So the effect will start to take place from now going forward for the next 18 months, I would say, that we get the benefits to sort of work out for us. So far, everything is working out exactly as planned. And so we have high hopes that you will see the significant benefit from that next year.
Michael Lavery: Okay, great. Thanks so much.
Dirk Van de Put: Thank you.
Luca Zaramella: Thank you.
Operator: Our next question comes from Matt Smith, Stifel.
Matthew Smith: Hi. Thank you. Just wanted to follow up on the commentary about the channel shift in the US with club and e-commerce growing much faster than measured channels in the biscuit business. Can you talk about how that’s impacting your share performance and if there’s a margin difference for you between the channels? And maybe just as a follow-up, are you seeing or hearing from retailers in the measured channels that they’re adjusting for the consumer behavior shift?
Dirk Van de Put: Yes. So, yes, the shift is noticeable largely because those channels offer larger packs, both online and in the club channels and that’s what consumers are looking for. We see our volume share going up overall due to the share that we are gaining, although those channels are not always measured, but we know that our shares are going up there. So we feel pretty good about what’s going on there. The margin for us is about the same. So we don’t see a significant margin effect. And as it relates to some of the consumer benefits we see, for instance, a brand like belVita is benefiting from that shift because it has a bigger presence in those channels. So overall, I would say, clearly a volume effect — a volume and a share effect for us. No effect on the margins and no real necessary adaptation from our side.
Matthew Smith: Thank you for that. I’ll pass it on.
Operator: Our final question comes from John Baumgartner, Mizuho Securities.
John Baumgartner: Good afternoon. Thanks for fitting me in.
Dirk Van de Put: Hi, John.
Luca Zaramella: Hi, John.
John Baumgartner: Hi, there. Luca I’d like to ask about reinvestment. Overhead expenses were up double-digits in Q3. They’re also up double digits year-to-date as well, I think. Can you just update us on the progress there, where you’ve made the biggest improvements in capabilities for this year’s spending? What capabilities you plan to build next with future investments into through 2024? And then maybe how you’re thinking about generating operating leverage on that spending as we move forward?
Luca Zaramella: Yes. So the numbers are somewhat impacted by the acquisitions as well. So the acquisitions are clearly incremental year-on-year and they make their way into overhead cost and particularly. So the way you have to think about our overhead cost is the following. We have been managing inflation quite effectively as a company. Inflation, though, particularly labor-related inflation, has been a little bit higher. In these numbers, there is a cost associated with our management incentive plan and long-term incentive plan. The company has done very well, and that has resulted in some incremental costs. All the rest in terms of corporate costs and other functions, we have been investing in three areas selectively. One, it is digital capabilities, and it is the biggest bump you see in corporate costs.
We have been investing in sales, and we have been investing in marketing. All the other functions has managed inflation that is below of the revenue growth in their respective market. And functions like finance, particularly has been pretty much, I would say, a little bit higher than flat in terms of cost. So we have been selectively investing in three areas digital services, sales and marketing, and that will continue into next year. All their assets being kept absolutely in control. And then there is a cost associated with the acquisitions and management incentive plans. That’s a simple way you have to think about it. Where do we spend in terms of investments? We will continue investing in sales capabilities, particularly in emerging markets.
We will continue to invest in marketing, both people and A&C, as we call it. And in terms of digital, there is going to be an acceleration. We are looking into as a major investment that is coming our way and that is both capital and running costs, but it’s too early to talk about that. So hopefully, that provides you with some color around our total overhead costs.
John Baumgartner: Yes. That’s great. And then, Dirk, just coming back to the adjacent categories, the packaged croissant the snack bars, I think you referred to it as being in a test and learn phase. And I’m curious, there’s a lot going on right now with innovation, synergies and the assets. What sort of stands out to you thus far in terms of surprises or having a greater appreciation for these assets? What are you — I guess, what are you learning from test and learn at this point?
Dirk Van de Put: Yes, I wouldn’t say it’s all test and learn. So it’s a mixture of just reinforcing the businesses that we have, more launches from our own range, doing some geographical expansion, doing some distribution expansion. So it’s a lot more than test and learn. If I start with snack bars, I think we are discovering the power of snack bars. That’s why we highlighted it in the prepared remarks. We’re doing particularly well with Clif and also with a brand like Grenade in the UK and in Europe, which is really growing very fast. So first conclusion would be snack bars are going to be a real strength for us. There’s a big opportunity in the rest of the world. If you look at the development of the snack bar market in the US, it’s far ahead of the rest of the world.
So we see a huge opportunity there in the years to come. And particularly in the Anglo-Saxon countries, we think that’s going to happen first. As it relates to cakes and pastries, there is this segment, which is in-store bakery. Give & Go, that’s not a test and learn anymore. That’s now a $900 million business, but that has been very incremental to us. We’ve seen some very significant growth. It’s a segment that is growing very fast, and we’re taking share. So our expectation is that going forward, Give & Go will continue to see big growth because clients like Target or Walmart are moving from made in-stores towards freeze and thaw, which is what Give & Go is offering there. So second conclusion, the in-store bakery segment is going to be very interesting for us going forward.
