market share and so on and you know, how you manage that relationship? Also, just Bob, you’d mentioned pricing on owned and licensed and I just wanted to be clear if that was new pricing that’s recently gone in the market or if that’s still to come? And then finally, I know that inventory destocking for Pods at retail had been a potential watch point that hasn’t come up. So I’m assuming it’s a non-issue, but I just wanted to check in on that front, as well. Thanks.
Robert Gamgort : Sure. Yes. Thanks for the opportunity for me to talk about the way – the way the system works. So, again, I go back to the very beginning and say that what we manage as an ecosystem that involves our brands, our partner brands and private-label brands, our retailer brands. And it’s really important that retailers are considered to be a partner in this whole ecosystem, as well because, conversion of brewing by the cup are popped by the cup benefits all of the interested stakeholders in this. Our objective is really focused and hasn’t changed, which is we want to have a growing system. We want to category to continue to expand. We want the dynamics of that category to be constructive for everybody. Part of that is managing our own brands which we manage very separately from our partners.
So there is no conflict of ventures. We manage those as a separate group within our organization that has no visibility into what our partners or private-label are doing and it allows us just to maintain focus on the category. For us, we see the opportunity for more pricing within our brands, within the category. If you take a look at our price gaps versus other forms of coffee, even though there’s been pricing in the single-serve segment, the price gaps versus all forms of at-home coffee right now are the narrowest they have ever been. And in fact, we do believe they are at a point where it’s actually not doing anything to drive category growth. Partners and that includes some of our retail partners and their private-label brands. Look, sometimes they have short-term objectives that are more share-driven.
So, we see some of that promotional competition and that shift share between one brand to another, but it really does nothing for the category which is our focus. And so that’s why when I take a look at our pricing, it comes back from being more restrained in the promotional environment, which allows us to protect margin. And again, if you go back to the highest level, the rational decision for us to make is to improve our margins in a growing category. And then, you did point out something about if owned in license brands are losing some share it might have some negative in mix impact. Fair enough that mix is as great as some people think it is as we said before. But I would then also point out that we’re looking at pricing inflation and productivity.
And the reason that people should believe that we’re not concerned about that that difference of share is the visibility that we’re giving you two improve in margin going forward. If it were a heavy negative impact on our business, we wouldn’t be able to do that. So we understand all these weavers of pricing inflation part to be mix. And sometimes you have to trade out one for the other. We can do that for the long-term health of the system and the growth of the category, which is what we are focused on. And then your last point is about destocking of pods. It’s not something that we’ve seen at retail and nor do we expect to see anything of that nature.
Operator: Our last question will come from Steve Powers with Deutsche Bank. You may now go ahead.
Steve Powers: Yes. Hey, good morning. Thank you.
Robert Gamgort : Hey Steve.
