Now with regards to Dew, the launch of bubly burst has been very, very good to the brand. We launched it as a permanent additional flavor to the portfolio early in the year. It’s been obviously successful. We knew it was a successful LTR and therefore, it’s a successful permanent product. And it’s been bringing incremental consumers to the brand and help us gain share now. Obviously, we will keep investing in the portfolio and the brand, and we have strong programs for the summer. Hopefully, that will deliver as we expect, and we’ll continue to build Mountain Dew in the category. So feeling good about those two brands.
Operator: Thank you. One moment for our next question. Our next question comes from Lauren Lieberman with Barclays. Your line is open.
Lauren Lieberman: Great. Thanks, good morning. In the prepared remarks, I noticed in the discussion of PBNA and plans to improve profitability there. There were two new bullets. The first two talking about deemphasizing certain product and package combinations and the second around revenue management and increasingly precise consumer value proposition. So I was curious if you could just — I know there’s new management for that business as well. So I would love to get a little bit more color maybe around those two points? I thought would be helpful. Thanks.
Ramon Laguarta: Yes. Lauren, I think the — I don’t know, maybe we have put a bit more detail, but the intentionality was always there. And I mentioned last time on the last couple of calls that we’re making choices in PBNA in terms of making sure that we deliver profitable growth, and we’ll continue to make those choices emphasizing the parts of the portfolio where there is a better return on the investments for us and eliminating those parts of the portfolio where the margins are not that attractive and they’re going to get probably not that better over time. So we’ve been referring to categories like packed water or some of the less profitable take-home formats, where we will be making choices. We feel good about both the productivity at PBNA under margin expansion of PBNA.
And we feel that, that will continue based on the ideas that we have and the organizational focus that the team has been putting under the new management, but also the old management in PBNA. There’s much more focus on becoming a better operating machine in the supply chain and sales and expanding the margin. So, we feel good about PBNA margin expansion and profitable growth delivery this year.
Operator: Thank you. Our next question comes from Andrea Teixeira with JPMorgan. Your line is open.
Andrea Teixeira: Hi, good morning. Thank you. So, Ramon, if you can please comment on the overall consumption and in particular for snacks and how consumer behavior evolved in the context of your comments about normalization? And then a clarification for Jamie, on the margin outlook. On the prepared remarks, you mentioned a more benign commodities environment, but that has recently changed in particular, for oil and looking at DSD. Hoping to get some clarification on the diesel impact or this is going to be more further down and perhaps not even impacting 2024? Thank you.
Ramon Laguarta: Yes. So, listen, Andrea hi. The — I would say the consumer globally, we think is very resilient. And we see it in, as you saw from our international business performance. And it’s basically supported by two facts, very low unemployment or quite low unemployment globally and wages growing at a good pace in majority of the countries where we participate. So, those two things make us feel quite good about the consumer. Now, when you double click, there is probably two areas that were — that probably surface. One is Chinese consumers. I think Chinese consumers are being very cautious and we’re seeing the savings rate really going very high in China. Our category is still resilient in China, but especially we’re delivering growth through share of market gains in China.
So, that’s a good performance by the team, but an area of watch out for us. The other double-click is in the, I would say, the lower income consumer in the U.S. The lower income consumer in the U.S. is stretched, is making a lot of — he is strategizing a lot to make their budgets get to the end of the month. And that’s a consumer that is choosing what to buy, where to buy and making a lot of choices. That’s a consumer that we’re emphasizing in our commercial programs. I think we’re learning how best to keep that consumer in our categories and the frequency that we want that consumer, and we are pivoting our commercial plans, our innovation, giving that consumer the right innovation, the right value in different parts of the month through different channels, digital and physical.
Making sure that the ROI on the investments are the best ROIs. So, those two are the consumers that I would say we’re paying more attention in terms of specific commercial programs. But I would say the consumer is very resilient everywhere else. And our teams, I think, are pivoting to maintain our brands top of mind in their baskets at the frequency that we want and continue to gain market share. So, this applies to beverages and to snacks. Your question was more on snacks, but I think it applies to both categories. So, I know Jamie on.
Jamie Caulfield: Yes. Andrea, on commodities, really no change in the outlook. A couple of points I just want to emphasize. One is the diversity of the inputs in the basket, so no single commodity accounts for more than 10% of the total. So that diversification kind of smooth things out. And the other point I’d make is we do tend to forward buy and hedge, so that we’ve got good visibility for the year that helps us with planning the business overall. And so outlook Q2 through Q4, so relatively benign inflation and not a lot of volatility in the rate of inflation quarter-to-quarter.
Operator: Thank you. One moment for our next question. Our next question comes from Peter Grom with UBS. Your line is open.
Peter Grom: Thanks operator and good morning, everyone. So I was hoping to get an update on the CELSIUS agreement and kind of just your broader energy drink strategy at this point. In the release, you spoke positively about the partnership, but I think there were some changes to the incentive structure a few weeks back. So maybe first, just any thoughts on how the brand is performing as part of your energy portfolio? And then just like anything you can share in terms of what changed with the agreement? But maybe specifically, how does it really help Pepsi? And maybe what benefit does it provide for CELSIUS, if anything? Thanks.
