Michael Hsu: I’ll start and then I’ll let Nelson correct me. But I would say, it’s our job. And so from my chair, I would say we have to do it, right? And so — and the back story — and I know you came out last year or so, Javier. But when I came into this role, the 3 things that we set out to do was, one, accelerate organic growth; second, reduce our earnings volatility; and the third thing, importantly, is enhance our margins; and so that was a fundamental goal when I came into this role. The kind of the curveball that came in, in between that was COVID, the demand shock, supply shocks and everything else in the inflation shocks. And so over the last couple of years, we said, hey, we’ve got an interim goal of, one, we got to restore our margins which I think this quarter kind of marks a pretty significant point for us that hey, we are back pre-COVID or 2019 levels.
But still, as we talk internally, it’s our job to enhance margins from here. And that’s what I’m saying is we have to continue to be disciplined around our commercial programming, our innovation our revenue management and also just a discipline on the cost program and I still see further opportunity for us to expand our margins. But maybe I’ll give you — I’ll ask Nelson to kind of give you some more specifics around the near term.
Nelson Urdaneta: Yes. So Javier, just to build on what Mike said. I mean — and we’ve been talking about this since we had our lowest point in gross margin at 29.8% about 5 quarters ago. And our whole point was that we were going to get back to the 35% which is a milestone and not an end state. And really, what’s happened is we’ve made — and we’ve been making and you can see significant investments behind building capabilities in the organization. So we’ve been building a lot of muscle around revenue growth management and this includes price-back architecture and the ability to have also the right packs and sizes and formats for the different customers that we deal with across the globe. Secondly is around productivity. We’ve made sure that we strengthen and buttress our overall gross margin productivity pipeline and that remains strong today.
And then you can see how we’ve been delivering that over time and we intend to deliver ongoing productivity, gross productivity as an element to drive that. And then, the other bid is around our innovation. We’ve increased our focus around innovation; last year, drove 60% of our revenue growth and it’s accretive innovation. And if you combine these 3, that’s really the way we’re staring at expanding margins over time, gross margins. And that’s truly what’s going to drive balanced and sustainable growth for years to come for us.
Operator: Your next question is coming from Steve Powers from Deutsche Bank.
Steve Powers: So two questions. The first one, just Nelson, maybe you could expand a bit on the other manufacturing cost inflation and the higher call for the year that you’ve made today? Just maybe a little bit of further detail as to the drivers there and where we are in that cycle as we look forward?
Nelson Urdaneta: Sure. So as you indicated, we took our call from $200 million to $250 million through the first 3 quarters of the year were close to $200 million, just a tad below. And what’s really driving this is a few things. One, keep in mind that a lot of the service inflation and lease inflation, et cetera and some cost inflation flow through this number. And it’s being weighed in by some of the hyperinflationary economies that we deal with. So we’re being impacted on that end because we’ve seen some costs accelerate outside of the U.S., Steve. So that’s part of what’s driving that $250 million based on where we’re at, at this stage.
