# To Our Stockholders

_Source: `DeepSeekOCR_Ardian_pruned_1k/consumer-defensive-packaged-foods/NYSE_BGS_2021/NYSE_BGS_2021.mmd` · pages 2-8_

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To Our Stockholders:

## Business Performance

I am pleased to report that fiscal 2021 was a strong year for B&G Foods. We set a company record for net sales, which increased 4.5% to \(2.056 billion. We also successfully completed the integration of the Crisco brand, which we acquired in late fiscal 2020 and represents one of B&G Foods' largest acquisitions.

Notwithstanding our net sales growth, fiscal 2021 witnessed unprecedented industry-wide input cost inflation and supply chain challenges. As a result, our net sales and adjusted EBITDA \( ^{*} \)  finished the fiscal year at the low end of our guidance. Inflation in full year 2021 was in the mid-single digits, with the second half increasing to a double-digit increase across our portfolio. While we were able to mitigate a portion of the impact of inflation by implementing cost savings measures and successfully executing pricing throughout the year, pricing actions generally lag behind rising input costs and therefore we were unable to fully offset the input cost increases.

In addition, we dealt with numerous industry-wide COVID-19 related and other supply chain challenges, including shortages of labor, various product inputs and transportation services, which affected our ability to satisfy demand for many products. We made several key additions to manufacturing capacity in 2021 to meet higher demand, principally for Ortega taco sauce and taco shells and our spices & seasonings. The supply chain challenges and disruptions were exacerbated by the Omicron surge in December and January, which significantly impacted our fourth quarter net sales. While we expect continued supply chain constraints and inflationary pressure in fiscal 2022, the overall supply chain appears to be recovering from the Omicron surge and we have implemented and continue to implement pricing and cost savings measures to recover new and continued inflation impacts.

## Investment Highlights

In our seventeen years as a publicly held company, we have proven our commitment to creating stockholder value by consistently paying a generous and growing cash dividend. Our total stockholder return, assuming reinvestment of dividends, over the prior 1- and 3-year periods ending January 1, 2022 was 17.6% and 29.6%, respectively. We have paid a dividend every quarter since our initial public offering and over the seventeen years since our initial public offering, we have increased the dividend at a compound annual growth rate of 4.9%. We have been able to maintain our dividend policy year after year by growing net sales and adjusted EBITDA over the past seventeen years at compound annual growth rates of 10.6% and 10.1%, respectively. Our dividend yield is among the highest in the industry and we remain committed to our policy of returning a meaningful portion of our excess cash to stockholders. During 2021, we returned $122.9 million of cash to our stockholders.

## Acquisition Strategy

Our ongoing acquisition strategy continued to yield positive results in 2021. We successfully integrated the Crisco brand which we acquired from The J. M. Smucker Co. on December 1, 2020. The Crisco brand performed above our expectations despite major increases and volatility in primary soybean and canola oil inputs. This acquisition is consistent with our longstanding acquisition strategy of targeting well-established brands with defensible market positions and strong cash flow at reasonable purchase price multiples.

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## Corporate Social Responsibility

ESG Mission and Goals. In fiscal 2021, we continued to make important strides in our corporate social responsibility efforts. For example, during fiscal 2021 we developed our environmental, social and governance (ESG) mission and goals, which we adopted and announced in early fiscal 2022. Our five-year diversity, equity and inclusion (DEI) and environmental sustainability goals are described on pages 12, 13 and 15 of the following Annual Report. We plan to report on these goals annually. As a company, we are committed to enhancing our corporate social responsibility efforts and plan to continue to increase our public disclosures regarding the steps we have been taking over the years to promote corporate social responsibility and minimize our impact on the environment.

Diversity, Equity and Inclusion. In 2021 as part of our DEI efforts, B&G Foods founded the B&G Foods Culinary Leaders of Tomorrow Scholarship at The Culinary Institute of America (CIA) to support individuals from diverse backgrounds in their pursuits of culinary careers. With a goal of making culinary education and employment more accessible to all, the B&G Foods Culinary Leaders of Tomorrow Scholarship awards five \(10,000 grants to eligible students at the CIA each year with a total commitment of \)1,000,000 in scholarships over eight years. Food is a universal language, and B&G Foods believes that the culinary arts are made infinitely more powerful with a diverse blend of people and perspectives. Whether students seek employment in or outside the kitchen, B&G Foods hopes that these annual awards will promote greater diversity, equity and inclusion within the world of food.

## In Closing

Overall, the B&G Foods team responded well to the significant challenges facing our industry in 2021. We moved quickly on pricing to confront significant inflation on key inputs and costs. We worked through numerous supply chain constraints to maintain production and deliveries to our customers. We successfully integrated the Crisco brand despite record high soybean commodity prices, and added new capacity to meet elevated demand for core product lines.

Moving forward, we remain focused on the following key priorities:

• first and foremost, managing B&G Foods effectively through the current inflationary, pricing and supply environment;

• improving organic growth performance beyond COVID-19 recovery;

• focusing on brands and categories where we have the capabilities, scale and right to win—in terms of both resources and structure;

• making disciplined acquisitions that are accretive to our portfolio and cash flows, and fit with our core expertise in center store, dry distribution; and

• accelerating cost savings and productivity efforts to eliminate non-value-added costs and strengthen margins.

Despite the challenges of fiscal 2021, demand for our products remains elevated as consumers continue to cook and bake more at home relative to pre-pandemic levels. We believe that post-pandemic trends, including flexible, remote work and renewed interest in cooking, are generating opportunities for our existing (and future) portfolio. I believe stockholders of B&G Foods should continue to expect a bright future ahead.

Sincerely,

![](images/3_0.jpg)

Kenneth C. "Casey" Keller

President and Chief Executive Officer

March 30, 2022