VITAL FARMS, INC., 10-K filed on 3/7/2024
Annual Report
v3.24.0.1
Document and Entity Information - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Mar. 04, 2024
Jun. 25, 2023
Cover [Abstract]      
Document Type 10-K    
Amendment Flag false    
Document Period End Date Dec. 31, 2023    
Document Fiscal Year Focus 2023    
Document Fiscal Period Focus FY    
Current Fiscal Year End Date --12-31    
Entity Registrant Name Vital Farms, Inc.    
Entity Central Index Key 0001579733    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company true    
Entity Ex Transition Period false    
Entity Shell Company false    
Entity Voluntary Filers No    
Entity Well-known Seasoned Issuer No    
ICFR Auditor Attestation Flag false    
Security 12b Title Common Stock, - par value $0.0001 per share    
Trading Symbol VITL    
Security Exchange Name NASDAQ    
Document Annual Report true    
Document Transition Report false    
Entity File Number 001-39411    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 27-0496985    
Entity Address, Address Line One 3601 South Congress Avenue    
Entity Address, Address Line Two Suite C100    
Entity Address, City or Town Austin    
Entity Address, State or Province TX    
Entity Address, Postal Zip Code 78704    
City Area Code 877    
Local Phone Number 455-3063    
Entity Common Stock, Shares Outstanding   41,795,788  
Entity Public Float     $ 402,240
Auditor Firm ID 185    
Auditor Name KPMG LLP    
Auditor Location Austin, Texas    
Documents Incorporated by Reference

Portions of the registrant’s definitive proxy statement for the registrant’s 2024 annual meeting of stockholders, to be filed within 120 days after the close of the registrant’s fiscal year, are incorporated by reference into Part III of this Annual Report.

    
Document Financial Statement Error Correction [Flag] false    
v3.24.0.1
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 25, 2022
Current assets:    
Cash and cash equivalents $ 84,149 $ 12,914
Investment securities available-for-sale 32,667 65,814
Accounts Receivable, net of allowance for credit losses of 550 and 699 as of December 31, 2023 and December 25, 2022, respectively 39,699 38,895
Inventories 32,895 26,849
Prepaid expenses and other current assets 6,114 5,142
Total current assets 195,524 149,614
Property, plant and equipment, net 66,839 59,155
Operating lease right-of-use assets 8,911 1,895
Goodwill and other assets 3,904 4,002
Total assets 275,178 214,666
Current liabilities:    
Accounts payable 33,485 25,972
Accrued liabilities 24,218 18,477
Operating lease liabilities, current 3,057 1,208
Finance lease liabilities, current 3,255 1,570
Income taxes payable 1,206 425
Total current liabilities 65,221 47,652
Operating lease liabilities, non-current 5,771 892
Finance lease liabilities, non-current 10,481 7,023
Other liability, non-current 1,028 767
Total liabilities 82,501 56,334
Commitments and contingencies (Note 20)
Stockholders’ equity:    
Preferred stock, $0.0001 par value per share, 10,000,000 shares authorized as of December 31, 2023 and December 25, 2022; no shares issued and outstanding as of December 31, 2023 and December 25, 2022, respectively 0 0
Common stock, $0.0001 par value per share, 310,000,000 shares authorized as of December 31, 2023 and December 25, 2022; 41,684,649 and 40,746,990 shares issued and outstanding as of December 31, 2023 and December 25, 2022, respectively 4 4
Additional paid-in capital 163,325 155,716
Retained earnings 29,725 4,159
Accumulated other comprehensive loss (377) (1,547)
Total stockholders’ equity 192,677 158,332
Total liabilities and stockholders' equity $ 275,178 $ 214,666
v3.24.0.1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 25, 2022
Statement of Financial Position [Abstract]    
Accounts Receivable, net of allowance for credit losses $ 550 $ 699
Prepaid expenses and other current assets, net of allowance for credit losses $ 227 $ 206
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 310,000,000 310,000,000
Common stock, shares issued 41,684,649 40,746,990
Common stock, shares outstanding 41,684,649 40,746,990
v3.24.0.1
CONSOLIDATED STATEMENTS OF INCOME - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Income Statement [Abstract]      
Net revenue $ 471,857 $ 362,050 $ 260,901
Cost of goods sold 309,531 252,606 178,002
Gross profit 162,326 109,444 82,899
Operating expenses:      
Selling, general and administrative 101,728 77,236 57,868
Shipping and distribution 27,344 30,104 24,979
Total operating expenses 129,072 107,340 82,847
Income from operations 33,254 2,104 52
Interest expense (782) (114) (52)
Interest income 2,542 992 381
Other expense, net (2,813) (151) (27)
Total other income (expense), net (1,053) 727 302
Net income before income taxes 32,201 2,831 354
Income tax provision (benefit) 6,635 1,601 (2,028)
Net income 25,566 1,230 2,382
Less: Net loss attributable to noncontrolling interests 0 (21) (47)
Net income attributable to Vital Farms, Inc. common stockholders $ 25,566 $ 1,251 $ 2,429
Earnings Per Share      
Basic: $ 0.62 $ 0.03 $ 0.06
Diluted: $ 0.59 $ 0.03 $ 0.06
Weighted average common shares outstanding:      
Basic: 41,192,544 40,648,592 40,027,278
Diluted: 43,312,836 43,469,586 43,321,733
v3.24.0.1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Statement of Comprehensive Income [Abstract]      
Net income $ 25,566 $ 1,230 $ 2,382
Other comprehensive income (loss), before tax:      
Unrealized net holding gain (loss) 1,371 (1,745) (385)
Amounts reclassified for realized losses to earnings 182 96 55
Available-for-sale debt securities, before tax 1,553 (1,649) (330)
Other comprehensive income (loss), before tax 1,553 (1,649) (330)
Income tax (expense) benefit related to items of other comprehensive income (loss) (383) 383 80
Other comprehensive income (loss), net of tax 1,170 (1,266) (250)
Comprehensive income (loss) 26,736 (36) 2,132
Less: Comprehensive loss attributable to noncontrolling interests 0 (21) (47)
Comprehensive income (loss) attributable to Vital Farms, Inc. common stockholders $ 26,736 $ (15) $ 2,179
v3.24.0.1
CONSOLIDATED STATEMENTS OF REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS EQUITY - USD ($)
$ in Thousands
Total
Redeemable Noncontrolling Interest
Variable Interest Entity, Primary Beneficiary
Common Stock
Treasury Stock
Additional Paid-In Capital
Retained Earnings
Accumulated Other Comprehensive Loss
Total Stockholders' Equity Attributable to Vital Farms, Inc. Stockholders
Noncontrolling Interests
Beginning Balance at Dec. 27, 2020 $ 142,210   $ 5 $ (16,276) $ 144,311 $ 14,039 $ (31) $ 142,048 $ 162
Beginning balance at Dec. 27, 2020   $ 175              
Beginning balance, Shares at Dec. 27, 2020     44,938,958            
Beginning Balance, Shares at Dec. 27, 2020       (5,494,918)          
Exercise of stock options 2,803       2,803     2,803  
Exercise of stock options, Shares     1,034,929            
Vesting of restricted stock units, Shares     15,000            
Stock-based compensation expense 4,440       4,440     4,440  
Net loss attributable to noncontrolling interests - stockholders (47)               (47)
Retirement of treasury stock       $ 16,276 (2,554) (13,722)      
Retirement of treasury stock, Shares     (5,494,918) 5,494,918          
Other comprehensive loss, net (250)           (250) (250)  
Net income attributable to Vital Farms, Inc. stockholders 2,429         2,429   2,429  
Ending Balance at Dec. 26, 2021 151,585   $ 5   149,000 2,746 (281) 151,470 115
Ending balance at Dec. 26, 2021   175              
Ending Balance, Shares at Dec. 26, 2021     40,493,969            
Exercise of stock options 685       685     685  
Exercise of stock options, Shares     180,835            
Vesting of restricted stock units (9)       (9)     (9)  
Vesting of restricted stock units, Shares     51,852            
Shares issued under employee stock purchase plan, Shares     20,334            
Stock-based compensation expense 6,040       6,040     6,040  
Dissolution of noncontrolling interest 67 $ (175) $ (1)         (1) 68
Net loss attributable to noncontrolling interests - stockholders (21)         162   162 $ (183)
Other comprehensive loss, net (1,266)           (1,266) (1,266)  
Net income attributable to Vital Farms, Inc. stockholders 1,251         1,251   1,251  
Ending Balance at Dec. 25, 2022 $ 158,332   $ 4   155,716 4,159 (1,547) 158,332  
Ending Balance, Shares at Dec. 25, 2022 40,746,990   40,746,990            
Exercise of stock options $ 692       692     692  
Exercise of stock options, Shares 737,000   737,000            
Vesting of restricted stock units, Shares     217,347            
Shares issued under employee stock purchase plan, Shares     25,878            
Shares withheld for tax liability on vested restricted stock units     (42,566)            
Shares withheld for tax liability on vested restricted stock units $ (796)       (796)     (796)  
Shares issued under employee stock purchase plan 296       296     296  
Stock-based compensation expense 7,417       7,417     7,417  
Net loss attributable to noncontrolling interests - stockholders 0                
Other comprehensive loss, net 1,170           1,170 1,170  
Net income attributable to Vital Farms, Inc. stockholders 25,566         25,566   25,566  
Ending Balance at Dec. 31, 2023 $ 192,677   $ 4   $ 163,325 $ 29,725 $ (377) $ 192,677  
Ending Balance, Shares at Dec. 31, 2023 41,684,649   41,684,649            
v3.24.0.1
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Cash flows from operating activities:      
Net income $ 25,566 $ 1,230 $ 2,382
Adjustments to reconcile net income to net cash (used in) provided by operating activities:      
Depreciation and amortization 7,925 5,441 3,540
Reduction in the carrying amount of right-of-use assets 4,129 1,840 0
Amortization of available-for-sale debt securities 348 711 1,301
Stock-based compensation expense 7,417 6,040 4,440
Uncertain tax positions 58 405 0
Deferred taxes (179) 227 (2,536)
Net realized losses on derivative instruments 2,711 0 0
Other 438 184 341
Changes in operating assets and liabilities:      
Accounts receivable (862) (13,858) (6,078)
Inventories (6,443) (15,574) 1,733
Income taxes receivable 0 199 1,354
Prepaid expenses and other current assets (1,151) (131) 426
Deposits and other assets 98 45 (46)
Income taxes payable 782 425 0
Accounts payable 6,671 2,352 6,796
Accrued liabilities 5,157 3,843 4,029
Operating lease liabilities (1,759) (1,477) 0
Net cash (used in) provided by operating activities 50,906 (8,098) 17,682
Cash flows from investing activities:      
Purchases of property, plant and equipment (11,538) (10,468) (16,711)
Purchases of leasehold improvements 0 (89) 0
Purchases of available-for-sale debt securities (982) (33,817) (51,688)
Purchases of derivative instruments (1,971) 0 0
Sales of available-for-sale debt securities 2,895 0 1,436
Settlements of derivative instruments 106 0 0
Maturities and call redemptions of available-for-sale debt securities 32,265 34,345 48,523
Proceeds from the sale of property, plant and equipment 1,056 100 0
Return of investment in variable interest entity 552 0 0
Dissolution of equity investment 0 (108) 0
Net cash provided by (used in) investing activities 22,383 (10,037) (18,440)
Cash flows from financing activities:      
Proceeds from exercise of stock options 692 675 2,803
Proceeds from issuance of common stock under employee stock purchase plan 296 0 0
Payment of tax withholding obligation on vested RSU shares (796) 0 0
Principal payments under finance lease obligations (2,246) (554) (471)
Payment of contingent consideration 0 (38) (152)
Net cash (used in) provided by financing activities (2,054) 83 2,180
Net increase (decrease) in cash and cash equivalents 71,235 (18,052) 1,422
Cash and cash equivalents at beginning of the period 12,914 30,966 29,544
Cash and cash equivalents at end of the period 84,149 12,914 30,966
Supplemental disclosure of cash flow information:      
Cash paid for interest 775 114 43
Cash paid for income taxes 5,996 99 102
Supplemental disclosure of non-cash investing and financing activities:      
Purchases of property, plant and equipment included in accounts payable and accrued liabilities 187 1,143 1,493
Revolving Credit Facility [Member]      
Cash flows from financing activities:      
Proceeds from borrowing under revolving line of credit 7,500 0 0
Repayment of revolving line of credit $ (7,500) $ 0 $ 0
v3.24.0.1
Pay vs Performance Disclosure - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Pay vs Performance Disclosure      
Net Income (Loss) $ 25,566 $ 1,251 $ 2,429
v3.24.0.1
Insider Trading Arrangements
 12 Months Ended
Dec. 31, 2023
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
Rule 10b5-1 arrangement modified false
Non-Rule 10b5-1 arrangement modified false
v3.24.0.1
Nature of the Business and Basis of Presentation
 12 Months Ended
Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature of the Business and Basis of Presentation

1. Nature of the Business and Basis of Presentation

Vital Farms, Inc. (the “Company,” “we,” “us” or “our”) was incorporated in Delaware on June 6, 2013 and is headquartered in Austin, Texas. The Company packages, markets and distributes shell eggs, butter and other products. These products are principally sold under the name Vital Farms in addition to other trade names, primarily to retail and foodservice channels in the United States.

Vital Farms of Missouri, LLC is a wholly owned subsidiary of Vital Farms. All significant intercompany transactions and balances have been eliminated in the audited consolidated financial statements.

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the included disclosures are adequate, and the accompanying consolidated financial statements contain all adjustments necessary for a fair statement of our consolidated financial position as of December 31, 2023, consolidated results of operations and the consolidated cash flows for the fiscal years ended December 31, 2023, December 25, 2022 and December 26, 2021. Such adjustments are of a normal and recurring nature and certain reclassifications of previously reported amounts have been made to conform to the current year presentation. A reclassification of $1,539 has been made from accounts receivable, net to prepaids and other current assets, net in the consolidated balance sheet as of December 25, 2022 to conform to the current year presentation of our accounts receivable from the Company's network of farms.

Fiscal Year: The Company’s fiscal year ends on the last Sunday in December and contains either 52 or 53 weeks. Therefore, the financial results of certain 53-week fiscal years will not be exactly comparable to the prior and subsequent 52-week fiscal years. The fiscal year ended December 31, 2023 contains operating results for 53 weeks, while the fiscal years ended December 25, 2022, and December 26, 2021 contain operating results for 52 weeks.
v3.24.0.1
Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates principally include revenue recognition, determination of useful lives for property and equipment, trade spend accruals, goodwill, allowance for credit losses, inventory obsolescence, stock option valuations, accrued liabilities, income taxes and contingencies. Actual results could differ from those estimates.

Concentrations of Customers and Risk: A substantial amount of our shell egg processing occurs at our Egg Central Station shell egg processing facility. Any shutdown or period of reduced production at Egg Central Station, which may be caused by regulatory noncompliance or other issues, as well as factors beyond our control, such as natural disaster, weather, fire, power interruption, work stoppage, disease outbreaks or pandemics, equipment failure or delay in raw materials delivery, would significantly disrupt our ability to deliver our products in a timely manner, meet our contractual obligations and operate our business.

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, investments, accounts receivable and derivative instruments. The Company maintains deposits with large financial institutions that the Company believes are of high credit quality. At times the Company’s cash and cash equivalents balances with individual banking institutions are in excess of federally insured limits. The Company has not experienced any losses related to its cash and cash equivalents balances.

The Company's customer concentration for the fiscal year ended December 31, 2023 was as follows:

 

 

 

Net Revenue
Year Ended December 31, 2023

 

Net Revenue
Year Ended December 25, 2022

 

Net Revenue
Year Ended December 26, 2021

 

Accounts Receivable, Net
as of December 31, 2023

 

Accounts Receivable, Net
as of December 25, 2022

Customer A

 

25%

 

26%

 

18%

 

18%

 

23%

Customer B

 

*

 

11%

 

12%

 

12%

 

12%

Customer C

 

*

 

*

 

14%

 

*

 

*

Customer D

 

*

 

*

 

10%

 

*

 

*

Customer E

 

*

 

*

 

*

 

11%

 

13%

Customer F

 

*

 

*

 

*

 

11%

 

*

* Denotes percentage less than 10%

Cash and Cash Equivalents: The Company considers all short-term, highly liquid investments purchased with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash deposits are all in financial institutions in the United States. As of December 31, 2023 and December 25, 2022, cash and cash equivalents consisted of cash on deposit with balances denominated in U.S. dollars and investments in money market funds.

Investment Securities: The Company accounts for its investment securities in accordance with ASC 320, Investments-Debt and Equity Securities. The Company considers all of its debt securities for which there is a determinable fair market value, and there are no restrictions on the Company’s ability to sell within the next 12 months, as available-for-sale. The Company classifies these securities as current, because the amounts invested are available for current operations. Available-for-sale securities are carried at fair value, with unrealized gains and losses, net of tax, recorded in other comprehensive income until the security is settled or sold, except for changes in allowance for expected credit losses, which are reported on a gross basis in other expense.

The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization is recorded in interest income. The cost of securities sold is based on the specific identification method with realized gains and losses on the sale of debt securities and declines in value due to credit-related factors, reclassified out of accumulated other comprehensive income when sold and recorded in other income. Income tax effects related to realized gains and losses on available-for-sale securities are released from accumulated other comprehensive income quarterly with the recognition of the Company’s tax provision. Interest and dividends on securities classified as available-for-sale are recorded in interest income.

Variable Interest Entity: The Company consolidates all entities where a controlling financial interest exists. The Company has considered its relationship with Ovabrite, Inc. to determine whether the Company has a variable interest in that entity, and if so, whether the Company is the primary beneficiary of the relationship. GAAP requires variable interest entities (“VIEs”) to be consolidated if an entity’s interest in the VIE is a controlling financial interest. Under the variable model, a controlling financial interest is determined based on which entity, if any, has (i) the power to direct the activities of the VIE that most significantly impacts the VIE’s economic performance and (ii) the obligations to absorb losses that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Management performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with a VIE will cause the consolidation conclusion to change. The consolidation status of a VIE may change as a result of such reassessments. Changes in consolidation status are applied prospectively in accordance with GAAP.

Segment Information: The Company operates and manages its business as one reportable and operating segment. The Company’s Chief Executive Officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of evaluating financial performance and allocating resources. All of the Company’s long-lived assets and customers are located in the United States.

Fair Value of Financial Instruments: Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three levels of inputs that may be used to measure fair value are defined below:

•
Level 1 - Quoted prices in active markets for identical assets or liabilities.
•
Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
•
Level 3 - Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The carrying values of cash, trade receivables, other non-trade receivables within prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities approximate their fair value due to the short-term nature of these assets and liabilities.

Accounts Receivable: Accounts receivable are stated at amounts due from customers net of any allowance for credit losses. The Company generally does not have collateral for its receivables, but the Company does periodically evaluate the creditworthiness of its customers.

Allowance for Credit Losses: The allowance for expected credit losses related to trade receivables is estimated based on the trade receivable aging category, credit risk of specific customers, past collection history, and management’s evaluation of accounts receivable. The evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. The provision for expected credit losses is charged within selling, general and administrative costs. These losses have been immaterial to date. Subsequent recoveries, if any, are credited to the allowance.

The allowance for expected credit losses related to other non-trade receivables are estimated based on the aging category and the probability of default. Provisions for current estimated credit losses are classified within selling, general and administrative costs.

Inventories: Inventories are stated at the lower of cost (determined under the weighted average cost method) or net realizable value. In addition to product cost, inventory costs include expenditures such as in-bound shipping and handling and warehousing costs incurred in bringing the inventory to its existing condition and location. Inventory includes eggs and egg-related products, butter and butter-related products, packaging, feed, laying hens, pullets, and equipment parts. A reduction in the carrying value of an inventory item from cost to net realizable value is recorded in cost of goods sold with the offset to inventory. Any inventory that does not meet the quality control standards of the Company is separated and written down to its net realizable value.

Derivative Financial Instruments: The Company uses derivative instruments as part of its risk management activities to reduce its exposure to commodity price risk. Business operations give rise to certain market exposures, mostly due to changes in commodity prices of corn and soybean meal. Credit risks associated with derivative contracts are not significant, as the Company minimizes counterparty exposure by dealing with creditworthy counterparties and collateralized insurers and by utilizing exchange traded instruments and insurance backed commodity settlement contracts. While the Company may be exposed to potential losses due to the credit risk of non-performance by these counterparties, losses are not anticipated. The Company does not hold derivative instruments for trading purposes. Additionally, the Company’s derivative contracts are short-term in duration and do not make use of credit-risk-related contingent features.

Derivatives used to manage commodity price risk are not designated for hedge accounting treatment. Therefore, the changes in fair value of these derivatives are recorded as incurred within other expense, net. Net realized gains and losses on derivative instruments are reported as a reconciling item from net income to cash from operating activities in our consolidated statements of cash flows. Cash flows related to settlements and purchases of derivative instruments are reported as investing activities within the consolidated statements of cash flows.

Property, Plant and Equipment: Property, plant and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives. The general range of useful lives of other property, plant and equipment is as follows:

 

 

 

 

Estimated Useful Life

Land

N/A

Land improvements

 

15 to 20 years

Buildings and improvements

15 to 39 years

Vehicles

5 years

Machinery and equipment

2 to 7 years

Furniture and fixtures

5 years

Leasehold improvements

Lesser of lease term or 5 years

When assets are sold or retired, the cost and related accumulated depreciation or amortization of assets disposed of are removed from the accounts, with any resulting gain or loss recorded in operations in the consolidated statements of income. Normal repairs and maintenance costs are expensed as incurred to operations.

Goodwill: Goodwill represents the excess of cost over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. Goodwill is not amortized but is tested for impairment annually on the first day of the fourth fiscal quarter or more frequently if events or changes in circumstances indicate that the asset may be impaired. The Company’s goodwill impairment test is performed at the enterprise level given the single reporting unit.

The Company first assesses qualitative factors to determine whether events or circumstances existed that would lead the Company to conclude that it is more likely than not that the fair value of the reporting unit is below its carrying amount. If the Company determines that it is more likely than not that the fair value of the reporting unit is below the carrying amount based on qualitative factors or if significant changes to macro-economic factors related to the reporting unit have occurred that could materially impact fair value, a quantitative goodwill assessment would be required. In the quantitative evaluation, the fair value of the reporting unit is determined and compared to the carrying value. If the fair value is greater than the carrying value, then the carrying value is deemed to be recoverable and no further action is required. If the fair value estimate is less than the carrying value, goodwill is considered impaired for the amount by which the carrying amount exceeds the reporting unit’s fair value and a charge is reported as impairment of goodwill in the consolidated statements of income. To date, the Company has not recorded any impairment charges associated with its goodwill.

Leases: The Company determines if an arrangement is or contains a lease at inception, which is the date on which the terms of the contract are agreed to and the agreement creates enforceable rights and obligations. Under ASC 842, Leases (“Topic 842”), a contract is or contains a lease when (i) explicitly or implicitly identified assets have been deployed in the contract and (ii) the customer obtains substantially all of the economic benefits from the use of that underlying asset and directs how and for what purpose the asset is used during the term of the contract. The Company also considers whether its service arrangements include the right to control the use of an asset.

The Company has made an accounting policy election not to recognize right-of-use (“ROU”) assets and lease liabilities for leases with a term of 12 months or less. For all other leases, the Company recognizes ROU assets and lease liabilities based on the present value of lease payments over the lease term at the commencement date of the lease. The Company’s recognized ROU assets also include any initial direct costs incurred and lease payments made at or before the commencement date, which are reduced by any lease incentives.

Future lease payments may include fixed rent escalation clauses or payments that depend on an index (such as the Consumer Price Index measured by the U.S. Bureau of Labor Statistics). Subsequent index changes and other periodic market-rate adjustments to base rent are recorded as variable lease expense during the period in which they are incurred. Residual value guarantees or payments for terminating the lease are included in the lease payments only when it is probable they will be incurred.

The Company has made an accounting policy election to account for lease and non-lease components in its contracts as a single lease component for all asset classes. The non-lease components typically represent additional services transferred to the Company, such as common area maintenance for real estate, which are variable in nature and recorded in variable lease expense in the period incurred.

Impairment of Long-Lived Assets: The Company reviews the carrying value of property, plant and equipment for impairment whenever events and circumstances indicate the carrying value of an asset may not be recoverable from the estimated undiscounted future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects and the effects of obsolescence, demand, competition and other economic factors. The Company did not recognize an impairment loss during the fiscal years ended December 31, 2023, December 25, 2022, and December 26, 2021.

Noncontrolling Interest: The Company recognizes noncontrolling interest related to VIEs, in which the Company is the primary beneficiary, as equity in the consolidated financial statements separate from the parent entity’s equity. The amount of net income or loss attributable to noncontrolling interests is included in consolidated net income on the face of the consolidated statements of income. Changes in the parent entity’s ownership interest in a subsidiary that do not result in deconsolidation are treated as equity transactions if the parent entity retains its controlling financial interest. In addition, when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary will be initially measured at fair value and the difference between the carrying value and fair value of the retained interest will be recorded as a gain or loss. Affiliate equity interests where the Company has certain rights to demand settlement are presented at their current redemption values, as redeemable noncontrolling interest in the consolidated balance sheet. Because these transactions take place between entities under common control, any gains or losses attributable to these transactions are required to be included within additional paid-in-capital on the consolidated balance sheets.

Income Taxes: Income taxes are computed using the asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements. In estimating future tax consequences, the Company considers all expected future events other than enactment of changes in tax laws or rates. A valuation allowance is recorded, if necessary, to reduce net deferred tax assets to their realizable values if management does not believe it is more likely than not that the net deferred tax assets will be realized.

The Company recognizes the benefit of an income tax position only if it is more likely than not (greater than 50%) that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position. Otherwise, no benefit can be recognized. Assessing an uncertain tax position begins with the initial determination of the sustainability of the position and is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed. Additionally, the Company must accrue interest and related penalties, if applicable, on all tax exposures for which reserves have been established consistent with jurisdictional tax laws.

The Company’s policy is to recognize interest and penalties related to uncertain tax positions in the provision for income taxes. As of December 31, 2023 and December 25, 2022 the Company had accrued interest and penalties related to uncertain tax positions of $171 and $85.

Net Income per Share Attributable to Vital Farms, Inc. Common Stockholders: The Company applies the two-class method to compute basic and diluted net income per share attributable to the Company’s common stockholders when shares meet the definition of participating securities. The two-class method determines net income per share for each class of the Company’s common stock and preferred stock according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between the Company’s common stock and preferred stock based upon their respective rights to share in the earnings as if all income for the period had been distributed. During periods of loss, there is no allocation required under the two-class method since the preferred stock does not have a contractual obligation to share in the Company’s losses.

Basic net income per share attributable to the Company’s stockholders is computed by dividing net income by the weighted-average number of shares outstanding during the period without consideration of potentially dilutive common stock. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue shares of the Company’s common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company unless inclusion of such shares would be anti-dilutive. For periods in which the Company reports net losses, diluted net loss per common share attributable to the Company’s common stockholders is the same as basic net loss, because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

Revenue Recognition: The Company generates revenue primarily through sales of products to its customers, which include natural channel retailers, mainstream channel retailers and foodservice customers. The Company sells its products to customers on a purchase-order basis.

Revenue is recognized when control of the product is transferred to the customer and the related performance obligation is satisfied, which typically occurs upon delivery of the product to the customer, for an amount that reflects the net consideration the Company expects to receive in exchange for delivering the product. The Company offers sales incentives through various programs to customers and allow deductions from its customers, which may include credits or discounts to customers in the event that products do not conform to customer specifications or expire at a customer’s site. The cost associated with promotions and chargebacks is estimated and recorded as a reduction in revenue and is recognized at the time the related revenue is recorded, which normally precedes the actual cash expenditure. The recognition of this cost therefore requires management judgment regarding the volume of promotional offers that will be redeemed. Differences between estimated cost and actual redemptions are recognized as a change in management estimate in a subsequent period.

In many cases, key sales terms such as pricing and quantities ordered are established on a regular basis such that most customer arrangements and related incentives have a duration of less than one year. Amounts billed and due from customers are short-term in nature and are classified as receivables since payments are unconditional and only the passage of time is required before payments are due.

Treasury Stock: The Company records treasury stock activities under the cost method whereby the cost of the acquired stock is recorded as treasury stock. The Company’s accounting policy upon the formal retirement of treasury stock is to deduct the par value from the Company’s common stock and to reflect any excess of cost over par value as a reduction to additional paid-in capital (to the extent created by previous issuances of the shares).

Shipping and Distribution: The Company’s shipping and distribution costs include costs incurred with third-party carriers to transport products to customers and salaries and overhead costs related to activities to prepare the Company’s products for shipment. Shipping and distribution costs were $27,344, $30,104, and $24,979 during the fiscal years ended December 31, 2023, December 25, 2022, and December 26, 2021, respectively. Freight-in costs are included within cost of goods sold and were $4,823, $9,610, and $7,623 during the fiscal years ended December 31, 2023, December 25, 2022, and December 26, 2021, respectively.

Stock-Based Compensation: The Company measures all stock-based awards granted to employees and directors based on the estimated fair value on the date of the grant and recognizes compensation expense for those awards, over the requisite service period, which is generally the vesting period of the respective award. Stock options generally vest ratably over three years from the date of grant and expire 10 years from the date of grant. Restricted stock awards generally vest ratably over three years from the date of grant and contain no other service or performance conditions. The Company recognizes stock-based compensation expense on a straight-line basis over the requisite service or vesting period. Forfeitures for stock options and restricted stock awards are recognized as they occur. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing valuation model, which requires inputs based on certain subjective assumptions, including the fair market value of the Company’s common stock, expected stock price volatility, the expected term of the option, the risk-free interest rate for a period that approximates the expected term of the option, and the Company’s expected dividend yield. The Company classifies stock-based compensation expense in its consolidated statements of income in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.

Advertising and Promotion Expenses: Advertising and promotion expenses consist primarily of production costs and the costs to communicate the advertisements to promote and market the Company’s products. Production costs such as idea development, artwork, audio and video crews and other upfront development costs are expensed the first time the associated advertising campaign is launched or aired. The costs to communicate the advertisements such as airtime and distribution costs are expensed as incurred. During the fiscal years ended December 31, 2023, December 25, 2022, and December 26, 2021, the Company incurred advertising and promotion expenses of approximately $23,625, $13,301, and $11,469, respectively.

Emerging Growth Company Status: The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised financial accounting standards until such time as those standards apply to private companies.

Recently Adopted Accounting Pronouncements: In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) and also issued subsequent amendments to the initial guidance, ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11, ASU 2020-02, ASU 2020-03 and ASU 2022-02 (collectively, “Topic 326”), to introduce a new impairment model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. Topic 326 requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. The Company adopted ASU 2016-13 on December 26, 2022. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. There was no impact on the Company’s consolidated financial statements at adoption.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which intends to simplify the guidance by removing certain exceptions to the general principles and clarifying or amending existing guidance. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company adopted ASU 2019-12 during fiscal year 2022 and there was no material impact on the Company’s consolidated financial statements for the fiscal years ended December 25, 2022 and December 31, 2023.

Recently Issued Accounting Pronouncements Not Yet Adopted: In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) — Improvements to Reportable Segment Disclosures (“ASU 2023-07”) in order to improve stockholders’ understanding of an entity’s business activities through enhanced disclosures around reportable segments. ASU 2023-07 will require incremental and more detailed disclosure regarding segment expenses on both an annual and interim basis. For public companies ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company expects to adopt the standard for the fiscal year beginning January 1, 2024. The Company is currently evaluating the impact of its pending adoption of ASU 2023-07 on its consolidated financial statements.

In December 2023, the FASB issued ASU No 2023-09, Income Taxes (Topic 740) — Improvements to Income Tax Disclosures (“ASU 2023-09”) in order to enhance the transparency and usefulness of income tax disclosures. The guidance is applicable to all entities subject to income tax and it will require disclosure of certain categories within the rate reconciliation to improve consistency as well as disclosure of reconciling items which meet a certain quantitative threshold which will improve transparency. Additionally, entities must disclose the amount of taxes paid to federal, state and foreign municipalities. For public business entities ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Company expects to adopt the standard for the fiscal year beginning December 30, 2024. The Company is currently evaluating the impact of its pending adoption of ASU 2023-09 on its consolidated financial statements.
v3.24.0.1
Investment Securities
 12 Months Ended
Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
Investment Securities

3. Investment Securities

The following table summarizes the Company’s available-for-sale investment securities as of December 31, 2023:

 

 

Amortized Cost

 

 

Gross Unrealized Gains

 

 

Gross Unrealized Losses

 

 

Allowance for Credit Losses

 

 

Fair Value

 

U.S. corporate bonds and U.S. dollar
   denominated foreign bonds

 

$

33,134

 

 

$

10

 

 

$

(477

)

 

$

—

 

 

$

32,667

 

Total

 

$

33,134

 

 

$

10

 

 

$

(477

)

 

$

—

 

 

$

32,667

 

The following table summarizes the Company’s available-for-sale investment securities as of December 25, 2022:

 

 

Amortized Cost

 

 

Gross Unrealized Gains

 

 

Gross Unrealized Losses

 

 

Allowance for Credit Losses

 

 

Fair Value

 

U.S. corporate bonds and U.S. dollar
   denominated foreign bonds

 

$

66,658

 

 

$

4

 

 

$

(2,000

)

 

$

—

 

 

$

64,662

 

U.S. Treasury

 

 

1,176

 

 

 

—

 

 

 

(24

)

 

 

—

 

 

 

1,152

 

Total

 

$

67,834

 

 

$

4

 

 

$

(2,024

)

 

$

—

 

 

$

65,814

 

The following table presents the Company’s proceeds, gross realized gains and losses from the sale of available-for-sale securities for the periods presented:

 

 

Fiscal Year Ended

 

 

 

December 31,
2023

 

 

December 25,
2022

 

 

December 26,
2021

 

Proceeds

 

$

2,895

 

 

$

—

 

 

$

1,436

 

 

 

 

 

 

 

 

 

 

Gross realized gains

 

 

—

 

 

 

9

 

 

 

—

 

Gross realized losses

 

 

(183

)

 

 

(105

)

 

 

(55

)

Net realized losses

 

$

(183

)

 

$

(96

)

 

$

(55

)

Actual maturities may differ from contractual maturities because some borrowers have the right to call or prepay obligations with or without call or prepayment penalties. The amortized cost and fair value of the Company’s investments in available-for-sale securities as of December 31, 2023 by contractual maturity are as follows:

 

 

Amortized Cost

 

 

Fair Value

 

Due within one year

 

$

23,478

 

 

$

23,157

 

Due after one year through five years

 

 

9,656

 

 

 

9,510

 

Total available-for-sale

 

$

33,134

 

 

$

32,667

 

The following tables present the Company’s unrealized loss aging for available-for-sale securities by type and length of time the security was in a continuous unrealized loss position as of the periods presented:

 

 

 

December 31, 2023

 

 

 

Less than 12 months

 

 

12 months or longer

 

 

Total

 

 

 

Fair Value

 

 

Unrealized Losses

 

 

Fair Value

 

 

Unrealized Losses

 

 

Fair Value

 

 

Unrealized Losses

 

U.S. corporate bonds and U.S. dollar
   denominated foreign bonds

 

$

699

 

 

$

(3

)

 

$

29,247

 

 

$

(474

)

 

$

29,946

 

 

$

(477

)

Total

 

$

699

 

 

$

(3

)

 

$

29,247

 

 

$

(474

)

 

$

29,946

 

 

$

(477

)

 

 

 

 

December 25, 2022

 

 

 

Less than 12 months

 

 

12 months or longer

 

 

Total

 

 

 

Fair Value

 

 

Unrealized Losses

 

 

Fair Value

 

 

Unrealized Losses

 

 

Fair Value

 

 

Unrealized Losses

 

U.S. corporate bonds and U.S. dollar
   denominated foreign bonds

 

$

31,657

 

 

$

(888

)

 

$

32,406

 

 

$

(1,112

)

 

$

64,063

 

 

$

(2,000

)

U.S. Treasury

 

 

—

 

 

 

—

 

 

 

1,176

 

 

 

(24

)

 

 

1,176

 

 

 

(24

)

Total

 

$

31,657

 

 

$

(888

)

 

$

33,582

 

 

$

(1,136

)

 

$

65,239

 

 

$

(2,024

)

As of the fiscal year ended December 31, 2023, there were 47 diversified issuances in the Company’s securities portfolio in an unrealized loss position, with credit ratings from BBB- to AAA. As of December 31, 2023, there are no individual bonds with unrealized losses exceeding $46, and 46 issuances have been in a loss position greater than 12 months.

The decline in fair value has resulted primarily from rising interest rates over the last 12 months, and the Company does not believe there has been any significant decline in the creditworthiness of the issuers. The Company also does not believe it is likely that a significant number of bonds will be called early, and it does not have liquidity needs that would necessitate a sale of any material investments prior to maturity. Therefore, the Company has not recorded an allowance for credit losses on the investment securities as of December 31, 2023.

The fair value and location of all investment securities are included in “Fair Value Measurements” in Note 5 below.
v3.24.0.1
Derivative Financial Instruments
 12 Months Ended
Dec. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments

4. Derivative Financial Instruments

The Company enters into derivative instruments to mitigate the impact of commodity price volatility. Such instruments may include call options on commodity price contracts. Realized and unrealized gains and losses on the Company’s commodity derivatives not designated as hedging instruments are recorded in other expense, net. The Company recognizes all derivative instruments as either assets or liabilities.

The following table presents the aggregated outstanding notional amounts related to the Company’s derivative financial instruments for the periods presented:

 

 

Metric

 

December 31,
2023

 

 

December 25,
2022

 

Commodity:

 

 

 

 

 

 

 

 

Corn

 

Bushels (in thousands)

 

 

2,351

 

 

 

—

 

Soybean Meal

 

Tons

 

 

25

 

 

 

—

 

For the fiscal years ended December 31, 2023, December 25, 2022, and December 26, 2021, the pre-tax amount of commodity contract derivative losses recognized in other expense, net was $2,435, $0, and $0, respectively.

The fair value and location of all outstanding derivative financial instruments are included in “Fair Value Measurements” in Note 5 below.
v3.24.0.1
Fair Value Measurements
 12 Months Ended
Dec. 31, 2023
Fair Value Disclosures [Abstract]  
Fair Value Measurements

5. Fair Value Measurements

Assets Measured at Fair Value on a Recurring Basis

The fair value hierarchy requires the use of observable market data when available. In instances where the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.

The following tables present information about the Company’s financial assets measured at fair value on a recurring basis for the periods presented:

 

 

Fair Value Measurements as of December 31, 2023, Using:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market

 

$

64,498

 

 

$

—

 

 

$

—

 

 

$

64,498

 

Investment securities, available-for-sale:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. corporate bonds and U.S. dollar
   denominated foreign bonds

 

 

—

 

 

 

32,667

 

 

 

—

 

 

 

32,667

 

Prepaid expenses and other current assets:

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments

 

 

—

 

 

 

394

 

 

 

—

 

 

 

394

 

Total assets measured at fair value

 

$

64,498

 

 

$

33,061

 

 

$

—

 

 

$

97,559

 

 

 

 

Fair Value Measurements as of December 25, 2022, Using:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market

 

$

6,740

 

 

$

—

 

 

$

—

 

 

$

6,740

 

Investment securities, available-for-sale:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. corporate bonds and U.S. dollar
   denominated foreign bonds

 

 

—

 

 

 

64,662

 

 

 

—

 

 

 

64,662

 

U.S. Treasury

 

 

—

 

 

 

1,152

 

 

 

—

 

 

 

1,152

 

Total assets measured at fair value

 

$

6,740

 

 

$

65,814

 

 

$

—

 

 

$

72,554

 

During the fiscal year ended December 31, 2023, there were no transfers between fair value measurement levels. For additional information on concentrations of credit risk for the Company’s financial instruments, refer to “Summary of Significant Accounting Policies” in Note 2 and “Investment Securities” in Note 3 above.

Fair Value of Other Financial Instruments

The carrying values of the Company’s short-term financial instruments not included above, including cash, trade receivables, other non-trade receivables included in prepaid expense and other current assets, accounts payable, accrued expenses and other current liabilities approximate their fair value due to their short-term nature.
v3.24.0.1
Revenue Recognition
 12 Months Ended
Dec. 31, 2023
Revenue from Contract with Customer [Abstract]  
Revenue Recognition

6. Revenue Recognition

The following table summarizes the Company’s net revenue by primary product for the periods presented:

 

 

Fiscal Year Ended

 

 

 

December 31,
2023

 

 

December 25,
2022

 

 

December 26,
2021

 

Net Revenue:

 

 

 

 

 

 

 

 

 

Eggs and egg-related products

 

$

449,045

 

 

$

339,214

 

 

$

239,967

 

Butter and butter-related products

 

 

22,812

 

 

 

22,836

 

 

 

20,934

 

Net Revenue

 

$

471,857

 

 

$

362,050

 

 

$

260,901

 

Net revenue is primarily generated from the sale of eggs and butter. The Company’s product offerings include shell eggs, hard-boiled eggs, liquid whole eggs, and stick butter. The Company’s previous convenient breakfast product line (including egg bites and egg-based breakfast bars) was discontinued in 2022, and the Company’s ghee and spreadable tub butter offerings were discontinued during the fiscal year ended December 31, 2023. The revenues related to the discontinued product lines were immaterial.
v3.24.0.1
Allowance for Credit Losses
 12 Months Ended
Dec. 31, 2023
Allowance for Credit Loss [Abstract]  
Allowance for Credit Losses

7. Allowance for Credit Losses

As of December 31, 2023 and December 25, 2022, the Company had an allowance for credit losses of $777 and $699, respectively.

The Company recognizes current estimated credit losses (“CECL”) for accounts receivable. The CECL for trade receivables are estimated based on the trade receivable aging category, credit risk of specific customers, past collection history, and management’s evaluation of accounts receivable. The Company also has other receivables which are classified within prepaid expenses and other current assets. The CECL for other receivables are estimated based on the other receivables aging category and the probability of default. Provisions for CECL are classified within selling, general and administrative costs.

Changes in the allowance for credit losses for the periods presented were as follows:

 

 

Accounts Receivable

 

 

Prepaid Expenses and other Current Assets

 

 

Total

 

As of December 27, 2020

 

$

(196

)

 

$

—

 

 

$

(196

)

Provisions charged to operating results

 

 

(184

)

 

 

—

 

 

 

(184

)

Account write-offs

 

 

111

 

 

 

—

 

 

 

111

 

As of December 26, 2021

 

$

(269

)

 

$

—

 

 

$

(269

)

Provisions charged to operating results

 

 

(546

)

 

 

(206

)

 

 

(752

)

Account write-offs

 

 

322

 

 

 

—

 

 

 

322

 

As of December 25, 2022

 

$

(493

)

 

$

(206

)

 

$

(699

)

Provisions charged to operating results

 

 

(364

)

 

 

(148

)

 

 

(512

)

Account write-offs

 

 

307

 

 

 

127

 

 

 

434

 

As of December 31, 2023

 

$

(550

)

 

$

(227

)

 

$

(777

)
v3.24.0.1
Inventories
 12 Months Ended
Dec. 31, 2023
Inventory Disclosure [Abstract]  
Inventories

8. Inventories

Inventory consisted of the following as of the periods presented:

 

 

December 31,
2023

 

 

December 25,
2022

 

Eggs and egg-related products

 

$

25,521

 

 

$

13,675

 

Butter and butter-related products

 

 

1,697

 

 

 

5,718

 

Packaging

 

 

4,988

 

 

 

5,452

 

Pullets

 

 

289

 

 

 

981

 

Other

 

 

896

 

 

 

1,121

 

Reserve for inventory obsolescence

 

 

(496

)

 

 

(98

)

Inventories

 

$

32,895

 

 

$

26,849

 

On a periodic basis, the Company compares the amount of inventory on hand with its latest forecasted requirements to determine whether charges for excess or obsolete inventory reserves are required.
v3.24.0.1
Property, Plant and Equipment
 12 Months Ended
Dec. 31, 2023
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment

9. Property, Plant and Equipment

Property, plant and equipment consisted of the following as of the periods presented:

 

 

December 31,
2023

 

 

December 25,
2022

 

Land

 

$

552

 

 

$

552

 

Land improvements

 

 

818

 

 

 

835

 

Buildings and improvements

 

 

30,532

 

 

 

29,667

 

Vehicles

 

 

1,055

 

 

 

894

 

Machinery and equipment

 

 

50,979

 

 

 

34,978

 

Leasehold improvements

 

 

492

 

 

 

919

 

Furniture and fixtures

 

 

461

 

 

 

685

 

Construction in progress

 

 

3,001

 

 

 

3,312

 

 

 

87,890

 

 

 

71,842

 

Less: Accumulated depreciation and amortization

 

 

(21,051

)

 

 

(12,687

)

Property, plant and equipment, net

 

$

66,839

 

 

$

59,155

 

During the fiscal years ended December 31, 2023, December 25, 2022, and December 26, 2021, depreciation and amortization of property, plant and equipment was approximately $7,925, $5,441, and $3,540, respectively.
v3.24.0.1
Leases
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Leases

10. Leases

The Company leases office facilities, warehouses, office equipment and vehicles for delivery of products under lease agreements with initial terms approximating one to five years. The Company's finance leases include leases on a transportation fleet as well as office equipment and its operating leases primarily consist of leases on its buildings, including its corporate headquarters.

In addition, substantially all the Company’s long-term supply contracts with farms contain components that meet the definition of embedded leases within the scope of Topic 842. These arrangements convey to the Company the right to control implicitly identified property, plant and equipment as it takes substantially all the utility generated by these assets over the term of the arrangements at a variable price. The initial term of these supply agreements ranges from one to seven years. Excluding upfront leasing costs discussed below, the total purchase commitments contained in these arrangements are variable and represent rentals; there are no minimum purchase commitments associated with these long-term supply contracts. During December 2023, the Company executed two long-term supply contracts with farms to provide an upfront lease payment to offset farm construction costs, loans and other startup costs. The upfront leasing costs have been classified within our operating lease right-of-use assets on the consolidated balance sheet for the year ended December 31, 2023 and will be amortized to cost of goods sold over the term of the long term supply arrangements.

As the classification and timing of recognition of costs attributable to the eggs and embedded cost of the lease rentals are identical, the Company does not allocate the total purchase cost of eggs between the cost of the eggs and the embedded cost of the lease rentals or distinguish between them in its accounting records. The Company records the total purchase cost of eggs, which includes costs associated with the eggs and the corresponding cost of embedded lease rentals from the same arrangement, into inventory. These costs are expensed to cost of goods sold when the associated eggs are sold to customers and are also reported as part of our variable lease cost.

The Company’s office lease for its corporate headquarters facility in Austin, Texas includes an option to renew, generally at the Company's sole discretion, with renewal terms that can extend the lease term up to five years. In addition, certain leases contain termination options, where the rights to terminate are held by the Company, the lessor, or both parties. These options to extend or terminate a lease are included in the lease terms when it is reasonably certain that the Company will exercise that option. As of December 31, 2023, it is not reasonably certain that the Company will exercise the right to extend its office lease and therefore, the Company has not included the extended term in the calculation of its ROU assets or liabilities. The Company’s leases do not contain any material restrictive covenants or residual value guarantees.

Operating lease cost is recognized on a straight-line basis over the lease term and finance lease cost is recognized as amortization expense for ROU assets and interest expense associated with finance lease liabilities. Amortization expense associated with our finance leases during the fiscal years ended December 31, 2023 and December 25, 2022 was $2,565 and $439, respectively, and is recorded within costs of goods sold and selling, general and administrative costs in the consolidated statement of income.

The components of lease cost consisted of the following for the periods presented:

 

 

Fiscal Year Ended

 

 

 

December 31,
2023

 

 

December 25,
2022

 

 

December 26,
2021

 

 Operating lease cost

 

$

1,714

 

 

$

1,445

 

 

$

—

 

 Finance lease cost – amortization of right-of-use assets

 

 

2,565

 

 

 

439

 

 

 

—

 

 Finance lease cost – interest on lease liabilities

 

 

740

 

 

 

87

 

 

 

28

 

 Short-term lease cost

 

 

771

 

 

 

67

 

 

 

—

 

 Variable lease cost

 

 

7,533

 

 

 

2,967

 

 

 

—

 

 Variable lease cost – long-term supply contracts

 

 

200,050

 

 

 

143,696

 

 

 

—

 

 Total lease cost

 

$

213,373

 

 

$

148,701

 

 

$

28

 

Supplemental balance sheet information related to leases is as follows:

 

 

As of December 31, 2023

 

 

As of December 25, 2022

 

Finance Leases

 

 

 

 

 

 

Machinery and equipment

 

$

16,321

 

 

$

8,931

 

Less: Accumulated depreciation and amortization

 

 

(2,837

)

 

 

(272

)

Property, plant and equipment, net

 

$

13,484

 

 

$

8,659

 

 

 

 

As of December 31, 2023

 

 

As of December 25, 2022

 

Weighted-average remaining lease term (years)

 

 

 

 

 

 

Operating leases

 

 

2.97

 

 

 

2.18

 

Finance leases

 

 

3.83

 

 

 

4.85

 

Weighted-average discount rate

 

 

 

 

 

 

Operating leases

 

 

7.38

%

 

 

3.32

%

Finance leases

 

 

7.12

%

 

 

6.34

%

Future undiscounted cash flows are as follows:

 

 

As of December 31, 2023

 

 

 

Operating Leases

 

 

Finance Leases

 

2024

 

$

3,579

 

 

$

4,103

 

2025

 

 

3,170

 

 

 

4,103

 

2026

 

 

3,017

 

 

 

4,095

 

2027

 

 

—

 

 

 

3,332

 

2028

 

 

—

 

 

 

—

 

Thereafter

 

 

—

 

 

 

—

 

Total lease payments

 

 

9,766

 

 

 

15,633

 

Less imputed interest

 

 

(938

)

 

 

(1,897

)

Total present value of lease liabilities

 

$

8,828

 

 

$

13,736

 

 

Supplemental cash flow information related to leases is as follows:

Cash paid for amounts included in measurement of lease liabilities:

 

 

Fiscal Year Ended

 

 

 

December 31,
2023

 

 

December 25,
2022

 

Operating cash outflows - payments on operating leases

 

$

1,759

 

 

$

1,477

 

Operating cash outflows - interest payments on finance leases

 

 

740

 

 

 

87

 

Financing cash outflows - principal payments on finance leases

 

 

2,246

 

 

 

554

 

Right-of-use assets obtained in exchange for new lease obligations:

 

 

As of December 31, 2023

 

 

As of December 25, 2022

 

Operating leases

 

$

8,583

 

 

$

—

 

Finance leases

 

 

7,390

 

 

 

8,931

 
v3.24.0.1
Accrued Liabilities
 12 Months Ended
Dec. 31, 2023
Payables and Accruals [Abstract]  
Accrued Liabilities

11. Accrued Liabilities

Accrued liabilities consisted of the following as of the periods presented:

 

 

December 31,
2023

 

 

December 25,
2022

 

Employee-related costs

 

$

9,131

 

 

$

7,453

 

Promotions and customer deductions

 

 

6,982

 

 

 

4,414

 

Distribution fees and freight

 

 

2,876

 

 

 

2,351

 

Marketing and broker commissions

 

 

3,627

 

 

 

1,598

 

Purchases of inventory

 

 

525

 

 

 

1,349

 

Professional fees

 

 

1,066

 

 

 

761

 

Other

 

 

11

 

 

 

551

 

Accrued liabilities

 

$

24,218

 

 

$

18,477

 
v3.24.0.1
Product Exit Costs
 12 Months Ended
Dec. 31, 2023
Restructuring and Related Activities [Abstract]  
Product Exit Costs

12. Product Exit Costs

During the fiscal year ended December 25, 2022, the Company made the decision to exit its convenient breakfast product category due to a shift in focus to product offerings that are core to the Company’s operations. Charges incurred in connection with these product exits were substantially complete by December 25, 2022, and the Company believes the actual charges as shown below approximate fair value.

During the fiscal year ended December 31, 2023, the Company made the decision to exit its ghee and spreadable tub butter product offerings. Charges incurred in connection with these product exits were immaterial.

As of December 25, 2022, the ending liability balance related to the convenience breakfast category exit was $119. As of December 31, 2023, remaining liabilities of $45 are expected to be settled or released by the end of the 13-week period ending March 31, 2024.

The following table summarizes the activity related to the exit of the Company’s convenient breakfast products during the periods presented:

 

 

 

 

For the Fiscal Year Ended December 31, 2023

 

Description

 

Statement of Income
Classification

 

Beginning Liability Balance

 

 

Charges Incurred

 

 

Amounts Paid or Settled

 

 

Amounts Released as Unutilized

 

 

Ending Liability Balance

 

Asset write-downs

 

Cost of goods sold

 

$

119

 

 

$

—

 

 

$

(74

)

 

$

—

 

 

$

45

 

Total

 

 

 

$

119

 

 

$

—

 

 

$

(74

)

 

$

—

 

 

$

45

 

 

 

 

 

 

For the Fiscal Year Ended December 25, 2022

 

Description

 

Statement of Income
Classification

 

Charges Incurred

 

 

Amounts Paid or Settled

 

 

Amounts Released as Unutilized

 

 

Ending Liability Balance

 

Contract terminations

 

Selling, general and administrative

 

$

1,126

 

 

$

(1,126

)

 

$

—

 

 

$

—

 

Inventory obsolescence

 

Cost of goods sold

 

 

749

 

 

 

(749

)

 

 

—

 

 

 

—

 

Customer allowances

 

Net revenue

 

 

146

 

 

 

(111

)

 

 

(35

)

 

 

—

 

Asset write-downs

 

Cost of goods sold

 

 

119

 

 

 

—

 

 

 

—

 

 

 

119

 

Co-manufacturer charges

 

Cost of goods sold

 

 

135

 

 

 

(135

)

 

 

—

 

 

 

—

 

Asset disposals

 

Selling, general and administrative

 

 

66

 

 

 

(66

)

 

 

—

 

 

 

—

 

Total

 

 

 

$

2,341

 

 

$

(2,187

)

 

$

(35

)

 

$

119

 
v3.24.0.1
Long-Term Debt
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Long-Term Debt

13. Long-Term Debt

In October 2017, the Company entered into a credit facility agreement with PNC Bank, National Association (the “Credit Facility”) that initially included a $4.7 million term a loan, a $10.0 million revolving line of credit and an equipment loan with a maximum borrowing capacity of $1.5 million.

Subsequently, the terms of the Credit Facility were modified at various times between fiscal 2018 and fiscal 2023. Such amendments (i) amended various definitions, (ii) waived a technical default in May 2020 which was triggered by exceeding the capital expenditure limit, (iii) increased borrowing capacity and (iv) extended the maturity date. The Ninth Amendment to the Credit Facility in April 2021 eliminated the term loan and equipment loan. The Tenth Amendment to the Credit Facility in December 2022 modified certain covenants related to commodity hedging, consented to the dissolution of immaterial subsidiaries and implemented changes related to the discontinuation of LIBOR. The Eleventh Amendment to the Credit Facility, effective July 26, 2023 extended the maturity date by one year, from April 2, 2024 to April 2, 2025.

The maximum borrowing capacity under the revolving line of credit is currently $20.0 million. Interest on borrowings under the revolving line of credit, as well as loan advances thereunder, accrues at a rate, at the Company’s election at the time of borrowing, equal to (i) the secured overnight financing rate as administered by the Federal Reserve Bank of New York plus 2.00% or (ii) 1.00% plus the alternate base rate, as defined in the Credit Facility. During the fiscal year ended December 31, 2023, the Company borrowed and repaid $7.5 million under the revolving line of credit. As of December 31, 2023, there were no outstanding amounts under the revolving line of credit.

The Credit Facility is secured by all of the Company’s assets (other than real property and certain other property excluded pursuant to the terms of the Credit Facility) and requires the Company to maintain three financial covenants: a fixed charge coverage ratio, a leverage ratio and a minimum tangible net worth requirement. The Credit Facility also contains various covenants relating to limitations on indebtedness, acquisitions, mergers, consolidations and the sale of properties and liens. As a result of the limitations contained in the Credit Facility, certain of the net assets on the Company’s consolidated balance sheet as of December 31, 2023 are restricted in use. The Company’s wholly owned subsidiaries are non-operating and have no restricted net assets within the meaning of Rule 4-08(e)(3) or Rule 12-04 of Regulation S-X. The Credit Facility also contains other customary covenants, representations and events of default. As of December 31, 2023, the Company was in compliance with all covenants under the Credit Facility.

During the fiscal years ended December 31, 2023, December 25, 2022, and December 26, 2021, the Company recognized interest expense related to draws on the revolving line of credit of $7, $0, and $52, respectively.
v3.24.0.1
Preferred Stock
 12 Months Ended
Dec. 31, 2023
Equity [Abstract]  
Preferred Stock [Text Block]

14. Preferred Stock

As of December 31, 2023, the Company’s amended and restated certificate of incorporation authorized the Company to issue 10,000,000 shares, par value $0.0001 per share, of preferred stock, in one or more series and with such designation, rights and preferences as may be determined from time to time (collectively, the “preferred stock”) by the Company’s Board of Directors. As of December 31, 2023, there were no shares of preferred stock issued or outstanding.
v3.24.0.1
Common Stock
 12 Months Ended
Dec. 31, 2023
Equity [Abstract]  
Common Stock and Common Stock Warrant

15. Common Stock

Common Stock: As of December 31, 2023, the Company’s amended and restated certificate of incorporation authorized the Company to issue 310,000,000 shares of common stock, par value $0.0001 per share, of which 41,684,649 shares were issued and outstanding.

The voting, dividend and liquidation rights of the holders of the Company’s common stock are subject to and qualified by the rights, powers and preferences of the holders of the preferred stock, if any. Each share of the Company’s common stock is entitled to one vote on all matters submitted to a vote of the Company’s stockholders. Holders of the Company’s common stock are entitled to receive dividends as may be declared by the Board of Directors, if any, subject to the preferential dividend rights of preferred stock, if any. No cash dividends were declared or paid during the periods presented.

As of each balance sheet date, the Company had reserved shares of common stock for issuance in connection with the following:

 

 

 

December 31,
2023

 

 

December 25,
2022

 

Options to purchase common stock

 

 

3,920,485

 

 

 

4,634,205

 

Restricted stock units

 

 

565,376

 

 

 

505,504

 

Shares available for grant under the 2020 Equity Incentive
   Plan and 2020 Employee Stock Purchase Plan

 

 

13,313,326

 

 

 

11,503,459

 

Total

 

 

17,799,187

 

 

 

16,643,168

 

Treasury Stock: In August 2021, the Company retired an aggregate of 5,494,918 shares of its common stock held in treasury. Upon retirement, the shares were redesignated as authorized but unissued shares of the Company’s common stock.
v3.24.0.1
Stock-Based Compensation
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation

16. Stock-Based Compensation

The Company recognized stock-based compensation expense and the related tax benefit as follows for the periods presented:

 

 

Fiscal Year Ended

 

 

 

December 31,
2023

 

 

December 25,
2022

 

 

December 26,
2021

 

Cost of goods sold1

 

$

260

 

 

$

188

 

 

$

133

 

Selling, general and administrative expense2

 

 

7,157

 

 

 

5,852

 

 

 

4,307

 

Total

 

$

7,417

 

 

$

6,040

 

 

$

4,440

 

 

 

 

 

 

 

 

 

 

Tax benefit

 

$

2,998

 

 

$

970

 

 

$

3,872

 
1.
Includes $7, $6 and $0 of expense related to the 2020 Employee Stock Purchase Plan as of December 31, 2023, December 25, 2022, and December 26, 2021, respectively.
2.
Includes $97, $57 and $0 of expense related to the 2020 Employee Stock Purchase Plan as of December 31, 2023, December 25, 2022, and December 26, 2021, respectively.

Stock Option Activity

The following table summarizes the Company’s stock option activity since December 25, 2022:

 

 

Number of
Options

 

 

Weighted-
Average
Exercise
Price

 

 

Weighted-
Average
Remaining
Contractual
Term (Years)

 

 

Aggregate
Intrinsic
Value

 

Outstanding as of December 25, 2022

 

 

4,634,205

 

 

$

9.35

 

 

 

 

 

$

38,520

 

Granted

 

 

520,154

 

 

$

15.00

 

 

 

 

 

 

 

Exercised

 

 

(737,000

)

 

$

1.05

 

 

 

 

 

$

9,091

 

Cancelled/Forfeited

 

 

(496,874

)

 

$

21.89

 

 

 

 

 

$

61

 

Outstanding as of December 31, 2023

 

 

3,920,485

 

 

$

10.07

 

 

 

5.8

 

 

$

28,749

 

Options exercisable as of December 31, 2023

 

 

2,793,016

 

 

$

8.31

 

 

 

5.0

 

 

$

25,215

 

Options vested and expected to vest as of December 31, 2023

 

 

3,920,485

 

 

$

10.07

 

 

 

5.8

 

 

$

28,749

 

The Company estimates the fair value of stock options on the date of grant using a Black-Scholes option-pricing valuation model, which uses the expected option term, stock price volatility, and the risk-free interest rate. The expected option term assumption reflects the period for which the Company believes the option will remain outstanding. The Company elected to use the simplified method to determine the expected option term, for all periods presented, which is the average of the option’s vesting and contractual term. The Company’s computation of expected volatility is based on the historical volatility of selected comparable publicly traded companies over a period equal to the expected term of the option. The risk-free interest rate reflects the U.S. Treasury yield curve for a similar instrument with the same expected term in effect at the time of the grant.

The following table summarizes the valuation model assumptions, fair values and intrinsic values of stock options during the fiscal years indicated:

 

 

December 31,
2023

 

 

December 25,
2022

 

 

December 26,
2021

 

Expected term (in years)

 

6.0

 

 

6.0

 

 

6.0 - 6.5

 

Expected stock price volatility

 

27.8% - 29.2%

 

 

27.6% - 28.6%

 

 

28.5% - 29.4%

 

Risk-free interest rate

 

3.63% - 4.45%

 

 

1.64% - 4.16%

 

 

0.57% - 1.36%

 

Expected dividend yield

 

0%

 

 

0%

 

 

0%

 

Weighted average fair value at grant date

 

$

5.33

 

 

$

3.97

 

 

$

7.31

 

Fair value of stock options vested

 

$

3,160

 

 

$

3,245

 

 

$

2,694

 

Intrinsic value of stock options exercised

 

$

9,091

 

 

$

1,827

 

 

$

20,343

 

Proceeds from stock options exercised

 

$

776

 

 

$

568

 

 

$

2,776

 

As of December 31, 2023, total unrecognized stock-based compensation expense related to unvested stock options was $3,412, which is expected to be recognized over a weighted-average period of 1.62 years.

Restricted Stock Unit Activity

The following table summarizes the restricted stock units ("RSU") activity since December 25, 2022:

 

 

Number of
RSUs

 

 

Weighted-
Average
Grant Date Fair Value

 

Unvested as of December 25, 2022

 

 

505,504

 

 

$

13.58

 

Granted

 

 

350,497

 

 

$

15.04

 

Vested1

 

 

(217,347

)

 

$

14.03

 

Forfeited

 

 

(73,278

)

 

$

14.10

 

Unvested as of December 31, 2023

 

 

565,376

 

 

$

14.24

 
1.
Shares of common stock that were withheld to cover taxes on the release of vested RSUs and became available for future grants pursuant to the 2020 Equity Incentive Plan

As of December 31, 2023, total unrecognized stock-based compensation expense related to the Company’s unvested RSU activity was $5,220, which is expected to be recognized over a weighted-average period of 1.76 years.

The fair value of RSU shares vested during the fiscal years ended December 31, 2023, December 25, 2022, and December 26, 2021 was $3,044, $1,549, and $564, respectively.

2020 Equity Incentive Plan: In July 2020, the Board of Directors adopted the Vital Farms, Inc. 2020 Equity Incentive Plan (“2020 Incentive Plan”), which was subsequently approved by the Company’s stockholders and became effective on July 30, 2020. Initially, the maximum number of shares of the Company’s common stock that may be issued under the 2020 Incentive Plan was 8,595,871 shares. The 2020 Incentive Plan provides that the number of shares reserved and available for issuance under the 2020 Incentive Plan will automatically increase each January 1, beginning on January 1, 2021 and ending on (and including) January 1, 2030, by an amount equal to 4% of the outstanding number of shares of common stock on the immediately preceding December 31 or such lesser number of shares as determined by the Board of Directors. As of December 31, 2023, 11,200,932 shares were available for future grants of the Company’s common stock, which excludes 1,667,385 shares of common stock that were automatically added to the available reserve on January 1, 2024.

Employee Stock Purchase Plan: In July 2020, the Board of Directors adopted the 2020 Employee Stock Purchase Plan (“2020 ESPP”), which was subsequently approved by the Company’s stockholders and became effective on July 30, 2020. The 2020 ESPP authorizes the initial issuance of up to 900,000 shares of the Company’s common stock to certain eligible employees or, as designated by the Board of Directors, employees of a related company. The 2020 ESPP provides that the number of shares reserved and available for issuance under the 2020 ESPP will automatically increase each January 1, beginning on January 1, 2021 and ending on (and including) January 1, 2030, by an amount equal to the lesser of (i) 1% of the outstanding number of shares of common stock on the immediately preceding December 31 and (ii) 900,000, or such lesser number of shares as determined by the Board of Directors. As of December 31, 2023, 2,112,394 shares of the Company’s common stock were available for future issuance, which excludes 416,846 shares of common stock that were automatically added to the available reserve on January 1, 2024. The Board of Directors authorizes six-month offering periods, with the most recent beginning on November 16, 2023.
v3.24.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

17. Income Taxes

For the fiscal years ended December 31, 2023, December 25, 2022, and December 26, 2021, the provision for income taxes consisted of the following:

 

 

December 31,
2023

 

 

December 25,
2022

 

 

December 26,
2021

 

Current:

 

 

 

 

 

 

 

 

 

Federal

 

$

5,136

 

 

$

384

 

 

$

225

 

State

 

 

1,678

 

 

 

539

 

 

 

282

 

Deferred:

 

 

 

 

 

 

 

 

 

Federal

 

 

28

 

 

 

803

 

 

 

(2,164

)

State

 

 

(207

)

 

 

(125

)

 

 

(371

)

Provision (benefit) for income taxes

 

$

6,635

 

 

$

1,601

 

 

$

(2,028

)

The Company’s income before income taxes is entirely derived from domestic sources for all periods presented. The reconciliation of the federal statutory income tax provision to the Company’s effective income tax provision is as follows:

 

 

December 31,
2023

 

 

December 25,
2022

 

 

December 26,
2021

 

Provision at statutory rate of 21%

 

$

6,762

 

 

$

594

 

 

$

74

 

State income taxes

 

 

1,117

 

 

 

51

 

 

 

(416

)

Stock-based compensation

 

 

(1,636

)

 

 

225

 

 

 

(2,846

)

Non-deductible costs

 

 

574

 

 

 

279

 

 

 

12

 

Charitable deduction

 

 

(95

)

 

 

634

 

 

 

(88

)

Change in deferred tax asset valuation allowance

 

 

84

 

 

 

(774

)

 

 

774

 

Revisions to prior year

 

 

4

 

 

 

212

 

 

 

—

 

Changes in uncertain tax positions

 

 

58

 

 

 

347

 

 

 

—

 

Tax credits

 

 

(238

)

 

 

—

 

 

 

—

 

Other, net

 

 

5

 

 

 

33

 

 

 

462

 

Provision (benefit) for income taxes

 

$

6,635

 

 

$

1,601

 

 

$

(2,028

)

 

Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company’s deferred income tax assets and liabilities at December 31, 2023 and December 25, 2022 were comprised of the following:

 

3

 

 

December 31,
2023

 

 

December 25,
2022

 

Deferred tax assets:

 

 

 

 

 

 

 

Accrued expenses

 

 

$

3,716

 

 

$

2,594

 

Allowances and other reserves

 

 

 

191

 

 

 

171

 

Inventory

 

 

 

1,498

 

 

 

963

 

Net operating loss carryforwards

 

 

 

110

 

 

 

1,503

 

Charitable contributions

 

 

 

—

 

 

 

230

 

Stock-based compensation

 

 

 

1,465

 

 

 

1,046

 

Lease liability

 

 

 

5,558

 

 

 

2,624

 

Other

 

 

 

467

 

 

 

581

 

Total deferred tax assets

 

 

 

13,005

 

 

 

9,712

 

Less: Valuation allowance

 

 

 

(84

)

 

 

—

 

Net deferred tax assets

 

 

$

12,921

 

 

$

9,712

 

Deferred tax liabilities:

 

 

 

 

 

 

 

Prepaid expenses

 

 

$

490

 

 

$

590

 

Property and equipment

 

 

 

6,778

 

 

 

6,273

 

Operating and finance lease right of use assets

 

 

 

5,517

 

 

 

2,589

 

Intangibles

 

 

 

507

 

 

 

430

 

Total deferred tax liabilities

 

 

$

13,292

 

 

$

9,882

 

Net deferred tax liabilities

 

 

$

(371

)

 

$

(170

)

A valuation allowance is required to be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. A full review of all positive and negative evidence needs to be considered, including the Company’s current and past performance, the market environments in which the Company operates, the utilization of past tax credits, the length of carry back and carry forward periods and tax planning strategies that might be implemented. Management considered the scheduled reversal of deferred tax liabilities and projected future taxable income in making this assessment.

The activity in the Company’s deferred tax asset valuation allowance for the fiscal years ended December 31, 2023 and December 25, 2022 was as follows:

 

 

December 31,
2023

 

 

December 25,
2022

 

Valuation allowance as of beginning of year

 

$

—

 

 

$

774

 

Increases recorded to income tax provision

 

 

84

 

 

 

—

 

Decreases recorded as benefit to income tax provision

 

 

—

 

 

 

(774

)

Valuation allowance as of end of year

 

$

84

 

 

$

—

 

As of December 31, 2023, the Company had unrecognized tax benefits, which represent the aggregate tax effect of the differences between tax return positions and the benefits recognized in the Company’s financial statements. At December 31, 2023, all of the unrecognized tax benefits, if recognized, would affect the Company’s annual effective tax rate. The unrecognized tax benefits are long-term in nature and the Company does not anticipate the balance of the unrecognized tax benefits to change materially in the next 12 months.

The following table reflects changes in gross unrecognized tax benefits:

 

 

December 31,
2023

 

 

December 25,
2022

 

Gross tax contingencies as of beginning of year

 

$

511

 

 

$

219

 

Increase in gross tax contingencies

 

 

165

 

 

 

320

 

Decrease in gross tax contingencies

 

 

(22

)

 

 

(28

)

Gross tax contingencies as of end of year

 

$

654

 

 

$

511

 

As of December 31, 2023, the Company had state net operating loss carryforwards of $0.4 million which begin to expire in funding re2035.

The Company files a U.S. federal income tax return, as well as income tax returns in various states. Tax years 2020 and forward remain open to examination by the tax jurisdictions to which the Company is subject, with certain state taxing jurisdictions being open back to 2017.
v3.24.0.1
Net Income Per Share
 12 Months Ended
Dec. 31, 2023
Earnings Per Share [Abstract]  
Net Income Per Share

18. Net Income Per Share

Basic and diluted net income per share attributable to the Company’s common stockholders were calculated as follows:

 

 

Fiscal Year Ended

 

 

 

December 31,
2023

 

 

December 25,
2022

 

 

December 26,
2021

 

Numerator:

 

 

 

 

 

 

 

 

 

Net income

 

$

25,566

 

 

$

1,230

 

 

$

2,382

 

Less: Net loss attributable to noncontrolling interests

 

 

—

 

 

 

(21

)

 

 

(47

)

Net income attributable to Vital Farms, Inc. stockholders’ — basic and diluted

 

$

25,566

 

 

$

1,251

 

 

$

2,429

 

Denominator:

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding — basic

 

 

41,192,544

 

 

 

40,648,592

 

 

 

40,027,278

 

Weighted average effect of potentially dilutive securities:

 

 

 

 

 

 

 

 

 

Effect of potentially dilutive stock options

 

 

1,994,774

 

 

 

2,745,161

 

 

 

3,290,615

 

Effect of potentially dilutive restricted stock units

 

 

107,577

 

 

 

64,455

 

 

 

3,840

 

Effect of potentially dilutive common stock issuable pursuant to the ESPP

 

 

17,941

 

 

 

11,378

 

 

 

—

 

Weighted average common shares outstanding — diluted

 

 

43,312,836

 

 

 

43,469,586

 

 

 

43,321,733

 

Net income per share attributable to Vital Farms, Inc. stockholders

 

 

 

 

 

 

 

 

 

Basic

 

$

0.62

 

 

$

0.03

 

 

$

0.06

 

Diluted

 

$

0.59

 

 

$

0.03

 

 

$

0.06

 

The Company excluded the following shares of common stock, outstanding at each period end, from the computation of diluted net income per share attributable to Vital Farms, Inc. common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

 

 

Fiscal Year Ended

 

 

 

December 31,
2023

 

 

December 25,
2022

 

 

December 26,
2021

 

Options to purchase common stock

 

 

15,429

 

 

 

27,954

 

 

 

4,817

 

Unvested restricted stock

 

 

8,362

 

 

 

45,386

 

 

 

18,927

 

 

 

23,791

 

 

 

73,340

 

 

 

23,744

 

 
v3.24.0.1
Accumulated Other Comprehensive Income (Loss)
 12 Months Ended
Dec. 31, 2023
Equity [Abstract]  
Accumulated Other Comprehensive Income (Loss)

19. Accumulated Other Comprehensive Income (Loss)

The amounts reclassified from accumulated other comprehensive income (loss) (“AOCI”) to the statements of income were as follows:

 

 

 

 

Amounts Reclassified from AOCI

 

 

 

 

 

Fiscal Year Ended

 

AOCI Component

 

Statement of Income Classification

 

December 31,
2023

 

 

December 25,
2022

 

 

December 26,
2021

 

Gains on available-for-sale securities

 

Other income, net

 

$

182

 

 

$

96

 

 

$

55

 

 

Total before tax

 

 

182

 

 

 

96

 

 

 

55

 

 

Tax expense

 

 

(45

)

 

 

(22

)

 

 

(13

)

 

Net of tax

 

$

137

 

 

$

74

 

 

$

42

 

The gross amount and related tax expense recorded in, and associated with, each component of other comprehensive income (loss) were as follows:

 

 

Fiscal Year Ended

 

 

 

December 31, 2023

 

 

December 25, 2022

 

 

December 26,
2021

 

 

 

Before Tax

 

Tax

 

After Tax

 

 

Before Tax

 

Tax

 

After Tax

 

 

Before Tax

 

Tax

 

After Tax

 

Available-for-sale debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized net holding gain (loss)

 

$

1,371

 

$

(338

)

$

1,033

 

 

$

(1,745

)

$

405

 

$

(1,340

)

 

$

(385

)

$

93

 

$

(292

)

Amounts reclassified for realized losses to earnings

 

 

182

 

 

(45

)

 

137

 

 

 

96

 

 

(22

)

 

74

 

 

 

55

 

 

(13

)

$

42

 

Total other comprehensive income (loss)

 

$

1,553

 

$

(383

)

$

1,170

 

 

$

(1,649

)

$

383

 

$

(1,266

)

 

$

(330

)

$

80

 

$

(250

)
v3.24.0.1
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

20. Commitments and Contingencies

Supplier Contracts: The Company purchases its egg inventories under long-term supply contracts with farms. Purchase commitments contained in these arrangements are variable dependent upon the quantity of eggs produced by the farms. Accordingly, there are no estimable future purchase commitments associated with these supplier contracts and there are no minimum payments associated with these long-term supply contracts. The Company records the total cost of eggs into inventory and they are expensed to cost of goods sold when the associated eggs are sold to customers and are also reported as part of the Company’s variable lease cost. During December 2023, the Company executed two long-term supply contracts with farms to provide a one-time payment of $200,000 each at lease inception as an incremental cost of obtaining the lease.

Indemnification Agreements: In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its Board of Directors and its executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. As of December 31, 2023, the Company has not incurred any material costs as a result of such indemnification agreements.

Litigation: The Company is subject to various claims and contingencies that are in the scope of ordinary and routine litigation incidental to its business, including those related to regulation, litigation, business transactions, employee-related matters and taxes, among others. When the Company becomes aware of a claim or potential claim, the likelihood of any loss or exposure is assessed. Based on these assessments and estimates, we may establish reserves, as appropriate. These assessments and estimates are based on the information available to management at the time and involve a significant amount of management judgment. Actual outcomes or losses may differ materially from our assessments and estimates.

On May 20, 2021, the Company and certain of its current and former officers were named as defendants in a class action complaint captioned Nicholas A. Usler et al. v. Vital Farms, Inc. et al. in the United States District Court for the Western District of Texas. The plaintiffs alleged false advertising claims on behalf of themselves and a putative class of alleged consumers of the Company’s eggs. The named officers of the Company were subsequently dismissed as defendants in this matter. In September 2023, the parties engaged in mediation to discuss potential settlement of remaining claims, but no agreement was reached and the lawsuit is ongoing. The Company believes the claims are without merit and is vigorously defending itself in this matter. Given the uncertainty of the litigation, the stage of the case, and the legal standards that must be met for, among other things, class certification and success on the merits, the Company is unable to reasonably estimate the possible loss or range of loss, if any, that may result from the claim.

Although the Company maintains insurance for certain potential liabilities, such insurance does not cover all types and amounts of potential liabilities and is subject to various exclusions and caps on amounts recoverable. Even if the Company believes a claim is covered by insurance, insurers may dispute its entitlement to recovery for a variety of potential reasons, which may affect the timing and, if the insurers prevail, the amount of the Company's recovery. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the Company records a liability for the loss. If the loss is not probable or the amount of the loss cannot be reasonably estimated, the Company discloses the claim if the likelihood of a potential loss is reasonably possible.
v3.24.0.1
Related Party Transactions
 12 Months Ended
Dec. 31, 2023
Related Party Transactions [Abstract]  
Related Party Transactions

21. Related Party Transactions

Ovabrite: Ovabrite, Inc., a Delaware corporation (“Ovabrite”), has been deemed a related party because its founders were stockholders of the Company, with the majority stockholder in Ovabrite also serving as the Company’s executive chairperson and member of the Board of Directors. Since Ovabrite’s incorporation in November 2016, the Company has been deemed to have had a variable interest in Ovabrite, and Ovabrite has been deemed to have been a VIE, of which the Company has been the primary beneficiary. Accordingly, the Company has consolidated the results of Ovabrite since November 2016. All significant intercompany transactions between the Company and Ovabrite have been eliminated in consolidation.

Effective August 30, 2022, Ovabrite’s Board of Directors and the holders of the majority of its outstanding capital stock consented to dissolving the entity, and a Certificate of Dissolution was filed with the Delaware Secretary of State. As of December 31, 2023, Ovabrite had completed its business activities and liquidated its remaining assets. The results of operations of the Ovabrite entity were immaterial for all periods presented.

Sandpebble Builders Preconstruction, Inc.: The Company utilizes Sandpebble Builders Preconstruction, Inc. and Sandpebble South, Inc. (collectively “Sandpebble”) for project management and related services associated with the construction and expansion of our egg processing facilities, including site selection, project management and related services for the Company’s potential future egg packing facility. The Company's contract with Sandpebble for services related to the Company's next egg packing facility was awarded after a competitive bidding process. Victor Canseco, the owner and principal of Sandpebble, is the father of Russell Diez-Canseco, the Company’s President and Chief Executive Officer and a member of the Board of Directors. In connection with the services described above, the Company paid Sandpebble $631, $962, and $1,037 during the fiscal years ended December 31, 2023, December 25, 2022, and December 26, 2021, respectively. Amounts paid to Sandpebble are included in property, plant and equipment, net and selling, general and administrative costs. As of the fiscal years ended December 31, 2023 and December 25, 2022, amounts owed to Sandpebble were $0 and $51, respectively, and are included in accounts payable.

Whole Foods Market, Inc: A member of the Board of Directors was, until February 2022, an executive vice president and senior advisor at Whole Foods. The Company serves the majority of its natural channel retail customers through food distributors, such as US Foods Inc. and United Natural Foods, Inc., who purchase, store, sell and deliver products to Whole Foods. While the Company cannot precisely determine its specific revenue attributable to Whole Foods, it is a significant customer.
v3.24.0.1
401(k) Savings Plan
 12 Months Ended
Dec. 31, 2023
Retirement Benefits [Abstract]  
401(K) Savings Plan

22. 401(k) Savings Plan

The Company established a defined contribution savings plan in 2017 under Section 401(k) of the Internal Revenue Code of 1986, as amended. This plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Company contributions to the plan may be made at the discretion of the Board of Directors. During the fiscal years ended December 31, 2023, December 25, 2022, and December 26, 2021, the Company made contributions totaling $1,185, $861, and $651 respectively, to the plan.
v3.24.0.1
Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Use of Estimates

Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates principally include revenue recognition, determination of useful lives for property and equipment, trade spend accruals, goodwill, allowance for credit losses, inventory obsolescence, stock option valuations, accrued liabilities, income taxes and contingencies. Actual results could differ from those estimates.
Concentrations of Credit Risk and Significant Customers

Concentrations of Customers and Risk: A substantial amount of our shell egg processing occurs at our Egg Central Station shell egg processing facility. Any shutdown or period of reduced production at Egg Central Station, which may be caused by regulatory noncompliance or other issues, as well as factors beyond our control, such as natural disaster, weather, fire, power interruption, work stoppage, disease outbreaks or pandemics, equipment failure or delay in raw materials delivery, would significantly disrupt our ability to deliver our products in a timely manner, meet our contractual obligations and operate our business.

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, investments, accounts receivable and derivative instruments. The Company maintains deposits with large financial institutions that the Company believes are of high credit quality. At times the Company’s cash and cash equivalents balances with individual banking institutions are in excess of federally insured limits. The Company has not experienced any losses related to its cash and cash equivalents balances.

The Company's customer concentration for the fiscal year ended December 31, 2023 was as follows:

 

 

 

Net Revenue
Year Ended December 31, 2023

 

Net Revenue
Year Ended December 25, 2022

 

Net Revenue
Year Ended December 26, 2021

 

Accounts Receivable, Net
as of December 31, 2023

 

Accounts Receivable, Net
as of December 25, 2022

Customer A

 

25%

 

26%

 

18%

 

18%

 

23%

Customer B

 

*

 

11%

 

12%

 

12%

 

12%

Customer C

 

*

 

*

 

14%

 

*

 

*

Customer D

 

*

 

*

 

10%

 

*

 

*

Customer E

 

*

 

*

 

*

 

11%

 

13%

Customer F

 

*

 

*

 

*

 

11%

 

*

* Denotes percentage less than 10%
Cash and Cash Equivalents

Cash and Cash Equivalents: The Company considers all short-term, highly liquid investments purchased with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash deposits are all in financial institutions in the United States. As of December 31, 2023 and December 25, 2022, cash and cash equivalents consisted of cash on deposit with balances denominated in U.S. dollars and investments in money market funds.
Investment Securities

Investment Securities: The Company accounts for its investment securities in accordance with ASC 320, Investments-Debt and Equity Securities. The Company considers all of its debt securities for which there is a determinable fair market value, and there are no restrictions on the Company’s ability to sell within the next 12 months, as available-for-sale. The Company classifies these securities as current, because the amounts invested are available for current operations. Available-for-sale securities are carried at fair value, with unrealized gains and losses, net of tax, recorded in other comprehensive income until the security is settled or sold, except for changes in allowance for expected credit losses, which are reported on a gross basis in other expense.

The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization is recorded in interest income. The cost of securities sold is based on the specific identification method with realized gains and losses on the sale of debt securities and declines in value due to credit-related factors, reclassified out of accumulated other comprehensive income when sold and recorded in other income. Income tax effects related to realized gains and losses on available-for-sale securities are released from accumulated other comprehensive income quarterly with the recognition of the Company’s tax provision. Interest and dividends on securities classified as available-for-sale are recorded in interest income.
Variable Interest Entity

Variable Interest Entity: The Company consolidates all entities where a controlling financial interest exists. The Company has considered its relationship with Ovabrite, Inc. to determine whether the Company has a variable interest in that entity, and if so, whether the Company is the primary beneficiary of the relationship. GAAP requires variable interest entities (“VIEs”) to be consolidated if an entity’s interest in the VIE is a controlling financial interest. Under the variable model, a controlling financial interest is determined based on which entity, if any, has (i) the power to direct the activities of the VIE that most significantly impacts the VIE’s economic performance and (ii) the obligations to absorb losses that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Management performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with a VIE will cause the consolidation conclusion to change. The consolidation status of a VIE may change as a result of such reassessments. Changes in consolidation status are applied prospectively in accordance with GAAP.
Segment Information

Segment Information: The Company operates and manages its business as one reportable and operating segment. The Company’s Chief Executive Officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of evaluating financial performance and allocating resources. All of the Company’s long-lived assets and customers are located in the United States.
Fair Value of Financial Instruments

Fair Value of Financial Instruments: Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three levels of inputs that may be used to measure fair value are defined below:

•
Level 1 - Quoted prices in active markets for identical assets or liabilities.
•
Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
•
Level 3 - Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The carrying values of cash, trade receivables, other non-trade receivables within prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities approximate their fair value due to the short-term nature of these assets and liabilities.
Accounts Receivable

Accounts Receivable: Accounts receivable are stated at amounts due from customers net of any allowance for credit losses. The Company generally does not have collateral for its receivables, but the Company does periodically evaluate the creditworthiness of its customers.
Allowance for Credit Losses

Allowance for Credit Losses: The allowance for expected credit losses related to trade receivables is estimated based on the trade receivable aging category, credit risk of specific customers, past collection history, and management’s evaluation of accounts receivable. The evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. The provision for expected credit losses is charged within selling, general and administrative costs. These losses have been immaterial to date. Subsequent recoveries, if any, are credited to the allowance.

The allowance for expected credit losses related to other non-trade receivables are estimated based on the aging category and the probability of default. Provisions for current estimated credit losses are classified within selling, general and administrative costs.
Inventories

Inventories: Inventories are stated at the lower of cost (determined under the weighted average cost method) or net realizable value. In addition to product cost, inventory costs include expenditures such as in-bound shipping and handling and warehousing costs incurred in bringing the inventory to its existing condition and location. Inventory includes eggs and egg-related products, butter and butter-related products, packaging, feed, laying hens, pullets, and equipment parts. A reduction in the carrying value of an inventory item from cost to net realizable value is recorded in cost of goods sold with the offset to inventory. Any inventory that does not meet the quality control standards of the Company is separated and written down to its net realizable value.
Derivative Financial Instruments

Derivative Financial Instruments: The Company uses derivative instruments as part of its risk management activities to reduce its exposure to commodity price risk. Business operations give rise to certain market exposures, mostly due to changes in commodity prices of corn and soybean meal. Credit risks associated with derivative contracts are not significant, as the Company minimizes counterparty exposure by dealing with creditworthy counterparties and collateralized insurers and by utilizing exchange traded instruments and insurance backed commodity settlement contracts. While the Company may be exposed to potential losses due to the credit risk of non-performance by these counterparties, losses are not anticipated. The Company does not hold derivative instruments for trading purposes. Additionally, the Company’s derivative contracts are short-term in duration and do not make use of credit-risk-related contingent features.

Derivatives used to manage commodity price risk are not designated for hedge accounting treatment. Therefore, the changes in fair value of these derivatives are recorded as incurred within other expense, net. Net realized gains and losses on derivative instruments are reported as a reconciling item from net income to cash from operating activities in our consolidated statements of cash flows. Cash flows related to settlements and purchases of derivative instruments are reported as investing activities within the consolidated statements of cash flows.

Property, Plant and Equipment

Property, Plant and Equipment: Property, plant and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives. The general range of useful lives of other property, plant and equipment is as follows:

 

 

 

 

Estimated Useful Life

Land

N/A

Land improvements

 

15 to 20 years

Buildings and improvements

15 to 39 years

Vehicles

5 years

Machinery and equipment

2 to 7 years

Furniture and fixtures

5 years

Leasehold improvements

Lesser of lease term or 5 years

When assets are sold or retired, the cost and related accumulated depreciation or amortization of assets disposed of are removed from the accounts, with any resulting gain or loss recorded in operations in the consolidated statements of income. Normal repairs and maintenance costs are expensed as incurred to operations.
Goodwill

Goodwill: Goodwill represents the excess of cost over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. Goodwill is not amortized but is tested for impairment annually on the first day of the fourth fiscal quarter or more frequently if events or changes in circumstances indicate that the asset may be impaired. The Company’s goodwill impairment test is performed at the enterprise level given the single reporting unit.

The Company first assesses qualitative factors to determine whether events or circumstances existed that would lead the Company to conclude that it is more likely than not that the fair value of the reporting unit is below its carrying amount. If the Company determines that it is more likely than not that the fair value of the reporting unit is below the carrying amount based on qualitative factors or if significant changes to macro-economic factors related to the reporting unit have occurred that could materially impact fair value, a quantitative goodwill assessment would be required. In the quantitative evaluation, the fair value of the reporting unit is determined and compared to the carrying value. If the fair value is greater than the carrying value, then the carrying value is deemed to be recoverable and no further action is required. If the fair value estimate is less than the carrying value, goodwill is considered impaired for the amount by which the carrying amount exceeds the reporting unit’s fair value and a charge is reported as impairment of goodwill in the consolidated statements of income. To date, the Company has not recorded any impairment charges associated with its goodwill.
Leases

Leases: The Company determines if an arrangement is or contains a lease at inception, which is the date on which the terms of the contract are agreed to and the agreement creates enforceable rights and obligations. Under ASC 842, Leases (“Topic 842”), a contract is or contains a lease when (i) explicitly or implicitly identified assets have been deployed in the contract and (ii) the customer obtains substantially all of the economic benefits from the use of that underlying asset and directs how and for what purpose the asset is used during the term of the contract. The Company also considers whether its service arrangements include the right to control the use of an asset.

The Company has made an accounting policy election not to recognize right-of-use (“ROU”) assets and lease liabilities for leases with a term of 12 months or less. For all other leases, the Company recognizes ROU assets and lease liabilities based on the present value of lease payments over the lease term at the commencement date of the lease. The Company’s recognized ROU assets also include any initial direct costs incurred and lease payments made at or before the commencement date, which are reduced by any lease incentives.

Future lease payments may include fixed rent escalation clauses or payments that depend on an index (such as the Consumer Price Index measured by the U.S. Bureau of Labor Statistics). Subsequent index changes and other periodic market-rate adjustments to base rent are recorded as variable lease expense during the period in which they are incurred. Residual value guarantees or payments for terminating the lease are included in the lease payments only when it is probable they will be incurred.

The Company has made an accounting policy election to account for lease and non-lease components in its contracts as a single lease component for all asset classes. The non-lease components typically represent additional services transferred to the Company, such as common area maintenance for real estate, which are variable in nature and recorded in variable lease expense in the period incurred.
Impairment of Long-Lived Assets

Impairment of Long-Lived Assets: The Company reviews the carrying value of property, plant and equipment for impairment whenever events and circumstances indicate the carrying value of an asset may not be recoverable from the estimated undiscounted future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects and the effects of obsolescence, demand, competition and other economic factors. The Company did not recognize an impairment loss during the fiscal years ended December 31, 2023, December 25, 2022, and December 26, 2021.
Noncontrolling Interest

Noncontrolling Interest: The Company recognizes noncontrolling interest related to VIEs, in which the Company is the primary beneficiary, as equity in the consolidated financial statements separate from the parent entity’s equity. The amount of net income or loss attributable to noncontrolling interests is included in consolidated net income on the face of the consolidated statements of income. Changes in the parent entity’s ownership interest in a subsidiary that do not result in deconsolidation are treated as equity transactions if the parent entity retains its controlling financial interest. In addition, when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary will be initially measured at fair value and the difference between the carrying value and fair value of the retained interest will be recorded as a gain or loss. Affiliate equity interests where the Company has certain rights to demand settlement are presented at their current redemption values, as redeemable noncontrolling interest in the consolidated balance sheet. Because these transactions take place between entities under common control, any gains or losses attributable to these transactions are required to be included within additional paid-in-capital on the consolidated balance sheets.
Income Taxes

Income Taxes: Income taxes are computed using the asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements. In estimating future tax consequences, the Company considers all expected future events other than enactment of changes in tax laws or rates. A valuation allowance is recorded, if necessary, to reduce net deferred tax assets to their realizable values if management does not believe it is more likely than not that the net deferred tax assets will be realized.

The Company recognizes the benefit of an income tax position only if it is more likely than not (greater than 50%) that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position. Otherwise, no benefit can be recognized. Assessing an uncertain tax position begins with the initial determination of the sustainability of the position and is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed. Additionally, the Company must accrue interest and related penalties, if applicable, on all tax exposures for which reserves have been established consistent with jurisdictional tax laws.

The Company’s policy is to recognize interest and penalties related to uncertain tax positions in the provision for income taxes. As of December 31, 2023 and December 25, 2022 the Company had accrued interest and penalties related to uncertain tax positions of $171 and $85.
Net Income (Loss) per Share Attributable to Vital Farms, Inc. Common Stockholders

Net Income per Share Attributable to Vital Farms, Inc. Common Stockholders: The Company applies the two-class method to compute basic and diluted net income per share attributable to the Company’s common stockholders when shares meet the definition of participating securities. The two-class method determines net income per share for each class of the Company’s common stock and preferred stock according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between the Company’s common stock and preferred stock based upon their respective rights to share in the earnings as if all income for the period had been distributed. During periods of loss, there is no allocation required under the two-class method since the preferred stock does not have a contractual obligation to share in the Company’s losses.

Basic net income per share attributable to the Company’s stockholders is computed by dividing net income by the weighted-average number of shares outstanding during the period without consideration of potentially dilutive common stock. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue shares of the Company’s common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company unless inclusion of such shares would be anti-dilutive. For periods in which the Company reports net losses, diluted net loss per common share attributable to the Company’s common stockholders is the same as basic net loss, because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.
Revenue Recognition

Revenue Recognition: The Company generates revenue primarily through sales of products to its customers, which include natural channel retailers, mainstream channel retailers and foodservice customers. The Company sells its products to customers on a purchase-order basis.

Revenue is recognized when control of the product is transferred to the customer and the related performance obligation is satisfied, which typically occurs upon delivery of the product to the customer, for an amount that reflects the net consideration the Company expects to receive in exchange for delivering the product. The Company offers sales incentives through various programs to customers and allow deductions from its customers, which may include credits or discounts to customers in the event that products do not conform to customer specifications or expire at a customer’s site. The cost associated with promotions and chargebacks is estimated and recorded as a reduction in revenue and is recognized at the time the related revenue is recorded, which normally precedes the actual cash expenditure. The recognition of this cost therefore requires management judgment regarding the volume of promotional offers that will be redeemed. Differences between estimated cost and actual redemptions are recognized as a change in management estimate in a subsequent period.

In many cases, key sales terms such as pricing and quantities ordered are established on a regular basis such that most customer arrangements and related incentives have a duration of less than one year. Amounts billed and due from customers are short-term in nature and are classified as receivables since payments are unconditional and only the passage of time is required before payments are due.
Treasury Stock

Treasury Stock: The Company records treasury stock activities under the cost method whereby the cost of the acquired stock is recorded as treasury stock. The Company’s accounting policy upon the formal retirement of treasury stock is to deduct the par value from the Company’s common stock and to reflect any excess of cost over par value as a reduction to additional paid-in capital (to the extent created by previous issuances of the shares).
Shipping and Distribution

Shipping and Distribution: The Company’s shipping and distribution costs include costs incurred with third-party carriers to transport products to customers and salaries and overhead costs related to activities to prepare the Company’s products for shipment. Shipping and distribution costs were $27,344, $30,104, and $24,979 during the fiscal years ended December 31, 2023, December 25, 2022, and December 26, 2021, respectively. Freight-in costs are included within cost of goods sold and were $4,823, $9,610, and $7,623 during the fiscal years ended December 31, 2023, December 25, 2022, and December 26, 2021, respectively.
Stock-Based Compensation

Stock-Based Compensation: The Company measures all stock-based awards granted to employees and directors based on the estimated fair value on the date of the grant and recognizes compensation expense for those awards, over the requisite service period, which is generally the vesting period of the respective award. Stock options generally vest ratably over three years from the date of grant and expire 10 years from the date of grant. Restricted stock awards generally vest ratably over three years from the date of grant and contain no other service or performance conditions. The Company recognizes stock-based compensation expense on a straight-line basis over the requisite service or vesting period. Forfeitures for stock options and restricted stock awards are recognized as they occur. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing valuation model, which requires inputs based on certain subjective assumptions, including the fair market value of the Company’s common stock, expected stock price volatility, the expected term of the option, the risk-free interest rate for a period that approximates the expected term of the option, and the Company’s expected dividend yield. The Company classifies stock-based compensation expense in its consolidated statements of income in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.
Advertising and Promotion Expenses

Advertising and Promotion Expenses: Advertising and promotion expenses consist primarily of production costs and the costs to communicate the advertisements to promote and market the Company’s products. Production costs such as idea development, artwork, audio and video crews and other upfront development costs are expensed the first time the associated advertising campaign is launched or aired. The costs to communicate the advertisements such as airtime and distribution costs are expensed as incurred. During the fiscal years ended December 31, 2023, December 25, 2022, and December 26, 2021, the Company incurred advertising and promotion expenses of approximately $23,625, $13,301, and $11,469, respectively.
Emerging Growth Company Status

Emerging Growth Company Status: The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised financial accounting standards until such time as those standards apply to private companies.
Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements: In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) and also issued subsequent amendments to the initial guidance, ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11, ASU 2020-02, ASU 2020-03 and ASU 2022-02 (collectively, “Topic 326”), to introduce a new impairment model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. Topic 326 requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. The Company adopted ASU 2016-13 on December 26, 2022. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. There was no impact on the Company’s consolidated financial statements at adoption.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which intends to simplify the guidance by removing certain exceptions to the general principles and clarifying or amending existing guidance. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company adopted ASU 2019-12 during fiscal year 2022 and there was no material impact on the Company’s consolidated financial statements for the fiscal years ended December 25, 2022 and December 31, 2023.
Recently Issued Accounting Pronouncements Not Yet Adopted

Recently Issued Accounting Pronouncements Not Yet Adopted: In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) — Improvements to Reportable Segment Disclosures (“ASU 2023-07”) in order to improve stockholders’ understanding of an entity’s business activities through enhanced disclosures around reportable segments. ASU 2023-07 will require incremental and more detailed disclosure regarding segment expenses on both an annual and interim basis. For public companies ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company expects to adopt the standard for the fiscal year beginning January 1, 2024. The Company is currently evaluating the impact of its pending adoption of ASU 2023-07 on its consolidated financial statements.

In December 2023, the FASB issued ASU No 2023-09, Income Taxes (Topic 740) — Improvements to Income Tax Disclosures (“ASU 2023-09”) in order to enhance the transparency and usefulness of income tax disclosures. The guidance is applicable to all entities subject to income tax and it will require disclosure of certain categories within the rate reconciliation to improve consistency as well as disclosure of reconciling items which meet a certain quantitative threshold which will improve transparency. Additionally, entities must disclose the amount of taxes paid to federal, state and foreign municipalities. For public business entities ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Company expects to adopt the standard for the fiscal year beginning December 30, 2024. The Company is currently evaluating the impact of its pending adoption of ASU 2023-09 on its consolidated financial statements.
v3.24.0.1
Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Summary of Significant Customers Information

The Company's customer concentration for the fiscal year ended December 31, 2023 was as follows:

 

 

 

Net Revenue
Year Ended December 31, 2023

 

Net Revenue
Year Ended December 25, 2022

 

Net Revenue
Year Ended December 26, 2021

 

Accounts Receivable, Net
as of December 31, 2023

 

Accounts Receivable, Net
as of December 25, 2022

Customer A

 

25%

 

26%

 

18%

 

18%

 

23%

Customer B

 

*

 

11%

 

12%

 

12%

 

12%

Customer C

 

*

 

*

 

14%

 

*

 

*

Customer D

 

*

 

*

 

10%

 

*

 

*

Customer E

 

*

 

*

 

*

 

11%

 

13%

Customer F

 

*

 

*

 

*

 

11%

 

*

* Denotes percentage less than 10%
Schedule of Useful Lives of Property Plant and Equipment The general range of useful lives of other property, plant and equipment is as follows:

 

 

 

 

Estimated Useful Life

Land

N/A

Land improvements

 

15 to 20 years

Buildings and improvements

15 to 39 years

Vehicles

5 years

Machinery and equipment

2 to 7 years

Furniture and fixtures

5 years

Leasehold improvements

Lesser of lease term or 5 years
v3.24.0.1
Investment Securities (Tables)
 12 Months Ended
Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
Summary of Available-for-sale Investment Securities

The following table summarizes the Company’s available-for-sale investment securities as of December 31, 2023:

 

 

Amortized Cost

 

 

Gross Unrealized Gains

 

 

Gross Unrealized Losses

 

 

Allowance for Credit Losses

 

 

Fair Value

 

U.S. corporate bonds and U.S. dollar
   denominated foreign bonds

 

$

33,134

 

 

$

10

 

 

$

(477

)

 

$

—

 

 

$

32,667

 

Total

 

$

33,134

 

 

$

10

 

 

$

(477

)

 

$

—

 

 

$

32,667

 

The following table summarizes the Company’s available-for-sale investment securities as of December 25, 2022:

 

 

Amortized Cost

 

 

Gross Unrealized Gains

 

 

Gross Unrealized Losses

 

 

Allowance for Credit Losses

 

 

Fair Value

 

U.S. corporate bonds and U.S. dollar
   denominated foreign bonds

 

$

66,658

 

 

$

4

 

 

$

(2,000

)

 

$

—

 

 

$

64,662

 

U.S. Treasury

 

 

1,176

 

 

 

—

 

 

 

(24

)

 

 

—

 

 

 

1,152

 

Total

 

$

67,834

 

 

$

4

 

 

$

(2,024

)

 

$

—

 

 

$

65,814

 
Schedule of Proceeds, Gross Realized Gains and Losses from the Sale of Available-for-sale Securities

The following table presents the Company’s proceeds, gross realized gains and losses from the sale of available-for-sale securities for the periods presented:

 

 

Fiscal Year Ended

 

 

 

December 31,
2023

 

 

December 25,
2022

 

 

December 26,
2021

 

Proceeds

 

$

2,895

 

 

$

—

 

 

$

1,436

 

 

 

 

 

 

 

 

 

 

Gross realized gains

 

 

—

 

 

 

9

 

 

 

—

 

Gross realized losses

 

 

(183

)

 

 

(105

)

 

 

(55

)

Net realized losses

 

$

(183

)

 

$

(96

)

 

$

(55

)
Summary of Contractual Maturities of Investment Securities The amortized cost and fair value of the Company’s investments in available-for-sale securities as of December 31, 2023 by contractual maturity are as follows:

 

 

Amortized Cost

 

 

Fair Value

 

Due within one year

 

$

23,478

 

 

$

23,157

 

Due after one year through five years

 

 

9,656

 

 

 

9,510

 

Total available-for-sale

 

$

33,134

 

 

$

32,667

 
Schedule of Unrealized Loss Aging for Available-for-sale Securities

The following tables present the Company’s unrealized loss aging for available-for-sale securities by type and length of time the security was in a continuous unrealized loss position as of the periods presented:

 

 

 

December 31, 2023

 

 

 

Less than 12 months

 

 

12 months or longer

 

 

Total

 

 

 

Fair Value

 

 

Unrealized Losses

 

 

Fair Value

 

 

Unrealized Losses

 

 

Fair Value

 

 

Unrealized Losses

 

U.S. corporate bonds and U.S. dollar
   denominated foreign bonds

 

$

699

 

 

$

(3

)

 

$

29,247

 

 

$

(474

)

 

$

29,946

 

 

$

(477

)

Total

 

$

699

 

 

$

(3

)

 

$

29,247

 

 

$

(474

)

 

$

29,946

 

 

$

(477

)

 

 

 

 

December 25, 2022

 

 

 

Less than 12 months

 

 

12 months or longer

 

 

Total

 

 

 

Fair Value

 

 

Unrealized Losses

 

 

Fair Value

 

 

Unrealized Losses

 

 

Fair Value

 

 

Unrealized Losses

 

U.S. corporate bonds and U.S. dollar
   denominated foreign bonds

 

$

31,657

 

 

$

(888

)

 

$

32,406

 

 

$

(1,112

)

 

$

64,063

 

 

$

(2,000

)

U.S. Treasury

 

 

—

 

 

 

—

 

 

 

1,176

 

 

 

(24

)

 

 

1,176

 

 

 

(24

)

Total

 

$

31,657

 

 

$

(888

)

 

$

33,582

 

 

$

(1,136

)

 

$

65,239

 

 

$

(2,024

)
v3.24.0.1
Derivative Financial Instruments (Tables)
 12 Months Ended
Dec. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule Of Notional Amounts of Outstanding Derivative Instruments

The following table presents the aggregated outstanding notional amounts related to the Company’s derivative financial instruments for the periods presented:

 

 

Metric

 

December 31,
2023

 

 

December 25,
2022

 

Commodity:

 

 

 

 

 

 

 

 

Corn

 

Bushels (in thousands)

 

 

2,351

 

 

 

—

 

Soybean Meal

 

Tons

 

 

25

 

 

 

—

 
v3.24.0.1
Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2023
Fair Value Disclosures [Abstract]  
Schedule of Financial Assets Measured at Fair Value

The following tables present information about the Company’s financial assets measured at fair value on a recurring basis for the periods presented:

 

 

Fair Value Measurements as of December 31, 2023, Using:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market

 

$

64,498

 

 

$

—

 

 

$

—

 

 

$

64,498

 

Investment securities, available-for-sale:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. corporate bonds and U.S. dollar
   denominated foreign bonds

 

 

—

 

 

 

32,667

 

 

 

—

 

 

 

32,667

 

Prepaid expenses and other current assets:

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments

 

 

—

 

 

 

394

 

 

 

—

 

 

 

394

 

Total assets measured at fair value

 

$

64,498

 

 

$

33,061

 

 

$

—

 

 

$

97,559

 

 

 

 

Fair Value Measurements as of December 25, 2022, Using:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market

 

$

6,740

 

 

$

—

 

 

$

—

 

 

$

6,740

 

Investment securities, available-for-sale:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. corporate bonds and U.S. dollar
   denominated foreign bonds

 

 

—

 

 

 

64,662

 

 

 

—

 

 

 

64,662

 

U.S. Treasury

 

 

—

 

 

 

1,152

 

 

 

—

 

 

 

1,152

 

Total assets measured at fair value

 

$

6,740

 

 

$

65,814

 

 

$

—

 

 

$

72,554

 
v3.24.0.1
Revenue Recognition (Tables)
 12 Months Ended
Dec. 31, 2023
Revenue from Contract with Customer [Abstract]  
Summary of Net Revenue by Primary Product

The following table summarizes the Company’s net revenue by primary product for the periods presented:

 

 

Fiscal Year Ended

 

 

 

December 31,
2023

 

 

December 25,
2022

 

 

December 26,
2021

 

Net Revenue:

 

 

 

 

 

 

 

 

 

Eggs and egg-related products

 

$

449,045

 

 

$

339,214

 

 

$

239,967

 

Butter and butter-related products

 

 

22,812

 

 

 

22,836

 

 

 

20,934

 

Net Revenue

 

$

471,857

 

 

$

362,050

 

 

$

260,901

 
v3.24.0.1
Allowance for Credit Losses (Tables)
 12 Months Ended
Dec. 31, 2023
Allowance for Credit Loss [Abstract]  
Schedule of Changes in Allowance for Credit Losses

Changes in the allowance for credit losses for the periods presented were as follows:

 

 

Accounts Receivable

 

 

Prepaid Expenses and other Current Assets

 

 

Total

 

As of December 27, 2020

 

$

(196

)

 

$

—

 

 

$

(196

)

Provisions charged to operating results

 

 

(184

)

 

 

—

 

 

 

(184

)

Account write-offs

 

 

111

 

 

 

—

 

 

 

111

 

As of December 26, 2021

 

$

(269

)

 

$

—

 

 

$

(269

)

Provisions charged to operating results

 

 

(546

)

 

 

(206

)

 

 

(752

)

Account write-offs

 

 

322

 

 

 

—

 

 

 

322

 

As of December 25, 2022

 

$

(493

)

 

$

(206

)

 

$

(699

)

Provisions charged to operating results

 

 

(364

)

 

 

(148

)

 

 

(512

)

Account write-offs

 

 

307

 

 

 

127

 

 

 

434

 

As of December 31, 2023

 

$

(550

)

 

$

(227

)

 

$

(777

)
v3.24.0.1
Inventories (Tables)
 12 Months Ended
Dec. 31, 2023
Inventory Disclosure [Abstract]  
Schedule of Inventory

Inventory consisted of the following as of the periods presented:

 

 

December 31,
2023

 

 

December 25,
2022

 

Eggs and egg-related products

 

$

25,521

 

 

$

13,675

 

Butter and butter-related products

 

 

1,697

 

 

 

5,718

 

Packaging

 

 

4,988

 

 

 

5,452

 

Pullets

 

 

289

 

 

 

981

 

Other

 

 

896

 

 

 

1,121

 

Reserve for inventory obsolescence

 

 

(496

)

 

 

(98

)

Inventories

 

$

32,895

 

 

$

26,849

 
v3.24.0.1
Property, Plant and Equipment (Tables)
 12 Months Ended
Dec. 31, 2023
Property, Plant and Equipment [Abstract]  
Schedule of Property, Plant and Equipment

Property, plant and equipment consisted of the following as of the periods presented:

 

 

December 31,
2023

 

 

December 25,
2022

 

Land

 

$

552

 

 

$

552

 

Land improvements

 

 

818

 

 

 

835

 

Buildings and improvements

 

 

30,532

 

 

 

29,667

 

Vehicles

 

 

1,055

 

 

 

894

 

Machinery and equipment

 

 

50,979

 

 

 

34,978

 

Leasehold improvements

 

 

492

 

 

 

919

 

Furniture and fixtures

 

 

461

 

 

 

685

 

Construction in progress

 

 

3,001

 

 

 

3,312

 

 

 

87,890

 

 

 

71,842

 

Less: Accumulated depreciation and amortization

 

 

(21,051

)

 

 

(12,687

)

Property, plant and equipment, net

 

$

66,839

 

 

$

59,155

 
v3.24.0.1
Leases (Tables)
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Schedule of Components of Lease Cost

The components of lease cost consisted of the following for the periods presented:

 

 

Fiscal Year Ended

 

 

 

December 31,
2023

 

 

December 25,
2022

 

 

December 26,
2021

 

 Operating lease cost

 

$

1,714

 

 

$

1,445

 

 

$

—

 

 Finance lease cost – amortization of right-of-use assets

 

 

2,565

 

 

 

439

 

 

 

—

 

 Finance lease cost – interest on lease liabilities

 

 

740

 

 

 

87

 

 

 

28

 

 Short-term lease cost

 

 

771

 

 

 

67

 

 

 

—

 

 Variable lease cost

 

 

7,533

 

 

 

2,967

 

 

 

—

 

 Variable lease cost – long-term supply contracts

 

 

200,050

 

 

 

143,696

 

 

 

—

 

 Total lease cost

 

$

213,373

 

 

$

148,701

 

 

$

28

 
Summary of Supplemental Balance Sheet Information Related to Leases

Supplemental balance sheet information related to leases is as follows:

 

 

As of December 31, 2023

 

 

As of December 25, 2022

 

Finance Leases

 

 

 

 

 

 

Machinery and equipment

 

$

16,321

 

 

$

8,931

 

Less: Accumulated depreciation and amortization

 

 

(2,837

)

 

 

(272

)

Property, plant and equipment, net

 

$

13,484

 

 

$

8,659

 

 

 

 

As of December 31, 2023

 

 

As of December 25, 2022

 

Weighted-average remaining lease term (years)

 

 

 

 

 

 

Operating leases

 

 

2.97

 

 

 

2.18

 

Finance leases

 

 

3.83

 

 

 

4.85

 

Weighted-average discount rate

 

 

 

 

 

 

Operating leases

 

 

7.38

%

 

 

3.32

%

Finance leases

 

 

7.12

%

 

 

6.34

%
Summary of Operating and Finance Leases Future Undiscounted Cash Flows

Future undiscounted cash flows are as follows:

 

 

As of December 31, 2023

 

 

 

Operating Leases

 

 

Finance Leases

 

2024

 

$

3,579

 

 

$

4,103

 

2025

 

 

3,170

 

 

 

4,103

 

2026

 

 

3,017

 

 

 

4,095

 

2027

 

 

—

 

 

 

3,332

 

2028

 

 

—

 

 

 

—

 

Thereafter

 

 

—

 

 

 

—

 

Total lease payments

 

 

9,766

 

 

 

15,633

 

Less imputed interest

 

 

(938

)

 

 

(1,897

)

Total present value of lease liabilities

 

$

8,828

 

 

$

13,736

 

 
Summary of Cash Flow Information related to Leases

Supplemental cash flow information related to leases is as follows:

Cash paid for amounts included in measurement of lease liabilities:

 

 

Fiscal Year Ended

 

 

 

December 31,
2023

 

 

December 25,
2022

 

Operating cash outflows - payments on operating leases

 

$

1,759

 

 

$

1,477

 

Operating cash outflows - interest payments on finance leases

 

 

740

 

 

 

87

 

Financing cash outflows - principal payments on finance leases

 

 

2,246

 

 

 

554

 

Right-of-use assets obtained in exchange for new lease obligations:

 

 

As of December 31, 2023

 

 

As of December 25, 2022

 

Operating leases

 

$

8,583

 

 

$

—

 

Finance leases

 

 

7,390

 

 

 

8,931

 
v3.24.0.1
Accrued Liabilities (Tables)
 12 Months Ended
Dec. 31, 2023
Payables and Accruals [Abstract]  
Schedule of Accrued Liabilities

Accrued liabilities consisted of the following as of the periods presented:

 

 

December 31,
2023

 

 

December 25,
2022

 

Employee-related costs

 

$

9,131

 

 

$

7,453

 

Promotions and customer deductions

 

 

6,982

 

 

 

4,414

 

Distribution fees and freight

 

 

2,876

 

 

 

2,351

 

Marketing and broker commissions

 

 

3,627

 

 

 

1,598

 

Purchases of inventory

 

 

525

 

 

 

1,349

 

Professional fees

 

 

1,066

 

 

 

761

 

Other

 

 

11

 

 

 

551

 

Accrued liabilities

 

$

24,218

 

 

$

18,477

 
v3.24.0.1
Product Exit Costs (Tables)
 12 Months Ended
Dec. 31, 2023
Restructuring and Related Activities [Abstract]  
Summary of Activity Related to Exit of Breakfast Products

The following table summarizes the activity related to the exit of the Company’s convenient breakfast products during the periods presented:

 

 

 

 

For the Fiscal Year Ended December 31, 2023

 

Description

 

Statement of Income
Classification

 

Beginning Liability Balance

 

 

Charges Incurred

 

 

Amounts Paid or Settled

 

 

Amounts Released as Unutilized

 

 

Ending Liability Balance

 

Asset write-downs

 

Cost of goods sold

 

$

119

 

 

$

—

 

 

$

(74

)

 

$

—

 

 

$

45

 

Total

 

 

 

$

119

 

 

$

—

 

 

$

(74

)

 

$

—

 

 

$

45

 

 

 

 

 

 

For the Fiscal Year Ended December 25, 2022

 

Description

 

Statement of Income
Classification

 

Charges Incurred

 

 

Amounts Paid or Settled

 

 

Amounts Released as Unutilized

 

 

Ending Liability Balance

 

Contract terminations

 

Selling, general and administrative

 

$

1,126

 

 

$

(1,126

)

 

$

—

 

 

$

—

 

Inventory obsolescence

 

Cost of goods sold

 

 

749

 

 

 

(749

)

 

 

—

 

 

 

—

 

Customer allowances

 

Net revenue

 

 

146

 

 

 

(111

)

 

 

(35

)

 

 

—

 

Asset write-downs

 

Cost of goods sold

 

 

119

 

 

 

—

 

 

 

—

 

 

 

119

 

Co-manufacturer charges

 

Cost of goods sold

 

 

135

 

 

 

(135

)

 

 

—

 

 

 

—

 

Asset disposals

 

Selling, general and administrative

 

 

66

 

 

 

(66

)

 

 

—

 

 

 

—

 

Total

 

 

 

$

2,341

 

 

$

(2,187

)

 

$

(35

)

 

$

119

 
v3.24.0.1
Common Stock (Tables)
 12 Months Ended
Dec. 31, 2023
Equity [Abstract]  
Schedule of Reserved Shares of Common Stock for Issuance

As of each balance sheet date, the Company had reserved shares of common stock for issuance in connection with the following:

 

 

 

December 31,
2023

 

 

December 25,
2022

 

Options to purchase common stock

 

 

3,920,485

 

 

 

4,634,205

 

Restricted stock units

 

 

565,376

 

 

 

505,504

 

Shares available for grant under the 2020 Equity Incentive
   Plan and 2020 Employee Stock Purchase Plan

 

 

13,313,326

 

 

 

11,503,459

 

Total

 

 

17,799,187

 

 

 

16,643,168

 
v3.24.0.1
Stock-Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Summary of Recognized Stock - Based Compensation Expense

The Company recognized stock-based compensation expense and the related tax benefit as follows for the periods presented:

 

 

Fiscal Year Ended

 

 

 

December 31,
2023

 

 

December 25,
2022

 

 

December 26,
2021

 

Cost of goods sold1

 

$

260

 

 

$

188

 

 

$

133

 

Selling, general and administrative expense2

 

 

7,157

 

 

 

5,852

 

 

 

4,307

 

Total

 

$

7,417

 

 

$

6,040

 

 

$

4,440

 

 

 

 

 

 

 

 

 

 

Tax benefit

 

$

2,998

 

 

$

970

 

 

$

3,872

 
1.
Includes $7, $6 and $0 of expense related to the 2020 Employee Stock Purchase Plan as of December 31, 2023, December 25, 2022, and December 26, 2021, respectively.
2.
Includes $97, $57 and $0 of expense related to the 2020 Employee Stock Purchase Plan as of December 31, 2023, December 25, 2022, and December 26, 2021, respectively.
Summary of Stock Option Activity

The following table summarizes the Company’s stock option activity since December 25, 2022:

 

 

Number of
Options

 

 

Weighted-
Average
Exercise
Price

 

 

Weighted-
Average
Remaining
Contractual
Term (Years)

 

 

Aggregate
Intrinsic
Value

 

Outstanding as of December 25, 2022

 

 

4,634,205

 

 

$

9.35

 

 

 

 

 

$

38,520

 

Granted

 

 

520,154

 

 

$

15.00

 

 

 

 

 

 

 

Exercised

 

 

(737,000

)

 

$

1.05

 

 

 

 

 

$

9,091

 

Cancelled/Forfeited

 

 

(496,874

)

 

$

21.89

 

 

 

 

 

$

61

 

Outstanding as of December 31, 2023

 

 

3,920,485

 

 

$

10.07

 

 

 

5.8

 

 

$

28,749

 

Options exercisable as of December 31, 2023

 

 

2,793,016

 

 

$

8.31

 

 

 

5.0

 

 

$

25,215

 

Options vested and expected to vest as of December 31, 2023

 

 

3,920,485

 

 

$

10.07

 

 

 

5.8

 

 

$

28,749

 
Summary of Assumptions, Fair Values and Intrinsic Values of Stock Options

The Company estimates the fair value of stock options on the date of grant using a Black-Scholes option-pricing valuation model, which uses the expected option term, stock price volatility, and the risk-free interest rate. The expected option term assumption reflects the period for which the Company believes the option will remain outstanding. The Company elected to use the simplified method to determine the expected option term, for all periods presented, which is the average of the option’s vesting and contractual term. The Company’s computation of expected volatility is based on the historical volatility of selected comparable publicly traded companies over a period equal to the expected term of the option. The risk-free interest rate reflects the U.S. Treasury yield curve for a similar instrument with the same expected term in effect at the time of the grant.

The following table summarizes the valuation model assumptions, fair values and intrinsic values of stock options during the fiscal years indicated:

 

 

December 31,
2023

 

 

December 25,
2022

 

 

December 26,
2021

 

Expected term (in years)

 

6.0

 

 

6.0

 

 

6.0 - 6.5

 

Expected stock price volatility

 

27.8% - 29.2%

 

 

27.6% - 28.6%

 

 

28.5% - 29.4%

 

Risk-free interest rate

 

3.63% - 4.45%

 

 

1.64% - 4.16%

 

 

0.57% - 1.36%

 

Expected dividend yield

 

0%

 

 

0%

 

 

0%

 

Weighted average fair value at grant date

 

$

5.33

 

 

$

3.97

 

 

$

7.31

 

Fair value of stock options vested

 

$

3,160

 

 

$

3,245

 

 

$

2,694

 

Intrinsic value of stock options exercised

 

$

9,091

 

 

$

1,827

 

 

$

20,343

 

Proceeds from stock options exercised

 

$

776

 

 

$

568

 

 

$

2,776

 
Summary of Restricted Stock Unit Activity

The following table summarizes the restricted stock units ("RSU") activity since December 25, 2022:

 

 

Number of
RSUs

 

 

Weighted-
Average
Grant Date Fair Value

 

Unvested as of December 25, 2022

 

 

505,504

 

 

$

13.58

 

Granted

 

 

350,497

 

 

$

15.04

 

Vested1

 

 

(217,347

)

 

$

14.03

 

Forfeited

 

 

(73,278

)

 

$

14.10

 

Unvested as of December 31, 2023

 

 

565,376

 

 

$

14.24

 
1.
Shares of common stock that were withheld to cover taxes on the release of vested RSUs and became available for future grants pursuant to the 2020 Equity Incentive Plan
v3.24.0.1
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Provision for Income Taxes

For the fiscal years ended December 31, 2023, December 25, 2022, and December 26, 2021, the provision for income taxes consisted of the following:

 

 

December 31,
2023

 

 

December 25,
2022

 

 

December 26,
2021

 

Current:

 

 

 

 

 

 

 

 

 

Federal

 

$

5,136

 

 

$

384

 

 

$

225

 

State

 

 

1,678

 

 

 

539

 

 

 

282

 

Deferred:

 

 

 

 

 

 

 

 

 

Federal

 

 

28

 

 

 

803

 

 

 

(2,164

)

State

 

 

(207

)

 

 

(125

)

 

 

(371

)

Provision (benefit) for income taxes

 

$

6,635

 

 

$

1,601

 

 

$

(2,028

)
Reconciliation of Federal Statutory Income Tax Provision

The Company’s income before income taxes is entirely derived from domestic sources for all periods presented. The reconciliation of the federal statutory income tax provision to the Company’s effective income tax provision is as follows:

 

 

December 31,
2023

 

 

December 25,
2022

 

 

December 26,
2021

 

Provision at statutory rate of 21%

 

$

6,762

 

 

$

594

 

 

$

74

 

State income taxes

 

 

1,117

 

 

 

51

 

 

 

(416

)

Stock-based compensation

 

 

(1,636

)

 

 

225

 

 

 

(2,846

)

Non-deductible costs

 

 

574

 

 

 

279

 

 

 

12

 

Charitable deduction

 

 

(95

)

 

 

634

 

 

 

(88

)

Change in deferred tax asset valuation allowance

 

 

84

 

 

 

(774

)

 

 

774

 

Revisions to prior year

 

 

4

 

 

 

212

 

 

 

—

 

Changes in uncertain tax positions

 

 

58

 

 

 

347

 

 

 

—

 

Tax credits

 

 

(238

)

 

 

—

 

 

 

—

 

Other, net

 

 

5

 

 

 

33

 

 

 

462

 

Provision (benefit) for income taxes

 

$

6,635

 

 

$

1,601

 

 

$

(2,028

)

 
Schedule of Deferred Income Tax Assets and Liabilities

Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company’s deferred income tax assets and liabilities at December 31, 2023 and December 25, 2022 were comprised of the following:

 

3

 

 

December 31,
2023

 

 

December 25,
2022

 

Deferred tax assets:

 

 

 

 

 

 

 

Accrued expenses

 

 

$

3,716

 

 

$

2,594

 

Allowances and other reserves

 

 

 

191

 

 

 

171

 

Inventory

 

 

 

1,498

 

 

 

963

 

Net operating loss carryforwards

 

 

 

110

 

 

 

1,503

 

Charitable contributions

 

 

 

—

 

 

 

230

 

Stock-based compensation

 

 

 

1,465

 

 

 

1,046

 

Lease liability

 

 

 

5,558

 

 

 

2,624

 

Other

 

 

 

467

 

 

 

581

 

Total deferred tax assets

 

 

 

13,005

 

 

 

9,712

 

Less: Valuation allowance

 

 

 

(84

)

 

 

—

 

Net deferred tax assets

 

 

$

12,921

 

 

$

9,712

 

Deferred tax liabilities:

 

 

 

 

 

 

 

Prepaid expenses

 

 

$

490

 

 

$

590

 

Property and equipment

 

 

 

6,778

 

 

 

6,273

 

Operating and finance lease right of use assets

 

 

 

5,517

 

 

 

2,589

 

Intangibles

 

 

 

507

 

 

 

430

 

Total deferred tax liabilities

 

 

$

13,292

 

 

$

9,882

 

Net deferred tax liabilities

 

 

$

(371

)

 

$

(170

)
Schedule of Deferred Tax Asset Valuation Allowance

The activity in the Company’s deferred tax asset valuation allowance for the fiscal years ended December 31, 2023 and December 25, 2022 was as follows:

 

 

December 31,
2023

 

 

December 25,
2022

 

Valuation allowance as of beginning of year

 

$

—

 

 

$

774

 

Increases recorded to income tax provision

 

 

84

 

 

 

—

 

Decreases recorded as benefit to income tax provision

 

 

—

 

 

 

(774

)

Valuation allowance as of end of year

 

$

84

 

 

$

—

 
Unrecognized Tax Benefits

The following table reflects changes in gross unrecognized tax benefits:

 

 

December 31,
2023

 

 

December 25,
2022

 

Gross tax contingencies as of beginning of year

 

$

511

 

 

$

219

 

Increase in gross tax contingencies

 

 

165

 

 

 

320

 

Decrease in gross tax contingencies

 

 

(22

)

 

 

(28

)

Gross tax contingencies as of end of year

 

$

654

 

 

$

511

 
v3.24.0.1
Net Income Per Share (Tables)
 12 Months Ended
Dec. 31, 2023
Earnings Per Share [Abstract]  
Schedule of Basic and Diluted Net Income Per Share

Basic and diluted net income per share attributable to the Company’s common stockholders were calculated as follows:

 

 

Fiscal Year Ended

 

 

 

December 31,
2023

 

 

December 25,
2022

 

 

December 26,
2021

 

Numerator:

 

 

 

 

 

 

 

 

 

Net income

 

$

25,566

 

 

$

1,230

 

 

$

2,382

 

Less: Net loss attributable to noncontrolling interests

 

 

—

 

 

 

(21

)

 

 

(47

)

Net income attributable to Vital Farms, Inc. stockholders’ — basic and diluted

 

$

25,566

 

 

$

1,251

 

 

$

2,429

 

Denominator:

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding — basic

 

 

41,192,544

 

 

 

40,648,592

 

 

 

40,027,278

 

Weighted average effect of potentially dilutive securities:

 

 

 

 

 

 

 

 

 

Effect of potentially dilutive stock options

 

 

1,994,774

 

 

 

2,745,161

 

 

 

3,290,615

 

Effect of potentially dilutive restricted stock units

 

 

107,577

 

 

 

64,455

 

 

 

3,840

 

Effect of potentially dilutive common stock issuable pursuant to the ESPP

 

 

17,941

 

 

 

11,378

 

 

 

—

 

Weighted average common shares outstanding — diluted

 

 

43,312,836

 

 

 

43,469,586

 

 

 

43,321,733

 

Net income per share attributable to Vital Farms, Inc. stockholders

 

 

 

 

 

 

 

 

 

Basic

 

$

0.62

 

 

$

0.03

 

 

$

0.06

 

Diluted

 

$

0.59

 

 

$

0.03

 

 

$

0.06

 
Schedule of Commom Shares Excluded from Computation of Diluted Earnings Per Share

The Company excluded the following shares of common stock, outstanding at each period end, from the computation of diluted net income per share attributable to Vital Farms, Inc. common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

 

 

Fiscal Year Ended

 

 

 

December 31,
2023

 

 

December 25,
2022

 

 

December 26,
2021

 

Options to purchase common stock

 

 

15,429

 

 

 

27,954

 

 

 

4,817

 

Unvested restricted stock

 

 

8,362

 

 

 

45,386

 

 

 

18,927

 

 

 

23,791

 

 

 

73,340

 

 

 

23,744

 

 
v3.24.0.1
Accumulated Other Comprehensive Income (Loss) (Tables)
 12 Months Ended
Dec. 31, 2023
Equity [Abstract]  
Schedule of Accumulated Other Comprehensive Income

The amounts reclassified from accumulated other comprehensive income (loss) (“AOCI”) to the statements of income were as follows:

 

 

 

 

Amounts Reclassified from AOCI

 

 

 

 

 

Fiscal Year Ended

 

AOCI Component

 

Statement of Income Classification

 

December 31,
2023

 

 

December 25,
2022

 

 

December 26,
2021

 

Gains on available-for-sale securities

 

Other income, net

 

$

182

 

 

$

96

 

 

$

55

 

 

Total before tax

 

 

182

 

 

 

96

 

 

 

55

 

 

Tax expense

 

 

(45

)

 

 

(22

)

 

 

(13

)

 

Net of tax

 

$

137

 

 

$

74

 

 

$

42

 
Schedule of Component of Other Comprehensive Income

The gross amount and related tax expense recorded in, and associated with, each component of other comprehensive income (loss) were as follows:

 

 

Fiscal Year Ended

 

 

 

December 31, 2023

 

 

December 25, 2022

 

 

December 26,
2021

 

 

 

Before Tax

 

Tax

 

After Tax

 

 

Before Tax

 

Tax

 

After Tax

 

 

Before Tax

 

Tax

 

After Tax

 

Available-for-sale debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized net holding gain (loss)

 

$

1,371

 

$

(338

)

$

1,033

 

 

$

(1,745

)

$

405

 

$

(1,340

)

 

$

(385

)

$

93

 

$

(292

)

Amounts reclassified for realized losses to earnings

 

 

182

 

 

(45

)

 

137

 

 

 

96

 

 

(22

)

 

74

 

 

 

55

 

 

(13

)

$

42

 

Total other comprehensive income (loss)

 

$

1,553

 

$

(383

)

$

1,170

 

 

$

(1,649

)

$

383

 

$

(1,266

)

 

$

(330

)

$

80

 

$

(250

)
v3.24.0.1
Nature of the Business and Basis of Presentation - Additional Information (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Organization Consolidation And Presentation Of Financial Statements [Line Items]    
Date of incorporation Jun. 06, 2013  
Other current assets    
Organization Consolidation And Presentation Of Financial Statements [Line Items]    
Reclassification   $ 1,539
v3.24.0.1
Summary of Significant Accounting Policies - Summary of Significant Customers Information (Details) - Customer Concentration Risk
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Sales Revenue Net | Customer A      
Summary Of Significant Accounting Policies [Line Items]      
Concentration risk percentage 25.00% 26.00% 18.00%
Sales Revenue Net | Customer B      
Summary Of Significant Accounting Policies [Line Items]      
Concentration risk percentage   11.00% 12.00%
Sales Revenue Net | Customer C      
Summary Of Significant Accounting Policies [Line Items]      
Concentration risk percentage     14.00%
Sales Revenue Net | Customer D      
Summary Of Significant Accounting Policies [Line Items]      
Concentration risk percentage     10.00%
Accounts Receivable | Customer A      
Summary Of Significant Accounting Policies [Line Items]      
Concentration risk percentage 18.00% 23.00%  
Accounts Receivable | Customer B      
Summary Of Significant Accounting Policies [Line Items]      
Concentration risk percentage 12.00% 12.00%  
Accounts Receivable | Customer E      
Summary Of Significant Accounting Policies [Line Items]      
Concentration risk percentage 11.00% 13.00%  
Accounts Receivable | Customer F      
Summary Of Significant Accounting Policies [Line Items]      
Concentration risk percentage 11.00%    
v3.24.0.1
Summary of Significant Accounting Policies - Additional Information (Details)
 12 Months Ended
Dec. 31, 2023
USD ($)
Segment
Dec. 25, 2022
USD ($)
Dec. 26, 2021
USD ($)
Dec. 27, 2020
USD ($)
Summary Of Significant Accounting Policies [Line Items]        
Number of reportable segment | Segment 1      
Number of operating segment | Segment 1      
Allowance for doubtful accounts $ 777,000 $ 699,000 $ 269,000 $ 196,000
Impairment of long-lived assets 0 0 0  
Accrued interest or penalties on uncertain tax position 171 85,000    
Shipping and distribution costs 27,344,000 30,104,000 24,979,000  
Cost of goods sold 309,531,000 252,606,000 178,002,000  
Marketing and advertising expense 23,625,000 13,301,000 11,469,000  
Right-of-use asset 8,911,000 1,895,000    
Lease liability $ 8,828,000      
Employee Stock Option        
Summary Of Significant Accounting Policies [Line Items]        
Stock options - vest year 3 years      
Stock options - date of grant and expire 10 years      
Restricted Stock [Member]        
Summary Of Significant Accounting Policies [Line Items]        
Stock options - vest year 3 years      
Maximum        
Summary Of Significant Accounting Policies [Line Items]        
Term of Contract 7 years      
Minimum        
Summary Of Significant Accounting Policies [Line Items]        
Term of Contract 1 year      
Freight        
Summary Of Significant Accounting Policies [Line Items]        
Cost of goods sold $ 4,823,000 $ 9,610,000 $ 7,623,000  
v3.24.0.1
Summary of Significant Accounting Policies - Schedule of Useful Lives of Property Plant and Equipment (Details)
 12 Months Ended
Dec. 31, 2023
Land improvements | Minimum  
Summary Of Significant Accounting Policies [Line Items]  
Property plant and equipment, estimated useful life 15 years
Land improvements | Maximum  
Summary Of Significant Accounting Policies [Line Items]  
Property plant and equipment, estimated useful life 20 years
Buildings and Improvements | Minimum  
Summary Of Significant Accounting Policies [Line Items]  
Property plant and equipment, estimated useful life 15 years
Buildings and Improvements | Maximum  
Summary Of Significant Accounting Policies [Line Items]  
Property plant and equipment, estimated useful life 39 years
Vehicles  
Summary Of Significant Accounting Policies [Line Items]  
Property plant and equipment, estimated useful life 5 years
Machinery and Equipment | Minimum  
Summary Of Significant Accounting Policies [Line Items]  
Property plant and equipment, estimated useful life 2 years
Machinery and Equipment | Maximum  
Summary Of Significant Accounting Policies [Line Items]  
Property plant and equipment, estimated useful life 7 years
Furniture and Fixtures  
Summary Of Significant Accounting Policies [Line Items]  
Property plant and equipment, estimated useful life 5 years
Leasehold Improvements  
Summary Of Significant Accounting Policies [Line Items]  
Property plant and equipment, estimated useful lives Lesser of lease term or 5 years
v3.24.0.1
Investment Securities - Summary of Available-for-sale Investment Securities (Details) - USD ($)
Dec. 31, 2023
Dec. 25, 2022
Schedule Of Available For Sale Securities [Line Items]    
Amortized Cost $ 33,134,000 $ 67,834,000
Unrealized Gains 10,000 4,000
Unrealized Losses (477,000) (2,024,000)
Allowance for Credit Losses 0 0
Fair Value 32,667,000 65,814,000
US Corporate Bonds and US Denominated Foreign Bonds    
Schedule Of Available For Sale Securities [Line Items]    
Amortized Cost 33,134,000 66,658,000
Unrealized Gains 10,000 4,000
Unrealized Losses (477,000) (2,000,000)
Allowance for Credit Losses 0 0
Fair Value $ 32,667,000 64,662,000
US Treasury Securities    
Schedule Of Available For Sale Securities [Line Items]    
Amortized Cost   1,176,000
Unrealized Gains   0
Unrealized Losses   (24,000)
Allowance for Credit Losses   0
Fair Value   $ 1,152,000
v3.24.0.1
Investment Securities - Schedule of Proceeds, Gross Realized Gains and Losses from the Sale of Available-for-sale Securities (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Investments, Debt and Equity Securities [Abstract]      
Proceeds $ 2,895 $ 0 $ 1,436
Gross realized gains 0 9 0
Gross realized losses (183) (105) (55)
Net realized losses $ (183) $ (96) $ (55)
v3.24.0.1
Investment Securities - Additional Information (Details)
Dec. 31, 2023
USD ($)
Position
Security
Dec. 25, 2022
USD ($)
Debt Securities, Available-for-Sale [Line Items]    
Aggregate unrealized losses $ 0 $ 0
Unrealized Losses $ 477,000 2,024,000
Unrealized Loss Position greater than 12 months | Position 46  
Maximum    
Debt Securities, Available-for-Sale [Line Items]    
Unrealized Losses $ 46,000  
AFS Securities    
Debt Securities, Available-for-Sale [Line Items]    
Number of Securities Issuances for unrealized losses | Security 47  
US Corporate Bonds and US Denominated Foreign Bonds    
Debt Securities, Available-for-Sale [Line Items]    
Aggregate unrealized losses $ 0 0
Unrealized Losses $ 477,000 $ 2,000,000
v3.24.0.1
Investment Securities - Summary of Contractual Maturities of Investment Securities (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 25, 2022
Investments, Debt and Equity Securities [Abstract]    
Due within one year Amortized Cost $ 23,478  
Due in 1-5 years Amortized Cost 9,656  
Amortized Cost 33,134 $ 67,834
Due within one year Fair Value 23,157  
Due in 1-5 years Fair Value 9,510  
Total available-for-sale Fair Value $ 32,667 $ 65,814
v3.24.0.1
Investment Securities - Schedule of Unrealized Loss Aging for Available-for-sale Securities (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 25, 2022
Debt Securities, Available-for-Sale [Line Items]    
Fair value, less than 12 months $ 699 $ 31,657
Unrealized losses, less than 12 months (3) (888)
Fair value, 12 months or longer 29,247 33,582
Unrealized losses, 12 months or longer (474) (1,136)
Fair value, Total 29,946 65,239
Unrealized losses, Total (477) (2,024)
US Corporate Bonds and US Denominated Foreign Bonds    
Debt Securities, Available-for-Sale [Line Items]    
Fair value, less than 12 months 699 31,657
Unrealized losses, less than 12 months (3) (888)
Fair value, 12 months or longer 29,247 32,406
Unrealized losses, 12 months or longer (474) (1,112)
Fair value, Total 29,946 64,063
Unrealized losses, Total $ (477) (2,000)
US Treasury Securities    
Debt Securities, Available-for-Sale [Line Items]    
Fair value, less than 12 months   0
Unrealized losses, less than 12 months   0
Fair value, 12 months or longer   1,176
Unrealized losses, 12 months or longer   (24)
Fair value, Total   1,176
Unrealized losses, Total   $ (24)
v3.24.0.1
Derivative Financial Instruments - Schedule Of Notional Amounts of Outstanding Derivative Instruments (Details)
bu in Thousands
Dec. 31, 2023
bu
T
Dec. 25, 2022
bu
T
Corn    
Derivative [Line Items]    
Notional amounts of derivative financial instruments | bu 2,351 0
Soybean Meal    
Derivative [Line Items]    
Notional amounts of derivative financial instruments | T 25 0
v3.24.0.1
Derivative Financial Instruments - Additional Information (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Derivative Instruments, Gain (Loss) [Line Items]      
Pre-tax amount of derivative losses $ (2,711) $ 0 $ 0
Commodity Contract [Member] | Non designated [Member]      
Derivative Instruments, Gain (Loss) [Line Items]      
Pre-tax amount of derivative losses $ 2,435 $ 0 $ 0
v3.24.0.1
Fair Value Measurements - Schedule of Financial Assets Measured at Fair Value (Details) - Recurring - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 25, 2022
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]    
Assets measured at fair value $ 97,559 $ 72,554
Level 1    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]    
Assets measured at fair value 64,498 6,740
Level 2    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]    
Assets measured at fair value 33,061 65,814
Money market    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]    
Assets measured at fair value 64,498 6,740
Money market | Level 1    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]    
Assets measured at fair value 64,498 6,740
US Corporate Bonds and US Denominated Foreign Bonds    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]    
Assets measured at fair value 32,667 64,662
US Corporate Bonds and US Denominated Foreign Bonds | Level 2    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]    
Assets measured at fair value 32,667 64,662
US Treasury Securities [Member]    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]    
Assets measured at fair value   1,152
US Treasury Securities [Member] | Level 2    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]    
Assets measured at fair value   $ 1,152
Derivative financial instruments    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]    
Assets measured at fair value 394  
Derivative financial instruments | Level 2    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]    
Assets measured at fair value $ 394  
v3.24.0.1
Fair Value Measurements - Additional Information (Details)
Dec. 31, 2023
USD ($)
Fair Value Disclosures [Abstract]  
Fair value liabilities transfers, Level 2 to Level 1 $ 0
v3.24.0.1
Revenue Recognition - Summary of Net Revenue by Primary Product (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Disaggregation Of Revenue [Line Items]      
Net revenue $ 471,857 $ 362,050 $ 260,901
Eggs and Egg Related Products      
Disaggregation Of Revenue [Line Items]      
Net revenue 449,045 339,214 239,967
Butter and Butter Related Products      
Disaggregation Of Revenue [Line Items]      
Net revenue $ 22,812 $ 22,836 $ 20,934
v3.24.0.1
Allowance for Credit Losses - Additional Information (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Dec. 27, 2020
Allowance for Credit Loss [Abstract]        
Allowance for credit losses $ 777 $ 699 $ 269 $ 196
v3.24.0.1
Allowance for Credit Losses - Schedule of Changes in Allowance for Credit Losses (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Financing Receivable, Allowance for Credit Loss [Line Items]      
Allowance for credit losses, Beginning balance $ (699) $ (269) $ (196)
Reductions (provisions) charged to operating results (512) (752) (184)
Account write-offs 434 322 111
Allowance for credit losses,Ending balance (777) (699) (269)
Account receivable member      
Financing Receivable, Allowance for Credit Loss [Line Items]      
Allowance for credit losses, Beginning balance (493) (269) (196)
Reductions (provisions) charged to operating results (364) (546) (184)
Account write-offs 307 322 111
Allowance for credit losses,Ending balance (550) (493) (269)
Prepaid expenses and other current assets member      
Financing Receivable, Allowance for Credit Loss [Line Items]      
Allowance for credit losses, Beginning balance (206) 0 0
Reductions (provisions) charged to operating results (148) (206) 0
Account write-offs 127 0 0
Allowance for credit losses,Ending balance $ (227) $ (206) $ 0
v3.24.0.1
Inventories - Schedule of Inventory (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 25, 2022
Inventory [Line Items]    
Reserve for inventory obsolescence $ (496) $ (98)
Inventories 32,895 26,849
Eggs and Egg Related Products    
Inventory [Line Items]    
Inventory gross 25,521 13,675
Butter and Butter Related Products    
Inventory [Line Items]    
Inventory gross 1,697 5,718
Packaging    
Inventory [Line Items]    
Inventory gross 4,988 5,452
Pullets    
Inventory [Line Items]    
Inventory gross 289 981
Other    
Inventory [Line Items]    
Inventory gross $ 896 $ 1,121
v3.24.0.1
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 25, 2022
Property Plant And Equipment [Line Items]    
Property, plant and equipment, gross $ 87,890 $ 71,842
Less: Accumulated depreciation and amortization (21,051) (12,687)
Property, plant and equipment, net 66,839 59,155
Land    
Property Plant And Equipment [Line Items]    
Property, plant and equipment, gross 552 552
Land improvements    
Property Plant And Equipment [Line Items]    
Property, plant and equipment, gross 818 835
Buildings and Improvements    
Property Plant And Equipment [Line Items]    
Property, plant and equipment, gross 30,532 29,667
Vehicles    
Property Plant And Equipment [Line Items]    
Property, plant and equipment, gross 1,055 894
Machinery and Equipment    
Property Plant And Equipment [Line Items]    
Property, plant and equipment, gross 50,979 34,978
Leasehold Improvements    
Property Plant And Equipment [Line Items]    
Property, plant and equipment, gross 492 919
Furniture and Fixtures    
Property Plant And Equipment [Line Items]    
Property, plant and equipment, gross 461 685
Construction in Progress    
Property Plant And Equipment [Line Items]    
Property, plant and equipment, gross $ 3,001 $ 3,312
v3.24.0.1
Property, Plant and Equipment - Additional Information (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Property Plant And Equipment [Line Items]      
Depreciation and amortization of property, plant and equipment $ 7,925 $ 5,441 $ 3,540
v3.24.0.1
Leases - Additional Information (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
USD ($)
Contract
Dec. 25, 2022
USD ($)
Dec. 26, 2021
USD ($)
Lessee, Lease, Description [Line Items]      
Number of longterm supply contracts | Contract 2    
Lessee, Operating Lease, Existence of Option to Extend [true false] true    
Lessee, Operating Lease, Existence of Option to Terminate [true false] true    
Option to extend The Company’s office lease for its corporate headquarters facility in Austin, Texas includes an option to renew, generally at the Company's sole discretion, with renewal terms that can extend the lease term up to five years.    
Option to terminate In addition, certain leases contain termination options, where the rights to terminate are held by the Company, the lessor, or both parties.    
Lease- amortization expense | $ $ 2,565 $ 439 $ 0
Maximum      
Lessee, Lease, Description [Line Items]      
Term of Contract 7 years    
Minimum      
Lessee, Lease, Description [Line Items]      
Term of Contract 1 year    
v3.24.0.1
Leases - Schedule of Components of Lease Cost (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Leases [Abstract]      
Operating lease cost $ 1,714 $ 1,445 $ 0
Finance lease cost - amortization of right-of-use assets 2,565 439 0
Finance lease cost - interest on lease liabilities 740 87 28
Short-term lease cost 771 67 0
Variable lease cost 7,533 2,967 0
Variable lease cost - long-term supply contracts 200,050 143,696 0
Total lease cost $ 213,373 $ 148,701 $ 28
v3.24.0.1
Leases - Summary of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 25, 2022
Leases [Abstract]    
Machinery and equipment $ 16,321 $ 8,931
Less: Accumulated depreciation and amortization (2,837) (272)
Property, plant and equipment, net $ 13,484 $ 8,659
Weighted-average remaining lease term (years) 2 years 11 months 19 days 2 years 2 months 4 days
Weighted-average discount rate 7.38% 3.32%
Weighted-average remaining lease term (years) 3 years 9 months 29 days 4 years 10 months 6 days
Weighted-average discount rate 7.12% 6.34%
v3.24.0.1
Leases - Summary of 0perating and Finance Leases Future Undiscounted to Leases (Details)
Dec. 31, 2023
USD ($)
Leases [Abstract]  
Operating leases 2024 $ 3,579,000
Operating leases 2025 3,170,000
Operating leases 2026 3,017,000
Operating leases 2027 0
Operating lease, 2028 0
Operating leases Thereafter 0
Total lease payments 9,766,000
Less imputed interest (938,000)
Total present value of lease liabilities 8,828,000
Finance leases 2024 4,103,000
Finance leases 2025 4,103,000
Finance leases 2026 4,095,000
Finance leases 2027 3,332,000
FinanceLease, 2028 0
Finance leases Thereafter 0
Total lease payments 15,633,000
Less imputed interest (1,897,000)
Total present value of lease liabilities $ 13,736,000
v3.24.0.1
Leases - Summary of Cash Flow Information related to Leases (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Leases [Abstract]    
Operating cash outflows - payments on operating leases $ 1,759 $ 1,477
Operating cash outflows - interest payments on finance leases 740 87
Financing cash outflows - principal payments on finance leases $ 2,246 $ 554
v3.24.0.1
Leases - Summary of Right-of-Use Assets (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Leases [Abstract]    
Operating leases $ 8,583 $ 0
Finance leases $ 7,390 $ 8,931
v3.24.0.1
Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 25, 2022
Payables and Accruals [Abstract]    
Employee-related costs $ 9,131 $ 7,453
Promotions and customer deductions 6,982 4,414
Distribution fees and freight 2,876 2,351
Marketing and broker commissions 3,627 1,598
Purchases of inventory 525 1,349
Professional fees 1,066 761
Other 11 551
Accrued liabilities $ 24,218 $ 18,477
v3.24.0.1
Product Exit Costs - Additional Information (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Restructuring and Related Activities [Abstract]    
Liability balance related to exit $ 45 $ 119
Restructuring and Related Activities, Completion Date Mar. 31, 2024  
v3.24.0.1
Product Exit Costs - Summary of Activity Related to Exit of Breakfast Products (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Restructuring Cost and Reserve [Line Items]    
Restructuring Reserve, Beginning Balance $ 119  
Charges Incurred 0 $ 2,341
Amounts Paid or Settled (74) (2,187)
Amounts Released as Unutilized 0 (35)
Restructuring Reserve, Ending Balance 45 119
Net Revenue | Customer Allowances    
Restructuring Cost and Reserve [Line Items]    
Restructuring Reserve, Beginning Balance 0  
Charges Incurred   146
Amounts Paid or Settled   (111)
Amounts Released as Unutilized   (35)
Restructuring Reserve, Ending Balance   0
Cost of Goods Sold | Inventory Obsolescence    
Restructuring Cost and Reserve [Line Items]    
Restructuring Reserve, Beginning Balance 0  
Charges Incurred   749
Amounts Paid or Settled   (749)
Amounts Released as Unutilized   0
Restructuring Reserve, Ending Balance   0
Cost of Goods Sold | Asset Write-downs    
Restructuring Cost and Reserve [Line Items]    
Restructuring Reserve, Beginning Balance 119  
Charges Incurred 0 119
Amounts Paid or Settled (74) 0
Amounts Released as Unutilized 0 0
Restructuring Reserve, Ending Balance 45 119
Cost of Goods Sold | Co-manufacturer Charges    
Restructuring Cost and Reserve [Line Items]    
Restructuring Reserve, Beginning Balance 0  
Charges Incurred   135
Amounts Paid or Settled   (135)
Amounts Released as Unutilized   0
Restructuring Reserve, Ending Balance   0
Selling, General and Administrative | Asset Disposals    
Restructuring Cost and Reserve [Line Items]    
Restructuring Reserve, Beginning Balance 0  
Charges Incurred   66
Amounts Paid or Settled   (66)
Amounts Released as Unutilized   0
Restructuring Reserve, Ending Balance   0
Selling, General and Administrative | Contract Terminations    
Restructuring Cost and Reserve [Line Items]    
Restructuring Reserve, Beginning Balance $ 0  
Charges Incurred   1,126
Amounts Paid or Settled   (1,126)
Amounts Released as Unutilized   0
Restructuring Reserve, Ending Balance   $ 0
v3.24.0.1
Long-Term Debt - Additional Information (Details) - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Oct. 31, 2017
Debt Instrument [Line Items]        
Interest expense $ 7,000 $ 0 $ 52,000  
Revolving Line of Credit        
Debt Instrument [Line Items]        
Repayments of Long-Term Lines of Credit 7,500,000 $ 0 $ 0  
Outstanding debt 0      
PNC Bank, National Association | Revolving Line of Credit        
Debt Instrument [Line Items]        
Line of credit facility maximum borrowing capacity       $ 10,000,000
PNC Bank, National Association | Revolving Line of Credit | Sixth Amendment        
Debt Instrument [Line Items]        
Line of credit facility maximum borrowing capacity $ 20,000,000      
PNC Bank, National Association | Revolving Line of Credit | Tenth Amendment | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member]        
Debt Instrument [Line Items]        
Debt instrument basis spread on variable rate 2.00%      
PNC Bank, National Association | Revolving Line of Credit | Tenth Amendment | Alternate Base Rate        
Debt Instrument [Line Items]        
Debt instrument basis spread on variable rate 1.00%      
PNC Bank, National Association | Term Loan        
Debt Instrument [Line Items]        
Debt instrument face amount       4,700,000
PNC Bank, National Association | Equipment Loan        
Debt Instrument [Line Items]        
Line of credit facility maximum borrowing capacity       $ 1,500,000
PNC Bank, National Association | Credit Facility        
Debt Instrument [Line Items]        
Line of credit facility covenant terms The Credit Facility is secured by all of the Company’s assets (other than real property and certain other property excluded pursuant to the terms of the Credit Facility) and requires the Company to maintain three financial covenants: a fixed charge coverage ratio, a leverage ratio and a minimum tangible net worth requirement. The Credit Facility also contains various covenants relating to limitations on indebtedness, acquisitions, mergers, consolidations and the sale of properties and liens.      
Line of credit facility covenant compliance As of December 31, 2023, the Company was in compliance with all covenants under the Credit Facility.      
PNC Bank, National Association | Credit Facility | Eleventh Amendment [Member]        
Debt Instrument [Line Items]        
Debt Instrument, Maturity Date Apr. 02, 2025      
PNC Bank, National Association | Credit Facility | Term Loan And Equipment Loan        
Debt Instrument [Line Items]        
Debt instrument eliminated 2021-04      
v3.24.0.1
Preferred Stock - Additional Information (Details) - $ / shares
Dec. 31, 2023
Dec. 25, 2022
Class Of Stock [Line Items]    
Preferred stock, shares outstanding 0 0
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares issued 0 0
v3.24.0.1
Common Stock - Additional Information (Details) - USD ($)
 1 Months Ended 12 Months Ended
Aug. 31, 2021
Dec. 31, 2023
Dec. 26, 2021
Dec. 25, 2022
Class Of Stock [Line Items]        
Common stock, shares authorized   310,000,000   310,000,000
Common stock, par value   $ 0.0001   $ 0.0001
Common stock, shares issued   41,684,649   40,746,990
Common stock, shares outstanding   41,684,649   40,746,990
Common stock voting rights   Each share of the Company’s common stock is entitled to one vote on all matters submitted to a vote of the Company’s stockholders    
Common stock dividend declared or paid   $ 0    
Treasury Stock        
Class Of Stock [Line Items]        
Retirement of treasury stock, Shares 5,494,918   5,494,918  
v3.24.0.1
Common Stock - Schedule of Reserved Shares of Common Stock for Issuance (Details) - shares
Dec. 31, 2023
Dec. 25, 2022
Class Of Stock [Line Items]    
Common stock for issuance 17,799,187 16,643,168
Employee Stock Option    
Class Of Stock [Line Items]    
Common stock for issuance 3,920,485 4,634,205
Restricted Stock Units    
Class Of Stock [Line Items]    
Common stock for issuance 565,376 505,504
Shares Available for Grant | 2020 Equity Incentive Plan and 2020 Employee Stock Purchase Plan    
Class Of Stock [Line Items]    
Common stock for issuance 13,313,326 11,503,459
v3.24.0.1
Stock-Based Compensation - Additional Information (Details) - USD ($)
$ in Thousands
 1 Months Ended 12 Months Ended
Jan. 01, 2024
Jul. 31, 2020
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Common stock for issuance     17,799,187 16,643,168  
Restricted Stock Units          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Unrecognized stock-based compensation expense     $ 5,220    
Expected weighted-average period of recognition     1 year 9 months 3 days    
Common stock for issuance     565,376 505,504  
RSU of shares vested     $ 3,044 $ 1,549 $ 564
Employee Stock Option          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Unrecognized stock-based compensation expense     $ 3,412    
Expected weighted-average period of recognition     1 year 7 months 13 days    
Common stock for issuance     3,920,485 4,634,205  
2020 Equity Incentive Plan | Common Stock          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Maximum number of shares issuable   8,595,871      
Percentage of outstanding common stock   4.00%      
Share-based compensation award, description     Initially, the maximum number of shares of the Company’s common stock that may be issued under the 2020 Incentive Plan was 8,595,871 shares. The 2020 Incentive Plan provides that the number of shares reserved and available for issuance under the 2020 Incentive Plan will automatically increase each January 1, beginning on January 1, 2021 and ending on (and including) January 1, 2030, by an amount equal to 4% of the outstanding number of shares of common stock on the immediately preceding December 31 or such lesser number of shares as determined by the Board of Directors    
Number of shares available for future grants     11,200,932    
2020 Equity Incentive Plan | Common Stock | Subsequent Event          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Number of new shares issued 1,667,385        
2020 Employee Stock Purchase Plan | Common Stock          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Maximum number of shares issuable   900,000      
Percentage of outstanding common stock   1.00%      
Share-based compensation award, description     The 2020 ESPP authorizes the initial issuance of up to 900,000 shares of the Company’s common stock to certain eligible employees or, as designated by the Board of Directors, employees of a related company. The 2020 ESPP provides that the number of shares reserved and available for issuance under the 2020 ESPP will automatically increase each January 1, beginning on January 1, 2021 and ending on (and including) January 1, 2030, by an amount equal to the lesser of (i) 1% of the outstanding number of shares of common stock on the immediately preceding December 31 and (ii) 900,000, or such lesser number of shares as determined by the Board of Directors.    
Common stock for issuance     2,112,394    
2020 Employee Stock Purchase Plan | Common Stock | Subsequent Event          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Number of new shares issued 416,846        
v3.24.0.1
Stock-Based Compensation -Summary of Recognized Stock-Based Compensation Expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]      
Stock-based compensation expense $ 7,417 $ 6,040 $ 4,440
Tax benefit 2,998 970 3,872
Cost of Goods Sold      
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]      
Stock-based compensation expense [1] 260 188 133
Selling, General and Administrative      
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]      
Stock-based compensation expense [2] $ 7,157 $ 5,852 $ 4,307
[1] Includes $7, $6 and $0 of expense related to the 2020 Employee Stock Purchase Plan as of December 31, 2023, December 25, 2022, and December 26, 2021, respectively.
[2] Includes $97, $57 and $0 of expense related to the 2020 Employee Stock Purchase Plan as of December 31, 2023, December 25, 2022, and December 26, 2021, respectively.
v3.24.0.1
Stock-Based Compensation -Summary of Recognized Stock-Based Compensation Expense (Parenthetical) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]      
ESPP expense $ 7,417 $ 6,040 $ 4,440
Cost of Goods Sold      
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]      
ESPP expense [1] 260 188 133
Cost of Goods Sold | Employee Stock Purchase Plan      
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]      
ESPP expense 7 6 0
Selling, General and Administrative      
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]      
ESPP expense [2] 7,157 5,852 4,307
Selling, General and Administrative | Employee Stock Purchase Plan      
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]      
ESPP expense $ 97 $ 57 $ 0
[1] Includes $7, $6 and $0 of expense related to the 2020 Employee Stock Purchase Plan as of December 31, 2023, December 25, 2022, and December 26, 2021, respectively.
[2] Includes $97, $57 and $0 of expense related to the 2020 Employee Stock Purchase Plan as of December 31, 2023, December 25, 2022, and December 26, 2021, respectively.
v3.24.0.1
Stock-Based Compensation - Summary of Stock Option Activity (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Share-Based Payment Arrangement [Abstract]      
Number of Options, Beginning balance 4,634,205    
Number of Options, Granted 520,154    
Number of Options, Exercised (737,000)    
Number of Options, Cancelled/Forfeited (496,874)    
Number of Options, Ending balance 3,920,485 4,634,205  
Number of Options, Options exercisable as of December 31, 2023 2,793,016    
Number of Options, Options vested and expected to vest as of December 31, 2023 3,920,485    
Weighted-Average Exercise Price, Beginning balance $ 9.35    
Weighted-Average Exercise Price, Options Granted 15    
Weighted-Average Exercise Price, Options Exercised 1.05    
Weighted-Average Exercise Price, Options Cancelled 21.89    
Weighted-Average Exercise Price, Ending balance 10.07 $ 9.35  
Weighted-Average Exercise Price, Options exercisable as of December 31, 2023 8.31    
Weighted-Average Exercise Price, Options vested and expected to vest as of December 31, 2023 $ 10.07    
Weighted Average Remaining Contractual Life (Years), Balance 5 years 9 months 18 days    
Weighted Average Remaining Contractual Life (Years), Options exercisable as of December 31, 2023 5 years    
Weighted Average Remaining Contractual Life (Years), Options vested and expected to vest as of December 31, 2023 5 years 9 months 18 days    
Aggregate Intrinsic Value $ 28,749 $ 38,520  
Aggregate Intrinsic Value, Exercised 9,091 $ 1,827 $ 20,343
Aggregate Intrinsic Value, Cancelled 61    
Aggregate Intrinsic Value, Options exercisable as of December 31, 2023 25,215    
Aggregate Intrinsic Value, Options vested and expected to vest as of December 31, 2023 $ 28,749    
v3.24.0.1
Stock-Based Compensation - Summary of Assumptions, Fair Values and Intrinsic Values of Stock Options (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]      
Weighted average fair value at grant date $ 15    
Fair value of shares vested $ 3,160 $ 3,245 $ 2,694
Intrinsic value of stock options exercised 9,091 1,827 20,343
Proceeds from stock options exercised $ 776 $ 568 $ 2,776
Employee Stock Option      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]      
Expected term (in years) 6 years 6 years  
Expected stock price volatility, minimum 27.80% 27.60% 28.50%
Expected stock price volatility, maximum 29.20% 28.60% 29.40%
Risk-free interest rate, minimum 3.63% 1.64% 0.57%
Risk-free interest rate, maximum 4.45% 4.16% 1.36%
Expected dividend yield 0.00% 0.00% 0.00%
Weighted average fair value at grant date $ 5.33 $ 3.97 $ 7.31
Minimum | Employee Stock Option      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]      
Expected term (in years)     6 years
Maximum | Employee Stock Option      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]      
Expected term (in years)     6 years 6 months
v3.24.0.1
Stock-Based Compensation - Summary of Restricted Stock Unit Activity (Details) - Restricted Stock Units
 12 Months Ended
Dec. 31, 2023
$ / shares
shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Number of RSUs, beginning balance | shares 505,504
Number of RSUs, Granted | shares 350,497
Number of RSUs, Vested | shares (217,347) [1]
Number of RSUs, forfeited | shares (73,278)
Number of RSUs, Ending balance | shares 565,376
Weighted-Average Grant Date Fair Value, beginning balance | $ / shares $ 13.58
Weighted-Average Grant Date Fair Value, Granted | $ / shares 15.04
Weighted-Average Grant Date Fair Value, Vested | $ / shares 14.03 [1]
Weighted-Average Grant Date Fair Value, Forfeited | $ / shares 14.1
Weighted-Average Grant Date Fair Value, ending balance | $ / shares $ 14.24
[1] Shares of common stock that were withheld to cover taxes on the release of vested RSUs and became available for future grants pursuant to the 2020 Equity Incentive Plan
v3.24.0.1
Income Taxes - Provision for Income Taxes (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Current:      
Federal $ 5,136 $ 384 $ 225
State 1,678 539 282
Deferred:      
Federal 28 803 (2,164)
State (207) (125) (371)
Provision (benefit) for income taxes $ 6,635 $ 1,601 $ (2,028)
v3.24.0.1
Income Taxes - Reconciliation of Federal Statutory Income Tax Provision (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Income Tax Disclosure [Abstract]      
Provision at statutory rate of 21% $ 6,762 $ 594 $ 74
State income taxes 1,117 51 (416)
Stock-based compensation (1,636) 225 (2,846)
Non-deductible costs 574 279 12
Charitable deduction (95) (634) (88)
Change in deferred tax asset valuation allowance 84 (774) 774
Revisions to prior year 4 212 0
Changes in uncertain tax positions 58 347 0
Tax credits (238) 0 0
Other, net 5 33 462
Provision (benefit) for income taxes $ 6,635 $ 1,601 $ (2,028)
v3.24.0.1
Income Taxes - Reconciliation of Federal Statutory Income Tax Provision (Parenthetical) (Details)
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Provision at statutory rate 21.00%
v3.24.0.1
Income Taxes - Schedule of Deferred Income Tax Assets and Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 25, 2022
Deferred tax assets:    
Accrued expenses $ 3,716 $ 2,594
Allowances and other reserves 191 171
Inventory 1,498 963
Net operating loss carryforwards 110 1,503
Charitable contributions 0 230
Stock-based compensation 1,465 1,046
Lease liability 5,558 2,624
Other 467 581
Total deferred tax assets 13,005 9,712
Less: Valuation allowance (84) 0
Net deferred tax assets 12,921 9,712
Deferred tax liabilities:    
Prepaid expenses 490 590
Property and equipment 6,778 6,273
Operating and finance lease right of use assets 5,517 2,589
Intangibles 507 430
Total deferred tax liabilities 13,292 9,882
Net deferred tax liabilities $ (371) $ (170)
v3.24.0.1
Income Taxes - Additional Information (Details) - State
$ in Millions
 12 Months Ended
Dec. 31, 2023
USD ($)
Income Taxes [Line Items]  
Net operating loss carryforwards $ 0.4
Net operating loss carryforwards expiration year 2035
v3.24.0.1
Income Taxes - Schedule of Deferred Tax Asset Valuation Allowance (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Income Tax Disclosure [Abstract]    
Valuation allowance as of beginning of year $ 0 $ 774
Increases recorded to income tax provision 84 0
Decreases recorded as benefit to income tax provision 0 (774)
Valuation allowance as of end of year $ 84 $ 0
v3.24.0.1
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Income Tax Disclosure [Abstract]    
Gross tax contingencies as of beginning of year $ 511 $ 219
Increase in gross tax contingencies 165 320
Decrease in gross tax contingencies (22) (28)
Gross tax contingencies as of end of year $ 654 $ 511
v3.24.0.1
Net Income Per Share - Schedule of Basic and Diluted Net Income Per Share (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Numerator:      
Net income $ 25,566 $ 1,230 $ 2,382
Less: Net loss attributable to noncontrolling interests 0 (21) (47)
Net income attributable to Vital Farms, Inc. common stockholders $ 25,566 $ 1,251 $ 2,429
Denominator:      
Weighted average common shares outstanding - basic 41,192,544 40,648,592 40,027,278
Weighted Average effect of potentially dilutive securities:      
Weighted average common shares outstanding — diluted 43,312,836 43,469,586 43,321,733
Net income per share attributable to Vital Farms, Inc. stockholders      
Basic $ 0.62 $ 0.03 $ 0.06
Diluted $ 0.59 $ 0.03 $ 0.06
Employee Stock Option [Member]      
Weighted Average effect of potentially dilutive securities:      
Effect of potentially dilutive stock options 1,994,774 2,745,161 3,290,615
Restricted Stock Units      
Weighted Average effect of potentially dilutive securities:      
Effect of potentially dilutive stock options 107,577 64,455 3,840
Employee Stock Purchase Plan      
Weighted Average effect of potentially dilutive securities:      
Effect of potentially dilutive stock options 17,941 11,378 0
v3.24.0.1
Net Income Per Share - Schedule of Excluded Common Shares Including at Anti-dilutive Effects (Details) - shares
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive securities excluded from computation of earnings per share 23,791 73,340 23,744
Employee Stock Option      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive securities excluded from computation of earnings per share 15,429 27,954 4,817
Unvested Restricted Stock      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive securities excluded from computation of earnings per share 8,362 45,386 18,927
v3.24.0.1
Accumulated Other Comprehensive Income (Loss) - Schedule of Accumulated Other Comprehensive Income (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Amounts reclassified from accumulated other comprehensive loss to earnings $ 182 $ 96 $ 55
Tax expense (45) (22) (13)
Net of tax 137 74 42
Gains on available-for-sale securities      
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Amounts reclassified from accumulated other comprehensive loss to earnings $ 182 $ 96 $ 55
v3.24.0.1
Accumulated Other Comprehensive Income (Loss) - Schedule of Component of Other Comprehensive Income (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Unrealized net holding gain (loss), Before Tax $ 1,371 $ (1,745) $ (385)
Unrealized net holding gain (loss), Tax (338) 405 93
Unrealized net holding gain (loss), After Tax 1,033 (1,340) (292)
Amounts reclassified from accumulated other comprehensive loss to earnings 182 96 55
Amounts reclassified for realized losses to earnings (45) (22) (13)
Net of tax 137 74 42
Income tax (expense) benefit related to items of other comprehensive income (loss) (383) 383 80
Other comprehensive income (loss), net of tax 1,170 (1,266) (250)
Other comprehensive income (loss), before tax 1,553 (1,649) (330)
Available-for-Sale Securities      
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Amounts reclassified from accumulated other comprehensive loss to earnings $ 182 $ 96 $ 55
v3.24.0.1
Commitments and Contingencies - Additional Information (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
USD ($)
Commitments And Contingencies [Line Items]  
Long-term supply contracts costs $ 200,000
v3.24.0.1
Related Party Transactions - Additional Information (Details) - Sandpebble Builders Preconstruction, Inc - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
Related Party Transaction [Line Items]      
Expense paid to related party $ 631 $ 962 $ 1,037
Amounts owed to related party $ 0 $ 51  
v3.24.0.1
401(k) Savings Plan - Additional Information (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 25, 2022
Dec. 26, 2021
401(k) Saving Plan      
Defined Benefit Plan Disclosure [Line Items]      
Contributions made by the company $ 1,185 $ 861 $ 651