Utz Brands, Inc. Q1 FY2025 earnings call

Howard Friedman discussed that the strength in organic sales growth is due to opportunities in untracked channels like natural, discount, and club, as well as the benefit of the opened Rice distribution center. Boulder Canyon is performing well with innovation like Canyon Poppers and Tortilla Chips, and growing distribution in various channels. On The Border is growing with new flavored tortilla chips and has distribution gain opportunities. Partner Brands are expected to continue declining but less negatively, while non-branded non-salty Dips & Salsa faces near-term pressure but is expected to stabilize. There are opportunities in the natural organic space with Boulder Canyon through innovation and brand equity investments, and channel dynamics with value-seeking consumers across different classes of trade are noted.

The bonus packs program is winding down as they transition to summertime merchandising plans. Expect normalized price mix going forward with a point of price investment. Continued distribution gains in core markets for On The Border, Boulder Canyon, etc., and expansion geographies are anticipated.

Consumer sentiment weakening could impact bonus pack decisions; need to watch market response and consumer behavior. Potential challenges with non-branded non-salty Dips & Salsa in the near term.

Q: Explain difference between flat overall retail sales and 3% organic sales growth; impact of timing or untracked channels.

A: Howard Friedman said it's due to strength in untracked channels like natural, discount, club, and benefits from Rice distribution center opening, with no pulled-forward revenue.

Q: Bonus pack impact on price mix and volume/mix; Boulder Canyon new product reception.

A: Ajay Kataria noted price related to bonus packs, with some non-bonus pack price cap; Howard Friedman discussed Boulder Canyon's positive reception and growth in untracked and traditional channels.

Q: Partner Brands growth outlook; Boulder Canyon flavored opportunity.

A: Howard Friedman said Partner Brands expected to decline but less negatively; Boulder Canyon has innovation and distribution opportunities.

Q: Bonus packs winding down, impact of consumer sentiment; metrics for bringing back bonus packs.

A: Howard Friedman said watching market response, bonus packs were a value addition way, and would evaluate conditions to bring back if needed.

Q: Natural organic opportunities; channel shifts.

A: Howard Friedman talked about Boulder Canyon's innovation, distribution gains, and brand equity investments; channel dynamics with value-seeking consumers across classes of trade.

Q: Potato chip subcategory dynamics; Utz vs Boulder households.

A: Howard Friedman discussed different drivers for Utz and Boulder Canyon outperformance, and household overlap not exclusive.

Q: C-stores performance and acceleration; bonus packs impact on consumption.

A: Howard Friedman talked about working on distribution, innovation, and retailer service in C-stores; bonus packs impact on consumption hard to tease out exclusively.