And that’s a pivot that I think you’ll see ongoing, not just in the back half of this year, but actually into ‘24 and beyond, where we’re getting margin improvement out of these productivity initiatives. And obviously, the margins are quite good year-to-date entirely driven by productivity. In the back half, you’ll continue to see that level of productivity improvement, if anything, it will accelerate, but we are continuing to invest. We’re investing in advertising and marketing and A&M was up 50 bps in the second quarter. You’re going to continue to see us invest in A&M. You’re going to continue to see us invest in capabilities. And our investment cycles tend to be more back half oriented than they are front half oriented when we have a sense as to how the year is going to turn out.
So that’s what you’re seeing in the implied guidance in the balance of the year. It’s not that the productivity is going to diminish. It’s not that anything is going on with the pricing other than the overlap effects of pricing. It’s really a reflection of some of the productivity being reinvested it in the back half of the year, so that we continue that strong momentum into ‘24 and beyond.
Operator: Thank you. One moment for our next question. Our next question comes from Vivien Azer with TD Cowen. Your line is open.
Vivien Azer: Hi. Good morning. Thank you. I was looking to actually follow-up…
Hugh Johnston: Hi, Vivien.
Vivien Azer: Good morning. On Bonnie’s question, but just to drill down on PBNA margins, down a little bit year-over-year. In your prepared remarks, you reiterated your confidence in expanding margins on a full year basis. I was hoping you could just expand on some of the headwinds that you saw in the quarter and what gives you confidence on the full year margin outlook for the segment specifically? Thank you.
Hugh Johnston: Yeah. Hi, Vivien. It’s Hugh. The margins in PBNA was down in the second quarter. We had a big gain on an asset transaction in 2022. We’re cycling over that transaction in ’23. And for the full year on PBNA, you’ll see the margins up in a healthy way, and north of 100 basis points.
Operator: Thank you. One moment for our next question. Your next question comes from Lauren Lieberman with Barclays. Your line is open.
Lauren Lieberman: Hi. Is this better, hopefully.
Hugh Johnston: It is. Much better.
Lauren Lieberman: Okay. Cool. I’m still sitting in the same place. Okay. I was going to ask — sorry about that, I was going to ask about Gatorade. So tons of innovation activity, you guys have talked about it. We’re seeing it very much in the marketplace. And in the release, you talked about Gatorade being up double-digits in the quarter. But when we look at Nielsen, it shows something that significantly trails that. And so I was just curious, I guess, about mix of on track, how much of maybe some of the performance you’re seeing has to do with incremental shelf space and distribution given the breadth of innovation and new product activity there has been?
Ramon Laguarta: Yeah, Lauren. I think the — I think there are a couple of factors. The G2 DSD has a meaningful impact on timing on when we reflect our sales and when the consumer actually buys compared to previous years. So we’re much — the cycle has reduced substantially, given our DSD — and that might have some implications on the readings. We feel good about the sports category even though it has been cold in some parts of the country for the month of June and so on. But in general, within the categories continues to have healthy metrics in terms of penetration and usage and everything else. Our innovation G FIT, Gatorade and most importantly for us long term, our powders and tablets is going very, very well. So we believe in those subsegments continue to develop along with G Zero, which continues to attract new consumers to the category.
