VITL - Earnings call transcript Q2 2020

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Operator

Ladies and gentlemen, thank you for standing by and welcome to Vital Farms Second Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] It is now my pleasure to introduce Investor Relations, ICR, Ashley DeSimone.

Ashley DeSimone

Thank you. to webcast. second welcome conference XXXX and and call afternoon Vital quarter Farms earnings Good call Russell and today's Jason On are Dale, Officer; Chief Chief and Executive Financial Officer Chief Officer. Diez-Canseco, Operating President and everyone press filed earnings now second market release should the today to By Company's access quarter close. after have Investor section the available website Company's is This Relations at on the of www.vitalfarms.com.

statements from laws. a press for these differ XX-Q the with SEC make on in and release, other XXXX, and of And that materially financial risks Before we based differ adjusted call, could These and forward-looking is uncertainties note today's presented any Please described risks those the in statements quarter forward unaudited. for during discussion results call forward-looking to a are report expectations looking implied on of company's on securities course with management's and to filed from information beliefs within statements. the current the management cause Please begin, or please today. those statements June results on is XX, may the non-GAAP note actual will which that could expressed refer made the detailed Form filings cause of EBITDA, to today's involve meaning management the the refer today's financial to quarterly that measure. this ended that the actual SEC all of federal materially call

that locations. to comparable are remote today's conducting of call isolation a for financial presented presentation note adjusted of this with intended While to from prepared information considered accordance to I'd not measure in useful the or today our substitute GAAP. believes investors, to information also the its provides a as company reconciliation financial in accordance this in refer information the non-GAAP respective press for GAAP. with our is Please for be we most like measure release EBITDA

may during be there other technical or issues such, brief minor call. As the crosstalk delays,

now in So President turn advance Vital thank the call you for and I'd to Farms. Officer Russell? Diez-Canseco, patience over Chief Executive of and like to understanding. your Russell

Russell Diez-Canseco

Thank It's company. will on today's more great our believe and review all will call everyone. Officer our quarter first Operating you as we Officer look for with our fiscal growth. is On Financial and our of our of quarter you, public an Dale, taking reasons second brand model our briefly provide outlook. earnings positioned the call, our business good Ashley, to a then well XXXX We financial to discuss long-term detail review Chief and and afternoon, speak questions. discuss overview I results in then second Jason financial Chief your highlights, forward

increased compared quarter. revenue First, financial strong pleased to XX% highlights. our to second quarter second quarter report second year. to last Net $XX.X the million a We're

to XX,XXX million, a We second also and table the many our small Adjusted stores. increased food ethical of farms approximately by profit provide coordinating to to margin story, to to network increasing mission XXXX over our network business XXX you an bringing national overview metrics. a $X.X XXX of the saw of Vital bring from quarter model and of new continued on is to products year-over-year. I positive trends strategy. in of their like a points our Farms growth improved family Gross XXX% our EBITDA demonstrating Because key are profitability. basis our profit would approximately

members, consumers, a that call prioritize environment, communities, stockholders. we capitalism, we sustainable suppliers, to our Our our our exemplified and by crew must for each enterprise, build the whom our and values the rooted stakeholders, belief benefits are farmers and our our long-term in of conscious our employees, customers

well as as a Corporation are Certified We Public Corporation. B a Benefit

the genders and in we with in positioning and eggs and Vital trust to brand And valuable butter, continue profitability. focused retailers. Since and premium delivering about XXXX, we as trusted potentially a founding I consumers we and am values stakeholders makes brand our and other build on optimistic consumers driven strategic for could in growth offer categories have Farms disrupt better options. Our to

XX% on sales. For sales ending delivered the and the the were retail U.S gross dollar June the XXXX. number of pasture-raised net we of XXXX, half based a egg XX, dollar overall of profit first XX XX% number and pasture-raised XX% the brand growth one example, weeks growth we egg of In a brand in market egg two with share last

growth our to turn I'll strategy. Next,

elements. Our growth key four of consists strategy

consumer First, through expand penetration how greater full awareness.

Second, grow within the retail channel.

footprint food four, our our expand through across product offerings extend service; Third, innovation.

each through Now of along four from these highlights walk our two quarter dimensions. we'll

eating quarter, early First, X.X% are to We penetration the home on first from some basis increased to first at XXXX second see XX are In the X.X%, from household penetration. COVID-XX. making that are our these for purchases. by end the more toward of repeat that consumers signs recognize basis of and due sequential some We do at products the household driven time gains a who up up quarter. points trying trends

during In period weeks. XX% those multiple become XX, times Farms XXX,XXX XX% June example, of stock-up April the COVID approximately period, those following Vital and have the Farms For eggs ending repeat new week the buying weeks purchased already eggs. purchased households during eight Vital ending XX, purchasers X X

the within retail grow Second, channel.

increased by of over class doors, the the second Farms or grocery by Vital driven store food XXX count primarily trade. During quarter,

whole of that remained robust of by channel, increased lot Our trade digits. velocities double in extended in And the despite these distribution. including natural class the foods,

the innovation. food additional of the attract in small quarter limited our service, see our growth to two offerings food extend we service. across forward new ability we expand our it that Well, look headwinds to sector remains in rebounds. This and product to in our bringing a sector focus opportunities business, as footprint customers. Four, Third, segment through

Consumers are in the are liquid have more are with And cheese, Bites number to vegetables. staying line up whole eggs, than with We made consumers a including ingredients, growing ingredients, successful days bites ramp which but Egg crave cook. busier Egg a don't on raised of fresh was usual August. and address home production we ever. Egg new two the who to new serve, than our for quarter refrigerated pasture-raised packed Bites made of Vital of in right their pasture-raised meats focus quality many, always Farms created now. breakfast of protein time Our who launched humanely high single the at Bites,

co-manufacturer to valuable has As our ingredient us given experience process procurement, entire the management. first to product, launch innovation this in from multi ideation

from launch members and we many thank this involve across efforts the market. crew bring tireless to company for them successful product their Our to

our on Now, I'll bit about talk impact of the a COVID business.

we health our focused believe we and toward stakeholders. and in earlier, tailwinds of on mentioned consumption we other products. have COVID shifts well-being created have in-home for the our related crew As late February, Since retail members

As through believe increased our seen has increased just a limited Station demand is help deliver among service with two we experiencing we to continuing we Egg in farms serve product brand market supply animals. to cases second Farms Vital innovation, and incredibly from operations Jason, to growth allowed result, we channels, will walk turn production the we pre-COVID who you at increasing awareness, help Springfield, produced have team increasing our Central our for over well-positioned a us as Missouri. confirmed In and penetration the impact from our and summary, commitment on call supply I'd as levels partners. retail focused in support to financials. family on food humanely for above remain are continued like ongoing chain food Their raised robust both to retail now quarter

Jason Dale

great speaking We're opportunities you build first trusted Russell, very increase for XX% growth we earnings channel. are call was our a the last business you, public what meaningful a second financial on we to We've ahead. million, to the Thank year. $XX.X pleased in as Net results to compared second up retail the good as everyone. quarter growing quarter believe investments and in afternoon, significant revenue penetration company. our with and with quarter be It's made

sales because of Our confidence by trends net in to with more some of in of gross customers, an revenue were and for in increase volume excess revenue primarily sales. the increases butter Growth of $XX.X XXXX. and of a $X.X due compared overall million to second in was XXXX $X.X count or employee of in gross increase XX% quarter volume, SG&A operating shipping or margin, our turnover in year-over-year in in in $X.XX of partially profit with margin mainly a $XX IPO. for increase the margin. than was our an distributors and increase to for an in of growth was was revenue and XXX $X.X from an with COVID-XX. head the $XX.X representing basis revenue revenue year, gross associated with The The expenses to QX increased last Total was million of warehousing increase primarily income full support or share of increase XX% increase increased of quarter to $XX.X exceed operations and net expenses strong $X.X distribution in revenue retail second million expenses which attributable our freight share incentives related costs The increased resulted sales stay-at-home of which in distribution to increase the the $XX XXXX, costs the due compared million were of the second of increase net XXXX. million, XX% rate net and per and revenue $XXX due increase to increase expectation year. to portion customers net to million in $X.X year. gross The million a to revenue programs third-party income high includes for associated year-over-year. gross million QX This net net in net costs shell due resulted primarily second or quarter the million, primarily quarter million in a and connection to second of million The development million offered was $X.X year. primarily $X.X $X.X XX% compared Gross million quarter increase compared of due of growth, was increase in offset Total increase related driven expenses or or profit an primarily was compared million with the increase last to was XX% quarter to $X.XX quarter egg SG&A and last diluted butter diluted in and XXXX in to from last associated lower rate revenue egg points with associated to egg transportation inventory. gives in sales, us the sales our of total distribution of the $X.X to by of of in to year Net which compared expenses spending to expanded products. corporate million on per shipping net marketing

EBITDA $X.X was our the million leverage adjusted which increase. margin of second in costs. the over in second represents improvement to for million as compared gross $X.X EBITDA operating well Our due to The XXXX, fixed XXXX was quarter primarily expanded an of adjusted XXX% as quarter

EBITDA to million the for $XX to full range expect the year $XX we in million adjusted of of ahead, XXXX. Looking be

on proceeds of full outstanding does Bank. as the not million XXXX We the expenditures loan issued reflect PNC X,XXX,XXX the proceeds Subsequent and sold million payment borrowings the our offerings August end initial Now totaled from stock second our the or shares egg a of shares shell stockholders of shifting and public stock further note, including quarter pasture-raised the common balance at include our X, general for offering to X,XXX,XXX offered which common our purposes, XXXX, our of cash certain the second or public sold including selling we and use Station we the of shares June to per fund in for with Missouri, expenditures, structure. $XX completed of capital, not Central of IPO operating XX, was XX, and $X.X This Total discounts, $XX.X our in proceeds expenses Springfield, proceeds shell us equipment of by IPO plan to facility capital under $X.X to selling corporate working quarter as for XXXX from and after million. Of deducting any of $XX.X approximately expenses. of increase of our in share. capacity receive We stockholders. expansion the million processing price resulted to Capital our underwriting $X.X Egg in outstanding to debt offering million June net commissions eggs. of did in sale capital company's XXXX. from distribution

As shares XX,XXX,XXX of September were outstanding. X, XXXX, common of there stock

humanely ahead robust With look Vital today, we at for and come. have food market Farms for we growth turn to call the raised unique Russell. we As opportunity back many to the I'll achieve a produced animals, believe at from to now that, over strong years

Russell Diez-Canseco

on the in company any you, shared values resulted no joining have this growth. framework of commitment in we model Vital it living capitalism needs today Reflecting meeting decisions, Vital strategic which the for we of multi-stakeholder coincidence Farms. fantastic interest you so the does our and a within just Thank with is Jason. our our the the of all that call Thanks, for part than story Farms forms and your has been The conscious of its to more a of, and of profitable job every day. that stakeholders values make

Operator

our comes Rob And the line Instructions] first of Dickerson question from Jefferies. [Operator with

Rob Dickerson

Great. Thank you.

So welcome.

just a household off, job. for the First a companies. penetration. first a obviously done We're of I short, keep lift is kind on food board of lot this question, across my is guess to it seeing great

in total a You the are year. you just nice this spoke up X.X% where step which to penetration, earlier is from

of, to kind that around trial brief the can, on step maybe, are term of high much probability longer goals given tracing you So of of of the as there and of any accelerate kind basis maybe maybe but your shifts a not a retaining and only retain it, strategy some kind up near-term just maybe kind of to of or in pivots commentary as if now repeat. kind

Russell Diez-Canseco

thanks and here. and Rob, welcome for Thanks, the thanks warm for being

a So thoughts. few

on do stage externally. be -- I is the lot of we our the to trial the games? early have internally we about able to question convert to and loyalty signs we is, that hold do which we have referenced time. repeat, hope have to ability over get in the going a Are early we into And First to call an some

and some of the of time got period first a period. have bought in peak us we've bought for pantry who percentage people in the loading the us back So second subsequent COVID X-week come time

once. in And intro. And some of had portion the more specifics those we us shoppers bought than the have

buying evidence the when were entire showed some but even brand So up maybe shopper journey that shelves, their right? through there early it's days, the all awareness is back usual already some kept on loyalty. new shoppers us way the We focused from on

certainly And an new trial. of an so, we acceleration that we've had recognize uptick or

from absolutely broadcast platforms, rating message that. community people receiving strong And for in interact that our looking which the beyond in in us. our loyalty our part with that brand way at -- we example, of commitment interact and media a so management to includes maintaining we're the simply fans other ways with And [ph] other our social the

for So about retention an to the news this The we order new the is make us. year. aggressive on that's trial for the definitely good in assumption top did of not guidance of deliver mind

we terms it's you and for of longer of -- And to the retain are related both but us think of assumption, so, the remains making which trial early predict much a in business, and retain. extent much new terms relatively, list in to we'll conservative COVID I the if how we that too how

So how there continue our beyond may be as an upside there behave expectations coming the to in consumers opportunity months. we see

Rob Dickerson

XX% XX% follow-up of way I right. QX like than to right, get the guidance, in half implied not that, did all guess, to of it's the visibility, Obviously, what thirds of just now about said, and revenue be just kind obvious just back might -- that year-over-year. reasons, there QX. it for Great. kind you're better two also in as All the through QX. looks right, into And you much as then you of terms And

that just and you to of guess essentially I where you at just speak, just through visibility field XXX terms don't guess And half? in like doors So we’re lot. good how have say, might of and to your visibility Thanks conservative of quarter. new or kind to have what doing what guide QX kind feel given QX actually second pretty come kind guide, get in but then the is coming our too kind the a of of the is, we want decent best of, that I we have you kind That's it. is for a as

Russell Diez-Canseco

Thanks, Yes. Rob.

level want in So, may well. at I'll Jason in chime then chime let to macro a as me and

-- at humble the absolutely That rates, et uncertainty that macro right? what the the -- one what tailwind for the February about et our and forces incomes, future, fall of headwind the portfolio, we higher on of are same And unemployment countervailing at -- time, a lower the at resurgence, the cetera. -- of home, a eating election primarily of for potential fact economy, product the a the there's retail. in hand, channel more the And it's We potential maybe lot brings because portfolio XX, cetera. unemployment, create

fourth that I in we're kind with comfortable So of our we guidance not, I are think in where light would think that. of quarter uncertainty be the annual

Rob Dickerson

Okay, great.

Russell Diez-Canseco

continue, thing think the add point, that towards to you higher pull would only -- if guidance, we is be your Rob, that why guidance would I'd the range think. reason have I a of the see Yes, I end we things of

range. the COVID, not out, day higher what we of what day see would -- we the the towards end of continue, we're kind kind up seeing into we've continue and seen So in if peaks but of

Operator

of Morgan our Thank Stanley. you. Kaufman the with next from And question line Pamela comes

Pamela Kaufman

back the the to year. outlook about your the ask half the environment for for on of Congratulations Hi. promotional I wanted IPO.

stepping some talked potentially initially you I from this strength about promotions and had up of think the quarter. reinvesting

So plans curious on an just was update there. to your get

Russell Diez-Canseco

Pamela and -- Thanks, thanks sorry. for

and appreciate question. you appreciate So I that being I here

the at investments late approach remaining of Feb through, -- wouldn't with of cadence trying so that resumption when typical if plans stock. all deliver with we're a plan We purposeful was, partners that. it agree retailers, the year, kind our half promotional of don't a do not afloat of the we challenge promotion. see to depth demand back with half this continuing of retailers let's stay much to weeks as the to year. and shelf back requiring are promotional retailers relying in of pantry before and keep back at of be to lot strong least a We we the in agreed of in -- this mid a did hey, go in the judicious and activity point sense levels, recognizing at yes, first promotional on above being that want and trend to not just uncertain to we the were stock, call to we we year We So, be great and a the saw pre-COVID year we're to it pull pretty be this make more April, at seems loading well. time extensive the and but to trying Because staying to might lift we the to point,

Pamela Kaufman

and with that retailers its more has That your distribution color been initial on provide just outlook and the for sense. Bites makes and if reception consumers And can Egg performance for how of in just some you Okay. product. growth further terms Thanks. then

Russell Diez-Canseco

Yes. Thanks.

hitting as and of for few out year it's mean, relatively hit Egg modest things we really as to. were expected I that and getting just expectations Bites, about had a weeks just well up running days. We working as them early -- we ago. are So we kind this for started shelves, still

we'll lots today into insights release, pretty So, our next have more early. it's that in but

Pamela Kaufman

Okay. Thank you.

Russell Diez-Canseco

Thank you.

Operator

from Thank Chris you. Growe question with the Stifel. And comes of next our line

Christopher Growe

here, Yes, add first on margin, the just I the good quarter could, quarter factors on Hi, but just a on congrats which performance and good we if for on I IPO. just the understand not the of the as strong the second afternoon. year. should and very congratulations well. looking had I'll obviously to question, in obviously quarterly a was -- my the half guidance consider gross

utilization curious You kind have as well your your maybe stands full peak, sure, coming great of cost some leverage maybe cost business. I'd What obviously were, down to and running the the today, you of or through. leveraging ideas guess kind be out. level I you some of around degree what I'm are fixed fixed of where give capacity to sort

Russell Diez-Canseco

going Jason. that's be for think to I

Jason Dale

Yes.

to kind of thanks, your beat point I point out gross first Yes, Chris. margin the So -- QX. about just think in the

to where think of of think XXX definitely probably COVID the kind attribute there, I basis in So that at. peaks what we we I saw points of could were you about peak related of

of I the adjusted quarter. about we as think, we're the half had get doing modeled versus down slightly where think to single we we of that, you selling from back we're look year I we're Pam the in product still of higher just guidance the leveraged what that's to between margin for EBITDA not really with a we were but egg promotional that and originally and And for had in trying could. some the giving every range because of then Relative talked we the guys trade out are the kind think just terms just much broken they getting assumes about what peak, And than retailers forward. we I in footprint down year. any the and were

a those in think And just and to and year. the back a that planned QX on will place that less this things we that actually of of we line there transportation leverage to costs close and half more starting doing things and in was so, put about I part as the will warehousing it's up relative were play about mentioned the continue, continue

Christopher Growe

how of demand? today rough this and elevated just just where can about a sense you Jason or you comments of utilization, kind levels, capacity accommodate Any are give

Jason Dale

Yes.

probably between XX% So, XX% utilization. somewhere I range and we're mean, at

today. process and So to quarter we that And ECS capacity plenty second to growth plans. and diligent stay on at the expect of we we're to expansion able support in again, 'XX continue running and the of have be our up

Christopher Growe

quick the household -- these of kind figure new some in up basically a a what space And but of that degree doors, just around great. new another -- sales to understand, the of new around of this question, was more stickiness you're shelf But terms penetration have doors Okay. and accrued more lot, question we how to understand getting to then a obviously that earlier kind an was bit many shelf just -- like are or in space, discussed just new distribution like we new shelf company seeing of here? earlier to

Russell Diez-Canseco

Thanks Chris. Yes. Russell. It's

nice channel, had especially strong certainly household increase lift. yes, in And penetration So, we're the the in natural velocities. seeing, a

we think QX. we about XXX mentioned -- prepared as I doors in added during remarks, new the we had

existing in both retail think new. to I and with partners, engaging effective So we be continue

We and retailers open to their continue approach. traditional -- reviews to category are be continuing do reset

we're and from And seeing substantial note. to work strategy and continue so, kind that not have, that any of we always as changes process on our our we plan

Christopher Growe

time Okay. Thank for today. you your

Russell Diez-Canseco

Thank you.

Jason Dale

Thanks.

Operator

from line of our with the Adam And you. next Samuelson Thank Goldman question comes Sachs.

Adam Samuelson

afternoon, Good Thanks. everyone. Yes.

Russell Diez-Canseco

Adam. Hey,

Jason Dale

Adam. Hey,

Adam Samuelson

Hi.

different following maybe angle. from question utilization up a So earlier on capacity the on

how north that flocks thinking of issues a that could think as have you’ve live plus half, to are you on your with talking any Russell, about quarter, sales and up and in XX% of little play Jason, tight bit about the comments back helped? inventory how chain? this far second network, fill you the ahead seen you supply grower live ground up in in increase terms And stock rate, having in on a obviously, the it you've COVID with big are got XX% the there. the is seeing your And any Just, just

Jason Dale

Adam. room you're the within lead -- referencing that and beyond range Great. down lot guys what there's talking generate kind as the again, our guidance of to of in of gas put we're the new you that of we're to we not far hit of But all again, about. told we terms kind range. think supply Thanks, I that a well Yes, kind what farms, time of to gave,

And one thoughtful planning make being and sure as very in continue to down year, the and rest your it spot a to nice to continued the kind making supply put where the QX, to decisions of actively stickiness -- the a how of in we point go we uptick kind this. into of continue the so saw of we into demand and we're supply things really see and we now, about 'XX we're great right balance. we have grow We're of through right

put so to make sure don't get there want and that a actually And we of in bunch we to where create too we farms crazy down an imbalance.

in 'XX being And so, our support be farms to certainly we're growth. thoughtful about that, adding and we'll

Adam Samuelson

reviews the a of from and thinking or from COVID then of about kind of benefited might about SKU you of mainstream that have a wondering And households points count to you just convert helpful is per items in conventional of perspective particularly you door. channel maybe number as That's how Right. more into on kind distribution kind number think follow-up shelf retailer that really the distribution, of some items 'XX in category done, customers, recurring those has your has new impacted, the color. buyers. And of the any

Russell Diez-Canseco

category majority an of don't Adam. Appreciate which and vast the me. conversations I'm I between the downside items, retailer that, business. other front reviews on -- updated in door some -- items there have very adding to somewhere a or been average quo have Anecdotally, items. and on so per our of reason of was statistic for are few a aware There actually material lost status examples we I where impact

distinguished supply it So to the diversity ourselves good there's to spring. April of that the confident that for scrambling vendors and about belief taking in a care in And they great counted. it want interpretation and like March got times what can deliver as in my think partners suppliers felt feel the when I some they on and is they're that bad. think trepidation that sure we of part my and in And of I retailers be being make they've

we the with the I strong so that as think is think benefits into generally And us. head a to of one of retailers maintain fall, want I partnership

Adam Samuelson

the Okay. very Thanks I'll much. pass I appreciate it on. really color.

Russell Diez-Canseco

Thank you.

Operator

you. Thank

comes of Suisse. the question Moskow from next Credit Your with Robert line

Robert Moskow

I more Thank farmers. learn to you're maybe happened wanted bit what's the contracts negotiating Hi. little you. with with that a your about

you're more to you have which are I you new risk that think of and contracts going. scale. discussions those for these I Have recently pay eggs, to typically more taken premium you’ve converted steps think how -- you now reduce farms sense that the your makes

Russell Diez-Canseco

Jason, you that? want pick to

Jason Dale

Yes, don't the Yes. contracts last haven't you have adding guys, right time we Rob. actively we're since Hey, now to down. had actual any, -- supply we We new I any added think not so talked today.

So to over. people that point, we're not actively converting

next in will form expire as contracts the put on supply, the new As come and year look we they the down to the new contracts. in

Robert Moskow

Okay.

Russell Diez-Canseco

little color, add But I maybe just a bit more can Rob.

to throughout supply growth. are we the year adding support continued our regularly and So

the signed think distinction contracts. new is I recently haven't that we

some sign number imagine then supply can there's You online, a and of a comes months later. lead to contract, time that

leave a aren't you distinction. to didn't adding So that we impression I supply. with any there's want the

Robert Moskow

that the Okay. of are are you to could here your gross still think contract out In boost the margin that margins, years. factors margin? want other What you biggest that Is it you or try over higher? ask might expand call margins drivers gross there gross that changes, case, to two next do the

Jason Dale

of growth long-term the pillars, year, continue same further we and Yes, not talked of but Like on the beyond ones to yes, farmers new our playbook now, I and through we getting we're that that the to as same right as kind think get we're of evolve years, with obviously those and kind end more in and continue the look will the out we to get put have to queue, margin. out there supply accrete target work we we about, people into contracts continue have larger this and guidance still got right?

Robert Moskow

Okay. All you. right. Well, thank

Jason Dale

You bet.

Russell Diez-Canseco

Thanks, Rob.

Operator

of Bank our And from with question Ken comes Zaslow line you. Thank Montreal. next of the

Kenneth Zaslow

everyone. afternoon, Good Hi.

Russell Diez-Canseco

Hello.

Jason Dale

Ken. Hi,

Kenneth Zaslow

have I medium eggs to the do you think gone have market. there's them? have on And is making Do more a I about those feel And it, your permanency have know on stick? strategy that? found eggs, follow-up you One you question. the questions. you working there size to How into guys two been like Just sure guys

Russell Diez-Canseco

Great. about shell for of medium that, is certainly Ken. to That's to as for at is retail sell you're right. ways And eggs. focus think that something Thanks us. There an be two a egg. able are to them area One

an converting them liquid The them other by eggs. is to ingredient use as into

to channel make for Those mediums are could to can So hard those egg we in And the new Egg all used sell eggs. We when market a example, medium mediums to pasture-raised as bulk, used our you bring food we currently be do if not Bites. make liquid also well. at eggs of use those boiled service could whole retail. for those and imagine medium there eggs

to some on often experiencing demand be again, influenced next part sure supply continues We entire in diverse there seasonal supply make presenting it That we to say we year. when fall into as a there some is desire may solving. the are to actively and are of supply. But the retailers can't by a that that we're area shortages base is head is focused projected for retailers there season interest, I be that an and often solve opportunity

Kenneth Zaslow

you And us with if space could kind gain help question much did My gain actually forecast second how that? you out to or do of that? expect is, how in the And shelf you reset?

Russell Diez-Canseco

go great Well, strategies velocities, high and retailers, and we specific. we're are be retailer try seeing Generally, where retailer very tend each us especially but those different. the In to that some those and or and have most for items. to create what retailer the of more we for is proposals eggs an sense SKUs, makes there's in we maybe example, and might one two just always deciding a negotiation propose retailer element for of an them. the several And element

for our process, change. three the four. answer the that got as the the and have I Mulo but -- of I a road whole, of great is of SKUs market don't we've -- XX, and I So portfolio shelf have It's whole while at don't statistic between our foods three average we out in XX on probably kind -- a of show the in in in think offhand sort

be And and SKU certainly and still productive retailers very the a fifth so, to category meaningful and we to and sixth fourth, believe fifth that can -- performance. the addition the category

Kenneth Zaslow

Thanks, appreciate guys. it. Really Great.

Russell Diez-Canseco

Thank you, Ken.

Jason Dale

you. Thank

Operator

the I'll now conference turn closing for remarks. Diez-Canseco you. Thank back to over Russell

Russell Diez-Canseco

at Thank excited with a and engage we're you questions really great this to new for all stakeholders again. we're you. It's Hey, in doing. your -- and thanks everybody what is for being Have great Thanks here and us, for day. engagement.

Operator

the gentlemen, thank disconnect. does you and in Ladies program, conference. conclude now you and may participating today's This for

Vital Farms (VITL) 10 Sep 202020 Q2 Earnings call transcript