Chris Bellairs: Good morning, Matt.
Matt Smith: Kind of taking on to the comment around an increase in marketing spend in the second half. Could you talk about your expectation that elasticity trends improve we can track the volume and pricing performance in measured channels, but that would capture the impact of the supply chain performance as well. So can you talk about that moderating elasticity expectation in relation to your increased marketing investment and the supply chain improvement.
Wendy Davidson: Yes. Thank you. Good morning. From an elasticity standpoint, we’re actually seeing elasticity is about in line with what we expected. And you’ve probably heard Mark talk about this in the past that our brands and the place we play in our categories tend to be a bit more price protected than some parts of the category €“ price point into the premium end of some of our categories and that’s allowed us to be able to continue to appeal to a less recession-sensitive consumer. So elasticities have been in line with where we expected them to be. But as we go into the back half of this year, the investments behind marketing will ensure that we’ve got right shopper programs. In some cases, it’s shippers. It allows us to be able to have incremental points of distribution. So it’s not all just traditional marketing, but it will allow us to invest in right place, right message, right time.
Matt Smith: Thank you for that. And just a quick follow-on. Can you talk about the price gaps today, particularly in your snacking portfolio? And is there a need to increase the investment in promotional spending there to shore up the volume performance? Or do you believe the marketing investment should lead to that improved elasticity? I’ll leave it there and pass it on after your response. Thank you.
Chris Bellairs: Across the Board, Matt, the price gaps have remained with a few isolated examples both in snacks and the broader portfolio, the price gaps have remained about where they were before we started taking price. It’s something, as you’ve heard on prior calls. We monitor that very closely. Price thresholds and our prices, our gaps relative to competition. And so we haven’t really seen much of a change there, again, with the exception of a few isolated examples. And so we don’t really see that as being a major player in snacks performance right now. And again, it’s one of the reasons €“ one of the main reasons why elasticities have performed where we thought they would or in some cases, even better, because it’s really that gap to competition that has been stable and therefore didn’t then lead to a consumer behavior.
Matt Smith: Great. Thank you. I’ll pass it on.
Operator: Thank you. Our next question comes from the line of Ken Goldman with JPMorgan. Please proceed with your question.
Ken Goldman: Hi, good morning.
Wendy Davidson: Good morning.
Ken Goldman: When do you €“ with the understanding, you’re still in, I guess, information gathering mode what do you see early on as Hain’s greatest core competence? I’m asking because I think there’s some questions out there about what Hain really stands for. Given you have a diverse set of categories, you’re pretty big in Europe but also pretty big in the U.S. I think people are curious, at least the questions I’m getting. What gives Hain’s sort of the right to win overall in the market. I realize it’s a very broad question and maybe a little early to ask you that. But I’m just curious what your initial thoughts are there.
Wendy Davidson: Yes. Good morning. I would say €“ I guess I’ll answer it with the reasons why I came to Hain less so than where I think we’re headed going forward. I think Hain has a fantastic portfolio of brands. And as I said in my opening, that are largely number one or number two in their categories. But when we look at the broader category, we’re under indexed and under shared. So can we be a bigger player in the categories around better for you fill in the blank, better-for-you snacking, better-for-you baby, better for you yogurt, better-for-you plant-based. So lots of categories that we’re in that the consumer continues to look to Hain has a credibility in that space that, in some ways, we may be under leveraged and reach across channels and reach across our geographies.
So those are the reasons why I came here and those are still the opportunities that I see ahead of us. We’ve also got, I think, a really passionate group of people. And I know everybody says that, you come to a company, you say, well, the people are really interested in the company, but it’s very unique here. Every person that I met with in my early days when I asked why they came to Hain or why they stayed at Hain, all centers around a belief in where we’re bringing better for you to the consumer, and we’re all the consumer as well. So it’s really inspiring to see the people here. I think there’s an opportunity for us to align ourselves around categories where we can win with brands that can be a bigger player and get our full share, fair share and full potential across the marketplace.
Ken Goldman: Thank you for that. And a quick follow-up, as you think about getting your fair share, often, companies talk about that. It’s harder sort of I’ve found to achieve fair share that you kind of pointed out. So what do you think the steps might be? And maybe this is a little premature to ask this, right? But the steps might be a sort of getting Hain its fair share. Is it a question of leaning in on marketing? Is it a question of top-to-top conversations with customers? I’m just trying to get a sense of the plan of attack there because it has been a question for about Hain for a while about how they can expand distribution.
Wendy Davidson: Yes. I think the work that the team had done over the last four years really put us in a great position along those lines. Streamlining the portfolio around where we play, brands that we should be in categories we should be in to focus the energies of the company. When you have too many small brands the entire organization and that complexity is distracted with lots of small opportunities instead of placing a few big bets. So I think we’re better positioned to be able to go after the market opportunity. It’s early days, so too soon for me to say sort of how we will do that. I will say that the €“ if you look at CPG-101, it’s €“ do you have the core portfolio in all the right places? Do you have the right pack size and right price architecture to be in the right place in the right way?
Is your sales team executing across the marketplace in the way you want? And have you built a P&L shape that enables you to consistently support the brands in all the points of distribution. And then you follow that up with planful innovation that keeps fresh news around the brands, but that is sustained investment around the innovation big bets. Those are €“ I mean, has basic playbook around building brands and building high-growth businesses. That’s what I’m assessing where we are as a baseline and where we need to go from here.
Ken Goldman: Thank you so much.
