Simply Good Foods Co-The Stock

The Simply Good Foods Company and its subsidiaries (Simply Good Foods) operate as a consumer packaged food and beverage company.

The company intends to lead the nutritious snacking movement with trusted brands that offer a variety of convenient, innovative, great-tasting, better-for-you snacks and meal replacements, and other product offerings. The product portfolio the company develops, markets, and sells consists primarily of protein bars, ready-to-drink (‘RTD’) shakes, sweet and salty snacks and confectionery products marketed under the Quest and Atkins brand names. Simply Good Foods is poised to expand its wellness platform through innovation and organic growth along with acquisition opportunities in the nutritional snacking space.

The company’s nutritious snacking platform consists of brands that specialize in providing products for consumers that follow certain nutritional philosophies and health-and-wellness trends: Quest for consumers seeking a variety of protein-rich foods and beverages that also limit sugars and simple carbohydrates and Atkins for those following a low-carbohydrate lifestyle or seeking to manage weight or blood sugar levels. The company distributes its products in major retail channels, primarily in North America, including grocery, club, and mass merchandise, as well as through e-commerce, convenience, specialty, and other channels. The company’s portfolio of nutritious snacking brands gives the company a strong platform with which to introduce new products, expand distribution, and attract new consumers to the company’s products.

With the company’s Quest brand, the company strives to offer an attractive line up of protein bars, cookies, protein chips and salty snacks, RTD shakes, and confections, which target these existing and emerging consumer trends. With the company’s Atkins brand, the company strives to offer a compelling line of protein bars, RTD shakes, cookies, protein chips and salty snacks, and confections. The company’s sales, marketing, and research and development capabilities enable the company to distribute products to a national customer base across a spectrum of retail channels, including the mass merchandise, grocery, drug, club stores, e-commerce, and small format retail, such as convenience stores and gas stations.

The company continues to proactively engage with the company’s retail customers, contract manufacturers, and logistics and transportation providers, to meet demand for the company’s products and to remain informed of any challenges within the company’s business operations.

Strategies

The company’s strategies are to innovate and expand the portfolio of product offerings to meet consumer demand for higher protein products and new product forms; leverage platform to expand in attractive food and snacking categories; expand distribution in white space opportunities; and continue the company’s marketing efforts and strategies to both increase household penetration and reach consumers beyond the company’s core historic buyers.

Products

Core Quest Products

The company’s core Quest brand products consist of protein bars, cookies, salty snacks and confections.

Protein Bars: To keep on-the-go consumers energized and fueled, the company’s Quest bars offer a convenient and effective solution, providing consumers with protein, fiber and a delicious taste. The typical Quest bar profile contains about 20 grams of protein, 5 grams or less of net carbs and about 1 gram of sugar. Quest offers more than 25 different flavors of protein bars.

Cookies. First launched in 2018, Quest’s cookie products are a convenient source of high-protein combined with low net carbs and low-sugar. Available in a variety of flavors, including Chocolate Chip, Peanut Butter, Oatmeal Raisin and Snickerdoodle, Quest’s cookies typically contain about 15 grams of protein, 4 grams or less of net carbs and less than 1 gram of sugar. Quest also offers soft baked frosted cookies containing about 5 grams of protein, 1 grams of net carbs and less than 1 gram of sugar.

Salty Snacks. Quest’s protein chips, including the tortilla-style chips launched in spring 2018, quickly became a high-selling product offering an attractive nutrition profile when compared to conventional chip products. Offered in flavors including nacho cheese, ranch, chili lime, BBQ, loaded taco and spicy sweet chili, Quest’s chips typically contain about 18 grams of protein, about 4 grams of net carbs, and around 6 grams of fat compared to 2 grams of protein, 15 grams of net carbs and 8 grams of fat for a well-known leading conventional brand. Quest’s cheddar cheese crackers launched during fiscal year 2023, contain 10 grams of protein, 5 grams of net carbs and 7 grams of fat.

Confections. Quest’s confections include full-size and mini peanut butter cups, ‘fudgey’ brownie, ‘gooey’ caramel candy bites, chocolatey coated peanut candies and ‘coconutty’ caramel candy bars sold in a variety of packaging. The full-size peanut butter cups feature a nutrition profile for two cups of 11 grams of protein, 1 gram of net carbs, less than 1 gram of sugar and 4 grams of fiber. The mini peanut butter cups feature a nutrition profile per serving of 8 grams of protein, 1 gram of net carbs, less than 1 gram of sugar and 3 grams of fiber. The candy bars feature a nutrition profile of 12 grams of protein, 3 to 4 grams of net carbs, about 1 gram of sugar and about 9 grams of fiber. The candy bites feature a nutrition profile of 5 grams of protein, 1 gram of net carbs, l to 3 grams of net carbs, about 1 gram of sugar and 4 to 9 grams of fiber.

Core Atkins Products

The company’s core Atkins brand products consist of protein bars, RTD shakes, confections, cookies, and chips.

Protein Bars. To keep on-the-go consumers energized and fueled, the company’s Atkins bars offer a convenient and effective solution, providing consumers with protein, fiber and a delicious taste. Atkins offers two main types of bars: Atkins Meal Bars and Atkins Snack Bars. Atkins Meal Bars contain 13 to 17 grams of protein and are available in more than 10 different flavors. Atkins Snack Bars contain 7 to 13 grams of protein, with 2 to 4 grams of net carbs, and are available in 15 different varieties.

RTD Shakes. The company’s rich and creamy Atkins RTD shakes contain 10 to 15 grams of protein, as well as other important vitamins and minerals. Available in a variety of flavors, including cookies and crème, café caramel and creamy chocolate, Atkins’ RTD shakes are made with high quality ingredients and are designed to provide energy balance through the day. The company’s Atkins’ Plus RTD shakes contain 30 grams of protein, for the company’s consumers seeking higher protein content.

Confections. The company’s Atkins Endulge line, which is designed to satisfy consumers’ sweet cravings, and which the company call Treats, consists of delicious desserts without all of the added sugar. Atkins offers a variety of different Treats, such as peanut butter cups and pecan caramel clusters, each with only 1 gram of sugar or less and low net carbs, providing consumers with the option to indulge.

Cookies. First launched in 2021, Atkins’ soft and chewy cookie products are a convenient source of high-protein combined with low net carbs and low-sugar. These sweet tasting cookies are available in double chocolate chip, peanut butter and chocolate chip. Atkins’ cookies contain approximately 10 grams of protein, 3 grams of net carbs and approximately 1 gram of sugar or less depending on the flavor.

Chips. First launched during 2022, Atkins’s protein chips offer an attractive nutrition profile when compared to conventional chip products. Offered in nacho cheese, ranch, and chipotle BBQ flavors, Atkins’s chips typically contain about 13 grams of protein, about 4 grams of net carbs, and around 7 grams of fat compared to 2 grams of protein, 15 grams of net carbs and 8 grams of fat for a well-known leading conventional brand.

Recipes. While provided free of charge, the company also offers over 1,600 protein-rich, low-carbohydrate and low-sugar recipes designed to help consumers achieve and maintain a healthy lifestyle, while still enjoying delicious food.

Marketing, Advertising and Consumer Outreach

The company’s marketing efforts are designed to increase consumer awareness of and demand for the company’s products. The company employs a broad mix of marketing, including coupons, product sampling, consumer and trade events, advertising (television, online and print) and recipe and food plans, to target the company’s consumers. The company also uses online resources, including social media sites, to communicate with consumers and build interest in the company’s brands. The company’s advertising and use of online resources are aimed at increasing consumer preference and usage of the company’s brands. The company’s trade promotions focus on obtaining retail feature and display support, achieving optimum retail product prices and securing retail shelf space. The company uses coupons (freestanding insert newspaper, store register, on-pack and online coupons) to help stimulate product trial and repeat purchases by providing consumers with economic incentives. The mix of these marketing activities varies between the Quest and Atkins brands.

Retailers

The company has a wide variety of customers across the mass, food, club, drug, and e-commerce channels. A substantial majority of the company’s sales are generated from a limited number of retailers. Sales to the company’s largest retailer, Walmart, represented approximately 31% of consolidated sales in fiscal year 2023, of which approximately 24% is through their mass retail channel and approximately 7% is through their Sam’s club and e-commerce channels. Sales to the company’s next largest retailer, Amazon, represented approximately 16% of consolidated sales in fiscal year 2023.

E-Commerce

The company sells its products on questnutrition.com, Atkins.com, Amazon.com and e-commerce platforms of the company’s brick-and-mortar customers, which all deliver the company’s products directly to the location designated by the consumer.

International

The company’s products are also sold outside North America. The company’s top international sales are in Australia and New Zealand. For the fifty-two weeks ended August 26, 2023, international net sales represented approximately 2.7% of total net sales. The company’s international supply chain is run by a lean team solely focused on international operations. Similar to the U.S. operations, international operations utilize contract manufacturers for products, and distributors for distribution and sales.

Regulation and Compliance

Along with contract manufacturers, brokers, distributors, ingredients and packaging suppliers, Simply Good Foods is primarily subject to laws and regulations in the United States promulgated by federal, state and local government authorities. In the United States, the federal agencies governing the manufacture, distribution and advertising of products include, among others, the U.S. Federal Trade Commission (‘FTC’), the U.S. Food and Drug Administration (‘FDA’), the U.S. Environmental Protection Agency, and the Occupational Safety and Health Administration, in addition to similar state and local agencies.

Food-Related Regulations

As a manufacturer and distributor of food products, the company is subject to several food-related regulations, including the Federal Food, Drug and Cosmetic Act and regulations promulgated thereunder by the FDA.

The company is subject to the Food Safety Modernization Act, which, among other things, mandates that the FDA adopt preventative controls to be implemented by food facilities in order to minimize or prevent hazards to food safety. The company is subject to numerous other federal, state and local regulations involving such matters as the licensing and registration of manufacturing facilities, enforcement by government health agencies of standards for the company’s products, inspection of the company’s facilities and regulation of the company’s trade practices in connection with the sale of food products.

Environmental Regulations

The company is subject to various state and federal environmental laws, regulations and directives, including the Food Quality Protection Act of 1996, the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the Federal Insecticide, Fungicide and Rodenticide Act and the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended.

Competition

The company’s identified branded competitors include, but are not limited to, CLIF Bar, KIND bars, Boost, Premier Protein, Core Power, Fairlife, Muscle Milk, ONE bar, Pure Protein, Slimfast, and think!.

Research and Development Activities

The company’s total research and development expenses were $4.3 million for the fifty-two weeks ended August 26, 2023.

History

The Simply Good Foods Company was founded in 2017. The company was incorporated in 2017.