Dave Marberger: Yes. I mean we obviously got the biggest benefit was from the tomato pricing and we saw the expected benefits there. The elasticities were good and in line with what we expected. We also did have a benefit of mix in the quarter. So our price/mix which was a little over 4% for the quarter, we did get a benefit of mix which contributed as well. And so a lot of our businesses in Grocery & Snacks are progressing as we expected. And so that’s driving a good mix for us. So that was part of the equation as well in the quarter.
Operator: Next question comes from Alexia Howard with Bernstein.
Alexia Howard: Okay. So can I ask to begin with just about the productivity improvements in the food service channels. It seemed as though they were particularly strong this quarter. Is that likely to continue going forward?
Sean Connolly: It was definitely a strong margin performance for food service. There’s been a little bit of weakness in traffic in food service but I’d say overall, it was a very good quarter. And I think that is just an example of the productivity and total cost savings performance we expect across the portfolio, Alexia. So food service has opportunities but we’ve also got opportunities across the international business and the retail business in the U.S. as well. So we expect strong continued cost savings performance across the total portfolio.
Alexia Howard: Great. And then can I just hone in on private label in the frozen vegetable area. There seems to be some confusion out here about whether private label is becoming more of a problem just broadly or whether it’s actually still fairly contained. Is there anything that you’re seeing in terms of private label, either in frozen vegetables or more broadly that would suggest it’s becoming more of an issue. Or is it really that the supply chain challenges have been overcome on the private label side but there doesn’t seem to be any major red flags or anything on the horizon?
Sean Connolly: Yes. Let me frame that up for you. So you’ve got the big picture of how that works. Overall, as a company, we under-index, as I mentioned a few minutes ago, versus private label. That is obviously category specific. So there are some categories that have more private label. A good example is canned tomatoes, where you basically got Hunts, you’ve got private label and then you’ve got some kind of regional brands that are smaller in the area. One of the other categories where there is a larger piece of private label is frozen vegetables. But as you think about vegetables more broadly, vegetables are sold frozen. They’re sold in the produce section and they’re sold in the canned food section in the center of the store.
And there’s been a lot of movement between that as value-seeking behaviors have been out there. And one of that has been actually about 6 months ago, some trade out of frozen into can and we’re seeing that come back. Within frozen vegetables Alexia, there are — there’s kind of the commodity vegetable tier — and then there’s the more premium steamer and then value-added tier which is soft season, things like that. For the last 2 years, we have been focused on building our business and our innovation pipeline in the premium value-added space and actually pulling back on the commodity veg space, doing more value over volume, as you’ve heard us talk before. And the reason for that is because that’s a lower-margin business. Not surprisingly, it’s more commodity oriented.
So there’s a role for us to play or there’s — that business plays a role for us as a company in terms of overhead absorption in our vegetable plants but our aspiration is not to be the world leaders and fastest growers in commodity veg tier within frozen because that’s just arguably a bit of a misuse of our resources that we could people and otherwise but elsewhere because there’s not much of a profit pool there. So it’s important for us to maintain a certain scale of business there for overhead absorption purposes but that is not strategically where we play. When we look at frozen vegetables, we are looking — and you can see in our innovation pipeline and more premium products and more value-added tier.
Operator: The next question comes from Rob Dickerson with Jefferies.
Rob Dickerson: Great. Sean, just, I guess, a question specific to frozen. I mean it sounds like the ROI on the investments have been attractive. You seem very kind of upbeat and encouraged to the momentum on the business. But at the same time, when we think about kind of what’s happened in the quarter, doesn’t really seem like a lot of that was driven necessarily by kind of upside, so to speak, within that volume component within Refrigerated and frozen. So I’m just curious, as you speak to those investments, are we talking kind of more promotional activity, you’re doing better and better and bigger pack sizes. Just trying to gauge kind of what’s like your perspective as to why the ROIs are good and kind of what you’re doing right because optically, as we look at the number in the segment which does include refrigerated it’s not really better and there was, I think, a little bit of an easier compare.
So just trying to gauge — get a little bit more color on that one piece.
Sean Connolly: Yes. I think to not get too twisted up in the optics of the combined R&F segment — if you look at — I think it was Page 10 of our presentation today which was consumption in our consumer domains. That’s really the key kind of evidence point of what we’re seeing from our investments. So our investments have been heavily skewed towards frozen, as I mentioned, because that’s a very strategic business for us. And that line — that consumption line there in terms of volume change has moved from minus 7.8% in Q1 of fiscal ’24 to minus 2.8% in Q3 ’24 and in the most recent — in the first month of the fourth quarter, that number is about a minus 1.2%. So that’s when I referenced the nearly 7-point swing in consumption that we’ve seen over the last couple of quarters, that’s precisely what I’m talking about.
