# To Our Stockholders

_Source: `DeepSeekOCR_Ardian_pruned_1k/consumer-defensive-packaged-foods/NYSE_BGS_2022/NYSE_BGS_2022.mmd` · pages 2-8_

---

To Our Stockholders:

## Business Performance

Fiscal 2022 was a challenging year, with rapidly rising inflationary input costs across key commodities (particularly following the commencement of the war in Ukraine), and the constant pressure of implementing pricing actions that lagged cost increases to adhere to customer lead time requirements. For fiscal 2022, the total input cost inflation impact across our portfolio was greater than 20%. Net sales increased 5.2% to \(2.163 billion (a company record) behind pricing across the portfolio to recover high input cost inflation.

As a result, our adjusted EBITDA \( ^{*} \)  reflected the impact of industry-wide input cost inflation and supply chain disruptions, declining 15.9%. Additionally, gross profit was negatively impacted by higher-than-expected input cost inflation, including materially increased costs for raw materials and transportation. 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 rising input costs and could not fully offset the total input cost increases.

However, we are encouraged by our fourth quarter 2022 results and performance. The fourth quarter results and performance demonstrated strong recovery, reflecting the catch up of cumulative pricing actions against inflationary cost, a moderating inflationary environment, and the recovery of our higher margin spices & seasonings business. Net sales grew 9% in the fourth quarter behind pricing implementation and supply recovery, with margins improving versus the fourth quarter of last year. The fourth quarter of 2022 was the first quarter in fiscal 2022 where margins were at least flat or improving year over year.

## Investment Highlights

In our eighteen years as a publicly held company, we have proven our commitment to creating stockholder value by consistently paying a cash dividend. We have paid a dividend every quarter since our initial public offering. In large part because of the current inflationary environment and rising interest rates under our credit agreement, we reduced our dividend rate to $0.76 per share per annum in November 2022. Although our company reduced the dividend rate, our board of directors reaffirmed our company's dividend policy, which reflects a basic judgment that our stockholders are better served when the company distributes a substantial portion of its cash available to pay dividends to stockholders instead of retaining it in the business. Under this policy, a substantial portion of the cash generated by our company in excess of operating needs, interest and principal payments on indebtedness and capital expenditures sufficient to maintain our properties and other assets is distributed as regular quarterly cash dividends to the holders of our common stock and not retained by us. We believe the new dividend rate is sustainable in both the short- and long-term, consistent with our desire to provide stockholders with an attractive and reliable return on investment, and consistent with our commitment to reduce our leverage.

## Transition to Business Units

In June 2022, we announced that we are transitioning our company from a function-based organization structure to a business unit structure to establish clear focus and drive organic and acquisition growth. The four newly created business units are Spices & Flavor Solutions, Meals, Frozen & Vegetables and Specialty. These business units will define the categories and brands that we will resource and grow, the platforms for future acquisitions, the brands that we will run for efficiency and cash flow, and the businesses we may exit

<--- Page Split --->

over time. The business unit structure will also push accountability and multi-function responsibility down to more closely managed parts of the complex B&G Foods portfolio—improving the speed and clarity of decision-making to deliver financial performance and growth.

In connection with the transition to business units, we began making progress on reshaping the B&G Foods portfolio by completing the sale of the Back to Nature brand in January 2023. This was a proactive step to exit the small, fragmented, lower margin snacks portfolio that is outside of the future of B&G Foods' core.

## Fiscal 2023

In fiscal 2023, we expect inflation to continue at lower rates. We plan to raise prices selectively to recover higher input costs, but only against key commodity categories versus the broader actions required in fiscal 2022. Overall, we expect fiscal 2023 to demonstrate continued margin recovery as pricing actions previously implemented in 2022 along with the more selective pricing actions in the first half of fiscal 2023 offset year over year inflation.

## Corporate Social Responsibility

Environmental, Social & Governance (ESG) Mission and Goals. In fiscal 2022, we continued to make important strides in our corporate social responsibility efforts. For example, during fiscal 2022 we adopted and announced five-year diversity, equity and inclusion (DEI) and environmental sustainability goals, which 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. As part of this commitment, we expect to publish our first annual corporate social responsibility report in fiscal 2023.

Corporate Philanthropy. In January 2022, we adopted philanthropy principles that include promoting food security, supporting the communities where B&G Foods employees live and work, and accelerating diversity in the culinary arts.

• Promoting Food Security. As a leading manufacturer of high quality, well known food brands, we believe we can make a difference in the community by supporting causes and organizations that promote food security and education to ensure those in need have access to safe and nutritious food.

In November 2022, we announced a philanthropic partnership with America's Grow-a-Row (AGAR), a not-for-profit organization that grows and gleans fresh, healthy fruits and vegetables that are donated to those suffering from hunger or living in areas that lack reliable access to fresh, affordable produce. In February 2023, we donated $250,000 to AGAR, which will result in the planting, growing, harvesting and distribution of 1.25 million servings of fresh produce to communities in need across the United States.

• Supporting the Communities Where We Live and Work. At B&G Foods, we combine our passion for food with our passion for supporting and giving back to the community. We donate food, money and our time and expertise to various causes and charitable efforts at the corporate, brand and local levels, and encourage our employees to do the same. Through these efforts we strengthen, educate and feed our hometown communities across North America.

• Accelerating Diversity in The Culinary Arts. Food is a universal language, and we believe the culinary arts are made infinitely more powerful through a diverse blend of people and perspectives. As part of our ongoing commitment to diversity, equity and inclusion, we offer culinary arts scholarships to cultivate the talents of underrepresented students to maximize their impact in the culinary world.

In 2021, we 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

<--- Page Split --->

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. Scholarship recipients who continue their education in good standing will receive the award each year until graduation.

## In Closing

Overall, the B&G Foods team responded well to the significant challenges facing our industry in 2022. 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. While we certainly had our share of challenges in fiscal 2022, we are encouraged by our results in the fourth quarter. Our transition to four business units remains on track and we made progress on reshaping the B&G Foods portfolio with the sale of the Back to Nature brand. Our business unit leadership is working to drive improved margins, better manage supply and demand and build stronger growth plans. While the structure of our company may have changed, our values have not. Our passion for what we do, our commitment to food safety and quality; diversity, equity and inclusion; integrity and accountability; our customer and consumer focus; our commitment to the safety and health of our employees; and our belief in collaboration and empowerment are the values that drive what we do day in and day out. It is because of these values that our company has been successful through the years, and remains committed to driving a bright future ahead.

Sincerely,

Kenneth C. "Casey" Keller

President and Chief Executive Officer

March 30, 2023

March 30, 2023