Gerry Sweeney: Got it. And then you did touch upon it for a second. This was down on my list of questions, I guess, it impacted both direct ship €“ I think DSD, but some of the hedging contractual structure and delays. I think last quarter, you talked about Q2, which we just had some improvement, but more substantial improvement in Q3 and Q4. How does that work out? Or is that still sort of on the table per se?
Scott Drake: Yes, exactly. The €“ I think that when you look at the program we have, really, we hedge so that we can have more certainty around our costs. And when theoretically, when prices are rising like they were in the last couple of years, that’s when you saw us get much more coverage, and we went much longer on our contractual coverage of those costs. And then when we had the thesis the prices were going to be falling, we’ve obviously shortened up our coverage quite a bit so that we could get to those lower prices as quick as possible. But we are still working through some of those inventories. It has to be brought in, manufactured, distributed, sold, et cetera, to get the way all the way to the P&L. So we’re starting to see that now, but that is another thing that that lag, along with some of the pricing lags we’ve talked about, are both €“ we’re seeing progress, but we’re just going to need some more time, a few more months here to continue to work through them.
But the good news on both fronts is that they’re accelerating. So through Q3, Q4 and even Q1, we think we’ll continue to have these tailwinds and really see nice progress.
Gerry Sweeney: On that front, how long does it take for sort of inventory to roll through? So obviously, pricing is down as well over well above $2 a pound, now it’s below on average. How long does it take to sort of see that benefit?
Scott Drake: Yes. It’s interesting. If you look at our €“ like any other business, if you look at our top SKUs, those turned quite a bit. It’s pretty regular. But I’ll use an example from DSD and our spices and teas. Some of those products, they kind of have a growing season and ordering season and you really only place your orders once or twice a year for some of those items. So you’ve got longer inventory and it just takes a little longer for those to turn. But I think on average, when you look at it, it’s €“ people can do the kind of quick inventory turns, but we’re usually at a couple of months, two to three months I would say, on average. But then again, you’ve got with DSD you have that sale and that turn and then you’ve got your collection, your AR period there that would tack on to the end of that.
And with DSD, you’ve kind of got the customer notification. So even if you’re going to change prices or move some of these things, there’s usually a 30-day or so notification period. And that tends to make it just feel longer and really because it is longer than the 60 to 90 days we talk about so much.
Gerry Sweeney: Got it. And then unrestricted cash was up and just looking at the balance sheet, inventories were down. I actually €“ I mean; I didn’t scrub the balance sheet or go through it. But I would imagine as cost of coffee reduces, working capital, just like an inventory should decline as well. Is that a fair assumption? And is that what drove 2Q or are we just seeing with some of the initiatives you put in place, just better inventory management, et cetera?
