Greetings, and welcome to the Freshpet Fourth Quarter and Fiscal Year 2021 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jeff Sonnek with ICR. Thank you, Jeff. You may begin. Thank you. Good afternoon, and welcome to Freshpet's Fourth Quarter 2021 earnings call and webcast. On today's call are Billy Cyr, Chief Executive Officer, and Heather Pomerantz, Chief Financial Officer. Scott Morris, Chief Operating Officer, will also be available for Q&A. Before we begin, please remember that during the course of this call, management may make forward-looking statements within the meaning of the federal securities laws. These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Please refer to the company's annual report on Form 10-K filed with the SEC and the company's press release issued today for detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. Please note that on today's call, management will refer to certain non-GAAP financial measures such as EBITDA and adjusted EBITDA, among others. While the company believes these non-GAAP financial measures provide useful information for investors, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Please refer to today's press release for how management defines such non-GAAP measures, a reconciliation of the non-GAAP financial measures to the most comparable measures prepared in accordance with GAAP, and limitations associated with such non-GAAP measures. Finally, the company has produced a presentation that contains many of the key metrics that will be discussed on this call. That presentation can be found on the company's investor website. Management's commentary will not specifically walk through the presentation on the call, but rather it's a summary of the results and guidance they will discuss today. Now I'd like to turn the call over to Billy Cyr, Chief Executive Officer. Thank you, Jeff, and good afternoon, everyone. The message I would like you to take away from today's call is that we finally have the capacity needed to support our significant growth potential, and build upon the momentum that we've created through five consecutive years of accelerating revenue growth. We fully intend to take advantage of that capacity, but we've also learned some hard yet valuable lessons over the past two years. Those lessons are the foundation for the conservative planning that we've undertaken, which we believe is required in this complex and challenging environment. Over the past two years, we've navigated everything from the COVID crisis to labor shortages to supply chain issues and inflation. Our operations wobbled numerous times along the way, and we are keenly aware of the impact those have had on our many stakeholders, most notably our customers and consumers. We learned that in order to deliver the long-term sustainable growth Freshpet is capable of, we need to do a better job preparing for and insulating ourselves from those issues. The environment we are operating in today still has many of the issues we have faced over the past two years, albeit some are less impactful, like COVID, and others are more impactful, like inflation. The more important change is how well we've prepared for those issues and plan for new and unknown challenges. We finally have more than enough capacity and have more coming online. We have stabilized, trained, and developed our workforce, and we have completed our ERP conversion. Further, we have strengthened our marketing programs, increased our innovation, installed more and larger fridges, and built a broader and deeper management team. We have a rare opportunity to change the way people feed their pets forever and build a truly great company. To do that, though, we need to plan and prepare for continued disruption to ensure the reliability of our operations in an uncertain environment, while also planning to aggressively maximize Freshpet's growth potential. We believe the plan we are sharing with you today strikes the right balance between the two. Perhaps the most important decision we are making to achieve that relates to how we will manage our capacity. We successfully built enough capacity to refill the trade inventory hole we created during 2020 and early 2021. It took a long time to refill that hole, and to do it, we had to both delay our growth and increase our production to a level well in excess of demand. For perspective, in February, we produced at an annualized run rate of approximately $600 million in net sales, while our consumption run rate was approximately $490 million in net sales. We are currently producing at an annualized run rate more than $100 million greater than demand. That is the magnitude of the production increase we had to put in place to refill the trade inventory hole. Please note that both the production and net sales numbers I just provided are at the pricing in place in February prior to our second price increase. We also have more capacity coming online throughout 2022, both in Ennis and Kitchens South. That gives us plenty of headroom to grow, and we plan to use it. We expect to grow at a rapid rate, and we'll invest in marketing early in the year to drive our growth, but it will take time to fill that much capacity. For a period of time, we will have more capacity than our reasonable and conservative assumptions would indicate we will need. Excess capacity generally means excess cost. We debated quite a bit about the best way to manage that. We analyze the pros and cons of delaying our capacity additions and scaling back production staffing to deliver more robust margins this year. In doing so, we are mindful of several important risk factors. First, ERP conversion. We just completed our ERP conversion, and while it is going well, as anyone who has done one can tell you, there are always bumps along the way. Second, construction and startup of Ennis. We are heavily dependent on the completion of the construction of our Ennis, Texas facility and a successful startup now delayed to early Q3 due to construction material shortages. As we all know, it is very difficult to get construction materials and equipment delays are numerous and lengthy. Further, startups always come with some level of risk. Third, tight labor markets. We're in the midst of one of the tightest labor markets in decades. We've worked hard to build a team of highly skilled employees and have real momentum with our training program, the Freshpet Academy. We are seeing the dividends of that labor strategy every day, but the labor market remains a risk. Fourth, supply chain disruptions. Up and down the supply chain, we are seeing interruptions brought on by everything from labor shortages to port blockages to material shortages and even mandate and lockdown protests, and now avian flu. Reliability of supply and transportation, something we used to take for granted, can no longer be assumed, and many of the shortages are unpredictable. For example, who would have thought that a Canadian vaccine mandate protest by truckers would disrupt the flow of supply in the U.S.? Fifth, COVID. While we all hope that COVID is largely behind us and we can return to some level of normalcy, we would look foolish if our plan required that. This virus and the magnitude of its impact on families and the supply chain has constantly surprised people, and we don't wanna be in that spot again. Sixth, pricing and inflation. Finally, we have taken the most significant price increase we've ever taken, and we are budgeting for a reasonable level of price sensitivity. However, if we have less price sensitivity than we have modeled, we do not want to get ourselves in a position where we cannot supply our customers and consumers reliably. Alternatively, while we lock our costs on as many of our ingredients and materials as we can prior to the beginning of the year, some of them continue to flow. The pricing actions we have taken fully address the inflation we saw and anticipated at the time we took the pricing, but we continue to watch the costs. If we see higher costs persist for any reasonable length of time, we will not hesitate to take the necessary pricing to recover those costs as quickly as possible. Given those factors, we have made the decision to carry buffer manufacturing capacity this year. That is, capacity that is more than we theoretically need to meet the guidance we are providing. We view this as a very important strategic decision and the result of our experience over the past two years. We have a unique opportunity to create and define the fresh pet food market and capture the lion's share of it as long as we can reliably supply our customers and consumers. Failing to do so opens the door for competitors and encourages our customers and consumers to look elsewhere, squandering our first mover advantage. That is a risk we are not willing to take. The cost of the unabsorbed overhead created with this approach is significant in the short run, costing us approximately $13 million-$17 million for the year, or approximately 225-300 basis points of adjusted gross margin, but incredibly inexpensive over the long run. If that investment enables us to capture and maintain a much larger share of the emerging market for fresh pet food for a long time, that investment will look tiny in comparison to the opportunity it created. This approach has already paid dividends for us. In January, we were able to shut down one production line for much of the month to absorb the higher absenteeism due to Omicron and still keep up with demand rather than digging a deeper trade inventory hole and further frustrating our customers and consumers. The result, despite all the challenges of Omicron, our fill rates improved from the mid-60s in December to the high 80s last week, and our year-to-date shipments are up 38% versus year ago. This approach also allows us to meet demand if it exceeds our projections, which is possible if we experience less price sensitivity than we planned, or our advertising proves to be more effective than anticipated. Finally, it can enable us to opportunistically expand distribution or launch innovative new products. If any of those generate upside volume, that would help us absorb the overhead investment we are making. We are also convinced we will need that capacity by late Q4 of this year and believe it would be counterproductive to scale back the capacity only to have to ramp it back up in less than six months. This is especially true with regard to labor, as we've worked hard to recruit and train the talent needed to overcome the pandemic challenges. It is imperative that we strategically build upon our talent and labor pool, not diminish it. I suspect there are some of you who wish our capacity would be more elastic. So do I. But when you have the only production capacity capable of producing our best-in-class products, the only flex is within our network. Unlike so many other fast-growing companies who can turn on and turn off co-packers, we can't do that. We are building the largest, most efficient, and most highly capable fresh pet food manufacturing base capable of supporting a business of $2 billion or more. We view that as a strategic advantage, and we will need all the capacity we are operating now by the end of this year and will need even more next year. To help you understand the impact of this choice, we will be providing a margin and profit illustration at the end of each quarter and for the year that dimensionalizes the cost. As I said, it is sizable, but against the scale of the long-term opportunity we are seizing, it is a small price to pay. We will be able to continue and accelerate our momentum, restore our credibility with customers and consumers, and insulate ourselves from the volatility that may be ahead of us. With that context, let me outline some of the key points of our plan for 2022. First, we are guiding to greater than $575 million in net sales for the year. If we deliver that, we will have generated 35% growth for the year, our sixth consecutive year of accelerating growth. That net sales target is inclusive of a blended pricing impact of approximately 15%, i.e., the fiscal year impact of the two price increases we have announced and implemented, and an assumption of some price elasticity due to the magnitude of the price increases. While we believe our brand and pet food in general are relatively inelastic, our projections assume that net sales growth will be about 10 points greater than unit movement growth. Our guidance also includes an understanding of the headwind we have due to the trade inventory refill in the year-ago, partially offset by the more modest trade inventory refill we are completing on bags in Q1. A 35% growth rate might not sound like it is a conservative assumption. However, our year-to-date Nielsen's are up approximately 35% and accelerating, with the most recent weeks up approximately 40%, and that is before we get any benefit from the second price increase. Further, we will be lapping an extended period of out-of-stocks and delayed marketing in the year-ago for most of the first half of 2022. To deliver those net sales, we will lean heavily on our advertising program. Our advertising investment is approximately 12% of net sales and more heavily front-loaded, consistent with the way we did our media planning in years prior to the pandemic. If those investments put us ahead of our plans by mid-year, we would add more media later in the year to keep the momentum going and utilize the buffer capacity we have. We are also watching the impact that the higher pricing will have on our household penetration and buying rate. We believe that we will have a short-term setback on household penetration when the higher pricing first appears on the shelf, but it will quickly turn positive as we have fuller distribution, a heavier media plan, and increased fridge placements. The buying rate will likely benefit from the higher pricing, even if a small number of consumers choose to use less Freshpet and make our long-term target more achievable. However, there will be some offset due to the rapid influx of new buyers as the year progresses. At retail, we are expecting our customers to lean into more distribution this year now that we have ample supply to support them. We are expecting approximately 1,300 net new stores and approximately 1,775 upgrades in second fridges this year. We will be introducing a variety of new products this year, with many of them launching towards mid-year or later. Stay tuned for formal announcements down the road. Based on our success in the U.K. and Canada, we are going to invest further in those markets through increased media to support expected distribution gains. We are also beginning phase one of our launch in France. We've been testing in about a dozen grocery stores in France for much of the past year and are ready to move to the next step there, expanding into a larger number of stores and beginning a media investment in several markets. Our goal is to not only make this market a success, but to also validate that our process for qualifying and launching into a new country can be done more efficiently than we've done in the U.K. So far, we feel good about the progress we are making there and have begun to prospect for our next country. To support this anticipated growth, we'll be starting up several new lines this year. As I mentioned earlier, the capacity we are operating today produced at an annualized run rate of approximately $600 million in February at the pricing in place then. However, as we grow, we will run out of capacity on some specific items by mid-year, so we need to bring on new capacity to support them. In simple terms, we will have excess roasted meals capacity for much of 2022, but we'll need to add rolls capacity mid-year and Fresh from the Kitchen capacity by Q4. In total, we will have installed capacity with operations ramping up that could support almost $1 billion in net sales by the end of 2022. As we get a better idea on the actual demand and mix we will have in 2023, we will make the necessary plans to scale the capacity to better fit the demand. That will come through the pace of adding staffing and startup timing. However, it is important to note that we will also be doing as much to create demand to fill the capacity as we can reasonably justify. We have a unique first-mover advantage, and we want to convert as many pet parents to the Freshpet regimen as possible before any meaningful competition arrives. As significant as that capacity is, we know that we will need more in 2023 and beyond. The significant increase in lead times for capital equipment and construction are causing us to revisit our capacity addition plans. We are taking a prudent approach, balancing our projected growth, the new lead times, and the significant inflation in the cost of materials. The bottom line is that we aim to be as efficient with our capital as possible to meet our rising, rapidly rising demand, and we are amending our credit agreement to provide the necessary flexibility. Let me be clear, the fundamental strategy and goals have not changed. However, we will be putting added emphasis on projects that build on our existing infrastructure and resources and enable us to scale our production more quickly and in smaller increments. Those adjustments to our capacity planning do not impact our 2025 goals to deliver 11 million households, $1.25 billion in net sales, and a 25% adjusted EBITDA margin. Rather, they ensure that we can reach them in this more fluid and complex operating environment while being as efficient as possible with shareholder capital. We remain very committed to those goals and believe the plan we are laying out today will put us well on our way towards achieving them. Before I turn it over to Heather, let me briefly summarize the key points I want you to take away. First, we have finally refilled the trade inventory and have ample capacity to support reliable and consistent retail availability. This will allow us to get back to doing what we do best, i.e., drive the growth of Freshpet. Second, we have developed a conservative plan that is designed to insulate the business from the numerous external factors that have impacted us over the past two years and others that we may not have encountered yet, so that we can maximize our first mover advantage in this uncertain environment. Third, we have put in place the necessary building blocks to rebuild our margins, including the new ERP system that is now operating, the higher pricing to offset inflation, and a more stable workforce that can drive productivity improvements. In total, I believe we are very well positioned to deliver the growth and profitability that Freshpet is capable of delivering. I will now turn it over to Heather to provide a summary of Q4 of 2021 and the details of our 2022 plan. Thank you, Billy, and good afternoon, everyone. Let me begin with a quick summary of 2021. As we announced in January, we delivered $425.5 million of net sales in 2021, an increase of 33.5% versus 2020 and our fifth consecutive year of accelerating growth. In Q4, our net sales grew 37.1% to $115.9 million. Adjusted gross margin for the year was 44.5%, a decline of 380 basis points. In Q4, our adjusted gross margin was 41.7%, a decline of 410 basis points. Those reductions were largely due to inflation and temporary operating inefficiencies we incurred as we rapidly scaled the business with outdated systems in a turbulent environment. Those issues, coupled with higher freight costs due to inflation and our temporary inefficiencies, flowed through to the bottom line and resulted in adjusted EBITDA for the year of $43 million, a reduction of 8.5% versus the prior year. Adjusted EBITDA for Q4 was $9.7 million, a decrease of 25% versus year ago. That decrease was due to the same factors plus a higher marketing investment in the quarter than in the prior year, which was 11.9% of sales, up 620 basis points from the year ago. We are not happy with those results and know we can do much better. We have taken the necessary actions to remedy the problems, but they will take time to flow through our P&L. The actions we have taken are, first, increase pricing. We announced two price increases that in total will increase our pricing by 17.2% when fully in effect. The first price increase went into effect at the end of November, and the second price increase went into effect today. The impact in FY 2022 will be approximately 15%. Those price increases were designed to cover the margin impact of inflation in our input costs, freight, and labor. However, I caution that we are operating in a very dynamic environment, and those costs, particularly freight, remain volatile. If further pricing is needed, we will take it. Second, we implemented our new ERP system. This system will enable us to plan full truckloads rather than ship half full trucks, creating greater leverage on our freight spend. It will also enable us to implement a pricing system later this year that rewards customers who order efficiently, i.e., in full truckloads and full pallets. Third, invested in training and retention. The wage investment we made last year is designed to drive higher quality operations through increased skills of our workforce, and we are seeing signs that it is working. Fourth, invested in automation and equipment upgrades. We shut down our lines last year to install some new automation and to also upgrade some of our older equipment. We have seen the benefits of those upgrades. Fifth, invested in new technology capable of increasing throughput and reducing costs. As time goes by, a higher and higher percentage of our capacity will be comparable to the equipment we have in Kitchens 2.0, which requires fewer people to produce more product. We will start up our next manufacturing technology innovation in March. Each of those efforts are underway and will gradually begin rebuilding our gross margin to historic run rates. While we will still encounter some unevenness in costs associated with rapid growth and the addition of new capacity, the overall trend should be very favorable. Turning to our guidance for 2022. Billy outlined our net sales guidance of $575 million and the rationale for it. I will instead focus on the cost and profitability. Our first priority is to fully support our growth via a significant increase in our media investment. We expect to spend about 12% of sales in media in the U.S., and it will be front loaded to begin filling the excess capacity Billy described. This is important so that we can jumpstart our household penetration increases again. Due to the massive out of stocks we had last year and the delays in marketing investments, we only increased household penetration by 6% last year, well below our long-term rate of approximately 24%. We are quite confident that our media program will restore that growth rate even in the face of higher pricing, but it will take a little bit of time. As you also heard, we are increasing our media investment in Canada, the U.K., and for the first time in France. Those efforts are part of a long-term plan to develop a robust international business and eventually have the scale to justify European sourcing. Until then, those markets are investments for us with the cost well in excess of the contribution we generate. The total cost is very manageable within our P&L and is not big enough to justify breaking it out separately yet. We are also investing in our organizational capability so that we are prepared to support a much larger business and can continue the kinds of innovation our customers and consumers expect from us. We are adding talent, but it will be at a rate that puts us on track to deliver the 1,000 basis points of SG&A leverage we committed as part of our 2025 plan. Adjusted gross margin has lots of moving parts this year. We are squarely focused on two important measures of our success. The run rate adjusted gross margin of the fully utilized Bethlehem campus and the overall run rate adjusted gross margin of the business before we incur the usual startup inefficiencies in Ennis. It is important to note that the Bethlehem campus will be operating very close to full capacity this year and can provide a reasonable view of the profit and cash generation potential of Freshpet at scale. We believe that is a very important proof point for the long-term value of the Freshpet business. In today's investor presentation, there is a chart that demonstrates that potential. The chart shows that now that Bethlehem is operating at scale, it is generating approximately $145 million of cash before media investment, and the adjusted EBITDA before media is 29.2%. As a mature business, we would expect to incur some media investment, but nowhere near the 12% of sales we are investing now to drive a 35%+ growth. A mature business would expect to spend much less. Even if you charge the full 12% of net sales in media investment to the now full Bethlehem campus, the cash the campus has generated would pay for the entire capital spent to build that site in approximately two years. We believe that view provides greater clarity on the ultimate profit potential of Freshpet at scale and justifies continued investment in new capacity. As I indicated, we believe we have significant room for further improvement by driving production efficiencies, lowering our freight costs, and gaining the benefits of scale in our corporate overhead. Within this year, we expect to drive improvements in our adjusted gross margin via pricing and increased mix of production on our higher speed lines and elimination of the temporary operating inefficiencies through the systems and training investments. Headwinds we will face will be production plant mix, product mix, and any further inflation beyond what we have covered with our pricing. The adjusted gross margin cadence will be lowest in Q1 as we have very little benefit of the pricing and systems improvement and virtually all of the higher costs in the quarter. In fact, if we had the benefit of the higher pricing for the full quarter, it would add approximately $10 million-$15 million in adjusted EBITDA in the quarter. We also incurred the unabsorbed capacity costs resulting from shutting down one production line in January due to the staffing issues caused by Omicron. In total, that means that we will produce very little, if any, adjusted EBITDA in the quarter. Margins will improve significantly in Q2 as the pricing is fully reflected and our systems and talent increase efficiencies. We expect Q3 to retreat sequentially due to the impact from the Ennis startup, where we will be generating smaller volumes in advance of ramping up. With respect to Q4, we are expecting even greater margin headwinds as we will have two new lines operating at reduced capacity as they ramp up, but it should be better than Q1. We will also begin to more fully utilize our new Dallas distribution center as the year unfolds. For most of the year, that DC will be a cost headwind as we will have to ship product from Bethlehem to that DC in order to have the full complement of products available for our customers' orders. By the end of the year, though, it should be a more efficient way to distribute Freshpet to a significant portion of the country. In total, we are establishing guidance of greater than $55 million in adjusted EBITDA for the year. However, as Billy indicated, that result is negatively impacted by several factors. They are one, excess capacity. We are carrying approximately $13 million-$17 million in buffer capacity costs this year. That capacity is designed to insulate us from any disruption and prepare us for the increased demand we expect by Q4. This represents approximately 225-300 basis points of adjusted gross margin. Two, temporary pricing versus inflation mismatch. Our second price increase just went into effect with orders today while our higher costs began flowing through our P&L in January or earlier. We believe that this mismatch creates an approximate $10 million-$15 million headwind to our adjusted EBITDA in the first quarter. Three, adverse mix impact. All of the trade inventory refill we did this year was on bags, which have a lower margin than our rolls. The trade inventory refill was largely completed in February, so Q1 will have a disproportionate mix of bags. After that, our mix should normalize. Four, plant mix. This year, we will have a disproportionate amount of production at our partner at Kitchens South until Ennis is fully operational late in the year. That plant mix will flip-flop for self-produced product in 2023 as Ennis gets up to scale. Taken together, these variables are creating an adjusted EBITDA headwind of approximately $25 million-$30 million and an adjusted gross margin headwind of approximately 400 basis points. Due to the size of the number, we will call out the impact of the buffer capacity in our communications this year so that you will have a better visibility on it as we grow into our scale. We are providing the balance of the information for perspective, but do not plan on updating it on a regular basis. In closing, we believe we have constructed a plan that prudently balances the need to restore the consistency and reliability of our operations, the need to demonstrate the potential profitability of the business as it grows, and also maximizes the size of the opportunity in front of us. As challenging as the past two years have been, we arrived at the place we are today with the resources and tools to fulfill Freshpet's potential. We remain very confident in our long-term goals of 11 million households, $1.25 billion in net sales, and a 25% adjusted EBITDA margin. We believe we have the ability to change the way people nourish their pets forever. That concludes our overview. We will now be glad to take your questions. Operator? Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. In the interest of time, we ask that participants limit themselves to one question and one follow-up. One moment, please, while we poll for questions. Thank you. Our first question is from Anoori Naughton with JP Morgan. Please proceed with your question. Hi, good afternoon. Good afternoon, Anoori. Thank you for giving us some of the details into the risks considered in your guidance. What gives you confidence that the $575 is conservative enough to encompass all of the one-time type events that have challenged you and others in the industry lately? What do you see as the potential upside drivers in your outlook as well? Let me just talk about the risk profile, and then Scott might just give a commentary on where the upside part of it is. Unlike most companies where demand is really the big question for them, our big issue over the last two years, in fact the last many years, has not been the absence of demand, it's been the absence of supply. Our entire risk mitigation approach has been focused on how do we get ourselves enough supply that we can let the demand rise to where it needs to be. As I said in the comments, we're already running at the rate that would support the $575. We feel very good about the underlying growth rate here. Our big challenge is, are we gonna have enough capacity? That's what we've laid out is a plan that we have significantly more capacity than the $575 would require. I think the proof in the pudding was in January, where you know we were able to take down a line and still keep up with the demand and not dig a trade inventory hole. We feel very good that we're managing the right element of risk here. It's not the demand side. The element of risk is not the demand side. The element of risk is on the supply side. Scott, do you wanna comment on the demand drivers and the upside? Yeah, certainly. So I totally agree with Billy. I mean, I think what he's getting into is, for the past two years, we really have not been in a situation where we've been able to supply customers or consumers the product and the product specifically that they are looking for. We're finally in the last like month or two, starting to see those inventories come back. We're starting to see our situation and our appearance at retail much better than it's been. The question we're asking ourselves is, what would the growth have been the last couple of years if we didn't have that situation? We're starting to see some of these pretty enormous numbers come through, both on the, you know, through Nielsen in the weekly, you know, data that we're seeing. Really what it comes down to is in stock. We also feel like the media performance and the advertising that we now have on air is the best we've ever had. We know the correlation between the media and the impact on not only driving penetration but also revenue. We're really confident in our innovation, and we're also seeing really nice, steady progression in distribution. It feels like every single thing is lining up on the business behind finally having enough inventory. Yeah. Anoori, I would just close that with the, you know, it is amazing. It is very different. We are in a very different position than most other companies, where managing risk means you manage the, you know, the net sales via the demand part of it. We think the demand is our strength and the driver, and it has been. We're trying to manage the risk entirely by giving ourselves plenty of cushion and plenty of room on the supply side. That's helpful. Thank you. Our next question is from Mark Astrachan with Stifel. Please proceed with your question. Good afternoon, everyone. Hope all is well. I guess just directionally following up on that, you talked about, I guess, what mid-teens 15% or so benefit from pricing this year. Guiding at 35, so that implies volume trends, you know, a lot weaker than where they were running a year ago. You talked about elasticity having not a huge impact, and obviously everybody else in pet is taking price. Maybe if you could kind of parse those two pieces out there and you know, why this number couldn't, I guess, be potentially bigger. I mean, I get wanting to guide conservatively, but price is obviously a much bigger piece of the puzzle this year relative to what it has been historically. You know, how do you think about that? Then, you know, theoretically, I guess you talk about in the presentation, plant capacity, which is still, you know, $100+ million above what you guided to for revenue. You know, is that something that you can potentially meet if demand is there? You know, again, potentially to what Scott was talking about in terms of kind of the perfect storm here of advertising spend and innovation, et cetera. That's a lot, but anything there would be helpful. Right. Let me take the front part of it and remind you, because we did put an awful lot into our prepared comments. To the first part of your question about pricing 15%, what we said in the comments was that we've built into our plan that unit movement would be about 10 points below what the net sales movement or the measured track movement would be. We're getting about a 10-point help instead of the 15 points that come from pricing. That's the assumption that we've got in the plan for price sensitivity. If price sensitivity turns out to be less than that, if it's a straight benefit to the bottom line, that would imply five more points of growth purely from the pricing. Scott, do you wanna just talk about the upside as you see it based on the demand side of it? Well, let me touch just a little bit on what we know on pricing at this point, just to level set everybody, if that's all right. On dry, we're seeing between 8% and 12%. On wet, we're seeing and I'm talking about, like, where it's gonna land, right? I don't have a crystal ball, but I'm just from what I can see so far, it looks like it's 8%-12%, and wet is gonna be 12%-30%. As we've mentioned, we're at about 17% on the two increases together. The first one is in place. The second one is effective as of today, and that was in the script. I think it's also in the presentation. We have seen a couple of specific places where there have been moves on a few items. Let me talk about the first price increase. Mark, I don't know if I can totally answer your question, but I'm gonna give you pieces to the puzzle. If you look at the first price increase, what we've seen so far, which is about 5%, between 5% and 6%, depending on the item, it looks like there's virtually no impact so far. Now, it's really hard to read because there's a lot of different drivers going on. We're getting back in stock. We also see a little bit of mix, but it looks like there's almost no price increase. There are a few instances, as I was mentioning, where there are a few SKUs at our some of our top customers where they've gone ahead and moved all of it already. One of those is our 6 lb chicken roll, for example. We've seen about a 15% price increase, which would encompass the move from both the first and the second price increase or the majority of it. That item, over the course of February, is up 86% in that same retailer. You know, it's really hard to read, but it looks like we are moving through the pricing really, really well. Again, we don't know where it's all gonna land. We don't know what's gonna happen when the entire the entire line's up, but it looks very encouraging at this point. As I was touching on earlier, from a demand perspective, it looks like consumers are waiting for us to get back in stock and get back into our products. Thank you. Our next question comes from Steph Wissink with Jefferies. Please proceed with your question. Thank you. Good afternoon, everyone. I wanna just pull on the common thread here again and try to stress test your plans for distribution. You talked about demand and what your anticipation is for maybe a little bit of household penetration destruction and then revival in the back half. Talk a little bit about the retailer conversations and how your commitments are in terms of fridge expansion. I think you also mentioned some larger refrigerators. Just help us reconcile the guidance with what portion is unit growth, demand growth, versus some incremental accessibility growth with distribution. Thank you. Scott, do you wanna take that? Yeah, absolutely. The vast majority of our growth this year is gonna come through penetration and buying rate. The biggest piece should be penetration. The way we think about it is our advertising and marketing should drive about 80% of our total growth in the year. The last two pieces of distribution and innovation should be the other driver. I would say about 80% of our total growth should come through the marketing and the advertising that we're putting in place. It is the key driver. Although we are getting more stores, and we have in the presentation, you'll see, there's a lot of information, I know. You'll see about, you know, over 1,300 new stores. You'll see significant increases in not only are we upgrading almost 1,000 fridges, but we're also adding a fair number, almost 900 second fridges. All of those pieces are coming into play. The one thing I will say is I think we have been very transparent. With the retailers and all of our communications all along the way. We have been far from perfect, but we have delivered lots and lots of bad news. I think we've laid out the plan that we shared with them early last year about what we're building. We're now being able to show them not only what we're building tangibly, both Kitchens 2.0 and what we're doing in Ennis and Kitchens South, but now we're actually starting to really fill trucks at different types of levels. I think that there's a tremendous amount of confidence in working together with us to really build out the fresh pet food category. Thank you. Thank you. Our next question comes from Bill Chappell with Truist Securities. Please proceed with your question. Thanks. Good afternoon. Good afternoon. Hey, just wanna understand, I guess two things. One on the absorption and one on kind of the sales of refilling the shelves. On the absorption, is this basically you're building a safety stock and even if demand is greater than you expect, you want a high level of safety stock, which I guess could go stale throughout the year? Or could that number come down meaningfully, you know, if demand goes up? On the revenue in terms of filling the channel, and I think we expected last quarter, your initial expectations were much higher than consumption growth as you were refilling the channels. That didn't happen 'cause of supply chain issues. I would have thought that you would have a big bump in this first quarter, as you finally are refilling the fridges. Is that not the case? Is that just happening more throughout the year, or am I missing something? I guess first, help me understand the absorption and how it works through the year, and help me understand the kind of the flow of revenue as you refill the shelves. Thanks. Bill, let me take the second part of your question, and then Heather will answer the first part of your question. On the second part of your question, we pretty much completed the trade inventory refill as of, you know, this week. We've been shipping very strongly, and as I indicated in the prepared comments, our net sales or our sales to date are up about 38%. Last year's February was weak. Last year's March was much stronger 'cause we were bouncing back from all the storms we had in February. You'd expect that we got some benefit, you know, what we're giving you is a projection for the first quarter that'll kinda be in line with where we wanna be. I would also just caution that we are doing, as we said, we completed our ERP conversion and we feel very good about where we are, but we just wanna give ourselves a little bit of breathing room in case there are any glitches or any issues with trucking or anything else that might happen, like happened in Q4. We're trying to be a little bit cautious and conservative on it. The trade inventory refill is pretty much done. Fresh from The Kitchen was gonna be the last thing we refilled, and we haven't cut a case on Fresh from The Kitchen in three weeks. We've been shipping pretty full. Heather, you wanna take the first part of the question? Sure. Yeah. Bill, it's not safety stock. The way you wanna think about it is when we call it buffer capacity, it's really stacked capacity in our cost structure. We're planning for a staffed capacity that supports a business that could be upwards of 15% greater. If we had no supply chain kind of operational issues and things, you know, continued to operate smoothly with no disruption, then increased demand could be supported by this fixed cost structure that we have in place 15% more. Having said that, you know, in months where we might have some sort of operational disruption, and we talked about in our prepared remarks around what happened in January with Omicron, where we shut down a line during the month of January, that allowed us to sort of operate and support the demand that was there without disrupting customer service. That does eat away at that buffer. But having said that, it allows for that disruption without missing our sales guide. It protects on the upside. If we do have the upside, then that, of course, takes away the margin impact as well. Just to be clear, as we move to the fourth quarter, you would expect kind of the run rate of that absorption to be kind of low single-digit millions. Is that right? I mean, you're starting high, and then you're kinda growing into it. You won't hold this kind of level forever. Yeah. I mean, I think we will always plan to have some buffer capacity given our level of growth. Having said that, you know, the outcome of how this impacts the financials will depend on, you know, how things progress. If we could face margin impact and absorb and not absorb any of it if every month we had some sort of operational constraint, which we don't expect to have, like January. Having said that, we could also support a higher demand, and that's why we're spending, you know, on media ahead, and trying to invest for that increased growth. We can absorb that with this buffer capacity as well. By the end of the year, it will either result in supporting higher demand, and so therefore you would achieve a higher margin, or it would, you know, support the guide, and not impact margin because we have that buffer capacity there. Thank you. Our next question is from Robert Moskow with Credit Suisse. Please proceed with your question. Hi. Thanks. I was hoping for a little more clarity on slide 37, where you show the profitability of Bethlehem Campus when it's $535 million in sales. And I guess that's where I'm questioning is your total company not at $535 million yet, so what's the sales basis for this scenario? And how do you come by these numbers that shows the cash generation? Heather, you wanna take that? The $535 million is a capacity view of the Bethlehem Campus, Rob. This is simply a reflection of the capacity of the facility and revenue, the cost structure related to that, which is now, it's not fixed because we'll continue to drive efficiency initiatives and drive cost savings initiatives to even improve that. As it stands right now, when you look at that net sales capacity with the current cost structure of Bethlehem, you have a 50.2% margin. That's the first stopping point. What we've done is we've taken a fair share of the SG&A expenditures to have a view of what the contribution of that facility looks like. Again, that's the current state of our SG&A expenditures, which we know we're working on driving further improvements via scale, via growth, leverage in G&A, as well as logistics scale. That will even improve. We wanted to take sort of a stopping point to say, "What is this worth now?" Knowing that it'll even get better, and that's what that margin represents. Okay. Rob, to clarify one point. The $535 million is, it says in the footnote down there, the total company sales of $600 million. It would mean that if we were deciding to use all the capacity in Bethlehem and source the rest of the stuff to get to a $600 million number would come from other sites. We may choose, you know, depending on the mix of the products that we sell this year, to not have some of it come from Bethlehem. Some of it might come from Kitchens South, it might come from Ennis, depending on what kind it is and where it is. At the capacity and staffing plan that we've demonstrated and proven and are operating today, this is what you deliver at the pricing. This is at the full year, if you had a full year of the pricing that's in place as of today. It also assumes all the pricing goes through as well, right? Yeah. That's in the footnote. Full year benefit of the 2022 full price increase. It assumes all of your pricing is offsetting the inflation, which has been substantial. That within the- Right. Um. Correct. Okay. It just results in basically a two-month correction because you didn't have the pricing in January and February, but you had the costs. Okay. I'll stop there. Thank you. Okay. Thank you. Our next question is from Brian Holland with Cowen. Please proceed with your question. Yeah, thanks. Good evening. Just to clarify here on the guide and the $13 million-$17 million. You're front loading your media spend. I think, Billy, you mentioned potentially leaning heavier into the media spend as we go through the year. Is the thought process here that as long as the risk factors that you laid out that are supporting the why you would want to have that buffer capacity in place, so Ennis comes online on time or no further delays than what you've currently projected, everything else is okay, and you're seeing the correlation between your media spend and your sales, you would lean into those, you would lean into that excess buffer capacity in the second half of the year through increased media spend? That would close the gap between your buffer capacity, which is $660 million, and we would lose the unabsorbed cost, assuming that's what you chose to do. Is that the way to think about that? Conceptually, you're right. There's a timing issue in all of those in that scenario that you laid out, where, as we said, we're front loading the media to, like, 65% first half, 35% in the second half. If we found ourselves running towards net sales that were well in excess of what our plan is, we would have the opportunity to add more media in the second half. You wouldn't get as significant a benefit. It would be more carrying you towards the next year, but you would have that opportunity. There are lead times both on the media commitments as well as on the, you know, making sure you ramp up all the right staffing in the right places. We will have plenty of staffing to support a significant part of that. We just wanna make sure they're also reflecting whatever the risks are that are out there, whether they're transportation risks, whether they're ingredient risks, whatever. There could always be some of those other elements that can strain us, and we just wanna make sure that we have the capacity before we lean into the higher level of media. Understood. Just on the media spend, you mentioned international and you're tacking France into that mix now and leaning heavier into that. I don't know if it's possible to dimensionalize between kind of, like, media spend behind North America or U.S. specifically and the rest, but if we think about that, you know, how much are we spending on the U.S. relative to? Are we leaning in heavier there, or is that spend kind of the same? Yeah, it's like 90% U.S. is the way to think about it. Brian? Yeah. Strategically and conceptually, we sourced the U.S. to where we think it needs to be before we put the revenue into the other markets. To the media into the other markets, but we have more than adequately funded the other markets. We do not put media money into those countries at the expense of the U.S. Thank you. Our next question is from Peter Benedict with Baird. Please proceed with your question. All right, guys. Thanks. Two questions. First, can you talk about the CapEx budget, how you kinda see that this year, and maybe next, and how kind of the, maybe the borrowings are gonna flow? That's my first question. Heather, do you wanna take that? Yeah. I know we touched on in the prepared remarks that we're looking at our plans, and you know, we are doing that. From a 2022 perspective, from a spend perspective, it's largely in line with what we've shared, so just from a you know, financial perspective. We're reviewing the plans, as we said. Of course, as you know from a marketplace perspective, there's you know, longer lead times and inflation that we're facing. Our focus in looking at the refined plans is really around taking it as an opportunity to look for capital efficiency and ways to optimize. You know, one of the things that we are doing is looking at our existing infrastructure and how we can continue to expand on our existing infrastructure as well as, you know, increase capacity in smaller increments. So it's all in the works. What you should know from a funding perspective, consistent with what we shared at ICR, is that we're looking to amend our credit agreement at this point to provide the flexibility to support those plans. Okay. Then just wanted to clarify kind of the cost view, that's, I guess, embedded here with the inflation. Are you just assuming that the costs that you exited the fourth quarter with are kind of what's gonna persist for the rest of the year? Is it more what you're seeing today, you're assuming continues the rest of the year? Or are you assuming either any relief on the inflation front or incremental headwinds? I understand that cost inflation is on commodities, it's on freight, it's on a whole variety of things, but just trying to understand how you've built this plan from that perspective. Sure. First of all, this reflects what we know, of course, exiting 2021, coupled with what we locked in in terms of our chicken contract, which is a meaningful piece as well. It contemplates our expectations of inflation for this year, for the full year, as best we know it right now. A lot of what we buy is on a contract, but there is variability, of course, within the cost structure, as we saw, of course, in 2021. What you see in terms of a margin impact is a reflection of our best expectations of this inflation, but a mismatch really around price versus inflation, where the second price increase, as we mentioned, started today. You're missing, you know, when you think about when that comes in, it's about two and a half months of a mismatch in terms of price versus inflation. Thank you. Our next question comes from Bryan Spillane with Bank of America. Please proceed with your question. Hey, good afternoon, everyone. Just two quick ones for me. The first one, maybe this is just, I'm a little dense on this. If we're looking at the $660 million, you know, I guess, staffed capacity at Q4, how much of that does that include both price increases and I guess as we're trying to think available capacity for 2023, how much of it has been increased, I guess, just in pure pounds versus dollars available? Just because you've got more pricing now contemplated than I guess you would've thought a year ago. Just trying to see if there's, you know, actually more pound capacity available, and that there's not a risk that, you know, you can, if you overdeliver on volume, that creates some additional tightness in capacity. It's a little bit complicated 'cause there's a lot of moving parts in there. First, we actualized all of the capacity numbers based on what our run experience has been, you know, the efficiencies we're seeing, the yields we're seeing. That $660 million number that we had been sharing before had been prior to the assumptions for price increases. Theoretically, there's the increased value of the price increases that would flow through. There is some mix differences 'cause those different items, the capacity doesn't necessarily all match up with the same size of the price increases, so there's some moving parts that are in there. If the broader question is there some risk that we're gonna be tight on the pounds capacity in this plan, we think we've got plenty of headroom, and we have the ability to flex the headroom quite a bit. If you think about what we said in the prepared remarks, the first place that we could be tight is gonna be on rolls. The rolls line that's coming up in the third quarter now from Ennis is gonna be the we're gonna be tightest on rolls when we get there. Once that comes on, it is such a large increment of capacity, we should be fine on rolls for a while. The next place we're gonna have capacity tightness in pounds will be on Fresh from The Kitchen, and that's where we'll be heavily dependent on the bag line that comes up in Ennis, which will be coming on up in the fourth quarter. We'll have lots of roasted meals bag capacity. If the demand that comes in as it comes in throughout the year is on roasted meals, there's no issue with available capacity. Depending on where you are in rolls and Fresh from The Kitchen, you could be just short of capacity coming on. Once it's on, we have more than enough pound capacity and the ability to expand that pound capacity through incremental staffing hours. It's a long-winded way of saying I'm not worried about the pound side of this thing. I think that we're pretty well prepared for that, assuming we get the construction of Ennis up and get it started up. Okay. No, that's helpful. Maybe just one second question, Billy, is just can you just give us a sense or your perspective on, you know, just how competitors in the fresh segment coming into the market have impacted the demand for fresh? I guess, you know, we've seen a lot of advertising for The Farmer's Dog and you know, and their, you know, social media following, right, is followers have increased, you know, substantially in the last six months. You've got, I guess, JustFoodForDogs now in Petco, you know, with distribution there and frozen. Just trying to understand, as you see more competitors coming into the market, is it actually just expanding, you know, awareness of fresh? Is it just good for the segment in general, or are you concerned at all about just the competitive dynamics heating up? No, I would say that with the world exploding in our case, and it's just making the opportunity that much bigger, but Scott can give you a lot better color on it. Yeah. Obviously we take you know, keep a really close eye on all of this. I think maybe the best place to answer that or to start with that is when we look at where the future state is, and you know, you've heard us talk a little bit about that, but we believe that you know, the future state for fresh and frozen, however people wanna divvy it up, it's kind of a $6 billion kind of piece of the pie. Some people have seen $4 billion, you know, some people have seen $6 billion. It's a very very big piece of the category into the future. There's a tremendous amount of potential. I mean, obviously our goal is we're the incumbents. We think we have an incredible proposition, portfolio. We've built a We've been really thoughtful to try and build a really, really good business. We've seen a lot of people come in over time. I mean, I think you remember probably a few years ago there was a billion Merrick product and there was a Farmer's Market product. You know, the frozen DTC guys have been around since like 2015, 2014, 2015, pick your number. They've been growing. They've grown to, you know, well over $200 million in retail, a retail number. We've seen a lot going on, and all during that time, we've been able to maintain a 25%, 30%, 35% growth rate, you know, depending on the year. We think there's an incredibly big TAM. We know that we've been able to grow incredibly well through it. As we've watched some of these competitors come to market in multiple different classes of trade, typically our performance has not been impacted whatsoever at the retailer they're at. We've also tend to outperform them significantly. I mean, you know, it's interesting. I mean, I think that they'll there is a piece of business there. I think that we're gonna have the vast majority of this kind of pie, and I think that there's gonna be several other people that are gonna try and divvy up the smaller piece of the total market. The other thing I will say is what the other people have done from an innovation standpoint and how they've thought about it has it's. We have been paying close attention, and I think that they have uncovered some consumer opportunity, and it's something that we've been working a lot on and we think we're going you know, later this year, the work that we've done and the innovation that we're going to bring will completely upend the DTC landscape, with many of those brands coming in. I think we're really well-positioned. I mean, I know it's our company. I know I'm one of the founders. I know it's hard to not be incredibly bullish. I think we're in a really, really good position. I think that those guys will make progress. I think we're just gonna make so much more progress, and have so much scale and so much know-how and also be fresh, which I believe is better than frozen. I think we're gonna end up in a really good spot. Thank you. Our next question is from Jason English with Goldman Sachs. Please proceed with your question. Hey, good afternoon, folks. Congrats on the capacity getting that right-sized. You mentioned the step-up in media to 12% of sales. Can you tell us where you finished 2021 out? Heather, do you have that? Yeah, I do. We finished. I'm just pulling it up really quick to give you more precise. About 10.5%, a little over 10.5%. Okay. So this was the biggest year of year-on-year increase in media spend, I think, in the company's history. You're pointing to it as a driver of the slowing penetration growth. How do I flip those two? I mean, the biggest issue for us on Jason, I think. Scott, go ahead. Yeah, Jason, I think it's a really key point. The biggest challenge we've had is we've had periods where we are completely out of stock on cat food. We're completely out of stock on bags or completely out of stock on rolls. Over the course of the year, you can see those moves where when we are out of stock on those specific items that people tend to really prefer, like forms, which is really the first decision that people make, we lose those people for periods of time. Now, what I can tell you is when those products come back in stock, the growth rate is extraordinary and it's explosive. I can show it to you like by item. When we finally get all of our products in, I think we're gonna have really, really significant explosion in our penetration. Now, I think it's an interesting way to look at it, but in a way, having all that adversity this past year and being able to put up the growth numbers that we put up and it coming more from buying rate, I think it demonstrates the dedication that a lot of consumers have to our product and how they were willing to stick with us because quite honestly, we aggravated a lot of folks. We're keeping a close eye on it. It appears like we're off to a really good start. The business is responding well to media already this year. You can see it in the growth rates. You're gonna see penetration. It's always a slightly trailing indicator before we get any of the data. It looks like we're gonna be back on track with our penetration growth. Well, Scott, in terms of back on track, you were running sort of 10%-15% penetration growth pre-COVID. Mm-hmm. Over the last two years, to give your two-year CAGR, during COVID is around 16%. Why isn't that on track? Like, if I heard you cite a 24% number. I'm not sure where that is, but based on the data we're looking at, your longer term CAGR on penetration has been that sort of mid-teens. But you're underwriting something above trend. What gives you that confidence? Let me just take a shot. I think I'm not sure what data you're looking at on the penetration numbers, but you know, as we think about the penetration gains were in the 2020s for back-to-back years in the years 2019 and 2020. When we look at it and look at the media spending and the conversion from that into households, it's been at a very consistent rate, a consistently improving rate, with the only year where we are off was in 2021. We were off because frankly, the out of stocks. We had a better than expected year in 2020 because of all the pandemic-related stuff. We, 2021, the efficiency in 2021 for a conversion of media into penetration was better than what it was in 2019. We saw continued improvement. If you convert the media spending that we're planning this year into household penetration, we feel comfortable we're gonna get back to where we were, the trend line that we were on. Thank you. It, it- Our next question is from Rupesh Parikh with Oppenheimer. Please proceed with your question. Good afternoon. Thanks for taking my question, and I'll be quick here. Just in terms of the guidance, the $13 million-$17 million unabsorbed expenses, so if we see higher sales during the year, would the flow-through be higher than normal for these sales? Heather, do you wanna take that? Rupesh, can you just clarify what you mean on flow-through? Yeah. You already have these costs built into your base of $13 million and $17 million. Yeah. If you end up seeing higher sales in your guidance, would the flow-through on those incremental sales? Oh, yeah. be higher than normal? It will be. Yeah. You will just have the variable input costs on there. We will basically improve margin for each dollar above. You get a margin benefit because you don't increase the plant costs related to that. Okay, great. That's, I mean, that was commercialized. This that's commercialized in our slide deck as well, where you see the adjusted EBITDA impact on the flow-through as well there. Okay, great. Just one more quick question. I know labor availability and freight costs were headwinds last year. What are you guys seeing right now on the labor availability front? For freight costs, I know it's very volatile out there. Have you seen any stabilization or is this still hard to conclude where it's gonna end up? I'll take a shot at that. The labor part, we think the move that we made last year was the right one and it's working, and we've seen an improvement in our retention rate or, think of it as, we've cut in half the turnover rate that we were seeing before. We feel very good about the move we made. Doesn't mean that we're perfect. We have to stay on top of it. We also did some changes in the employee benefits that are designed to better meet the needs of the younger workforce that we have today. We feel like that move has worked, and we're not worried about labor availability, at least not for the foreseeable future. On the freight side, that is, you know, that is a tough market. We're seeing, you know, costs go up because of fuel costs, and we're also seeing the availability of trucking. It is better now than it was in the end of the fourth quarter, but it's still not what I would call a great place to be. We're far away. We're a long way away from being in balance and stable on freight and transportation at this point. Thank you. Our next question comes from Jon Andersen with William Blair. Please proceed with your question. Good afternoon, everybody. Most of my questions have been asked and answered. Just one quick one. The new fridges for 2022 is a step up. It sounds like more than 3,000, whether that be new stores or upgrades or second fridges. Can you talk about first the cadence that you expect through the year? Second, a little bit of color around where these placements and upgrades are going to be concentrated and what that typically does for you. Does it drive household penetration? Does it drive buy rate? What's the kind of the, you know, the benefit as reflected in your primary drivers of your business? Thanks. Hey, Jon. From a cadence standpoint, we believe they're gonna be fairly evenly spread through the year. More so than we have seen in certain years. I would say fairly evenly split. We could end up like a 60/40, but it's gonna be pretty darn close to you know kind of an even spread. Where are we getting those placements? You know, part of them are almost all of them are existing customers. There's a couple of newer customers, but almost all of them are existing customers at this point where we're just expanding distribution in stores we're not. On the second fridges, those are stores that are performing quite well and are now either being remodeled or there's a situation where they've deemed it, where they feel like it we have the need and enough velocity and demand to add a second fridge in there. The way we think about all of the fridges being placed, not only new, but also second fridges, is we use them as a multiplier effect on our marketing, on our advertising. So if we have a year where we have extraordinary. We think of the, you know, it's interesting 'cause Jason was touching on this question a minute ago. When we think about acquiring consumers, we typically look at it from a CAC basis, like a consumer acquisition basis. So what does it cost us to acquire a consumer for our business? The range has been, call it $45-$55. Let's just say that's the range. It's pretty close in there. Depends on the year and on what's going on. If we have a year where we get extraordinary placements, we have really good advertising and really good innovation, you're gonna see things on the lower end, so like a $45 CAC or so from an acquisition standpoint. If we didn't have any of that, you might see kind of $55 or slightly higher. Now last year was an exceptional year because of the out-of-stock issues. But that's kinda how we think about it and how it helps kinda think of it as a complement to the overall kind of growth on the business. Again, about 80% of the growth is driven in marketing. Is the marketing slightly more effective because we get a lot more fridges, they're higher visibility fridges, and we have really good innovation. That's really kinda how we typically kinda think about building the revenue model for the business. That, that's helpful. If I could squeeze one follow-up in on innovation. Billy, I think you mentioned a good slate of innovation mostly midyear. I know you're not gonna talk about specific items, not asking you to talk about specific items. But can you talk conceptually about the size of the innovation pipeline and maybe the focus of it? You know, type of dog, occasions, you know, different forms, just to give us a sense for what we may be opening up here in terms of, you know, incremental TAM. Thanks. I don't think we have enough time for Scott to answer that question. So John, it's another one of these things where we spend a lot of time thinking about, and I think we've gotten to a point where we know when we're adding innovation, the innovation's going to improve our business performance. We're not. Because we. Like, some people have unlimited shelves, right? Or the potential of unlimited shelves. We don't. We have our fridges, and we sometimes have second fridges. So we wanna be very, very prudent and thoughtful in the innovation we're bringing to market. So when we're testing innovation, it has to be more successful than what we already have out there, and it has to bring incremental consumers into the business, into the portfolio. So that's really how we evaluate it. We continue to always identify where there are gaps and where there are opportunities. One of the things we've seen is there is a lot of opportunity around size-specific items, certain sizes of dogs, certain aspects around sustainability. People are really interested in. We're gonna do more and more around sustainability. You'll see different things that we're doing on our lines in our businesses and our products. You're also gonna see more and more plant-based items continue to come. We think there's a tremendous area of opportunity. Finally, we know that convenience and customization is really, really interesting to a subset of consumers. That's really what we wanna tackle, and we think that we have an opportunity from a fresh perspective to do an amazing job customizing and creating very convenient products for consumers that feel very specific to their pets. There's a pretty broad array. Probably I think late this year we'll probably do a very extensive sharing session with the investor and analyst community, you know, and we'd love to kinda share more details at that point. Thank you. There are no further questions at this time. I would like to hand the floor back over to Mr. Cyr for any closing comments. Great. Thank you. Let me just leave you with one thought from American humorist Corey Ford. "Properly trained, a man can be dog's best friend." To eliminate any doubt, properly trained means that you know to feed Freshpet every day. Thank you for your interest and attention. Good night. This concludes today's conference. You may disconnect your lines at this time.