Ryals McMullian: So, Mitch, it is up a little bit. I think in the prepared remarks, we indicated that, while it was up for the category that it still remains below pre-pandemic levels. So your comment about it sort of being below average certainly rings true. The primary reason that we’re seeing for that in our research is there’s just not much lift to be had. The category has historically been mainly driven by base sales, but there was also historically some incrementality available via promotion. What we’re seeing now is that, you’re really not getting much lift, when you do promote. And I’ve said before, I think that kind of, to your point, that does somewhat indicate a pressure consumer in the extra — to the extent that the opportunity for expandable consumption is not really there right now.
Consumers are buying what they need and that’s it. Now, going forward, would I expect to see some higher promotions maybe as we look into next year, we’ll have to see. It’s a very tough thing to predict. Just looking at the overall macro environment in the consumer, I would have thought that we might have already seen a little bit more of an uptick, but we really haven’t. And I think that’s largely due to the fact that there’s just not a lot of return available right now on promotion.
Mitchell Pinheiro: And then what’s driving the higher sale rates that you mentioned in the — as it related to margins?
Ryals McMullian: Yes. So a lot of that is retailers are very keen on minimizing out stocks due to the growth of e-commerce. And so, keeping a little bit more on shelf can obviously impact your style a bit.
Mitchell Pinheiro: Okay. And is that across — is that in all categories? Meaning, is it just in traditional loaf, or are you seeing it broadly into the organic and other sub-categories?
Ryals McMullian: No, I would say it’s more centered in traditional loaf. I mean, the stale rates for DKV and things like that are trending about where they were.
Mitchell Pinheiro: Okay. And then, sort of final sort of bigger picture question is your market share in bread is relatively — its mean relatively stable. Up and down a couple of basis points over the last couple of years. And I’m curious, like, what it’s going to take. I mean, it’s 17% share of the category, 18% share. That’s still relatively modest, especially for being number two player in the category. And I’m curious what it’s going to take to get that from 17% to 19% to 21%.
Steve Kinsey: Yes, it’s a great question. I mean, obviously, one element that we’re dealing with right now, of course, is the sort of resurgence of private label while the consumer is under pressure, though I do think it’s important to note that continues to moderate as we go forward. So that’s one factor. The other thing that’s going to impact our growth is further penetration into under developed territories. We continue to grow very nicely in the Northeast, but, we —
Ryals McMullian: Mitch, we also have a decent chunk of the country that we don’t cover in that upper Midwest area. So, gaining access to that market at the right point in time will also be nicely accretive to overall share. And look, we continue to innovate as well. And we’ve proven that consumers will pay a premium price for differentiated items that really lean in heavily on quality and taste, right. And our innovation efforts, whether that’s in our core category or now I’m moving outside the category with snacks is focused on that. And that should also help us drive share going forward. I’d also call out breakfast. Until we brought forth Dave’s Killer Bread. Into the breakfast category, we virtually had no presence there.
And so, and we’re experiencing some nice growth there. Now we’ve got Papa Pita online out west. We’re able to deliver fresher muffins to that part of the territory and are picking up some distribution that we had lost due to quality issues shipping it across the country. So, all these things are important and ultimately add up to improve share over time.
