What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-02-20 compared with 2024-02-29 · 122 added, 107 removed, 181 unchanged (56% of the section changed)

4 unchanged sentences

We are a leading United States manufacturer of branded salty snacks.

We produce a broad offering of salty snacks, including potato chips, tortilla chips, pretzels, cheese snacks, pork skins, veggie snacks, pub/party mixes, and other snacks.

We produce a broad offering of salty snacks, including potato chips, tortilla chips, pretzels, cheese snacks, pork skins, pub/party mixes, and other snacks.

Our iconic portfolio of authentic, craft, and “better-for-you” (“BFY”) brands, which includes Utz, Zapp’s, On The Border, Golden Flake, and Boulder Canyon , among others, enjoys strong household penetration in the United States, where our products can be found in approximately half of U.S.

1 unchanged sentence

We are the second-largest producer of branded salty snacks in our Core Geographies as of December 29, 2024, based on retail sales, and we have historically expanded our geographic/distribution reach and product portfolio organically and through acquisitions.

Our company was founded in 1921 in Hanover, Pennsylvania, and benefits from more than 100 years of brand awareness and heritage in the salty snacks industry.

As of December 31, 2023, we operate 14 manufacturing facilities with a broad range of capabilities, and our products are distributed nationally to grocery, mass, club, convenience, drug and other retailers through direct shipments, distributors, and approximately 2,250 DSD routes.

We were founded in 1921 in Hanover, Pennsylvania, and benefit from more than 100 years of brand awareness and heritage in the salty snack industry.

As of December 29, 2024, we operate eight primary manufacturing facilities with a broad range of capabilities, and our products are distributed nationally to grocery, mass, club, convenience, drug, e-commerce and other retailers through direct shipments, distributors, and approximately 2,500 DSD routes.

Our business benefits from multiple opportunities to deliver attractive long-term profitable growth.

Our value creation strategies are focused on driving productivity to enhance margins, reinvesting in marketing and innovation to accelerate revenue growth and continuing to make strategic acquisitions.

We believe we are well-positioned for long-term growth as we (a) gained a significant amount of new buyers during 2020 and have continued to add even more buyers through 2023, (b) have significant opportunity in our Expansion Geographies and under-penetrated channels, (c) continue to execute productivity efforts that will help to fuel incremental marketing and innovation to accelerate growth in sales, (d) continue to make infrastructure improvements to enable us to continue to scale to greater heights, and (e) continue to make strategic acquisitions that deliver strong synergies and that enhance our competitive positioning.

We believe we are well-positioned for long-term growth in the salty snack industry as we (a) gained a significant amount of new buyers over the past several years, (b) have significant opportunity in our Expansion Geographies and under-penetrated channels, (c) continue to execute productivity efforts that we believe will help to fuel incremental marketing and innovation to accelerate growth in sales relative to our peers, (d) continue to make infrastructure improvements to enable us to continue to scale to greater heights, and (e) continue to make strategic acquisitions that deliver strong synergies and that enhance our competitive positioning.

We believe each of these growth avenues represents a sizeable opportunity to expand our net sales.

1 unchanged sentence

Recent Acquisitions and Dispositions

During fiscal year 2022, the Company focused on increasing manufacturing and streamlining distribution.

The Company has focused on increasing manufacturing and streamlining distribution.

In April 2022, the Company purchased a brand new, recently completed snack food manufacturing facility in Kings Mountain, North Carolina from Evans Food Group Ltd.

d/b/a Benestar Brands and related affiliates.

The Company paid the full cash purchase price of $38.4 million at the closing and concurrently with the facility purchase, the Company sold 2.1 million shares of the Company’s Class A Common Stock for $28.0 million, to affiliates of Benestar in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933.

During fiscal year 2022, the Company bought out and terminated the contracts of multiple distributors who had previously been providing services to the Company.

These transactions were accounted for as contract terminations and asset purchases and resulted in expense of $23.0 million for the fiscal year ended January 1, 2023.

During fiscal years 2022, 2023 and 2024, the Company bought out and terminated the contracts of multiple distributors who had previously been providing services to the Company.

These transactions were accounted for as asset purchases and contract terminations, respectively, and resulted in expense of $23.0 million, $1.5 million and $2.1 million for the fiscal years ended January 1, 2023, December 31, 2023 and December 29,2024, respectively.

On February 5, 2024, the Company sold certain assets and brands to affiliates of Our Home™, an operating company of BFY brands (“Our Home”).

Under the agreement, Our Home agreed to purchase the Good Health® and R.W.

Garcia® brands, the Lincolnton, NC, and Lititz, PA manufacturing facilities and certain related assets, and assume the Company’s Las Vegas, NV facility lease and manufacturing operations (the “Our Home Transaction”).

In addition, the Company and Our Home will operate under a Transition Services Agreement for 12 months.

The total consideration for the transactions is $182.5 million, subject to customary adjustments.

In addition, post-closing, the parties will operate under reciprocal co-manufacturing agreements under which Our Home will co-manufacture certain of the Company's products and the Company will co-manufacture certain Good Health® products.

Certain Good Health® products will continue to be distributed and sold on the Company's DSD network for Our Home.

Recent Developments

During 2023, we introduced our long-term growth strategy focusing on various initiatives.

Our portfolio strategy is focused on accelerating investments in marketing and innovation to drive top-line growth and achieve share gains in the attractive Salty Snack category.

We plan to further penetrate our Expansion Geographies and untapped channels and customers by further expanding our Power Brands in Expansion Geographies, as well as maintaining our share in our Core Geographies.

Under the agreement, affiliates of Our Home purchased the Good Health and R.W.

Garcia brands, the Lincolnton, NC and Lititz, PA manufacturing facilities and certain related assets, and assumed the Company’s Las Vegas, NV facility lease and manufacturing operations (the "Good Health and R.W.

Garcia Sale"), for $167.5 million, subject to customary adjustments.

On April 22, 2024, the Company sold to Our Home its Berlin, PA and Fitchburg, MA manufacturing facilities and certain related assets, including certain inventory (the “Manufacturing Facilities Sale”).

The total consideration for the Manufacturing Facilities Sale was $18.5 million, subject to customary adjustments.

The Company and Our Home are operating under transition services agreements related to each of the Good Health and R,W.

Garcia Sale and the Manufacturing Facility Sale, which are scheduled to expire during the first half of 2025.

In addition, the parties will operate under reciprocal co-manufacturing agreements pursuant to which Our Home will co-manufacture certain of the Company's products and the Company will co-manufacture certain Good Health products.

Certain Good Health products will continue to be distributed and sold on the Company's DSD network for Our Home pursuant to a distribution agreement.

The Company received approximately $18.7 million in advance from Our Home for certain terms under these agreements, which the Company will recognize through income from operations over the terms of the transition services and co-manufacturing agreements.

Divestitures , to our audited consolidated financial statements included under Part II, Item 8 of this Annual Report on Form 10-K (our "Audited Financial Statements"), for further discussion.

During the fiscal year ended December 29, 2024, the Company paid $9.2 million to purchase an indefinite life intangible right for use of a third-party brand name.

This intangible is classified as an indefinite life trade name.

Goodwill and Intangible Assets, Net to our Audited Financial Statements.

Growth Strategy

We have a long-term growth strategy focusing on various initiatives.

Our portfolio strategy is focused on accelerating investments in marketing and innovation to drive top-line growth and achieve share gains in the Salty Snack category.

We plan to further penetrate our Expansion Geographies and untapped channels and customers by further expanding our Branded Salty Snacks in Expansion Geographies, as well as maintaining our share in our Core Geographies.

We plan to transform our supply chain into a more cost-efficient and flexible system.

As part of our long-term growth strategy, we intend to enhance our independent operator DSD system to further improve execution and generate higher returns and strengthen other organizational capabilities while driving out costs.

Additionally, we intend to improve our balance sheet flexibility by accelerating cash generation and maintaining a disciplined capital allocation approach, which will reduce leverage while opportunistically pursuing acquisitions.

Our business is managed and reported in one operating segment.

However, we strategically manage our portfolio of brands by segregating our sole operating segment into Power Brands and Foundation Brands.

Power Brands, in aggregate, enjoy a combination of higher growth and margins, greater potential for value-added innovation, and enhanced responsiveness to consumer marketing as compared to Foundation Brands.

As a result, we focus our investment spending and brand-building activities on Power Brands while managing Foundation Brands for cash flow generation to support investment in Power Brands and fund other corporate priorities.

We assess the designation of brands as Power Brands or Foundation Brands and reclassify brands based on their alignment with the criteria above.

Our Power Brands are comprised of our flagship Utz brand and iconic On The Border® brand;

craft brands such as Zapp’s ®, Golden Flake ® Pork Skins, TORTIYAHS!, and Hawaiian ®;

BFY brands such as Boulder Canyon ®;

strong regional snacking brands such as Bachman®, Tim’s Cascade® Snacks, and "Dirty" Potato Chips®;

and selected licensed brands such as TGI Fridays ®.

As part of our long-term growth strategy, we intend to enhance our DSD system of IOs to further improve execution and generate higher returns and strengthen other organizational capabilities while driving out costs.

Our business is managed and reported in one operating segment due to the similar nature of all of the products that the Company sells, the functional alignment of the Company's organizational structure, and the reports that are regularly reviewed by the chief operating decision maker (the “CODM”) for the purpose of assessing performance and allocating resources.

However, we strategically manage our portfolio of brands by segregating our sole operating segment into Branded Salty Snacks and Non-Branded & Non-Salty Snacks.

Branded Salty Snacks, in aggregate, enjoy a combination of higher growth and margins, greater potential for value-added innovation, and enhanced responsiveness to consumer marketing as compared to Non-Branded & Non-Salty Snacks.

As a result, we focus our investment spending and brand-building activities on Branded Salty Snacks while managing Non-Branded & Non-Salty Snacks for cash flow generation to support investment in Branded Salty Snacks and fund other corporate priorities.

We periodically assess the designation of brands within these segregations and reclassify brands based on their alignment with the criteria above.

Branded Salty Snacks

Our Branded Salty Snacks are comprised of our Power Four Brands, consisting of our flagship Utz® brand, On The Border®, Zapp’s ®, and Boulder Canyon®, along with our Other Brands, including Golden Flake ®, TORTIYAHS!

®, Hawaiian ®, Bachman ®, Tim’s Cascade® , Dirty Potato Chips®, TGI Fridays ®, and Vitner's ®.

Our flagship Utz brand generated retail sales in excess of $850 million in 2024, representing an approximate 7.1% compound annual growth rate ("CAGR") (during 2020 through 2024) and making it one of the 10 largest salty snack brands in the United States by retail sales as of December 29, 2024.

Recognized for its iconic logo featuring the “Little Utz Girl” since the 1920s, the Utz brand currently uses the slogan "Family Crafted Flavor Since 1921”.

We sell a variety of salty snacks under the Utz brand, including potato chips, pretzels, cheese snacks, pub/party mixes, and others.

We sell a variety of salty snacks under the Utz brand, including potato chips, pretzels, cheese snacks, pub/party mixes, and seasonal favorites.

Our On The Border brand ("OTB") is a national brand of tortilla chips, salsa and queso.

OTB is the #2 unflavored tortilla chip brand as of December 31, 2023.

The acquisition of OTB strengthened the national geographic footprint in our Expansion Geographies and enhanced our presence in the Mass and Club retail channels.

Our Boulder Canyon Power Brand anchors our position in the BFY category of salty snacking, which has been a high-growth category in recent years.

OTB is the #2 unflavored tortilla chip brand in the United States based on annual sales for the fiscal year ended December 29, 2024.

The acquisition of OTB strengthened our national geographic footprint, particularly in our Expansion Geographies, and enhanced our presence in the Mass and Club retail channels.

Our Boulder Canyon brand anchors our position in the BFY category of salty snacking, which has been a high-growth category in recent years.

Boulder Canyon offers a line of premium BFY potato chips, including those made with olive or avocado oils.

In the Natural channel as defined by SPINS, LLC, Boulder Canyon is the #2 potato chip brand, growing 27% within the channel in 2023 and its “Canyon Cut” rippled avocado oil-based chip is the #1 selling salty snack item as of December 31, 2023.

Our Power Brands also include a number of our authentic craft brands including Zapp’s, Hawaiian , and Golden Flake pork skins.

For example, Zapp’s offers a line of premium kettle-cooked potato chips with bold, authentic flavors steeped in its New Orleans roots, including “Voodoo,” “Hotter ‘N’ Hot Jalapeño,” “Spicy Cajun Crawtators,” and "Cajun Dill Gator-tators,” among others.

In the Natural channel as defined by SPINS, LLC, Boulder Canyon is the #2 potato chip brand, growing 32.7% within the channel in 2024, its “Canyon Cut” rippled avocado oil-based kettle-style chip is the #1 selling salty snack item as of December 29, 2024.

Our Zapp’s brand offers a line of premium kettle-cooked potato chips with bold, authentic flavors steeped in its New Orleans roots, including “Voodoo,” “Hotter ‘N’ Hot Jalapeño,” “Spicy Cajun Crawtators,” and "Cajun Dill Gator-tators,” among others.

Our Other Brands also includes others such as:

Hawaiian and Golden Flake pork skins.

Hawaiian is a premium kettle chip brand that evokes the feel of the Pacific islands, with exotic flavors like “Sweet Maui Onion,” "Luau BBQ,” "Mango Habanero,” and "Hulapeño.” Our Golden Flake brand, a part of Southern culture since 1923, has a full line of Southern-style pork skins with flavors like “Louisiana Hot Sauce” and "Sweet Heat Barbecue,” which offer great taste and crunch with low carbohydrates.

In fiscal year 2023, our Foundation Brands included strong regional snacking brands, such as Golden Flake ® Chips and Cheese, Snyder of Berlin ®, and R.W.

and BFY brands such as Good Health® , as well as other partner and private label brands.

On February 5, 2024, the Company sold the Good Health and R.W.

Garcia Brands to Our Home.

We have historically utilized the strong regional positions and relevance of our Foundation Brands to drive increased distribution for our Power Brands.

We produce a broad range of salty snack foods, including potato chips, tortilla chips, pretzels, cheese snacks, veggie snacks, pub/party mixes, pork skins, ready-to-eat popcorn, and other snacks which include salsa and dips.

Non-Branded & Non-Salty Snacks

In fiscal year 2024, our Non-Branded & Non-Salty Snacks included partner brands, private label, co-manufacturing for which we are the manufacturer, Utz branded non-salty snacks such as On The Border® Dips and Salsa, and sales not attributable to specific brands.

We produce a broad range of salty snack foods, including potato chips, tortilla chips, pretzels, cheese snacks, pub/party mixes, pork skins, ready-to-eat popcorn, and other snacks which include salsa and dips.

Our products are packaged in a variety of different sizes and configurations, ranging from individual packages to shareable bulk containers.

3 unchanged sentences

We also believe that our diversified product portfolio results in more predictable and stable financial performance as we are not overly exposed to only one salty snack sub-category.

Product Innovation

Recent Developments in Product Innovation

New product innovation is critical in the salty snacks category because consumers both enjoy long-time favorites and like to experiment with new forms, flavors, textures, and ingredients.

In particular, our brands have strong competitive positions across an assortment of popular salty snacks, including potato chips, tortilla chips, pretzels, cheese snacks, pub/party mixes, veggie snacks, and pork skins.

In particular, Zapp’s Sinfully Seasoned Pretzel Stix is proving to be a very successful innovation.

Launched with two flavors in October 2022, Voodoo and Jazzy Honey Mustard, Zapp’s Pretzel Stix has reached $20 million in retail sales and become a top 10 pretzel brand in its first year.

Voodoo flavored Zapp's Pretzel Stix was named “Best Pretzel Stix” in Self Magazine’s February 2023 Pantry Awards and “Best Pretzel” in People Magazines July 2023 Food Awards Edition, while Zapp’s Pretzel Stix was named “Best New Products” in 2023 Progressive Grocer Editors Picks.

Strong repeat rates on the current line and the launch of two new on-trend flavors, Spicy Cajun and Sweet Cinnamon and Sugar in 2024 support continued strong momentum for Zapp’s Pretzel Stix.

The Utz brand delivered flavor innovation on its core potato chips line with a very positive partnership with Mike’s Hot Honey.

As a Summer Limited Time Offer (“LTO”), Utz Mike’s Hot Honey potato chip dollar sales performed five times higher than the previously best Utz LTO.

Hot Honey is a winning combination of sweet/spicy and a go-to-flavor for potato chip consumers.

Due to this success, Utz Mike’s Hot Honey Potato Chips were transitioned to an everyday item.

Additionally, Mike’s Hot Honey will appear as a variety in a new line of flavored pretzels February 2024 called Utz Mixed Minis.

On The Border Chips and Dip launched two successful LTOs with Sam’s Club including Creamy Salsa Verde and Southwest flavors.

To capture incremental placement and purchase of On The Border Café, seasonal packaging was launched during key holidays in Summer, Holiday and in Football/Tailgate.

We are taking advantage of consumers desire for convenient variety and multipacks with a portfolio of innovation such as the Utz 40 count Classic Snacks Variety Pack, On The Border 30 count Café Variety Pack club LTO, Hawaiian Island 18 count Variety Pack and the new line-up of 10 count multipacks offered in customer favorites such as Utz Original Ripples, Utz Party Mix and Utz Cheese Balls.

In the BFY space, we continue to innovate.

Boulder Canyon known for BFY oils, such as avocado oil, launched two successful LTOs under the Boulder Batch line, Spicy Green Chili, to take advantage of the hot & spicy trend that has now proven to be the #1 flavor in salty snacks, and a dill flavored kettle chip in partnership with Grillo’s Pickles, the fastest growing pickle brand.

Investments in new product innovation support three focus areas that are rooted in the consumer and tied to our portfolio and brand strategy:

Expanding Positive Choices, Delivering Craveable Flavor, and Capturing Occasions.

Within Expanding Positive Choices, the focus in 2024 was on Boulder Canyon, a brand offering solutions for consumers seeking great tasting BFY snacks via BFY oils such as avocado oil and olive oil.

Innovation contributed to the brand’s 32.7% growth in the natural channel in 2024.

Within the potato chip segment, Boulder Canyon launched two kettle chips:

Spicy Green Chili as an everyday item following a successful 2023 limited time offer (“LTO”) launch and a Buffalo Ranch Boulder Batch LTO.

Both flavors capitalized on the hot & spicy trend that continues as the #1 flavor category in salty snacks.

Also, within potato chips, Boulder Canyon entered the Wavy/Ripple subcategory with the launch of Boulder Canyon Wavy chips in top category flavors, Sea Salt and Cheddar Sour Cream.

Introduced in September 2024 in the Natural Channel, Boulder Canyon Wavy is off to a strong start with both Sea Salt and Cheddar Sour Cream flavors exceeding expectations.

Additionally, Boulder Canyon moved beyond potato chips in 2024, entering the cheese snacks sub-category with the introduction of Canyon Poppers.

This launch leverages our expertise in cheese snacks and consumer desire for BFY snacks.

Two flavors, White Cheddar and Jalapeno Ranch, represent top category flavors, Cheddar and Hot & Spicy.

Within Delivering Craveable Flavor, we addressed consumer desire for flavor exploration with innovation across brands and snacking subcategories.

Utz leveraged strength as the #4 brand of pretzels with an over 50% repeat purchase rate and the other positive trends in flavored pretzels, which now represents over 50% of pretzels.

Utz has driven 5% growth in the category, due, in part, to the launch of Utz Mixed Minis, a line of seasoned mini pretzels in Garlic Butter, Mike’s Hot Honey and Sea Salt varieties.

Within potato chips, Utz leveraged the success of the award-winning Mike’s Hot Honey to offer a Mike’s Extra Hot Honey as a Summer LTO capitalizing on the hot & spicy trend.

Zapp’s , a brand that embodies the bold and vibrant flavors of New Orleans, also offered innovation against this focus area.

Building on the launch of Zapp’s Sinfully Seasoned Pretzel Stix in 2023, two new flavors were launched in 2024 – Spicy Cajun and Sweet Cinnamon & Sugar.

Following up on multiple product awards for Zapp’s Sinfully Seasoned Pretzel Stix in 2023, Zapp’s Spicy Cajun pretzels was named one of the year’s Best New Products by Convenience Store News for 2024.

Zapp’s Sinfully Seasoned Pretzel Stix is the #6 brand in the seasoned subcategory in the fifty-two weeks ended as of December 1, 2024.

Within potato chips, Zapp’s introduced the Big Cheezy New Orleans Kettle Style potato chips.

While cheese flavored potato chips represent 12% of potato chips and are growing, this popular flavor is underrepresented in kettle style chips subcategory at less than 1% sales representing an opportunity for Zapp’s .

Within Capturing Occasions, our focus is expanding usage via variety/multipack innovation to address consumers' preference for portioned packs and seasonal offerings that are designed to attract consumers that are engaging in celebration.

In 2024, we introduced a portfolio of variety/multipacks across our Power Four Brands and our Targeted Brands.

Our Approach to Product Innovation

Given our long-standing customer relationships, broad production capabilities, and scalable distribution platform, we plan to continue expanding our presence in certain salty snack sub-categories that we believe are highly synergistic to our existing business.

5 unchanged sentences

We also collaborate with third-party seasoning and flavor houses to understand the latest trends in consumer flavors and emerging consumer flavor preferences.

Going forward, we intend to increase our investments in market research and other resources to generate more consumer insights and new product innovations.

Going forward, we intend to continue to increase our investments in market research and other resources to generate more consumer insights and new product innovations.

We also utilize our flexible manufacturing and distribution platform to streamline the new product innovation process from idea conception through development and commercialization to market.

4 unchanged sentences

Marketing, Advertising, and Consumer Engagement

Our marketing strategy is focused on driving stronger consumer pull for, and building brand equity of, our Power Brands.

Our marketing strategy is focused on driving stronger consumer pull for, and building brand equity of, our Branded Salty Snacks.

We conduct marketing efforts through three principal sets of activities:

3 unchanged sentences

Historically we have relied more heavily on sponsorships, trade promotions, and in-store merchandising for consumer engagement;

however, we are making shifts of spending into more consumer awareness and brand-building advertising.

In fiscal year 2023, we spent approximately $12.3 million related to consumer marketing and advertising expenses and $29.8 million in cooperative advertising.

Consistent with our value creation strategies, we intend to continue to increase our investments in digital and social consumer marketing and advertising focused on our Power Brands as well as continue to allocate our current mix of media spending toward activities with the highest return on investment.

however, we are making shifts of spending more on consumer awareness and brand-building advertising.

In fiscal year 2024, we spent approximately $17.8 million related to consumer marketing and advertising and $33.8 million in cooperative advertising.

Consistent with our value creation strategies, we intend to continue to increase our investments in digital and social consumer marketing and advertising focused on our Branded Salty Snacks as well as continue to allocate our current mix of media spending toward activities we believe will generate the highest return on investment.

We will continue to expand our investments in digital and social media, including as part of our strategy to grow our eCommerce and retailer marketing investments.

We believe these marketing strategies will drive long term net sales growth by increasing brand equity, supporting geographic expansion.

In fiscal year 2023, our top 10 customers, all of which are retailers, represented approximately 40% of our invoiced sales, and one customer provided in excess of 10% of our net invoiced sales in fiscal year 2023.

We believe these marketing strategies will drive long term net sales growth by increasing brand equity, and supporting geographic expansion.

In fiscal year 2024, our top 10 customers, all of which are retailers, represented approximately 40% of our invoiced sales, and one customer provided in excess of 10% of our net sales in fiscal year 2024.

Although orders are processed through purchase orders, as opposed to volume commitments, we have historically benefited from long-term relationships with our key customers, having a sales relationship for more than 20 years on average across our top 15 retail customers.

6 unchanged sentences

The salty snacking industry is competitive and includes a number of diverse participants.

Our identified competitors include PepsiCo (Frito Lay), Campbell’s (Snyder’s-Lance), Kellogg’s (Pringles), General Mills, Grupo Bimbo, Hershey’s, Hain Celestial, and Arca Continental (Wise), among others.

Our principal identified competitors include PepsiCo (Frito Lay), Campbell’s (Snyder’s-Lance), Kellanova (Pringles)(to be acquired by Mars), General Mills, Grupo Bimbo, Hershey’s, Hain Celestial, and Arca Continental (Wise), among others.

Our products also compete with private label or retailer-branded salty snacks.

However, private label branded salty snacks represented only approximately 5.1% of US category retail sales for the year ended December 31, 2023, less than its approximately 5.5% share of retail sales since 2018.

However, private label branded salty snacks represented only approximately 6.7% of U.S.

category retail sales for the year ended December 29, 2024, less than its approximately 7.0% average share of retail sales since 2019.

Historically, the salty snacks category has benefited from favorable competitive dynamics, including low private label penetration and category leaders who compete primarily via marketing and innovation.

Importantly, as of December 31, 2023, we are the #2 brand platform in our Core Geographies, representing over 7% of total salty snacks category retail sales based on Circana data.

As of December 31, 2023, in our Core Geographies, we have the #2 position in pork skins and in pretzels with 17% and 15% of sub-category retail sales, respectively.

We have the #3 position in potato chips, cheese snacks and tortilla chips with 12%, 7% and 4% of sub-category retail sales, respectively.

Importantly, as of December 29, 2024, we are the #2 brand platform in our Core Geographies, and our brands represent approximately 7% of total salty snacks category retail sales in our Core Geographies based on Circana data.

As of December 29, 2024, in our Core Geographies, we have the #2 position in pork skins, pretzels and cheese snacks with 17%, 14% and 7% of sub-category retail sales, respectively.

We have the #3 position in potato chips and tortilla chips with 11% and 4% of sub-category retail sales, respectively.

We believe we have a strong and defensible position in our Core Geographies with a significant opportunity to enhance our national position by expanding sales in Expansion Geographies (where we represent 2.8% of category retail sales).

As of December 31, 2023, we are the #3 salty snack brand platform in the US, representing 4.4% of total salty snacks category retail sales.

As of December 29, 2024, we are the #4 salty snack brand platform in the U.S., representing 4.3% of total salty snacks category retail sales.

Notably, in 2024, approximately $2.8 billion of salty snack retail sales were generated by approximately 1,200 smaller competitors, each with retail sales of less than $200 million.

We believe this fragmented group of smaller brands provides an attractive opportunity for us to expand our retail sales by either acquiring or displacing smaller regional or product-specific competitors.

We believe this fragmented group of smaller brands provides an attractive opportunity for us to expand our retail sales by either acquiring or gaining share from smaller regional or product-specific competitors.

The principal ingredients used to manufacture our products include potatoes, oil, flour, wheat, corn, cheese, spices, and seasonings.

8 unchanged sentences

A number of external factors such as weather, commodity markets, and governmental or agricultural programs can affect the cost of raw materials used in our products.

To provide greater visibility and mitigate risks, we typically look to enter into pricing arrangements covering a meaningful portion of our forecasted purchases over the next 3 to 18 months.

To provide greater visibility and mitigate risks, we typically look to enter into pricing arrangements covering a meaningful portion of our forecasted purchases over the next three to 18 months.

As of December 29, 2024, we estimate that we have entered into pricing arrangements covering approximately 36% of our budgeted direct material needs in fiscal year 2025.

Manufacturing.

As of February 14, 2024, we manufacture our products primarily through 10 company-operated manufacturing facilities across the United States.

These include three legacy Utz facilities and seven facilities that were added over the last ten years from acquisition (for more details see Item 2 “Properties” in this Annual Report on Form 10-K for more details).

Our facilities have the capacity to produce approximately 500 million pounds of salty snacks annually, after the effect of the Our Home Transaction, based on management’s estimate of available capacity, excluding weekly sanitation, over a seven-day work schedule, providing us with significant available capacity to accommodate increased sales.

As of December 29, 2024, we manufacture our products primarily through eight company-operated manufacturing facilities across the United States.

These include three legacy Utz facilities and five facilities that were added over the last ten years from acquisition (for more details see Item 2 “Properties” in this Annual Report on Form 10-K for more details).

Our facilities have the capacity to produce approximately 500 million pounds of salty snacks annually based on management’s estimate of available capacity, excluding weekly sanitation, over a seven-day work schedule, providing us with significant available capacity to accommodate increased sales.

We believe this available capacity across our manufacturing footprint will enable us to leverage existing fixed costs to generate higher margins on incremental organic sales or acquired brands as well as generate potential future cost savings through consolidating our manufacturing footprint.

Our manufacturing facilities are well-maintained, and we have a program to ensure appropriate maintenance capital expenditures are undertaken.

We also utilize several co-manufacturers for certain products, with the most significant being our OTB branded tortilla chips as well as branded salsa and queso.

In addition, pursuant to the Our Home Transaction, under reciprocal co-manufacturing agreements Our Home will co-manufacture certain of our products and we will co-manufacture certain Good Health® products.

During fiscal 2022, we began investing in talent and process improvements, associated with setting up our Integrated Business Management ("IBM") process, which uses supply and demand planning to optimize manufacturing and other supply chain and logistics processes.

While we are purposefully shifting toward moving manufacturing in-house, we also continue to utilize several co-manufacturers for certain products, with the most significant being our OTB branded tortilla chips as well as branded salsa and queso.

During fiscal 2022, we began investing in talent and process improvements, associated with setting up our integrated business planning (“IBP”) process, which uses supply and demand planning to optimize manufacturing and other supply chain and logistics processes.

Distribution.

3 unchanged sentences

We have historically expanded the geographic reach of our distribution network from our Core Geographies, where we benefit from strong brand awareness and heritage, to our Expansion Geographies, where we have expanded both organically and through acquisitions.

During the fiscal year ended December 31, 2023, we were able to expand our market share in our Expansion Geographies, led by growth in the grocery channel according to Circana data of U.S.

retail sales in the salty snacks category.

We plan to continue to expand our distribution and sales of Power Brands in these geographies, supported by our increased brand investments, expansion of our direct-to-customer and DSD distribution capabilities, and potentially through strategic acquisitions.

During the fiscal year ended December 29, 2024, we were able to expand our market share in our Expansion Geographies.

We plan to continue to expand our distribution and sales of Branded Salty Snacks in these geographies, supported by our increased brand investments, expansion of our direct-to-customer and DSD distribution capabilities, and potentially through strategic acquisitions.

Direct-to-Warehouse :

3 unchanged sentences

Direct-Store-Delivery:

We are one of only four scaled U.S.

We are one of few scaled U.S.

salty snack providers with extensive DSD capabilities.

Within our DSD system, our independent operators (“IOs”) pick up products from our manufacturing facilities, distribution centers, storage facilities, or small bins and distribute and sell these products to retail stores within a geographic territory.

Within our DSD system, our IOs pick up products from our manufacturing facilities, distribution centers, storage facilities, or small bins and distribute and sell these products to retail stores within a geographic territory.

Our DSD system provides service to both large and small customers, and it provides us a competitive advantage in expanding distribution, increasing shelf space, executing in-store merchandising activities, and ensuring products are fresh and available wherever consumers shop.

Our DSD network included approximately 2,250 routes reaching over 83,000 retail stores in 2023.

Our DSD routes are comprised of approximately 2,200 IOs, covering substantially all of our routes as of December 31, 2023.

Our DSD network includes approximately 2,500 routes reaching over 81,500 retail stores in 2024.

While we expect to have a small number of routes under the ownership of the Company as we acquire and re-sell routes as part of our normal operations, as of December 29, 2024, substantially all of our DSD routes are managed by IOs.

Over the last several years, we have converted from a predominately company-owned route sales professionals ("RSP") model toward the use of IOs.

17 unchanged sentences

Finally, in addition to real-time product testing during production, we frequently monitor product attributes including taste, aroma, texture, and appearance, and random samples of finished goods are regularly sent to third-party laboratories for testing and verification.

Human Capital

Each day we demonstrate the family values espoused by our founding family in our workplace culture:

inclusivity, well-being and professional growth.

These values are celebrated and help to drive our success which relies on our ability to attract, develop and retain key personnel whose skills, experience and industry knowledge benefit our operations and performance.

Our Board of Directors (“Company Board”), Company Board committees and management oversee various associate initiatives including compensation and benefits programs, succession planning, leadership development, diversity, equity and inclusion.

We aim to both attract and retain a qualified workforce through an inclusive and accessible recruiting process and online platform, as well as by offering competitive wages, benefits, and training opportunities.

We also support and develop our associates through company-wide training and development programs intended to build and strengthen associates’ leadership and professional skills.

Diversity, Equity and Inclusion

We recognize that the diverse perspectives and backgrounds of our associates are vital for our performance, and by embracing it, we ensure that we have a workplace where every associate feels that they are valued and that they can contribute not only to our success, but their success, as well.

To foster a work environment that values all people, Utz partnered with a nationally recognized consulting firm to help develop a comprehensive diversity, equity, and inclusion strategy, which includes various aspects of human capital management, including recruiting, training, and leadership developme nt.

Since partnering with a consultant, we have developed a three year strategy that is underway that includes various initiatives, projects and actions that have yielded positive results.

Human Capital Resources

Our values lead the way we work and are rooted in over a century of heritage that focuses on our people.

Acting with respect, working collaboratively and in an integrated way, focusing on ownership and accountability, and continuously pursuing excellence are core values that have underpinned our success in attracting, engaging, and developing our associates.

Our Board of Directors (“Company Board”), Company Board committees, and Executive Leadership management oversee various associate initiatives including compensation and benefits programs, succession planning, leadership development, and diversity, equity and inclusion.

We aim to both attract and engage a qualified workforce through competitive compensation and benefits, training and development opportunities, as well as through listening initiatives designed to uncover opportunities to improve the ways we work.

We recognize that the diverse perspectives and backgrounds of our associates are vital to maximize our performance, and by embracing a workplace where every associate feels that they are valued and that they can contribute not only to our success, but to their success as well, we believe that we are able to provide high-quality products for our consumers, drive efficiencies for our business and business partners, and improve our results for our stockholders.

To foster a work environment that values all people, Utz partnered with a nationally recognized consulting firm to help develop a comprehensive strategy, which includes various aspects of human resources, including recruiting, training, and leadership developme nt.

We developed a three year strategy that is underway that includes various initiatives, projects and actions that have yielded positive results.

As of our 2023 ESG report published in August 2024, our associate demographics in the U.S.

(based on self-reported data from our associates) were:

1 Includes all races except White.

2 One associate did not specify a self-identified race but was included in the total;

however, this individual's data was not reflected in either the White or POC categories

Health and Safety

21 unchanged sentences

• 401(k) plan with competitive company match and profit sharing.

Employee Headcount

Associate Headcount

As of December 29, 2024, we employed approximately 3,000 full-time associates and 200 part-time associates.

Over the last several years, we have meaningfully reduced our number of full-time associates and our selling, distribution and administrative expenses through our business transformation initiatives, particularly our DSD shift from RSPs to IOs and the associated restructuring of our sales management and corporate organization structure (see “— Supply Chain — Distribution” and "Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations of Utz Brands Holdings — Recent Developments and Significant Items Affecting Comparability —Independent Operator Conversions ” for more information).

Over the last several years, we have meaningfully reduced our number of full-time associates and our selling, distribution and administrative expenses through our business transformation initiatives, particularly our DSD shift from RSPs to IOs and the associated restructuring of our sales management and corporate organization structure (see “— Supply Chain — Distribution” and " Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations of Utz Brands Holdings — Recent Developments and Significant Items Affecting Comparability —Independent Operator Conversions ” for more information).

Additionally, we have reduced the number of associates and operating expenses through several network optimization initiatives that reduced our plant footprint by three plants in fiscal year 2023 and consolidated certain of our transportation and warehousing operations.

In the first quarter of fiscal year 2024, we further reduced our number of full-time associates and our selling, distribution and administrative expenses through our business transformation initiatives, including the Our Home Transaction.

Garcia Sale and Manufacturing Facilities Sale, which further reduced our plant footprint by an additional five plants.

Sustainability

We recognize the importance of Environmental, Social and Governance ("ESG") issues for all stakeholders.

We recognize the importance of ESG issues for all stakeholders.

We use leading ESG and sustainability frameworks and guiding principles, such as the Sustainability Accounting Standards Board ("SASB"), the Task Force on Climate-related Financial Disclosures ("TCFD") and the U.N.

12 unchanged sentences

trademark registrations, which protect certain rights in the following brands:

Utz, ON THE BORDER, Zapp’s, Golden Flake, Boulder Canyon, Hawaiian, TORTIYAHS!, Tim’s Cascade, Snyder of Berlin, “Dirty”, Kitchen Cooked, Bachman and Jax , among others.

Utz, ON THE BORDER, Zapp’s, Golden Flake, Boulder Canyon, Hawaiian, TORTIYAHS!, Tim’s Cascade, Snyder of Berlin, “Dirty”, Kitchen Cooked, and Bachman and Jax , among others.

Depending upon the jurisdiction, trademarks are valid as long as they are used in the regular course of trade and/or their registrations are properly maintained.

7 unchanged sentences

The results of any current or future litigation cannot be predicted with certainty and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

See “ Risk Factors — Potential liabilities and costs from litigation, claims, legal or regulatory proceedings, inquiries or investigations can have an adverse impact on our business, financial condition or results of operations.

See Part I, Item 1A, “ Risk Factors — Potential liabilities and costs from litigation, claims, legal or regulatory proceedings, inquiries or investigations can have an adverse impact on our business, financial condition or results of operations.

” Moreover, future litigation may be necessary to defend ourselves, our partners, and our customers by determining the scope, enforceability, and validity of third-party proprietary rights or to establish our proprietary rights.

We also license certain third-party brand names for use on our products, including the TGI Friday’s, HeluvaGood, Grillo’s Pickles, and Mike's Hot Honey.

We also license certain third-party brand names for use on our products, including the Grillo’s Pickles, and Mike's Hot Honey.

We use these trademarks in connection with production and distribution of snack products to be sold under the trademarked labels.

1 unchanged sentence

Sales under our trademark licensing agreements represent approximately 1% of our 2024 invoice sales.

In addition, we license certain of our owned brands, including Utz, for use by third parties in certain food categories (such as frozen foods), however these arrangements do not materially impact our financial position.

Finally, we have historically engaged in certain cross-marketing and/or promotional activities with third parties, thereby increasing the visibility of our brands.

20 unchanged sentences

The SEC maintains an Internet site that also contains these reports at:

In addition, copies of the Company's annual report will be made available, free of charge, on written request to the Company.

In addition, paper copies of the Company's annual report will be made available, free of charge, on written request to the Company.

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