Good day, and welcome to the Beyond Meat, Inc. 2022 Third Quarter Conference Call. All participants will be in a listen-only mode [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. At this time, I would like to turn the conference over to Teri Witteman, Chief Legal Officer and Secretary. Please go ahead.

Thank you. Good afternoon and welcome. Joining me on today's call are Ethan Brown, Founder, President and Chief Executive Officer and Lubi Kutua, Chief Financial Officer and Treasurer. By now, everyone should have access to the company's third quarter earnings press release filed today after the market close. This document is available in the Investor Relations section of Beyond Meat's website at www.beyondmeat.com. Before we begin, please note that all the information presented on today's call is un-audited. And during the course of this call, management may make forward-looking statements within the meaning of the federal securities laws. These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Forward-looking statements in the earnings release that we issued today, along with the comments on this call, are made only as of today and will not be updated as actual events unfold. We refer you to today's press release, the company's annual report on Form 10-K for the fiscal year ended December 31st, 2021, the company's quarterly report on Form 10-Q for the quarter ended October 1, 2022 to be filed with the SEC, and other filings with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. Please also note that on today's call, management may make reference to adjusted EBITDA, which is a non-GAAP financial measure. While we believe these non-GAAP financial measures provides useful information for investors, any reference to this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Please refer to today's press release for a reconciliation of adjusted EBITDA to its most comparable GAAP measure. And with that, I would now like to turn the call over to Ethan Brown.

Thank you, Teri. And good afternoon, everyone. Last month, we signaled that the business continues to navigate a challenging period where broader economic conditions, particularly inflation, category-specific headwinds and increased competition have, over the past 12 months, combined to disrupt what has been over a decade of growth. This disruption has been in contrast to the year we had planned, where we expected a resumption of our strong growth trajectory as the pandemic receded in the majority of our markets. In my remarks today, I will briefly unpack what we believe are the key drivers of this disruption in our growth, the elements that we believe are transitory and those that may be more persistent. I will then walk through the full force transition underway toward accelerated cash flow positive operations in route to a sustainable growth model. Before doing so, I would like to take a moment to offer a broader perspective as is the case with many emerging industries that challenge the status quo, the path to mainstream adoption is rarely straight and smooth. Turbulence along the way generally does not signal a diminished long-term total addressable market, or TAM. The history of innovation is replete with examples of this phenomenon, captured across a host of disruptive technologies. We are in one such moment as a brand category and are operating with urgency and decisive action to navigate it. We do so with an unwavering focus on our $1.4 trillion TAM, the global meat market, and continued execution of our long-held goal of achieving taste and price parity with animal protein. As we seek to pivot the business to cash flow positive operations and quicken our path to profitability, we are committed to transparency and accountability. To this end, in my remarks, I will center on a clear…

Thanks, Ethan. We recorded net revenues of $82.5 million in the third quarter of 2022, in line with the updated guidance we shared on October 14 and representing a 23% decrease compared to the third quarter of 2021. This result fell short of the expectations that informed our outlook on our Q2 earnings call, primarily as a result of weaker-than-expected demand in the category, and especially within our core subcategory of refrigerated. In addition to overall category softness and as we shared in our October 14 press release, net revenues during the third quarter were also negatively impacted by increased competition, certain customer decisions, such as reductions in targeted inventory levels and postponed and/or canceled promotions as well as delayed and/or canceled product promotions and introductions relative to our prior plans. In aggregate, total volumes sold during the third quarter of 2022 declined 12.8% compared to the year ago period, primarily as a result of the factors I just described, while net revenue per pound decreased approximately 11%. The decrease in net revenue per pound was primarily attributable to strategic, but limited price reductions in the US and broader list price reduction in the EU, increased trade discounts, unfavorable changes in foreign exchange rates and to a lesser extent, changes in sales mix. Turning to gross profit. Gross profit in the third quarter of 2022 was minus $14.8 million or minus 18% of net revenues as compared to $23 million or positive 21.6% of net revenues in Q3 of 2021. Gross profit in the third quarter of this year was negatively impacted by approximately $7.2 million, or minus 8.8 percentage points of gross margin of underutilization fees and one-time termination costs associated with certain co-manufacturer agreements, of which approximately $5.9 million was related to Beyond Meat Jerky, including such underutilization…

Thank you. We will now being the question-and-answer session. [Operator Instructions] Please limit yourself to one question and re-queue for additional questions. First question today will come from Alexia Howard of Bernstein. Please, go ahead.

Good evening, everyone. First of all, thank you very much for really focusing on how do you get back to cash flow positive. You've obviously given us a quantification of the savings from the two reduction in forces or the most recent reduction in force that you've just put in place. But the level of cash burn is still quite high. Lubi, thank you for going through the components, and I recognize you're going to give us more details on the fourth quarter. Is there anything else you can tell us about how much you could reduce the input cost or the COGS ingredient packaging side of things? How much the plant cost could come down by reducing the use of unnecessary co-manufacturers? Is there anything else that you can give us that will give us an idea of how much those all of that cash burn can come down by so that we can get some visibility into what the drivers are? Thank you and I’ll pass it on.

All the speakers’ lines are live?

I apologize. We were muted. Alexia, thanks for the question. Although, I can't provide the exact level of specificity that you're asking for. Let me try to give some qualitative information here that hopefully will help you in your modeling. So we put out a target to be cash flow positive within the second half of 2023. Clearly, there isn't a path to getting there if we don't restore our gross margins back to positive territory. Now we're not prepared just yet to give you sort of an exact target for gross margins for 2023. As I said in my prepared remarks, we'll be providing more detail at our fourth quarter earnings call. But clearly, restoring the gross margin back into sort of solidly positive territory is high on our priority list. And it entails a couple of different things, including stabilization of the core, rightsizing the network, those two initiatives are going to be very important levers to driving initiatives are going to be very important levers to driving continued improvement in the gross margin profile of the business. And then obviously, we've taken recently the difficult, but necessary decision to really reduce our operating expenses, and we'll continue to benefit from that as well as we move into next year. And so those -- from a margin perspective, those are going to be the two big drivers. And then obviously, there is the -- as I said in my prepared remarks, there's the inventory reduction and CapEx objectives as well that will help us get to that cash flow positive.

That's great, Lubi. And -- I can just give some additional color. We're obviously going to continue to bring cash consumption down. I think the biggest, broadest explanation that I think is important to drive home, when you have this drop in volume and associated deleveraging, things are going to start showing up in gross margin and elsewhere that are unfavorable. And you can either wait for growth to return or you can rightsize your production system and your organization. And I want you guys to hear directly from me, we are rightsizing the organization, the operational footprint to be able to drive the cash flow positive within the second half of next year independent of any aggressive growth assumptions. And I think that is something that is new to our business, given the 12-plus years of pretty aggressive growth that we had enjoyed. I think we will enjoy again in the future. But for now, it's really about stabilizing the business based on a more reasonable revenue growth trajectory. And it's exactly as Lubi said in terms of making sure that we'll see some growth in the core lines of beef burger and dinner, but again nothing extraordinary. Continuing to reduce the size of the network and eliminate idle fees, moving certain parts of production back in-house, so that we can improve overhead absorption really aggressively managing inventory. We always think about inventory as kind of sleeping money, and we need to start accessing much more of that. And there's two benefits to that, right? One is, obviously, you reduce inventory levels and free up the cash; but two, is you can use some of that inventory to welcome new consumers into the brand at a time when they're economically stressed. And so we're going to -- some of that targeted pricing, which we can explain more later on the call. We're going to go ahead and implement. And then we have a whole cost-down program, which actually is going quite well, and it's one that we've been driving. The challenge is you're not going to see those results until we move through some of the inventory that we have now and start to get to the conversion of raw material into products within the new production system and where those cost down programs have been successful. So a lot of things are in play to be able to drive us from the model that we had, which was one of heavy cash consumption to one that will be cash flow accretive.

Our next question will come from Adam Samuelson of Goldman Sachs. Please go ahead.

Yes, thank you. Good evening everyone. Maybe, Ethan, you kind of alluded at the end of the last answer, but some of those strategic targeted pricing actions and the ability to -- or the target to free up inventory, can you provide a little bit more context and scope around what that entails, what you think the incremental distribution could be? And where you think the inventory balance will end up either at the end of the fourth quarter, or at the end of the first quarter to help you access the cash that's on the balance sheet?

Sure. Thank you, Adam. I'm going to give you an answer that probably is one degree of specificity away from where I think you'd like it just because of competitive reasons and things of that nature. So part of the push toward cash flow positive and a sustainable growth model is to dramatically narrow our focus within foodservice and retail. And the unifying theme in terms of what we're targeting are those opportunities that give us the highest probability of restoring growth also nurturing the most valuable long-term pathways that we have. And so examples of that, we have a number of QSR partners. We're narrowing our focus somewhat to a handful that we're having great success with and want to nurture those. I think there's a lot of focus on our US business and our US retail appropriate to sell. But if you look at what's going on in Europe, for example, and just focus for a moment on the launches and the tests that I mentioned, and then as well as the permanent menu placements, not only Europe or Latin America and in parts of Asia, we are planting seeds that we expect to be pretty significant volume drivers for us in the future. So, we'll narrow our focus there. And then when you get into the retail space, again, and narrowing the focus toward what can we do to restore growth in the fresh meat case, where we really believe transformation can occur. And an enormous amount of energy time and focus has gone into the third iteration of our Sausage platform, for the fresh case and the fourth iteration of our burger platform and beef platform. We expect to have those out. I can't give a specific deadline for that. But in a way, it will…

Our next question today will come from Robert Moskow of Credit Suisse. Please go ahead.

Hi, Ethan.

Hi, there.

The script today and the task at hand, it's a very different task than what your vision of the company was originally. And I also think the culture of the company that you've built. And I'm just wondering, do you have the right people in place to execute this new kind of approach? And are people ready to make this kind of pivot? Do you need to bring in different people to do it?

Yes. But that's a great question. Thanks, Rob, for asking that. It is a pivot for sure. And I want to be very clear that it's coming from me. I feel very passionate about this change that we're making. I have no doubt about the long-term opportunity facing our company and our ability to go get it. We continue to produce the very best products, all these other things, right? What we have to do is change our mindset from one where it was growth above everything else to now pushing very quickly the business into a cash flow positive and a profitable position. And that's not because I feel that I need to produce better numbers for people right now or things of that nature. It's because it's what's going to allow us to endure this current economic situation and reach that longer-term goal. And so in terms of the people that I have around me, I do think that we have a lot of the right pieces in place and a lot of the language that I was using, you could obviously resonate with people who are aware of the lean literature and things of that nature. We have folks that have come out of that school of lean principles. And it's not a manufacturing mindset. It's a organization-wide mindset, right? And so we are pushing that out throughout the organization, but it is the number one goal. The hallmark of the way I manage our business is we have a high-level set of goals for a three-year period. We have a three-year plan. We've got a one-year annual operating plan. But those boils down into a set of discrete projects. The number one project for this company is to push this into a cash flow-positive position by the second half of next year in order to accelerate profitability. Anyone who's not willing to sign up for that is not going to be very comfortable here. So it is -- it's coming from the top. I'm very passionate about it. We have the energy here to get it done. And just all the intensity and focus you saw on us signing up the very best partners in the world, putting the best products out and growing the movement. We are now shifting to achieving this goal, again so that we can realize that long-term vision we have for the company. I had no intention of shifting gears in terms of what our long-term goal is. We will be very large protein player globally. And this is a difficult period economically across the country and across the world. So we are going to rightsize the organization to get through, and it's coming from me, and we'll get it done.

Our next question today will come from Cody Ross of UBS. Please go ahead.

Hi, good evening. Thank you for taking our questions. I just want to touch a little bit, Lubi. You talked about a good part of your goal to become cash flow positive is to turn gross margin positive. Can you just remind us or give us any color on what percentage of your COGS are fixed versus variable?

I'm not sure that we've quantified that specifically, but the vast majority of our COGS basket is variable of our – our COGS cost is variable. And that's a function of the sort of the co-manufacturer sort of model that we have today. And obviously, a fair amount of our finished goods production is still done with our co-manufacturing partners. And therefore, the only fixed costs that we have embedded are associated with our own facilities where we do extrusion.

Our next question today will come from Peter Saleh of BTIG. Please go ahead.

Great. Thanks for the question. Ethan, I just wanted to come back to a comment you made. You said you guys are going to focus on gross profit dollars and not necessarily gross margin percent. So maybe just if you can provide a little bit more detail on that? What will you be focusing on in terms of products that drive gross profit dollars? And are there any products or channels that you'll be cutting that maybe were higher gross percent, but lower on the dollar side? Just trying to kind of understand that comment in the context of what you guys gave us today? Thanks

Sure. So it has to do with the pricing program, we're putting in place on one of our items that is kind of in our core. And again, it's not going to be a blanket pricing for all segments, but we think it will be meaningful for this that we apply it to. And I wanted the team to understand that the goal there is to drive conversion of inventory, bring new people into the category. We're obviously not going to do anything that would be on a per unit basis negative. But it has to do with that program. I also think the days and again, gets to the change in mindset, we launched the jerky product, great partnership with Pepsi. I had a -- I think it's a $30 million contribution this year to revenue. I think we grew the category 4x or something of that nature. And we finally crossed over into a breakeven situation on the margin on that. It's being obscured by these termination fees and idle fees and things of that nature. But those days are over, like we're not going to be launching any products that aren't cash flow positive and margin -- profit dollar contributors at the onset. And so it's really about flexing where we have room in margin to flex to drive more volume, and that gets down to our core lines. And again, I don't want to specify which one or which segment we're going after, but that's the reason that I'm asking the team to focus on profit dollar right now versus that margin.

Yes, I would just add on top of that, that we're being very targeted with these programs. And we're looking at, number one, as Ethan alluded to, we're looking at some of our core SKUs where we continue to have strong margins on those already. And so these won't be negative margin from a unit perspective. But we're also looking at our core products where there are existing distribution gaps and where we have an opportunity to maybe secure new points of distribution by doing some kind of a special program, bring in new consumers who maybe haven't tried these types of products or our brand before. So it's a targeted type of program. And it -- as Ethan said, it is -- these are cash flow accretive, assuming we get the lift, right? These still cash flow accretive activity because we'll be covering our variable costs.

Our next question today will come from Michael Lavery of Piper Sandler. Please go ahead.

Thank you. Good evening. I just wanted to come back to fixed costs. I know we've touched on this a little bit, but for some of these underutilization penalties or for the new headquarters, which I think the rent starts at around $15 million a year and then builds. So, there's -- it's a meaningful outlay in terms of your spend. How much flexibility do you have on terminating or changing any of these contracts, or do you -- are you committed to the headquarters building? Is there a better way to think about how to run -- set that up? What's some of the flexibility you might have?

Yes. So it's a great question. So we have kind of four buckets that we're looking at of kind of agreements and things we entered into several years ago that -- comporting more with the kind of growth curve that we're seeing then that we're just going to have the tough discussions with those partners about how to address it, and we're doing that now. On the headquarter question itself, we're just consolidating a bunch of leases. So we're pushing forward in that direction, getting out of them, things of that nature. And so I don't think we'll change course on the headquarters, but we will consolidate into them. And that's, I think, an important step. I mean people -- I think many people have commented on the disruptive aspect of the pandemic and distributed workforce in our kind of work we're push in and turning out best products in the world and doing it under tight time lines, we need everyone together. And so I'm very much committed to making sure that happens. But the kind of idle fee things and things of that nature, we're doing a few things there. One would be trying to consolidate some of our production in areas where we do have idle fees to make sure that we're not spending anything that's unnecessary for production. And then having those conversations, right? I mean I think that the world has changed and everyone needs to play a part as our partner. So, it's a big focus for me.

Our next question today will come from Rupesh Parikh of Oppenheimer. Please go ahead.

Good evening and thanks for taking my question. So, just on international markets. I was curious if you guys have reviewed the business. Any thought of actually exiting any international markets to more quickly rationalize the business?

Yes. That's a good question. I think in Europe; you'll start to see as some of the inventory eroded. I can't predict the future there, obviously, but we see some trends that we like. There's an overhang of inventory. In China, it's so early to tell what's going on there because they're just coming out of all these lockdowns. And they come out and they go back in and things of that nature. What we are doing, though, is reducing expense throughout our global operation and relying more heavily on partners. We have a terrific partner in Europe, an Zandbergen, and working very closely with them. to continue to serve and grow the longer term opportunity for Beyond in Europe, but do in a way that’s maybe a little bit more asset-light. And then in China, without getting into too much. We're looking at some similar opportunities there.

The next question today will come from Peter Galbo of Bank of America. Please go ahead.

Hey guys, good afternoon. Thanks for taking the question. Lubi, just a really quick one. I appreciate that you've given kind of a qualitative look at 2023 revenues, but maybe just so that we're all on the same page. Can we kind of just outline some of the puts and takes that get's you to a still kind of compressed revenue next year? I think, I heard from you obviously, rationalizing some of the footprint across QSRs and some retail partners, focusing more on the core. I think you'll be lapping the jerky kind of load in from the first half of this year going into next year. But then I would think on the positive side of the ledger, you'll have some load-in on stake in Popcorn Chicken. So just wanted to understand all of the puts and takes as we start to think about, again, from a high level, where revenues could shake out for 2023? Thanks.

Sure. I think you actually answered your own question, but there is – certainly, if you look at where the trends have been in the business recently, and we've started to see some increased pressure in our international markets as well. That stuff is not going to turn on a dime, right? And so I think in the near term, there's going to continue to be some, some pressure, particularly you look in the first half of next year. But then as we've been discussing, right, we have a number of these initiatives that are really focused on stabilizing and eventually restoring growth within our core. This includes things like launching, the new iterations of some of our key core SKUs. And so when you look at those activities as well as, to your point, start to layer on a bigger contribution from things like stake and popcorn chicken and potential other new launches. We do expect that the -- some of the pressure that we expect to feel in the first half of the year should abate as we get to the second half. So I know that's not overly specific, but hopefully, that gives you some sort of idea about how we're thinking about it.

Our next question today will come from John Baumgartner of Mizuho. Please go ahead.

Good afternoon. Thanks for the question. Ethan, I want to dig into innovation because it's hard to think that there isn't cannibalization whether it's meat balls versus ground beef, ground beef versus patties. And you're renovating products, but you're also launching the fourth iteration of ground beef. And the competition has moved on to frozen meals, protein bowls. They're hitting new meet states going from commodity to value add. Why isn't Beyond also moving away from commodity products? Why wouldn't that benefit you more than trying to migrate consumers from like a beef 3.0 to 4.0? I'm just trying to think bigger picture about what you can do need state wise to get revenue growth back into the model?

Yeah, a very good question. So I think the move you've seen from us on frozen is in part response to that, and you'll see more of that from us in the frozen space in term the convenience and things like that without dealing too much. I don't think that, that part of your question is, in any way, not consistent with where we're headed. But on the question about the core, we really do believe – and we've seen this that – our products continue to get closer to animal protein, right, in terms of the taste and texture and sensory experience. As we drive down the cost -- BCP did a nice study on this. The consumers want to do this. They just don't want to pay more for it, right? And so we have to continue to drive toward taste parity, which we're getting closer on and then realize this cost goal that we've had, which I think we're still going to hit within the time frame that I specified in at least one product in one category. And then Taco Bell Corniche has a good example, at that time the menu is the same price of stake. And so, I'm not going to walk away from that massive global opportunity around beef, pork and poultry with just the core cuts of that, the grounds, things of that nature. Because I'm certain that as we hit price parity with that, as the products become indistinguishable as the climate situation worsens as people get a clear sense of what the real health benefits are. And I want to actually just -- use this as a moment to talk about that real health benefits are of our products. This conversion will happen. And so, I got to make sure,…

Our next question today will come from Ben Theurer of Barclays. Please, go ahead.

Thank you very much and good evening, everyone. I wanted to follow up on your comments you just made around pricing and getting to price parity. And it really feels like if you just look and dig into the sales versus volume that you shared in the press release that there's been already a lot of investments, particularly on the international side. And it's tough to follow data points. So maybe you can help us understand where you stand right now in terms of the price premium versus your, call it, commodity appeals, particularly on the international side?

Yes. So a couple of things. One of the things that is requiring patients is, we've been able to affect -- sorry, we've been able to realize pathways to significant savings in our production that are just congested right now, because we have inventory that we have to draw down in order for the new production, new sourcing, all that stuff to come to fruition, right? And so there's just a backlog in terms of to be able to show the cost down measures that we've taken. In -- internationally, not -- just to be very honest, we're just too expensive right now, right? Part of the pricing actually look in Europe is because of that. But I was just getting -- I got a text earlier this morning from a friend -- from a colleague, Head of Sales, at one of our divisions here, who was in Israel. And he was saying just how incredibly expensive our products are there, and I heard the same thing about Singapore recently. And so we have to drive better coordination across our distribution network, across our retailers about not driving the price up. Even in the US, I think a lot of the contraction you've seen is not all, but a lot of the contraction you've seen if you go into the store, on average, $3 more than a pound of beef. The consumer is clearly signaling as they go to a dollar store and everywhere else. So that's just not what they're going to do today. So again, I get back to the BCG study, back to the vision I've had to the company since I started, we've got to get this to be at price parity. And I think it's interesting, there's so much -- and I understand it's human nature, desire to call this in one way or the other. They say, well, publishing or not. Yet the dynamics are not yet in place to answer that question. Let the economy settle, let us get our price point at parity. Then let's see what happens. And so if the launch doesn't go well with the QSR, the sky is falling. Well, how about it, maybe it was priced too high? Maybe it wasn't the right build? Things of that nature. So it's not binary, and we just have to keep chopping away at this thing. And we'll get to the point where you'll see that accelerated growth again. But we've got a lot to navigate right now, and I want to make sure we stabilize the company and be able to do that, and that's what I'm focused on.

Our next question will come from Rebecca Scheuneman of Morningstar. Please go ahead.

Great. Thank you for squeezing me in. So my question really stems from the -- on the $7.2 million fees that was in the gross margin. So I'm trying to get a sense for how much of that will be continuing into other quarters, or how much was truly one-time? It seems like if it's a termination fee that, that would be one-time, but maybe some of these underutilization would be ongoing. So I would just like some clarity on how much of this we can expect to continue forward as long as we're in this softer environment? Thank you.

That's a good question. So I mean, you're right, the majority was the termination, but doesn't -- but there are these continuing capacity fees, and we're reorienting the network to be able to absorb some of those, so they're not just going to nonproductive use. And then we're also just in negotiation. But if you look at what's happened in the industry, I mean, I found this interesting just from a disruption perspective and how categories expand and then contract and expand again. You saw JBS closed entirely their Plantera effort here, like 125 people, whole facility in Denver. I don't know who listened to it. My friend, Michael commentary yesterday at Maple Leaf, I think it took $190 million goodwill charge on their plant protein business and impairment rather. And also, I think, 22.5% negative margin. So there's just -- there's so much volatility right now in this category given the broader economic issues and things of that nature. And so you're going to run it. If you design a business for a year to say you're going to get -- I'll make up the number, $150 million in revenue or something for a quarter, and it drops dramatically, you're going to have idle fees, you're going to have excess capacity. You're going to have lower absorption of overhead, all these knock-on effects. And we're feeling those. And instead of just saying, I'm going to cross my fingers and hope for growth to return in that process of negotiation, in that process of reducing the operations footprint temporarily to be able to produce better margin without any significant resumption of growth.

Our next question will come from Ken Zaslow of Bank of Montreal. Please go ahead.

Yes, real quick question. Of your program, which -- of the four 4 steps that you have, do you think is most at risk or out of your control? And which ones do you think you have the most control over?

So I think Lubi was referring specifically to four 4 of the kind of financial levers on the program that we have is three steps, obviously, to drive home the reduction in OpEx. And that one, I think we feel comfortable with. I think the -- getting to cash flow positive really depends on not only discipline there, but also working through our inventory, which is a second step. And then third, which is probably the one that we have the least control over is the result of the execution of our focused growth strategy. We're narrowing down our focus to some key retail activities and some key food service activities and some key QSR partners. It's a much narrower scope than we've had in the past. But we think those are the kind of 80/20 rule. Those are the ones that are going to drive growth. If the economy continues to worsen, if we don't connect with the consumer in the right way, that could be something where there's risk. But again, we're not structuring the business for that that has to happen at some sort of dramatic level. We're going to structure the business differently, right? Where -- if there's -- even if there's some moderate growth, I mean, very moderate, we'll be able to achieve the goals that we're talking about -- what I like about that is that as these things that would have been percolating and that we've been planting the seeds quarter after quarter, the 25 distinct launches, the nonexisting products, countries, the Taco Bell stuff here in the US, the Panda Express here in the US, the McDonald's in Europe, the Pizza Hut in Latin America, as those things start to move from kind of the test phase into much broader utilization, those has gone upside for a business that has been rightsized. And I think that's where the value creation in this environment will occur.

And ladies and gentlemen, at this time, we will conclude our question-and-answer session. I would like to turn the conference back over to Ethan Brown for any closing remarks.

I think I've said it all, what I wanted to convey. It is a pivot in our business model. It's a pivot from kind of growth above all to cash flow positive and sustainable growth. I'm very excited about it. It's something I think is going to produce the long-term results that we've been after and do so in a way that's more efficient. And I look forward to building it together. Thanks.

The conference has now concluded, and we thank you for attending today's presentation. You may now disconnect your lines.