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Operator: Good day, and welcome to the B&G Foods, Inc. First Quarter 2026 Financial Results Conference Call. Today’s call, which is being recorded, is scheduled to last about 1 hour, including remarks by B&G Foods management and the question-and-answer session. I would now like to turn the call over to AJ Schwabe, Senior Associate, Corporate Strategy and Business Development for B&G Foods. AJ, please go ahead.

AJ Schwabe: Good afternoon, and thank you for joining us. With me today are Casey Keller, our Chief Executive Officer; and Bruce Wacha, our Chief Financial Officer. You can access detailed financial information on the quarter in the earnings release we issued today, which is available at the Investor Relations section of bgfoods.com. Before we begin our formal remarks, I need to remind everyone that part of the discussion today includes forward-looking statements. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. We refer you to B&G Foods’ most recent annual report on Form 10-K and subsequent SEC filings for a more detailed discussion of the risks that could impact our company’s future operating results and financial condition.

B&G Foods undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We will also be making references on today’s call to the non-GAAP financial measures, adjusted EBITDA, segment adjusted EBITDA, adjusted net income, adjusted diluted earnings per share, adjusted gross profit, adjusted gross profit percentage, base business net sales and segment adjusted expenses. Reconciliations of these financial measures to the most directly comparable GAAP financial measures are provided in today’s earnings release. Casey will begin the call with opening remarks and discuss various factors that affected our results, selected business highlights and his thoughts concerning the outlook for the remainder of fiscal 2026 and beyond.

Bruce will then discuss our financial results for the first quarter of 2026 and our revised guidance for fiscal 2026. I would now like to turn the call over to Casey.

Kenneth Keller: Good afternoon. Thank you, AJ, and thank you for joining us today for our first quarter 2026 earnings call. Today, I will cover an update on our portfolio reshaping, including the recent divestiture and acquisition, an overview of first quarter performance, Bruce will cover more detailed financial results; and finally, the outlook for fiscal year 2026. Portfolio divestitures. The first quarter witnessed major progress in our efforts to reshape the B&G Foods portfolio. We completed the divestiture of the Green Giant U.S. frozen business to Seneca Foods Corporation on March 2. This is the largest piece in our portfolio transformation that is resulting in stronger focus, simplification, greater synergies and higher margins across the B&G Foods portfolio.

The first quarter includes the final 2 months of the Green Giant U.S. Frozen business within B&G. In addition, we completed the acquisition of the College Inn and Kitchen Basics broth and stock businesses from Del Monte Foods on March 19. These key brands are a much stronger fit with our current shelf-stable portfolio and play in a growing category that is driven by the expansion of the fresh store perimeter. The impact of these two transactions will create positive EBITDA and higher margins on our portfolio, replacing the low-margin Green Giant U.S. frozen business with a more profitable and stable broth and stock business. These transactions were also critical in reducing our pro forma net leverage ratio in Q1 to almost 6x. Further, we previously announced the divestiture of Green Giant Canada, the final component of the Green Giant divestitures.

That transaction requires Canadian regulatory approval and remains under review. Subject to regulatory approval and other customary closing conditions, we expect to close during Q2 of fiscal year ’26. Q1 results. The first quarter demonstrated significant improvement in base business net sales trends relative to a lower Q1 in fiscal year ’25, impacted by some trade inventory reductions. Quarter one base business net sales grew plus 2.8% versus last year. Some of the key drivers. The Spices & Flavor Solutions business unit grew Q1 net sales plus 9.1% versus last year, benefiting from the growth in fresh food and proteins as well as strength in the club and foodservice channels. Segment adjusted EBITDA was up plus 13.1% versus quarter one fiscal year ’25 behind strong volume and pricing growth.

The Frozen & Vegetables business unit in the first 2 months of Q1 delivered a recovery in segment adjusted EBITDA from a net loss in segment adjusted EBITDA in Q1 last year behind higher volumes, lower trade spend and lower manufacturing costs. Quarter one continued to benefit from the implementation of our cost savings and restructuring initiatives. Unallocated central overheads were down almost $2 million from last year. We will continue to remove direct costs associated with the Green Giant business and restructure central costs to reflect divestitures. Fiscal year ’26 outlook. The updated guidance range for fiscal year ’26 is increased to $1.735 billion to $1.775 billion in net sales and $275 million to $290 million in adjusted EBITDA. The key assumptions.

The current outlook for fiscal year ’26 reflects the addition of the College Inn and Kitchen Basics brands. The impact of the Green Giant U.S. Frozen divesture was built into our previous guidance as well as the year-over-year impact of the Don Pepino and Le Sueur U.S. divestitures in fiscal year ’25. We expect fiscal year ’26 base business and net sales trends on the remaining core meals, Spices & Flavor Solutions and specialty businesses to modestly improve versus last year. Quarter one trends were a strong start for the year against a lower base in quarter one fiscal year ’25, but are expected to be flat to slightly down for the remainder of fiscal year ’26, recognizing the impact of the 53rd week in quarter four of fiscal year ’25. A key financial risk we are watching closely is the price of oil, which impacts both transportation costs and the price of soybean oil given its market relationship to biofuels.

We expect these costs to come down from current highs but remain elevated year-over-year. If oil and fuel costs continue at high levels, we will evaluate pricing actions to cover significantly higher input costs. Finally, the pending divestiture of Green Giant Canada has not been reflected in our guidance. We will update fiscal year ’26 guidance when that transaction closes, but expect the divestiture of Green Giant Canada to be relatively neutral from an adjusted EBITDA impact. Looking forward, fiscal year ’26 is poised to be a transformational year with a more focused, higher-margin and stable portfolio once divestitures and closing transition services have been completed. We expect continued improvement in base business net sales trends towards the long-term algorithm of 1%.

Further, we will also become a less complex, more efficient and leaner company behind a simplified portfolio, restructuring operations to rightsize overheads and focus resources and investment behind the core categories and brands in spices and seasonings, meals and baking staples. Thank you, and I will now turn the call over to Bruce for more detail on the quarterly performance and outlook for the remainder of fiscal 2026.

Bruce Wacha: Thank you, Casey. Good afternoon, everyone. Thank you for joining us today. As we highlighted on our last call, we had a fast start to the year. Our financial performance was very strong in January as we lap prior year inventory destockings, and we then demonstrated continued momentum in the business throughout the remainder of the quarter, particularly within our Spices & Flavor Solutions business unit. Meanwhile, we remained active on the M&A front with the divestiture of our Green Giant U.S. frozen business and the establishment of our Green Giant U.S. frozen contract manufacturing business at our frozen vegetable manufacturing facility in Mexico with about a month to go in the quarter. And then the closing of our acquisition of the College Inn and Kitchen Basics broth and stocks business with about 2 weeks to go in the quarter.

I will provide more details on the transactions later in the call, but in effect, we used the net proceeds from the divestiture of the marginally profitable Green Giant U.S. frozen business to partially fund the acquisition of the more profitable College Inn and Kitchen Basics business. And we are very pleased with our divestiture and acquisition counterparts on both of these transactions. I’m happy to report that both transitions are proceeding relatively smoothly. As we review our first quarter 2026 results, we will highlight the comparative differences that result from this 2026 activity as well as from the divestitures of the Don Pepino and Le Sueur brands, which we own for only parts of fiscal 2025. Because the divestiture of Green Giant Canada has not yet closed, there was no impact to our net sales or adjusted EBITDA.

However, because Green Giant Canada is classified as an asset held for sale for accounting purposes, the pending divestiture does impact how the Green Giant Canada assets are carried on our balance sheet and within certain line items of our P&L. For the first quarter of 2026, we generated $408.9 million in net sales, a net loss of $32.5 million or $0.41 per diluted share, adjusted net income of $6.8 million or $0.08 per adjusted diluted share, adjusted EBITDA of $57.6 million and adjusted EBITDA as a percentage of net sales of 14.1%. The company’s net loss for the first quarter was primarily attributable to a $36.3 million noncash loss on sale of assets, a $5.8 million noncash loss on disposals and impairment of PP&E as well as certain acquisition divestiture-related and nonrecurring expenses.

Details regarding the impairments and other adjustments are included in our earnings release issued today and our 10-Q that will be filed later this week. Net sales for the first quarter of 2026 decreased by $16.5 million or 3.9% to $408.9 million from $425.4 million for the first quarter of 2025. The decrease was primarily attributable to the Green Giant U.S. Frozen, Le Sueur U.S. and Don Pepino divestitures, partially offset by an increase in base business net sales, 1 month of net sales from the contract manufacturing agreement the company entered into on March 2, 2026, with the acquirer of the Green Giant U.S. frozen business and a partial month of net sales for the College Inn and Kitchen Basics brands. Net sales of our Green Giant U.S. frozen business, which we owned for only 2 months during the first quarter of 2026, contributed $27.2 million less net sales during the first quarter of 2026 compared to the first quarter of 2025.

Net sales of the Don Pepino and Le Sueur businesses, which we divested in 2025 and are therefore not part of our first quarter 2026 results were $10.6 million during the first quarter of 2025. Partially offsetting the impact of these divestitures were 1 month of sales for the new Green Giant U.S. frozen contract manufacturing agreement, which contributed $8.5 million of net sales in the first quarter of 2026 and a partial month of net sales for the College Inn and Kitchen Basic brands acquired on March 19, 2026, which contributed $2.9 million to the company’s net sales for the first quarter of 2026. Base business net sales for the first quarter of 2026 increased by $9.9 million or 2.8% to $365.1 million as compared to $355.2 million for the first quarter of 2025.

The increase in base business net sales was driven by increases in volume that contributed $6.6 million or 1.9%, an increase in net pricing and the impact of product mix of $1.6 million or 0.5% and the impact of foreign currency of $1.7 million or 0.5 percentage points. Gross profit was $79.9 million for the first quarter of 2026 or 19.5% of net sales and adjusted gross profit was $84.6 million or 20.7% of net sales. Gross profit was $90.1 million for the first quarter of 2025 or 21.2% of net sales, and adjusted gross profit was $90.6 million or 21.3% of net sales. The first quarter of 2026 marked a somewhat different story than our experiences in 2025. Today, we are seeing resiliency in our volumes with modest recovery in many of our brands as compared to the more negative sales trends that we experienced in 2025.

Across our internal manufacturing network, our factory employees are working hard with seven of our 10 internal manufacturing facilities increasing output during the first quarter of 2026 when compared to 2025 volumes. Additionally, two of the three facilities that did not increase year-over-year volumes during the first quarter are currently ahead of our budget volumes for those factories for the year-to-date period. However, input costs, which excluding the impact of tariffs were largely benign in 2025, are beginning to show some signs of inflationary pressure in recent months. We will be watching these trends for any signs of sustained inflationary pressures and when appropriate, we will consider implementing pricing actions to protect our profitability.

Selling, general and administrative expenses increased by $1.1 million or 2.2% to $50.2 million for the first quarter of 2026 from $49.1 million for the first quarter of 2025. The increase was comprised of an increase in acquisition, divestiture-related and nonrecurring expenses of $6.4 million, inclusive of an increase of $1.9 million for disposals and impairments of PP&E, partially offset by decreases in general and administrative expenses of $3.9 million and warehousing expenses of $1.4 million. Expressed as a percentage of net sales, selling, general and administrative expenses increased by 0.7 percentage points to 12.3% for the first quarter of 2026 as compared to 11.6% for the first quarter of 2025. We are following these costs closely, and we are proactively taking steps to reduce our ongoing SG&A commitments to better reflect the size of our business going forward as we work to minimize the impact of any stranded costs on our ongoing overhead structure due to the impact of the recent divestitures.

We generated $57.6 million in adjusted EBITDA or 14.1% of net sales in the first quarter of 2026 compared to $59.1 million or 13.9% in the first quarter of 2025. The Le Sueur, U.S. and Don Pepino businesses contributed nearly $1 million to segment adjusted EBITDA during the first quarter of 2025. Net interest expense decreased by $2 million or 5.1% to $35.8 million for the first quarter of 2026 from $37.8 million for the first quarter of 2025. The reduction of net interest expense was primarily attributable to a reduction in average long-term debt outstanding during the first quarter of 2026 relative to average long-term debt outstanding during the first quarter of 2025. Depreciation and amortization was $15 million in the first quarter of 2026 compared to $16.8 million in the first quarter of 2025.

We had a net loss of $32.5 million or $0.41 per diluted share for the first quarter of 2026 compared to net income of $0.8 million or $0.01 per diluted share for the first quarter of 2025. The net loss for the quarter of 2026 was primarily driven by a loss on sale of assets of $36.3 million in connection with the divestiture of the Green Giant U.S. frozen business, $5.8 million for noncash disposals and impairments of PP&E as well as an increase in acquisition, divestiture-related and other nonrecurring costs. We had adjusted net income of $6.8 million or $0.08 per adjusted diluted share in the first quarter of 2026. In the first quarter of 2025, we had adjusted net income of $3.4 million or $0.04 per adjusted diluted share. Adjustments to our EBITDA and net income are described further in our earnings release.

I would now like to touch on results by business unit for the first quarter. Net sales for Spices & Flavor Solutions increased by $8.3 million or 9.1% in the first quarter of 2026 to $100.1 million from $91.7 million in the first quarter of 2025. The increase was primarily due to higher volumes across Spices & Flavor Solutions business unit, coupled with higher net pricing and product mix. Spices & Flavor Solutions segment EBITDA increased by $3.4 million or 13.1% in the first quarter of 2026 compared to the first quarter of 2025. The increase in segment adjusted EBITDA was largely driven by increased volumes and to a lesser extent, by increased pricing that largely offset the impact of increased tariff costs. and other input costs as well as increased allocations to spices cost of goods that were driven in part by the divestiture of the Green Giant U.S. frozen business.

Net sales for Meals increased by $0.9 million or 0.9% in the first quarter of 2026 to $107.1 million from $106.1 million for the first quarter of 2025. The acquisition of the College Inn and Kitchen Basics brands added approximately $2.9 million of net sales during our first 2 weeks of ownership in the business. Meals net sales also benefited from the higher net pricing and improved product mix, which were offset in part by modestly lower volumes across the business units. Meals segment adjusted EBITDA decreased by approximately $5 million, primarily driven by the impact of unfavorable cost comparisons in certain raw materials and manufacturing expenses as well as increased allocations to Meals cost of goods that were driven in part by the divestiture of the Green Giant U.S. frozen business.

These incremental costs were offset in part by increased net pricing and the impact of product mix. We also made investments in certain brands in the Meals portfolio, such as Ortega, where we increased trade spending and marketing expenses during the first quarter of 2026 to help drive improved sales performance throughout the remainder of the year. Net sales for Specialty decreased by $3.6 million or 2.7% in the first quarter of 2026 to $130.8 million from $134.4 million in the first quarter of 2025. The decrease was primarily due to the divestiture of the Don Pepino business, which generated $3.5 million of net sales in the first quarter of 2025. Base business net sales for Specialty were essentially flat for the quarter. Specialty segment EBITDA decreased by $7.4 million in the first quarter of 2026 compared to the first quarter of 2025.

The decrease was primarily due to the Don Pepino divestiture, unfavorable cost comparisons in certain raw materials, manufacturing expenses, the impact of tariffs and increased allocations to specialty cost of goods that were driven in part by the divestiture of the Green Giant U.S. frozen business. Financial performance for the Frozen & Vegetable unit during the first quarter of 2026 and the first quarter of 2025 are not comparable due to the impact of the Le Sueur U.S. and Green Giant U.S. frozen divestitures and the impact of our new contract manufacturing agreements for the Green Giant U.S. frozen business. We are pleased to report that net sales of Green Giant Canada remained strong and increased by $4.2 million or 16.4% to $30.1 million for the first quarter of 2026 compared to $25.9 million for the first quarter of 2025.

Separately, the new contract manufacturing agreements for Green Giant U.S. Frozen generated $8.5 million in net sales for the quarter during its first month of operation following our sale of the Green Giant U.S. frozen business. This contract manufacturing arrangement has a cost-plus structure and is expected to provide a modest but stable profit stream going forward. Now I will spend a little time on our balance sheet, which has also improved in the first quarter of 2026. Net debt to pro forma adjusted EBITDA before share-based compensation and extraordinary tariffs was 6.07x at the end of the first quarter of 2026 compared to 6.57x at the end of the fourth quarter of 2025. As discussed on previous earnings calls, we are continuing to reduce leverage.

We expect to remain on track to reduce net debt to pro forma adjusted EBITDA before share-based compensation and extraordinary tariffs to approximately 6x or less by the midpoint of this year, supported in part by the divestiture of the Green Giant Canada business, which subject to regulatory approval in Canada, we expect to be completed during the second quarter and which we expect will reduce net leverage by another 0.25 of a turn or so once it closes. Additionally, as announced by press release today, beginning with the dividend declared today and payable on July 30, 2026, to record holders as of June 30, 2026, our Board of Directors has reduced our dividend by 50% to $0.095 per quarter or $0.38 per share per annum. In our 21 years as a publicly held company, we have proven our commitment to creating stockholder value by consistently returning a meaningful portion of our excess cash to stockholders in the form of a cash dividend.

Following the completion of the Don Pepino, Le Sueur U.S. and Green Giant U.S. divestitures and the College Inn and Kitchen Basics acquisition, our Board has concluded that an adjustment to our intended dividend rate was appropriate. On an annualized basis, the reduction in dividend is expected to provide an additional $30 million or so, which we intend to use to repay long-term debt and for other business purposes, which we expect will further accelerate the reduction in our leverage ratio. Before I get to our updated 2026 guidance, I would like to remind the audience that we continue to live in unpredictable times. Our 2026 guidance reflects what we know today and for example, does not factor in significant changes in inflation, tariff policies or the potential impact of escalation in the conflicts in Eastern Europe, the Middle East or Latin America could have on our results.

Please note that our guidance reflects the expected impacts only of acquisitions and divestitures that have already closed. In other words, our guidance reflects the expected impacts of the Don Pepino, Le Sueur U.S. and Green Giant U.S. frozen divestitures, the commencement of the Green Giant U.S. frozen contract manufacturing agreement and the College Inn and Kitchen Basics acquisition. But our guidance does not reflect the expected impact from the pending Green Giant Canada divestiture because that divestiture has not yet closed. Our guidance also does not take into account any upcoming potential refinancing or other capital markets transactions. Also, as a reminder, our guidance reflects that fiscal 2026 has 1 fewer week than fiscal 2025, which had a 53rd week.

While we love the benefit of the 53rd week in our fiscal 2025 results, we will lap that benefit or approximately $18 million of net sales during fiscal 2026. As a result and as noted in our earnings release, we expect fiscal 2026 net sales in the range of $1.735 billion to $1.775 billion, adjusted EBITDA in the range of $275 million to $290 million and adjusted EBITDA as a percentage of net sales in the range of approximately 15.8% to 16.3%. And based on this guidance, we expect adjusted diluted earnings per share to be in a range of $0.575 to $0.675 per share. Additionally, we expect for full year 2026, interest expense of $152.5 million to $157.5 million, including cash interest of $145 million to $150 million, depreciation expense of $40 million to $45 million, amortization expense of $17 million to $19 million, cash taxes of approximately $5 million or less, an effective tax rate of 26% to 27% and CapEx will likely be at the lower end of our $30 million to $35 million target.

Now I will turn the call back over to Casey for further remarks.

Kenneth Keller: Thank you, Bruce. In closing, B&G Foods is making real progress against our long-term goals, improving the base business net sales trends of the core business to the long-term range of flat to plus 1%, reshaping the portfolio through divestitures and acquisitions for future growth, stability, higher margins and cash flows and reducing our net leverage ratio below [ 5.5x ] through divestitures and excess cash flow to facilitate strategic acquisitions. This concludes our remarks, and now we would like to begin the Q&A portion of our call. Operator?

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Operator: [Operator Instructions] The first question comes from the line of Andrew Lazar with Barclays.

Andrew Lazar: First thing, excluding the portfolio changes since the last time you provided guidance, curious how the outlook changes for the year, if at all, because it’s harder to track that. And then it still seems like underlying consumption for the tracked channel data was down close to maybe mid-single digit in the quarter. And I think you mentioned you’re expecting it to be flat to slightly down for the rest of the year. So just trying to get a sense for those things first off.

Kenneth Keller: Yes. So basically, our guidance is updated just to reflect the College Inn and Kitchen Basics acquisition. Our prior guidance included the other divestitures around Green Giant U.S. Frozen, Don Pepino, Sclafani and the Le Sueur brand. So really, the only change is the result of adding in the College Inn and Kitchen Basics acquisition. What — when we talk about base business net sales or organic net sales, it’s not just the tracked consumption data, it’s our total portfolio, which would include our business in foodservice and private label brand business, in Canada, our Canada business untracked. And that’s probably our tracked channels now represent less than 60% of our portfolio. And we’ve seen pretty strong growth in our spices private label business, our spices, foodservice business, our other foodservice businesses, Canada is growing.

Our industrial business has performed well. We also have private label business in baking powder and other things. So when we say our organic business is going to be roughly flat, we mean the composite of both our measured channels and our tracked channels — our tracked channels and our unmeasured channels.

Andrew Lazar: Yes, okay. And then do the portfolio changes you’ve made in the past few quarters, do you think make it harder or easier or neither to sort of execute pricing if and when needed, should the industry have to deal with another round of inflation going forward? And maybe you can get into a little bit where you’re sort of covered and for how long on some of your key inputs?

Bruce Wacha: Yes. So we don’t break out all of that publicly. I mean we’re covered for a decent portion of this year on input costs just through our normal forward purchases. From an ability to take price, the divestitures, we’ve eliminated the Green Giant U.S. frozen business, which we think is a great business, just not the right one for us. doesn’t really impact one way or the other, the rest of the business. It was a different business for us. We still have about 50 brands. We’re still very relevant. We think our brands are relevant, and we’ll continue to take action as needed.

Kenneth Keller: I think, Andrew, the key input we’re watching is oil and soybean oil because there is a real relationship between soybean oil and crude oil because of its use as a biofuel. So that’s the one we’re watching pretty closely. It’s up north of $0.70 a pound. So very high. And we are covered reasonably long. But obviously, if oil prices stay where they are, we’re going to need to take some action as I expect the industry will just because of the rising input costs.

Operator: Next question comes from the line of Scott Marks with Jefferies.

Scott Marks: I wanted to just follow up quickly on something that Andrew asked just in terms of the kind of flattish outlook for the rest of the year. Can you just help us understand a little bit how you’re thinking about that in terms of price versus volume versus mix and across the different segments, just what we should be thinking about?

Kenneth Keller: Yes. We haven’t really broken out price mix on a forward basis before. We’re encouraged with the progress that we made in the first quarter in terms of stabilizing volumes, whether you see that in our net sales with a little bit of net sales growth driven by volumes or even in our consumption data where the — for the portion that does track those channels where it’s improved. We think this year is going to be a little bit less forgiving from a top line standpoint than the prior year.

Scott Marks: Okay. Understood.

Kenneth Keller: When you look at the base business organic net sales, you also have to take into account that we did have a 53rd week in the fourth quarter last year. So we’ll obviously have one less week in this year’s fourth quarter than last year.

Scott Marks: Okay. Understood. And then just in terms of the decision around the dividend, just wondering if you can help us understand why was the 50% reduction the right number? And how do you feel just in terms of the flexibility it gives you to do what you need to do with some of that increased cash?

Bruce Wacha: Sure. It certainly generates another $30 million on an annualized basis in cash — excess cash relative to where we were before. As we’ve said all along, as we went down the journey through evaluating the Green Giant business and the disposal of it, we would continue to reevaluate the dividend on a go-forward basis. It’s very important to the company. It’s something that we’ve been doing for a long period of time, and we think it is the right thing for shareholders. It just has to be at the right level, reflecting where we are from a cash generation standpoint.

Kenneth Keller: I think the important principle for us is in today’s interest rate environment, we would like to have excess cash, 50% of — at least 50% of that going towards debt reduction and the other 50% dividend. So this is trying to get that in balance because we believe that the interest rate environment that we’re in now, we need to be continuing to pay down debt. That’s the right thing for us, and that’s the right thing for shareholders.

Operator: Next question comes from the line of Robert Moskow with TD Cowen.

Robert Moskow: I just wanted to make sure I understood the comments on cost. It sounds like soybean oil is really the only thing that’s really jumping on you. But are there other elements? You mentioned oil costs. Does that flow through your logistics, your packaging? And is your pricing power on those elements of your structure less clear?

Bruce Wacha: Yes, it does flow through both on logistics and on some packaging. And just like everybody else in the industry, we’re waiting and watching to see these higher, more elevated costs for energy stick, right? And probably just like everybody else in the industry, we’re evaluating and determining whether or not it makes sense to protect margins with pricing initiatives to offset that.

Kenneth Keller: I think our biggest concern right now is the price of soybean oil. It’s quite elevated on a historical level. So that’s the one we’re watching closely because it is largely — and from a Crisco oil standpoint, it is the majority of the cost.

Robert Moskow: Yes. I think you’ve changed the business effectively to be able to price up and down for that. But — but the other elements, I think, are a little trickier because passing through logistics cost is sometimes tougher, I think, with retailers historically, maybe that’s changing. But is there any way to put some numbers to this, Bruce, where like if you have $100 per barrel oil, like how much inflation would you expect to be incremental to your business? And if you can tell to me without soybean oil, maybe that’s even simpler?

Bruce Wacha: Yes. We don’t, but I would point out, despite some skepticism, I think in 2017 or 2018, when transportation costs went haywire, we took price based on fuel cost and transportation and logistics and then again, in 2022, 2023. And so yes, it won’t be perfect. We’re also looking deep into productivity initiatives and continuous improvement to help cover costs. But yes, our expectation would be if these costs stay elevated permanently or relatively permanently, we would expect to take price to cover a significant portion of that.

Robert Moskow: Okay. Last question. You have the College Inn business now and Kitchen Basics. Any surprises in your first couple of weeks of owning it, positive or negative?

Kenneth Keller: Yes. I think right now, we’ve been very focused on ensuring that the plans in the business are solid. We had some visibility of that before, but we’ve kind of taken over most of the selling of that as quickly as possible, even within the first month now. So it’s key that we have the right plans for promotion, customer support in the fall, and that’s what we’ve been really focused on. You can imagine that the Del Monte bankruptcy and transition, obviously, probably didn’t get the highest attention from the business. So we’re just trying to shore that up. So I don’t think there’s any big surprises. We’re also launching a couple of SKUs that were sort of holds in the portfolio and trying to accelerate that process as well. But so far, so good. But as you can imagine, getting our hands around it quickly is really our goal.

Bruce Wacha: And Rob, the other thing just to keep in mind, I don’t know if we talked about this after our last call, when we first looked at this business, it’s like College Inn, #2 Northeast regional brand, generates cash, stable. We were — that’s what first intrigued us. And as we spent time on the acquisition, we learned a little bit more about the category and the category dynamics. Casey talked about this on our last call. This is actually a category that’s been doing pretty well despite some of the other center store trends. And some of the appeal of what’s going on in the perimeter is helping driving sales here. And then also with this Kitchen Basics business, it’s a grower, right? This was the innovator brand of 10 years, 20 years ago, but it’s continuing to travel down on that path and grow. And we’re really excited to get both of these businesses into the portfolio.

Operator: Next question comes from the line of William Reuter with Bank of America.

William Reuter: So on the price increases that you potentially would take, I’m wondering if you’ve kind of alerted some customers that this may have to take place. And I guess I feel like when we are in a situation like this where — well, the war is unlikely or the conflict is unlikely to go on in perpetuity. When a price rises for a short period of time, I think those discussions maybe are a little more challenging. So I guess, have you started to alert them? And what has the feedback been?

Kenneth Keller: We certainly have discussed soybean oil. So I mean, I think that’s — and we’ve had those discussions with the volatility in that commodity over the last 5 years. So that’s not something that’s new to us, looking at how do we move the cost of soybean oil and vegetable oil up and down with the price. So we have that kind of agreement with the marketplace and how we move. And that’s been the pattern, too, in that market. So yes, those discussions have taken place. In terms of fuel and transportation logistics, we’re not really having those conversations yet. I think they’re feeling it themselves, our customers. So I think we will start having those conversations, but we wanted to see where this played out before we would have any further conversations because this isn’t something that we would — these fuel costs move so much on a spot basis that we want to make sure that we’ve got a longer-term trend before we do anything.

But again, we have covered some of that increase in our forecast, in our outlook. So we’ve already expected that fuel is going to be higher. It’s just a question of how high it stays, to be honest. So — and that’s what we’re watching pretty closely. Packaging, honestly, longer-term packaging resin contracts that frank — we really haven’t seen increases hit us yet because those are sort of 6-month, 12-month contracts. So we’ll need to see where oil shakes out longer term as an input cost in our packaging.

William Reuter: Got it. Yes. I guess does your guidance imply that raw materials kind of remain where they are? Or does it imply that they come down to more reasonable or rational levels over a longer period of time?

Kenneth Keller: I guess what we’ve done is we’ve — let’s take fuel. We’ve assumed that it comes down a little bit from where it is today, but certainly higher than what we initially entered our year with our assumptions entering the year.

William Reuter: Got it. Okay. I guess just one last one for me. Your organic sales growth, which has been solid. I guess how much of this is driven by new product innovations versus just underlying growth of some of the products or the categories that you’re participating in there?

Kenneth Keller: We don’t — I don’t really have a split on that. There is some element of innovation that is driving that, some new items that have gone in. So for instance, on Cream of Wheat, we’ve launched protein varieties. So there is some growth coming from that. There’s also growth coming just from volume increases or category growth. We’ve got some businesses that are performing very nicely. There’s also — as I said before, our foodservice business has been growing. Our channel — our customer channel mix in foodservice has been positive. We do have some private label business predominantly in spices and in baking powder, and those have been performing very well. So yes, I think it’s a combination of things that’s driving our growth.

Bruce Wacha: Yes. And the other thing to throw in there, so as Casey is saying spices, we’re seeing some nice category growth. We’re seeing some nice channel growth. We also have, we think, one of the best spice manufacturing facilities in North America, and we’ve been investing in that and building out our capabilities. So we’ve got incremental capacity that we didn’t have a couple of years ago that’s helping to support some of this growth as well. So not necessarily product innovation, but the ability to manufacture and produce product and sell it.

Operator: Next question comes from the line of David Palmer with Evercore ISI.

David Palmer: I just wanted to ask you a follow-up question on consumption data versus what you are seeing in your all channel consumption and maybe what we should be assuming to see in the — what we use in terms of if we use Circana includes supposedly Costco and Amazon, pretty broad set. Right now, I see down 4% for the quarter, down 7.5% for April for B&G Foods. And I’m just wondering like when we’re looking forward and trying to match up this consumption, what would equate to your flat consumption assumption, what sort of gap should we be thinking about there? And do you need this consumption that we’re tracking to get better to get to that? How should we think about that?

Kenneth Keller: I think, look, the — and I know this is hard for you guys to see and track, but post Green Giant, U.S. Frozen Green Giant, we’re even less measured than we were before. So if you think about our business, you look at the tracked measured data, if you’re using Circana or you’re using Nielsen or whatever, IRI, that’s probably covering less than 60% of our universe right now. There are big swaths that are not just untracked channels, but they are different channels. So our foodservice business has been positive. And that’s probably in the neighborhood of 13% to 15% of our portfolio right now, total sales. Our private label businesses are probably over — well over 10%, approaching, I don’t know, 12%, 13% of our portfolio, and those have been growing nicely.

Our Canadian business, which isn’t in obviously, most of the U.S. databases is also growing in the first quarter. So what — when you try and project it out, we need our measured channels to get better by some amount, but we don’t need them to flip totally to positive that we expect them to gradually improve over time. So we don’t need — I mean, we continue to see strong growth in those other unmeasured channels that should continue, foodservice, our private label businesses, et cetera. But we do want to see some improvement in our measured channel data, and that’s what we’re working against.

David Palmer: Just roughly speaking, maybe the decline rate in the consumption that we see would be down low single digits and you can get a few points from nonmeasured? Or do you think the gap…

Kenneth Keller: We’re probably getting mid-single-digit growth from the — some of those nonmeasured channels. Yes. And the other thing that’s really messy in the most recent consumption data is the shift in Easter timing year-over-year.

David Palmer: Yes. No doubt.

Kenneth Keller: That’s also a complexity, I think you have to factor in because the most recent data would be comparing against the Easter period last year.

David Palmer: And by the way, when you’re saying mid-single digits from the non-measured, are you talking about mid-single-digit contribution to growth from the 40%? Or are you talking about that non-measured to 40% growing at mid-single-digit rate?

Kenneth Keller: I’m talking the non-measured 40% growing at mid-single-digit rate.

David Palmer: Yes. That’s pretty good. And then I guess one of the — like just philosophical things that you’ve seen multiple cycles before, very experienced executive in dealing with energy-related inflation. I wonder — I remember these periods of energy-related inflation in its many forms in packaging, distribution and what have you that it just — it was particularly tough when it came to pricing power and those discussions with retailers. It felt different weird that they were dealing with the same type of pressures in those — do you think that’s the case? Do you feel like that, that is that something we should brace for? It’s just a much different type of pricing discussion with that type of inflation?

Kenneth Keller: Never easy. Yes. I mean — and it is a hard discussion. It is a hard discussion with retailers, but that’s why I think what we are hearing from us is that we’ve covered a fair amount of increase in energy inputs. We’ve been able to cover that through productivity, cost savings, other efforts. If it stays — let’s — if oil stays north of $100 a barrel or whatever, I mean, we’re going to have to think about it. I think that’s going to be an impact for our customers. It’s going to be an impact for us, the industry. So we’re expecting it to stay higher. It’s a question of how high it stays before it becomes a really, really serious issue in terms of cost. But so far, we’ve been able to kind of manage it and manage an increase.

But I think we would expect it to come down below $100 over time, assuming that Iran and Strait of Hormuz and are open and oil flows again and the market ease. I mean I think there was a lag effect on all those things happening, but we just need to keep watching it because if it stays at well over $100 a barrel, I think everybody has a problem, everybody.

Operator: Next question comes from the line of Karru Martinson with Jefferies Company.

Karru Martinson: One of your competitors talked about the consumer, especially on the low end, running out of money by the end of the month. I’m suddenly kind of wondering how do we square that with the ability to take price in this environment?

Kenneth Keller: I don’t know about all consumers running out of money. I guess you’re just talking about pressure on them. But look, there’s a balancing act. I mean, we think with our portfolio, we are mass mainstream regular way grocery for a good portion of our business, and we may see some trade down there. But we also expect to see some trade down benefit of people going out to eat as well, which pushes them into the categories that we’re selling. We’re meals, we’re affordable. We think this plays to our strength, but it doesn’t mean that it’s easy. It’s a tough world. I think we’re not really talking about pricing, we would only look at pricing related to any oil cost, take soybean oil aside, if we believe that it was going to stay this elevated for an extended period of time.

So I mean my hope is that we can cover the increase we got that we have planned, we can cover that with our own internal cost savings, productivity and other efforts. Soybean oil is a different conversation that we need — the commodity is up dramatically from a year ago. We as an industry, we will just have to take price. And I’m expecting that the industry will see that. But beyond that — beyond those two things, I mean, we’re not really — we don’t really see the need to take pricing on our portfolio. It’s really those two components, what — how high does energy stay, which would not be a significant increase in price or on the soybean oil, if it stays where it is in the $0.75 a pound range, that’s dramatically higher than where we were buying it last year at $0.50 a pound.

So that one — but we already have that kind of pegged as a commodity that has to go up and down. So I don’t really think you should think about broad actions on our portfolio right now unless we see energy costs staying elevated for a really extended period of time.

Karru Martinson: Okay. And just lastly, in terms of the portfolio, certainly pruning some here, adding some stronger performers. Do you feel like that we’re where we want to be with the portfolio? Are there still opportunities to take some brands out or to add others?

Kenneth Keller: Yes. I think we don’t normally comment on M&A activity, but I think the concept of what you’re talking about, we will continue to evaluate. As we reshape our portfolio, we want to have strong businesses that generate higher margins, stronger cash flow. So we’ll always look at opportunities in our portfolio to make shifts like we just did to take Green Giant, divest it to a buyer that is a better fit with their capabilities and everything and then buy businesses with those proceeds that generate higher cash flow, higher margins and frankly, just fit better within our capabilities. So yes, we will continue to look at those opportunities.

Operator: We have time for one more question. The next question comes from the line of Carla Casella with JPMorgan.

Carla Casella: I know you’ve got a lot of questions on soybean costs. But I’m just trying to dial back to like 2022, ’23 when we saw the spikes, you talked about a resistance level where consumers really change their buying behaviors. Are we — I think it was like a $5 level that you gave at retail. And I’m just wondering kind of how close we are to that now? And if you’re seeing any resistance already? Or is this more just a fear as we go into the back half?

Kenneth Keller: Well, we haven’t taken any pricing moves yet. But you’re right, we would try and stay below key price thresholds if we took pricing action. We’d work towards that on how we could price and effectively manage the key thresholds because we know consumers have a response. Like on the core size, $5 threshold is something we try and manage to. So we will look at that consideration and try and manage the price elements and work with our customers to try and keep the prices at the right threshold so that we don’t get a high elasticity effect if we cross those. But we haven’t taken pricing yet. So we’re looking at where soybean oil stays. And right now, it’s at — it’s close to the levels that it reached in ’22.

Carla Casella: Okay. Great. And then on the 2027 bond maturity, how far ahead of maturity do you typically like to be in terms of refinancing? Are you okay going current? Do you think that could hurt your ratings? Any thoughts there?

Kenneth Keller: I think as we typically have, we generally expect to refinance our debt before it goes current. I don’t think where we are today in this cycle is vastly different from probably four or five other maturities that we’ve refinanced since I’ve been here.

Operator: Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.

Kenneth Keller: Thank you.

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