Company: THS
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001320695-25-000107
Chunk: 71

Company: TreeHouse Foods, Inc.
Filing Date: 2025-11-10
Form: 10-Q
Item: Part I, Item 1
Chunk 71
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 insurance recovery for the voluntary recall of frozen griddle products and an additional $4.5 million insurance recovery for the voluntary recall of certain broth products within Cost of sales in the Condensed Consolidated Statements of Operations. 

Subsequent to September 30, 2025, the Company was notified that it would be receiving an additional $7.0 million insurance recovery for the voluntary recall of frozen griddle products, resulting in a total amount of insurance recoveries received of $30.0 million, which is the maximum recovery available for the recall. The Company is seeking to recover additional broth recall-related costs through its insurance coverage, and such recoveries are recorded in the period in which the recoveries are determined to be probable of realization. Refer to Note 16 to our Condensed Consolidated Financial Statements for additional information.

RTD Business Exit

During the second quarter of 2024, the Company made the decision to exit the RTD business as part of the Company's portfolio optimization strategy to focus on higher-growth, higher margin categories. During the first quarter of 2025, production for the RTD business ceased, and the Company sold the related machinery and equipment. Refer to Note 3 to our Condensed Consolidated Financial Statements for additional information.

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Macroeconomic Conditions and Trends

Persistent inflationary pressures on U.S. households are contributing to sluggish overall food and beverage consumption trends. In the categories where TreeHouse operates, private brands have consistently gained market share when compared to national brands, and many grocery retailers are making strategic investments in private brands. We continue to monitor consumption trends including initiatives that emphasize health and nutrition, as well as increased use and/or prevalence of certain weight loss drugs, which may or may not impact consumer preferences and consumption patterns. Additionally, continued economic uncertainty may further impact consumer spending and thus, consumption trends.

Many of our ingredients and packaging input costs remain elevated when compared to historical levels, including the prices of coffee and cocoa. In response, from time to time we will implement pricing actions to recover these higher costs. We will continue to monitor the inflationary environment, as well as regulatory impacts on food ingredients, to determine if additional pricing actions will be necessary.

As it relates to tariffs, our manufacturing footprint consists of 21 production facilities in the United States and five in Canada. A substantial portion of our products manufactured in Canada that are shipped to the United States qualify for duty-free treatment under the United States-Mexico-Canada Agreement ("USMCA"). We source a portion of our raw materials and