Versus, I probably can’t take pricing a bulk-pack in another particular channel, because the consumer is much more price sensitive there. So I think what you’ll see us do and the team has done a really nice job with identifying where we can take the price that won’t be an impact on volume and reach, but you won’t see it as a wholesale price increase.
David Palmer: Okay, great, thanks very much looking forward to Investor Day.
Wendy Davidson: Absolutely.
Operator: Thank you. Our next question comes from the line of Jon Andersen with William Blair. Please proceed with your question.
Jon Andersen: Hi, Good morning, everybody. Thanks for the question.
Wendy Davidson: Good morning.
Jon Andersen: Good morning. Wendy you mentioned in the prepared comments, some work had been done rationalizing I think an international brand and resulting in kind of a core assortment on that brand, that’s been more productive on the shelf. Is there more kind of SKU rationalization that will be happening, as you move forward? Is that an opportunity, I guess, and to what extent? And then a bigger picture question on the portfolio is there additional kind of broader based pruning that you’re evaluating I think about business like Personal Care, being a little bit outside the wheelhouse of better-for-you food and beverage. Thanks.
Wendy Davidson: Yes. No. Great question, in terms of SKU rationalization, this should be a regular part of how we run the business, to be honest. And every one of our brand managers, every one of our portfolio leads, every one of the market leads, should be looking at the assortment of SKUs that they have, and make sure that is the hardest working assortment of SKUs. It also has an impact on innovation. We don’t want to launch innovation, just for the sake of innovation, it has to be truly incremental to the brand and incremental to the category. So we can go to a retailer, justify the space, and use innovation to create greater brand awareness back to the core. And it’s an incremental sale, not just swapping now sales, otherwise it’s a lot of work and effort is very low return on that investment.
So, the particular similar instance we talked about in the prepared remarks, was actually in Europe in our non-dairy beverage business. The team rationalized a pretty large chunk of the portfolio, down to the hardest working assortment, and that had a positive impact in driving real volume, real business impact. That’s an example to be used across lots of parts of our business. So, long answer to your question, but we absolutely see an opportunity for us to eliminate parts of the tail, it will help our supply chain to be more efficient. It will help our dollar spend to be more efficient and it will help our relationships with our retail partners, because we’re using our space wisely, to bring in more shoppers and keep the shopper in their longer.
As we think about the overall company portfolio. I mean, obviously, we’re always looking at the portfolio on to shape it, but that’s not going to be the primary strategy. So, you shouldn’t expect to see Hain’s future growth be just buying new businesses, or selling off businesses. We have to actually run the businesses that we have, and then we can make strategic choices around what does or doesn’t fit in the portfolio. But then we are selling off healthy businesses. So our focus right now in particular, with something on Personal Care is stabilizing that business, ensuring that against the right fighting core of brands and fighting core products, so then we then have optionality with that portfolio. I can’t say what in our portfolio will exist with us in Hain in the next three years, but we have an opportunity to ensure that we are good stewards of the brands we have, so that if we choose to sell those off.
We’re selling-off a healthy business to somebody.
Jon Andersen: Thanks. That’s really helpful. And I look forward to seeing you at Investor Day.
Wendy Davidson: Absolutely, look forward to it as well.
Operator: Thank you. Our next question comes from the line of Andrew Wolf with CL King & Associates. Please proceed with your question.
Andrew Wolf: Thanks, good morning. I wanted to follow-up on Personal Care. Just wanted to your assessment — I think you’ve done across the company’s portfolio. The softness there, it sounded like you think you need it — sounds like from what you just said, it’s more of a rightsizing it into the strength, which is you’ve shown works and others have shown works. But have you unearthed any structural issues either internally, such as just the scale of operations may not be sufficient, or anything externally. Maybe it’s a different competitive set than food, or do you think it’s just more of a traditional solution in the way that you just sort of refer to it?
Wendy Davidson: Yes, I would say that we’ve — we’re taking a very holistic review of the business. I mentioned I think in the last earnings call that we’ve brought in new leadership, to run that business and to take it through that evaluation. But, I would say it’s pretty typical of any business that you evaluate. You look at where our opportunities to grow in the marketplace. What’s the right — what’s the strength of the brand. What’s the right categories of those brands are playing in? Are we getting the right price in market with the channel opportunity there in personal Care, for instance, is a very big product line in online versus the rest of our portfolio. What might that look like in the future around our omni and e-commerce approach?
Looking at your distribution footprint and your manufacturing footprint. Could that be optimized or made more efficient? Similar to what we did with meat-free in Canada. So we’ve consolidated our meat-free operations in Canada, to more effectively use the footprint we have there. We’re doing lots of work around our distribution centers holistically within Hain. So I would say yes and is everything in the portfolio, but it’s also making sure that we understand how the brands can effectively breakthrough and compete in the categories that we choose to have them in. And so, you’ll see a fair amount of transformation around the Personal Care business over the next 12-months. That then again, gives us optionality if either returning to growth with us or returns to growth and it’s a business that we can effectively find a home before.
But we want to make sure that we’re running a healthy business, before we make those choices.
Andrew Wolf: Thank you. And the other question I’d like to ask is, you brought up addressing the away from home market, convenience stores and other food service opportunities. Does the current existing brand, the products as they are — they can fit them right into that distribution into that channel, through the distributors or directly. Or are there a lot of changes in pack sizes or even usage types that are going to have to come, just on the product itself to fit the channel?
Wendy Davidson: Yes, the primary products that we would see in brands that have application away from home. It’s going to be our snack portfolio, it is going to be Celestial Seasonings tea and it’s going to be Greek Gods yogurt. So the beauty of Greek Gods is it’s already and multi-pack, in multi-serve, which is ideally suited for that space. Not taking into C-store, but taking it into back of house and contract management. Our Snack portfolio already has single-serve in the pack sizes that we need. It’s a driving distribution and really pleased that we’ve picked up some very large distribution gains in both Garden Veggie and Terra in C-store in particular, that you’ll see come through in fiscal ’24. So, getting some early good green shoots which is great.
