Tracey Joubert: Yes. So look, as Gavin said, we do expect the top line to be rate-driven, benefiting from the 2022 pricing and mix. We’re obviously also mindful of the inflationary impact to both, the consumer and costs — our own input costs, and we’ve taken that into consideration. But as I said, we do expect to grow our gross margin per hectoliter in both business units. So margin expansion on the gross margin line. And I think that was…
Gavin Hattersley: Yes. The other side of your question, Nadine, was around consumers and consumer behavior. I think overarchingly, I’d say we’re not seeing anything terribly different than any other fast-moving consumer good. So the beer industry is no different there. We’re not observing significant trade down, which was the other part of your question, across our portfolio, or frankly, in the industry. Of course, if that comes, we think we’ve got the ideal portfolio to deal with that, but we haven’t actually seen it at this point in time. And as I said in my prepared remarks, we are seeing consumers trading down maybe from a 30 pack to a 24 or 24 to a 12 or a 12 to a 6. Obviously, that is negative from a volume perspective, that contraction, but it’s actually positive from a mix point of view for our organization. So hopefully, that answers your question.
Operator: Thank you. Our next question comes from Chris Carey of Wells Fargo.
Chris Carey: So, I just wanted to follow up just quickly there and then ask you a question. But, Tracey, you made a comment about your inflation — the COGS per hectoliter inflation running, I guess, at this level into the front half and then fading. Can you maybe be a bit more specific about what you meant there? Did you mean the rate of — COGS per hectoliter inflation to stay at this kind of level and then trail down in the back half? So you’re really looking for mid- to high single-digit underlying, or just any perspective there? And just what you think is going to be driving that between commodities and some of these non-commodity costs like conversion and freight. So I just wanted to clarify that.
Tracey Joubert: Yes. Thanks, Chris. We don’t give cost per hectoliter guidance. So, I just want to clarify, I didn’t say at this level. But what I did say is that we do expect the inflation to moderate in the back half of the year. So we sit in an inflationary period. We do still expect headwinds for the year, but again, moderating in the back half, and a lot of that’s driven on what we see in the forward curves for commodities.
Chris Carey: Okay. And then, when you said gross margin expansion, you meant total enterprise for the year — next year?
Tracey Joubert: Yes. I’m talking — so gross margin per hectoliter expansion growth in both of our business units is what I said.
Chris Carey: And that would lead to total company gross margin expansion?
Tracey Joubert: Yes
Chris Carey: Yes. Great. Okay. Thanks so much. Thanks for clarifying that. Then just on — if I look at your 10-K, marketing obviously down and it implies a G&A run rate up about high single. I think you were very clear that the marketing was down because of the discontinued SKUs, and you’d be investing and marketing would be up next year. And so that’s very clear. But that underlying G&A rate, would you expect that to ease next year, or are we talking about another year where there’s wage inflation, there’s — everything costs a bit more now? And so can you just talk about your ability to manage that line item? And just conceptually how you see G&A, excluding marketing for next year? So, thanks so much.
Tracey Joubert: Yes. So, look, we manage our G&A, I think, really well, and we’ll continue to manage the costs related to G&A. We don’t specifically give G&A guidance. But as I’ve said and Gavin said, we’ll continue to invest behind the business. We’ll continue to invest behind our brands, particularly our core brands and our innovations. So, much more than that, Chris, I can’t give you without giving the guidance.
Operator: Thank you. Our next question comes from Filippo Falorni of Citi.
Filippo Falorni: First question on the U.S. beer industry. You mentioned soft industry performance in Q4, and it sounded like volume improved in January. So, can you talk about your expectations for the balance of the year? And then, the second question on market share, you’ve done a lot of progress in improving the market share performance of both Coors Light and Miller Lite, are you assuming share gains for those two brands in 2023? Thank you.
Gavin Hattersley: Thanks, Filippo. Yes, we have seen a rebound in volume performance in the first part of this year compared to what we experienced in the fourth quarter of last year. I think as far as the full year is concerned, I’d point you to Tracey’s comments around the fact that our top line guidance is more rate driven than volume driven. And I think I gave a little bit of clarification around that from a contract brewing point of view. And yes, you rightly point out that Miller Lite and Coors Light are healthier than they’ve been in years. I mean, they grew combined NSR in the U.S. in the second half. And that continues to be strong upward trajectory that we saw in 2021. We grew NSR for both Coors Light and Miller Lite in Canada, and they posted their strongest dollar share performance in over a decade.
So, I think we’ve done an excellent job of ensuring that Coors Light and Miller Lite have a very clear differentiated brand position and Coors Light, obviously, owns refreshment, Miller Lite owns beer taste. And we’ve built on those foundations with very strong consistent marketing programs Made to Chill for Coors Light and Miller Lite’s Beer Point of You. And then on top of that, we’ve got strong sales execution across chain and grocery. And we’ve actually outpaced Bud Light in both feature and display for seven of our largest chain retailers. So, all of that translates into good share gains versus our competitors. I think we’ve got really strong programs for 2023, starting with the Super Bowl, which wasn’t just a point in time. It was a buildup for several months before that, and we’ll continue to leverage that post the Super Bowl.
So, we don’t shy away from being the challenger in the challenger position versus our competitors. And we’re going to make the dollars that we’ve got worked pretty hard for it — for us. How that translates into share gains, well, let’s wait and see.
Operator: Our next question comes from Kaumil Gajrawala of Credit Suisse.
Kaumil Gajrawala: Can you talk a bit — looking forward, can you talk a bit about capacity and how you’re thinking about cap utilization given what we’re observing with volumes?
