Brian Mullan: Okay, understood. Thank you. Just to follow-up just related to the potential or not the potential, but you’re going to be expanding production capacity in the US. I think In the past you said it’s a 10% to 15% increase in hubs to be able to serve an additional 8,000 to 10,000 DFD doors on top of the capacity you have. So just how do you want us thinking about the cost to build each additional new hub? Maybe how long would it take you to build? And how many hubs are you thinking you can get to next year in your planning?
Josh Charlesworth: Okay. I’ll take that. Hi, Brian. Yes actually just stepping back a moment as it relates to supporting the whole DFD opportunity in the US, including QSR, we can add about 6000 points of access from the existing production hubs with minimal investment. You’re just talking trucks, drivers that kind of thing. But clearly we want to go beyond that which is what you’re talking about. We want to start investing and increase capacity in underserved markets around the country as well. That can be new markets like New England or Upstate New York Minnesota, but also markets where we’re near full capacity with very strong businesses like California and Florida. So, yes, as you talked about going beyond the 12,000 points of access that we can do from our existing hubs we would add about 10% to 15% of hubs on top of our existing network and that would serve about another 8000 points of access.
So 20,000 points of access all in obviously exciting opportunity. Now it’s interesting these production hubs in the future we’ll be building them to support more off-premise DFD sales than the hubs that we have today. So they’re going to have additional donut making lines. They’ll have larger load-out logistics areas. So, we’re going to evolve to support what is clearly a rapidly growing DFD opportunity for us. And with 10% to 15% more hubs works out at about 25 35 new hubs over the next few years about $3 million to $6 million a hub. Timing depends on a number of factors. As I said there’s nothing finalized with McDonald’s so we’ll continue to update you on our plans as we have more information.
Brian Mullan: Okay. Thank you very much.
Operator: Your next question is from the line of Andrew Wolf with C.L. King. Please go ahead.
Andrew Wolf: Great. Thank you. I just wanted to ask the restaurant industry at large generally had a weak summer especially August and September and then it bounced back in October. Was the cadence of sales certainly within the shops and the hubs was that similar? And was and also how was the DFD? Was there any similarity to sort of the restaurant industry at large in your sales cadence?
Jeremiah Ashukian: Yes. Thanks Andrew. Seasonally, Q3 is actually one of our softest periods traditionally and Q4 is one of our strongest. So we’re kind of seeing that cadence right in line with our expectations. So growth obviously in the quarter was right in line with what we’d expected it to be. In the US specifically we are pleased with the growth we’re seeing in the US and how the underlying business is holding up given some of the price we’ve taken as it grew double-digits for the fourth consecutive quarter. With respect to DFD all of our channels grew DFD being one of the largest growth contributors at over 20% in Q3. Of that growth in DFD half was driven by points of access and half was driven by price and premiumization and bringing specialty donuts into the channel. And we’re actually maintaining productivity in existing doors which is a good sign for us as well.
Josh Charlesworth: It’s really interesting the seasonality of us versus the industry you referenced. Obviously to the earlier question we’re learning about QSR restaurants and the way they behave this year. And obviously the summer season and the ones we’ve been servicing is quite big. It’s a big part of the year for us. It can be a low obviously related to weather factors and what have you and less holidays during that period. It was actually really exciting that we’re able to bring a lot of excitement around the brand in the low season with M&Ms. Pumpkin spice was a fantastic promotion in the US and I mentioned the Hailey Bieber influence strawberry glaze promotion as well. So, to be able to create that excitement at this premium specialty donuts in the low season was great.
And that applied to the donut shops e-commerce in particular and DFD where we supplied those specialty donuts across all three. Now, looking ahead, of course, we’ve got more holidays more excitement around the brand to think about our high season. And hence the good start with Halloween was really good to see as well.
Andrew Wolf: Great. Just one follow-up on the comments on the maintenance of sales productivity at DFD doors. It’s good to hear. Is that on a dollar basis or on a unit basis? I guess what I’m specifically asking about it sounds like the premiumization is going well but is there like an elasticity issue at all? Or is it about what you expect? And so I guess it would end up being the same. Would it translate to any change in shrink in terms of product that didn’t get bought?
Jeremiah Ashukian: Yes, I think so. I can take that Andrew. And as I mentioned half of the growth was driven by price. And when you look at the existing doors they’re maintaining that productivity on a unit basis. So, we’re not seeing significant elasticities and they’re definitely in line with what we would have expected to see.
Josh Charlesworth: And the specialty donuts, there’s a lot of demand for them. So in many ways having those become a bigger part of the portfolio is good for productivity because they sell out faster.
Mike Tattersfield: Yeah.
Andrew Wolf: Got it. Okay, terrific. Thank you.
Operator: [Operator Instructions] Our next question is from the line of Bill Chappell with Truist. Please go ahead.
Bill Chappell: Thanks. Good morning. Just two questions on Insomnia and the announcement intra-quarter on there. I guess one as you’re thinking about potentially strategic alternatives can you maybe quantify what that business did for organic sales in the US for the quarter and what that would mean for the year? And then second, just kind of a little more color behind the thought process of that. And from the IPO on you had been pretty firm about saying it was a key part of the business and it was something that you could really nurture and build. And this seems like the timing in terms of maximizing value for it, when there’s a lot of noise about GLPs and what have you is not ideal. So just trying to understand kind of what went behind it. And what your thought process is on, timing and stuff like that as well as kind of what it would take away in terms of the total organic growth. Thanks.
Mike Tattersfield: Hey Bill, this is Mike. Five years ago we took on the business of Insomnia. One of the key things that we really looked at is, how do we capitalize on the delivery and e-commerce capability of that brand and then, how do we help that brand start to expand itself and get scaled in the US and potentially outside of the US. So what we’ve seen and you’ve seen today, where 20% of our retail sales overall is being driven by delivery we check that box, right? So when you start to see we’re there now at a 250 cookie shop basis — bakery basis in the US. They’re starting to unlock in the international both in the Canada and the UK. They have a tremendous growth story. Krispy Kreme has a tremendous growth story in front of us. The reason to look at strategic alternatives is to just explore and enhance that growth potential that we have there. So that’s why the timing is the right timing, right now. That’s why we chose this today.
Jeremiah Ashukian: Yeah. And let me — I can pick it up in terms of how we’re feeling overall in the top line is I kind of mentioned a few questions ago that again we’re super pleased with, how the business is performing both on top line as well on as well as on profitability sequentially and year-over-year. With respect to the process, we’re super pleased with the strong level of interest we’ve seen already from very high-quality parties and remain focused on the transaction which will generate a strong return on investment in the business that we made and realize value for our shareholders. And we’ll share more news as we have it with you all. With your question around the overall growth impact, we expect it to have a 100 basis point to 200, basis point overall impact on the total growth of the business.
