And then number three, we’re in a good spot in many of the developed markets in terms of our commercial plans. We do joint business planning with our customers. And we’re probably in line to maybe even a little ahead of where we’ve been historically with all of that. So given the information was available to us a little bit earlier and given there was undoubtedly questions in the investment community on what ’24 look like given the evolving pricing and inflationary environment, we thought it was prudent to at least give some indication of what guidance would look like in ’24. So that’s what drove the decision.
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. I actually wanted to follow up on Dara’s question there. But just more in the context of your actual performance versus your initial expectations historically because it’s really been a while since organic revenue growth has actually fallen short of your initial outlook. So can you maybe just characterize your confidence in the ’24 outlook at this stage and really whether or not you’ve embedded enough conservatism just given what remains a pretty choppy backdrop for the consumer? Thanks.
Hugh Johnston: Sure. Happy to address that. We obviously have a long history here of meeting or exceeding expectations, both our internal expectations as well as the guidance, including this quarter, where we beat revenue and we beat EPS. In fact, we’ve now met or beat consensus for 55 straight quarters. So we tend to be, I think, appropriately conservative in the way that we communicate to you all. So from that perspective I think you can go into 2024 with a similar expectation that we should at least achieve the numbers that we’ve laid out for you.
Operator: Thank you. One moment for our next question. Our next question comes from Nik Modi with RBC Capital Markets. Your line is open.
Nik Modi: Thank you. Good morning, everyone. Hugh, I was hoping maybe you can just provide some of the macro underpinnings that kind of go into your 2024 viewpoints at this point? Just would love to kind of get your state of the union on the consumer or the economy and kind of how you guys are thinking that will shape up as you go through 2024? Thanks.
Hugh Johnston: Sure. Why don’t I start and then Ramon, obviously, you’re super deep on the consumer as well, but I’m happy to start on this one. Number one, I do think that we see the consumer right now being more selective, and you see it in a variety of ways, right? You see some trade down in terms of channels of trade that they’re purchasing products in. You see some orientation toward value. At the same time, the things that I usually look at with the consumer to detect whether there’s high stress, we see good results, Nik. Number one is the convenience store channel. Typically, when gas prices are up and consumer incomes are stressed, you see revenue in those channels under stress as well. For Q3, we saw revenue up 5% in beverages and 8% in foods in the convenience channel.
Number two is food service, that’s also typically a leading indicator, that’s still growing double-digits. So I think we’ve gone into the year with an approach that says, given all that I laid out during Dara’s question, we expect the consumer to continue to be cautious. And to the degree that they are worse than that, we’ve got cost plans in place that we would use to mitigate whatever challenges we face. But we think our revenue outlook accommodates an increasingly cautious consumer next year.
Ramon Laguarta: Yes. And the other thing I would say is all the long-term structural tailwinds of our categories will continue. If you think about urbanization, demographic shifts, lifestyles, et cetera, that have been driving our snacking categories or beverage category, they move from package-to-package. All those things will continue, and they drive a lot of our confidence in our categories, then obviously, we have almost completed. By now, our innovation plans, our commercial plans are — I think we’ve got better at affordability and premiumization of our portfolio. So we think our share of market will be good next year as well. So that’s what’s driving our kind of confidence for next year.
Operator: Thank you. One moment for our next question. Our next question comes from Bonnie Herzog with Goldman Sachs. Your line is open. Again, Bonnie Herzog, your line is open, and if you have a question, go ahead and ask it. It looks like they didn’t have a question, do you want me to go and move on to the next person?
Ramon Laguarta: Yes, please.
Operator: Okay. Sure thing. One moment. Our next question comes from Chris Carey with Wells Fargo. Your line is open.
Chris Carey: Hi. Good morning.
Ramon Laguarta: Good morning, Chris.
Chris Carey: The inflation got a bit worse quarter-over-quarter in the PBNA segment, specifically, whereas in the rest of the segments, the trend is for continued easing. Can you just comment on some of the puts and takes that you’re seeing from a commodity inflation standpoint in this segment, particularly and how the beverage side is driving the inflation expectations going into next year relative to food? I’m really speaking to Hugh’s comments on above average inflation next year. And just given what we see from commodities in general, I’m trying to parse out where exactly that outlook is coming from? So thanks so much.
Hugh Johnston: Yes. Good morning, Chris. Chris, we don’t get into by commodity levels of dissecting the numbers and guidance. That’s something that historically we haven’t done. As you know, the beverage segment is a little more packaging exposed in foods is just by virtue of the nature of the products. But I’d rather not go any further than that to get into the specifics of individual commodities for competitive reasons.
Operator: Thank you. One moment for our next question. Our next question comes from Robert Ottenstein with Evercore ISI.
Robert Ottenstein: Great. Thank you very much. I just want to shift a little bit more kind of to the long-term. And I was just wondering if you can kind of give us a sense of the vision, your vision for the business, the beverage business and the food business in the US in light of your large investment in Instacart what you’re trying to accomplish there? And other kind of strategic moves you’re doing on the digital side and the — all the underlying work that you’re doing in terms of automation and productivity. Just kind of what do you see the business looking like in the future? And how does Instacart play into it? Thank you.
