What changed in this filing

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Item 1. Business

2023-08-23 compared with 2022-08-25 · 21 added, 30 removed, 147 unchanged (26% of the section changed)

13 unchanged sentences

Available Information

Our Internet website address is http://www.lancastercolony.com.

Our Internet website address is https://www.lancastercolony.com.

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge through our website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission (the “SEC”).

The information contained on our website or connected to it is not incorporated into this Annual Report on Form 10-K.

The SEC also maintains a website, http://www.sec.gov, that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

The SEC also maintains a website, https://www.sec.gov, that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

DESCRIPTION OF AND FINANCIAL INFORMATION ABOUT BUSINESS SEGMENTS

3 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.

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.

The financial information relating to our business segments for the three years ended June 30, 2023, 2022 and 2021 is included in Note 9 to the consolidated financial statements, and located in Part II, Item 8 of this Annual Report on Form 10-K.

7 unchanged sentences

Refrigerated Dressings and Dips

Salad dressings Marzetti, Simply Dressed

Salad dressings Marzetti, Marzetti Simply

Vegetable dips and fruit dips Marzetti

2 unchanged sentences

Croutons and salad toppings New York BRAND Bakery, Chatham Village, Marzetti

We also manufacture and sell other shelf-stable products pursuant to brand license agreements including Olive Garden ® dressings, Buffalo Wild Wings ® sauces and Chick-fil-A ® sauces.

We also manufacture and sell other products pursuant to brand license agreements, including Chick-fil-A ® sauces and dressings, Olive Garden ® dressings and Buffalo Wild Wings ® sauces.

Additionally, a small portion of our Retail sales are products sold under private label to retailers.

20 unchanged sentences

Dressings and Sauces

Salad dressings Marzetti, Simply Dressed

Salad dressings Marzetti

Frozen Breads and Other

4 unchanged sentences

Most of the products we sell in the Foodservice segment are custom-formulated and include salad dressings, sandwich and dipping sauces, frozen breads and yeast rolls.

Finally, within this segment, we sold other roll products under a temporary supply agreement resulting from the November 2018 acquisition of Omni Baking Company LLC.

The temporary supply agreement was terminated effective October 31, 2020.

Our top five Foodservice direct customers accounted for 58%, 58% and 61% of this segment’s total net sales in 2023, 2022 and 2021, respectively.

14 unchanged sentences

McLane orders our products on behalf of these national chain restaurants, and we invoice McLane for these sales.

Chick-fil-A, Inc.

Our relationship with Chick-fil-A, Inc.

(“Chick-fil-A”), one of our national chain restaurant accounts, also represents a significant portion of our consolidated net sales.

We supply Chick-fil-A indirectly through distributors, including McLane.

In addition, Chick-fil-A is a growing contributor to our Retail sales since we began selling their sauces to grocery retailers under an exclusive license agreement beginning in March 2020 with a regional pilot test.

Retail sales of Chick-fil-A sauces have grown through geographic expansion, ultimately reaching national distribution in April 2021.

Net sales attributed to Chick-fil-A, including the Retail sales resulting from the exclusive license agreement and the indirect Foodservice sales, totaled 24%, 21% and 16% of consolidated net sales for 2022, 2021 and 2020, respectively.

In Foodservice, we primarily supply Chick-fil-A indirectly through distributors, including McLane.

A portion of our Foodservice sales represent direct sales to Chick-fil-A.

Chick-fil-A is also a significant contributor to our Retail sales as we sell their sauce and dressing products into the retail channel through an exclusive license agreement.

Total net sales attributed to Chick-fil-A, including the Retail sales resulting from the exclusive license agreement and the Foodservice sales, totaled 26%, 24% and 21% of consolidated net sales for 2023, 2022 and 2021, respectively.

NET SALES BY CLASS OF PRODUCTS

29 unchanged sentences

Talent Acquisition;

Compensation and Benefits;

Total Rewards;

Employee Engagement;

12 unchanged sentences

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.

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.

Total Rewards

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

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

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.

We genuinely want to help our people to thrive both personally and professionally and have cultivated a high-performing workplace built on trust, accountability and growth.

Employee Engagement

9 unchanged sentences

In 2023, our workforce was 36% female and 44% 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.

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

We have already seen a positive impact with the percentage of women at levels of Vice President and above increasing by 58% from January 2020 to January 2023 and the percentages of non-white representation for positions of director and above nearly doubling in the same period.

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.

Several employee resource groups (“ERGs”) 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.

Each of our ERGs is sponsored by a member of our leadership team to ensure top-down accountability for our DEI initiatives.

Community Engagement

1 unchanged sentence

In 2023, 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.

We regularly donate funds and volunteer time to a range of other community organizations and foundations as well, including the Children’s Hunger Alliance, National Veterans Memorial and Museum, Jobs for America’s Graduates, and local food banks.

RAW MATERIALS

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.

During 2023, we obtained adequate supplies of raw materials and packaging.

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.

3 unchanged sentences

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