Adam Greenlee: Yes. And it’s — it’s an interesting question because for the most part, we see it across almost all of our categories. We’ve been having a lot of conversations with our customers about their promotional activity and most of those comments back relate to the consumer has really been trained to buy product on promotion right now. And it’s an interesting concept. And you kind of fast forward that to all of our categories, we certainly see it in food. We do see it in beverage. We see it in home care, we see in lawn care in advance of lawn and garden season. I just think it’s applying just about everywhere with different degrees of productivity, but there is promotional activity across most of our segments right now. I would say, I’ll exclude high-end fragrant beauty because there’s really no need for promotional activity there. That’s a different consumer set and a different value proposition.
Operator: Our next question will come from Daniel Rizzo.
Daniel Rizzo: Given the customer wins you had and what you’re seeing right now, can you hit the high end of your guidance for 2024 without restocking? Or does that assume a little bit of a restock cycle maybe in the back half of the year?
Adam Greenlee: Yes, good question. Obviously, as we think about the guidance that we give, it does factor in a range of outcomes. So for the most part, we don’t need a full recovery of the markets to get to the high end of our range, but it would take some volume growth in our — in each of our segments to get there.
Daniel Rizzo: I guess just to converse of that, to hit the bottom end, that assumes that things just don’t get better or that there’s some sort of demand decline or something or just a correction?
Adam Greenlee: Yes. I think again, we’re anticipating some nice recovery and growth in certain categories for ’24. So if that does not happen, and there is some other geopolitical items that would force demand to retract a bit, that’s how you get to the lower end of our guidance.
Daniel Rizzo: And then final question. You mentioned a lot of new contract wins, some coming in the middle of the year. I was just wondering, historically speaking, is there sometimes timing issues where customers delay commercialization or things get pushed out? Or does that — I mean, or is generally what you see what kind of happens if follows.
Adam Greenlee: Yes, I do. What I would say, Dan, is that the large contract commercializing in the first quarter was originally identified to commercialize in ’23. And while that’s disappointing, what’s one of the great things about Silgan’s disciplined approach to these customer arrangements is the contract doesn’t start until it’s commercialized. So while it’s, let’s call it, 6 months later than we anticipated, we do get the full term of the agreement that we had negotiated and agreed upon with the customer. The second item that’s commercializing midyear was also supposed to be a ’23 item. So unfortunately, they both got delayed. But the good news, as I said, the 1 in the first quarter, we are fully qualified and are commercializing literally as we speak. So we are right on track with commercializing both of those new business wins as we sit here today.
Operator: We’ll now take a follow-up from Gabe Hadje with Wells Fargo.
Gabe Hajde: Just hopefully, 1 fairly quick, Adam. My antenna went up when you talked about, I think, low double-digit decline in tinplate steel and that may be impacting order patterns on the food can side. I’m just curious if it’s isolated to that or if there’s anything — if there has been any other material movements that may have influenced customer order patterns, buying patterns? And then, I guess, relatedly, if in fact that is the case, operating rates maybe in the Metal Containers business were a bit below what you were expecting in the fourth quarter. And so we need to be mindful of that in Q1 and Q4 of 2024.
Adam Greenlee: Interesting question, Gabe. Let me — I’ll start, and we’ll probably just work around the horn here as we try to put an answer for you. First of all, I think with that kind of steel change, we didn’t really see a lot of customers delaying purchases from Q4 into Q1. So I’ll just — I’ll say that upfront. We’re going to get more visibility of that as we now cycle through the rest of Q1, but we just don’t think that really happened in Europe. And so I don’t think there’s a whole lot that we’re going to have to think about for Q4 either. I think we should have that conversation at the end of our Q1 call because we’ll have a lot more visibility. And then I just think the cadence for the year, there’s just not much else to think about for Europe.
We’re going to get through some of the other recovery of inflation items that the consumers had, and we are — we see it halfway to better volumes later in the year for the European business. But as we sit here today, we’re just taking that cautious approach.
Operator: [Operator Instructions] And it appears there are no further telephone questions. I’d like to turn the conference back over to our presenters for any additional or closing comments.
Adam Greenlee: Great. Thank you, Anna. Thanks, everyone, for your interest in Silgan and we look forward to reviewing our first quarter results after the first quarter.
Operator: And once again, that does conclude today’s conference. We thank you all for your participation. You may now disconnect.
