So long, Green Giant (canned). Decent quarter overall | BGS Message Board Posts


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Msg  905 of 906  at  11/9/2023 8:34:03 AM  by

RJCogburn64


So long, Green Giant (canned). Decent quarter overall

 
 
From the conference call, a bit of color.... 
 

Over time, this business is -- it's a very competitive market with high private label. We are not the manufacturer of this business. So our counterpart in this transaction, Seneca, was the manufacturer that they're a great owner for this business and as you pointed out, this is a seasonal working capital business where you are basically buying at least a year in advance of all of your sales, that inventory during a period between July and October, which means that your planning is starting some 18 months before that pack season, which puts a lot of pressure. And so as we've owned this business, virtually every year has been either a high working capital or low working capital as we've tried to adjust to the right size pack.

We just haven't gotten it right. It's just a challenging business. It's closer to the agricultural chain than a lot of our other businesses. Even though it is a canned, packaged food business, it's just tough. We're not in the agricultural food game. There's a better owner for it and this is really going to simplify our business going forward. And the reality is this is a very, very high inventory intensity business. So, we bought the entire year supply at one time during the year and held it for the entire year. So you think about the intensity of that on the sales profile, it's pretty high. So, we obviously will not have to finance that additional kind of inventory going forward in the future, particularly in the Q3, Q4 timeframe.




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Msg # Subject Author Recs Date Posted
906 Re: So long, Green Giant (canned). Decent quarter overall jerrykrause 0 11/10/2023 7:38:58 AM




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