What changed in this filing

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Item 1. Business

2022-08-25 compared with 2021-08-26 · 59 added, 31 removed, 118 unchanged (43% of the section changed)

8 unchanged sentences

Simplify our supply chain to reduce our costs and grow our margins;

Identify and execute complementary mergers and acquisitions to grow our core.

Expand our core business with our Retail licensing program and complementary mergers and acquisitions .

As used in this Annual Report on Form 10-K and except as the context otherwise may require, the terms “we,” “us,” “our,” “registrant,” or “the Company” mean Lancaster Colony Corporation and its consolidated subsidiaries, except where it is clear that the term only means the parent company.

11 unchanged sentences

Costs that are deemed to be indirect, excluding corporate expenses and other unusual significant transactions, are allocated to the two reportable segments using a reasonable methodology that is consistently applied.

Our Chief Operating Decision Maker (“CODM”), in order to drive enhanced accountability and transparency throughout our organization, initiated a review of functional costs that have historically been part of the indirect costs allocated to our two reportable segments.

This review was completed as part of our preparation for our upcoming enterprise resource planning system implementation.

As a result of this review, our CODM identified certain support functions that would be more appropriately presented within corporate expenses to facilitate the management of the business, including assessing segment performance and allocating resources.

These changes were effective July 1, 2020.

All historical information has been retroactively conformed to the current presentation.

In 2021, our Chief Operating Decision Maker (“CODM”), in order to drive enhanced accountability and transparency throughout our organization, initiated a review of functional costs that had historically been part of the indirect costs allocated to our two reportable segments.

This review was completed as part of our preparation for our enterprise resource planning system implementation.

As a result of this review, our CODM identified certain support functions that were more appropriately presented within corporate expenses to facilitate the management of the business, including assessing segment performance and allocating resources.

These changes were effective in 2021, and all historical information was retroactively conformed to the current presentation.

These changes had no effect on previously reported consolidated net sales, gross profit, operating income, net income or earnings per share.

7 unchanged sentences

Frozen Parkerhouse style yeast rolls and dinner rolls Sister Schubert’s

Refrigerated Dressings, Dips and Other

Refrigerated Dressings and Dips

Salad dressings Marzetti, Simply Dressed

Vegetable dips and fruit dips Marzetti

Flatbread wraps and pizza crusts Flatout

Shelf-Stable Dressings and Croutons

5 unchanged sentences

We have placement of products in grocery produce departments through our refrigerated salad dressings, vegetable dips and fruit dips.

Our flatbread products and sprouted grain bakery products are generally placed in the specialty bakery/deli section of the grocery store.

We also have products typically marketed in the shelf-stable section of the grocery store, which include salad dressings, slaw dressing, sauces and croutons.

Within the frozen food section of the grocery store, we sell yeast rolls, garlic breads and mini stuffed bagels.

Within the frozen food section of the grocery store, we sell yeast rolls and garlic breads.

Our top five Retail customers accounted for 57%, 55% and 56% of this segment’s total net sales in 2022, 2021 and 2020, respectively.

34 unchanged sentences

Net sales attributed to Walmart Inc.

(“Walmart”) totaled 18%, 18% and 17% of consolidated net sales for 2021, 2020 and 2019, respectively.

(“Walmart”) totaled 18% of consolidated net sales for 2022, 2021 and 2020.

Net sales attributed to McLane Company, Inc.

13 unchanged sentences

Retail Segment:

Frozen breads 21% 22% 20%

Shelf-stable dressings, sauces and croutons 22% 21% 16%

Frozen breads 20% 21% 22%

Refrigerated dressings, dips and other 13% 15% 16%

16 unchanged sentences

HUMAN CAPITAL

As of June 30, 2022, we had 3,200 employees.

Of those employees, 24% are represented under various collective bargaining contracts and 6% are represented under a collective bargaining contract that will expire within one year.

Our people are essential to our vision to be The Better Food Company — better people, driven by purpose, making better food, in a better more collaborative culture, working in unison to make the world around us a little bit better place, every day.

The honesty, integrity and sound judgment of our people in following our Code of Business Ethics are what enable us to be successful and live our company’s purpose To Nourish Growth With All That We Do .

Consistent with that purpose, we are committed to diversity, inclusion and belonging in the workplace.

Our commitment was exemplified by five recent strategic actions:

We adopted a Diversity Hiring Statement, which reiterates our pledge to include highly qualified women and minority candidates, as well as highly qualified candidates with other diverse backgrounds, skills and experiences, in the pool of candidates for new leadership positions.

We appointed a Vice President of Environmental, Social, Governance and Corporate Affairs to support engagement of our stakeholders and enhanced disclosure practices.

We established a work-study program to provide both tuition support and work-study mentorship for high school students from low-income families.

We created an Employee Assistance Fund to offer short-term financial assistance to associates facing difficult life circumstances and times of crisis.

We encouraged and supported the development of several employee resource groups that promote diversity and equality by raising awareness and ensuring that group members have a voice in the company.

We believe our diversity, inclusion and belonging initiatives enhance our ability to attract and retain a high-performing, diverse team of people.

We also endeavor to provide our employees with competitive fixed and/or variable pay along with a benefit package which typically includes medical, dental and life insurance benefits, disability coverage, a 401(k) plan, and an employee assistance program, among other benefits.

In managing our business, we strive to reward performance, promote shared fiscal responsibility among the company and our employees, and strategically align talent within our organization, while also managing the costs of such actions.

Consistent with this purpose, our human capital management strategy emphasizes six key areas of focus:

Health and Safety;

Talent Acquisition;

Compensation and Benefits;

Employee Engagement;

Diversity, Equity and Inclusion (“DEI”);

and Community Engagement.

Our Board of Directors oversees this strategy and dedicates one Board meeting each year to a full review of talent.

Health and Safety

The health and well-being of our employees is paramount to the success of our business, and we are proud to be leaders in our industry with respect to our safety record and safety initiatives.

Our approach to occupational health and safety centers around three elements:

training, response, and tracking.

We maintain a rigorous safety training program that ensures employees throughout the organization are regularly trained in every aspect of workplace safety.

Management personnel with direct responsibility for safety oversight also receive comprehensive professional training and the opportunity for certification.

Talent Acquisition

We strive to attract and retain talented people by providing a great place to work.

We have built a collaborative and purpose-driven culture that attracts people who share our vision to be The Better Food Company .

In addition, we are committed to nourishing the growth of our employees by providing training and development opportunities to pursue their career paths and to ensure compliance with our policies.

During the novel coronavirus (“COVID-19”) pandemic, one of our major priorities while navigating through this period of volatility and uncertainty has been to ensure the health, safety and welfare of our employees.

Our health and safety program is well-developed and is reinforced through our policies, training, and auditing efforts.

The discussion in our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) describes many of the actions we have taken with respect to these efforts.

We continue to monitor the latest guidance from authorities, including federal, state and local public health departments, and adopt the appropriate measures to ensure we continue to operate safely and support our employees.

As of June 30, 2021, we had 3,200 employees.

Of those employees, 24% are represented under various collective bargaining contracts and 12% are represented under collective bargaining contracts that will expire within one year.

While we believe that labor relations with all our employees are satisfactory, a prolonged labor dispute or an organizing attempt could have a material adverse effect on our business and results of operations.

Our focus on our employees also extends beyond the workplace – we genuinely want to help our people to thrive both personally and professionally through a healthy work-life balance.

Compensation and Benefits

We offer our employees competitive fixed and/or variable pay along with a Total Rewards package which typically includes medical, prescription, dental and life insurance benefits, paid parental leave, adoption assistance, disability coverage, a 401(k) plan, and various employee assistance programs.

We continue to work to expand our Total Rewards program to strengthen our focus on work/life effectiveness and holistic well-being, which includes physical, financial, emotional, and social well-being.

We have undertaken external benchmarking to ensure our compensation and benefits packages remain competitive.

Employee Engagement

To keep our employees engaged and fulfilled in their roles, we have sought to establish a continuous feedback loop between our employees and company leadership.

We communicate consistently with our people via a range of channels, including town hall meetings, regular updates, and key announcements.

Each year, we invite our employees to respond to our annual employee engagement survey and share their views on a range of workplace questions.

Based on feedback from the survey, management develops and implements plans to address the primary areas of opportunity that have been identified by employees.

Diversity, Equity and Inclusion

We foster a collaborative working environment where all our employees can thrive and feel they belong.

We believe our commitment to diversity, equity, inclusion and belonging enhances our ability to attract and retain a high-performing and diverse team.

We monitor the diversity of our organization to identify areas of improvement, advance our DEI strategy and measure the effectiveness of our efforts.

Our goal is to establish a continuous improvement trend.

In 2022, our workforce was 35% female and 46% of our employees represented minority races or ethnicities.

In 2020, we adopted our Diversity Hiring Statement, which sets out our pledge to include women and minority candidates in the pool of candidates for new leadership positions.

We have already seen a positive impact, with 27% of our leadership team representing diverse backgrounds in 2022, up from 15% in 2019 before we implemented the policy.

To unlock opportunities for high school students from diverse backgrounds, we have committed to a work-study program that provides tuition support and work-study mentorship to high school students from low-income families.

We also encourage employee-led initiatives to promote diversity within the organization.

Several employee resource groups have been established in the last few years.

These affinity-based groups provide a support network for colleagues from diverse backgrounds and help to raise awareness of DEI topics.

We have also identified Diversity & Inclusion Champions on our leadership team to ensure top-down accountability for our DEI initiatives.

Community Engagement

Our volunteering and philanthropic efforts align with United Nations Sustainable Development Goals, with a particular focus on reducing poverty and food insecurity while promoting good health and quality education for all.

In 2022, our teams mobilized to support Pelotonia, Toys for Tots, and the United Way.

We regularly donate funds and volunteer time to a range of other community organizations and foundations as well, including the Children’s Hunger Alliance, Susan G.

Komen Race for the Cure, Jobs for America’s Graduates, and local food banks.

RAW MATERIALS

During 2021, we obtained adequate supplies of raw materials and packaging.

During 2022, we experienced some disruptions to our sourcing of raw materials and packaging.

We secured additional second-sourcing options to help limit the risk of supply disruptions.

We rely on a variety of raw materials and packaging for the day-to-day production of our products, including soybean oil, various sweeteners, eggs, dairy-related products, flour, various films and plastic and paper packaging materials.

We purchase the majority of these materials on the open market to meet current requirements, but we also have some fixed-price contracts with terms generally one year or less.

See further discussion in the “Risk Factors” section below and the “Financial Condition” section of our MD&A.

See further discussion in the “Risk Factors” section below and the “Financial Condition” section of our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”).

Although the availability and price of certain of these materials are influenced by weather, disease and the level of global demand, we anticipate that future sources of supply for 2023 will generally be available and adequate for our needs.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business