WEBVTT - Lifeway Foods Expands Reach With Walmart Pact

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio news. You're listening to Bloomberg

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<v Speaker 1>Business Week with Carol Masser and Tim Steneveek on Bloomberg Radio.

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<v Speaker 1>Shares up LifeWay Foods. It's the company bind keefer or kaffir,

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<v Speaker 1>depending on how you pronounce it when you see it

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<v Speaker 1>at the grocery store.

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<v Speaker 2>I don't know. You're captain yogurt.

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<v Speaker 1>I am captain Yogurt. They also do probiotic smoothies, farmers

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<v Speaker 1>cheese and more. They swung wildly earlier this month, shares

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<v Speaker 1>that is, searching as much as fifteen point seven percent,

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<v Speaker 1>but following as much as seven point five percent to

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<v Speaker 1>close lower by two point five percent. That was the

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<v Speaker 1>day the company reported earnings that trailed and sales that

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<v Speaker 1>topped estimates for the quarter. I want to bring in

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<v Speaker 1>Julius Smolanski. She's CEO of the three hundred and sixty

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<v Speaker 1>million dollar market cap LifeWay food She joins us from

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<v Speaker 1>Los Angeles. Julie, good to have you back with us.

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<v Speaker 1>How are you great?

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<v Speaker 3>Thank you so much for having me.

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<v Speaker 1>Well, thanks for joining us. I want to talk about

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<v Speaker 1>the state of the company, how you view the consumer,

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<v Speaker 1>but and then also talk a little bit about the

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<v Speaker 1>most recent news that you guys have with the known

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<v Speaker 1>because you've spent a lot of time on our program

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<v Speaker 1>talking about that. Let's start with the consumer and where

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<v Speaker 1>you're seeing areas of growth, because I know you last

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<v Speaker 1>time you spoke with us, you said, yes, Kafir is

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<v Speaker 1>certainly where we're where we're seeing growth, but we're also

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<v Speaker 1>branching out to other things, including Farmer's cheese, where the

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<v Speaker 1>areas of growth be right.

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<v Speaker 4>Now, Yeah, I mean we're seeing Thank you so much. Well,

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<v Speaker 4>LifeWay has never been stronger.

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<v Speaker 1>Uh.

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<v Speaker 3>We are going to have record growth.

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<v Speaker 4>This year, record our our highest historic year of success ever.

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<v Speaker 4>And we're seeing a record demand for functional, nutritious, gut

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<v Speaker 4>healthy foods, high protein and not just protein, but high

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<v Speaker 4>quality bioavailable protein. Not all protein is the same, and

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<v Speaker 4>we're seeing it everywhere. But you know, I think smart

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<v Speaker 4>consumers are really doing deep dives and research into their

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<v Speaker 4>protein choices and they're going to find that.

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<v Speaker 1>Yeah, go ahead, I'm gonna I know, I'm going to

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<v Speaker 1>steal a question from Carol, but it's a GLP one

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<v Speaker 1>question that should always ask. Yeah, go there. You know,

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<v Speaker 1>Sweet Green announced this like ultra high protein salad recently,

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<v Speaker 1>and it's all about for GLP one users. It's like

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<v Speaker 1>one hundred grams of protein and a salad.

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<v Speaker 3>Need it for your muscles?

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<v Speaker 1>Are you Are you seeing this and then the move

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<v Speaker 1>with people on GLP ones, are you seeing them reach

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<v Speaker 1>for kafir.

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<v Speaker 4>Absolutely, it is critical that people who are on GLP ones.

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<v Speaker 4>And roughly fifteen percent of Americans are using a GLP

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<v Speaker 4>one right now and one out of three are curious

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<v Speaker 4>and considering it next year. And I think that's going

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<v Speaker 4>to be a continued rise in consumer behavior. And we

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<v Speaker 4>are there is an absolute necessity in consuming high quality

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<v Speaker 4>bioavailable protein to make sure that you are preventing muscle loss.

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<v Speaker 4>And we also see us all time high in women

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<v Speaker 4>using strength and muscle building exercises.

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<v Speaker 3>At an all time high.

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<v Speaker 4>There's a lot of kind of trends happening all at

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<v Speaker 4>the same time, and we're right at the center of that,

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<v Speaker 4>really meeting the moment at LifeWay.

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<v Speaker 2>So you know, I'm just looking at all your products,

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<v Speaker 2>I mean, what's your money maker? What do you sell

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<v Speaker 2>the most of?

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<v Speaker 4>Obviously plaining kafirra is our number one farmer cheese, which

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<v Speaker 4>we started off the program with farmer cheese has been

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<v Speaker 4>one of our early product number two. My father made

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<v Speaker 4>this in Slavic communities, Russian, Ukraine, Eastern Europe. It's which

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<v Speaker 4>is like a soft, unripened cheese kind of I would say,

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<v Speaker 4>the sexier version of cottage cheese. It's already blended, it's spreadable.

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<v Speaker 4>It's a great canvas to do a lot, and right

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<v Speaker 4>now it's our time to shine with Thanksgiving upon us.

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<v Speaker 4>We have a whole cheesecake campaign, so you can make

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<v Speaker 4>a healthy cheesecake with us, sweet or savory. I also

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<v Speaker 4>like to put this on a potato chip and some

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<v Speaker 4>black caviard.

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<v Speaker 3>That's my favorite chef's kid.

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<v Speaker 1>That's fairs.

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<v Speaker 4>Yeah, very fancy and healthy because again, high quality feel protein,

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<v Speaker 4>not synthetic lab created protein, super super important. So yeah,

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<v Speaker 4>we are really seeing this kind of intersection of culture

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<v Speaker 4>and trends and gut health and probiotics all coming together. Protein,

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<v Speaker 4>high quality dairy is back.

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<v Speaker 2>You just give me an idea of some growth rates.

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<v Speaker 2>I'm looking at a release I think it was from

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<v Speaker 2>you guys or some research here that your Farmer cheese,

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<v Speaker 2>you guys are available in two thousand Walmart stores nationwide.

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<v Speaker 2>That's pretty huge. But my understanding is it's growing at

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<v Speaker 2>double digit year over year rates.

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<v Speaker 3>Is that correct? That is correct.

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<v Speaker 4>Yeah, we just picked up two thousand and Walmart stores.

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<v Speaker 4>We're in all of the Albertson's nationwide, and we are

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<v Speaker 4>expanding into other mass market stores really kind of following

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<v Speaker 4>along with Kaffir, which we have for forty years been

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<v Speaker 4>bringing into mainstream. So our growth is remarkable. We've had

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<v Speaker 4>twenty three quarters of four consecutive quarters year over year

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<v Speaker 4>of growth. That's six full years of growth we have

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<v Speaker 4>year to date from just for twenty twenty five, we're

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<v Speaker 4>at one hundred and fifty seven million. That's compared to

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<v Speaker 4>six years ago. We're up one hundred and twenty three percent.

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<v Speaker 4>So we are on fire. Our shareholder return back from

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<v Speaker 4>six years ago when we announced life Way two point

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<v Speaker 4>zero plan back in November exactly six years ago, our

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<v Speaker 4>shareholder return is eight hundred and sixty percent. So we

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<v Speaker 4>are really, you know, just again on fire. And this

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<v Speaker 4>isn't just a trend. This is something that has been

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<v Speaker 4>long happening. Like in Eastern year, go ahead, Well.

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<v Speaker 1>I just wanted to We don't have a ton of time,

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<v Speaker 1>but I wanted to make sure I got into what's

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<v Speaker 1>been happening lately with the denown interest, because back in September,

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<v Speaker 1>denot And said it will no longer pursue an acquisition

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<v Speaker 1>of LifeWay, and said it's in the process of reviewing

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<v Speaker 1>alternatives for its investment it owns, according to the Bloomberg Terminal,

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<v Speaker 1>about twenty two point seven percent of the company. You

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<v Speaker 1>guys said you will continue to explore value enhancing opportunities.

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<v Speaker 1>You've formed a strategic review committee. What's going to happen

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<v Speaker 1>to ton unstake, Well, we've.

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<v Speaker 4>Registered, they've registered their shares, so you know, we will

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<v Speaker 4>be looking for alternatives, just like like you said. And

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<v Speaker 4>you know, we're really focused on our growth right now.

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<v Speaker 4>We have a lot of opportunities, new products that we've launched,

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<v Speaker 4>new collaborations and partnerships, we're expanding internationally.

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<v Speaker 3>We're the number one brand in Mexico.

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<v Speaker 2>But Jelly does the alternatives that you guys are exploring,

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<v Speaker 2>does that maybe also include maybe selling to somebody else

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<v Speaker 2>or are you planning to continue to go it alone.

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<v Speaker 4>I mean, we believe that we are a strong company independent,

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<v Speaker 4>you know, as an independent company. But you know, we

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<v Speaker 4>always take every offer and evaluate it, and you know,

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<v Speaker 4>make sure that all shareholders are going to benefit from

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<v Speaker 4>any kind of transaction.

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<v Speaker 1>Part of the agreement that you made with to Known

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<v Speaker 1>was that you would separate the chair and CEO roles.

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<v Speaker 1>So now you're continuing as CEO. You're no longer chair.

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<v Speaker 3>That's right?

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<v Speaker 1>How I mean, what are you thinking about in terms

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<v Speaker 1>of your commitment to the company. Are you staying honest

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<v Speaker 1>as CEO for like how many more years? Your what's

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<v Speaker 1>your plan?

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<v Speaker 4>I don't have a crystal ball, but I am very

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<v Speaker 4>much committed and dedicated to LifeWay. My father founded this

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<v Speaker 4>company and I have been CEO for twenty three years

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<v Speaker 4>and it is my pride and joy, and we have

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<v Speaker 4>done a tremendous, remarkable job in our growth and I

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<v Speaker 4>feel like we're just getting started. It really feels like

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<v Speaker 4>that startup energy founder energy. Every single day. I am

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<v Speaker 4>very excited about some of the things we've entered the

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<v Speaker 4>zeitgeist of culture, and that's not by accident. That is

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<v Speaker 4>by strategic marketing, strategic vision and leadership. And you know,

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<v Speaker 4>we were a wordle word in Wordle. We had our

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<v Speaker 4>very first NASCAR. We had the first ever keeper drone

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<v Speaker 4>show in Chicago, which we're going to.

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<v Speaker 3>Be making bigger next year National Keeper Day.

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<v Speaker 4>So wait morning, come, okay, okay, we have to go

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<v Speaker 4>qu We'll have you back soon.

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<v Speaker 2>Julius Molanskape she's CEO of Life Wait Foods.

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<v Speaker 3>This is Bloomboard