Good morning and welcome to SunOpta's Third Quarter 2015 Earnings Conference Call. By now everyone should have access to the earnings press release that was issued last evening. The release, as well as the accompanying slides are available on the Investor Relations page of SunOpta's website at www.sunopta.com. This call is being webcast and its transcription will be available on the company’s website. As a reminder, please note that the prepared remarks which will follow contain forward-looking statements and management may make additional forward-looking statements in response to your questions. These statements do not guarantee future performance and therefore undue reliance should not be placed upon them. We refer you to all risk factors contained in SunOpta's press release issued yesterday, the company's Annual Report filed on Form 10-K and other filings with the Securities and Exchange Commission for a more detailed discussion of the factors that could cause actual results to differ materially from those projections and any forward-looking statements. Finally, we would like to remind listeners that the company may refer to certain non-GAAP financial measures during the teleconference. A reconciliation of these non-GAAP financial measures was included with the company's press release issued yesterday. Also, please note that unless otherwise stated, all figures discussed today are in U.S. dollars and are occasionally rounded to the nearest million. And now, I’d like to turn the conference call over to SunOpta's CEO, Rik Jacobs

Thank you and good morning and thanks for joining us today. With me on the call today is Rob McKeracher, our CFO. As this is my first call as a CEO and we have a lot of new shareholders, I would like to take this opportunity to spend some time discussing our business, our strategies, and our transformational acquisition of Sunrise Growers. I also want to set out some important milestones for the future. Goals that will help us deliver on the promise that we’ve been building with our investments in our production capacity, people and processes. After that Rob will take you through our third quarter results and then we will be happy to take your questions. I’d like to remind those on the call that there is an accompanying presentation on the Investor Relations page on our website. So referring to that presentation on slide two is regarding forward-looking statements which the operator already covered, so if you could kindly turn to slide number three. SunOpta has built a leading position in the fast growing organic and non-GMO markets, markets that are large, deep and growing at double digit rates. This growth is underpinned by persistent and powerful consumer trends, increasing awareness of the link between diet and health; think of the stories everyday in the newspaper or on the radio about the importance of eating well. In fact, the New York Times just on Sunday ran an article on what it called the seismic shift in the way people eat, highlighting that food companies will need to go more organic, use more fruit and generally be much more healthy; we are already there. Concerns about food additives, allergens and genetic modification, to my knowledge there are some form of activism requiring the labeling of GMO foods in…

Thanks Rik and good morning everyone. Because we’re spending a bit more time than usual talking about strategy and execution, I’m going to try to keep this relatively quick. Slide 11 shows our revenue breakdown. Revenues for the third quarter of 2015 were $306 million, a decline of 0.6% from the year earlier quarter. After adjusting for the impact of changes, including commodity prices, foreign exchange rates, product rationalization and acquired businesses, consolidated revenues increased 1.5% with SunOpta’s foods revenues increasing 3.5% versus the prior year. On a normalized basis revenues in global ingredients grew 4.2%, reflecting stronger demand for organic ingredients in the U.S. and Europe. Focusing just on our internationally sourced organic raw materials, revenues grew 14.7% on a normalized basis, driven by higher volumes of organic fruits and vegetables, oils, coconut and seed, partially offset by lower volumes of coco and certain sweeteners. On the domestic side of global ingredients, revenues declined 5% on a normalized basis, due mainly to lower volume to sunflower products as the strong U.S. dollar put pressure on our export business. Within consumer products, revenues grew $11.1 million or 9.6% over the third quarter of 2014. On a normalized basis, mainly adjusting for the revenue of the businesses we acquired in 2015, Citrusource and Niagara Natural, revenues inside consumer products grew 2.7%. In healthy snacks we experienced higher volumes of both poach and fruit based snacks for both new and existing customers, partially offset by lower volumes in bars as we transitioned away from a contract with unfavorable terms. In healthy beverages, during the third quarter we made up for the decline of one of our largest aseptic customers with increased volume from new customers, thanks to our continued focus on filling the new processing and packaging capacity we added earlier this…

Thanks Rob. If I can leave you all with four key takeaways as we look ahead, it will be the ones laid out on slide 15. We operate in great markets. We have a well defined strategy to drive our business to higher margin. Sunrise Growers make sense both strategically and financially and Excelution has to be paramount, especially in our consumer product segment. So with that, I’d ask the operator to please open up the floor for questions.

[Operator Instructions] Our first question comes from the line of Scott Van Winkle with Canaccord Genuity. Your line is now open.

Hi, thanks. Rob, can you go deeper into that port capacity issue. Kind of what was it and why doesn’t it repeat going forward?

Yes, sure. So it’s really a combination of two things Scott, import and export, all organic soy and corn. You might recall back earlier this year, mainly in the west port there were issues at the ports regarding labor, which certainly from our perspective slowed down some of our exports. We did get them to their eventual destination, but as you could appreciate not all on time and now at this quarter what we’re seeing is some of the penalizing effect of that, meaning we’re losing some of the performance bonds that we have to put up in order to do that business, so that hit us now. It’s really – but the real impact or the real catalyst for that was certainly earlier in the year. But then on the flip side, on the import side, mainly on the East Coast we encountered issues this quarter really with availability and the arrangement of timely freight to move the products that we were importing through the East Coast ports out of the port. So from that perspective we’re incurring more demurrage and detention costs there, that we don’t see now reoccurring going forward, because we’re mapping out the timing of those receipts a little better to make sure we can avoid those as best we can.

Okay, great. And then on the ingredients side, can you talk about kind of where we should expect margins. Over the last 12 months you’ve had the deflating commodities and that’s impacted the dollar revenue growth, but you picked up a little bit on the margin percent. Kind of where do we stand today going into kind of the next crop cycle? Are we more normalized on pricing, what does that margin look like, anything you have in that regard?

Sure. I think what you’ve seen even bigger picture, certainly the commodities are down right now and they are hitting lows from the – if you look back to the three to five year period we’re certainly at the bottom end right now, so we do expect this to kind of be the bottom of the commodity prices, but I think when you look back in time, what you really see in our global ingredients business is a steady step up to more predictable and more acceptable margins and we think with our shift to having a bigger proportion of that business being more tied into the international organic side, we’re going to continue to see this level of predictability and stability in our margin rates going forward. So really I look at it as much as anything as the mix Scott. Commodity still does influence us a bit. As prices go up, we could see compression, but I do think that with the mix towards more of the organic and then leveraging that business more and more for our internal sourcing, we should see good stability inside of Global Ingredients.

Okay, and then on the consumer products, nice to see some recovery on the volume on the aseptic non-dairy side and you mentioned there was new customers. What do we think about the roster of new business for the Allentown facility, and the expansion in Modesto. Are you going to see expanded business with existing customers or a lot of new customers coming through? I’m wondering, think about qualification cost and the time to start up a new customer relative to adding capacity from the existing customer or how that will play out, because you are looking for a lot of new volume obviously on aseptic non-dairy.

Yes. Hey Scott, this is Rik. We are obviously looking for new customers, as well as increased business with our current customs now that we have that national footprint in place. We will be able to provide the lowest landed cost across the country that should benefit us with our existing customers. But as we laid out last quarter, we have really had a high concentration with a few customers in our aseptic business. So that’s why we need to grow our existing, but also definitely add in new customers and also go into new categories with those new customers. And you are absolutely right, as we bring those new customs on, which we did a lot of in the third quarter, there are costs associated with that, because every single time we will need to do quantification runs which you know eats into capacity, right.

So you’d expect to see more that in Q4 I would assume, both as you kind of do your last ramp-up on the juice side, as well as non-dairy. When we think about looking at the real earnings power of the healthy beverage portfolio, is that a Q1 ’16 event timing wise?

Yes, I mean I would say that sequentially we should continue to see growth in our healthy beverages, both top line, as well as bottom line. I’ve laid out in my remarks that next year basically the chilled juice must be margin positive, which it hasn’t been for the last two years as we all know. And aseptic is our expectation that that’s going to grow at double digit rates from out top line and obviously that’s going to really help our bottom-line, because we are going to fill up the capacity more and more.

Great. Thank you.

Our next question comes from the line of Amit Sharma with BMO Capital Markets. Your line is now open.

Hi, good morning everyone.

Good morning Amit.

Rob, a quick question for you. First, you called out $1.5 million of plant expansion expenses in the quarter. Could you please help us understand overall the last 12 months, what were some of the expansion and start-up costs and when do we start to lap those?

Yes, sure. So this quarter it’s really two facilities to which those are related. So of the $1.5 million, roughly $900,000 to $1 million is starting up the East Cost aseptic operation and Allentown with the balance being a ramp-up inside San Bernardino now that we are at a spot where we’re going to be significantly increasing the capacity and the volumes, not capacity, but the volumes that we are running through that capacity there at San Bernardino. In terms of looking back over let’s just say even year-to-date this year that same plant expansion start-up cost is about $2.2 million and the delta between the 2.2 and 1.5 is really all East Cost related. So it’s really in earnest this quarter that we’ve been really doing the ramp-up cost activity at San Bernardino, so that would be kind of this year depending [indiscernible] Amit and then as we look forward to next, well not even next year, I mean this quarter, there will be the kind of completion if you will of the ramp-up of costs in Allentown of course. We are only now just starting to make the commercial products, revenues will follow shortly after that. But the biggest piece of these start up if will at Allentown should come this quarter and then start to evaporate as we get to Q1 of ’16.

Got it, and San Bernardino?

San Bernardino we are there now. So we have repatriated essentially all of our volume going into that facility as of today. And so with the volume facilities running at good levels, the next step is to – and the ramp-up is really to a great extent in relation to our extraction side, which of course is the ingredient side of that facility in bringing more fresh citrus to the facility, so we can start generating greater volumes there.

All right. And any sense of what is the excess cost associated with starting new customers in the aseptic beverage segment.

I mean the way we look at it, Amit is like every day or every shift I should say that we don’t produce in our factory, but we use that for brining a customer online. It’s costing us about $30,000, so that’s kind of your cost of goods that you have replace them, right. So and we brought on a lot. So we had at least I would say seven or eight qualification runs in the quarter. So you can do the math on that, that’s more than $200,000 which by the way we didn’t adjust for.

Got it, but those will go away as you establish these new investments.

Yes, they will go away to some degree. Having said that, I think we need to continuously innovate, innovate, innovative and continuously launch new products, hopefully more and more of those are the ones that we help create because that obviously gives us a lot more intellectual property protection.

Sure and just on the same line of thought, you talked about double digit growth in aseptic beverages next year. And if look at the category, at least the measure of channel data that we are tracking is still growing by low to mid teens. So do you feel pretty confident with that double digit number going into next year from a capacity – not a capacity, but a volume expansion perspective?

I think what’s important to note is that even though we always call it our aseptic non-dairy platform, we do a lot more than just non-dairy. Right, so non-dairy we are continuing to expand with coconut, almonds, now we are even getting into oat and others. So that’s I expect some growth from, but we are also in the food category we are doing Broth now, we are doing Nutritional Beverages now; we are doing dairy now, in single served packages. So our growth rate should exceed what is growing in the growth rate of aseptic non-dairy.

And you are margin agnostic when you call from non-based dairy to other like juices or nutrition drinks or dairy, are you?

Well what we’d really like as we like working with retailers and food service operators because of our two touch model over there right. So we are margin agnostic as long as we are offering customized turnkey solutions. We are not margin agnostic when we switch between turnkey customized solutions and tolling business. So our key is really and our focus for the future continues to be working on the private label and the food service side of the business.

And Rik, last question from me, and you touched on that in the presentation about the new centralized model and also the new management that you are putting in place. Could you just help us a little bit understand, like what’s happening within the organization that should give us more confidence that this is going to lead to a faster realization of underline value of the portfolio and the platform going forward?

Yes look, I mean I think you it’s important to note that most of the new leaders have now been in place for about two years, as you can see on the slide. So over the last couple of years they’ve worked very hard on streamlining all the processes, making sure that all the organizations are set, have to be honest as well. It hasn’t yet resulted in the bottom line growth that I have put forward now for 2016 and that’s what that is going to be all about. So while I think over the last two years we have improved all the individual functions. What it is really all about now is as one team improved bottom line performance of the business.

Okay. Thank you very much.

Thanks.

Our next question comes from the line of Jon Andersen with William Blair. Your line is now open.

Hi, good morning Rik and Rob.

Good morning, John.

I wanted to ask about Sunrise Growers. First, on the synergies that you defined for 2016 of $5 million to $7 million. Can you talk a little bit about your level of confidence, visibility into those specific synergies and then are there opportunities beyond the $5 million to $7 million that could materialize in ’16 or beyond.

Sure. I mean what we pointed out in our initial press releases is that by the end of 2017 we wanted to realize $10 million versus synergies. We now have basically work streams going on that are being populated by people from Sunrise as well as from SunOpta in the area of logistics and operations in the areas of sourcing, in the areas of human resources, you name it, commercial etcetera. So all the synergies that we pointed out were really cost base synergies, because those are the only ones we want have to count on. But we really see the next opportunity is revenue based synergies, because we have a much more developed organic platform, which is about 10% of the Frozen Food category today. For us as previous SunOpta it was more like 50% of sales. It is the fastest growing sub segment and that’s where we see revenue opportunities that we haven’t yet counted as our synergy. So we are confident in the numbers that I’ve given. We have opportunity for more. We don’t want to count those as synergies until they land basically, when it comes to the revenue side.

Fair point. Let me ask you on the top line though, so because you haven’t really commented on growth expectations for Sunrise I guess over and above to the $300 million that was announced as the annual revenue at the acquisition timeframe, how should we think about the opportunity to grow that business top line over the next two to three years. I know revenue synergies are often, there are longer type coming, but can you talk about some of the opportunities you mentioned organic where you expect to kind of place your bets or grow that business in specific segments.

Yes, I mean look, the Sunrise Growers business and first of all they are totally vertically integrated, right. So they buy the strawberries from the growers and they freeze them themselves, yes and they do that at a scale that nobody else can match in North America. That’s what gives them the real competitive advantage. Now, by freezing all of these berries we need to recognize that two-thirds of their business is retail business, right, and they have the largest retailers in the country, are there customers because of that scale that they offer. So in the retail side of the business we really continue to see this frozen fruit segment growing at double digit rate, especially on the organic side. One-third of their business, because when you freeze all of these berries, you not only get nice large ones that you put in polybags, you also get the small ones that you can puree or do whatever and sell into food service, that’s one-third of that business that’s not growing at double digit rates. So you got to think about that mix a little bit. So, overall growth rates are probably around the 10% mark.

Okay, that’s helpful, thanks. My last question is just on kind of the balance sheet and leverage. So Rob, you talked about being at about 5 times pro forma today and bringing that level down I think in the press releases 1 to 1.5 turns a year. Is that primarily driven by EBITDA growth, at least as you look at out over the next 12 to 18 months, as opposed to free cash flow generation and debt pay down. Thank you.

Yes, and so it is a combination, you are right, that we are sitting for a run rate perspective today obviously post acquisition around five times. The acquisition itself of Sunrise is cash flow accretive immediately for us. So there will be an element of debt reduction that lends towards the deleveraging, but I suggest that in the first 12 to 18 months EBITDA will be the bigger catalyst towards the decrease in leverage and then in the following let’s say 12 months you kind of now balance more over to the combination of the EBITDA growth and debt reduction still. So what you see is real opportunity, where both Sunrise and SunOpta and you heard in some of Rik’s prepared remarks, we’ve done a lot of investments into our platforms and into capacity which we are now executing on filling. So of course as we fill that EBITDA, we will accelerate here over the first 12 months.

Thanks guys, and Rob I’ll look forward to seeing you at Illinois next week.

Yes, look forward to it. Thanks.

Our next question comes from the line of Eric Gottlieb with Davidson. Your line is now open.

Good morning everyone. I want to talk a little bit more about aseptic beverages and almond milk. I believe in the last couple of times we spoke there’s a sort of difference in pricing on shelf due to a sourcing disadvantage. I’m wondering, has that changed at all and when that will grow out.

No, that has not changed. What has changed is that we now have capacity that we can fill with new customers and at a time that significant decrease happens, we did not have that pipeline of new customers. So the almond milk is still not growing versus prior year, it’s still declining.

When will we wrap the cost of advantage? Like when is the new crop coming?

On what, on the almonds?

Yes.

Well, the crop has already happened. I think it is more about the quantity of the crop has really gone down in California, because these things are grown in the valley and almonds are very thirsty. Those two things didn’t go well together in 2014, ’15 crop year. So that is really why almond prices have been going up. But you got to remember, we are not the ones buying these almonds, right. This is one of those businesses that is more on a tolling basis rather than on turnkey basis. Our customer buys the almonds. We just make them into almond milk for them.

Right, right, I got it. And then as far as utilization at the aseptic facilities, what is the utilization rate right now and then given the new customers coming on and expectations for them ramping up, where do you see that going?

Well, I mean look when we were, I mean as I just take you guys back to the second quarter of last year, we had 80% plus utilization in our facilities and fantastic profitability as a result. Right now we are not yet at an 80%. I would say we are more between 50% and 60%, so that’s what. What we’ve really done now – I mean we got about $250 million business in aseptic beverage. We build about $120 million runway and that runway needs to start getting filled. If I say I need to get double digit growth rate next year, that means I got to grow somewhere between $30 million, $40 million in terms of top line revenue. That still will leave some sort of a runway to go, but that will get us into much more acceptable profitability levels as well.

Okay, great. Moving on the Premium Juice, so real contributions next year and then also $10 million in new products. There’s all these targets that you’ve listed, SG&A at below right. Can we consider these guidance or more targets.

No, these are all targets for ourselves.

These are goals. I mean these are what I’ve set out for the team to achieve and there are goals on our way to reaching our overall goal obviously, right. So we, as you know we don’t give guidance, but I wanted to give all of our investors and you guys a better view of… For me 2015 is all about, we got to focus on consumer products, because ultimately as we add more value for our customers, we should be able to retain more value for ourselves. And right now because of all the investments we’ve made in our platforms and some factors outside of our control, I’ll be the first to say there’s a lot of factors inside of our control that we didn’t execute on, but because of that right now we are seeing a situation where actually consume products is at a margin, gross margin level that’s below our egregious levels and that’s as far as I’m concerned, that’s an upside down world.

Right, that makes sense. And then just housekeeping lastly, the tax rate, could you go over if there is anything in there to make it so low and then expectations going forward?

Yes sure, let me start backwards. The expectation going forward I suggest to be in the kind of 34% to 35% range. What you really see this quarter is the effect of having a net pretax income of such a low level. Often when that happens, and you are looking at the jurisdictional mix of where we are earnings our profits, the tax rate becomes a little bit – I mean it’s tough to recognize it as a rate. So I mean there’s a little bit in there of benefit. You go through your normal third quarter true-ups as the tax returns are done, but net-net what you see is the effect of not having a meaningful pre-tax number and what that can do to your overall tax. I mean you’re talking about 411,000 recovery on what is a pre-tax number of 253. So it wouldn’t be fair to just apply a rate against the 253, because there is big mix effect inside of that.

Great. Thank you for the clarification. Okay, I’ll pass it on. Thank you very much.

Thank you.

Our next question comes from the line of Chris Krueger with Lake Street Capital. Your line is now open.

Yes, good morning.

Good morning.

Hey Chris.

I just got a question on your aseptic expansions and your Allentown expansion, as well as the San Bernardino juice facility. If you look out the next call it 15 months or throughout the end of fiscal 2016, is this shift focusing away from kind of the start up expenses and more towards just driving higher sales growth and capacity utilization and ultimately margins, or is it going to be more – do you anticipate more expansion activity in 2016.

No, I think you are absolutely right. 2016 is about getting juice margin positive and growing a top line now that we built a revenue runway inside of aseptic. We have obviously the capacity now to basically add some more filling lines as and when we need them in the Allentown facility. I mean we started with one high speed line over there. We have laid the ground work for adding more lines as and when we need, but for me and for the team its really all about, lets fill that revenue runway.

Okay. And then a quick question on the soybean crop this year. Does that seem to be fairly to normal here. How does that look?

I think this year we were actually in one of the better spots in the nation inside of where we grow most of our non-GMO beans or we don’t grow them, our farmers do obviously, but well not our farmers, but well the contract farmers. So I think Minnesota was – we had a very good planting, we had the right amount of rain. The crop came off the field later than normal because the frost stayed away. So net-net, we had a good crop.

Okay good. And then my last question is on the Sunrise acquisition, which I believe closed in kind of mid-October. Can you refresh our memory as far as the seasonality of that business and how the fourth quarter is compared to the rest of the year?

Yes, I mean look, today in the frozen food category, which is why we are so excited about it, you got less than 30% household penetration right. So who are the ones that are using it the most, it is all the Millennials that are making their smoothies on their kitchen counters like my daughter does every day and that’s really the usage. It will basically – they have national programs year around. What really is going to drive the growth of that category further is I think it is a very nice profitable category for retailers as they start to merchandize these frozen fruits more and more, next to categories that have a higher household penetration, that’s where frozen food is going to benefit the most. Its year around programs gives us some seasonality. Do people make more smoothies at Christmas? Maybe, I would say they probably and I’m just saying this out of my intuition right now. The most smoothies will be made in the New Year, after New Year’s resolutions take effect.

Okay, thank you.

[Operator Instructions]. We have a follow-up question from the line of Scott Van Winkle with Canaccord Genuity. Your line is now open.

Hi, thanks. We talked about Sunrise earlier, growth exceptions. Can we talk a little bit about margins? One of the things that investors saw in the prospectus when you won the equity deal was that Sunrise has some challenged margins in the first half of this year relative to prior year run rates, because of that fruit crop yield. Can you give us an idea of kind of where it stands today? When you would expect to see more normal margins and then I know some companies have been talking about a bad berry harvest in the Pacific Northwest. Can you talk a little bit about cost expectations on those inputs?

Yes, so you are right, Scott they did buy a lot of fruit externally, because 2014 crop was not as good as 2015. So they’ve frozen a lot more berries themselves than they have last year. That really impacted margins in the first half of 2015, because of course they get a cost advantage when they freeze it themselves versus when they have to purchase it on the outside market. That is an issue that will not be recurring this year. I think from an overall margin perspective, mid-to-high teens is what should be expected of there and that is very consistent with other platforms where we have scale.

Got you, and that’s the type of result we should see when that company gets consolidated here in the fourth quarter.

Yes.

Great. And then Rob the 8% SG&A target, it really doesn’t sound like that much of a hurdle. I mean you haven’t had an 8% SG&A number in a couple of years. I’m wondering why that target and is there opportunity to come in a little more meaningfully below on SG&A run rate?

Yes, I mean look, as we ramp-up obviously our revenue, all I wanted to get clear is that we are not going to grow our SG&A in line with our revenue, so we want to be below 8%. We’ve looking around the industry, especially at those people who serve as the retailers and food service operators. We believe that below 8%, we probably have the lowest SG&A. I mean look at people in our space on the beverages side that does private label or somebody who just made a very large acquisition that does private label. I mean their SG&A is higher, okay. The fair point there is there margins are also higher. I just want to be on record to say that we need to be the most efficient company out there when it comes to SG&A as a percentage of revenue. So that’s early, and you’re right. Our internal targets are sharper than below 8%. I just want to give everybody the message that we will continue to be as efficient as need be.

All right. And then Rik I think on the juice margins, the $6 million juice margin kind of goal for next year that also seems relatively easy to achieve, given the acquisition of Citrusource. Am I missing something there? I mean I would assume that Citrusource brought more than $6 million of gross profit with it.

Well. For me again it’s margin positive. That is what we need to achieve there, and you got to remember Scott two things; that business consists of two elements. It consist on the one hand side of the bottling and your absolutely right, that’s where we bring in Citrusource bottling and all that. So that alone should already drive us to positive. What is really the key for the sustainable future longer term profitable there is we got to fill out the extraction sides. So the more we are able to start with oranges, make those into orange juice as opposed to providing with field oranges. It’s going to be beneficial to us.

And Scott, keep in mind that as we set these objectives that we are kind of keeping an eye to the year-over-year change. I think we bought Citrusource back March 2, so there is 10 out of 12 months of them in there, and of course we are going to lap a lot of burden that was just our juice facility on its own. So we set that $6 million to really return that to profitability and continue to grow Citrusource.

Got you. Thank you very much.

Thanks.

At this time we have time for one more question. Our final question is a follow-up from the line of Amit Sharma with BMO Capital Markets. Your line is now open.

Hi there, thanks for taking the follow-up. Two questions here, one I just wanted to quickly go back to the Sunrise and you talked about difficulties is sourcing, its impact to your margin earlier this year. Is there anything you can do structurally to the business to avoid this type of short falls in the future? Is it from a hedging perspective or how you source or how you price? Is there anything else that you could do separately, differently that may lessen the volatility margins in that business?

Yes, I mean look, they’ve already being doing it. Traditionally they source all their berries, strawberries out of California. They have invested in the facility in the Ancho Valley, Mexico where we are or they have been expanding in capacity and we will be continuing that. So more and more of the berries will be coming from Mexico. By the way, they are exactly the same berries. This is called the camarosa strawberry. Having said that, so that’s one thing – they’ve invested in more. There’s other areas in the world where they grow the same strawberry and that is where SunOpta then comes in to play, because from an international perspective, we are also by the way, almost all of the organic fruit that is being solid in the United States is sourced internationally. That’s where we have boots on the ground on every single continent, whether you are talking berries out Serbia or Chili or out of the Pacific Northwest or out of Canada, I mean that is where the organization, the vertical integrated organization of SunOpta’s build comes into play, to basically diversify away from any kind of crop risk in a certain geographic area.

So we should expect less volatility in margins going forward, in the Sunrise business. Is that fair and reasonable to expect.

That’s fair. It’s important to keep in mind Amit that Sunrise has been growing at north of 20% internal growth and organic growth CAGR and so part of that shortness if you will in having to buy more outside fruit was one of those nice to have problems in their eyes. I guess you could say in that their growth required them to go outside more than they otherwise would have and that’s why they’ve been so ahead of the curve here in adding more capacity to do their own freezing.

Okay, and then last one of the global ingredients side of the business Rik you talked about shifting more of your mix towards organic fruits, sweeteners, all the other nut’s and you talked about how that a might be a margin enhancement as well. Could you talk just about that a little bit more? Is that simply a greater advantage or is it a commoditized grain, sunflower or corn here. Is that to play here or is there anything else that you would like to highlight?

That is defiantly. I mean look, $400 million out of the roughly $600 million platform is organic, and that’s $400 million, that’s probably more than $300 million of that $400 million is what we sourced internationally, where we have built-up supply change, where we have the organic exports of different goods, etcetera, etcetera, etcetera and that has indeed a higher margin potential for us that the corn, the soil and the sunflower, whether that be non-GMO or organic.

Are you able to quantify what the differential is in margin between those two different type of businesses?

I think it’s probably about 4 or 5 points of margin.

Thank you very much.

Okay, so thanks everybody. Is there any other calls operator?

I’m showing no further questions in queue at this time.

Okay, well thanks for joining us this morning and just as a reminder, I think some on you already pointed it out. If you happen to be in the Chicago area next week, please stop by our booth that we have over there. There is a Sunrise booth and a SunOpta booth, by the way that will be the last time you will see two booths. That’s one of the synergies that we are going after. And it’s at the Private Label Manufacturers Association show which is from the 15th to 17th. So look forward to seeing you there if you are in the area. Bye-bye.