.3% to $47.9 million in the Q2 of 2023, from $44.2 million in the Q2 of 2022. The increase was composed of increases in general and administrative expenses of $3 million, consumer marketing expenses of $2 million, selling expenses of $0.6 million, and warehousing expenses of $0.1 million. These were partially offset by decreases in acquisition, divestiture-related, and non-recurring expenses of $2 million. Expressed as a percentage of net sales, selling general and administrative expenses increased by 100 basis points to 10.2% for the Q2 2023, as compared to 9.2% for the Q2 2022. As I mentioned earlier, we generated $68.5 million in adjusted EBITDA for the Q2 2023, compared to $54.1 million in the Q2 2022. The increase in adjusted EBITDA is primarily attributable to our pricing initiatives, which finally caught up to industry-wide input cost, inflation, and logistics inflation beginning in last year's Q4. Adjusted EBITDA as a percentage of net sales was 14.6% in the Q2 of 2023, compared to 11.3% in the Q2 of 2022, an increase of approximately 330 basis points. Net interest expense was $35.8 million in the Q2 of 2023, compared to $29.9 million in the Q2 of 2022. The increase was primarily attributable to higher interest rates on our variable rate borrowings, partially offset by a reduction in our average long-term debt outstanding and a $0.8 million gain on extinguishment of debt as a result of the repurchase of our bonds. Depreciation and amortization was $17.3 million in the Q2 of 2023, compared to $20.5 million in the Q2 of last year. We generated $0.15 in adjusted diluted earnings per share in the Q2 of 2023, compared to $0.07 last year. We remain very encouraged by the progress that we have made over the past year in terms of restoring our P&L. In addition to our P&L improvements, we are also continuing to make progress in the improvement of our cash flows and our balance sheet. We generated $62.9 million in net cash from operations in the Q2 and $132.4 million in net cash from operations during the first half of 2023, compared to net cash used in operations of $4.1 million in the Q2 of 2022, and net cash from operations of $21.1 million in the first half of 2022. Increased operating profits, improved margins, and more favorable working capital were the primary drivers of the improved cash from operations performance, which was offset in part by increased interest expense. We reduced our inventory by another $25 million or so in the Q2. Our inventory stood at approximately $675 million at the end of the Q2, which is more than $50 million lower than it was at the start of the year. We have also reduced principal amount of our long-term debt by $36.9 million in the Q2 and by $147.9 million in the first six months of the year. During the quarter, we repurchased $24.4 million of our senior unsecured bonds due 2025, at an average price of 95.74% of face value. Additionally, we reduced our revolver balance by $12.5 million during the Q2 compared to the end of the Q1. Our net leverage ratio, as defined by our credit facility, has also improved, dropping below 7x to 6.74x at the end of the Q2. We are focused on continuing to lower this ratio, and over time, we do expect to return to our long-term goal of of 4.5 to 5.5x pro forma net debt to adjusted EBITDA before share-based compensation expense. Our fiscal 2023 guidance remains dependent in part on many industry-wide or macro factors that have proven to be beyond our control over the last few years. However, Through six months, we are largely on track to achieve the targets we laid out at the beginning of the year. We are adjusting our net sales target to $2.11 to 2.13 billion. Through six months, our net sales are essentially flat, recovering the worst of our expected elasticity drag. Our updated guidance reflects base business net sales performance of approximately 0% to 1.5% growth during the back half of the year. As a reminder, the recently divested Back to Nature brand contributed approximately $10.2 million of net sales in the Q3 of 2022, and $11.9 million of net sales in the Q4 of 2022. A primary driver in the adjustment in net sales guidance is related to Crisco, given that input costs have come down over the course of the year. Our initial net sales target, assumed higher selling prices for Crisco. However, we now expect to be able to reduce selling prices for Crisco relative to their selling prices at the end of 2022, while still preserving our profits. Softer than expected volumes in our Green Giant canned and bag and box business have also impacted the outlook for the year. Meanwhile, we are reaffirming our adjusted EBITDA guidance of $310 to 330 million. Adjusted earnings per share is somewhat dependent on movements in interest rates, but we are also reaffirming our fiscal year guidance for adjusted diluted earnings per share of $0.95 to 1.15. The majority of the heavy lifting in our adjusted EBITDA margin and dollar recovery has largely happened, and as we mentioned in our previous calls, we expect improvements in the back half of the year to be somewhat more modest. We still do believe that our Q3 can show a modest improvement in 2023 versus 2022, while we also expect the Q4 of 2023 to look similar in many regards to the Q4 of 2022. For full year fiscal 2023, we also expect interest expense of $145 to 150 million, including cash interest of $140 to 145 million. Depreciation expense of $47.5 to 52.5 million. Amortization expense of $20 to 22 million. Effective tax rate of 26.5% to 27.5%, and CapEx of $35 to 40 million. I will turn the call back over to KC Keller for further remarks. Thank you, Bruce. In closing, Q2 results demonstrated strong year-over-year improvement, with pricing covering inflationary costs, improved margins, and a reduction in leverage. We remain on track to achieve fiscal year 2023 guidance of adjusted EBITDA and adjusted diluted earnings per share, as well as deliver improved base business sales trends in the back half of the year. This concludes our prepared remarks, and we would now like to begin the Q&A portion of the call. Operator? Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press star one. If you want to withdraw your question, please press star two. Your questions will be pulled in the order they are received. If you are using a speakerphone, please leave the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Andrew Lazar from Barclays. Please go ahead. Great, thanks a lot. Good afternoon, KC and Bruce. Hey, Andrew. Hey, Andrew. Hi. I guess first off, I'd love to maybe explore a little bit further the relationship between sort of volume and price that you expect on the base business in the back half. I think you said base business sales flat to up 1.5% in the second half. It sounded like you still maybe expected volumes to be down year-over-year, but at a more modest pace than what you saw, obviously, in the first half. Correct me if I'm wrong there, but if that's the case, it means you still expect, I guess, some year-over-year benefit from pricing, even though I know that Crisco pricing on a pass-through basis is gonna be coming down. I'm just trying to get a sense, maybe the magnitude of some of these things. Are, I guess, are you still expecting a positive price, benefit, even with the Crisco adjustment and volumes to still be negative? I'm trying to get a, a sense of how those work out, 'cause obviously it's, it looks like some of these things should invert, on each of these metrics versus what you saw in the first half, just 'cause of the comps and such. Yeah, right. I, I guess, you know, if, if I take... Let's take Crisco aside. If I look at the balance of the business, excluding Crisco and Green Giant, 'cause those are different factors, you know, we're kind of seeing elasticities with the pricing, you know, in that, in that 0.7 to 0.8 range that we've talked about before. You know, we still expect to get, you know, We'll get some pricing benefit for the remainder of the year 'cause we'll be, you know, lapping that for some portion, but we'll probably have, you know, some elasticity impact. We expect that year-over-year kind of differential to be lower. On Crisco, I think what's gonna happen is, pricing, you know, will come down because, you know, commodity costs, oil costs are lower in the back half of the year, particularly, I think, you know, starting in August, September, going into baking season. You'll probably see, you know, volume trends improve, but pricing will be down. These things are kind of all gonna net around each other to deliver some better improvement in the sales trends, but it'll be different. You know, we'll have different trends going on between Crisco and the rest of the business. On the Green Giant business, we lapsed some of the rationalization we did at the end of Q3. A lot of moving parts, Andrew, I know to say that, but, you know, I think overall, we're, we're seeing elasticities on most of the business where we expected Crisco a little bit higher with the very higher pricing, but we expect, as the price comes down, going to baking season, that volume and, and pricing will kind of, you know, volume trends will get better. Pricing will obviously be another factor. Okay. You know, a number of peer food companies have reported over the last two weeks, and it, it just seems like in kind of the very recent past, some have seen, I don't know, some changes in consumer behavior, right? That are a little less positive. Promotional activity start to ramp up as, as partly as would be expected, as capacity sort of loosens up and, and constraints ease and whatnot. You know, elasticity sort of ramp up a bit. Just trying to get a sense if you guys have seen any sort of discernible changes in, in some of those things for you, consumer behavior. You know, some have talked about consumers sort of hunkering down a little bit more or, or protecting their, you know, I think as, as Kellogg said today, you know, zealously protecting against waste, things like that. Also we've seen some destocking at, at retail, which I think you mentioned briefly. Maybe you could just cover off on some, any, any changes you've seen in, in those behaviors more recently as it relates to your business? Yes, I would say on, on Crisco, we've seen a higher elasticity because we hit, you know, kind of big thresholds that we've never seen in the category before. You know, $5, $6 for a bottle of oil. I mean, we've never seen that before, so we saw elasticities higher there. On, on the rest of the business, I'm not so sure it's that different, maybe slightly higher in terms of elasticities. Overall, what we are hearing from consumers, in some categories, is that they are kind of stretching out their purchases. If they might have been, you know, kind of maintaining more inventory in the household on spices or on oil bottles, you know, they're now doing that less and kind of basically stretching the purchase cycle out. We hear that a little bit in terms of how people have changed behavior. We hear that they're, they have made on the margin, particularly when prices are really, you know, high relative to history. They are making some trade down to, you know, private label. We see that in the oil category at these high prices. Hopefully, as we bring the price back down, we'll see some of that recover. We are hearing those kind of themes from consumers as we, as we talk to them about, and it varies by category. We are hearing that consumers are kind of stretching out their purchases, running down their home inventories, and responding when prices have gone really high and maybe making some marginal trade down, you know, kind of behavior. I, and I think that's a kind of a continuation of what we were seeing in the Q1 and, you know, throughout the year, as opposed to some radical shift that, that just happened over the last couple weeks. We've seen we've seen some customers you know, kind of taking inventory levels down, which by the way, is what we're doing. We are, we're not shocked by that, but I would say that's a smaller extent to the other things that we're talking about. Got it. Thanks so much. Thank you. Your next question comes from Michael Lavery, from Piper Sandler. Please go ahead. Thank you. Good evening. Hey, Michael. Just was wondering if you could touch on, unmeasured channels or, you know, maybe any. You, you mentioned a little bit of inventory destocking, but your reported number was a few points ahead of what we're seeing from the consumption, the scanner data sell-through. How should we think about how that looks in 3Q or the second half? Does that reverse or any kind of thoughts on what the drivers were and what's ahead? Yeah, I mean, I, I think, I think there wasn't a, a massive difference, at least as we see it, between the consumption data and shipments. You know, both pretty tight. Where we see differences is, you know, we've got 8%, 9% of our sales outside of the U.S., mostly in Canada. For some of our businesses, particularly spices and food service, there is a, it's going into an untracked channel, and then much lesser degree, but certainly within spices, with our partnership brand and Fiber Girl, you know, we do have some through private label. We think we're generally pretty close to the consumption data, and in, and in this quarter, we didn't think we were radically different. Okay, that's helpful. Just on the balance sheet, you mentioned some of the debt paid down in the quarter. Is there any sort of cadence, like, you know, should, should a similar amount be likely any given quarter, or how should we think about just the progression there? Yeah, typically our Q3 is an inventory build, which will lead to maybe a little bit of an upturn in leverage. I think our PAC is gonna be smaller this year, so it won't be as pronounced as it has been in other years. Outside of that, we typically like to, you know, burn inventory and reduce leverage. Our goal is to keep bringing leverage down. Okay, great. Thanks so much. Thank you. Your next question comes from Nick Modi, from RBC Capital Markets. Please go ahead. Yeah, thank you. Good evening, everyone. just a few questions on, on my end. I mean, just going back to this threshold pricing, on the, on, on the Crisco business, do you think that that kind of thought process is, is also relevant in, in other segments of the, the packaged food categories and, and across your portfolio? I mean, we've seemed to have crossed some critical price thresholds for, for a lot of different, subsegments and, and categories, and so I just would love to get your thoughts on, on that. Then the second question is really, you know, out-of-home versus in-home. Would love your point of view on what you're seeing in the market right now, in that regard. Yes, on the first one, I mean, honestly, you know, I've been in this business for a long time. It's always been true that price thresholds drive higher elasticity. Consumers respond to the big dollar, you know, points, and it's true in almost every category. Y ou might have, like, under $5, you know, between $4.50 and $4.80, you're not gonna get a huge, you know, kind of change in elasticity, but if you cross $5, consumers would say, "That's a threshold," and they react differently. We've seen that predominantly in the Crisco business, as we've gone over, you know, some big thresholds that consumers have never seen before. Even on some other categories where we've taken pricing, you know, one of the things we'll do is look at that when we cross a threshold and try and understand how consumers are behaving. In some cases, you know, if we have some commodity relief, we will take it back down below the threshold because we see, you know, higher elasticity. We've done that on a couple things, not universally, but we've done it on a couple of things. That dynamic is definitely true in the, in the food, in the food segment right now. There, there's no doubt if you cross a threshold, that consumers behave a little bit differently. The elasticities tend to get a little higher on that marginal move. What was your second question? I'm sorry. Yeah. It, it was just out of, in-home dynamics I was curious what you think. I mean, honestly, this is sort of a, you know, this is a moving dynamic as we've come out of COVID or, you know, because I think people forget that last year, in the beginning of 2022, we had, you know, we had Omicron, and we had a lot of stay-at-home behavior in the Q1. We saw a big increase in food service year-over-year in the Q1, as people were kind of going back to, you know, eating out-of-home on a more regular basis. We still saw a little bit of that trend going on in Q2, on the food service out-of-home business. What we're starting to see in the last couple of months is maybe a slowdown in traffic in some of the out-of-home channels and food service outlets. I mean, it's gonna vary by, by, you know, by customer, by outlet. but I think it's gonna it's kind of stabilizing year-over-year in the back half of this year, and depending on what happens with the economy, I mean, if the economy turns down a little bit and we go into sort of stagnation or a mild recession, I think you'll see, you know, consumers shift back to in-home versus out-of-home. Right now, I think it's more normal, with, with some signs that we need to watch about maybe food service traffic slowing down. Does that help? Yes. Thank you so much. I'll pass it on. Thank you. Your next question comes from William Browder from Bank of America. Please go ahead. Good afternoon. Just thinking about a couple potential tailwinds next year. When you look at your basket of food prices and where they are at this point, let's kind of, avoiding the Crisco issue and the resets in price that happened there, do you have a sense for whether, as a whole, your, your costs could be lower from an input cost perspective next year, and a magnitude to that? Hard to say that it would be lower at this stage, but certainly the pace of inflation has significantly decreased. There, there are you know, you're, you're throwing one out with, with Crisco, where the costs are lower than they were last year at this time, you know, which is great, which is allowing us to adjust price, which should be good for volumes. Logistics costs are lower than they were last year. Diesel fuel, lower than it was last year, but we are still seeing some modest inflation across kind of the portfolio as a whole. Got it. Then. We're kind of expecting I mean, right now we're modeling, you know, kind of this year, inflation, you know, year-over-year is more like 4% to 5% versus the 20% to 21% last year. Next year, we're looking more in like the 3% to 4% range early on. That's kind of the early outlook we can see from a few commodities, but obviously that's gonna change in the next six months. Okay, understood. Then I guess secondarily, I know some retailers reset their shelves and twice a year, and some do it kind of in the August timeframe. Were there any resets that either benefited you or, where you lost shelf space, kind of this end of the summer, fall? The, the resets happen at different times during the year in different categories. You know, we have, you know, we have, some of the frozen sets are getting, are getting reset now and, you know, kind of in August, and we fared reasonably well. Most of our, our new innovation has been accepted and shipping in, and our total distribution points look pretty stable, year-over-year. That's the one that I know about is, is actually moving. We haven't seen some of the other categories, big categories, we haven't seen a lot of changes. Some of those happened early, happened earlier this year, so we're already through those. I think the big one, the big one we're going through right now is the frozen portfolio. Got it. Okay, I'll pass. Thank you. Thank you. Your next question comes from Hale Holden from Barclays. Please go ahead. Hey, Hale. Hi, afternoon, guys. I had two questions. One is, maybe a little bit more color just on the volume weakness in spices in the core. If there's anything specific to read in there or, anything we should be thinking about? Honestly, I don't think so. I think it's really a tale of how the first two quarters, you know, lapped what they lapped last year. I don't Hale, if you remember, in the 1st quarter of last year, we had really low service levels in our spices business. Our factory was having trouble running. We had Omicron call outs. We, you know, we were, you know, we were really not shipping very well. And producing. You know, we really had production and service problems in the 1st quarter. You saw our 1st quarter numbers were a huge growth year-over-year. In the 2nd quarter, 'cause we went down there, got everything back up and running, kind of in the April, May timeframe. In the Q2, we were refilling pipeline with customers, you know, inventories with customers. We actually shipped kind of ahead of consumption in that, in the, in the Q2 last year. This year, we're lapping that. I think as Bruce said, so you're, you saw a big growth in the Q1, a decline in the Q2. The net of that was, you know, over 1% growth over the first half of this year. I think we're fine. It's just a matter of how the business is flowing versus the problems last year in production and service. I, I expect that you're gonna see, you know, growth in the second half of the year. We do have actually some resets happening on spices, you know, coming up very shortly, which we're very positive. We've had good acceptance of some of our new items, and so I feel good about the second half and how it's gonna flow. Got it. Then on the second half, I fully understand the Crisco discussion, so we just take that off the table. For the, for the base business, ex Crisco, you know, sort of talk through the puts and takes on, on volume pricing and the, and the implement or normalization in volume that you're looking at, and you know, how, how much risk you think or tail risk you think there is in, in that part of the equation? Well, I mean, on, on the rest of the business, ex Crisco, I think it's, you know, we said the elasticity of 0.7, 0.8. You know, what's gonna happen is we're lapping the pricing, so we're lapping the price increases last year. The differential in pricing on the rest of business will be smaller because we had fewer and fewer pricing increases in the back half of last year. We, kind of most of them happened through July, some in August. I guess the last one was in October 1st. As we lap, we're gonna have less pricing benefit, but I expect that we'll have less volume decline because those two are working with each other on elasticity. Basically, on the forget Crisco for a second, and I guess this is what I was trying to say with Andrew in the, in the start of the call. We expect lower pricing benefit, but lower volume declines in the back half of the year as we're lapping, as, as we've lapped most of the big pricing actions, and we're no longer kind of have this huge pricing differential versus a year ago period. Does that help? It does help, and I, I apologize for asking almost the same question Andrew did. Just maybe-. No, no, no, I, I don't think I was, I don't think I was clear enough with Andrew, so. All right. Thank you, guys. I appreciate it. Thank you. Thank you. Your next question comes from Connor Dugan from Consumer Edge Research. Please go ahead. Good afternoon, guys. Thanks for the question. Connor. We've heard from other reporters about a more challenging promo environment, emerging with select brands after the dial of promotions, and, I mean, you called out Del Monte in, in the prepared remarks. Just I guess, I guess in the data that we're seeing, private label looks to be continuing to gain share across your portfolio, and just, I guess, how should we sort of think about the trade-off of price realization and promo activity in the second half as it relates to frequency and intensity? Yeah. Couple things. Certainly, as, as we started this year or laid out the plans for this year, we, we kind of expected a lot to happen as it did, which is massive, massive prices, increases to protect margin, right? Last year was, was tough, and we knew that that was gonna cost those volumes, and it did. You know, I think you're seeing that across the packaged food universe, but that's something that we, we very much expected and, you know, as part of our game plan, we had to, we had to restore EBITDA and EBITDA margins. I think specifically with regards to private label and promotionary environment, both, increasing, both probably lower than they were 2019. Certainly on the promotional side, it's going up. It's, it's kinda gone up over the last one or two, but we're still at lower levels than we were in 2019, and not haphazard. With regards to private label, you know, private label is recovering share. There's areas where it's increased as price points were crossed. Casey referenced the Crisco vegetable oil versus private label. Certainly, that's an area where private label picked up some share. As price points come down, we would expect that to moderate or possibly reverse. But we're also still seeing private label at levels generally lower than where they were, you know, at the beginning of the pandemic. something, you know, both things that we need to continue to watch and monitor, but I don't, I don't think there's been any sudden changes, at least, that we've seen. Okay, great. Thanks for the color on that. Also just, one more for me. Just wanted to check in on the portfolio strategic review. Just wanna see, are you guys continuing to evaluate brands or categories just in the context of divestitures, or has that largely concluded with Back to Nature? We're continuing to evaluate. You know, we're, we're B&G, so we tend to do a, a fair amount of M&A. We're always looking at things. Right now, we're probably more focused on, you know, what, what makes sense to prune in the portfolio, and as it becomes appropriate to talk about it, you know, that's what we'll do. Back to Nature was just the first step. Yeah. Okay, all right. Sounds great. Thanks, guys. Yep. Thank you. Your next question comes from David Palmer, from Evercore ISI. Please go ahead. Thank you. KC Keller, I, I remember, you wanted to get more to a sort of a real-time pricing pass-through with the Crisco business, maybe limiting, profit dollar volatility, even if we were, were to continue to see sales and, and, and margins ebb and flow. Could you talk about maybe what you expect from that brand in, in terms of profit dollar contribution per quarter on a normalized basis, if there is such a thing? I mean, honestly, we have our new pricing model that we implemented, kinda at the end of last year, is working beautifully. We are, we're maintaining the gross profit dollars pretty consistent with where we want to see them. You know, margins have been, you know, pretty, pretty close to, you know, obviously, you have an effect when you have much higher sales and higher pricing, but those gross profit dollars and have been very strong. You know, the new pricing model, commodity-based pricing model, is working. You know, we get pricing reflected within 60 days. We agree on the market price with the customers, and that's what we price to. You know, we buy consistently within the, with the window so that our, our purchases and our pricing are kind of matched up. You know, we expect to deliver at or better than the, you know, the EBITDA and gross profit that we bought the Crisco business at with this pricing model, and so far, that's really working well. Yeah. maybe it's a suggestion because, you know, one of the comments you made, in, in the opening remarks was how your business was doing ex-Green Giant and ex-Crisco because those businesses are different in, in their price pass-through mechanisms. you know, if you were to describe those businesses differently in terms of you know. Yep gross profit, capture and say that that's your target, but also give more vivid description to that, that would be, that would be helpful and probably align with how you're looking at your business. Yeah ... just a suggestion. We can- You know. We can do that. Yeah. You know, we haven't really disclosed individual profitability by brand. I could tell you that despite the fact that Crisco sales were down in the Q2, our gross profit and our EBITDA was way up on that business. Yeah. I mean, in the near term, just thinking about the ebbs and flows here... Yeah ... you're, you're talking about taking down prices for Crisco. If we look at the charts for edible oils, they've spiked up lately. It seems like, you know, obviously, 60 days of lag can make all the difference in the world. It's, it's, it's wild that you might be contemplating, in 60 days, another price increase for the spike that happened. Could you just give us a sense of- Yeah How this works? Yeah. By the way, we have to be out buying oil 60 days in advance, at least 60 days in advance when we're selling it. Let's say we agree on a window with the trade, that we look at the price of oil or the cost of oil, and we agree that that's the cost of oil that we'll base our pricing off of, and we agree to that level with the, with the customer. We, we are already, we've already bought a lot of that oil at that price point in that range, or buying it at the same time that we're talking to them, because we can't, you know, we have to have oil kind of being delivered to be able to produce it on a, you know, 60 to 90-day window. The 60-day window, yes, the price can change, but then, you know, after we implement that new pricing, then we'll start after every quarter, we'll go back and reset that market mechanism with the trade. It works pretty well. I mean, yes, there's obviously a little squiggle here and there, but for the most part, it, it really aligns our cost and our market price to maintain our kind of our gross profit. Does that, does that help you understand? Yeah. Yeah, yeah. No, I think it's, I, I think it makes sense and it, it's, it'll be good if you can, if you're stabilizing those dollars, like you say, I think it'll be, it'll be a big difference from the past, but. I mean, this is our third price, pricing, this is our third pricing, kind of window with the trade, and so far it's worked well. Thank you very much. Thank you. Your next question comes from Carla Casella from JP Morgan. Please go ahead. Hi, thanks for taking the question. I'm wondering, have you done any more buybacks, bond buybacks since quarter end? If we did, we wouldn't be able to disclose it on the call. Okay. Then you mentioned, you're always active in the M&A market. Can you just talk about where you think that market is? I know there'd been some talk before that, buyers and sellers have different ideas in pricing. Is the market getting more rational today? There's been a lot of chatter and people talking about deals that might come to market. There hasn't been a lot of stuff that's been completed. Certainly, the level of dialogue seems to be picking up. We'll see. Okay, great. Then, how much of your business overall is typically food service? It's, it's certainly less than 15%. Okay. Then just one last one. You were talking about private label and their share. Has the pricing gap between your branded and private label changed dramatically today, or would you say it's in a kind of a healthy balance? I mean, we, we, we kind of target differentials of private label in different categories, you know, kind of in a, on a% basis and an absolute dollar basis. I think what's happened in a couple of categories is where you've had really big inflation and the prices have gone up a lot, like, you know, $1 or $2, that, that even though that% differential to private label may be the same as it was before, at the absolute higher price point, people are saying, well, on the margin, a few people are trading down to private label. That, that is what we hear and see in the data. You know, it's, it's just a matter of, you know, when people might make a different decision at $5 a bottle than they would at, at, at $3.50 a bottle, when the percentage difference to the private label might be the same, you know, at the $5 versus the $3.50, but that absolute dollar outlay, they, they might say, I'm gonna trade down. That's on the margin. You see a few consumers doing that on the margin. Okay, great. Thank you very much. Thanks, Carla. Thank you. Your next question comes from Robert Moskow from Cowen. Please go ahead. Hi, thanks for the question. Rob. I wanted to know whether you're seeing different behavior by different cohorts of consumers. You have a lot of brands that I, I do think target lower-income consumers, and I wanna know if you're seeing more sensitivity in that group than you are in other brands. Another way of saying, like, where do you, where are you most exposed to that low-income cohort, and is it more sensitive these days or are you doing okay in those brands? Yeah, I think there's, there's probably pluses and minuses on the, on the, you know, bias of a, of a tailwind as we think about downturns in the portfolio that we've had over time. Certainly don't expect if the economy slows, that we get any kind of benefit like we had during COVID, but historically, the portfolio has kind of done just, just fine during a downturn. I would expect that to continue here, with as many pluses and minuses. I mean, you know, I guess, Rob, I would say that I'm not sure that our product line is really skewed towards lower-income consumers. It's more kind of middle income, broadly distributed, broad, broad penetration. We don't really see like, you know, a big differential in the cohorts. I mean, lower-income consumers as part of our total portfolio purchases might change slightly, but we don't have these brands and businesses that really are skewed heavily down there. I mean, what Bruce just said is, I think, true. You know, we, you know, we do see patterns where, you know, when the economy kind of, you know, turns down a little bit, we see people move their eating habits from out-of-home or food service to in-home, and that's been true historically in every downturn. That's what-- I, I kind of referenced that a little bit. We're hearing a little bit of that from some of our food service operators, that they're seeing traffic slowing down a little bit. Maybe consumers are kind of belt-tightening and making decisions on the margin to maybe move from where they were in the last six months on food service or out-of-home consumption to maybe moving a little bit more in-home. I think that trend will get even more pronounced if the economy kind of slows down here. We get benefit from a slower economy as a, as a portfolio. Okay. All right. Well, thank you. Thanks, Rob. Thank you. There are no further questions at this time. You may proceed. Thank you, everyone. Appreciate you getting on the call and all of the questions, and we look forward to talking with you next quarter.