Good morning, and welcome to SunOpta's Fourth Quarter Fiscal 2018 Earnings Conference Call. By now everyone should have access to the earnings press release that was issued this morning and is available on the Investor Relations page on 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 this morning, the company's annual report filed on Form 10-K and in other filings with the Securities and Exchange Commission for more detailed discussion of the factors that could cause the actual results to differ materially from those projections and any forward-looking statements. The company undertakes no obligation to publicly correct or update the forward-looking statements made during the presentation to reflect future events or circumstances, except as may be required under applicable securities laws. Finally, we would like to remind listeners that the company may refer to certain non-GAAP financial measures during this teleconference. A reconciliation of these non-GAAP financial measures was included with the company's press release issued earlier today. Also, please note that unless otherwise stated, all figures discussed today are in U.S. dollars and occasionally rounded to the nearest million. And now I'd like to turn the conference call over to SunOpta interim CEO, Kathy Houde.

Good morning, and thank you for joining us today. With me on the call is Rob McKeracher, our Chief Financial Officer; and Mike Buick, our Senior Vice President of Consumer Products. Mike joined SunOpta 2 years ago and has been instrumental in leading the return to growth in revenue and margin improvements in our Healthy Beverage and Snacks operation and recently has taken over the leadership of the Healthy Fruit platform. Also, we note in the press release issued earlier today, former CEO and President, David Colo, has been terminated, and the board has initiated a search for a new CEO. I will serve as interim CEO until a successor has been identified. As you may recall, I previously served as interim CEO of SunOpta in late 2016, which coincided with the development and launch of our Value Creation Plan. Since the launch of the plan, SunOpta has exited and sold unprofitable and noncore alliances business, made significant investment in food safety and quality and in 2018 return to meaningful revenue growth. My deep familiarity with the company and the plan will ensure that our efforts to drive sustainable, profitable growth will continue uninterrupted until the transition period. In addition, the board and I will take full advantage of available resources to continue making progress against the company's operational, go-to-market and profit sustainability initiatives. Before I turn the call over to Rob, I'd like to reaffirm SunOpta's purpose and key strategies, which are not changing. Our purpose is to be the most innovative, integrated provider of organic ingredients and Healthy Fruit solutions across multiple channels. SunOpta is well aligned with consumer trends towards organic and non-GMO foods, and I believe the acceleration in growth that we delivered in the fourth quarter affirms our right to win in this attractive market.…

Thanks, Kathy. Let me begin with the sale we announced yesterday of our North American specialty and organic soy and corn business to Pipeline Foods for proceeds of $66.5 million. One of the key pillars of the Value Creation Plan we initiated 2 years ago is to optimize our portfolio, investing where structural advantages exist and divesting businesses where we are not effectively positioned. This allows us to simplify the business and deploy both our capital and human resources into areas of the business where we have market leadership with long-term growth and favorable margin opportunities. This sale is consistent with this strategy and allows us to focus our Global Ingredients operations on our international organic capabilities where we believe we have built the largest organic sourcing platform in the industry and are investing in expanded capabilities and capacity with more attractive margins and consistent growth. Additionally, this transaction increases the company's focus and mix towards Consumer Products, including retail and food service offerings in Beverage, Fruits and Snacks. Included in the sale of our soy and corn business are 5 facilities in the Midwest that contributed $104.4 million of external revenue and $8.3 million of gross profit, which included $0.8 million of depreciation and $6.8 million of earnings before income taxes, not included in the sales are Sunflower and roasting operations. The sale of the business is expected to simplify the company's operations, enabling cost reductions that extend beyond the employees and expenses that we'll transfer to the buyer. As a result, the company expect to rationalize an additional $3 million of SG&A expenses. On a pro forma basis, assuming the transaction had occurred at the beginning of 2018, and taking into consideration the contribution from the business sold as well as rationalized SG&A, adjusted EBITDA would have been…

Thanks, Rob. It's a pleasure to be able to join you and Kathy on the call today. Let me run through our Consumer Product platforms and address our frozen fruit margin optimization plan. In the Healthy Beverage platform, growth accelerated throughout 2018 as we expected. We successfully diversified our revenue base by customer and category as we entered the broth market. Production and shipments of broth started in the third quarter and ramped up very quickly in the fourth quarter. During the fourth quarter, we realized significant costs in our aseptic network as a result of the increase in production levels to support broth. We transitioned all facilities across our three plant aseptic network to 24/7 continuous production schedules, which led to increased labor and training costs. This investment countered some of the efficiency gains caused by higher utilization, but it was the right investment for future volume and profit expectations and was needed to support the peak broth season, particularly given the timing of our late entrance into this category. The speedy launch of the broth also caused us to experience increased changeover, freight and logistics costs to meet delivery schedules, as we were unable to prebuild any inventory ahead of the primary broth production season. We also had to manage higher maintenance costs as we adjusted to the processing of new ingredients. In 2019, we will have the ability to lock down a more optimal production schedule and prebuild inventory, which will enable us to prevent a repeat of these inefficiencies. In short, I consider our accelerated entry into the broth category a great success and a key addition to our beverage portfolio that will contribute to our growth and long-term margin targets. Healthy Beverage delivered 17.8% growth during the fourth quarter despite some nondairy customers reducing their…

Thanks, Mike. In the Global Ingredients segment, we generate strong revenue growth in both international organic sourcing and the domestic raw material and supply platforms. We continue to see strong organic ingredient demand and have further enhanced our focus on our Tradin organic operations as a result of the sale of the specialty and organic soy and corn business. In 2018, we commercialized the second organic cocoa processing line in The Netherlands and are now focused on enhancing efficiency and margin with this new capacity. We've also now fully commercialized the new roasting equipment in our Crookston facility and are positioned to pursue margin accretive growth opportunities in Healthy Roasted Snacks, including products such as chickpeas, pumpkin seeds and other nonallergen-based snacking items. In addition, we are in the early stages of expanding our global organic sourcing capabilities in an attractive new category. We have broken ground on organic avocado oil processing facility in Ethiopia, which is expected to come online in the second half of 2019. Avocado oil demand is strong, and certified organic avocado oil is in very supply. Now on to the Value Creation Plan. Our focus on operational excellence is the primary driver of productivity in 2018. We achieved our 2018 target of $20 million of productivity improvements, and this is most noticeable in our Beverage, Snacks and Ingredient platforms. These productivity improvements were offset by investments in price, quality and service in frozen fruit platform. We developed and began to implement our fruit margin optimization plan. And as Mike just discussed, the investments in automation have already begun in our frozen fruit operations. Our portfolio optimization efforts during 2018 included the sale of our soy and corn business; the addition of a second organic cocoa processing line in The Netherlands; our ongoing project to expand…

Thanks, Rob. Before we begin the Q&A, I'd like to leave you with a few key messages. When we launched the Value Creation Plan, we gave our commitments to generate long-term value for all our stakeholders, our customers, our employees and our shareholders. We remain steadfast in achieving this goal. SunOpta is well aligned with consumer trends towards organic and non-GMO foods, and we are more convinced than ever that we have the right team and the platform needed to succeed. So with that, I'd like to ask the operator to please open up the call to questions.

[Operator Instructions]. Our first question comes from the line of Amit Sharma with BMO Capital Markets.

Kathy, lots of discussion on the operation, but very light on details of why David was let go. Can you provide a little bit more clarity on that issue?

Sure. Thanks, Amit. I think the overall results were the main factor and the board just thought it was time to make a change in leadership, which was highlighted by Q4. The board has a commitment to the shareholders to deliver this plan, and as a result we acted decisively, and we believe that the company is best served by finding a new leader at this time.

You're not changing operational metrics around Value Creation Plan or the speed of the -- of what the changes are. Is that going to change with the new leadership, or simply the impression was that we are not as far along as we would have liked to this time of Value Creation Plan?

So you're correct. We're not as far along as we'd like to be. And we also believe that different phases of the plan required different leadership skills. If we can reflect on what's happened, we've cleaned up the portfolio by selling noncore assets such as our soy and corn business. We've stabilized our foundation, we've improved quality, systems and process. And now we're much more CPG company. So we feel we progressed to phase 1 and partway through phase 2. But going forward, we're focused on accelerating sales and generating increased gross margin and profit, and we feel that it would be best served with different leadership skills at this time.

And then, Rob, a little bit more clarity on the CPG margins. I mean, obviously, top line exceeded everybody's expectations. But you did provide some -- little bit detail on what was the margin have been, but can you provide a little bit more clarity on what those headwinds are? And I want to make sure I heard you correctly that EBITDA for the first 3 quarter is going to be very limited growth? And then what is the growth or whatever growth is in the fourth quarter, is that fair?

Yes. No, exactly, Amit, you interpreted that correctly. So to help to provide some clarity on what we're thinking in our expectations in '19, we are seeing limited growth in the first three quarters. The biggest headwind being, of course, the fruit business. As I reflect on [indiscernible] from a -- kind of progression through the Value Creation Plan and it is very similar we commented on last quarter, when it comes to Beverage, when it comes to Snacks, when it comes to organic, green operations, we're more or less right where we expected to be at this phase. The prepared remarks included some insight into what the margins step ups were. [Indiscernible] obviously, fruit is one of the areas where there's a big headwind and we need to overcome that. So as we look at the puts and the takes and the work it's going to take to get them to margin improvement on the underway and EBITDA lift, it really is back half and especially fourth quarter oriented. The fruit efforts that we're undertaking with the optimization plan, they're designed to lower the cost of our 2019 back season. But of course, the effort that goes into that does present itself on the P&L, so you get to selling that inventory, which is really in the fourth quarter and beyond. So when you consider that and you consider the buildup and the things like productivity efforts where they build upon themselves. Consider the seasonality of our broth business, which is very back half centric in production. Production really started in the third quarter, but the sell-through peaking just ahead of the Thanksgiving season, all those factors taken into consideration really point to the reason why we'd expect the EBITDA to show up more -- from an improvement perspective more predominantly in the fourth quarter.

And how much of a drag was approved in 2018?

So if you look at...

From a -- sorry, go ahead.

From a growth margin perspective, 2018 and it was the MD&A as it relates to [indiscernible], but fruit is down $33 million year-over-year. Just to add some context, if you will, to the size of the drop off, that means it's an additional $7 million here in fourth quarter. Now within that, we did take $3.1 million of inventory write-downs in decisions on cleaning up inventory and reducing our overall inventory levels, which we provided some context on that in the script that also weighed on margins. So the fourth quarter change compared to prior year was nowhere near what we experienced in the first 3 months of the year, but nonetheless it was down. So you can think of 2018 in that context where fruit is down $33 million and Beverage and Snack and the Organic Ingredient operations not being able to compensate.

[Operator Instructions]. Our next question comes from the line of Jon Andersen with William Blair.

I do want to come back to Amit's question about the leadership change because just from outside, kind of looking in, it seems a strange time to make that kind of a change. The company is on the cusp of an inflection in the frozen fruit business, i.e, you've made a significant improvements as you pointed out today in the Beverage business and the Snacks business, some improvement in Global Ingredients, particularly on the International Organic side. And it feel like what you're trying to communicate today is that you're getting close on fruit, which is in many ways I think the last piece to the puzzle. So I think the external perception here would be that, why make a change if that's the case. It just doesn't seem to make sense. I don't know if you can comment a little bit about that, if is there anything more you can say.

Sure. I think that I go back to my previous comment. The results were not there. And they were not quick enough and it was highlighted by what's happened in Q4. We feel like we've made some great progress as you've indicated through phase 1 and partway through Phase 2. And certainly the issues lies in the fruit business. However, ongoing demand will be to accelerate sales and generate increased gross margin and profit. And we believe that -- decisively, we believe that a change in leadership will help escalate that and improved skill set in a different CEO will aid in that as well.

Okay. Going to the fruit business specifically, maybe, Rob, can you talk a little bit more detail about what happened in the fruit business in the fourth quarter more from a sales perspective? The business was up in aggregate, in revenue, I'm wondering if you can kind of parse that for us by the retail side of the business versus the industrial and food away from home portions. And were there any kind of one-time factors that lifted sales in the quarter such that the revenue growth that you reported might have been a little bit stronger than we'd expect on kind of a go-forward basis?

Sure. Now let me start and then I -- just from a market perspective, I'll hand it over to Mike and he can provide some insights on just from what we're seeing in the market. But yes, definitely, saw the -- quite a large step up over the prior year in the fruit business. And what's driving that and it was in the prepared remarks is obviously we've seen volume increases. But those volume increases far surpass the revenue increases and then that obviously correlates to sales price reduction that we've been talking about. So when I look at the fourth quarter specifically here, we definitely saw the volume increases both in the retail space and the food service space. We do have a large program that we serve -- that basically serve school lunches for the most part. And there was very high shipments against that program here in the fourth quarter. So that one seasonal anomaly, I guess you call out where we did see increased levels of shipments in that food service, just like a fruit health program here in the fourth quarter. But -- and I quantify that, John, maybe in the $7 million to $8 million range of lift here compared to kind of normal. So this shipment is there, but it definitely help here in the fourth quarter to see that, that flow through in terms of getting our inventories down. Maybe I'll hand over to Mike, he'll just comment on some of the things we're seeing on the measured channels.

Sure. So from a measured channel basis, in the last 12 weeks, while the category is flat in dollars, up 4% in pounds. Private label is up 6% and on a volumes basis up 16%. As I look at the performance -- the top line performance of the business in the fourth quarter, what makes me feel very confident about the go-forward plan on fruit is that we really established trust and partnership with our customers as a result of the heavy work the team has done in the last 2 years in areas of food safety and quality customer service, introducing new tools and processes to manage the business. And so we really hit a really strong spot with our customers, we've expanded distribution within some of those customers. And so we're really seeing the benefits on the top line. That's why the fruit margin optimization plan is so important and it's our singular focus on a go-forward basis. It's all about getting margin back into this business. And we are -- we're very clear eyed and laser focused on how we're going to achieve that. But it starts with making sure that you have a very healthy, strong business -- customer base, right? And so for all those reasons we feel like we're in very good position as we look forward on that business.

So that's helpful color. So step one is to kind of take some medicine in terms of pricing, cost investment to improve quality and service levels, and it seems like that's translated into stronger customer relationships and volume growth as you described. What are the steps 2 and 3? What should we be looking for or what are you looking for as milestones in that business to help assess whether you're on track toward getting back to, I think, what you said a more normal profitability level by the end of 2020? What are the next milestones we should be looking for?

Yes, so the next milestones I'm looking for is -- we're getting ready, we're preparing for the pack season, which is a critical part of delivering the plan on fruit. And so we have some operational and supply chain efficiency program that we're executing. We're measuring the results on a weekly basis, and we've got full support of the broader team. The next step is the capital investment we're making in the business. It's really a two-step program. In year 1, the 2019 plan, it's about downstream packaging efficiencies. So bringing in automation and things like [indiscernible], et cetera. That's going to enable us to reduce or eliminate a lot of our manual labor that's in the plants. That will be stepped up in 2020 as we look to drive even greater efficiency, improving and expanding our IQF tunnels, optimal sorting. I mean, really bringing in higher level of automation in these fruit plants, which they so desperately need. That's all kind of what I would call step 2. Step 3 is about innovation. We are an extremely innovative company, we've got very strong R&D teams. We've proven it in Beverage and Snacks that we can not only develop great innovation, but bring it to market and bring it to our customers. And we are working on some very exciting programs on the fruit side to do that as well. So as you think about fruit margin optimization, about 70% of that is optimizing in our cost base. The other 30% is improving customer and product mix and bring innovation to the market. And so it's really a holistic plan that's going to help us achieve the margins that we expect to deliver on this business on a go-forward basis.

Okay. And you referred a little bit to the slow start to the, I think, in Mexico the frozen berry season. Is that -- to what extent is that a risk factor from a cost or a supply perspective as you think about your kind of 2019 tax plan? Because I think this is a time of the year where you're usually taking in a lot of berries from Mexican farmers. So if you could kind of dimensionalize whether that's a -- is that a small concern? Is that something that could set you back in terms of some of your productivity or profitability objectives in fruit this year?

Sure. So in a typical season, right now, we would be bringing in quite a bit of strawberries from Central Mexico. We would just be starting Baja California and then moving up to coast. In Mexico, we're delayed, call it, 6 weeks in terms of those strawberries that are coming in. Central Mexico had an extremely cold and wet early season, which has impacted the entire market. And so in terms of the pacing, which we're receiving the strawberry and the cost, there are some headwinds that we are very actively addressing. They are important headwinds. They will not derail the overall margin improvement plan. We have some mitigation steps already in place. The good news is that even in the last week or two, the amount of strawberries that are coming into our Central Mexico facility has increased substantially. And so we're behind. Though, we're making that up very quickly. And we don't expect it to -- ultimately, once we execute our mitigation plan, we think we'll be able to minimize the impact to our P&L delivery.

Is pricing part of that? Do you have the ability to price? Are there...

It's absolutely -- pricing is one of the things that we're working through. And then we've started to have those conversations with customers. Customers are aware of the weather conditions of Central Mexico is impacting Baja California. Even California has seen some colder and wetter weather. And so kind of going back to the strong relationships we have with our customers, we're now in a position where we have those strategic conversations. And really, in a partnership fashion, figure out what's the best way to address it to deliver both of our objectives.

I mean to ask, I've got two more, probably ten more, but I will limit it to two. So there have been a couple of large write-downs on the fruit business in the past couple of years. Rob, I think you mentioned the numbers, I didn't got them down, but I mean, is -- I would suggest that something maybe has structurally changed in the profitability or your future expectations for the profitability of this business. At the same time, the fruit optimization program is designed to get you back to what are more normal margins, which I think are in the -- be in the mid-teens. So can you square the two of those? I mean, are you still comfortable, confident, less confident that a mid-teen margin rate for this fruit business is achievable, because it seems like it conflicts with the -- some of the write-downs that you had to take?

Yes. I'll comment on that, John. So you're right, the write-downs this fourth quarter, the $81 million, and last year the same time, the $115 million, both pertain to frozen fruit. There is no more goodwill in that business. So we did recognize the remaining write-down. This fourth quarter -- I think there's a couple of things in play here. The fruit margin optimization plan and as Mike just mentioned, is the top priority. And we have inside the company our best people working on it and it's weekly focused. We're tracking our improvements. We've built a plan that we're quite confident we can deliver to return the business back to the historical, which would be historical mid-teen margins. But when you look at from a recovery perspective, when you do your -- the accounting side of the question, if you will, from a [indiscernible] write-down standpoint, there's certain things you can include and certain things you can't and you have apply discount factors and one of the things that it's reflected in -- following the third quarter even in the share price, right, the extended time it's taken the extension at the fruit margin deterioration is causing to us more value creation plan goals, that's a really big determinant in taking a write down. So I wouldn't read into it that the write-down necessarily means that we don't have the conviction or the ability to deliver against this plan, we do. But at the end of the day, from accounting perspective, you tend to air on the side of conservatism and on a discounted cash flow basis that pushing out and getting back to that margin levels is really a key factor to this level of write-down.

Okay. And then on the '19 -- the 2019 outlook, you said a couple of times that you expect EBITDA to -- is it fair to be say -- to be leveled to grow a little bit in the first three quarters of the year, with then more significant growth in the fourth quarter? First, is that accurate? Do you expect any growth in Q1 through Q3, or just kind of level year-over-year?

Yes, I think, our view in prepared remarks is limited. So I would interpret that to meaning more or less what you saw in 2018. Obviously, there's going to be puts and takes in the business. We have some new seasonality inside -- especially inside of beverage. We've got good things going on in Organic Ingredients. And there are things that can lead to it being a little up. But I -- at this stage, Jon, I think, it's safer to set an expectation that we expect the growth to show up here in the fourth quarter of '19 from an EBITDA standpoint.

Okay. And the follow up to that is the base. So I think you did look -- round numbers, $53 million of adjusted EBITDA in 2018. Again, I'm coming up with $53 million. You have -- with the sale of the soy and corn business, I think, maybe Kathy mentioned, that would be a 5% pro forma headwind or $5 million pro forma headwind. So are we working with a base then that's $48 million in 2018 when we talk about growth in '19?

Yes. So as we -- we added a page to the back of the press release, you can see the adjusted EBITDA of $4.6 million that is the net of the business that we sold offset by rationalized SG&A actions that we've taken. And so if you -- that's a $4.6 million pro forma impact on 2018. And you can see what the quarterly effect of that is, too. So yes, I would suggest that is the base from which to model 2019.

Okay. And then promise the last one. Given the kind of the revised view, where are you from a balance sheet perspective? I mean, are there any covenant issues? Where are things tight to the extent that they are tight? And how do you manage through that to get to this kind of bridge over the next couple of fruit seasons, so you can execute the optimization plan in fruit?

Yes. So I added into the scripts and you can see it. So after the sale, of course, of the soy and corn business, which, of course, we did for all the right strategic reasons, but financially one of the benefits of that was there was not a lot of taxes. In fact, very minimal taxes or fees on that transaction. So we have reduced our debt by around $64 million on a pro forma basis and created almost additional $50 million of borrowing capacity in our global ABL. So just to remind everyone, the way our debt capital structure [indiscernible] it's on one hand the global ABL, the other hand [indiscernible] notes north. Both of those agreements are what I call covenant late. So from a covenant perspective and other things, this -- apart from the strategic merits, this transaction really did create a much bigger buffer, if you will, to be sitting here on a pro forma basis $100 million excess capacity in that ABL. So in other words, we've got the ability to borrow up to another $100 million. And so that's really what provides us flexibility to continue on this Value Creation Plan journey, including the capital investment it's going to take to succeed with the turnaround inside of fruit business. So certainly after the sale, we don't have any concern with our ability, if you will, to do what we need to do to drive margin and growth in the business. So we feel we're right there.

Our next question comes from the line of Chris Krueger with Lake Street Capital Markets.

Just have a few quick ones here. As far as the CEO search is concerned, does the board of directors have any kind of goal as far as the time line for when we could see that come to fruition?

So Chris, we're moving very quickly as it -- in terms of the search we've created a search committee and we've already begun discussions with candidates. So we're hopeful that it will be a very expeditious process, and we're working very hard at making sure that happens. So we'll hopefully have an update for you on or before Q1.

Okay, that's good. When we talk about pack season for the frozen fruit, can you refresh my memory when roughly pack season begins and ends?

Sure. So in the California plants, we're talking May through July sort of time frame into summer, depending on how quickly the growers convert from fresh to frozen, so there's always some dynamic at play and we've got to be ready. So we're pulling together the group this week and then the next week and we're getting ready for season, as we speak.

Okay. And then my last question. In the past SunOpta has provided operating margin goals for the Global Ingredients segment as well as the Consumer Segment. I think the Global Ingredients was 6% to 8%, long-term goal, and the other was 11% to 13% in Consumer. Do you still have those same goals? Or is there anything changed, especially since the sale of the soy and corn business?

Yes. Those are pretty old targets. But the target that everybody is aligned to now, and I can tell you that the company is still committed to deliver here as an adjusted EBITDA as a percentage of revenue of 10% to 11% as we progress and execute the Value Creation Plan. If you want to think of that in terms of segmented delivery, what it would basically mean is our Global Ingredients segment would be in the mid-teen 14-ish%, maybe 15% gross margins, and then your Consumer Product business will be up in the high teens, so call it 18% to 19%. On a blended average basis, to achieve the 10% to 11% objective, our consolidated gross margin needs to be in the 16% to 17% range. So Chris, as we step back and look at the portfolio that we have and really focus the business on growing the top line and driving profitable sales, meaning gross margin, that's how we structured the Value Creation Plan, the targets we set platform-by-platform to end up at that spot.

We have a follow-up question from the line of Amit Sharma with BMO Capital Markets.

Kathy, one for you. I mean, listening to the EBITDA progression for next year, it's really clear that EBITDA recovery is delayed, right, even if we are going to be at that point at some point, it's certainly delayed. And at the same time, if you look at the multiple that you receive for the North American corn and soy business, right, 8.5, 9 multiple, that's fairly attractive. Now given that the strategic options on the table from a company asset base perspective perhaps these assets are better in the hands of somebody else, and let's look to see how we can monetize even the European business or the aseptic business. Can you talk about that, how the board views those options?

Yes. Let me pick it up off here I think just because there are three questions in there, all good ones. But from a timing perspective, in terms of delivering of the plan, as I step back and look at it, no surprise, fruit is the -- essentially the entire reason that we are not on the path of the time frame that we set out 2 years ago. If I kind of look at what we're expecting in '19, and if I just put fruit back to where we are targeting to get it back to those historical mid-teen ranges, I'd tell you that we're basically right on the algorithm and right on the pace that we expected to get to. So speaking about Beverage and then speaking about Snacks, and certainly the [indiscernible] organic on business, which is right where we expected it to be. So just the -- similar to what we have been commenting in the last quarter and again now this quarter, it's definitely, fruit sets us back. We do say it's going to take two crop to get back to the margin structure and margin delivery we need. And of course, that will present itself until after we start selling through that inventory. So from a time frame perspective, that's -- it really is all shouldered by fruit and the development there. As I move on to the soy and corn business and the multiple, yes, we need to -- if you look at the multiple based on the business that was sold, certainly, it's pretty attractive, I think that's kind of in line certainly with what we see, unique in specialty and organic -- not [indiscernible] Specialty Ingredients business going forward. From an overall company perspective because of the simplification it will allow us to bring, you're talking a mid-teens multiple after we remove the SG&A that would be a stranded and no longer necessary. So we're quite pleased certainly with multiple of the transaction. I already talked about the proceeds. So your last question, as you look to the overall component parts of the business, I mean, obviously, we're -- we look at our business, and if you listened to our prepared remarks, we like all the businesses that we're in. And we think they're all attractive and they're all in great market positions for growth, including fruit, albeit we have a big opportunity in front of to drag the margins out. So as I think about the sum of the parts, that's what we're focused on really driving value into this platform now. Obviously, now with a greater weighting towards Consumer and in our Ingredients business now, a very unique specialty, almost exclusively organic platform, which we think from a market perspective is pretty special.

Thank you. But I think the question really is from board perspective, are those options to monetize these assets at a higher multiple, are those being considered? Are those part of the process? Or is the thought that let's just find somebody else to run these assets and see if we can turn them around?

In answer to that, Amit, we're always looking at all the options. Our shareholders have indicated their strong commitment to what we're doing right now and executing the plan and the change in leadership, despite -- we're always considering other options, so neither one is exclusive.

And then just one more on for you and one for Mike as well, you did say that you're looking for somebody with a different skill set. Can you be a little bit more specific, like what are we looking for? Because we didn't see that much change at least in the strategy to get to -- from a turnaround perspective. So what are the skill sets that we're looking for in the new CEO?

So the skills sets we are looking for in the new CEO I think are track record and execution, that's really important that we actually need our numbers. We're focused on increasing our revenue and somebody who has the proven track record in that as well. Somebody who's able to drive a more profitable growth and somebody with proven private label experience. I think those are the top 4 criteria.

Got it. And that's one last one for Mike. Mike you did talk about the delay in Mexico and we saw that a couple of years ago that delayed crop or short crop generally leads to more inefficient processing on your end. Is that baked into your expectations as you laid for the first 8 quarters? Or could that [indiscernible] if the crop continues to get delayed in Mexico or even in California?

Yes. So that is certainly a concern and one of the things the team is focused on in managing through. Ultimately, there are a number of things that we're evaluating to mitigate any challenges on that business, up into and including potential customer pricing. So short crops on strawberries are, especially we're seeing the growth that we're seeing is something that we have to navigate through. I have a tremendous amount of confidence in the team that we're going to pull all the right levers to make sure that we're as successful as we can be.

And that concludes today's question-and-answer section. We do have a follow-up question, actually, from the line of Jon Andersen with William Blair.

There's some language in the press release and also in the prepared comments around your focus areas with respect to the Value Creation Plan program in 2019. One of those calls out the continuous improvement and looking to deliver $10 million of gross profit enhancement in 2019. I guess, my question on that is, is that kind of a veiled forecast for profitability improvement in 2019, or is that a target that you think you need to offset some of the cost headwinds that you're going to be facing? Just kind of characterize that $10 million and is it a gross number? Is it a net number? And maybe how you're going after it?

Yes. Sure, Jon. And we didn't talk as much about [indiscernible], so much to cover. But we've really embraced and adopted what we call SunOpta 360, which is our continuous improvement program that goes right across the company. And when you're managing and committing to a program like that, you set productivity targets every single year. So this really -- that $10 million is really what I consider to be structural enhancements to our overall operations that can drive all things equal $10 million more profitability to the business. You set those things up, because in any given year, you're -- and by the way, that's not going to set at the start of year and see where we you end up. This is a perpetual and ongoing stream, if you will, of opportunities that we can do to lower cost in terms of cost of manufacturing, in terms of labor, enhancing yield, lower material costs, lowering conversion costs, all sorts of things. And that $10 million is a gross number. So many of be using that to offset or help offset some of the inflationary pressures you'll be seeing. But I guess, the $10 million are our gross target just from a costing [indiscernible] sold perspective in 2019. Don't read into that, that's the only thing that we're looking at because we've already talked and conservative folks, we're in a growth pattern in beverage. We've been in the growth and expect more growth inside the Snacks, inside the Global Ingredients, and so when you're in those modes, we do expect more contribution from that growth. It also come and help them offset certain inflationary pressures and the work we've got from -- on the deferred business.

And that concludes today's question-and-answer session. I'd like to turn the call back to Kathy Houde for closing remarks.

Thank you, operator. And thank you all for participating in our fourth quarter conference call. Before I conclude, I would like to again thank all of the employees of SunOpta for their tireless efforts. We look forward to speaking with you in the future and updating you on our progress as we focus our efforts at expanding margins and profitability in 2019 and beyond. Have a great day.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program, and you may now disconnect. Everyone, have a great day.