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Item 1. Business

2024-10-29 compared with 2023-10-24 · 159 added, 143 removed, 257 unchanged (54% of the section changed)

The Simply Good Foods Company is a consumer packaged food and beverage company that aims to lead the nutritious snacking movement with trusted brands that offer a variety of convenient, innovative, great-tasting, better-for-you snacks and meal replacements, and other product offerings.

The product portfolio we develop, market and sell consists primarily of protein bars, ready-to-drink (“RTD”) shakes, sweet and salty snacks and confectionery products marketed under the Quest® and Atkins® brand names.

Simply Good Foods is poised to expand its wellness platform through innovation and organic growth along with acquisition opportunities in the nutritional snacking space.

Our nutritious snacking platform consists of brands that specialize in providing products for consumers that follow certain nutritional philosophies and health-and-wellness trends:

Quest for consumers seeking a variety of protein-rich foods and beverages that also limit sugars and simple carbohydrates and Atkins for those following a low-carbohydrate lifestyle or seeking to manage weight or blood sugar levels.

Quest for consumers seeking a variety of protein-rich foods and beverages that also limit sugars and simple carbohydrates, Atkins for those following a low-carbohydrate lifestyle or seeking to manage weight or blood sugar levels, and OWYN for consumers seeking protein-rich beverages that are plant-based and tested for the top nine allergens that also limit sugars and simple carbohydrates.

We distribute our products in major retail channels, primarily in North America, including grocery, club, and mass merchandise, as well as through e-commerce, convenience, specialty, and other channels.

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We believe snacking occasions have been on the rise in recent years as consumers continue to desire more convenient, healthy and delicious foods, snacks, and meal replacements.

We believe our emphasis on product formats such as our protein bars, cookies, chips and salty snacks, and RTD shakes positions us to fill important needs for consumers.

We believe a number of existing and emerging consumer trends within the U.S.

food and beverage industry will continue to both drive the growth of the nutritional snacking category and increase the demand for our product offerings.

Some of these trends include increased consumption of smaller, more frequent meals throughout the day, consumers’ strong preference for convenient, “better-for-you” snacks, consumers’ greater focus on health and wellness, consumers’ movement toward limiting carbohydrate and sugar consumption, and the trend of consumers seeking to add convenient sources of protein and fiber to their diets.

We believe our emphasis on product formats such as our protein bars, cookies, chips and salty snacks, confections, RTD shakes, and protein powders positions us to fill important needs for consumers.

We believe several existing and emerging consumer trends within the U.S.

food and beverage industry will continue to drive both the growth of the nutritional snacking category and increase the demand for our product offerings.

Some of these trends include increased consumption of smaller, more frequent meals throughout the day, consumers’ strong preference for convenient, “better-for-you” snacks, consumers’ greater focus on health and wellness, consumers seeking to add convenient sources of protein and fiber to their diets, and consumers’ movement toward limiting carbohydrate and sugar consumption or avoiding certain allergens.

With our Quest brand, we strive to offer an attractive line up of protein bars, cookies, protein chips and salty snacks, RTD shakes, and confections, which target these existing and emerging consumer trends.

With our Atkins brand, we strive to offer a compelling line of protein bars, RTD shakes, cookies, protein chips and salty snacks, and confections.

With our OWYN brand, we strive to offer RTD shakes and protein powders that are plant-based and tested for the top nine allergens in a variety of protein levels.

Our sales, marketing, and research and development capabilities enable us to distribute products to a national customer base across a spectrum of retail channels, including the mass merchandise, grocery, drug, club stores, e-commerce, and small format retail such as convenience stores and gas stations.

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(“Atkins”), on July 7, 2017.

As part of Simply Good Foods’ strategy to become an industry leading snacking platform, in November 2019, we acquired Quest Nutrition, LLC (“Quest”).

This transaction is referred to as the “Quest Acquisition.”

As part of Simply Good Foods’ strategy to become an industry leading snacking platform, in November 2019, we acquired Quest Nutrition, LLC (“Quest”) and we acquired Only What You Need, Inc.

in June 2024.

We refer to the acquisition of Quest Nutrition, LLC as the “Quest Acquisition” and the acquisition of Only What You Need, Inc.

as the “OWYN Acquisition”.

Our principal executive offices are located at 1225 17 th Street, Suite 1000, Denver, Colorado, 80202.

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We maintain a web site at www.thesimplygoodfoodscompany.com .

Business Trends in Fiscal Year 2023

Throughout fiscal year 2023, we continued to actively monitor the effects of the dynamic macroeconomic inflationary environment in the United States and elsewhere, elevated levels of supply chain costs, the level of consumer mobility, including the rate at which consumers return to working outside the home, and consumer behavior.

Current or future governmental policies may increase the risk of inflation and possible economic recession, which could further increase the costs of ingredients, packaging and finished goods for our business as well as negatively affect consumer behavior and demand for our products.

During fiscal year 2023, our business performance was affected by unfavorable raw material costs, higher co-manufacturing costs, and supply chain challenges, including supply chain disruptions resulting from labor shortages and disruptions in sourcing ingredients.

The supply chain environment showed signs of improvement during fiscal year 2023 and we expect to see improvement during fiscal year 2024 in overall cost environment and in our gross margin.

We continue to proactively engage with our retail customers, contract manufacturers, and logistics and transportation providers, to meet demand for our products and to remain informed of any challenges within our business operations.

For more information on the effects of supply chain cost increases on our profitability during fiscal year 2023, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-K.

Our Strengths

Powerful brands with strong consumer awareness and loyalty .

We are a leader in the fast growing nutritional snacking category, and both the Quest and Atkins brands are leading brands with combined scale in protein bars, protein chips, confections, cookies, and RTD shakes.

We are a leader in the fast-growing nutritional snacking category, and our Quest, Atkins and OWYN brands are leading brands with combined scale in protein bars, protein chips, confections, cookies, RTD shakes, and protein powders.

Our highly focused snacking portfolio provides us with a leading position within retailers’ nutrition and wellness aisles, resulting in meaningful shelf space.

Our brands can appeal to both consumers interested in an active lifestyle who are seeking protein-rich, low-carb snacking options as well as weight management program consumers, which makes our brands highly attractive and strategic for a diverse set of retailers across various distribution channels.

Our brands can appeal to consumers interested in an active lifestyle who are seeking protein-rich, low-carb snacking options, weight management program consumers, and consumers looking to consume protein through convenient RTD shakes and powders that are plant-based and tested for the top nine allergens, which makes our brands highly attractive and strategic for a diverse set of retailers across various distribution channels.

Aligned with consumer mega trends.

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In addition, we believe consumers’ eating habits are gradually shifting towards increased convenience, snacking and meal replacement.

We also believe our portfolio of convenient and nutritious products and our ongoing effort to meet consumer demands for convenient snacking options support their individual health, nutrition and lifestyle goals.

believe our portfolio of convenient and nutritious products and our ongoing effort to meet consumer demands for convenient snacking options support their individual health, nutrition, allergen sensitivities, and lifestyle goals.

Scalable snacking and food platform.

We have been able to grow our product offerings for both of our nutritious snacking brands through our line extensions and through acquisitions.

We have been able to grow our product offerings for our nutritious snacking brands through our line extensions and through acquisitions.

Our in-house product development experience and our outsourced manufacturing model allow us to bring new products to market quickly.

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We believe we can leverage our strong relationships with our retail customers and distributors, a strong brand building track record, and category management expertise to help new products, brands and brand extensions gain distribution and consumer recognition, allowing us to continue to successfully expand our snacking platform.

We believe our strong balance sheet allows us to participate in attractive acquisition opportunities.

Asset-light business with strong cash generation .

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Our in-house research and development laboratories allow us to develop new products internally and bring them to market quickly through our contract manufacturing network without diverging from high standards of taste, nutritional content, quality, and safety.

Additionally, we intend to satisfy developing and changing consumer preferences through the pursuit of merger and acquisition transactions.

Additionally, we intend to satisfy developing and changing consumer preferences through the continued pursuit of merger and acquisition transactions.

Leverage platform to expand in attractive food and snacking categories .

We believe the fragmented snacking category presents an opportunity for consolidation and the opportunity to build, through disciplined acquisitions, a leading platform in the nutritional snacking space.

We believe the fragmented snacking category presents an opportunity for growth and the opportunity to build, through disciplined acquisitions, a leading platform in the nutritional snacking space.

As a leader in nutritious snacking, we believe we have the unique capability to leverage our operating platform, product innovation expertise and customer relationships to expand beyond our current brands.

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Expand distribution in white space opportunities.

In the fifty-two weeks ended August 26, 2023, approximately 77% of Quest’s gross sales in the U.S.

In the fifty-three weeks ended August 31, 2024, approximately 77% of Quest’s gross sales in the U.S.

and approximately 83% of Atkins’ gross sales in the U.S.

were through the mass retailer, grocery and convenience store distribution channels.

Our management believes there is opportunity for the brands to further penetrate those channels as well as other

distribution channels such as convenience and club stores.

In addition, while shoppers have increased e-commerce purchases generally, approximately 21% of Quest’s gross sales for the fifty-two weeks ended August 26, 2023 were through its e-commerce channel and approximately 14% of Atkins’ gross sales for the same period were through its e-commerce channel.

Our management believes there is opportunity for each of our brands to further penetrate those channels as well as other distribution channels such as convenience and club stores.

In addition, while shoppers have increased e-commerce purchases generally, approximately 22% of Quest’s gross sales for the fifty-three weeks ended August 31, 2024, were through its e-commerce channel and approximately 17% of Atkins’ gross sales for the same period were through its e-commerce channel.

We intend to leverage our brand recognition to develop further the distribution channels through which we reach consumers, including through the continued expansion of the e-commerce channel.

Continue our marketing efforts and strategies to both increase household penetration and reach consumers beyond our core historic buyers.

We intend to expand our marketing efforts to bring first-time buyers into the Quest and Atkins brand franchises.

For our Quest brand, our historic consumer base has been individuals pursuing a performance-based active and athletic lifestyle and for our Atkins’ brand it has been people interested in weight management.

We intend to expand our marketing efforts to bring first-time buyers into the Quest, Atkins and OWYN brand franchises.

For our Quest brand, our historic consumer base has been individuals pursuing a performance-based active and athletic lifestyle.

For our Atkins’ brand it has been people interested in weight management or pursuing a lifestyle of eating low carbohydrate foods.

And, for our OWYN brand, the historic consumer base has been consumers looking for an allergen sensitive, plant-based and non-dairy RTD shake or protein powder that is high in protein and low in carbohydrates and sugar.

As public opinion on the use of chronic weight management medication is shifting significantly as the popularity of clinical solutions grows and more medications are approved by the FDA, we are looking to communicate to consumers who have elected to use these medications what we believe are the complementary benefits of using our products to support achieving or maintaining their weight management goals.

For both the Quest and Atkins brands, we have an active and growing digital and social presence, using a comprehensive approach of search, banner, and search engine optimization efforts.

For all our brands, we have an active and growing digital and social presence, using a comprehensive approach of search, banner, and search engine optimization efforts.

We are a leader in social media, with an evolving social media presence on major channels such as Facebook, Instagram, Pinterest, X (formerly known as Twitter) and YouTube.

We also have a growing network of social influencers and content creators, who promote our products in their targeted social media posts.

We believe that social media is a cost-effective way of continuing to attract and retain our consumers.

We believe that our ongoing efforts to educate consumers about the benefits of our nutrition philosophy and lifestyle will further reinforce our brands.

We believe social media is a cost-effective way of continuing to attract and retain our consumers.

We believe our ongoing efforts to educate consumers about the benefits of our nutritional philosophy and lifestyle will further reinforce our brands.

For our Quest brand, we have used a national, targeted broadcast ad campaign, and continue to leverage targeted streaming television ads and an extensive network of social media influencers and content creators who prompt both our Quest brand products through their online posts to motivate new buyers and product introductions.

For our Atkins brand, we use targeted broadcast and streaming television and print ads with a celebrity-based campaign that attempts to (i) motivate potential programmatic weight loss consumers to try the Atkins approach to healthier eating and weight loss as these Atkins consumers are our most loyal, profitable and frequent purchasers and (ii) broaden the reach of the Atkins brand to appeal to those consumers generally interested in low carbohydrate, low sugar nutrition.

For the OWYN brand, we have used an extensive network of social media influencers and content creators who promote our OWYN brand products through their online posts to motivate new buyers.

We intend to continue to make focused changes to our approach to consumer outreach to attract consumers beyond our historic core buyers.

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For the Atkins brand, we intend to continue our marketing efforts to attract self-directed low-carbohydrate and health motivated eaters (those individuals not on a program diet) who buy and consume our Atkins products.

We also note the Atkins brand has approximately 96% aided brand awareness with U.S.

consumers and the Quest brand has approximately 76% aided brand awareness with U.S.

Our Vision and Mission

Our vision is to lead the nutritional snacking movement with trusted brands that offer a variety of convenient, innovative, great-tasting, better-for-you snacks and meal replacements and other product offerings.

Our mission is to empower healthy lives through smart and satisfying nutrition.

As we work to integrate the recently acquired OWYN brand, we will evaluate our marketing efforts to continue to attract consumers who are interested in RTDs and powders that are plant-based and tested for the top nine allergens in a variety of protein levels.

During fiscal year 2024, we updated the Simply Good Foods purpose.

Our purpose is:

We’re raising the bar on what food can be.

We say no to the status quo, and we say yes to making better food.

Food that offers robust nutrition, not hollow nutrition.

Energy, not depletion.

Enjoyment, not regret.

Simply, we’re on a mission to make food that works for you - that is radically nutritious and defyingly delicious.

Better nutrition made easy so you can live well.

We don’t compromise, so you never have to.

Core Quest Products

Our core Quest brand products consist of protein bars, cookies, salty snacks and confections.

Our core Quest brand products consist of protein bars, cookies, muffins, brownies, salty snacks and confections.

Protein Bars.

To keep on-the-go consumers energized and fueled, our Quest bars offer a convenient and effective solution, providing consumers with protein, fiber and a delicious taste.

The typical Quest bar profile contains about 20 grams of protein, 5 grams or less of net carbs and about 1 gram of sugar.

Quest offers more than 25 different flavors of protein bars.

First launched in 2018, Quest’s cookie products are a convenient source of high-protein combined with low net carbs and low-sugar.

Available in a variety of flavors including Chocolate Chip, Peanut Butter, Oatmeal Raisin and Snickerdoodle, Quest’s cookies typically contain about 15 grams of protein, 4 grams or less of net carbs and less than 1 gram of sugar.

Quest also offers soft baked frosted cookies containing about 5 grams of protein, 1 grams of net carbs and less than 1 gram of sugar.

Quest’s cookies, muffins, and brownies sold under the Quest Bake Shop banner are convenient sources of high-protein combined with low net carbs and low-sugar.

Salty Snacks .

Quest’s protein chips, including the tortilla-style chips launched in spring 2018, quickly became a high-selling product offering an attractive nutrition profile when compared to conventional chip products.

Offered in flavors including nacho cheese, ranch, chili lime, BBQ, loaded taco and spicy sweet chili, Quest’s chips typically contain about 18 grams of protein, about 4 grams of net

carbs, and around 6 grams of fat compared to 2 grams of protein, 15 grams of net carbs and 8 grams of fat for a well-known leading conventional brand.

Quest’s cheddar cheese crackers launched during fiscal year 2023, contain 10 grams of protein, 5 grams of net carbs and 7 grams of fat.

Quest’s confections include full-size and mini peanut butter cups, “fudgey” brownie, “gooey” caramel candy bites, chocolatey coated peanut candies and “coconutty” caramel candy bars sold in a variety of packaging.

The full-size peanut butter cups feature a nutrition profile for two cups of 11 grams of protein, 1 gram of net carbs, less than 1 gram of sugar and 4 grams of fiber.

The mini peanut butter cups feature a nutrition profile per serving of 8 grams of protein, 1 gram of net carbs, less than 1 gram of sugar and 3 grams of fiber.

The candy bars feature a nutrition profile of 12 grams of protein, 3 to 4 grams of net carbs, about 1 gram of sugar and about 9 grams of fiber.

The candy bites feature a nutrition profile of 5 grams of protein, 1 gram of net carbs, l to 3 grams of net carbs, about 1 gram of sugar and 4 to 9 grams of fiber.

Quest’s protein chips and crackers line quickly became a high-selling product offering an attractive nutrition profile when compared to conventional chip and cracker products.

Quest’s confections include peanut butter cups, “fudgey” brownie, “gooey” caramel candy bites, chocolatey coated peanut candies and “coconutty” caramel candy bars sold in a variety of packaging.

Core Atkins Products

Our core Atkins brand products consist of protein bars, RTD shakes, confections, cookies, and chips.

Our core Atkins brand products consist of protein bars, RTD shakes, confections, and cookies.

Protein Bars.

To keep on-the-go consumers energized and fueled, our Atkins bars offer a convenient and effective solution, providing consumers with protein, fiber and a delicious taste.

Atkins offers two main types of bars:

Atkins Meal Bars and Atkins Snack Bars.

Atkins Meal Bars contain 13 to 17 grams of protein and are available in more than 10 different flavors.

Atkins Snack Bars contain 7 to 13 grams of protein, with 2 to 4 grams of net carbs, and are available in 15 different varieties.

Our rich and creamy Atkins RTD shakes contain 10 to 30 grams of protein, as well as other important vitamins and minerals.

Available in a variety of flavors, including cookies and crème, café caramel and creamy chocolate, Atkins’ RTD shakes are made with high quality ingredients and are designed to provide energy balance through the day.

Our Atkins’ Plus RTD shakes contain 30 grams of protein, for our consumers seeking higher protein content.

Our Atkins Endulge® line, which is designed to satisfy consumers’ sweet cravings, and which we call Treats, consists of delicious desserts without all of the added sugar.

Atkins offers a variety of different Treats, such as peanut butter cups and pecan caramel clusters, each with only 1 gram of sugar or less and low net carbs, providing consumers with the option to indulge.

First launched in fiscal year 2021, Atkins’ soft and chewy cookie products are a convenient source of high-protein combined with low net carbs and low-sugar.

These sweet tasting cookies are available in double chocolate chip, peanut butter and chocolate chip.

Atkins’ cookies contain approximately 10 grams of protein, 3 grams of net carbs and approximately 1 gram of sugar or less depending on the flavor.

First launched during fiscal year 2022, Atkins’s protein chips offer an attractive nutrition profile when compared to conventional chip products.

Offered in nacho cheese, ranch, and chipotle BBQ flavors, Atkins’s chips typically contain about 13 grams of protein, about 4 grams of net carbs, and around 7 grams of fat compared to 2 grams of protein, 15 grams of net carbs and 8 grams of fat for a well-known leading conventional brand.

Our Atkins Endulge line, which is designed to satisfy consumers’ sweet cravings, and which we call Treats, consists of delicious desserts without all the added sugar providing consumers with the option to indulge.

Atkins’ cookie products are a convenient source of high-protein combined with low net carbs and low-sugar.

While provided free of charge, we also offer over 1,600 protein-rich, low-carbohydrate and low-sugar recipes designed to help consumers achieve and maintain a healthy lifestyle, while still enjoying delicious food.

Core OWYN Products

RTD Shakes and Powders .

Our OWYN RTD shakes and powders are plant-based, contain 20 to 32 grams of protein, and do not contain gluten, dairy, soy, eggs, nuts, tree nuts, are low in sugar, and contain prebiotic fiber.

Marketing, Advertising and Consumer Outreach

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We use coupons (freestanding insert newspaper, store register, on-pack and online coupons) to help stimulate product trial and repeat purchases by providing consumers with economic incentives.

The mix of these marketing activities varies between the Quest and Atkins brands.

As part of our advocacy on the advantages of a protein-rich, low-carbohydrate, and low-sugar dietary approach, we have devoted portions of our respective brand websites and social media to promote consumer education, engagement, and dialogue about the benefits of our nutritional approaches and how our products can fit within those approaches.

The mix of these marketing activities varies among our brands.

As part of our advocacy on the advantages of a protein-rich, low-carbohydrate, low-sugar dietary approach, and with respect to our OWYN brand, plant-based, diary free and allergen sensitive, we have devoted portions of our respective brand websites and social media to promote consumer education, engagement, and dialogue about the benefits of our nutritional approaches and how our products can fit within those approaches.

Our sales and marketing team gathers information and feedback from consumers and retailers to enable us to better meet changing consumer needs.

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We also provide access to consumer service representatives to answer questions and educate consumers on nutrition, new products and developments.

As part of this approach, over time, for those consumers who have elected to use weight

management medications to pursue their weight management goals we expect to develop and enhance our marketing messages regarding how we believe our products can be used to meet their snacking use occasions and be complementary to their use of medication for weight management to achieve and maintain their weight management goals.

For both brands, in order to facilitate awareness and knowledge of the health benefits of a low-carbohydrate, low-sugar and protein-rich eating approach, we have established a variety of marketing and advertising strategies to connect with consumers, including digital marketing and social media platforms, television broadcast and streaming advertising as well as celebrity and social media influencer endorsements.

For both brands, we have built large consumer followings.

As part of this approach, over time, for those consumers who have elected to use weight management medications to pursue their weight management goals we expect to develop and enhance our marketing messages regarding how we believe our products can be used to meet their snacking use occasions and be complementary to their use of medication for weight management to achieve and maintain their weight management goals.

For our brands, in order to facilitate awareness and knowledge of the health benefits of a low-carbohydrate, low-sugar and protein-rich eating approach, whether dairy or plant-based, we have established a variety of marketing and advertising strategies to connect with consumers, including digital marketing and social media platforms, television broadcast and streaming advertising as well as celebrity and social media influencer endorsements.

We have built large consumer followings for our brands.

Beyond the core historic consumers for each of our brands, we believe there is significant opportunity to increase household penetration for our products by expanding our marketing, product offerings and educational efforts to consumers who are focused more generally on long-term healthy living.

In the fifty-two weeks ended August 26, 2023, approximately 66% of Selling and marketing expenses were spent on advertising costs.

In the fifty-three weeks ended August 31, 2024, approximately 72% of Selling and marketing expenses were spent on advertising costs.

We have a wide variety of customers across the mass, food, club, drug, and e-commerce channels.

A substantial majority of our sales are generated from a limited number of retailers.

Sales to our largest retailer, Walmart Inc., represented approximately 31% of consolidated sales in fiscal year 2024, of which approximately 23% was through their mass retail channel and approximately 8% was through their Sam’s club and e-commerce channels.

Sales to our next largest retailer, Amazon, represented approximately 18% of consolidated sales in fiscal year 2024.

No other customer represents more than 10% of sales.

For additional information, please see the risk factor “ We rely on sales to a limited number of retailers for a substantial majority of our net sales, and losing one or more such retailers may materially harm our business.

In addition, we maintain “at will” contracts with these retailers, which do not require recurring or minimum purchase amounts of our products ”.

We aim to ensure that our consumers may access our brand in the way that best suits their lifestyles by offering online ordering of our products.

We sell our products on questnutrition.com, Atkins.com, liveowyn.com, Amazon.com and the e-commerce platforms of our brick-and-mortar customers, which all deliver our products directly to the location designated by the consumer.

Product Innovation

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We also own virtually all of the recipes and specifications for our products.

We compete primarily with nutritional snacking brands in large retail and e-commerce environments.

The nutritional snacking industry is fragmented and highly competitive and includes a number of diverse competitors.

Our identified branded competitors include, but are not limited to, CLIF Bar, KIND bars, Boost, Premier Protein, Core Power, Fairlife, Muscle Milk, ONE bar, Pure Protein, Slimfast, and think!.

We believe that the principal competitive factors in the nutritional snacking industry are:

We have a number of diverse competitors of varying sizes and capabilities, including developers, marketers and sellers of other branded and private label nutritional snacking food products.

We compete primarily in large retail and e-commerce environments.

We believe the principal competitive factors in the nutritional snacking industry are:

• brand awareness and loyalty among consumers;

• product ingredients;

• macronutrient profile of products;

• product ingredients (including the sourcing and allergen profiles of ingredients);

• macronutrient profiles of products;

• product claims;

• product taste and texture;

• convenience of products;

• media spending;

• product convenience;

• advertising campaigns and associated spending;

• perceived product value

• product variety, packaging and labeling;

• access to retailer shelf space;

We believe that we currently compete effectively with respect to each of these factors.

However, a number of companies in the nutritional snacking industry have greater financial resources, more comprehensive product lines, broader market presence, longer standing relationships with distributors and suppliers, longer operating histories, greater distribution capabilities, stronger brand recognition, and greater marketing resources than we have.

• product positioning on e-commerce retailer sites.

We believe we currently compete effectively with respect to each of these factors.

However, a number of companies in the nutritional snacking industry may compete more effectively for a variety of reasons, including having greater financial resources, more comprehensive product lines, broader market presence, more established relationships with distributors, suppliers and customers, longer operating histories, greater distribution and selling capabilities, stronger brand recognition, or greater innovation and marketing capabilities than we have.

We expect the industry we operate in to remain highly competitive for the foreseeable future.

We operate an asset-light business model.

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The supply chain for our international business also uses exclusively contract manufacturers.

Supply Chain .

The majority of our products are shipped directly to one central warehouse, which is a leased warehouse managed by a third-party logistics provider.

We also have a separate warehouse for a portion of our distribution needs.

A substantial portion of our inventory is shipped directly to our retailers from the warehouse by the same third-party logistics provider.

Most of our remaining customers pick-up their orders at our distribution centers and make their own arrangements for delivery to their fulfillment network.

For certain customers, RTD shakes are shipped directly from the contract manufacturer to the customers’ locations.

We believe our use of demand forecasting and vendor-managed inventory systems enables us to meet shipping demands, ensure timely delivery of orders and offer service levels to our customers.

The principal ingredients to manufacture our products include chocolate and other coatings, dairy, proteins, soy, and nuts.

Our packaging consists of flexible film, cartons, tetra paper, and corrugate.

All of our core ingredients are purchased according to rigorous standards to assure food quality and safety.

The principal ingredients to manufacture our products include chocolate and other coatings, dairy, proteins, soy, nuts, and pea and pumpkin seed protein.

Our packaging consists of flexible film, cartons, tetra paper, plastic bottles and corrugate.

All our core ingredients are purchased according to rigorous standards to assure food quality and safety.

These core ingredients are generally available in adequate quantities from several suppliers.

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For certain ingredients we establish direct purchasing agreements with suppliers, under which our contract manufacturers source ingredients to produce finished products.

We also actively manage the cost of most of our packaging supplies, such as corrugate, film, and cartons.

The cost of sourcing our ingredients and packaging has been affected by the current elevated levels of supply chain cost inflation in the United States and elsewhere.

For more information, see “ – Business Trends in Fiscal Year 2023 ,” above.

We also procure certain ingredients directly that our contract manufacturers then use to produce our products.

We actively manage the cost of most of our packaging supplies, such as corrugate, film, and cartons.

Historically, OWYN has directly purchased and therefore owns the ingredients and packaging the contract manufacturers use for the production of OWYN products.

Manufacturing.

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Our contract manufacturers are regularly audited by third parties and are required to follow rigorous food safety guidelines.

We believe our contract manufacturers have capacity to meet our anticipated supply needs, although short-term high demand can cause disruptions.

We believe our contract manufacturers have capacity to meet our anticipated supply needs, although short-term high demand or production equipment issues can cause disruptions.

We monitor both near-term and long-term capacity as well as fulfillment rates and overall performance of our manufacturing partners and qualify alternate suppliers as needed.

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These finished products are then shipped directly to our distribution centers, or shipped directly from the contract manufacturer to the customer.

We lease two distribution centers, both in Greenfield, Indiana, referred to collectively as the Distribution Centers, where we store finished goods.

For the Quest and Atkins brands we lease two distribution centers, both in Greenfield, Indiana, referred to collectively as the Distribution Centers, where we store finished goods.

We utilize over 1.29 million square feet of floor space among our Distribution Centers.

For our OWYN brand, we currently use portions of four warehouses for finished goods which are located in Greenfield, Indiana, Greenwood, Indiana, Romeoville, Illinois, and Hackettstown, New Jersey.

For OWYN we utilize approximately 200,000 square feet of floor space.

Having completed the OWYN Acquisition in June 2024, we are currently evaluating the integration activities and the timing for their implementation related to the OWYN brand’s warehouse operations.

Distribution.

For Quest and Atkins, the majority of our products are shipped directly to one central warehouse, which is a leased warehouse managed by a third-party logistics provider.

We also have separate warehouses for a portion of our distribution needs.

A substantial portion of our inventory is shipped directly to our retailers from the warehouse by the same third-party logistics provider.

remaining customers pick up their orders at our distribution centers and make their own arrangements for delivery to their fulfillment network.

For certain customers, RTD shakes are shipped directly from the contract manufacturer to the customers’ locations.

We believe our use of demand forecasting and vendor-managed inventory systems enables us to meet shipping demands, ensure timely delivery of orders and offer service levels to our customers.

For the majority of our customers, our logistics provider distributes the finished goods via truckloads from our Distribution Centers, which first flow through regional terminals.

At the terminals, our orders are consolidated with other companies’

products being shipped to the customer.

The finished goods are then distributed to retailer distribution centers.

At the terminals, our orders are consolidated with other companies’ products being shipped to the customer.

The finished goods are then distributed to retailer customers’ distribution centers.

The regular weekly shipments and consolidation have reduced our costs.

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In some instances, the customer will arrange to pick-up directly finished products from our Distribution Centers.

We have a wide variety of customers across the mass, food, club, drug, and e-commerce channels.

A substantial majority of our sales are generated from a limited number of retailers.

Sales to our largest retailer, Walmart, represented approximately 31% of consolidated sales in fiscal year 2023, of which approximately 24% is through their mass retail channel and approximately 7% is through their Sam’s club and e-commerce channels.

Sales to our next largest retailer, Amazon, represented approximately 16% of consolidated sales in fiscal year 2023.

No other customer represents more than 10% of sales.

In addition, we maintain “at will” contracts with these retailers, which do not require recurring or minimum purchase amounts of our products.”

We aim to ensure that our consumers may access our brand in the way that best suits their lifestyles by offering online ordering of our products.

We sell our products on questnutrition.com, Atkins.com , Amazon.com and e-commerce platforms of our brick-and-mortar customers, which all deliver our products directly to the location designated by the consumer.

OWYN products for select channels are shipped through both distributors and redistributors throughout the United States.

OWYN products ship direct to a customer’s warehouse for most national and regional retail customers and the customers of two large distributors with one large customer arranging for products to be picked up.

Currently, OWYN uses a consolidator network for large national retailer customers, which avoids OWYN having to ship “less than truckload” deliveries to these customers throughout the United States.

OWYN currently uses one primary warehouse located in Illinois and a logistics provider in Illinois for the purpose of assembling e-commerce variety packages.

OWYN has also recently converted certain key distributors to a model where customers pick up shipments.

Having completed the OWYN Acquisition in June 2024, we are currently evaluating the integration activities and the timing for their implementation related to the OWYN brand’s distribution functions.

International .

Our products are also sold outside North America.

Our top international sales are in Australia and New Zealand.

For the fifty-three weeks ended August 31, 2024, international net sales represented approximately 2.5% of total net sales.

For products that are not manufactured in North America and shipped internationally, our international supply chain is run by a lean team solely focused on international operations.

Similar to U.S.

operations, international operations utilize contract manufacturers for products, and distributors for distribution and sales.

Food Safety and Quality .

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We hold an ISO 22000 certification for our U.S.

operations, which we first obtained during fiscal year 2022.

International .

Our products are also sold outside North America.

Our top international sales are in Australia and New Zealand.

For the fifty-two weeks ended August 26, 2023, international net sales represented approximately 2.7% of total net sales.

Our international supply chain is run by a lean team solely focused on international operations.

Similar to U.S.

operations, international operations utilize contract manufacturers for products, and distributors for distribution and sales.

operations, excluding OWYN, which we first obtained during fiscal year 2022.

Information Technology

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During the fifty-two weeks ended August 27, 2022, we substantially completed our efforts to fully integrate our operations and organization structure after the Quest Acquisition.

We aligned the nature of our production processes and the methods used to distribute products to customers for the Atkins® and Quest® brands.

We also designed our organizational structure to support entity-wide business functions across brands, products, customers, and geographic regions.

Additionally, our chief operating decision maker reviews operating results and forecasts at the consolidated level.

As a result, we determined our operations are appropriately still organized into one, consolidated operating segment and reportable segment.

We aligned the nature of our production processes, and the methods used to distribute products to customers for the Quest and Atkins brands.

Following the OWYN Acquisition, the Company's operations are organized into two operating segments, Quest and Atkins, and OWYN, which are aggregated into one reporting segment due to similar financial, economic and operating characteristics.

The operating segments are also similar in the following areas:

(a) the nature of the products;

(b) the nature of the production processes;

(d) the type of customer for the products;

and, (e) the nature of the regulatory environment.

The Company also designed its organizational structure to support entity-wide business functions across brands, products, customers, and geographic regions.

As a result, during the fifty-three weeks ended August 31, 2024, the Company determined its operations are organized into two operating segments, which were aggregated into one reporting segment due to similar financial, economic and operating characteristics.

During the fifty-two weeks ended August 26, 2023, and August 27, 2022, the Company determined its operations are organized into one, consolidated operating segment and reportable segment.

Regulation and Compliance

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We are subject to various labeling requirements with respect to our products at the federal, state and local levels.

At the federal level the FDA has authority to review product labeling, and the FTC may review labeling and advertising materials, including online and television advertisements, to determine if advertising materials are misleading.

At the federal level the FDA has authority to review product labeling, and the FTC may review labeling and advertising materials, including online and television

advertisements, to determine if advertising materials are misleading.

We are also subject to various state and local consumer protection laws.

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No employees were covered by a collective bargaining agreement.

Mission, Vision and Values.

Our mission is to empower healthy lives through smart and satisfying nutrition.

Our vision is to lead the nutritious snacking movement with trusted brands that offer a variety of convenient, innovative, great-tasting, better-for-you snacks and meal replacements.

Our values, Act with Integrity, Lead with Innovation, Succeed through Interdependence, Be Empowered, and Bring Passion Every Day, are critical to our success in fulfilling our mission and vision.

Ambition, Purpose and Values.

During fiscal year 2024, we updated our ambition, purpose and values to reflect one unified Simply Good Foods company.

We’re on a mission to make food that is radically nutritious and defyingly delicious.

Our ambition is to become the leader in nutritional snacking, leading the category with trusted brands consumers love.

Our values, Simply Bold, Simply Deliver, Simply Learn & Grow, Simply Together, and Simply Kind , are critical to our success in fulfilling our ambition and vision.

Training & Development .

Training and development is critical to our mission’s success, helps our employees grow their career, and is one way we attract, motivate and retain our employees.

Training and development is critical to our success, helps our employees grow their career, and is one way we attract, motivate and retain our employees.

We regularly host “Be Empowered” sessions for employees, which are educational classes and networking opportunities that teach our nutrition philosophy and our different business functions.

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In our normal performance review cycle, which took place in early fiscal year 2024, 99% of our employees held career discussions with their managers to identify opportunities for development and career progression.

Our accelerated mentorship program pairs junior talent with executive leadership, which is designed to broaden talent networks, increases exposure to cross-functional problem solving and builds leadership competencies and impact.

Because of these career discussions, the accelerated mentorship program and the talent review process conducted by our senior leadership, during fiscal year 2023, we promoted 8% of our workforce and provided associated compensation increases.

Our Commitment to Diversity, Equity & Inclusion (“DE&I”) .

We recognize the importance of a diverse, equitable and inclusive culture for our employees and its effect on our ability to achieve our mission, so we have made commitments to track and improve our performance in each of these areas.

Our Board of Directors created its Corporate Responsibility & Sustainability committee that has been tasked with, among other things, overseeing human capital resources and all our DE&I initiatives.

Because of career discussions, mentorship opportunities and the talent review process conducted by our senior leadership, during fiscal year 2024, we promoted 9% of our workforce and provided associated compensation increases.

Our Commitment to Diversity, Equity, Inclusion & Belonging (“DEI&B”) .

We recognize the importance of a diverse, equitable and inclusive culture for our employees and its effect on our ability to achieve our business objectives, so we have made commitments to track and improve our performance in each of these areas.

Our Board of Directors created its Corporate Responsibility & Sustainability committee that has been tasked with, among other things, overseeing human capital resources and all our DEI&B initiatives.

These initiatives include the following, among others:

• In 2022, we established a Diversity, Equity, Inclusion and Belonging Council consisting of mid-level and senior leaders so our DE&I efforts are informed and led by a cross section of our leaders.

• A Diversity, Equity, Inclusion and Belonging Council consisting of mid-level and senior leaders so our DEI&B efforts are informed and led by a cross section of our leaders.

Its mission is to foster a positive, open, and trusted culture of belonging where every person feels empowered to bring their unique selves to the workplace resulting in a competitive advantage through thought-leadership and talent growth that halos beyond our workforce to our partners and community, creating an inclusive ecosystem.

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The table below provides information as of August 31, 2024, the end of our fiscal year, about the representation of women and minorities as a percentage of our employees at various levels of management categories used by our Executive Leadership Team to manage our workforce.

This information is also reviewed by our Board of Directors about the representation of women and minorities as a percentage of our employees at various levels of management and our Board of Directors, as of August 26, 2023.

This information is also reviewed by our Board of Directors.

Female and Minority Representation

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1 Minority representation includes the percent of United States employees who identify as Black or African American, Asian, Hispanic, Native American, or two or more races.

In our Form 10-K for the fiscal year ended August 27, 2022, we provided a table of information for the period December 1, 2021 through December 15, 2021 from our 2021 EEO-1 report.

Earlier this year, the U.S.

Equal Employment and Opportunity Commission determined to delay the timeline for the submission of data to complete the 2022 EEO-1 report.

Data submission for our 2022 EEO-1 report is now scheduled for the period from October 31, 2023, through December 5, 2023.

As a result, updated information from our 2022 EEO-1 report is not available as of the filing date of this Form 10-K.

The table below is our 2023 EEO-1 report, shortened to eliminate rows and columns that have no employees in this report or in the previous report total.

This table shows our gender, racial, and ethnic composition by EEO-1 job category as set forth in the Section D Employment Data section of the Consolidated EEO-1 Report that we filed with the U.S.

Equal Employment Opportunity Commission (EEOC) in 2023.

The following information is provided for the period from December 1, 2023, through December 15, 2023, consistent with the report’s filing instructions.

Not-Hispanic or Latino

Hispanic or Latino Male Female

Job Categories Male Female White Black or African American Asian Native Hawaiian or Pacific Islander American Indian or Alaskan Native Two or More Races White Black or African American Asian Two or More Races Overall Totals

Executives/Senior Officials & Managers — — 9 1 — — — — 3 — — — 13

First/Mid Officials & Managers 1 10 40 3 5 2 — 3 38 — 8 3 113

Professionals 9 8 18 4 3 — 1 — 37 — 6 1 87

Technicians 1 — — — — — — — — — — — 1

Sales Workers 2 1 9 — 1 — — — 11 — — — 24

Administrative Support 1 9 1 — 1 — — — 6 2 1 1 22

Total 14 28 77 8 10 2 1 3 95 2 15 5 260

Previous Report Total 13 27 80 6 11 — 1 3 88 2 14 5 250

Employee Culture .

We regularly ask our employees to respond to engagement surveys to gather feedback on topics ranging from teamwork to, growth, job satisfaction, engagement and inclusion.

We regularly ask our employees to respond to engagement surveys to gather feedback on topics including teamwork, growth, job satisfaction, engagement and inclusion.

This encourages open communication with employees and management, and tracks employee engagement over time.

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Our goal is to expand the Dietary Guidelines to offer solutions for more Americans, including the more than half of the U.S.

population suffering from negative metabolic-related conditions such as cardiovascular disease, prediabetes, diabetes and obesity.

population suffering from negative metabolic-related conditions such as cardiovascular disease, prediabetes,

diabetes and obesity.

We also believe expanding the Dietary Guidelines would help to address health equity in many underserved populations in the United States who have higher rates of metabolic-related diseases.

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In addition, we have sponsored numerous continuing education courses for registered dieticians and other healthcare professionals, and we are a member of multiple collaborative groups focused on improving the nutritional quality of the U.S.

our nutritional approaches and how our products can fit within those approaches.

Through our websites and social media, we also share educational information to explain each brand’s approach to nutrition, teaching consumers how to make smarter food choices and the nutritional qualities of our approach and products.

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We will continue to follow the progress of our past recipients and their effect on their communities.

For the third year, we participated in Walmart’s “Fight Hunger.

Also in 2023, we participated in Walmart Inc.’s “Fight Hunger.

Spark Change.” campaign.

For each purchase of participating Simply Good Foods’ Atkins and Quest products at Walmart during the campaign, we donated the monetary equivalent of at least one meal to Feeding America.

For each purchase of participating Simply Good Foods’ Quest and Atkins products at Walmart during the campaign, we donated the monetary equivalent of at least one meal to Feeding America.

Through this program, Simply Good Foods secured at least 500,000 meals for Feeding America.

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by centering this volunteer event around Community Gardens, a place where people come together to access affordable, healthy food options.

In May 2024, we announced our partnership with the Boys and Girls clubs of metro Denver to create the Spark and Spoon project.

This project will impact over 28,000 kids and teens across Denver, providing them with nutrition education, healthy lifestyle programs, culinary programs, healthy food boxes, field trips, and provide funding for a dedicated full time staff member to support the programs.

In July of 2024, Simply Good Foods volunteers assisted with a cooking class, helping the kids learn vital food preparation skills such as chopping, measuring, and mixing as they created three special dishes and enjoyed the “art” of cooking.

Available Information

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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