Utz

Utz was explicit their price increases had “stickiness” that would boost profit margins even after inflation slows 

Utz CEO: “we took significant pricing actions throughout 2021 with an additional round of pricing already taken in February of 2022, with two more rounds of pricing actions planned in the late second and third quarter of 2022.” “Dylan Lissette — Chief Executive Officer: Our full year results reflect these trade-offs, as organic net sales growth accelerated meaningfully throughout the year, and we delivered a strong finish to 2021. While our topline performance was strong, our earnings reflect higher-than-anticipated supply chain costs as we prioritized customer service to ensure we met growing demand. Servicing our customers to the best of our abilities has always been a hallmark of Utz’ commitment to our partners. To offset these higher supply chain costs, we took significant pricing actions throughout 2021 with an additional round of pricing already taken in February of 2022, with two more rounds of pricing actions planned in the late second and third quarter of 2022.” (Utz Brand Q4 2021 Earnings Call, 3/2/2022)

Utz CFO: “our actions around pricing and productivity have stickiness to them. While they address margin gaps in the near term, they will drive margin enhancement when inflation stabilizes.” “Ajay Kataria — Chief Financial Officer: Before I turn the call over to Dylan, I would like to revisit our long-term margin opportunity. We believe that our ability to expand margins remain strong for several reasons. First, our actions around pricing and productivity have stickiness to them. While they address margin gaps in the near term, they will drive margin enhancement when inflation stabilizes. Second, our supply chain capabilities are improving as we accelerate productivity programs and optimize manufacturing and logistics processes to increase throughput and unlock efficiencies.” (Utz Brand Q4 2021 Earnings Call, 3/2/2022)

Utz CFO: “So we are not seeing any elasticity right now. Demand is outweighing supply.” “Ajay Kataria — Chief Financial Officer: And third, we consider elasticities in the second half. So we are not seeing any elasticity right now. Demand is outweighing supply. But we think at some point, elasticity will come into play. So we baked a little bit of that into our outlook as well.” (Utz Brand Q4 2021 Earnings Call, 3/2/2022)

Utz CFO: “we are very prepared now with the team, the tools, everything coming together and being in place to proactively go out and take pricing.” “Ajay Kataria — Chief Financial Officer: So I’ll take that. So there are a couple of questions in there. So first, the couple of rounds of pricing we have talked about, they are built into our outlook, and they’re not based on what’s happening in the last two weeks. What we are doing is really looking at the inflation that’s in front of us. Anything that’s known to us and reacting that way. From the situation constantly evolving the environment being dynamic. To your other question, we are very prepared now with the team, the tools, everything coming together and being in place to proactively go out and take pricing. We are watching what the competition is doing, and we are working our entire portfolio, not just on the typical pricing levers, but also looking at optimization and our SKU portfolio, etc. , to enhance margins.” (Utz Brand Q4 2021 Earnings Call, 3/2/2022)

Utz CFO: “there will be some of the benefit of pricing that we are taking now going into 2023… we have very strong reasons to believe that when inflation stabilizes, things are going to start to improve in terms of margins.” “Ajay Kataria — Chief Financial Officer Yeah, thank you for the question. So the way to think about that is look at it from a rolling time period, and there will be some of the benefit of pricing that we are taking now going into 2023. And as we think about it, we talked about this in our prepared remarks that we have very strong reasons to believe that when inflation stabilizes, things are going to start to improve in terms of margins. And part of that is because that once inflation stabilizes, there will be some overlapping pricing benefit going forward.” (Utz Brand Q4 2021 Earnings Call, 3/2/2022)