Erik Fyrwald: Yeah. So your second question, Mark, hard to definitively understand kind of what’s going on downstream in terms of the supply chain. However, I think in general, there was a little bit of volume that went from Q1 into Q1, but directionally, probably less than half a point. We were reducing prices, as you know, in certain segments. So customers decided to push some orders into Q1, but I think it’s fairly de minimis. In general, the feeling is that there’s not any restocking in the marketplace. There’s an absence in destocking, but there’s no view, I think generally, in terms of the customers are restocking at this point in time. In terms of your question on scent volumes, scent had a very strong first quarter. Note, that it was stronger in consumer versus fine.
So that as it makes that sort of mix neutral versus the enterprise from the standpoint, and as mentioned, we’re not anticipating that those high single digit volume gains will continue through the balance of the year. So that is a piece that’s basically reflected in our balance of your guide being lower from a volume standpoint.
Operator: Our next question comes from the line of Lauren Lieberman with Barclays. Lauren, your line is now open.
Lauren Lieberman: Great, thanks. I had two questions. First was just on the nourish performance in the quarter and volumes being up, food industry volumes are still quite weak. So I was just kind of curious if you could square for us your performance outside of inventory rebuilding versus kind of what we’re seeing in end market demand. And then the second thing was, Eric, very helpful to hear kind of the update on org structure and the direction you’re moving in. I was curious, though, ask a little bit backwards question, the org structure that was in the process of being set up, and Glenn, you were obviously a part of that. I understand the notion that it’s being deemed not the right path forward, but there were surely merits to that plan.
There were elements there that were going to bring something positive, or there was an intention. So I’m just curious, what, if anything, you think you kind of give up or forego in not pursuing that model, and if there are ways to kind of bring that into the structure, Eric, that you’re going to be setting up. If that didn’t make sense, I can try to clarify. Thanks.
Erik Fyrwald: No, no, I’ll start and then Glenn can add to it. First of all, in the organization structure, the idea was to have market-based organization structure. So, for example, health and biosciences would have been split up into four different units. As we’ve come together as executive leadership team and talked about it, the belief is that you gain the most by making sure that your innovation, that your R&D engine, stays within the business and the manufacturing and the commercial, so that you have that end-to-end and you’re going to customers with expertise that they can connect all the way back to R&D and what we call IC&D, that the innovation, creation and design capabilities that we bring. That really needs to stay within a business and be there end to end.
Now, we have different businesses that hit the same markets. So health, excuse me, home and personal care, both our biosciences business and our scent business have a lot in common with customers. So we’ll continue to have a global key account leader for large accounts that will represent the company, but then we’ll have experts from the business units coming into that account and working with that account, which is what the accounts want. They want both that overall IFF relationship, which, by the way, will include the presidents of the businesses, will include me and others, but that coordinated, but they want to see the experts that really know the innovation details that can bring that innovation to them and that’s what these end to end business units will enable us to bring.
Glenn Richter: So if I can add, the original premise, which actually predates me, Lauren, was that combining flavors and ingredients would represent a significant, quote, revenue synergy opportunity through cross sell. And the axis was put on synergies, as opposed to how do you optimize the individual businesses, that is being shifted the other way. Where the reality is these businesses will run much, much better with a single focus, either on flavors or ingredients. As Eric said, there are other mechanisms to help cross out, particularly with the global key accounts, as a way to develop long term plans, etcetera, but we’ve seen it just first hand in terms of the more that we get our ingredients team sort of focused on only ingredients, it does deliver results.
So I think that’s the big shift from three plus years ago when the deal was put together and early, it’s your first question, very early innings, by the way, although cautiously optimistic, our trends in terms of our flavors business were 4% plus volumes and the ingredients business were 3.5%. From what we can measure in terms of our competitive set on both sides of the house, we feel that we’re at parity or gaining share based on the quarterly results, I would caution particularly on the ingredients business, it is early. There’s a lot of remediation in that business, but it’s encouraging that we’re starting off relative to our peers in a good place.
Erik Fyrwald: And what I would just add to that is, I think flavors, it was really a good pipeline that the commercial team was able to land and ingredients. It was a combination of a strengthening pipeline, but also pricing actions that led to regain of some share that was lost due to big overpricing increases and now we’ve recovered some of that with some price give backs.
Operator: Our next question comes from the line of Laurence Alexander with Jefferies. Lawrence, your line is now open.
Laurence Alexander: Good morning. Just want to follow up on the comment about sort of the inventory dynamics downstream. If you look a little bit farther out, what are you hearing from customers about either them shifting their innovation strategies and therefore having more demand pull for your product, or longer term, they’re needing to reset inventory levels in terms of working capital days or other metrics. And then would that be a net tailwind or headwind for you from current levels?
Erik Fyrwald: So in the last, since I’ve joined, I think I’ve met with more than 20 customers, maybe 30 customers, and very consistently what we’re hearing back is that they’re pivoting from being able to grow with price increases to now needing innovation, innovation being more important than ever and that’s a good part of why it’s so important for us to have end-to-end business units that can bring that innovation quickly and aggressively because that’s what our customers want, so that they can continue to profitably grow their business. They have to have more innovation. That’s what they’re looking for. That’s what they need, and that’s what we’re going to deliver. So that’s how they’re going to grow and that’s how we’re going to grow.
Operator: Our next question comes from the line of Jeff Zekauskas with JP Morgan. Jeff, your line is now open.
