Edible Garden Q1 2026 Earnings Call Transcript

Quartr
Provided by Quartr
May 15, 2026

Key Takeaways

  • Positive Sentiment: Q1 revenue rose 22.9% year over year to about $3.3 million, driven by strength in cut herbs, vitamins/supplements, condiments, and international sales.
  • Positive Sentiment: Retail distribution continues to expand, with the company saying its footprint now exceeds 6,000 locations and new placements added at Target, Safeway, The Fresh Market, Hannaford, Busch’s, and Woodman’s.
  • Neutral Sentiment: Edible Garden is shifting toward higher-margin shelf-stable categories, especially RTD nutrition products, and is advancing its Iowa RTD initiative with Tetra Pak and a co-manufacturing plan ahead of its own facility launch.
  • Neutral Sentiment: Operating expenses increased sharply to $10 million from $5.6 million a year ago, mainly due to higher COGS from third-party sourcing and accelerated depreciation tied to the RTD pivot.
  • Neutral Sentiment: Cash improved sequentially to about $2 million from $1.1 million at year-end, helped by positive operating cash flow and financing inflows, though management said a working capital deficit remains.
AI Generated. May Contain Errors.
Earnings Conference Call
Edible Garden Q1 2026
00:00 / 00:00

There are 6 speakers on the call.

Speaker 4

Good morning, welcome to the Edible Garden Incorporated 2026 first quarter business update conference call. At this time, all participants are in a listen-only mode, and the floor will be open for questions following the presentation. If anyone should require operator assistance during the conference, please press star zero on your phone keypad. Please note this conference is being recorded. I will now turn the call over to your host, Ted Avase, Investor Relations at Crescendo Communications. Ted, the floor is yours.

Speaker 5

Thanks, Jenny. Good morning, and thank you for joining Edible Garden's 2026 first quarter earnings conference call and business update. On the call with us today are Jim Kras, Chief Executive Officer of Edible Garden, and Costas Dafoulis, Interim Chief Financial Officer of Edible Garden. Earlier today, the company announced its operating results for the three months ended March 31st, 2026. The press release is posted on the company's website, ediblegardenag.com. In addition, the company has filed its quarterly report on Form 10-Q with the U.S. Securities and Exchange Commission, which can also be accessed on the company's website as well as the SEC's website at sec.gov. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020.

Speaker 5

Before Mr. Kras reviews the company's operating results for the quarter ended March 31st, 2026 and provides a business update, we would like to remind everyone that this conference call may contain forward-looking statements. All statements other than statements of historical facts contained in the conference call, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations are forward-looking statements. The words aim, anticipate, believe, could, expect, may, plan, project, strategy, will, and the negative of such terms. In other words, in terms of similar expressions, are intended to identify forward-looking statements. These forward-looking statements are based largely on the company's current expectations and projections about future events and trends that it believes may affect its financial condition, results of operations, strategy, short-term and long-term business operations and objectives, and financial needs.

Speaker 5

These forward-looking statements are subject to several risks, uncertainties and assumptions as described in the company's filings with the SEC, including the company's annual report on Form 10-K for the year ended December 31st, 2025. Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in the conference call may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statement. You should not rely upon forward-looking statements as predictions of future events. Although the company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, level of activity, performance, or achievements. In addition, neither the company nor any person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The company disclaims any duty to update any of these forward-looking statements except as required by law.

Speaker 5

All forward-looking statements attributable to the company are expressly qualified in their entirety by these cautionary statements as well as others made on this conference call. You should evaluate all forward-looking statements made by the company in the context of these risks and uncertainties. With that, I would now like to turn the call over to Jim Kras, Chief Executive Officer of Edible Garden. Jim.

Speaker 2

Thanks, Ted. Good morning, everyone. The first quarter of 2026 reflected continued progress across the business as we began seeing stronger traction for many of the investments and strategic initiatives we put in place over the past year. Revenue increased approximately 22.9% year-over-year to approximately $3.3 million, supported by continued retail expansion and growth across multiple categories. One of the strongest contributors during the quarter was our cut herb business, where sales increased approximately 46% year-over-year, driven by continued growth within existing accounts as well as new account contributions from Kroger and Weis Markets. That momentum also extended beyond our core produce categories. Vitamin and supplement sales increased approximately 27% year-over-year, while condiment sales increased approximately 51%.

Speaker 2

We also continued seeing strong growth internationally, with sales increasing approximately 50% year-over-year, reflecting continued expansion of our distribution footprint and our growing demand for clean label, better for you products across multiple markets and categories. We continued expanding distribution with both existing and new retail partners during the quarter, including Target, Safeway, The Fresh Market, Hannaford, Busch's Fresh Food Market, and Woodman's Market. At the same time, we broadened distribution across our branded consumer product portfolio, including Pickle Party, Pulp, Kick. Sports Nutrition, Vitamin Whey, and JEALOUSY GLP-1 support products. We believe this momentum reflects the broader platform we have been building over the past years, leveraging the controlled environment, foundation, vertically integrated infrastructure, retail relationships, operational capabilities, and product development expertise established through our core business. We continue expanding into adjacent higher margin and shelf-stable categories.

Speaker 2

As we continue evolving beyond our traditional greenhouse and fresh herb business, one of the areas we are most focused on is the ready to drink or the RTD category. We believe RTDs represent a compelling long-term opportunity with the global market projected to grow from approximately $842.5 billion in 2025 to roughly $1.26 trillion in 2033 according to Phoenix Research. Through ongoing discussions with both existing and prospective retail partners, we continue seeing increasing demand for scalable domestic production solutions that can deliver clean label, shelf-stable, functional nutrition products with consistency, transparency, and operational reliability. We believe this reflects a meaningful unmet need as retailers and brands continue searching for reliable U.S.-based partners across functional beverage and wellness-focused nutrition categories.

Speaker 2

To support that opportunity, we continue advancing our Iowa Midwest RTD initiative during the quarter, which including ongoing work related to the integration of Tetra Pak processing and packaging solutions. Tetra Pak is a globally recognized leader in food processing and aseptic packaging solutions, and we believe this relationship significantly strengthens the operational foundation of our RTD platform. Our retail footprint now exceeds 6,000 locations across the United States, Caribbean, and South America. During Q1, we added new retail partners including Target, Safeway, Busch's Fresh Food Market, and The Fresh Market. This expanding distribution network is not only driving current revenue growth, but also represents the foundation for our future RTD product placement. These are relationships that are already in place that we will nurture and look to leverage.

Speaker 2

More broadly, our foundation is in controlled environment agriculture has allowed us to build deep expertise in traceability, sustainability, operational discipline, supply chain management, and retail execution. We believe those capabilities naturally support a broader Farm to Formula strategy and zero waste inspired initiative while supporting our continued expansion into shelf stable and functional nutrition categories. While we're in the early stages of this evolution, we believe the foundation is firmly in place through expanding retail network, growing branded product portfolio, and continued advancement of our RTD manufacturing initiative. At the same time, we remain focused on improving operational execution, scaling higher margin categories, strengthening margins over time, and positioning the company for long-term scalable growth and value creation. With that, I'll turn the call over to Costas to review the financials. Costas?

Operator

Thanks, Jim. Good morning, everyone. Revenue for the three months ended March 31st, 2026 increased approximately 22.9% year-over-year to approximately $3.3 million, compared to approximately $2.7 million in the prior year period. The increase was primarily driven by continued growth across the company's Cut Herb portfolio, which increased approximately 45.9% year-over-year. That growth was supported by expansion within existing customer accounts, along with new account contributions from Kroger and Weis Markets. We also saw broad-based growth across Hydro Basil, wheatgrass, vitamins and supplements, and condiments. International sales increased approximately 50% year-over-year, and condiment sales grew 51%, reflecting expanding demand for our branded product portfolio across the retail footprint that now exceeds 6,000 locations.

Operator

Operating expenses were $10 million for the three months ended March thirty-first, 2026, compared to $5.6 million for the three months ended March thirty-first, 2025. The increase of $4.4 million was primarily driven by two factors. First, cost of goods sold increased as we scaled Cut Herb distribution through third-party sourcing. It dynamically view as transitional as we work to renegotiate supplier terms. Second, depreciation and amortization increased approximately $2.5 million, primarily reflecting accelerated depreciation of certain fixed assets in connection with the company's pivot to RTD clean nutrition manufacturing at our Prairie Hills facility.

Operator

The company recorded an income tax benefit of approximately $3.4 million for the 3 months ended March 31, primarily related to a valuation allowance release in connection with the sale of certain tax benefits under the New Jersey Economic Development Authority's Technology Business Tax Certificate Transfer Program. This benefit is a discrete non-recurring item. Net loss for the quarter was approximately $3.7 million, compared to approximately $3.3 million in the prior year period. Turning to the balance sheet and cash flow, cash increased up to approximately $2 million at March 31 from $1.1 million at year-end. First sequential increase in 5 quarters. That improvement was driven by positive operating cash flow of approximately $251,000, which reflected favorable working capital, including collections on receivables and inventory reductions, as well as net financing inflows.

Operator

We continue to manage a working capital deficit and are focused on improving the company's capital position as we execute on our growth strategy. Looking ahead, our priorities for 2026 are clear. Continue scaling revenue through our expanding retail network. Improve our cost structure by transitioning Cut Herb sourcing and scaling higher margin branded categories. Advance the RTD manufacturing platform with Tetra Pak and maintain disciplined capital management. We're encouraged by the top-line momentum and the cash flow improvement this quarter, and we are focused on translating that momentum into margin improvement over the balance of the year. With that, operator, please open the line for questions.

Speaker 4

Thank you very much. We are now opening the floor for questions. If you would like to ask a question, please press star one on your phone keypad now. We ask that while you are posing your question, you please pick up your handset if you are listening on a speakerphone to provide optimum sound quality. You may press star two if you would like to remove your question from the queue. Please wait a moment whilst we poll for questions. Thank you. Our first question is coming from Nick Sherwood of the Maxim Group. Nick, your line is live.

Speaker 3

Hi, Jim. Good morning. Thank you for taking my questions. My first question is, you know, across the 6,000 retail locations your products are found in, how many of those stores are carrying the cut herb products? How many of them are carrying vitamin supplements? You know, how should we conceptualize, you know, what's being held in across those stores?

Speaker 2

Good morning, Nick. It's, you know, it's a combination and a mix, obviously. We're seeing growth come out of cut herbs. That's the preferred form that consumers like based on convenience. That continues to accelerate. You know, we have Target is gonna be coming online in the next week or so. That'll be significant for us as a business at the blend with the largest percentage being cut herbs, with, you know, with some potted herbs as well.

Speaker 2

As we start to evolve as a business and get into higher, more shelf-stable, you know, opportunities and products, you'll see that mix start to even out, where I think you're gonna see, especially with the ready-to-drinks down the road, that becoming a larger part of our business and, you know, and that's at a much higher velocity as well as margin, the RTD business.

Speaker 2

Near term, let's say the next six to 12 months as we bring on the RTDs, it's gonna be, I think, driven primarily by the vitamin supplements, which currently right now I would say is, you know, 20% of our business, with, you know, cut herbs being probably 40 to 50, and then the rest is kinda everything else, potted, wheatgrass, hydroponic basil, which is also a big player for us at a nice margin. I think a lot of top-line growth coming out of cut herbs, even more coming out of vitamins and supplements, knowing that, you know, the ring for a lot of these products is much higher than the clamshell of cut herbs.

Speaker 2

You know, the rest of it, is gonna be some of the other products that are, in the mix that have, I think, you know, better margins that will offset some of the top-line, growth that's coming out of the cut herb with, once again, the vitamins and supplements, I think, becoming a bigger and bigger part of our business.

Speaker 3

Understood. I appreciate the detail in that answer. Kinda looking at this new ready-to-drink platform, have you been able to provide some of your retail partners with prototypes? Can you kinda talk about the reception from your retail partners? How should we think about that, yeah?

Speaker 2

The reception's been overwhelming. It's, you know, what's great about being in the food business is people have to eat, right? Ready-to-drinks is in the segment which is just incredibly compelling with the growth in, you know, in protein consumption. You know, you can't turn the television on and not see it, you know, come up, whether in, you know, advertisements or people speaking about just the growing need, whether you're looking to, you know, you know, be an active individual and put on muscle mass or to recover or just live a healthier lifestyle, or if you're older and you're looking to keep, you know, weight on or if you may unfortunately be, you know, sick. The protein needs just continue to grow across the full spectrum of consumers.

Speaker 2

For us, you know, the retailers, many of which that we are in, you know, we've already gotten significant commitments with the factory that's going up. I would think, you know, we're gonna be at a point where it's gonna become more and more of a negotiation to figure out who we're gonna start to bring in post-launch. We are working with a co-manufacturer to start driving the business and servicing the overwhelming demand. I think we're probably gonna be close to capacity with them probably in the next few weeks. It's really been incredibly exciting. You know, we are focused on the core business. The greenhouse has got us here.

Speaker 2

The RTD business, it's just a monster with, you know, with the product lines that we have in there, both, you know, both a performance, high protein drink, and then we'll have an adult nutrition drink that's in there that's, you know, launching in, once again, in a tail end of 2027, early 2028 in our own factory. We'll be launching prior, or servicing business prior, you know, out of a co-manufacturer. Once again, just overwhelming demand, and, you know, we're gonna be seeing this paradigm shift for us as a business, you know, directed more and more towards that.

Speaker 2

Once again, I think we're so uniquely qualified because, you know, there's really no one out there that is coming out of the greenhouse business that's doing the innovative things that we're doing and isn't as qualified as we are to, you know, to really stand for something, whether it's clean label, which is what's driving the thrust of this, or just having a, you know, an eye on sustainability and working with someone like Tetra Pak, who's been a phenomenal resource for us as we, you know, we build out this platform. I mean, like I said, we've got probably more orders than we can handle.

Speaker 2

We'll be running our prototype to get more specific in mid-July with product beginning to manufacture at a co-man in September, while we build out the factory in Iowa. We're already in the final stages of finalizing the product. We teamed up with McCormick in order to develop the products, like I said, 1 is a sports nutrition dairy-based premix that then gets turned into a RTD in a Tetra Pak, and then the other 1 is an adult product not unlike Boost Ensure and those types. It's just fantastic.

Speaker 2

A joke I said to people, I've always wanted to be in the hotcakes business, you know, 'cause we're in the hotcakes business 'cause everything's selling like hotcakes. It's been pretty cool, in all honesty. Exciting, I think, for the team, the company, investors. I mean, just fantastic.

Speaker 3

Yeah. Sounds like there's a lot of momentum there and something to look forward to. Yeah. My last question is, you know, how do you keep or how do you make customers sort of loyal to your brand across product categories so that, you know, someone is recognizing that they may buy or maybe the condiments that they buy and ensuring that, you know, they're buying, you know, across your product categories as opposed to just kind of buying one of them?

Speaker 2

Sure. You know, look, it comes down to an exercise in marketing and distribution, right? And customer service, you know, both for our retailers and our, you know, end user. It's comes down to quality and consistency. I mean, you know, what, you know, the art of this is, you know, is communicating and hopefully, training consumers, for lack of a better word, to know that when they want the best, and that they only deserve the best, they buy Edible Garden. Putting forth the marketing, you know, initiatives that, you know, communicate that is something that, you know, I think we do a fairly good job of, whether it's through, you know, advertising and marketing and in store promotions and reinforcement or social media.

Speaker 2

Once again, I think, you know, if you've got the quality and the consistency and the availability, and you're shipping at 98% like we have, I mean, it drives not only, I think, loyalty because people know when they go in, your product's gonna be in there and look for Edible Garden, 'cause you know what you're gonna get. You're gonna get safe, high quality, best quality, produce that's super fresh. I think you just continue to give a consumer that experience, and it tastes great, and it makes your everything that you cook taste that much better. We believe if we deliver on that and we do our job, I think people will continue to be loyal and want our product.

Speaker 2

We see that, through, you know, the fact that we have a very stable revenue line, albeit, you know, small in comparison to many of the other companies out there. With the RTDs and our reputation with the, not only the consumers, but the retailers. Once again, talk about, you know, this notion of Farm to Formula and what that means. It's harnessing the greenhouses and all the great R&D stuff that we do, and we don't talk enough about it at the company. You know, the universities we're involved in, the partnerships with the EPA, the USDA, to, you know, things that just help, you know, drive quality, consistency, and elevate us beyond anybody else in the category.

Speaker 2

There's not too many people left because I don't think people made the investment, and I think the shareholders was backing us to allow us to get to where we are to do the great things that we're doing. I think all of that goes into building brand loyalty because people know that, hey, this is, you know, if I want the best in herbs, I want the best in condiments, I want great tasting, better for you products, and somebody who's got an eye on the environment as well, you know, you should buy Edible Garden. I think we've seen that. Once again, I think what really reflects it is our consistent relationships and the opportunities that it drives for something like the RTDs, where, you know, major retailers came to us and said, "Can you do this?

Speaker 2

We've got a problem. We've got, you know, I mean, the shortfall in the marketplace on this item is tremendous. To be able to do it better, cleaner, you know, and, you know, and do it where, like I said, you know, where people are calling us and saying, "Hey, you know, we've heard about what you guys are doing. Can you do it for us?" It's just, I mean, you work a lifetime to get to this position, and the company's put in 10 years and fought hard to be where we are, and now it's starting to pay off. It's a, it's an exciting time, and I couldn't be any more bullish on the business, you know, and we're just in a great spot.

Speaker 2

I gotta thank, frankly, the retailers, you know, for their support and, you know, because they're excited. They've got a problem. Well, you know, we're here. We've got a solution, and they've worked with us to craft, you know, a solution that works for all parties, and, you know, like I said, it's a huge opportunity that's only accelerating and growing.

Speaker 3

Yeah. Thank you for answering all my questions and, you know, looks like there's a lot of momentum there. I'll return to the queue.

Speaker 2

All right. Thanks, Nick. Take care.

Speaker 4

Thank you very much. Just a reminder there, if you would like to ask a question, you can still join the queue by pressing star one on your phone keypad now. Our next question is coming from Ellen Liczak of Forest Capital. Ellen, your line is live.

Speaker 1

Hey, good morning, guys. Thank you so much for taking my questions. You discussed the growing RTD opportunity and increasing retailer interest in domestic clean label functional nutrition products. As you look ahead, how are you balancing investment between the company's core produce business and the, really, like, the larger RTD opportunity? What do you think positions Edible Garden to compete effectively in that market?

Speaker 2

Well, welcome. Nice to meet you, and thanks for joining the call. We're looking to, you know, look, the future is gonna be, you know, the shelf-stable, better for you products. We are going to be, kinda allocating our resources, you know, along where we see the growth is. The core business, I think, look, I know that we've made a significant investment in the operations, you know, adding greenhouses, you know, tying them to contracts. That's the thing. That's the other thing that's, you know, very unique about, you know, the relationships we have. You know, the distribution platform of 6,000 stores holds steady and is growing, you know, every day that, you know, we're out there selling and working with our retail partners.

Speaker 2

I think you're gonna see a shift towards the investment in the RTD and nutrition platform because that's the future, and it's the larger opportunity, with the shelf stability, the overwhelming demand. You know, I think, you know, only if you're lucky once in your career, I've been fortunate to have it a few times. You know, harking back to my days in nutritional supplements with Nature's Bounty, where, you know, you catch a craze. Right now, we've got a protein craze. People want convenience. They want liquids. They don't necessarily wanna mix powders. They wanna have their nutrition, and they wanna have it on the go. They wanna have it when they need it.

Speaker 2

What's great is everybody from kids all the way to seniors, you know, have these nutritional needs and these protein needs. We're just starting there. I mean, there's so many other segments, you know, hydration, whatnot, that we could play in. We're gonna be investing, you know, a good chunk of our resources, our money, in that platform, really backed by the greenhouses and the wherewithal and the reputation that we have for, you know, for being, you know, a supplier that supplies very difficult, highly perishable products at a 98% ship rate, which is just unheard of. I mean, all of that has driven the retailers.

Speaker 2

This RTD opportunity came from a world's largest retailer said, "Hey, you know, can you help us out?" It wasn't necessarily something that was on our radar. When we started working with them and with their resources, we were able to partner with a Tetra Pak, partner with a McCormick's. When you think about Edible Garden our size and the partners that we're working with, it's a real credit to everybody at Edible Garden who sat there and made sure the truck left on time in full because that means everything to the retailers. They want availability. If you don't have a product on the shelf, you're missing a sale.

Speaker 2

I think that's, you know, just boiling it down, in simple terms, that's kind of what I think has made us, you know, effective. Like I said, we're gonna be putting our more and more resources towards that. I think I answered your second question, which is, you know, what positioned us for this opportunity, and that was, you know, really just, you know, our commitment. You know, I tell people at Edible Garden, we're a customer service company first that happens to make things or grow things. I think just getting in there and understanding the importance of the retailers and addressing their needs is something that I think we've just done really well as a team. It's paying off. You know. It's paying off.

Speaker 2

I mean, and it's frustrating 'cause it's been years of investment and, you know, and managing costs and managing suppliers and, you know, and those challenges aren't gonna stop. Now we have such a huge opportunity. You know, when everybody's got something in it, you know, to gain, you know, people come to the table with resources 'cause we're all gonna win. I hope I answered your question. Was that enough?

Speaker 1

Yeah, no. Yeah, no, you definitely did. Obviously it looks like you run a very tight ship. I mean, I have another question.

Speaker 2

Sure, go ahead.

Speaker 1

As you continue to evolve toward, you know, higher margin and shelf-stable categories, like what specific initiatives are, you know, are you underway with the core produce business to improve the operational efficiencies and strengthen the margins over time?

Speaker 2

Well, right now, a lot of it is, you know, not only a redeployment of existing resources that we have of people that, let's say, like whether it's in our regulatory department or our food safety, things like that can be deployed across the whole platform, including the RTDs. It's not like you're hiring another person. You know, we'll be looking to probably shift the business around, blend the business with our suppliers, you know, negotiate harder with our suppliers based on the growing demand, which I think puts us in a more advantageous position than we've been in the past to get some price considerations on what we're bringing in the house.

Speaker 2

I also think you're gonna see a lot of, I think. I don't even think I know we're gonna be looking to focus on the accounts where we make money. I think we'll start to remove some of the businesses that are maybe too far from the greenhouse with the rising, you know, diesel costs and if we're delivering it that way. We've already begun and it's and have impacted in this quarter, quite a bit of labor re-reduction just based on the investments that we made in Q1 or the investments we even made in Q4 to bring in more automation and more lines.

Speaker 2

You know, especially in preparation on what we anticipate to be, you know, a growing business, you know, when you think about it. You know, the overall business is up, you know, 22% with growth coming out of that core produce business. I don't see that stopping and, you know, and I think we've got a bunch of opportunities lined up. It's just gonna be a, you know, it's gonna be a margin play for us, a reduction of some costs in operations, negotiating better with our suppliers and, you know, and focusing on where we know that we can drive margin and profit and, you know, 'cause we've got a lot of the market share now, so that, you know, that's kind of happened and that investment's paid off.

Speaker 2

I think it's really a refinement and, you know, focus. Whether it's traditionally a low margin business, especially cut herbs, and so that drags us down a little bit. Once we start to shift to these higher margin, you know, products and we pick up velocity, you know, that will start to shift.

Speaker 2

I think we're already starting to see that while we reduce costs because, you know, we've been, you know I appreciate you saying I run a tight ship, but there's more to do, we gotta continue to refine, you know, our costs so that we can, you know, we can focus our energies, you know, where we need to, where we can drive margin as well as drive, you know, top line.

Speaker 1

Yeah. No, no, that definitely, that makes sense and looks like you guys are on your way. You also mentioned that international sales increased approximately 50% year-over-year. Can you discuss what's driving that growth and how important international markets could become within the broader business over time?

Speaker 2

Yes. A lot of it's driven, you know, or the majority honestly is driven by PriceSmart. You know, they are the, they are the major player in big box, so think Costco, except in the Caribbean and in South America. They are, they are continuing to grow. I know that they're opening, stores in Chile. They're already, you know, in Colombia and some of the other countries in South America, you know, as well as, you know, throughout the, you know, the Caribbean. They're NASDAQ listed as well. They're performing extremely well. You know, we've been able to continue. We've been in business with them for almost a decade, and so we've been able to benefit with, you know, to, from their growth. It's been a phenomenal relationship.

Speaker 2

They continue to not only drive an existing product that's been there for a while, but also expand into our Kick. Sports Nutrition line. I think you'll see even more growth out of that over the next year. Like I said, your earlier question about, you know, what does that product mix look like? You're gonna see vitamin supplements, our sports nutrition lines, the clean labeled products even before we start, you know, benefiting from this tremendous upside that we see on the RTDs. You'll see our, you know, existing protein powders, plant protein powders, all clean labeled.

Speaker 2

Those will start to come online, I would say, towards the tail end of this year as well, and you know, in significant numbers, you know, at a much, you know, and a really nice margin. Once again, as that mixes shifts, you know, the lower margin, you know, cut herb business doesn't become such a. I don't like using the word drag. It's just, it is a little bit of a drag on margin just 'cause it's a lower margin product line that right now, you know, we're getting, you know, requests to, you know, whether it's Target or, you know, or others to say, "Hey, can you take this business line? You do such a great job for our competitors.

Speaker 2

Can you do it for us?" You're gonna start to see a lot of this higher margin vitamins and supplement type of products, sports nutrition come online this year, as well as, you know, the high velocity, better margined, you know, RTDs as well towards the tail end of the year.

Speaker 1

Well, that's fantastic. I just got one more question. You highlighted expansion with several major retail partners during the quarter, right? As an investor, how should I think about the opportunity to continue increasing distribution within your existing retail relationships going forward?

Speaker 2

Well, it's gonna be, I mean, we're in an advantageous position, right? When you think about the fact that we're in 6,000 stores. Once again, super stable relationships really based on performance. I mean, you know, we're servicing Walmart, we're servicing Target, we're servicing Meijer, we're servicing Wakefern ShopRite, we're servicing, you know, the Hannaford and the Ahold Delhaize family of banners, Safeway. You know, it's, I mean, these are the who's who of people who sell food to, you know, the majority of the country.

Speaker 2

We're gonna continue to put, you know, look to go deep, you know, versus while we kind of go wide. Really it's about selling, you know, more, more products across our total portfolio to the existing customers that we have. We will add on, you know, new accounts as new accounts make sense. Once again, this whole idea of kind of, as you know, rationalizing out the relationship, the portfolio, the retailers, and making sure that, you know, we're going deep and driving the business at, you know, a higher margin and, you know, while addressing, you know, the operational inefficiencies that the business has, that we've, you know, continued to improve upon, so that, you know, we're, you know, we're more, you know, more efficient.

Speaker 2

You know, our whole, you know, seed to store or, you know, cradle to grave or whatever you wanna say it, you know, process here is efficient and that we are benefiting from, you know, the margin that we need by servicing, you know, the retailers in a way that allows them to have, you know, the products that sell at an efficient rate for them as well as us, and that we're, you know, gaining the, you know, margin and getting the margin expansion that we need because we have the optimal mix.

Speaker 2

I think it's a lot of it's gonna be, you know, continuing to work with the relation, you know, with the retailers that we've been working with for the last decade that we've worked so hard to prove ourselves, and that's paying off. It's selling, you know, more of what we currently have through the existing platform of retailers and distribution that we have, you know, versus, you know, going after necessarily new accounts. We've got a lot of business that we can do better at, I guess, is the best way to do it.

Speaker 2

We're gonna focus on that by getting, you know, getting them to take in ideally, you know, the pickles, which has been, you know, gaining momentum and, or the, you know, or the fermented hot sauces. Then, like I said, the vitamin supplements, you know, is really, you know, probably gonna be you know, on its own, not on its own, segmented out and focused on separately.

Speaker 2

But they all kind of dovetail into this better for you, and, you know, overall push that we have as a company and that aligns obviously with the, not only with what the consumers are looking for, but what the retailers are looking to do as there's been such a dramatic, an overwhelming initiative by the retailers to remove artificial colors, artificial sweeteners from products. You know, for us, timing was great. We were already doing it. Not only were we doing it with what we grew and, being USDA Organic, the first out there with a USDA certified, you know, organic product, with our Hydro Basil, which was incredibly, you know, innovative from the team.

Speaker 2

We're, you know, we're just in a position where, you know, we've got the right product at the right time, and the retailers are pushing this as they, you know, understand the importance of getting it to better for you products 'cause they're getting that pressure from a consumer base that's demanding it and an administration that's pushing it as well in Washington. We're, we're in a good spot.

Speaker 1

Well, thank you so much for taking my questions. I really appreciate it, and congratulations on the quarter. I'll hop back on the queue if I have any other questions. Thanks again.

Speaker 2

All right. Thank you.

Speaker 4

Thank you very much. Well, we appear to have reached the end of our question and answer session. I will now hand back over to the management team for any closing comments.

Speaker 2

Thank you, operator. Thanks again to everyone for joining us today and for your continued interest in Edible Garden. We believe the first quarter reflected meaningful progress across the business and continued validation of the broader strategy we have been executing against over the past several years. We're seeing encouraging momentum across our retail footprint, branded product portfolio, and operational initiatives while continuing to build a foundation for future growth and opportunities in higher margin, shelf-stable nutrition categories. As we move through 2026 and beyond, our focus remains on disciplined execution. That includes continuing to expand distribution, improve operational efficiencies, strengthen margins over time, advance our RTD initiative, and further leverage the infrastructure and retail relationships we have already established across the business.

Speaker 2

While we are still in the early stages of this evolution, we believe Edible Garden is becoming increasingly well-positioned as a diversified, clean label nutrition company with expanding capabilities across fresh, functional, and shelf-stable categories and a stronger foundation for long-term growth. We appreciate everyone's continued support and look forward to updating you on our progress in the quarters ahead. Thanks again, and have a great day.

Speaker 4

Thank you very much. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. We thank you for your participation.

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