BellRing Brands, Inc. (NYSE:BRBR) Q1 2023 Earnings Call Transcript

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William Chappell: Got it. And I guess I’m trying to understand like it seems like you’re modeling or we’re looking for kind of a soft landing as you — over the next three quarters lap the double-digit pricing and at the same time, capacity comes up and volumes need to accelerate. So I mean do you see that taking a few quarters to adjust or is it that simple of if you can get kind of the full set at the track channels like you have right now with the club channels that the volumes pick up pretty quickly?

Darcy H. Davenport: Not sure I’m totally tracking your question.

William Chappell: I mean just — I’m just trying to understand how you look over the next three to four quarters as you lap the price increase, but volume doesn’t — are you expecting volume to pick up that quickly to offset it?

Darcy H. Davenport: Yes. Paul, do you want to talk about cadence of volume?

Paul Rode: Sure. So we do expect volume to grow for Premier in the — as production comes online, and the key drivers for that are, we will relaunch some of the flavors that we aren’t currently selling. We talked about having some wide promotion in the latter part. But as we get into the next fiscal year, obviously, we — our current thinking is that it will be more of a normal promotional cadence of forward promotions in club, which drives a lot of volume. I also want to just highlight that we still have a pricing benefit for shakes in the second half. We took a price increase in October of this year and so while in the first half, we get the benefit of kind of two price increases, the one we took last April and the October 1 of this year.

In the second half, we still get a pricing benefit in the second half related to the current year price increase. So we still see a mix of volume and pricing benefits in the second half, but volume does become a more significant contributor to the second half than we expect to be in the first, and that’s because of the production coming online.

William Chappell: Got it, thanks so much.

Operator: Thank you. Our last question will come from Rob Dickerson with Jefferies. Your line is open.

Rob Dickerson: Thanks. Just have a quick question, longer term, and a quick follow-up. Darcy I’m just curious, if we think longer term, just around brand positioning where in it seems like category is still strong or are you still holding share despite the reduction in TDPs recently, there’s still some new innovation kind of being generated in the pipeline but if you step back and you think about the entire category and kind of the competitive backdrop, it usually when volumes are growing so much, there’s usually increased competition, new innovation, repackaging, just kind of a very general question, do you kind of foresee any repackaging design, coloring what have you need as we think for just I don’t know, next two to three years? I had a quick follow-up.

Darcy H. Davenport: I am assuming you’re talking about Premier?

Rob Dickerson: Yes.

Darcy H. Davenport: We’re always looking at those kind of things. I think that we’ve updated kind of the look and feel of Premier over time. I think from a brand positioning stand point we’re feeling really good. We continue all of our consumer research just continues to tell us kind of we have a tiger by the tail. And this is — this kind of mainstream approachable protein is right on trend. And so I think that the brand is positioned right. I think our challenge is just — it is production, it’s capacity, so then we can drive the message to more people. And that is absolutely the focus.

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