Ram Selvaraju: Hi. Thanks for taking my questions and congrats on the strong bottom-line performance. With respect to the HNH business, I just wanted to get a little bit more clarity on ultimately what you see as the long-term upside potential in the VitaCholine business, if you can offer us kind of any color on the long-term kinetics of growth there, given the status of VitaCholine is very much a flagship type product for you as well as how you are thinking about the growth curve, particularly with regard to the Kappa product lineup and you mentioned earlier, inventory normalization and the fact that you don’t — you’re not looking at that business is having been totally normalized yet. But whether we should look at this as being a situation where you expect it to hit its stride in terms of growth before the end of this year or if we should really expect sort of the after-burners to be turned on in the Kappa product line in 2024?
Ted Harris: Yes. So I’ll take a stab at that. Martin, you can chime in to add some color. But really two questions there. One around VitaCholine and the market potential. And then one around Kappa growth. On VitaCholine, we continue to be very excited about the potential of this essential nutrient. It is really a special nutrient that we believe just has underperformed over the years because of lack of awareness. Not really because of lack of studies, but really lack of awareness. And so we are, as I’ve talked in the past, really focusing on building a marketing, if you will, communication platform for effectively and comprehensively communicating about VitaCholine and our other portfolio of minerals and vitamins. And we do believe that we’re starting to make strides there and starting to impact overall awareness.
And it’s a bit of a journey. And it will take some time. But we believe that the size of the VitaCholine market really is, I want to say, three to five times what it is today. And that should allow for not only double-digit growth, which we have already been achieving by penetrating the market through awareness but more significant growth. I’m not going to be satisfied until we’re growing this market by 20%, 25% a year. And I think we need to be growing at those sorts of rates in order to achieve that three to five times market growth. And we need to do it by building awareness in the cognitive space. We need to do it by building awareness in the liver health space and so forth. And that’s what we’re focused on. So hopefully that gives you a little bit of a feel for what we think is possible there and hence why we’re investing in more capacity.
Relative to Kappa, I do think that the rest of the year will continue to be uncertain although we see some stabilization and a return to more normal conditions. I guess, I would like to say that going into 2024, we’re going to start to see growth really accelerate in our portfolio and in products like our K2. We certainly have a lot of new launch opportunities that we’re working on. And the team is excited about — there’s no question that the coming together of the Balchem team and the Kappa team is creating synergistic opportunities. And I think we’re going to start to realize that more and more as the year progresses. But as we go into 2024, we should be back up into the, call it, 15%, 20% type growth year-over-year of K2. Little bit similar to choline.
And we think that the market should be substantially larger than it is today, and we need to drive awareness there, maybe we need to do a few more studies, but we continue to be excited about K2 as a specialty vitamin.
