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Annie’s CEO John Foraker on how the company is handling the rising costs of commodities.
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As we heard from our team earlier soft commodity prices are hitting record highs this summer is the -- continues to.
A recap across the country how food companies though being affected.
And what they doing to hedge against the rising cost any CEO John four -- joins us now from San Francisco what I think -- and that question of most.
Food company CEOs how are you handling the price search.
Well he amazes in a relatively good position we are forward -- on most of our key commodities.
Through the end of this fiscal year so we really don't expect.
Much impact of about rising commodity prices on this fiscal year.
Com and also fortunately.
We buy a lot of -- we are high protein wheat from -- Midwest and Canada and the yields on those -- have been pretty good so -- or over on a reasonably good position we do expect a little higher commodity prices next year.
And dom and -- planning for that.
OK so when when you city -- it's the -- basically next you're gonna have to deal with a because your your your deathly hedging.
You did a good job of hedging would have the same time next year is kind of the -- refer you and you -- and it really you're you're using organic materials organic.
We'd as you mentioned -- example I mean that's already high priced and that's RD factored in the high here you're Iran of the balance sheet right now.
Right -- or organic materials are a little bit different market you can't open up.
Exchanges and see exactly what they're gonna -- -- -- trading -- so we tend to -- our commodities from long standing relationships with.
Really high quality farmers that we plan with over the longer term so while we are expecting a little higher commodity prices across the total.
Complex and not only our business but obviously the broader complex and you've been reporting about.
We believe that we're gonna go to handle lemon if we need to pass through a little bit of pricing we think we can do that we have very strong -- and -- and we haven't -- -- difficulty doing that the past yeah.
Yeah outlook certainly I -- three quarters of of Americans have at some point try to an organic products are certainly in the right.
Blended business right now at the same time you -- nasty you're gonna raise prices and October mean are you kind of think gonna have the -- raise prices again after that.
We think we're probably.
Okay for right now we're gonna watched.
Markets closely watched the the yields -- of that stuff coming and we -- in turn next buying season mobile plan appropriately but.
Again if we need to take some modest pricing we believe we have the flexibility to do that because we have a store -- OK I want you -- in his public earlier this year you know about almost six months ago now curious how you feeling about that decision to go public I mean we we're saying a lot of public companies considering.
Going private -- feeling so far about the results that you've gotten from the public market.
-- we feel really good we've obviously had a good reception from the public market.
We think broadly investors have recognized that the organic and natural spaces.
Really good healthy place to be there's a long term secular trend.
For consumers.
To -- he healthier and the more and more interest in doing that -- we sell to.
Gatekeeper moms -- interest in keeping.
You know artificial ingredients and things out of their kids' diets and -- as perfectly positioned for that so our overall sector in -- is doing.
Really well and we think we're well positioned for growth in the future being public now is is a good thing.
What -- about the sector since you brought that up because you know the sector overall I mean the amount of the biggest 12% growth rate between 2002010.
For the organic market.
Overall some multibillion dollar market everyone's trying to get space you've got -- -- selling organic products at the same time I've seen estimates of 8%.
Moving forward for that space to -- -- that's gonna continue could send the economy really hasn't picked up.
Like we'd expected.
Well the demand for -- org.
Panic has been very resuming even when the economy has been -- and consumer confidence has been really soft.
Consumers of products like -- he's -- to be a little bit higher income they tend to be more focused on health and wellness and you know that the average -- -- product for example retails for about two dollars and fifty cents and Tom but our moms and dads are buying the product are willing to pay a small premium to feed their kids a little bit healthier cleaner -- that they feel good about efficiently kids.
Not acknowledging he's got the kids want -- -- -- -- -- you -- -- and it's more I mean they -- they want -- great tasting Americans usually with a Q bunny coal burning on the package.
And the -- but but but where we feel like we're gonna get space in the industries -- -- -- -- OK let me -- spillover.
-- -- -- obviously this it's I was gonna talk about.
Other products even launching but -- -- sort of expand -- you're getting -- frozen pizza I know I can't be completely organic obviously but.
You know come worried intake is saying frozen pizza you got that he -- not -- -- the good stuff what's next for -- -- Well we'd see lots of opportunities and frozen that's a big frontier for us where we see lots of opportunities to.
Take our brand and -- up and other eating occasions and we are doing a certified organic rising crust pizza -- its national and whole foods and it's doing very well.
I'm and we're launching -- I made with organic -- line across.
Grocery stores right now that's rolling out and our second quarter so we see lots of opportunities the brand can definitely extend and other categories and we're just gonna stay focused on innovation and making great tasting products are consumers -- And you have one of the best -- probably -- trading right healthy and as a lot that's great thinker early is a -- -- February 7 in the box they should check it out right.
-- per -- any CEO John thank you very much good to have you on the show.
