Chris Bellairs: And if you decompose the $20 million, about two-thirds of it is the bonus dynamic.
Ken Goldman: Great, thank you to you both.
Wendy Davidson: You bet.
Chris Bellairs: Thanks, Ken.
Operator: Thank you. Our next question comes from the line of Alexia Howard with Bernstein. Please proceed with your question.
Alexia Howard: Good morning, everyone.
Wendy Davidson: Good morning.
Alexia Howard: Hi, there. So, can I ask about what you’re seeing with consumer dynamics here. Other more mainstream packaged food companies are saying that the lower income consumer is quite vulnerable here. I’m assuming that that’s not a huge concern of yours, but I’m wondering if there’s anything that you’re seeing between measured and non-measured channels, or just consumer dynamics that as they’re evolving right now?
Wendy Davidson: Yes, great question. And we’ve talked before about, our portfolio tends to play at the higher end of maybe conventional, at the lower end of premium. So it’s sort of puts us in a unique spot. What we’re finding is consumers want the products that are a regular part of their routine, and they want the brands. They are looking for different pack sizes. So for instance, with our Greek Gods yogurt, we’ve seen tremendous growth, and that is a brand that we don’t really do in single-serve. We do it all multi-serve, with consumers are sort of looking at multi-serve as a way for them to drive overall cost per serving reductions. Internationally, it’s a little bit different dynamic that marketplace, I find the consumer is much more sensitive and they’re actually shifting their shopping behavior to discount retailers.
We’re in a very good position there, in which, in both — and really switching to discounters, but also in private label. And we’re well positioned there, because we’re across the marketplace in both large retailers and discounters, but we’re also in both brand and private label. And for non-dairy beverage and meat-free we’re greater than half of our sales are private label versus brand, and especially meat-free we’ve seen the category recover and private label faster, than we’ve seen brand recover. In the U.S. we really are — our products don’t really skew to a more price sensitive consumer. And so, we haven’t really seen the consumer shifting their behavior except in that that multi-served focus.
Alexia Howard: Great, thank you very much. I’ll pass it on.
Wendy Davidson: You bet. Thanks.
Operator: Thank you. Our next question comes from the line of Jim Salera with Stephens Inc. Please proceed with your question.
Jim Salera: Hi guys, good morning. Thanks for taking my question.
Wendy Davidson: Good morning.
Jim Salera: Wendy, I wanted to ask you got a lot of moving pieces here on the brand reinvestment side. Can you maybe give us an idea of rank order, which brands or kind of sub categories are the primary focus and maybe when some of those promotions come on?
Wendy Davidson: Yes. You’ll see a continuation of some of the reinvestment that we put in place, latter part of quarter three and into quarter four. In Snacks, Baby Kids and in to tea or beverages in our U.S. business primarily. So, Celestial Seasonings Magic in Your Mug campaign was very successful. As well as some of the new innovation launch. You’ll see us continue to lean in and support Celestial Seasonings. You’ll see us continue to support Snack brands, but underneath that, it will be primarily Garden Veggie and Terra, in our Snacks portfolio. And then in Baby Kids, it will be the Earth’s Best campaign to continue to support that and support innovation. I would say that our — so those are category and brand prioritization.
The bigger piece for us is ensuring that we’ve got an always-on pressure around those brands, that keeps them top of mind with the consumer. But then we also want to make sure that we’re keeping them available to the consumer and easy to find. So some of our brand-building will be driving distribution across channels, to ensure that our products are available where the consumer is shopping, during the week. So, I would say that probably about half of our brand-building. The other half is making sure that we’re supporting our innovation that we’ve launched and in the past, Hain’s had some fantastic innovation, but we’ve not kept sufficient pressure to keep the consumer trying those products, or buying those, in addition to the core. For instance, this year we’ve launched the Sleepy time with Melatonin, that’s it in the top selling SKUs now, with the retailers, who have that on shelf.
We also launched Melty Sticks in Earth’s Best, that’s one of the top selling products as well in snacking for kids. And we feel really good about what those new pieces of innovation are doing. We’ve got some new innovation that will launch in the next year as well. So we want to make sure we’re supporting that with our brand building dollars.
Jim Salera: That’s all very helpful. Maybe one more. Just on the way that you view in-store promotions and driving trial through in-store offerings, versus kind of more high-level, brand marketing that somebody would see on social media or on television. Do you have a sense for which one you get more bang for your buck or what the appropriate mix between those two are?
Wendy Davidson: Well, it would depend on the brands, but I would say in general for Hain, our — and this is part of our desire to be disciplined in brand building from what you would see from a large CPG branded enterprise, but we want to make sure that we are also moving fast and nimble, in the way that you might see from a disruptor or start-up. And our brands aren’t going to be the time that we’re doing mass media promotions and media spend. That’s just not really effective spend for us, where we do get a lot of efficiency is in overall portfolio, but also in social media, but also in-store activation. And it really depends on the brands, but the team has implemented a pretty disciplined approach to marketing media mix, and using that modeling to then adjust on a quarter-on-quarter basis, channel-by-channel.
