John Baumgartner: I guess just thinking about the depth of the volume decline, and it feels like you’re not seeing a shift out-of-home channel. So it feels like it’s more to be just more left over consumption at home. I mean do you sense that consumers are getting close to normalizing to the new prices on shelf and that should just over the next couple of months sort of roll off with less deep volume declines going forward at this point in terms of the adjustment process for the consumer?
Jon Nudi: Yes, John. So obviously, volumes are down for NAR. And as we look at that, we expect, frankly, with the amount of pricing that we’ve taken, historical elasticities would suggest much bigger declines. So again, we feel comfortable with where we are. That being said, as we pivot into fiscal ’24, we want to get back to growing not only dollars but growing pound volume as well. And it’s going to be really all about the fundamentals. And as Jeff mentioned, we’re investing in marketing. We feel really good about our marketing on our major brands. Innovation is something that we haven’t pulled back on through the pandemic, and we’ll continue to press the advantage there. And we think that we’ve got some great items coming in the coming year.
And the capabilities that we’re investing in from an accelerated standpoint are really helping as well. I mentioned that around — in addition to that, digital marketing is something that’s very exciting right now in terms of the ability to really have one-to-one relationships and target consumers and over 50% of our marketing now across NAR is digital, and that will continue to increase. So, it will be back to the fundamentals, and we feel really good about our ability to compete in that role as we move forward.
Operator: The next question comes from Chris Carey of Wells Fargo. Please go ahead.
Chris Carey: So just a couple of quick questions around inflation. Just on the mid-single-digit inflation. You noted in the prepared remarks that, that is split between labor and conversion costs primarily. I wonder if you could just aggregate that. And then, what are you seeing from a commodity standpoint within that mid-single-digit equation?
Kofi Bruce: Yes. I appreciate the question. So I won’t decomp it very deeply other than to tell you that what we’re tracking is some of the headline commodity numbers have been obviously coming off of their peaks. Part of the reason we’re giving this expectation is because embedded within the inflation expectations for our total input cost a fair amount of conversion cost behind some of we’re not taking in just raw commodities. So as we think about the impact of continued labor pressure, energy costs, those and other conversion costs that go into taking raw materials, creating value-added inputs that go into our products. That’s what’s driving the inflation. So, I think the key here is it probably is an overread to look just at the commodity softening on some of the key commodities and assume that there’s going to be a more benign inflationary environment.
So we’ll give you a decomp and a little bit deeper dive when we come back in Q4 and provide guidance for the next year.
Chris Carey: Okay. That’s helpful. One quick follow-up. On the last earnings call, I believe there was a question just around whether the non-commodity pieces of the equation were appropriate buckets to come to retailers with an inflation story, right? And so this mid-single-digit inflation, are these the types of a typical inflation drivers that typically, you would be able to come to a retailer with the pricing story. I appreciate HMM and other offsets are going to be important, including revenue growth there of SRM. But just in the context of this total inflation idea that we’re hearing across the space right now, is that really sticking with the retailer? I just wonder if you could provide any context on that.
