All right, thank you, and everybody, welcome to CL King's Twenty-Second Annual Best Ideas Conference. Happy to have Lancaster Colony's management team with us, CEO David Ciesinski, CFO Tom Pigott, and Dale Ganobsik, head of IR and VP of Finance. So thank you, gentlemen, and good afternoon. I wanted to start with a couple generic consumer questions that I think are top of mind for everybody. Really, you know, how do you view the consumer behavior right now? Is it different between the two channels you serve or kind of similar, just value seeking? And do you think it's kind of bottomed out over the summer? You know, there were some tough months, particularly for the restaurants in July or so. You know, certainly bottomed out.
Is there any green shoots that maybe, you know, the consumers might be feeling better, either with the political cycle maybe coming to an end or gas prices being better? What, what's your take on the consumer at this time?
You know, I would say, Andrew, that the consumer is straining but not breaking, and I think it's particularly true with the lower income consumer, where the strain is probably most acute. As you move up to the middle income consumer, they too are feeling some impact of strain, but maybe slightly less so. And among more affluent consumers, I think they're certainly cognizant of the broader strain, but I don't think they're necessarily modifying their behavior in a material way, and I think with that as a backdrop, it's playing out across both retail and in food service. I think the single unifying theme is that consumers are looking for value.
After four or five years of inflation outpacing their wage growth, consumers, particularly in the lower income stratas, found themselves upside down, and initially they looked to bridge that gap by leaning into things like COVID savings. As COVID savings became somewhat depleted, they might have started to lean into credit cards, and as credit card balances grew and interest rates grew, I think they started to finally have to begin to reconciling with their, their behavior, right? And what we're seeing now is consumers are, are slowing down in some of their expenditures, both for food, but also for some of the experiences that they spent on post-COVID. As you look closer at our, our business, you know, what you're seeing is on the retail side, consumers are trading down from traditional grocery to mass.
And then some consumers are starting to look at moving over to private label selectively as well. On the food service side of the equation, full-service restaurants and QSR are both under some pressure, with traffic declining modestly, with full-service restaurants declining slightly more than quick-service restaurants. So. And as far as what is it that's going to change this, you know, I don't see a magic bullet. I don't think rates coming down are necessarily gonna result in a material shift. I think it's gonna take some time for consumers, one, to change their behavior, so sources and uses begin to rebalance, and then secondarily, a couple of years of wage growth hopefully outpacing inflation, for them to feel like they're on more solid footing. So I think it's like I said, they're under strain, but they're not breaking.
We've certainly seen periods of time, if you go back to the financial crisis, that were much worse than this. I would say I would juxtapose this with, on the flip side, there's far more, I would say, visibility to what's happening in the business than we've had over the last few years. Bearing in mind, we went through all of the uncertainty with COVID and its various stages, and then the supply chain disruptions and inflation. Our business alone had two years, in 2022 and 2023, where inflation was more than 20% each year on raw materials and packaging. All of that for us now is normalized. Our demand is normalized, which is making it considerably easier to run the business. Our labor situation has normalized, where it's...
Our turnover has dropped back down closer to historical levels, and it's getting easier for us to operate the business efficiently. So it's not, you know, what I would tell you, it's not a bad situation. It's a challenging situation. And in a world where we went through periods, you might have been the beneficiary of a minimum growth, where consumers had more money to spend, and you could enjoy that. Now, any growth that's gonna be had in the space, I think it's gonna be coming by way of execution: execution on new items, execution on marketing programs, and things like that.
So for those of us internally on the call here, whether it's Tom and finance team or whether it's Dale, you know, we're telling our teams this is the sort of year where it really comes down to executing, executing on new items and getting them out the door, executing on supply chain savings programs. You know, you get the gist here, right? Don't look for momentum. It's all about execution.
Wow, the great answer, and
Well, thank you.
... appreciate it. Yeah, no, good to get a straight answer. Maybe on the competitive environment, you know, you'll like, the way I'm looking at it, particularly in grocery-
Yeah
... you know, you got Walmart out there, has to make a price statement. That's their-
Yeah.
I mean, they can do a lot of things well, but that's their number one go-to-market. That's who they are. That's what they're known for. So you have two different ways that I think of whatever you want to call out, call it competitive environment, other manufacturers and private label and substitutes, but then, you know, just your channels. I mean, that includes private label, but who you're selling into and they're trying to make a stand, push back, or do they want value engineering to get the price points down? Just, I'd love to know how the channel, almost the channel relations are more than, you know, what's P&G up to or something, you know?
Yeah. So, you know, I, maybe what I'll do, Andrew, if you'll allow me, is just focus on the conversations we're having with most of these retailers.
Yeah, maybe-
You know, it's when you're going and you're meeting with a merchant. Usually they're gonna wanna hear about your innovation plans, and in the absence of that, they wanna know what you're gonna do with things like promotions and price cuts to drive traffic. Fortunately, we've had a really rich portfolio of new items, which allows our conversations with them to be very constructive and focused on new items. Whether it's the items that I talked about in Q4, you know, we had I believe 14 new items we launched in the last fiscal year that are carrying over into this year, and in our fiscal year 2025, we actually have a stronger stack of new items than we did last year, including the launch of gluten-free Texas Toast that we're very excited about. Our retailers are excited about.
Texas Roadhouse rolls, and rolling those out, if you allow me the double use of the word roll nationally, and a range of other things that we have going on. So I would tell you that when we're meeting with Walmart and Kroger and others, price isn't the first thing that comes up. They're really excited about our new items and asking us, "How can we get these items faster into the marketplace? What can we do with you to drive more trial?" When pricing, you know, does come up, you know, what we're hearing is we're looking at categories, and we're asking ourselves questions together. How do we feel about promoted price points? How do we feel about absolute price points? But they're not antagonistic, and they're not pushing us to roll prices back.
In some cases, we'll look at the data together, and we'll decide there might be a mutual vested interest in adjusting a price point. The example I've given, I know I've shared with you in the past, is in our 16-ounce Olive Garden size, where we could look along with Walmart and see that if prices went above that $4 price point, we would lose consumers that were value-seeking. We said we would invest to get below that $4 on that price point, and they said, "If you're gonna invest, we'll invest with you and give you incremental merchandise," and stuff. I would describe those as constructive conversations between two parties that are trying to figure out how they navigate this environment and seek out win-wins. That, as an item, has worked out as a win-win for all of us.
It isn't, at least in our case, it hasn't been antagonistic at all, but I think I would point to the fact that we have a strong portfolio of new items that helps that. On the food service side, as you know as well as anybody, maybe better, that we ... It's a cost-plus program where we mark-to-market on our pricing once a quarter. Most of those operators that buy sauces have been beneficiaries of soybean oil coming backwards, and you've seen that in some of the data that we've talked about recently. You know, we're gonna expect to see that moderate in 2025. We don't expect to see those moving back quite as much because the gains that we're... or the reductions we're seeing in soybean oil are being offset by increases in eggs and dairy.
So we expect commodities to be closer to flat, which I think they're grateful for, because I think it's food service in particular that's struggling more under the weight of price increases, where they've seen their traffic slow down. But overall, I think it's we're fact-based, they're fact-based, and we try to figure out what we can do collectively to grow business and make sure we're providing the appropriate level of value to our consumers. It's. They've been good conversations.
And just also, how about direct competition with other manufacturers? When you've described the business, the way you wanna do it is, you know, be narrow but deep, so that you can have the same economies of scale just in that, essentially, certainly in production-
Yeah. Yeah
... and maybe other areas in your chosen categories. But do you have enough firepower if it gets really promotional, or does that also... You know, where you think, you know, a big manufacturer may be able to allocate, you know, "We'll got a cash cow here. We got a, you know, et cetera. We can really invest in this." What's your take on... It sounds like the market's not there at this juncture, but if it were to get there, how you would-
Yeah
... do that?
You know, I think I would characterize our competitors as rational, and it may make sense to kind of click on them one at a time. If you look at our Texas Toast category, you know, private labels emerged as our single biggest competitor, as Pepperidge Farm and Cole's have both given up share. So we've picked up the branded share in the category, and private label has grown, but I would say behavior's been very rational, and nobody has been overly aggressive pricing because we all went through the years of inflation, and we're looking to recoup and stabilize our margins. You move around from Texas Toast to Sister Schubert's and our roll business. Here again, you know, Rhodes is a private competitor, and then we have private label, which is a smaller piece of the business. Again, things have been rational.
Moving to refrigerated dressing, it's an interesting category because here, private label doesn't really have much of a share. It's in the very low single- digits. Our competitors of Litehouse, and Bolthouse, and Marie's have all been somewhat rational, which is fortunate. As we move from refrigerated dressing, then into... Let's see, I'm moving in my mind here to, let's call it our licensed sauces. Here, I think we're beneficiaries to the fact that we have pretty unique items with unique flavor profiles... and not a natural knockoff. Now, Kroger and Walmart have both introduced knockoffs, but they haven't done terribly well. And given that they are sufficiently unique, we don't feel like we're naturally susceptible to more aggressive behavior.
I think if we were in the battle of things that were more, you know, branded but had a standard of identity, I think you might be more susceptible to that sort of competition. Some of the big guys, like Kraft Heinz, I know have been getting a little bit more aggressive on their promoted price points, but most of what they do doesn't necessarily bounce against us into the marketplace. Where Unilever, to get aggressive on mayo, really doesn't impact our proposition on Chick-fil-A sauce, for example. So, we feel like we're sufficiently isolated there that... What we look at is the consumer. As goes the consumer and their propensity to spend, goes our business. So we watch our competitors, but we're gonna watch our consumers even more closely.
Okay, so let's segue to your June quarter, your fiscal Q4, your outlook-
Yeah
... for the coming year. You know, there was, if you adjust it for divested businesses and deflation, you know, you had decent volume growth in both segments.
Yeah.
Actually, decent and 1% plus in grocery and I think better in, a lot better in-
Yeah
... food service. But that's... So is that what you're talking about? It's gonna be sort of that's the base... You know, I'm not guiding-wise, but just-
Yeah
... not, you know, not the heydays when you were, you know, mid-single-digit volume because, you know, everything was selling. But if you got something to sell, you can get some volume, if you've got some innovation. And otherwise-
Yeah
... consumer's probably gonna look something cheaper.
Yeah, I would say in this environment, what we shared at that for our Q4 results in August, I think remains true today, that we continue to see volume growth in the low single-digit range, and we see the ability to lever that with productivity to get mid-single digits on the operating income line. And, you know, the way we get there is, I would say, the retail business in particular with the strained consumer is low single-digit. And even with our new items, I really strain to see something that would give us the confidence to say that we're a mid-single-digit business there. If you look at the food service side here, I think the outlook has shifted a little bit.
If you went back, let's say, to the spring, we were feeling more bullish about a mid-single digit business. But now that the consumer is demonstrating a propensity to pull back away from home a little bit more, we still see line of sight to low single digit growth, but we don't quite have the confidence to say mid-single digit there. So you put it all together, we're still holding to that low single digit outlook. And it kind of gets back to where I started, Andrew, where I said, "You know, there's two forms of growth, simply stated. There's momentum growth, and there's execution growth." And I think we're living in a point in time where the growth that anybody that plays in packaged goods is gonna generate is gonna come by virtue of just execution.
Great consumer insight, great product, good execution, getting it on the shelf at the right price point. Nobody's gonna save us from ourselves. We just gotta do the work and execute.
Dave, that's... We're talking volume now, but you don't, what are the-
Yeah
... what do you think about in terms of pricing?
Yeah, we're not assuming that price is neither a good guy nor a bad guy for us in this environment, so kind of gets back to execution for that matter, right? It's strictly volumetric growth.
When if commodities are up 1%, pricing's up 1%, that kind of thing? Just sort of a-
Well-
... if not-
... if commodities are up 1%, we don't necessarily think that we're gonna be able to get a point of price through. Now, if it's in food service, and it's mark-to-market on commodities, there I think we could be able to move that through. But what we're seeing right now is that the benefit from pullbacks on things like soybean oil and wheat are being offset by increases in eggs and dairy, and modest packaging increases. So commodities, as a class in and of themselves, are flat. We're seeing wages growing, let's say 3%-ish, somewhere in that range, which is much better than they were a couple of years ago, and turnover stabilizing as well.
In that sort of environment, both retail operators and our food service operators expect us to offset that sort of a headwind in the context of our COGS with our own productivity program, so a long answer to, if we have a point of inflation coming into the business that's kind of odds and sods, we're gonna need to figure out how we lean into productivity to offset that, and we see line of sight to doing that.
Let's switch to that. You have been talking, even when, you know, there was more momentum externally about supply chain savings, whether it's value engineering or other things. You know, where, what is kind of gonna be a big driver of helping to close any gaps between, you know, ingredients, cost inflation, and, you know, whatever pricing you... the gap? Because if you're not gonna fully get it on price-
Sure
... what are you looking at this year, as you think about, you know, we're gonna be able to drive margin anyways, because of which initiatives are really front and center?
Maybe this is a good chance for me to catch my break, and I'll turn it over to my partner here, Tom.
Absolutely.
Tom, I'll let you-
... So I would say this year, we feel very good about the pipeline. There's a number of key initiatives. I think one is around factory automation, and that's in our dough network, where I think in the earnings call, we said our margin growth would be a little bit more back-end loaded because in the early part of the fiscal year, we're taking some of these facilities down and putting in newer equipment, faster equipment, that's gonna allow us to reduce our labor costs. So that's one aspect of it. There's just an ongoing cost savings initiatives, where there are a number of projects. We use Lean Six Sigma. That's always been part of our program.
But some of the things that are new is we have the benefit of SAP, and so we're able to see our waste numbers much better and target some initiatives there that we think will accelerate our cost savings this year. The other piece we're able to do with SAP is we're able to manage our production from plant to plant much easier. Previously, we used a series of Excel spreadsheets to move production around. Now, we've got the integrated system, so that should help us. We have value engineering, where we're kind of in our second year of this now, where we're looking to reduce packaging costs, something we've reformulated against out of some high expensive, higher-cost ingredients. So that's another key tenant to the program.
So I think this year, more so than in other years, I think we feel like with Luis Viso being in position for over a year, we're well positioned to drive some cost savings. And when you look at it, last year we grew our gross margins 180 basis points, and a lot of that was driven by favorable commodities relative to our pricing or PNOC favorability. As you get into next year, it's really, as Dave articulated, it's really gonna be about cost savings. So we feel like we're gonna continue to grow our margins with this program. We haven't put specific numbers out there, but as Dave articulated, we're targeting to get to mid-single digits on the operating income line, in part driven by this productivity program.
When, you know, you mentioned, Tom, bringing down lines and, you know, just taking them offline and putting in better equipment faster. How does that production get done? Is it... Do you need a co-packer?
Typically, what you will do is, if you can, you do a build before you take down the line. So we're building up inventory in the frozen. You've got the shelf life on frozen inventory to be able to facilitate that. So that's essentially what we've done. We've built inventory, we take the lines down, and then we bring them back up.
Okay, so it's not like you're... So financially, the cost burden will be the carrying cost of some extra inventory, not some-
As we make the transition. Yeah.
Both accurate margin or something like that.
The other thing, you know, Andrew, as long as we're on cost savings, the other thing I want to add is that there's some longer-term initiatives that we're focused in on around our manufacturing network. We still make salad dressings in Silicon Valley in an old facility there that we think over time, we might be able to optimize out of with the right pieces in place. And there are a couple other facilities in the network that you know, we're looking at different strategies to maybe an acquisition of another facility or other ways or maybe a greenfield. But we're progressing at a faster pace on that now that SAP is done, to really look at this network and try to optimize it that way.
That's not necessarily a big bang in fiscal 2025 for savings, but that's a longer-term pipeline of productivity that we still haven't, we still have an opportunity to get after.
So, is that something along the lines of a Horse Cave facility, where it's just this is a whole different order of-
Yeah, I mean-
... productivity and-
Mm-hmm.
Is that conceptually what you're talking about?
When you look at our cost per pound and our bottles per minute. I don't know, Dave. Do you want to share some of the-
Yeah
... yeah-
Um
the strategy there?
Sure.
But there's a lot of opportunity.
And maybe I'll even back up a little bit, Andrew. If you remember about three years ago, maybe four years ago, we had Bain & Company in, and they, as we were starting to experience really rapid growth in bottled sauces behind licensing, and you remember we had gone out with Olive Garden, but we quickly added to that Buffalo Wild Wings and then Chick-fil-A sauce, and our whole license portfolio started to take off. We engaged them to help us put together a network blueprint that we could drive our growth towards over a period of time. So we've sort of had this as an aspirational roadmap in the background. And what Tom is talking about now is really just effectuating that growth towards that aspirational roadmap, and it means taking...
You're looking at older facilities that might be in the wrong location geographically, where the cost of shipping ingredients out to manufacture and the cost of shipping the finished product back to the marketplace, and just their configuration puts them at a significant cost disadvantage on a per-pound basis. That's the sort of work that we're doing, where we're looking at the network and figuring out, "Hey, look, if we move production from this environment to an environment over here," either because we buy a brownfield or we build something else, or we increase capacity in one of our existing facilities, for example, we see line of sight to being enabled to significantly reduce our cost per pound.
Like, some of the metrics that we look at in addition to cost per pound are bottles per minute, and we have a lot of assets now that are very, very rapid. They're state-of-the-art. This gets to that notion of focus scale that you mentioned or you alluded to earlier in the conversation. We have some older other assets that are right out of Willy Wonka that move quite a bit slower. So, and I think what Tom is speaking to, as we move into this period of time where it comes down to execution growth, on the top line, we're focused on innovation and potentially licensing and acquisitions as a means by which to deliver outpaced growth.
On the bottom line, it's figuring out how do we leverage productivity projects and streamlining activity to step change our manufacturing footprint and make it more efficient, so we can sell more and earn more at the same time? And that's really, I, I think, kind of an exciting feature of where we are. If I, if you allow me to kind of go back and kind of do a where have we been, where are we now, and where do we wanna go, it's hard to believe, but we've been working together, a lot of us... I, I joined the company in, in late fiscal year 2016. And really, in 2017, 2018, we put together a better food company strategy and our operating model, and we started to put together a productivity program.
And then in 2019, like everybody else, we were right into 2019 and 2020, into COVID. We continued to grow during that period, but we had the uncertainty of COVID, and during that backdrop, we used it as a means by which to put in SAP and increase our capacity. But now, we're entering into a phase with SAP behind us and that big capacity project behind us, where we feel like we can leverage our team and our balance sheet really to focus on, again, innovating, expanding licensing, selectively considering acquisitions, and importantly, getting more aggressive in streamlining our manufacturing footprint. We think there's line of sight to improve our margin structure. We're not necessarily ready to make hard commitments right now, but if you look at our business, we see line of sight to improving things, and I think this is where Tom's going.
Mm-hmm.
We look forward to using this next couple of years to really grow the top line, but also figure out how we wring out more profit and productivity on the bottom line.
So, how on the latter, how is-
Mm-hmm
... the Horse Cave ROI versus, you know, what you hoped to get, the expectations?
No, it's been really strong.
Best scenario where... Yeah.
It absolutely has worked. And just one of the questions that I think we sort of conceptually talked about upfront is, you know, how are we at capacity at Horse Cave? What I'm pleased to share is actually we've taken Horse Cave, and we've largely loaded that place up. Because it's able to achieve a cost per pound that's better than other places in our network, and so we're basically pulling volume out of less productive facilities, and we're moving it into that facility. And that's given us some of the room to maneuver, to begin to think about, okay, now with some of these other sites, how might we think about these on a longer term basis? Are these, you know, potential candidates to close or potential candidates for consolidation?
But the Horse Cave facility, and it was a major lift, it's up and running, and we're pleased with progress.
Now, did you need the SAP to get the right standardized costs, or was that already in place? Does that improve standardized costs?
Yeah, we-
Like understanding it, you know.
Yeah, no, Andrew, that's an excellent question. I could go on for a while on that, but boy, we made a huge step forward with SAP in understanding our costs and having standard costs and understanding variances and being able to move our inventory, track our inventory. A lot of that, understanding our waste.
Yeah
... there's a lot of benefits, and this, you know, it doesn't all come at once. But we are starting to get after some of these initiatives and add initiatives as we learn more, in terms of optimizing our cost profile.
Andrew, maybe what I would build-
Yeah
... they're standardizing cost information, then they're standardizing our ways of working, and what we're also using this opportunity to do is standardizing our ways of working across each of our different factories, so where we run a 24-up Hosokawa machine, for example, that makes Chick-fil-A sauce, making sure we use the same SOP in each of these locations, or the bigger version of that, a 36-up. Again, a standardized SOP. The way we do our sanitation, the way we do maintenance, the way we do changeovers, all of that, I think, is geared towards helping us operate more efficiently, and the information that we get from SAP is informing us on a couple things: one, are we doing it? And then two, are we seeing the cost savings come from that?
Great. We have a few minutes left. Could you just tell us what's in store for this fiscal year in licensing? It's amazing, I wa- I waited on licensing till the end of the meeting. Usually, you know, that's sort of topic one, two, and three, but you have- you've brought it up, and you've had a lot of success. Obviously, there's new relationships this year, and then extended-
Yeah
... relationships, so-
Yeah
... some interesting things going on.
Sure. So we think the item that we talked about we're really excited about that's right before us is extending the relationship with Texas Roadhouse to their iconic rolls with the honey cinnamon spread. Those have been in test for the last several months in Ohio, Indiana, and Kentucky, where they've done exceptionally well. We got the green light from Texas Roadhouse to expand that nationally, so we're shipping it to Walmarts nationally now. It's gonna go into 4,000 stores, and then we expect later this winter, during the resets, to go into the rest of retail as well. So that's an item that we're very, very excited about. As you recall, last year, we did a test in one of the distribution centers or regions of Costco with Buffalo Wild Wings dips that did well.
We're gonna be expanding that with three different items into all retail, which we're excited about. We have a stack of new items that we're not ready to share quite yet with Chick-fil-A, but there's gonna be some exciting news that we have going on with them, and then just continuing to push the items that we launched last year. You know, some of these that have been just quiet success stories, like Olive Garden Caesar and Olive Garden Balsamic, that continue to round out that proposition, and new flavors with Buffalo Wild Wings, so there, there's a lot of activity. Last year, in 2024, nearly all of our innovation came by way of licensing.
This year, you can expect to see two-thirds of our innovation focused on licensing and about one-third focused on our own brands, namely Texas Toast and then, some of the new items that we're launching with Marzetti.
Texas Toast is gluten-free, and
That's right. Fantastic item.
What's coming up with Marzetti? Have you announced that to the market yet?
So yeah, we have. We launched just in the spring a new range of dips, some new flavors, a jalapeño dip, and a garlic parmesan dip that are both fantastic, and two new flavors of dressings with our classic lineup. So those are coming into the marketplace, and Sister Schubert's, one of the items that we continue to have requests for, we haven't quite squared the circle, is bringing back that sausage roll, but that's work we're doing on it.
Sounds nice. I think I'm getting hungry. We are at the one-minute warning, but I do wanna ask about M&A. I think you've articulated, you know, pretty focused strategy. Could you just give us a sense of, I guess, pretty quickly, in 30 seconds or so, you know, how likely you are to do a deal sometime in the next couple of years, given the focus? I mean, you know...
Why don't I... I'll start with the first part of the answer and then turn it to Tom. And from a process perspective, I feel like we've arrived at a point where we're ready to entertain M&A, but you can expect us to take a very disciplined view and run the IRRs and the NPVs to make sure they're good economic returns. Now, in terms of what we're looking at-
Yeah
... I'll turn it over to Tom, and he can talk about that.
Yes, so there, Andrew, we've talked, it's a focused strategy. There are two pillars to it. One is retail, dressings and sauces, dips, things that play into our core competencies. And then, on the manufacturing facility side, if we can find a facility that will enable us to implement the strategy we talked about, we would go ahead and execute on that. I think we will be doing something. I can't give you a time. I can't tell you, but what I can tell you is that-
Yeah, no, I understand.
... we're gonna stay disciplined. We are gonna stay disciplined. So if we get value for shareholders, we'll do it, but we're not gonna pay crazy multiples of revenue to get some more growth. What's nice about this business is we have some built-in growth drivers that continue to fuel it. While we know we have a lot of nice capabilities we'd like to lever through M&A, it's not required for us. So that's how we think about it, but we are definitely, you know, pursuing it, I would say.
Yep.
All right, since we're in overtime, I have one more question, related to this.
Bonus round. Bonus.
Would you look at a mature brand that maybe isn't growing much so the valuation's a little more, you know, palatable? And do you think you have enough of a core competency that if the brand still has a fair amount of equity, maybe it's been ignored or just not... that you know that you can bring what you bring to the table on the innovation side and maybe put, you know, growth back into a brand like that?
I think we would under select circumstances, but that wouldn't be necessarily the first place we'd go.
Yeah.
But I... There are a couple of scenarios that we won't get into where we might source a certain type of ingredient that has a brand tied to it, that by buying said brand, it would give us the ability to source that ingredient at the ability to generate cost synergies, if you're following me. And then secondarily, we could think about growing that brand. But I think we've tended to shy away from fixer-uppers, because if things aren't growing, given our current financial algorithm, it's likely not necessarily to help us in our multiple if we're buying assets that are shrinking.
Yeah, Dave has an expression, "Let's not try to catch a falling knife.
Yeah.
That's how we look at it.
Okay.
Yeah.
But if it's catchable-
Yeah
... maybe we would, but
Yeah, and there are others, I mean, that we look at.
Seems a good answer. That's what we're look-
Yeah
... we're looking at, but-
I mean, there are a lot of guys-
Very insightful. Well, thank-
... out there like, like Post, that do an amazing job of that, right? But their strategy is just fundamentally a little different than ours is.
Great. Well, really interesting conversation. Appreciate it as always, and, Dave, and Tom, and Dale, thank you very much, and, have a good rest of your afternoon, and thanks to everyone else who is listening online or-
Thank you.
Thank you, Andrew.
... on the webcast. Thank you all.
Appreciate it.
Take care.
Bye now.