Nutrien Ltd. (NTR) Earnings Call Transcript & Summary

Hello, and welcome back. Our next company in fireside chat will be Nutrien, and we're very pleased to have Mr. Mark Thompson with us from Nutrien. He is the Executive Vice President, Chief Strategy and Sustainability Officer. And before we get started with Mark, just 2 housekeeping items. One, for important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com\researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative, and they can help you with those. Secondly, we will take Q&A from those of you that are on the chat. [Operator Instructions] So with that, Mark, welcome, and thank you for joining us.

Thanks, Vincent. Nice to be here with you.

Yes. So maybe a good place to start. Obviously, Nutrien has very diversified business model across retail as well as wholesale crop nutrient production as well as your proprietary brands and seeds and crop chemicals. So you have a really interesting vantage point of what's going on in North American agriculture. And it's obviously been a very interesting 12 months since then what was going on 12, 15, 18 months ago in agriculture and obviously, the world as well. But as we sit here today, we still have very solid corn and soybean prices, and we're also seeing coffee and sugar and cotton and a bunch of other things, palm and so forth. But we've seen a big catch-up in fertilizer prices as well. And so we're starting to feel a fair amount of, "Well, what's the farmer going to do now? Where is affordability? Are they going to switch crops? Are they going to apply less? Nothing going to change? Is there -- are the economics still there?" So maybe you could give us the sort of state of the union in terms of farmer economics and purchasing behavior as far as Nutrien can see.

Sure. Well, thanks, Vincent. First of all, again, for having me. I think you captured the state of the world pretty nicely there. I think maybe just to start, if it's okay, I'll make a few comments about Nutrien and sort of our position and what we're focused on for those in our viewership today that may be less familiar with us as a name. And then we can jump right into your questions. So I think you properly captured it right up front that the agricultural fundamentals are exceptionally strong. And that's been driven by, I think, a strong structural uptick in demand across very important global markets and also some weaker-than-expected agricultural production across key regions over the past couple of seasons. And of course, that strength has translated to very strong demand from a crop nutrient standpoint and in the fertilizer business. And so the backdrop again is very, very supportive. And as you mentioned at the start, Nutrien's business model is very unique. We've got strong structural advantages. We're integrated across the agricultural value chain. So in this type of environment, we're very well positioned to deliver strong results and I think most importantly, serve growers in this type of environment. So if you look at what's happened this year, obviously, we've been very pleased to deliver record results. Our guidance for the full year is in and around that $7 billion of EBITDA. And I think it's one thing to be a price taker in this type of environment. But I think for us, it's about more than that. It's about controlling our controllables and taking key actions with our business model to make the most of the environment. So whether that's positioning the retail business to serve growers and work through challenges in the supply chain to optimally position us to deliver in this environment. I think we've done that. You've seen us flex up potash production and respond to market conditions to make the most of the environment, serve growers and increase profitability, and we've done that and I think similarly in the nitrogen business executed on past investments we've made really across that business as well. So I think we've been very pleased with our results and our performance and have controlled a lot of our controllables, even in this type of supportive environment. I think from a capital deployment standpoint, we continue to demonstrate that we will invest and deploy capital in areas that have been consistent to our strategy. We've returned about $900 million to shareholders so far this year. We've continued to invest in the retail business in the areas we've talked a lot about in growing through M&A and organically and continue to execute on our nitrogen growth strategy. And then, of course, we're a company, Vincent, which maybe we'll get a chance to talk about today that's focused on long-term shareholder value and our long-term viability as a company. And so from a sustainability standpoint, our Feeding the Future Plan, our 2030 targets, we've already started deploying capital to decarbonize our footprint, take CO2 out of our business, serve growers through more sustainable offerings like our carbon program and have a pretty well-defined path to capital deployment in that area. So we've got long-term focus as well. I think just transitioning into your comment on the current environment, Vincent, I think one of the things I'd point to, which we're getting asked a lot is, what's different today versus what we've seen historically, and people look to different moments in time where we've seen strong fertilizer prices in particular. I think if you draw a contrast to where we were a decade or so ago, when we saw sort of the '08, '09 situation play out really, in that environment, you had demand sort of lifting all the different boats. But I think one of the biggest differences we see from a grower and a channel standpoint is in that environment, you had significant speculative stocking of the channel that occurred during that time period, and that really led the demand destruction in the wake of that time period. Today, not only do we have strong demand, but I think we've seen very specific supply disruptions in each of the nutrients, then we have not seen that speculative stocking up of the channel like we saw a decade ago. So I think the fundamentals are different today. The markets where we operate are quite tight. We're doing our best to produce and make the most in those environments. And I think if you look to crop prices, Vincent, as you noted, over the next couple of years, the futures curve would tell us the market expects key agricultural commodities to remain above mid-cycle prices. So growers do have a strong incentive to maximize their productivity in this environment. So heading into 2022, we do feel pretty good about the fundamentals.

Okay. Maybe we start in the nitrogen market and think about the cost curve a little bit, there seems to have been some pretty significant upward movement in the high end of the cost curve, whether it be what's going on with natural gas prices in Europe and Asia as well as a variety of issues with Chinese coal. And yes, North American gas, certainly in the United States has firmed up a little bit, but nothing like the moves we've seen outside of the U.S., and AECO seems to still have a very significant advantage even versus Henry Hub and certainly versus everywhere else in the world. So that energy spread is clearly moving in your favor. But as you guys assess the high end of the cost curve, $35 gas in Europe, what have you, how do you see the cost curve sort of settling out over the next 12 months?

Yes, Vincent, I think a couple of thoughts for you. I'd be remiss if I didn't start by saying, we've been quite constructive, I think quite constructive publicly on nitrogen for the last couple of years, from an S&D standpoint. And so we have expected fundamental tightness in the S&D balance to increase for the last couple of years. And I think given the recency effect of what we've seen with energy prices, there is a lot of focus in that area. But I think even if we rewind the clock to, say, 6 months ago before we saw some of the really significant strength in energy prices in Europe, we had a very tight S&D balance. And I think nitrogen prices had already moved above mid-cycle prices at that point in time and were showing strength. So even before we got to this point where we had the high end of the cost curve really moving up parabolically in some of the areas you talked about, we are already in a tight market. So I think that's really the base fundamental thing to understand here. And of course, if you look at operating rates for the industry, we're well into the 90s. And when we look out over the next couple of years, we see that fundamental tightness continuing, and when you're operating at rates of 95% above, the market becomes very sensitive to any supply disruptions due to energy costs or otherwise, which we know are pervasive in the nitrogen industry. And as you mentioned, given where we operate and our access to AECO gas and NYMEX gas at the far left end of the cost curve, we're very well positioned. On your point about sort of Europe and Chinese energy prices, of course, we have seen about 8 million tonnes of production come out of Europe at this point in time based on European gas prices, and that has really elevated that high end of the cost curve. We would expect that going forward, we will see some moderation of those energy costs and thus, the cost curve start to moderate somewhat. However, I think our view is, given the fundamental S&D tightness, the relevance of that cost curve is somewhat diminished or your chances of staying at the cost curve with the marginal producers cost for any significant period of time really changes in an S&D environment like we're in. So going forward, we remain quite constructive notwithstanding the fact that we would believe energy prices will moderate. And I think even before we were in the situation, prices were already strong.

Okay. So it sounds like you anticipate that we'll remain in a demand-driven environment. Price is largely above wherever the cost curve settles out. And then obviously, the disruptions can amplify that. We've seen recently, China change its export policy to shut off exports pretty much certainly through, depending on who you ask, somewhere between March and June, and we'll wait and see what it winds up being. And we've had some news out of Russia and some news out of Egypt as well in the last few days or a week or so. So what do you envision happening with those countries and their policies? Do you envision those countries utilizing all of that nitrogen that they ordinarily would have exported internally? Or do they just want to keep it local to keep their prices low and then maybe some of that will get released after their peak season of demand is over? Or how do you envision all that playing out?

Yes. Look, Vincent, I think you'd probably agree, it's always risky to forecast government policy. So I certainly won't try to do that. However, I think you've characterized some of what we would see pretty accurately in that, again, depending on who you talk to and what you expect, there is the potential for Chinese exports to be substantially diminished. And I won't go back on what I already talked about, but I think we've established we've got a pretty tight S&D balance already. And any removal of Chinese exports from the market for any significant period of time will only serve to tighten that further and, I think, support prices. From a Russian standpoint, I think your point is also on the mark in that, I think what's going on there is a disincentive to allow nitrogen, which is needed in the country for domestic end uses to not exit the country and create sort of an incentive or a hurdle to make sure that some of that production stays in the country and doesn't respond to the price incentive that out there internationally. So to the extent that you see exports from those regions remain depressed for any significant period of time. I think it only goes to strengthen the fundamental story we've already talked about.

And can you talk a little bit about Nutrien's own nitrogen production capabilities in the expansions that, you did one phase and now you are working on the second phase so, it's brownfield low cost short payback period, high return. So how much more of that do you have within your own sort of fence lines and how should we be thinking about that?

Well, Vincent, I think you accurately characterize the Phase 1, we'll call them Phase 1 brownfield expansions for Nutrien anyways. We started a program in 2018 to add 500,000 tonnes of additional capacity, as you noted very short payback, very efficient capacity benefiting from low cost feedstock for an energy standpoint in the markets, where we operate and very high net backs in the market that we sell to. So those projects were completed successfully. We were right on budget. We're right on time. I think we had originally expected there would be very strong IRRs, well on the 20s on some of those projects. And that was based on sort of a more moderated mid-cycle set of prices. So in this type of environment certainly some of the best investments we've ever made in the nitrogen business for very efficient tonnes. We've just actually approved a second wave of projects earlier this year, about $260 million in total capital, again across multiple sites. The weighted average return of those projects would be about 25%. And so given, I think, the proven availability to execute and layer those into our network, very efficient tonnes and again a very prudent and a strong use of capital. So, if you look at our sales volumes today, kind of in the high 10s, approaching 11, we would expect that, that first wave kind of gets us sort of 11.2, 11.3 million tonnes. And as we complete that second wave in the years to come, we start to move up towards that 12 million tonne number from a nitrogen standpoint. And we actually have further optionality in the portfolio beyond Phase 2 if we feel that's an interactive use of capital once we move through the second wave of expansions. I think, Vincent, I'll also just mention, again, referencing the Feeding the Future Plan, we're already what we would consider to be a world leader in blue ammonia production. We produce and sell about 1 million tonnes of blue or low-carbon ammonia today. And we've already started deploying capital to get to our target of taking 1 million tonnes of CO2e out of the network by the end of 2023. And I think we've got a pretty well-defined path to what we believe is going to be a very attractive growth area for ammonia to serve as a potential fuel source for the marine industry, as a potential hydrogen carrier and really a significant growth avenue for that business. So we're a leader there today, and we're already deploying capital to further decarbonize the footprint. And I think we've got more optionality in our network beyond that. So a lot of attractive room around in nitrogen.

Okay. Excellent. We'll come back to the green aspects of that later. Maybe we shift to the potash market outlook, some similar dynamics, very strong demand environment, NOx S&D, you don't have the energy cost curve situation. Obviously, potash is rock. It's not a gas or a coal-based product. But we have had some supply disruptions there as well and some concerns over what could happen with Belarusian exports and so forth. So how do you assess that market? It's sort of the potash price. If I look at the chart of the 3 nutrients, potash sort of was the laggard and then caught up very quickly in terms of the slope of the line of the price increases. So how are you thinking about potash going into 2022?

Yes. Well, first, Vincent, I think when you look at agricultural fundamentals, clearly in this type of crop price environment, there's a very strong incentive to maximize crop productivity. And obviously, a potash is a critical part of that. And so we've seen really strong demand for potash prevail in 2021. Global shipments will be at a record level this year. And our strategy hasn't changed with respect to potash. I think we've always said, we will maintain our market share as the market grows. And I think the most unique thing about Nutrien's global position is the fact that we've got 6 low-cost assets. We've got network optionality, and I think you saw that on full display this year, given that we did see production outages from other producers in Canada. And as you noted, I think the lingering uncertainty around what could happen with exports out of Belarus and Nutrien proactively stepped into that situation to flex up production quite quickly and I think, support growers with availability but also capitalize on the environment. So it is a very fundamentally tight and strong market today. If you look at what we did in 2021, Vincent, we're going to produce about 14 million tonnes in the calendar year. Obviously, we'll be able to give, I think, a little bit firmer guidance on how we see the market shaping up when we report in Q4 when we get to February. But at this point, based on what we're seeing and what we know, we would expect our production levels and our outlook to be right around that 14 million tonnes heading into 2022 again. And obviously, as we've seen in this industry, time and again over the past decade or 2, while the supply outages can look like they're one-offs, they're not that unusual over the course of decades, but we do see supply come out of the market. So we'll also position ourselves that if the market needs more from us, we'll leave some optionality to flex further into the remaining 4 million tonnes of latent capacity that's low cost and available to us.

Yes. Maybe you could talk a little bit more about that 4 million tonnes and what the complexities are in terms of bringing it on in terms of what the lead time is. And is the workforce out there readily available to bring back? And how much training do they need? And do you just want to bring them back for 6 months? Or do you have to feel like you've got a line of sight where you could run a plant for 1 year or 2 years? Or how does that calculus work?

Sure. Well, of course, Vincent, there is calculus around that. But I think for the purposes of today's discussion and maybe say a few things. I think 2021 is a good indicator that when we looked at adding 1 million tonnes in 2021, that was done in a pretty nimble fashion. Our potash team responded quite quickly to the outage of other Canadian production to sort of look to the second half to ramp that production up fairly quickly and at fairly minimal cost to bring that 1 million tonnes on. We don't see a scenario, just to be very transparent, where you would be bringing that full 4 million block under in any real scenario that we see as probable as playing out. But I think in a theoretical sense, if you look at that 4 million as a block, you would need a period of months to bring it back on. But largely, we look at that latent capacity as bought and paid for, for the most part. Of course, there are some start-up costs. And if you look at the 4 million as a total, probably $100 million to $200 million in total capital to sort of restart that in a period of months to plan for labor availability, but the way we practically see that playing out over time is consistent with our strategy. As demand grows, we'll continue to grow our production in line with maintaining our market share. So I think you see it come on in an incremental way where we can plan for it pretty effectively.

Okay. And what about just sort of broader, I mean, we have very attractive potash prices, prices that are above the levels at which the industry has always talked about, reinvestment economics or incentive pricing for greenfield. So obviously, very good times right now, very snug environment. But how do you sort of assess, how much more capacity this might incent? Obviously, it would take a long time to come online. But how do you think about not running 4 million tonnes, but having prices that might encourage other folks to add tonnes?

Yes. Right now, Vincent, we don't see a lot of major greenfields that have not already been approved or announced on the horizon. I think what history in this industry has proven is that those projects take longer. They're more expensive than anybody thinks they're going to be. And one of Nutrien's predecessor companies, I think you could argue, is one of the most effective at delivering those projects very close to budget and in a very disciplined way. So we've got a lot of experience in that industry. But I think history has proven also that when those projects are announced in mass waves, the industry can overbuild itself, and we don't see that this time. I think those lessons from the past have been heated, and so we don't see a big wave of greenfields on the horizon aside from what's already been announced. Of course, in this type of price environment, the marginal brownfield project for certain global producers might become more attractive. But when we look out at the horizon, certainly over the 2020s, we see the need for several million tonnes more of production over the next couple of years. And when we look at the 4 million tonnes of latent capacity in our network that you just mentioned, certainly, we're by far best positioned from an investment economics and availability standpoint to meet that need.

And above and beyond that, I believe you have further capacity that you could go after on a brownfield basis, low cost, short payback, high return kind of situation, correct?

We do. And there is a very attractive optionality there when you look to the very long-term viability of the potash business and how we can play a role, meeting the demand of the future in decades to come. And the best thing about that capacity in my view is, one, it's low cost. So on an average basis, we've done some preliminary studies, and we understand where it sits. It's at multiple sites in the network, so it doesn't need to come all in one chunk. And on an average cost basis, it's extremely attractive from a capital cost per tonne standpoint in and around that $500 per metric tonne level based on the most recent studies we've done, which I think would arguably position us in an attractive spot in the industry to bring brownfield capacity on in the decades to come. Of course, the first order of business, the best return we have is continuing to grow with the market and unlocking the latent capacity just like we did this year. And the brownfields give us further optionality to go from 18, which is our existing operational capacity to 23 in the future.

Okay. Maybe if we just switch gears and go to retail, which has had an extremely strong year, both because of just underlying grower demand for a manner of products just given the economic environment, but it also seems like it's done quite well with the fertilizer price increases and capturing its fair share of those. How is retail position going? First of all, how is the fall application season going? And how are you positioning retail into 2022?

Sure. So maybe we'll just start, Vincent, with a couple of comments on 2021. So as you noted, anyone we've discussed today, agricultural fundamentals are very strong and in the type of backdrop that we're seeing today, certainly, agricultural producers want to maximize productivity and there's a good profitability incentive to do so. So we've seen a very strong pull just generally, I think, at the farm level. If you look to our comparable sales store growth that we reported just a few weeks ago for the third quarter, it's about 5% growth, which I think speaks to not only the underlying demand that's there at the farm level, but I think Nutrien has done exceptionally well in our Ag Solutions business in that environment. One of the reasons for that, obviously, is we've got unparalleled infrastructure across our network, our agronomist -- 3,600 agronomists. And I think historically, if you look to the levers we have to capitalize on this environment from an organic growth standpoint as well, our proprietary products business in Loveland products, the acquisition of Actagro and other products companies, which really growers want those high-value products that can really drive yield in this type of environment. Nutrien Financial positions us exceptionally well and then you look across just the entire portfolio of technologies and services from a digital and a sustainability standpoint and that really shines in this environment. So not only did the market benefit Nutrien Ag Solutions, we saw from our research, our business gained share across all 3 major crop input shelves, so outperforming the market and gaining share in chemistry, fertility and seed in this environment, which has really driven our results. As you noted, certainly, we've benefited from strategic procurement in a rising price environment. That's inevitably part of the story here. But I think you go back to controlling your controllables. With supply chain challenges being what they have, it's easy to look at the numbers, but I think, again, positioning ourselves to have what growers need and be profitable and perform so well in this environment has been a major accomplishment. As we look to 2022 and to your question on the fall season, Vincent, obviously, progress and harvest are moving along well. With the agricultural backdrop that we see today, we see every reason for growers to act on the economic incentive for a strong pull this fall. And I think heading into 2022, again, looking to the futures market, certainly, major crops are providing an economic incentive for growers to continue to maximize and optimize use of crop inputs. So we expect a positive backdrop moving into next year.

Great. Maybe we could shift gears now to -- there's obviously going to be a lot of free cash flow generated both through this year and into next year and beyond. How are you thinking about capital allocation? I know there's some debt paydown targets, but what about with excess cash in terms of buybacks and the dividend and so forth?

Sure, Vincent. So first, what I'd say is I think we've got really attractive capital deployment options that exist in our core business today. I think the go-forward plan really can be highlighted to looking to what we've done as well as instructive to the areas we're going to continue to focus. So in 2021, so far, we've returned about $900 million in capital to shareholders through both dividends and our share repurchase program. As you noted, in the quarter, we announced that we were going to look to delever and deploy $2 billion approximately on liability management. I think it's important to say we don't view that as a change in capital structure. We think our capital structure and our targets make sense. It's really looking at our capital structure on a through-the-cycle basis, and BBB flat is still where we want to be. I think really this is a timing issue of cash influx given the strength in fundamentals and doing some liability management to put us in a position to deploy that capital responsibly going forward. And then if you shift to look at the growth capital we've deployed in the business, I won't repeat what I said about nitrogen, but we've made very attractive investments in the nitrogen business already that have been extremely strong returns. And as we discussed, we see an opportunity with Phase 2 that we're working on now to deploy another $0.25 billion on those projects, and there's more optionality going forward. And in retail over the past 22 months or so, we've deployed about $300 million in Brazil, in line with our stated strategy to complete 5 acquisitions and build a really attractive business in what we consider to be a marquee and very important agricultural market. And we've also continued with our tuck-in program in mature markets like U.S. and Australia in a very disciplined way where we have a proven track record of adding value. And then as we also talked about, I think the latent capacity provides us with the benefit of not needing to deploy significant investment in potash from a growth standpoint. And really, we've got those tonnes we can unlock without any significant capital. So we do have growth levers across all the business. And I think going forward, Vincent, I would look to those same areas in terms of continued retail growth, the continued growth of the nitrogen business in the areas we've announced and talked about. And then looking, I think, to layer in returns of capital where we see that as the most attractive deployment option.

Okay. Maybe with our remaining time, we could talk about -- you mentioned earlier your sort of existing position in the blue ammonia sphere. But maybe you could talk to us a little bit about what you're thinking about in terms of growing that position and over what period of time.

Sure. So I'll just reiterate to start that we do consider ourselves to be a leader in low-carbon ammonia today. We've got a million tonnes in the network today that we would consider to be blue ammonia, puts us in a really, I think, strong position, and we've been doing this for several years. This wasn't about mandates or targets. I think we've seen an attractive opportunity to both mitigate risk in a potentially higher future carbon tax environment in the future. But I think that's really the base of the pyramid. It's less about risk management. I think that's just table stakes. There is a lot of opportunity in this area that we see going forward. So now as I said, we've already started deploying what's a very modest amount of capital to take 1 million tonnes of CO2 equivalent out of the network by the end of 2023. That's through projects like N2O abatement at our facilities, additional carbon capture utilization and storage opportunities and energy efficiency initiatives, and that makes an abundant amount of sense to continue to move in that direction. I think as we look forward, we've got those levers available to us. But what we're also exploring is the potential for technologies that can take low carbon to a new level. So talking about CO2 reductions in the 90-plus percent level and getting it much close to what I'll maybe call teal ammonia, which is very close to green. It's always tough with the color palette. But we are exploring technologies from our own industry and other industries that we believe can drive near carbon-free ammonia. And I think if you look where this market is headed, we're very encouraged by the potential future industrial end markets as real growth engines for the future of the ammonia business. Again, I mentioned ammonia as a potential fuel source for the marine transport industry, ammonia as a potential hydrogen carrier and just generally, playing a role in the global decarbonization efforts that are underway. And by some estimates, we could see demand for those types of ammonia products that are many multiples of the globally traded ammonia market today. So we see an opportunity for attractive returns there and to position ourselves in that equation. I think, Vincent, it bears mentioning that from a pure green ammonia standpoint with renewables or electrolysis today, certainly, there's improvements in technology that are needed and some challenges from an economics perspective, that don't pencil out today, but we are working on pilot projects with partners at small scale to explore those technologies to provide ourselves with as much optionality as possible to really benefit from, I think, some secular trends we see shaping up in the years to come.

And maybe just lastly, because I think it's really interesting with your position in retail, there's growing conversation about sort of carbon neutrality on farm and the opportunity for farmers to get paid for sequestering carbon. What's Nutrien's role in that going to be?

Sure. Well, I think, Vince, the most tangible thing I can point to is the carbon program that we launched at the end of last year and our pilot program that we've scaled up this year. We've taken a very measured approach. We're running 9 different pilot structures. We initially targeted about 100,000 acres in that program in North America. We had a lot of interest internally and externally. So we doubled the acreage under that program to 200,000. And I think what the goal of this year is to really learn and pilot and work with growers and the value chain to understand the existing protocols. And I think a couple of areas: one, where is this ready for scale; two, where is more time needed for investment to work with existing protocols; and what needs to be derisked further to really take this to a new scale. But I think growers are in a position to really be a positive part of the story and being a catalyst for climate action. And if you look at Nutrien Ag Solutions position, as we've already talked about, working with 500,000 growers around the world, having the agronomist army that we have and all the products and services and technologies, owning soil sampling capabilities, we're really ideally positioned to be a partner in that effort. And our efforts in the carbon program are aimed at doing exactly what you're talking about, not only looking at the soil as a carbon sink with practices like no-till and cover cropping but also looking how loss of nitrogen on the environment can be managed and our proprietary product portfolio of Loveland products, our enhanced efficiency fertilizer portfolio can play a big role in that. So I think there is promise there. We're going to need to see it play out over time. I think this is a long-term story, not a fly-by-night story. And we want to be the company that's thoughtful that does this in a science-based way so that we're really the ones that can help drive this to scale over the long term. I think, Vincent, maybe the other comment that I'd make that's related but different is that we also see our role evolving as a partner to players in the agricultural value chain, and even food and beverage companies, increasingly approaching us for what I like to call sustainability as a service. They want to decarbonize their own supply chains. They've got consumers who want to understand the attributes of food. And again, if you look at the retail business, we're running pilot programs and actual campaigns today with a number of participants in the ag value chain to create attributes, to reduce greenhouse gas emissions on the acre in a variety of outcomes that consumers want and CPG companies want to provide to consumers. So that's an evolving area of opportunity for our retail business in the sustainability environment.

Excellent. That's very exciting. We have run up on time. So I'm going to thank Mark very much for your time and for all of your answers today. It was really fascinating. Thank you again.

Thanks, Vincent. Great to be here with you.