Rockwell Medical, Inc. (RMTI): PESTLE Analysis [Nov-2025 Updated]

You're watching Rockwell Medical, Inc. (RMTI) try to execute a tricky pivot-they're shedding a massive customer and aiming for a profitable core business, but the external environment is a minefield. This isn't just a simple business turnaround; it's a high-wire act where political mandates, economic headwinds, and technological shifts all determine if they hit their goal of a $65 million to $70 million net sales guidance for 2025. Let's break down the six macro forces-Political, Economic, Sociological, Technological, Legal, and Environmental-that will defintely make or break RMTI's strategy right now.

Political Forces: The Medicare Reimbursement Headwind

The biggest political lever on RMTI is Medicare. Since the government sets the reimbursement rates for dialysis treatments, it directly squeezes the profitability of RMTI's major customers. This pushes those customers to demand the lowest possible price for hemodialysis concentrates. Plus, the US government's shift toward value-based care models means RMTI has to prove its products are cost-effective, not just available.

Honestly, FDA regulatory oversight is just a constant cost of doing business for all their hemodialysis products. Any talk of major healthcare reform legislation creates long-term contract uncertainty. You simply can't price a five-year deal confidently when the payment structure might change. That's the political reality.

Economic Forces: Navigating the $34 Million Revenue Gap

The economic story is all about the customer transition. Losing your largest customer is brutal, and RMTI estimates this will reduce revenue by about $34 million. This directly led to the 2025 net sales guidance dropping to between $65 million and $70 million. The company is now in a race to diversify its customer base to offset that massive gap.

To be fair, the cost-cutting and restructuring have been effective. They managed to drive Q3 2025 Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) to a positive $50,000. That's a huge operational efficiency gain. Still, inflationary pressure on raw materials and energy makes it tough to maintain their target gross margin of 16% to 18%. You can only cut costs so much before it hits quality.

Sociological Forces: Steadfast Demand Meets Home Care Trend

The good news is the long-term demand for dialysis products is essentially guaranteed by the growing US population with End-Stage Kidney Disease (ESRD). That's a demographic tailwind you can bet on. However, patient preference is changing fast. More people want home hemodialysis, which drives demand for specialized, convenient product packaging and systems, not just the bulk concentrates for in-center clinics.

Also, public health efforts focusing on preventive care could slow the growth rate of new dialysis patients over the next decade. For RMTI, securing new long-term contracts heavily relies on their reputation for product quality and reliable supply. People want convenience and reliability.

Technological Forces: Focus on Core and Paused Innovation

Right now, RMTI's technology focus is on the factory floor. They are optimizing manufacturing with automated processes to improve gross margins and reduce production costs, which is smart when margins are tight. Product innovation is centered on core concentrates, like the DAMX45 dry acid concentrate mix system, which is their bread and butter.

The big limit here is cash. R&D for Triferic, their key iron replacement therapy, has been paused to conserve cash and focus resources on the core business. That's a clear trade-off: short-term stability over long-term drug innovation. What this estimate hides is the risk from competitor advancements in portable or wearable dialysis technology, which could seriously disrupt the conventional in-center market RMTI serves.

Legal Forces: Contract Stability vs. Transition Risk

The legal landscape shows a clear effort to stabilize revenue. Over 80% of the customer base is now secured under multi-year, long-term agreements. That provides a solid revenue floor. Of course, mandatory compliance with all FDA manufacturing and quality system regulations for hemodialysis concentrates is non-negotiable and a constant legal cost.

The immediate legal risk is managing the contractual obligations related to the former largest customer's transition. Even as they transition away, that customer still represented 12% of Q3 2025 sales. Finally, intellectual property protection for proprietary products is essential to maintain market exclusivity against generic competitors. You must protect your moat.

Environmental Forces: The 'Green Dialysis' Challenge

The environmental factor is becoming a real cost driver. Dialysis concentrate manufacturing is part of a supply chain with a significant carbon footprint from transportation and packaging. The industry is under pressure for 'Green Dialysis,' which requires manufacturers to minimize water and energy use in production. This isn't just a PR issue; it's an operational mandate.

RMTI faces challenges in managing and reducing the substantial plastic and medical waste generated by dialysis treatments. On the plus side, the facility consolidation and operational streamlining they've done, while primarily economic, also naturally reduce the company's environmental footprint. It's a necessary dual benefit.

Rockwell Medical, Inc. (RMTI) - PESTLE Analysis: Political factors

Medicare reimbursement rates for dialysis treatments directly impact customer profitability and pricing pressure.

The political decisions made by the Centers for Medicare & Medicaid Services (CMS) set the financial baseline for Rockwell Medical, Inc.'s largest customers, the major dialysis providers. The End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) base rate for Calendar Year (CY) 2025 is set at $273.82, which is an increase of $2.80 from the CY 2024 rate of $271.02.

This modest increase translates to a projected total payment increase of approximately 2.7% to all ESRD facilities in CY 2025. For your customers-the dialysis clinics-this small margin increase is critical. It means they still face intense pressure to manage costs, so they push back hard on pricing for consumables like Rockwell Medical's hemodialysis concentrates. That's a permanent feature of this market.

US government focus on value-based care models influences demand for cost-effective hemodialysis concentrates.

The long-term shift toward value-based care (VBC) models, where providers are paid for patient outcomes rather than just the volume of services, continues to restructure the kidney care landscape. This is a major political driver for cost-effective products.

The Centers for Medicare and Medicaid Innovation (CMMI) is actively revising its models. The End-Stage Renal Disease Treatment Choices (ETC) model, which aimed to increase home dialysis and transplants, is set to sunset at the end of 2025. This signals a political environment that is quick to terminate models that fail to achieve targeted cost savings or outcomes, increasing regulatory risk for new, non-core products.

The Kidney Care Choices (KCC) model is also seeing consolidation, with the number of Comprehensive Kidney Care Contracting (CKCC) entities declining from 100 to 75 between Performance Years 2023 and 2025. This consolidation means fewer, larger customers who have more leverage in contract negotiations, which favors Rockwell Medical's core, high-volume, cost-effective concentrates business over specialized, higher-priced therapies.

Strict FDA regulatory oversight is constant for all hemodialysis products and new drug approvals like Triferic.

The Food and Drug Administration (FDA) maintains a strict, non-negotiable oversight on all hemodialysis products, including Rockwell Medical's core concentrates. This constant regulatory environment requires significant, ongoing compliance investment, but it also creates a high barrier to entry for new competitors.

The company's experience with its proprietary iron replacement drug, Triferic (ferric pyrophosphate citrate), highlights how political and reimbursement factors can trump initial FDA success. While Triferic and Triferic AVNU were FDA-approved in 2015 and 2020, respectively, Rockwell Medical ultimately discontinued its New Drug Applications (NDAs) for both in the United States in the fourth quarter of 2022 due to limited market adoption and, critically, unfavorable reimbursement. The FDA's bar is high, but the CMS reimbursement bar is often higher for commercial viability.

Potential healthcare reform legislation creates uncertainty for long-term contract pricing with major dialysis providers.

While no single piece of major, sweeping healthcare reform has been enacted in 2025, the political climate of cost-containment creates pervasive contract uncertainty. This uncertainty manifested in a major customer transition for Rockwell Medical in 2025.

The company's largest customer began transitioning away, which is expected to result in an estimated $34 million reduction in revenue compared to 2024. Rockwell Medical's Q3 2025 net sales were $15.9 million, a 44% year-over-year decline, directly illustrating the impact of a single major customer's contract decision, which is often influenced by the political and regulatory environment.

The good news is that management reports more than 80% of their remaining customers are under long-term contracts, providing a base of stability. Still, the political push for cost-savings and value-based models means every contract renewal is a high-stakes negotiation, making the long-term pricing environment defintely volatile.

• Focus on cost-discipline is critical: Q3 2025 gross margin was 14%, but 18% excluding restructuring costs.
• New contracts are essential: Rockwell Medical secured a new $1 million annual agreement in Q3 2025.
• 2025 net sales guidance is between $65 million and $70 million, a sharp drop from $101.5 million in 2024.

Your action item is to model the sensitivity of the remaining 80% contract base to a 5% price reduction scenario, using the 2025 net sales guidance as the baseline.

Rockwell Medical, Inc. (RMTI) - PESTLE Analysis: Economic factors

The loss of the largest customer reduced 2025 net sales guidance to between $65 million and $70 million.

The single most significant economic event for Rockwell Medical in 2025 is the transition of its largest customer, DaVita, to another supplier. This change forced a substantial revision of the company's financial outlook, mapping a clear near-term revenue risk. For the full fiscal year 2025, Rockwell Medical has reiterated its net sales guidance to a range between $65 million and $70 million. This is a dramatic step-down from the 2024 net sales of $101.5 million, showing the immediate economic impact of customer concentration risk. Honestly, losing your anchor client means you're playing defense for a year.

Customer diversification efforts are critical to offset the estimated $34 million revenue reduction from the customer transition.

Management estimated this customer transition would result in an approximate $34 million reduction in revenue compared to the prior year. To counter this, the company is aggressively pursuing customer diversification, which is a clear, actionable strategy. They're securing new, long-term contracts, with over 80% of their customer base now under multi-year agreements, providing better revenue visibility. For instance, new agreements include a multimillion-dollar, three-year supply deal with Innovative Renal Care (IRC) and a new contract with a single dialysis center in Southern Florida with an annualized net sales potential of approximately $1 million.

Here's the quick math on the revenue shift:

Cost-cutting and restructuring drove Q3 2025 Adjusted EBITDA to a positive $50,000, signaling operational efficiency gains.

Despite the top-line pressure, operational discipline is showing results. The company achieved a positive Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of $50,000 in the third quarter of 2025. This is a significant milestone, reinforcing the progress toward sustainable profitability, especially when compared to a negative Adjusted EBITDA of $0.2 million in the second quarter of 2025. This turnaround is directly linked to a rightsizing of the organization, including expense reductions and streamlining manufacturing operations to be more cost effective.

• Achieved Q3 2025 Adjusted EBITDA profitability at $50,000.
• Terminated a third-party manufacturing agreement, saving over $2 million annually in fixed overhead.
• Full-year 2025 Adjusted EBITDA guidance is between negative $500,000 and positive $500,000.

Inflationary pressure on raw materials and energy costs impacts the company's ability to maintain its target gross margin of 16% to 18%.

The broader economic environment, characterized by persistent inflationary forces in the healthcare sector, puts constant pressure on the company's cost of goods sold (COGS). While the company's full-year gross margin guidance remains between 16% and 18%, they are fighting to stay within that range. For example, the GAAP gross margin in Q3 2025 was 14%, but excluding restructuring costs-a one-time expense-it was 18%. This suggests that while cost-cutting measures are defintely working to improve core manufacturing efficiency, the underlying cost of raw materials and energy (key inputs for hemodialysis concentrates) remains a threat to margin stability. They must keep automating manufacturing to reduce labor and material costs, or the inflation will eat the margin.

Rockwell Medical, Inc. (RMTI) - PESTLE Analysis: Social factors

The growing US population with End-Stage Kidney Disease (ESRD) ensures a steady, long-term demand for dialysis products.

The core social driver for Rockwell Medical, Inc.'s (RMTI) business remains the relentless growth of the End-Stage Kidney Disease (ESRD) population in the U.S. This is a demographic certainty, not a guess.

Projections indicate the number of Americans living with ESRD is expected to increase by 29% to 68% between 2015 and 2030, which means the patient count could exceed 1.2 million by 2030. The patient population requiring kidney replacement therapy is currently increasing at a rate of 5% to 7% annually. This translates directly into a robust market for dialysis concentrates and consumables, with the U.S. ESRD market size, which includes dialysis, valued at an estimated $17.94 billion in 2024 and growing at a CAGR of 13.1% through 2030. This is a massive, inelastic demand base.

Increasing patient preference for home hemodialysis drives demand for specialized, convenient product packaging and systems.

Patients are demanding more autonomy and a better quality of life, shifting away from the traditional three-times-a-week in-center hemodialysis. This preference for home-based treatments, including home hemodialysis (HHD), is a significant social trend that Rockwell Medical must capitalize on.

The U.S. home dialysis systems market is projected to be valued at $9.7 billion in 2025, and the home hemodialysis segment alone is expected to grow at a Compound Annual Growth Rate (CAGR) of 10.7% from 2025 to 2032. This is much faster than the overall dialysis market growth. The convenience factor is key, so the demand for specialized products like Rockwell Medical's dry concentrates and smaller, more portable packaging is growing. In 2024, 13.3% of new dialysis patients were already opting for home dialysis, showing the clear direction of patient choice. You need to have products that fit into a patient's kitchen, not just a clinic's storeroom.

Public health focus on preventive care could slow the growth rate of new dialysis patients over the next decade.

While the ESRD population is still growing, there is a strong, concerted public health effort to slow the incidence (new cases) of kidney failure. New pharmacological agents like SGLT2 inhibitors and GLP-1 receptor agonists are proving effective in slowing the progression of Chronic Kidney Disease (CKD), particularly in patients with diabetes and hypertension.

The long-term goal for policymakers is to make dialysis rates in 2050 similar to 2025 through aggressive prevention. However, the impact is a slow burn. Right now, delays in diagnosing and treating CKD are still projected to lead to an over 75% increase in dialysis requirements across major countries by 2032, which shows the immediate risk to Rockwell Medical is low, but the long-term headwind is defintely real. The company must innovate to maintain its market share against a potentially shrinking pool of new patients in the distant future.

The company's reputation for product quality and reliable supply is a key factor in securing new long-term contracts.

In a life-sustaining industry like dialysis, reliability is the ultimate currency. Rockwell Medical's ability to secure and renew contracts hinges on its reputation for high-quality products and a reliable supply chain, especially after managing the transition of its largest customer in 2025.

This focus on quality translates to tangible business stability. As of the third quarter of 2025, over 80% of Rockwell Medical's remaining customer base is under long-term contracts. This contract stability is a critical moat, providing revenue visibility against a backdrop of competitive pressure. For example, in Q3 2025, the company signed a new three-year agreement with a single dialysis center in Southern Florida, which has the potential to generate approximately $1 million in annualized net sales, proving that quality and service still win deals.

Here's the quick math on the current contract base and market reality:

The next step is to ensure Operations can maintain the 100% supply reliability that secures these contracts, especially as you look to expand your home dialysis product line.

Rockwell Medical, Inc. (RMTI) - PESTLE Analysis: Technological factors

Focus on optimizing manufacturing with automated processes to improve gross margins and reduce production costs.

Rockwell Medical is making a deliberate technological shift toward manufacturing automation to stabilize and expand its gross margins, especially as the company navigates the loss of its largest customer. This isn't about new products; it's about efficiency. The company is actively investing in manufacturing upgrades and 'right-sizing' its operations to support margin stability.

For the 2025 fiscal year, management is guiding for net sales between $65 million and $70 million, with an expected gross margin range of 16% to 18%. To be fair, this is a challenging environment, but the efficiency push is already delivering. For instance, the termination of one third-party manufacturing agreement is projected to save over $2 million annually in fixed overhead costs alone. This kind of operational discipline is defintely a necessary step to maintain cash flow from operations, which was a positive $1.8 million in the second quarter of 2025.

Product innovation centers on core concentrates, such as the DAMX45 dry acid concentrate mix system.

The core of Rockwell Medical's current innovation strategy is tied directly to its primary business: hemodialysis concentrates. The technology here is the DAMX45 dry acid concentrate mix system, which is a strategic tool designed to drive the sales of their high-margin dry acid powders, CitraPure and Dri-Sate. This mixer is a game-changer for dialysis clinics because it addresses a major pain point: time.

The DAMX45 system is compact and user-friendly, and it can mix a full 100-gallon batch of acid concentrate on-site in approximately 3 minutes. That's over 90% faster than some traditional systems. This speed and simplicity-one-touch operation, no on-site technician required for maintenance-makes the switch to Rockwell Medical's dry concentrates a clear economic decision for clinics. The company is actively installing these mixers through partnerships, like the one with HydroCare, creating a direct technological link to new concentrate sales.

R&D for Triferic, a key iron replacement therapy, has been paused to conserve cash and focus resources on core business.

You need to be a realist in this business, and Rockwell Medical's decision regarding its proprietary iron replacement therapy, Triferic (ferric pyrophosphate citrate), shows that realism. The company has essentially paused all commercialization and R&D efforts for both Triferic (dialysate) and Triferic AVNU (intravenous) in the United States. They formally discontinued the New Drug Applications (NDAs) in the fourth quarter of 2022.

The simple math here is that the product faced limited market adoption and unfavorable reimbursement dynamics, despite its unique mechanism of action. So, to conserve cash and focus on the profitable concentrate business, the domestic R&D pipeline for Triferic is effectively shut down. Still, the technology is not abandoned globally; international partnerships continue, with the product approved in South Korea and a Marketing Authorization application submitted in Turkey.

Competitor advancements in portable or wearable dialysis technology could disrupt the conventional in-center market.

The biggest long-term technological risk to Rockwell Medical's core concentrate business is the rise of portable and wearable dialysis devices. Rockwell is a supplier to the traditional, in-center hemodialysis market, but the trend is clearly shifting toward home-based care. The global market for portable and wearable dialysis devices is estimated to be around $319.7 million in 2025 and is projected to grow at a Compound Annual Growth Rate (CAGR) of up to 13.9% through 2032.

This technology is a direct threat because it reduces the need for large-volume, in-center concentrates. Key competitors like Baxter, Fresenius, and startups such as AWAK Technologies (with its VIVANCE system) are driving this change. These devices, which are in human clinical trials, offer continuous treatment and greater patient mobility. This shift creates a structural headwind for any company whose business model relies on the traditional, high-volume delivery of dialysis concentrates to large, fixed centers.

• Monitor Baxter and Fresenius's home-dialysis equipment sales growth.
• Track AWAK Technologies' VIVANCE system for commercial launch dates.
• Evaluate the risk to your concentrate volume based on a 10% annual shift to home-based care.

Rockwell Medical, Inc. (RMTI) - PESTLE Analysis: Legal factors

Securing Revenue with Long-Term Contractual Stability

The legal structure of Rockwell Medical, Inc.'s customer base is a major de-risking factor right now. You're looking for stability in a volatile market, and the shift to multi-year agreements provides it. As of the end of the third quarter of 2025, over 80% of Rockwell Medical's customers are secured under long-term contracts. This is defintely a key legal and commercial achievement, ensuring predictable revenue streams that help offset the impact of major customer transitions.

This contractual foundation gives management clear revenue visibility, which is essential for capital planning and investment decisions. For example, the company signed new three-year agreements in Q3 2025, including one with a Southern Florida dialysis center that has the potential to generate approximately $1 million in annualized net sales. This shows the strategy is working to replace lost volume with lower-risk, diversified, multi-year commitments.

Managing the Transition of the Former Largest Customer

The contractual management of the former largest customer's transition is the most critical near-term legal and commercial challenge. This customer, which accounted for a substantial portion of historical revenue, is now a much smaller part of the business, representing only 12% of the company's Q3 2025 net sales.

The legal and operational complexities of this shift are clear when you look at the numbers. Total net sales for Q3 2025 were $15.9 million, a 44% decrease year-over-year, driven primarily by this customer's move to another supplier. The legal team must ensure the remaining supply relationship is managed precisely, as the CEO noted that contract discussions regarding this ongoing supply relationship are expected to resolve in Q4 2025. This resolution is a near-term catalyst that will provide final clarity on the legal obligations and future revenue trajectory.

Here's the quick math on the customer concentration risk reduction:

Mandatory FDA Compliance and the High-Risk Regulatory Environment

Compliance with all U.S. Food and Drug Administration (FDA) manufacturing and quality system regulations (QSR) is not optional; it's the cost of doing business in hemodialysis concentrates. The legal risk here is heightened by the current regulatory climate.

The FDA is demonstrating a more aggressive enforcement posture in 2025. As of early September 2025, the FDA had issued 19 warning letters citing violations of the Quality System Regulation for medical devices, surpassing the 12 issued during the same period in 2024.

Rockwell Medical's products, such as its single-use bicarbonate cartridge, are 510(k) approved. However, the industry has seen significant compliance failures, such as a competitor's (Nipro Renal Solutions) Class 1 recall in May 2025 for its liquid bicarbonate concentrate due to the potential for visible foreign matter. This underscores that Rockwell Medical must maintain rigorous Current Good Manufacturing Practices (cGMP) at its facilities to avoid a similar, financially devastating legal and regulatory event. The recent appointment of a new board member in November 2025 with deep expertise in FDA-regulated markets shows the company is prioritizing this legal and operational risk.

Intellectual Property Protection for Proprietary Products

Intellectual property (IP) protection is essential to maintain market exclusivity against generic competitors, especially for high-volume products. Rockwell Medical's legal position is strengthened by its proprietary products and associated regulatory approvals.

• CitraPure® and Dri-Sate® Concentrates: These are the company's branded dry acid concentrate powders. Protecting the trademarks and formulations is the first line of defense against generic market entry.
• DAMX45 System: This dry acid concentrate mix system is 510(k) approved to be used exclusively with Rockwell Medical's CitraPure® and Dri-Sate® powders. This regulatory exclusivity acts as a powerful legal and commercial barrier, tying the equipment to the consumables and making it harder for competitors to displace the product in a dialysis center.

The legal team must be vigilant. Any lapse in trademark enforcement or patent defense could quickly erode the competitive advantage built around these proprietary concentrate systems.

Rockwell Medical, Inc. (RMTI) - PESTLE Analysis: Environmental factors

The environmental landscape for Rockwell Medical, Inc. is defined by the high resource intensity of the dialysis industry and the growing pressure for 'Green Dialysis' initiatives. You should view the company's focus on dry concentrates not just as a cost-saver, but as a critical, built-in environmental advantage that reduces the carbon footprint of its supply chain immediately.

Dialysis concentrate manufacturing is part of a supply chain with a significant carbon footprint from transportation and packaging.

The most significant environmental opportunity for Rockwell Medical, Inc. lies in its core product mix: dry acid and bicarbonate concentrates like CitraPure and Dri-Sate. Shipping liquid concentrates is heavy and inefficient because you are mostly moving water, which dramatically inflates the Scope 3 emissions (indirect emissions from the value chain) for both the manufacturer and the customer.

Rockwell Medical, Inc.'s dry powder concentrates are mixed on-site at the clinic, meaning one case of dry product can generate 25 gallons of liquid acid concentrate. This concentration ratio drastically cuts the volume and weight of goods that need to be transported, directly lowering the carbon emissions from their logistics network, which utilizes both their own delivery trucks and third-party carriers. This is a defintely better model than moving water across the country.

Industry-wide pressure for 'Green Dialysis' requires manufacturers to minimize water and energy use in production.

The hemodialysis industry faces intense scrutiny because traditional in-center HD is one of the most resource-intensive medical therapies. A single in-center hemodialysis session can consume up to 500 liters of water, which is a massive drain on local resources. On an annual basis, this resource usage translates to a carbon footprint of about 10 tons of CO₂ per patient.

While Rockwell Medical, Inc. manufactures the concentrates, not the machines, the pressure to reduce water and energy use flows upstream to production. The company's customers, the dialysis clinics, are increasingly looking for partners that can help them mitigate this burden. This trend favors Rockwell Medical, Inc.'s dry concentrate systems because they enable the customer to reduce their storage requirements and streamline workflows, which is an indirect but powerful selling point in a resource-constrained world.

The company faces challenges in managing and reducing the substantial plastic and medical waste generated by dialysis treatments.

The sheer volume of disposable materials required for dialysis is a major environmental challenge. Globally, the renal replacement therapy industry generates nearly 2 billion tons of waste each year, with the vast majority coming from hemodialysis. This includes the plastic packaging for concentrates, tubing, filters, and other disposables.

Rockwell Medical, Inc. is now distributing a single-use bicarbonate cartridge, a product that addresses a fast-growing segment of the market, which is an estimated $100 million opportunity. But, to be fair, the convenience of single-use products inherently increases the plastic waste stream. This creates a strategic tension: the company must balance the clinical and logistical benefits of single-use products with the industry's need to adopt bioplastics or other strategies to reduce harmful disposable materials.

Facility consolidation and operational streamlining, while primarily economic, also reduce the company's environmental footprint.

Rockwell Medical, Inc. has been actively focused on enhancing operational efficiency, a move driven by the loss of a major customer that is expected to cost the company approximately $34 million in revenue compared to 2024. In response, the company has continued to consolidate and further automate its manufacturing operations.

Here's the quick math: reducing the number of facilities or automating processes to 'right-size' the organization to enhance operational efficiency, as noted in Q3 2025 results, directly translates to a smaller environmental footprint. Fewer facilities mean less total square footage to heat, cool, and power, which cuts Scope 1 and 2 emissions. This strategic move, aimed at maintaining a gross margin in the 16% to 18% range for 2025, has a clear environmental co-benefit, even if it is not the primary goal.

• Automate manufacturing to cut energy use.
• Consolidate facilities to reduce utility consumption.
• Streamline operations for less waste and more efficient resource use.

Next Step: Strategy Team: Quantify the estimated CO₂ and water savings from dry concentrate sales versus liquid for the 2025 guidance of $65.0M to $70.0M in Net Sales to create a formal 'Green Value Proposition' by end of Q4.