Externally, you have to give lead down. It’s a 60-day notice period. You have to commit to certain volumes. If you have a volume change or a mix change, it’s really hard to change that with our external co-mans. And what you can only do is adjust the volume, if the volume doesn’t come through adjusted internally. And what that results in is that you have a lower fixed cost absorption and results in higher cost per case, and that’s really impacting directly the margin. And then the other piece is, of course, the scrap. But a combination of better systems better processes, better integrating of the supply chain should address those issues. But I will tell you that relatively the declining volume environment is — makes it a little bit more challenging to navigate that as opposed to a growth environment where you will sell through things quicker.
Kevin Grundy: No, of course. We can appreciate that challenge. One last one, just because it’s important in sort of the bull case, I’d say, is sort of largely pegged to it to some degree, the elusive low to mid-50s gross margin target. I know it’s sort of difficult to call and you’re kind of drinking out of a fire hose at the moment, but where would you reasonably peg the market in terms of when you think you can achieve that?
Frank Smalla: Yes. I think the way I would answer that is that the target has not changed because the building blocks are exactly the same building blocks. We are behind from a timeline perspective. And there are a couple of factors where we are behind. One is the volume has impacted us clearly. So we have the the network of anchor breweries is in place. But with the current volume that we have in the declining volume, we can’t allocate it in an optimal way. So we would have liked to have a little bit more volume in the West Coast. We don’t have that. So that’s not — we’re not getting to optimum. We need a little bit more volume to get there. On the brewery efficiencies, and we’ve talked about that in the last 2 earnings calls, we have this variety packing line that takes a little longer to get to the target efficiencies.
We are seeing progress, and we are putting, we believe, the right measures in place but it will take a little longer to get to the target efficiencies. And that will have a significant impact on the cost structure. One is that you get a much better fixed cost absorption. And part of that, we will see this year because Ohio was only online last year for part of the year. So there’s going to be a carrier over impact that but we get additional 30% to 40% more volume out of that facility. So we’ll get that benefit and then we’re increasing the line benefits or the efficiency of the line benefits. So all these items and the waste reduction, especially the scrap that we would consider onetime, especially in the fourth quarter. We’re working to, of course, not repeat that and not have that result in a string of one-timers.
