Are we good to go now? Awesome. All right, we're live. We're live. Let's start talking about SunnyD Vodka Seltzer and get down to some pasta sauce and some other stuff. I've got a quick intro here. Sometimes when I meet general investors and tell them I cover packaged food companies, I can see their eyes start to glaze over and they think how boring. It's an old, mature industry with little growth. It's gotta be boring, right? Those in the room with us here today know that's not the case. There's plenty of drama in the sector. Too often it's more in the form of tragedy, but nonetheless drama. Sometimes there's a brand or a company or a management team that comes around and makes the mundane somehow magical. That's how I describe what's going on at Sovos. To tell us their story, we have two of the company's chief magicians here on stage with us today. Mr. Todd Lachman, the Founder, President, and CEO, and Mr. Chris Hall, the company's esteemed CFO. Gentlemen, let's turn it to you. Tell us how the magic works. Whoa. It was good, right? See, it was really, that was really good. Yeah. I said- Wow. Maybe a second call, you know, should be a writer or something. Yeah. As, let's jump into it. We here, people in the audience, I think they know your story, but we're gonna get to know a little bit better. As I think about your growth story when I first met with you guys, I think it was at a restaurant here in New York. It was pretty cool. Like, we were just coming out of COVID. It was one of the first live- Maybe some kitchen. Yeah, it was, it was good. It was a good dinner, like, we were desperately in need of some live human interaction at that point. The, the story was more multifaceted than I think it's evolved to today. You know, we talked about the multiple brands and the multiple engines of growth, while those brands, aside from Birch Benders, which is no longer in the fold, well, the other brands have done reasonably well. This has really been like a hero story behind Rao's, at least from my perception. Yep. Is that true? Has, like, your growth story evolved? How so? No, absolutely. I think you're right. I mean, if you think from the... That was a great dinner. It was the first analyst dinner- Yeah, it was awesome. ... since COVID, cork out of the bottle. If you think about that time period, we're doing the, this would be the summer of 2021. We went public in September of 2021. I mean, our thesis was building a portfolio of one-of-a-kind brands, which up until that point, you know, we had done. We had acquired Michael Angelo's and then Rao's and then noosa and then Birch Benders. Secondly, it's very important that people understand we have a specific checklist that we look at when we look to acquire these brands. We look at taste superiority or close to it in the category. We look at highest Net Promoter Score or close to it in the category. We look for under-penetrated brands, premium priced. I mean, at Sovos we call them, you know, one of a kind brands. Some people call them, you know, challenger brands, insurgent brands. That also lends itself to our playbook, which is just to, you know, focus on pounding distribution gains, awareness gains, and then that leads to household penetration gains. I mean, and that is still really our thesis today. However, if you look. Rao's LTM net sales, $618 million through the end of Q1. When we acquired Rao's, it was $65 million. In basically six years, we will have grown that brand tenfold. If you had asked Chris and I, "Hey, when you're kind of in the middle of 2023, where do you think the Rao's growth would have been then?" We wouldn't have said 40%. You're right, we... I would still say portfolio of one-of-a-kind brands. I think, you know, about a year ago, we were like, you know, why... If there's a niche pizza brand, why acquire that business when we can launch Rao's into pizza? Well, there's a really good challenger, insurgent salad dressing brand. Well, we might launch Rao's into salad dressing at some point in time. Wow, look at that soup brand. Well, let's launch Rao's. I think, you know, we're leveraging our capital in this brand that's working so well to drive it into categories and really getting Rao's to $1 billion. You know, we're... I think when we were sitting there before last year, you had said, "You know, are we a one-trick pony?" I said, "Well, at least call us a one-trick Clydesdale." You know, with the Rao's brand, but in the end of the day, right now, we are looking at everything Rao's as a priority. We're driving Rao's as fast as we can to $1 billion. LTM, 40% year-over-year. If you look at the Rao's brand itself, we're up close to, you know, 40% consumption level in the quarter. You've got sauce growing with massive upside that we can talk about. You've got soup. Last year was up close to 50%, now growing 20%-30%, depending on the time period. You've got frozen up close to 50%, you've got dry pasta, I think, you know, in the quarter was up 60%-70%, you know. All of those new categories have been in market for, you know, depending on frozen, sort of third year, the other ones in their fourth or fifth year. Yes, we are. Might we do another acquisition at some point in time? Sure. Right now, there is so much runway left on the Rao's brand in regards to household penetration, awareness, items on shelf, et cetera, that we are just doubling down on Rao's. Okay, let's stay there for a little bit then. Sauce business. Been on fire. I think you mentioned you became, what was it, the number two brand in IRI? We were number two last year, and we're still the number two brand in total MULO. We're number one in the food channel. That's phenomenal. Yeah. Absolutely phenomenal. That's dollar share. Volume share is substantially lower, right? Absolutely. Seven- About a $16-ish share translate, i t translates to about a 7% unit share. Okay. Yeah. You gave some penetration statistics on the last earnings call. They're different than what we pull from Nielsen panel data. What is your data source? What are you guys using for that? I mean, it would be IRI. Okay. Yeah. It's a lot higher than we're looking at, but still low relative to a RAGÚ or Prego. Can you drop those statistics again? Like, where is the penetration? Where is it compared to the others? What are the building blocks to get you there? Sure ...to close the gap? Yeah. Household penetration, let's just, you know, use household penetration, which is about over 50% of our portfolio. Right now, Rao's sauce is about a 13% household penetration. Yeah. You've got Prego mid-30s, you've got RAGÚ around a 30%. Two brands that were significantly larger than now, you've got Classico at about a 22-ish percent, and you've got Bertolli, I think like at a 20%. You look at our growth rates vis-a-vis, you know, everybody else, we're clear. We're adding household penetration in chunks. We had our largest quarterly household penetration gain in three years. Uh-huh just in this first quarter. When we acquired the brand, it was less than 3%, now it's 13% in sauce. You've got the total Rao's brand at 16%. I think the number that we've been talking about is, you know, we are driving hard to get to 20% of household penetration, and then we'll, you know, keep growing it from there. We think that that's realistic vis-a-vis where, you know, the, you know, you've got Prego and RAGÚ, you know, are above 30%. The question will be, "Well, why not 30%?" Well, you know, you've got $3, you know, paste-based sauce. You look at our price premium, we think that's a very realistic target from where we are. Now the question is, "Why can you grow it from there?" Well, our awareness is only at 58%. We acquired the brand, it was 14%. We grew at tenfold percentage points last year. We know we're growing it in Q1. Then distribution, we're still at only 14 average items. The other market leaders are above 20, and we just grew distribution 22% in the first, you know, in the first quarter. There are more distribution gains on sauce, you know, yet to come this year. That's an aided awareness statistic? That is aided awareness. Yeah. Yeah. Yeah. That's pretty high. Unaided, that'd be actually a really good metric. Yep To have that type of penetration, which is relatively low, but that type of market share, even for adjusted price point, it suggests that the loyalty and repeat rates on your business are phenomenal. Yeah ...relative to the other competition. Highest in the category. Sure. As you bring in new users, are you seeing that same type of loyalty? Absolutely. The highest repeat rate, any loyalty measure that we look at, highest in the category, and it really comes down to the product delivery. That's when we acquired Rao's, you know, we tested, you know, the sauce, best tasting sauce in the category. It was just completely different. That's why one of the things that we look to do is how can you differentiate. It is so different than, I mean, it's whole tomatoes, olive oil, slowly simmered in, you know, open kettles, fresh onions, et cetera, versus paste, water, sugar, canola oil, dehydrated onions. I mean, it's really, we've created a category within a category. Yeah. When consumers taste that, you know, they stick. The other question that comes up a bit, I don't know if I'm preempting another, is, "Well, at your price point, how can you sustain, et cetera?" One area that we talk about is the fact that, you know, going out to a family of four now to, let's just say, even Olive Garden, is about $70 average price ticket. It's, you can feed a family of four for $15 for Rao's dry pasta and a side salad. Also, if you look at the store now, I mentioned this on the call, you know, if you look at... And these are like food in the food store, 12 ounce Cholula, $7.92. Our average price is $7.40. You know, I can compare it to 8 Nestlé Drumstick, it's like $8. Box of 10, Uncrustables is $9 and something. Yeah ...you know, someone goes, "Well, it's an affordable luxury." Then everything in the store now, including a Raisin Bran is an affordable luxury. Everything is in, you know, kind of this universe and the taste superiority that we deliver, you know, that's, you know, one of the elements that is just really driving the exponential growth of the brand. It's even more expensive than Publix. Everything's so expensive there. You mentioned the quality of the product. I remember when I was familiar with Rao's before your IPO even began. We were loyal users in my house. My wife discovered it, and she's like, "This is great. This is so much better. Yeah. Then, when my bankers first told me about this story, they're like, "Oh, this brand's got shoulders. It's gonna do well in dry pasta." I'm like: What are you talking about? It's like flour and water. How do you carry over the same product superiority and win a business in a category like that, which seems so generic? You've done it. To my surprise, you've done it and you've done it well. How has the brand, like, what are the attributes that allow this brand to extend into those types of adjacencies so successfully? Sure. Well, I mean, it starts with the sauce. I mean, the brand. Well, let me take one step back because it is important that our fundamental philosophy, which we know is different than a lot of our peers. Having grown up in large CPG, I understand the mindset. The mindset is, I would say large CPG mindset is they look at Rao's sauce at time of acquisition. Ben can confirm this, yes or no, because he was on the site when we acquired the, you know, the brand. The mindset is, "Wow, that is a phenomenal jar of pasta sauce." Our mentality was, this is restaurant quality Italian cuisine, and that happens to make a great pasta sauce, but can clearly play in other categories. Mm-hmm. At the time of diligence, that was April of 2017, we tested the ability for Rao's to travel into soup, into dry pasta, into frozen, into a host of other categories through the roof, notably with Rao's users. You know, essentially at, you know, at that point in time, we knew that it had the capability to extend in other categories. First and foremost in our playbook is strengthen the core. We made sure that our first priority was, let's drive ubiquitous distribution of the sauce. We only had 45% ACV, now it's at 85% ACV. We had three average items. We really wanted to get the number of average items. It wasn't in Alfredo sauce, it wasn't in meat sauces, it wasn't in large sizes. Matter of fact, when we acquired the brand, they were like, "No, the number two is tomato basil." We're like, "Well, actually, marinara is half the category. I think 32 ounce marinara should be our number two item." Lo and behold, 32 ounce marinara is our number two item. 24 ounce marinara is number one. Get that core flourishing, now then we extend it into dry pasta. I'm new to the pasta sauce category. I'm like, "Why is Barilla the only one that has sauce and dry pasta?" Like, feels they kind of go together. We immediately launched dry pasta and that business... This is the fifth year, our dry pasta business is up 70%, you know, year on year. Then soup. Again, we can do things differently that others can't. Others... The main soup competitors are locked into canning assets. Newsflash, husband and wife sitting at home right now, the last thing they're thinking about is, "Hey, wow, what's gonna be the new innovation in a can?" You know what? Our soup competitors keep coming out with more products in a can. You know, we don't have to look backwards at our canning assets. We can look out the front of the windshield and say, "Well, the consumer would like an absolutely delicious meal, soup, that's in a glass jar that they can see." That soup business rocketed at number, you know, number five in the category, and it's still growing at 30% year-over-year. Yeah. A couple of examples. It comes down to the quality, both in terms of the product, the package that you deliver, and, you know, that's what we look to do. That's we really wanna make sure that we are taste superiority in every, any category that we have. It's in the right packaging vessel. We support it significantly with marketing. Mm-hmm. Mm-hmm. Okay. The more recent launches, you mentioned the youngest ones out there so far, your expansion in the frozen category. Yep. You've got entrees out there for a couple of years. Pizza, you're dabbling, right? You're just like... Very, very small test market effectively is what it's been until recently with, in terms of distribution. I mean, we launched, you know, pizza into four retailers in, between July and September. Yep. Now we are nationally expanding pizza. The way the resets work, it'll go through all of this year, and we'll be supporting it nationally starting sometime in Q3, but on a retailer by retailer basis. Honestly, we have high expectations for pizza. It's an, it's a $7 billion category similar to others that I think is just begging for some disruption. It's wood-fired crust, whole mozzarella, Rao's sauce, really great toppings depending on the pizza. Two share of a $7 billion category, $140 million of retail sales. I mean, that'd be a nice business. We have a little over two share now in soup, about a 1.5 share-ish in dry pasta, and less than a one share in frozen entrees. That's really our target as we go into these new categories, two share and beyond. Yeah. It's a nice thing when the categories are that big, the TAM's that big. Yep. The, the frozen entrees have been out there for a while. I think ACV in my last read was maybe 43%. We may have had C- stores in that poll, which is gonna pull it down. Yep. Is that intentional? Has that been an intentional sort of slow build, or is that like where you're seeing retail resistance to expanding even further? Yeah. I mean, we have I know the IRI and Nielsen are a little bit different. You know, I'm on the Nielsen board. I'll talk to them about that next week at our board meeting. I'm just laughing 'cause the difference in the IRI and the Nielsen. You know, we've got it above that, but it's still the. The number would still, you know, lead to the same, you know, question. You know, I think on frozen entrees, we've got a Rao's business and a Michael Angelo's business, and we know that the two can coexist together. We're, you know, we're driving Rao's. It was up 46%, you know, year-on-year in the last quarter. It was up, like, close to 50% or 60% last year. We're growing within the stores that we are, and we're absolutely looking to drive more, you know, ACV. There's, you know, whether I think it's just kind of the way the chips have fallen out in regards to the, you know, to the build and the priorities that we have, but now we are definitely driving more banner, higher ACV distribution on Rao's frozen. What's helped us from a capacity standpoint, and you saw it in the decline of the Michael Angelo's numbers, is that we got out of some lower margin, you know, item business on Michael Angelo's that's freed up capacity to make sure that we can drive Rao's. Often companies say they got out of something when the reality is the retailer made them get out of something. Yep. Like, they just chose to discontinue because they wanted to make space. Yep. Is that what's happening here? Are they saying, "Nah, I'll take that Rao's business, but to make space, we're gonna get rid of this Michael Angelo's stuff"? No. If you look, we have a variety of retailers where the two coexist nicely. Rao's super premium priced, Michael Angelo's premium priced. I mean, this was really unmeasured customers with some very large size items that really weren't, you know, generating that much. A lot of them were sort of in and out rotational items that we just decided not to, you know, not to take. You know, to the extent Michael Angelo's trends are, you know, we were down whether they can, you know, continue to be down, et cetera, I mean, our focus really is on driving that Rao's business. We've got the Michael Angelo's sauce now exclusively at Walmart, and we're really looking to grow our total frozen entree business and our total frozen business when you include pizza. You guys guided... Michael Angelo's net sales I think were down 5.6% or 6%. Mm-hmm which is on 6% the last quarter. Yep. You warned they're gonna be down more. Yep ... this upcoming quarter, before we bounce back to growth. Why does it get worse, and what would give you the rebound? Yeah, I would say, one thing on frozen. We have two brands in frozen entrees, Italian entrees, Rao's and Michael Angelo's. Michael Angelo's is actually still the bigger brand, but Rao's is growing. They both are produced in our plant, down in Austin, Texas, so they share the line. What we really see in the marketplace, is more of a shift to smaller sizes. Michael Angelo's has traditionally been large sizes, family sizes. The more profitable end of the business is on the single-serve piece of the business. That's a big part of the shift that we're seeing in the marketplace, and then we're echoing with our production. It's a very positive margin move for us, and it's also where the consumer's going. The combination of that is the best use of the capacity that we have. Now, we are also investing in that plant, to drive productivity, drive cost savings, putting more automation in than we've had historically. We're really starting to see that here this year. You wanna see it in Q1, you know, we were up a couple of hundred basis points on gross margin. Productivity's ramping up. This is a chunk of that. We'll continue to see that. We'll continue to invest in that plant because in its entirety, we're growing the frozen business double digits. Okay. Well, let's stick on the topic of margins then. You kind of, you brought us here, so let's dwell on this. Industry at large has been under a lot of margin pressure the last couple of years. The industry at large is inflecting, at an inflection point right now, and you guys are seeing it too. What drove some of the margin degradation? What are you seeing in costs? I know there was input costs. I know there was transitory costs. Ocean freight, that looks like it's better. There were some supply chain hiccups along the way. Unpack those for us and give us some better visibility of where we stand today. Yeah, sure. You know, like the industry as a whole, 2022 was a, you know, a challenging operating environment due to inflation and just due to some systemic, but even more periodic, supply challenges like the avian bird flu, like we actually had a weather event at one of our co-packers that hurt us on our pasta production. It was a challenging year both on both those fronts. We saw low double-digit inflation across 2022. We saw, as we were putting pricing into the marketplace to offset that, it was on a lag. As we were ramping up our productivity efforts, it was also on a lag and kind of behind our plans because it was just tough to get into the plants to bring in the equipment we needed to get engineers in there. During the first part of 2022, you might recall Omicron hit, that we didn't really wanna put a lot of people into our plants. We had a lag both on productivity and pricing. Now in 2023, those are both tailwinds for us. We're seeing mid-single digit type inflation in 2023. We've seen nice relief in some categories on some input costs, things like chicken and beef, and some other proteins has been, you know, more favorable. Resin, which we use in our noosa cups, has been favorable. Freight rates, whether it's transatlantic or even domestic on shipping, have gotten much better. There's also been headwinds this year, primarily on agricultural products, so for us that's tomatoes, olive oil, glass as well, and some co-packers passing on costs. The net of all that, now as I mentioned, is called mid-single digit inflation across 2023. Pricing-wise, you know, we're very positive in the first half of the year. That'll mitigate in the back half. We've covered our inflation for 2023 with our pricing, and then our productivity that's gonna hit as well. We're calling for the ongoing margin expansion across 2023 versus 2022, as we saw in Q1. We feel good about the plans we have in place. Again, we're automating down at the plants that we run, two plants, which is roughly 35% of our volume. We're doing some value engineering on some packaging, taking some resin out where we can. We're actually taking more of Rao's, as Todd talked about, direct and taking out distributors, which is a big savings for us as well. Then we're doing a good amount, we will be across the year really looking at our logistics network. We've been a business that's been buying businesses and kinda cobbling them together. We really haven't gone deeply into either our frozen or ambient network optimization, which now we're doing now that we're a focused three brands. That's gonna reap beneficially across the year on miles and ports of entry and, you know, all kinds of cost savings we'll get from that as well. At the end of the year, we're feeling good about, you know, margin expansion this year, exiting back around 30% margins, and then growing beyond that in the next couple of years. Okay. On the tomato side, do these tomato prices kind of flow with what we see coming out of California, or are they decoupled because you're getting these more out of Italy? We do buy tomatoes out of California for our frozen Italian entrees. Okay. We have seen the inflation there. Now we're locked both on supply and price through the crop season, which really runs through the end of Q3. Yeah. We will re-up, getting into Q4. Which I think is like another 20%+ step up. Well, we'll see. Well, you know, we did incurred kind of this year versus last year's crop was, you know, in that range. Don't know yet where the new crop will come in. You know, there was drought in California that was causing the tomatoes to go up. Well, there's plenty of rain there now. Yeah. It's not exactly the perfect rain, exactly where you want it, so it's kind of a wait and see on this year's crop. Okay. Okay. Got it. We're covered through Q3. It's a lot of rain. Yeah. Living out there. A lot of snow pack out there too. The melt off. We'll see if that does more harm than good. Exactly. What's gonna happen there. That's right. You said 35% of your volume's running through your own network now? Yeah. We produce all of the frozen entrees, which is, you know, over in retail, $130 million-$140 million of retail sales. We self-produce, like, 98% of noosa yoghurt, which is, you know, nearly a couple hundred million of retail sales. We produce all that, two plants, one in Texas, one in Colorado. All of Rao's sauce and then the other than frozen entrées, soup, pasta, those are co-packed either in Italy or the US, in fact, some in Canada. That's roughly 65%-70% of our volume. How does that influence your acquisition agenda, if at all? It doesn't. 'Cause you're not looking to go find assets that you can utilize your network. It's not synergy driven. That's what... I mean, behind your question, 35%. You know, I think when you talk... Kind of the thing there, it's just the arithmetic of, hey, we happen to have acquired a yoghurt business where we own a manufacturing facility. We happen to have acquired a frozen entrée business which had a facility, and we decided to launch Rao's. Now the percentage of those two businesses of our total is 35%. Right. We just happen to have acquired these other brands, which are co-man. They've worked very well in a co-man, you know, environment. No, we are not of the mind that, "Hey, we've got to suddenly build our own facility and, like, bring it all in-house." I mean, we're agnostic to self or co-manufacturing. As we've been public about, our highest margin businesses are sauce business, which is co-manufactured. Where does M&A sit in terms of priorities for you? Well, I think as per your very first question, lower than it was three years ago. Yeah. I think you already I think you already kind of indirectly- Our number one priority is Rao's, you know, to $1 billion. Because of that, in the end of the day, there's a lot of categories that we are very interested in, but those categories, a lot of them, Rao's can play quite well in. You know, our capital, our resources are focused now of, you know, extending Rao's into those categories versus acquiring our way into those categories. That's why a little bit like, you know, are you a portfolio of one-of-a-kind brands? I mean, we're still launching into the categories. In one way, let's say we acquired a pizza business and acquired a soup business and acquired a dry pasta business, we would be looked at as being, like, highly acquisitive. We're still entering all of those categories. We're just leveraging an asset that we acquired in 2017 to launch there. From a multiple category standpoint, pretty similar. We're just deciding to use an asset that we acquired quite efficiently, you know, in 2017 versus spending capital to buy brands in each of those areas. From a scale, the fact that now, you know, our marketing dollars on Rao's efficiently are communicating to consumers the Rao's brand, which helps halo over all of those categories versus having a separate brand in each category. Yep. I think you kind of answered the other question of where else you can go when you describe this as you bought an Italian cuisine business. Effectively going to an Italian restaurant, look at the menu and, That's your menu to shop off of where you could potentially go. Perfect. Yeah. What are you saying? [Tiramisu]? Is that what you're leading us to? I hadn't thought about it, but that sounds okay. That sounds okay to me. Why not? Name that Italian cuisine. Any questions from the audience? Can you talk about your sales, geographically? Sure. Where it's weak, where it's strong. Absolutely. Among retailers, where it's strong and. Yep. Can you dig deeper into, like, white space opportunities just for the sauce business. Yep. maybe in the U.S. and outside? Perfect. Do you mind repeating the question real quick? The question is just, you know, geographic development of the sauce business. I'll just sum it up, you know, like that. Retail or geographic, though they're perfectly correlated, and then U.S. international. When we acquired the brand, really little to no share in the middle of the country. Very strong in the Northeast and initially very strong in California. They had, you know, early distribution at Safeway prior to our acquisition. As a matter of fact, when we acquired the brand, we had initial conversations that were, like, saying, "Well, there must be no awareness of the Rao's restaurant in the Midwest." I was like, "Look, outside of the finance industry and whether you're like Rod Gilbert for the New York Rangers, like, no one knows about Rao's restaurant in New York." There's, like, 0% awareness of the restaurant. It was all because, and it gets to your question, no distribution at Walmart, nothing at Costco, nothing at Sam's, little to nothing at Kroger. Hence, we weren't in, like, the Midwest, Great Lakes, you know, name that region in the middle of the country. We are now, from a banner development standpoint and retailers, the sauce is ubiquitous now. We're up mid-80%, I mean, approaching 90% of Rao's sauce. We're actually added, we even ALDI, Lidl, some unmeasured customers. We're in every region of Costco. From a development perspective, I mean, now we're ubiquitous. Just because of historically, our share is still the largest in the Northeast, second largest in California, and then we're lower, but that's only just because our distribution has been in those retailers that I mentioned the last four or five years versus maybe 15 years, you know, elsewhere. Our advertising now is national in scope, so we're driving... If you look at the gains that we're producing in all of those regions, ex- California and the Northeast, I mean, they're like very chunky. That's the U.S. International, I know some people don't call it international, but honestly, we're underdeveloped in Canada. We cannot keep it in stock when we ship it into some of the regions of Canada in Costco. You know, we're focused on Loblaw, Sobeys, et cetera. We have for the first time starting, it was Q4 last year, we hired a full-time, you know, business manager based in Canada, reports into, you know, our selling organization, and we're driving some really nice gains in Canada. Then we're focused on, you know, Caribbean, you know, Central America, some of those spaces, et cetera, some parts of, you know, Mexico. There is pull, there's retailers all around the world, they know about Rao's, but right now there's so much white space in the U.S. given our awareness, given our average number of items, given our geographic distribution, as you just pointed out, that our focus is one, two, and three on the on the U.S. and Canada. What's the difference between Northeast and California versus Midwest in terms of market share? In the Northeast, I'll just give you Northeast, it's about 20. In some of those parts in the U.S., I mean, we could be like high single digits, like 10, 12, 14. It sort of all depends. We're number one in the Northeast, number one in California, and number two or three in a variety of the other, you know, regions. Those regions in the middle of the country, those are also the fastest-growing. That's where we're picking up distribution, we're picking up households, and that's where the growth is accelerating. Good. Any other questions out there? Okay. For you. You have a follow-up? Sure. Yeah, no, keep it going. It's all you. Just out of these side businesses, how does that relate to your pasta business? In other words, does it, you know, once you sell a lot of pasta, the side business kicks in, or is this the, or is like, you know, there's different penetration rates notwithstanding the sales in the pasta? No, no, I mean, We're entering those categories and driving those categories, so they're correlated by the fact they all have the Rao's mark on the package. Clearly our pasta sauce business is the largest. We launched into dry pasta, into soup, into frozen. We're just focused on, you know, maximizing ACV, maximizing items per square, driving awareness. I mean, if you think we have, like, a 13% penetration of sauce, we have a 2% or less on each of the other, you know, three core categories, and we just launched into pizza. You know. Now if you're a user of pasta, you know, your likelihood of using one of the other categories is exponential. All the testing that we do, et cetera. We, you know, we touch the consumer in different ways through our, you know, our marketing plan. You know, we have very high expectations for all of these other categories. I think it was $130 million combined retail sales in those other categories. Now 20% of our business up close to 50% year-on-year growth. Can you talk about the stock sale and the relationship with the largest shareholder and what's the different stock sale? Well, I'll just mention the role. I mean, Advent's been in our. I mean, I founded the company with Advent. They've been a phenomenal business partner. They have three seats on our board. Then you can mention the headline on the. Yeah, you know, they, Advent's still majority stockholder, roughly 54% of the stock. We had done a follow-on about a year ago. Yep. This was kind of the second monetization action by Advent. Takes them down now below 50% ownership. You know, like Todd said, great partner, you know, very, very supportive and still a major shareholder, even after the follow we've just executed. Awesome. We're out of time, guys. Thank you so much. I really appreciate you guys joining us here on stage. I appreciate you being part of the conference. Thanks, everyone. Yeah, thank you. Congrats on a great story. Thank you. I appreciate it.