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Greetings, and welcome to SunOpta's Second Quarter Fiscal 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Reed Anderson with ICR. Thank you. You may begin.

Good afternoon, and thank you for joining us on SunOpta's Second Quarter Fiscal 2025 Earnings Conference Call. On the call today are Brian Kocher, Chief Executive Officer; and Greg Gaba, Chief Financial Officer. By now, everyone should have access to the earnings press release that was issued earlier this afternoon and is available on the Investor Relations page of SunOpta's website at www.sunopta.com. This call is being webcast, and its transcription will also be available on the company's website. The investor presentation referenced during this call and webcast is also posted to the company's Investor Relations website. As a reminder, please note that the prepared remarks which follow contain forward-looking statements, and management may make additional forward-looking statements in response to your questions. These statements do not guarantee future performance, and therefore, undue reliance should not be placed upon them. We refer you to all risk factors contained in SunOpta's press release issued this afternoon, the company's Annual Report filed on Form 10-K and other filings with the Securities and Exchange Commission for a more detailed discussion of the factors that could cause actual results to differ materially from those projections and any forward-looking statements. The company undertakes no obligation to publicly correct or update the forward-looking statements made during the presentation to reflect future events or circumstances, except as may be required under applicable securities laws. Finally, we would like to remind listeners that the company may refer to certain non-GAAP financial measures during this teleconference. A reconciliation of these non-GAAP financial measures was included with the company's press release issued earlier today. Also, please note in the prepared remarks that follow, unless otherwise stated, the company will be referring to the continuing operations portion of the business and all figures are in U.S. dollars, occasionally rounded to the nearest million. Now I'll turn the call over to Brian to begin. Brian?

Good afternoon, and thank you for joining us today. I'm excited to share our second quarter '25 financial results as well as the operational progress delivered during the quarter across multiple fronts. Slide 3 serves as an agenda for the scripted comments we will share today. In order, I will cover our second quarter 2025 performance, accelerating investment in our fruit snacks business and our overall confidence in our outlook. Greg will then cover our 2Q financial results and our outlook in more detail. Following our scripted comments, we'll take your questions. We are thrilled with our second quarter performance. Our business momentum continues to build, giving us significant confidence in the future. We are executing well and doing what we said we would do, growing revenue, growing adjusted EBITDA, improving gross margins and allocating capital with discipline to drive ROIC. Importantly, we are doing all of that on schedule. Slide 5 provides a summary of the impressive numbers we achieved in the second quarter. We delivered year-over-year revenue growth of 13%, driven by 14% volume growth that was broad-based across our portfolio. Our 14% year-over-year growth in adjusted EBITDA is especially impressive considering we incurred $1.6 million of tariff headwinds on gross profit due to a timing lag of pass- through pricing. We'll talk more about our management of tariff exposure shortly. Our Q2 results were achieved despite ongoing consumer and tariff uncertainty, demonstrating both the resilience of our business model and the strength of our execution. The key takeaway from Q2 is very similar to Q1. We did what we said we would do, and we are advancing the objectives we outlined for 2025. While the second quarter was full of notable accomplishments, I want to highlight 3 that I'm particularly proud of. First, our revenue growth engine delivered again. Fueled by the capacity we are creating each and every day in our production facilities, we continue delivering unit volume growth that is among the highest of all publicly traded companies in the food and beverage space. Secondly, we successfully implemented pass-through pricing on substantially all known tariff impacts in effect as of July 31. Every one of our customers accepted some form of tariff upcharge, and we are billing them now. As the tariff landscape remains fluid, we will continue passing along tariff costs similarly to how we pass through raw material price changes. Importantly, our customers understand that these upcharges will remain in place until we've recovered any timing differences, even in the event of reductions or elimination. Greg will cover tariffs in more detail in his section. Finally, I'm confident in our ability to continue driving operational efficiency and gross margin improvements. Adjusted gross margin was 15.2% despite absorbing a 90 basis point impact due to the previously mentioned timing lag of tariff pass-through pricing. After considering that 90 basis points impact, we are on pace with the sequential margin improvement we outlined last quarter. Let's dive deeper into a few factors propelling our operational success during the quarter. The diversity of our revenue streams across categories, customers and channels remains a fundamental strength. During the first half of 2025, every product category, every go-to- market format and every channel grew year-over-year. In fact, each of our top 10 customers grew in the first 6 months of the year. In the second quarter, our foodservice category continued growing in mid-single digits with oat performing the best. The growth is driven by both menu assortment across customers and share gain in coffee chains. Our club channel business is thriving, up well over 25% as consumers seek quality products along with great value. Broth continues to perform well across both retail and club channels, up well over 25%. In better-for-you fruit snacks, we achieved our 20th consecutive quarter of double-digit growth, and fruit snacks now comprise 20% of our total revenue, roughly double the share it had 5 years ago. Margin expansion is a major focus for us, and we made substantial progress on the initiatives we outlined last quarter. We continue to unlock additional capacity from our existing asset base. Beverage and broth unit production increased 16% year-over-year, while fruit snack production rose 22%. When you look at our operational progress in the second quarter, we are approximately 1/3 of the way to achieving our targeted 300 basis points of gross margin expansion in Q4 as compared to Q1. Turning to better-for-you fruit snacks on Slide 6. The second quarter marked our 20th consecutive quarter of double-digit year-over- year increases in this category. Put plainly, this category continues to grow faster than our capacity can currently support. We are committed to serving growth through 2026 with our existing assets. Fortunately, the growth in demand in the better-for-you fruit snacks category has exceeded our expectations. We are pushing our equipment to the limit. Output increased 22% in 2Q '25 over the prior year, but the category and our customers will need more supply than we can offer. In response, we are announcing an investment in a new manufacturing line that will enable us to increase output by approximately 25%. I'm even more pleased to announce that the new Omak, Washington-based capacity is already oversubscribed. Greg will cover this investment in more detail in his section. As we look ahead on Slide 7, we remain very excited about our future. We are highly confident in our ability to execute and are enthused about our opportunities to create significant long-term value. Our new business pipeline has never been stronger, and we are exceptionally well positioned to drive sustainable growth and profitability. All of the categories in which we participate continue to exhibit strong unit volume growth. The customers we serve continue to gain share and are generally outperforming their respective markets. Contrary to what you may see in tracked channel data, industry growth rates have accelerated from prior years in the shelf-stable plant-based beverage category. Based on industry data and our internal estimates, the growth rates remain in the high single digits, and we expect this trend to continue. In closing, we're operating in an environment where consumers are increasingly focused on better-for-you products as well as value, and our portfolio is perfectly situated to capitalize on these trends. With our operational initiatives on track, strong momentum across our key growth platforms and clear line of sight to additional capacity expansion, we're well positioned to continue delivering strong results consistent with our growth algorithm. If you consider our revenue and volume growth rates, gross margin expansion target, adjusted EBITDA growth rate and improving ROIC, our results are clearly differentiated and among the top performers within the food and beverage space today. Now I'll turn the call over to Greg to highlight our key financial metrics, our 2025 outlook and discuss our tariff response plan and capital allocation priorities.

Thank you, Brian, and good afternoon, everyone. We had another strong quarter. As shown on Slide 9, revenue of $191 million was up 13% compared to last year, entirely driven by volume growth within our diverse portfolio. Gross profit increased by $7.2 million or 34% to $28.4 million compared to $21.2 million in the prior year. Gross margin increased by 230 basis points to 14.8% compared to 12.5%. Adjusted gross margin was 15.2% compared to 16% in the prior year. The 80 basis point decrease in adjusted gross margin is due to the timing lag on the pass-through of incremental tariff costs, investments in labor and infrastructure made over the past 2 quarters to improve long-term margins and incremental depreciation related to assets recently placed in service. These factors were partially offset by higher sales and production volumes for beverages, broth and fruit snacks, driving improved plant utilization. Earnings from continuing operations increased 198% to $4.4 million compared to a loss of $4.4 million in the prior year period. Adjusted earnings from continuing operations was $4.4 million or $0.04 earnings per diluted share compared to $2.2 million or $0.02 earnings per diluted share in the prior year period. Adjusted EBITDA increased 14% to $22.7 million compared to $20 million in the prior year period. Turning to our balance sheet. At the end of the second quarter, net debt was $271 million and net leverage was 2.9x, flat to the first quarter and down from 3x at the end of the fourth quarter. Cash provided by operating activities of continuing operations for the first 2 quarters was $17.8 million compared to $2 million in the first 2 quarters of the prior year. Cash used in investing activities of continuing operations was $18.6 million in the first 2 quarters of fiscal 2025 compared to $13.9 million in the first 2 quarters of fiscal 2024. Now turning to our outlook on Slide 10. We are revising our outlook for the year to reflect the strong performance in Q2 and the impact of tariffs. The revised outlook includes an increase of approximately $8 million in revenue and $10 million in cost of goods sold in the second half of the year for expected tariff expense, related pass-through pricing to our customers and the timing lag in the third quarter on implementing the pricing of the revised tariffs announced on August 1. Now we expect revenue in the range of $805 million to $815 million, growth of 11% to 13% versus 2024 compared to our prior guidance of 9% to 11%. From a profit perspective, we are reaffirming adjusted EBITDA of $99 million to $103 million, which represents growth of 12% to 16% as we expect operational improvements to offset the timing lag of the pass-through of incremental tariff costs. From a pacing standpoint, we expect revenue and adjusted EBITDA to improve sequentially each quarter with a 47% Q3 and 53% Q4 split for revenue and 42% Q3 and 58% Q4 split for adjusted EBITDA. We also continue to expect interest expense of $24 million to $26 million, capital expenditures on the cash flow statement of approximately $30 million to $35 million and free cash flow of $25 million to $30 million. Please note, essentially all of the free cash flow in 2025 is allocated for mandatory debt and notes payable repayments, which is reflected in our 2.5x net leverage target that we continue to expect to achieve by the end of 2025. Our long-term growth algorithm on Slide 11 is unchanged. We continue to target annual revenue growth of 8% to 10%, adjusted EBITDA growth of 13% to 17% and expect to deliver approximately the midpoint of these ranges in 2026. In addition, we expect ROIC of 16% to 18% by the end of 2026, gross margin of 18% to 19% for fiscal 2026 and gross margin of approximately 20% for fiscal 2027. Turning to Slide 12. As it relates to tariffs, while the situation remains fluid, as Brian mentioned, when we completed our pricing adjustments as of the middle of July, 100% of the incremental tariff impact was covered at that time. While we expect a lag of a month or 2 related to the pass-through of the revised tariffs announced on August 1, we anticipate recovery of substantially all additional costs. Finally, on Slide 13, our capital allocation priorities are unchanged. Our first priority continues to be delevering to 2.5x by the end of 2025. Our second priority is investing in our business, primarily through CapEx expansion to meet the significant demand growth we are seeing from our categories and customers. And the third priority is returning excess capital to shareholders. As we were tracking slightly ahead of our plan of achieving our year-end net leverage target of 2.5x and not envisioning needing significant growth CapEx in 2025, we took advantage of excess cash of approximately $1 million to return capital to shareholders by repurchasing 163,227 common shares in the second quarter. Additionally, as Brian mentioned, we are in a great position to announce the next phase of our capacity for our fruit snacks operations. Our execution in the fruit snacks category has been outstanding, delivering 20 consecutive quarters of double-digit growth, and our customer demand continues to accelerate faster than we expected. With a total investment of approximately $25 million, primarily occurring within 2026, we will be able to increase our capacity by 25% and the new capacity is already oversubscribed. We anticipate that the new equipment will come online in late 2026 and will be a key component to delivering our growth algorithm for 2027 and beyond. We remain committed to driving shareholder value and believe maximizing our cash generation and ROIC opportunities are the best way to deliver on this commitment over the long term. By maintaining reasonable debt levels, we ensure we are consistently in a strong position to fund our growth strategies with projects that deliver high rates of return on invested capital. We believe our capital allocation priorities will generate long-term value. Before opening the call for questions, just a reminder that for competitive reasons, we do not provide detailed commentary regarding customer or SKU level activity. And with that, operator, please open the call for questions.

[Operator Instructions] Your first question comes from the line of Andrew Strelzik with BMO.

My first one is about the new fruit snacks plant. And I was just curious for some more detail around that. I was curious if those are new customers, existing customers, a mix and how we should think about kind of the ramp of that once it opens. And then kind of thinking about what that might mean for your capacity needs on the plant-based side. Obviously, this is going to open and facilitate growth in '27. Should we assume that, that means you are covered either into '27 or beyond '27 on the plant-based side from a capacity perspective?

Andrew, thanks for the call. Appreciate it. A couple of things. Just for clarity, we're talking about adding a manufacturing line, not a plant. So it's a manufacturing line going into an existing plant. We're really fortunate. We have tried as hard as we can to sweat these assets. I think I mentioned on the prepared comments, 22% growth in unit production output in our fruit snacks facilities in the second quarter of '25. That is astounding that we were able to do that. That being said, the category keeps growing faster than even we thought. So I think it's a mix of certainly our existing customers who are clamoring for more. There may be some new opportunities, but largely, this line is oversubscribed with our existing customers. And it's a relatively reasonable investment at $25 million. We have a track record of very quickly turning that investment into unit growth in the last line expansion that we did. It's significantly accretive on an ROIC basis to our long-term targets. And at the end of the day, the category demands it, our customers demand it. And frankly, I think we'd be foolish not to go ahead and pull the trigger. It is long life -- a long project life, so we've got to invest or at least pull the trigger now to get something in place towards the end of 2026. But certainly, this goes into our '27 algorithm. As you switched your question to aseptic, let me also say that, again, our goal, we believe we have enough capacity either today or that we can create between now and then to fuel our '26 growth, our 2026 revenue growth. I think as we start thinking about 2027, we'll need to start thinking potentially about some growth CapEx. For clarity, we're talking about another line, another filler, something of that nature, no new greenfield plants, no new brownfield plants, but another manufacturing line to give us capacity. And I think the only thing that would change that is if the categories continue to grow faster than we think. Important to remember in all of this, Andrew, is with the fruit snack line that we're talking about, any potential investment in the future, we haven't -- we don't have one on the aseptic side, but any potential investment in the future, we can do that and still maintain or stay within our leverage ratios as well as our return on invested capital guidelines. So I feel really good about where we are.

And then I just wanted to ask about the adjusted gross margin progression in the back half of the year. You've talked about your initiatives gaining traction in the back half. It sounds like another 90 basis point headwind from the tariffs in the third quarter, if I'm not mistaken. And can you confirm that you'll fully restore the margins relative to the tariffs, I guess, in the fourth quarter? And is there anything else that we should be aware of in the back half of the year as we think about the gross margin progression?

Yes. So again, let's walk through that. Certainly, we had some timing delays and -- which are normal. I mean, remember, all of our raw product pass-through pricing, we've been doing this for years. And certainly, in environments where some raw products are increasing, there is a time lag in the pass-through pricing. When it's decreasing, there's also a time lag in the pricing. If you look at our raw product pass-through, over time, it just kind of all evens out, and we suspect that will happen with tariffs as well. But for the tariff impact in the second quarter, by the way, which we covered on the EBITDA line. I mean, EBITDA kind of came through. So this could have been a great quarter, but for that impact. But for that impact, we would have been right on schedule. We're about 1/3 of the 1 quarter through our 3-quarter plan, and we're about 100 basis points of improvement but for that tariff. So I still see us creating capacity. I think we have made progress incrementally in yield, both year-over-year as well as sequentially from the first quarter. Labor is always the hardest because we're talking about adjusting work processes, work protocols and work habits, and we're doing that over 7 plants and 28 shifts. So that's always the hardest, but it was also what we were counting on sort of in the smallest increment for the margin improvement. So at the end of the day, I would say we're exactly on track for where we would be or where we want to be in terms of margin enhancement. And if you look at, at least what we know now on tariffs, and Greg kind of gave you the guidelines of what we think revenue will increase in the back half as well as cost of goods sold. If you do the math, Greg, I think that ends up being a 30-ish, 35-ish basis point impact on margin. But overall, adjusted EBITDA, we can cover. Now Andrew, I would also say I haven't been online in the last 30 minutes. So the tariff situation may have changed, but we're going to be thoughtful and open and transparent with our customers, and they've been very supportive.

Your next question comes from the line of Jim Salera with Stephens Inc.

Brian, I wanted to talk about something you mentioned in your prepared remarks, just understand that there's a disconnect between the syndicated data. But I think the strength in shelf-stable plant-based milk really is encouraging to continue to see. And I was hoping you might be able to give us some details around, are you seeing in terms of what's driving your growth continued share gains among your customers, I guess, in the category? Or are there incremental brands that are coming into the category and that's what's contributing those gains? And as new brands come to the category, they want to work with you given your leadership position on the co-man. side. Any thoughts about the dynamics there would be helpful.

Yes. So Jim, let's kind of talk just about the category, that shelf-stable plant-based beverage category in total. First and foremost, tracked channel is really the only public metric or accessible metric that you have. And there is very little correlation between tracked channel and our unit volume growth. As a matter of fact, I would say it's uncorrelated. But there's a couple of reasons why. One, it's a very small portion of the overall shelf-stable category. It's less than 20% of the overall category. Foodservice and club make up a large percentage of that category and are growing significantly. In fact, just to give you a perspective of how small that tracked channel segment is, subsegment of the category, we know one club channel customer whose shelf-stable plant-based sales are bigger or larger than the entire tracked channel sales volume. So I mean, just to give you some perspective on that. We know foodservice is growing. I think foodservice is growing for a couple of different reasons. One, we see menu expansion, product assortment expansion with our products. Now some of -- most of them are products where our products are ingredients. So the finished good has an ingredients of our product, but we see that expansion. We also see expansion in limited time offers and promotional volume, which again incorporate our products and grow. I would dare say that there's also growth overall in the foodservice category. We see various chains who continue to put up significant year-over-year volume growth, both in foot traffic and sales, and we're growing with them. So when you look at the category in total, foodservice is growing significantly. Club channel is growing significantly. I think club, we would all agree, we've seen private label and club grow because of the -- a lot of the consumer search for both value and quality. And so we see some growth in there. But ultimately, that tracked channel barometer just is not correlated at all to our revenue growth. And we're gaining share, but I think more importantly, the category is growing. And I mentioned high-single digits. We've actually seen it accelerate since the previous quarter.

And then just tying off the second part of my question. Looking at the growth that you see among your customers, is it that they're gaining share in these untracked channels, and that's what's flowing through to the strong results that we see? Or is it that there's kind of new brands or new entrants into the category, just given the overall category strength and you're winning, I guess, what we would call like new accounts or new clients?

Well, I think it's a little bit of both, but it's definitely more heavily weighted to our customers gaining share. Remember, our customers most of the time, generally are outperforming the categories in which they operate by 300 to 600, 700 basis points. So Jim, by definition, they're gaining share. Now whether it's new customers for us or our existing customers gaining share, the important thing is we win. And when we provide a great solution for them, we win, and that's how our volume unit -- our unit volume growth occurs and reoccurs basically. Jim, the only other thing to answer that question, I mean, remember, we get so focused on plant-based beverage, the other thing that I would tell you, is we have a really diversified portfolio. Fruit snacks, we mentioned growing at double-digits for 20 consecutive quarters. Broth growing more significantly than the category. We're growing more significant than the category. Tea is a growing category. Even in our ready-to-drink protein shake category, we're growing. And I think that's a testament that also goes into when you look at our overall revenue figure.

Your next question comes from the line of Jon Anderson with William Blair.

Can I come back to the -- I want to come back to the gross margin and the progression in the back half of the year. I think Greg mentioned that in 2Q, the tariff headwind was 90 basis points and that there would be some carryforward of that into 3Q. Can you just a little bit more detail around that? What kind of a timing-related headwind to gross margin you expect in the third quarter? And then given the pass-through pricing, does that kind of completely overcome in the fourth quarter?

Yes, sure, Jon. So we did have in Q2 over 90 basis points of tariff timing lag of passing through that pricing. That price and those tariffs have been fully passed through to customers now, no impact going forward. The impact that we will have in Q3 is for the new changes that just occurred here on August 1. And we anticipate that there'll be roughly a $2 million impact to Q3. By the time we get to Q4, we should have those fully passed through. So that's reflected in our guide. We feel that for the year, we reaffirm that we'll be able to make this up with operational efficiencies, and we'll be able to still hit our plan for the year.

And then on the pipeline, Brian, I think you said in the prepared comments, it's never been stronger. I know that it's something you kind of emphasized last quarter as well. Could you just give us a little bit more of a -- maybe a current update on the pipeline when you say never stronger, how you're kind of defining that? And as those things kind of move to commercialization to things in the pipeline, does it tilt towards one of kind of your categories or go-to-market strategies or channels over the other?

Yes, sure. So Jon, the way that I would look at that is we talked a lot last quarter about our pipeline reaching essentially almost 25% of our overall annual volume. We don't stop selling, and we don't stop trying to create demand. And so what we've seen over the last quarter is more items have come into the top of that funnel. Certainly, fruit snacks would be one of those. Our better-for-you fruit snacks, we've seen even more acceleration in the category, more need, more desire. It's growing faster than, frankly, we thought or estimated, and it continues to do so. So certainly, we've seen more volume come in for fruit snacks. That being said, as I mentioned, our view of the shelf-stable plant-based beverage category is an accelerating growth trajectory. So foodservice continues to grow. Club channel continues to grow. Private label continues to grow. And that gives us a chance to enter more and more projects into the pipeline. So I don't know that I would necessarily want to get into the habit of saying today, it's 25% or 24% or 26%. But the fact of the matter is the more items that go in the top of the funnel, the greater chance you have something significant coming out of the bottom of the funnel. It also ultimately leads into why we're really confident in our long-term growth trajectory. As a matter of fact, when we talked about our long-term growth algorithm being in the 8% to 10% range, with the growth we're having in '25 and what we can see in '26 and '27, I would think that's probably closer to 10% already with what we see. So again, Jon, it's a lot of different things that are in the mix, certainly more heavily tilted towards existing customers. But there's a fairly robust pipeline of new customers and new opportunities that we're trying to push through the system. So hopefully, that helps.

Yes, that does. I did want to ask also a couple more things. Broth is -- obviously, it's been performing very well for you. I think you mentioned plus growing over 25% in the quarter. I guess, you have kind of scarce aseptic resources, though, and I'm trying to think about how you balance that capacity, aseptic capacity when you're thinking about pursuing plant-based milk versus protein shake versus broth business. Is it any business is the same, is kind of all treated equally? Or how do we think about that? And is that strength in broth, is that kind of a strategic part of the business for you going forward?

Jon, that's a great question, and thanks a lot for asking it. You want to know how we balance the aseptic choices that we have to make with pipeline and growth and customer demand, it is with broth, in fact. It serves as a wonderful opportunity because you can prebuild your broth season. It's very seasonal. Most of the sales are going on between Halloween and New Year's Day, so it's very seasonal. But broth gives us the opportunity to really take advantage of ebbs and flows in the production environment. And so I love the fact that we have broth. We've been able to take advantage of some opportunities in the market. It gives us a chance to produce it when we want to produce it as opposed to necessarily when maybe we have to. And I'm really excited. I mean, if you look at our broth prebuild position now versus a year ago, we're probably closer to 75%, 80% of our broth business that's already built and sitting in inventory. So that gives me great confidence heading into the third and fourth quarter for our broth business. I think the one thing that I would say is, although we wouldn't treat everything equal, there are certain advantages and opportunities to broth during a certain part of the year or potentially plant-based or potentially tea or protein shakes. I do think it is an opportunity for us to always look to optimize. And we do that as a matter of regular course. The key for us, expand the capacity, expand the gross margin, use that to fuel our unit volume growth. And then when the time is right, be prudent and disciplined in growth capital and do that by making sure we use our leverage target and our return on invested capital target as guardrails for how we pace growth investment. So hopefully, that helps as well.

Yes. One quick one follow-up. Did you say -- and again, I'm sorry if I missed it, the -- how much you expect to invest in the new line in Omak to support this tremendous growth you've seen in better-for-you fruit snacks and when that CapEx would likely be spent? And then kind of tied into that, the leverage ratio, it sounds like you're on great -- you're on track to hit kind of 2.5x. How do you think about capital as you enter 2026, more debt paydown, more share repurchase, something else? Any thoughts on that would be great.

Sure, Jon. I'll take your first question first. The new CapEx for fruit snacks will be approximately $25 million, which will mainly hit in 2026 as we anticipate that line coming in -- coming online by the end of '26, really for 2027 growth and beyond. Very high ROIC project, accretive to where we currently are and very excited that we're oversubscribed in that project. When it comes to leverage, Jon, you're absolutely correct. We are on track, and we feel we will hit our 2.5x leverage target by the end of this year, and that remains our top priority, right? After that, and you see it with this growth capital expansion and with the high ROICs, that is where we're going to be investing going forward to support our '27 growth and beyond. But again, we don't need that spend right now, Jon. That's more of a future item. But we're going to continue to invest wisely, right? We do want to have a solid balance sheet with a solid leverage target and stay within the guardrails that we've publicly disclosed of having an ROIC target of 16% to 18% by the end of '26 and going forward.

Your next question comes from the line of John Baumgartner with Mizuho Securities.

First off, Brian, I wanted to ask about the new business pipeline and your bullish commentary there. Can you discuss a bit in terms of the sentiment from your partners, foodservice and retail, to what extent are you seeing any degree of heightened uncertainty in terms of launch timing given the volatility we're seeing from consumers in terms of traffic and spending? How are your customers approaching the macroenvironment?

John, great question. I think let me just remind everyone, our mission is to be a supply chain solutions provider. To do that and do that well for our customers, we meet with our top 15 customers weekly, but at the very least monthly. And what we're doing when we talk to them are we're talking about future sales outlooks. We're talking to them about their inventory position. We're talking to them about assortment, innovation, LTOs, promotion. And so we pull all that together to help inform us, and that's really what informs our outlook on what we can see, not what we hope. And so that's a critical part of the information we gather. I will tell you, based upon that -- those discussions with our customers, that's why we think our pipeline is growing. Based upon those discussions with our customers, that's why we haven't seen a slowdown or an impact yet for some of the macroeconomic environments. And again, that's why we continue to be bullish about our long-term category. I think there's -- our long-term growth trajectory. I think there's also some structural tailwinds. Dietary, health and wellness, nutritional needs, these are not negotiable in a lot of consumers' lives. And I think that's a tailwind to our category. And so we love the fact that we can offer better-for-you value products that meet the customer wherever they shop. If that's from high-end foodservice to QSR, if it's from discount mass merchant stores to natural or traditional retail stores, if it's a brand, if it's private label, we can meet the consumer where they shop.

And then in terms of the supply chain, the aseptic, the Tetra Pak, that's been the standard in your categories for some time. But you look at some of these newer products out there in aluminum cans and plastic bottles, I'm curious the extent to which you may also need to augment your existing capabilities with different packaging formats and maybe that helps inform how you build future capacity for new growth opportunities, maintain max flexibility to service your customers. How do you think about changing the packaging mix kind of pull versus push with your customer base and your categories?

John, I think we always evaluate packaging format. We are always evaluating packaging format. But when I look at our pipeline, at least on our aseptic pipeline, that's all in Tetra format. So I guess the message I would say back to you is we're always looking at it. We're always trying to evaluate it. We're always trying to help shepherd our customers and them us so that we're addressing the consumer need. But the fact of the matter is our pipeline, our aseptic pipeline is an aseptic pipeline built on our Tetra capacity, and I think we've got a lot of runway in the Tetra product.

That concludes our question-and-answer session. I will now turn the call back over to Brian Kocher for closing remarks.

Thank you very much. Thank you all for joining us today. We really appreciate your time, your interest, your questions. As usual, I'd really like to try to summarize these calls and make sure we have a couple of key takeaways. If you remember 3 things from this call, please remember these 3. One, I'm really proud of the progress we've made as an organization. We had a really good quarter that could have been even better. So I'm really proud of the progress. At the beginning of the year, we laid out some pretty ambitious operationally focused growth plans, and our Q2 results demonstrate progress on increasing production capacity, on improving margin, on growing the top line, on building an operational foundation that's set for multiyear success. The short of all of that is, we are on track. So take away, we're on track. Secondly, I'm really energized about our unique opportunity to provide supply chain solutions in fast-growing, on-trend categories. Let me repeat some comments from earlier in the call. We continue delivering unit volume growth that is among the highest of all publicly traded companies in the food and beverage space. We have line of sight to multiple years of growth via our solutions and our capabilities. And so that would be a point that I'd take away. And then third and finally, I'm really confident in our path forward. Our operational improvement plan is on track. Our new business pipeline has never been stronger. Our categories are growing and in fact, some are accelerating. And the channels and customers we serve continue to outperform within those categories. Furthermore, our consumers' preference for better-for-you value-focused options are structural, long-term growth tailwinds. So please remember that as well. Before we end the call, I want to extend my gratitude and appreciation to all the SunOpta employees. Your passion and commitment have made SunOpta stronger and better and provide a trajectory for sustained success. I'm proud of what we've achieved so far, not satisfied, but proud. And I'm really excited to keep moving forward alongside each of you. So thanks for your support. That will end our call today. We appreciate your time. Look forward to updating you when we report next quarter as well. Thank you all.