Alexia Howard: Great. Thank you. And I’ll pass it on.
Michele Buck: Thank you.
Operator: Thank you. Our next question comes from the line of Rob Dickerson with Jefferies. Please proceed with your question.
Rob Dickerson: Great. Thank you so much. Michele, I think in the prepared remarks and you mentioned it previously, you’ve commented on products, I guess, on the perimeter of the store. I’m assuming where you’re kind of speaking to kind of more fresh bakery and you also spoke to kind of more satiating foods. By the — on the Salty Snacks side, you commented on snacks right?
Michele Buck: Right.
Rob Dickerson: Is this, is this all kind of around the price point demand? Are you just trying to basically find more value at an appropriate price. And therefore, even though you let’s say, you need a candy bar now you’re on a cupcakes. Just trying to figure out exactly what you’re speaking to? Thank you.
Michele Buck: Yes, absolutely. That is what it’s about. It is about the value equation. And certainly, we do see in times where consumers are really struggling a bigger focus on kind of the gut fill, the bang for the buck in terms of filling you up. And we’ve seen that and heard that from, especially from lower-income consumers before. So yes, that focus on society, where we’re seeing categories like Pretzels, Meat Snacks, Tortilla Chips, some of the things that are more filling, behave more strongly from a category perspective and something aerated like a rice cake or cheese puff or ready-to-eat popcorn. So yes, it is about that value for the book. Now the other thing, in addition to things like cupcakes that we did see, we did see some increase in fruit consumption, and there was not a lot of inflation in fresh produce like that. So I think there was a value perception there as well.
Rob Dickerson: Okay. Makes sense. Thank you. And then just quickly, International segment. Slowed somewhat materially, especially on the volume side. And I know you called out kind of a competitive dynamic, the moderation in category growth. If you kind of optically, at least when we see the numbers in Q3 relative to the year ago and vis-à-vis what we saw in Q2. It does seem like it’s almost somewhat sudden and I don’t know if I’m missing something. So maybe if you could just explain what that drop is and maybe it’s fully defined by just the shift in the non-U.S. holidays? Thanks.
Michele Buck: Yes. So there was definitely the shift in the non-U.S. holidays with Diwali in India coming a little bit later. The other big thing was the rationalization of our beverage business in Mexico, which I’m not sure that we’ve talked as extensively about, but we had a small drink business, maybe not that small in Mexico. It was sizable for Mexico. Not highly profitable and in our continuous efforts to make sure that we are focused on the best opportunities and putting our resources against those best opportunities. We made the decision to discontinue that drink business. So that did have a meaningful impact in the range of three to four points from a top line perspective and we really first started experiencing that in Q3. We will lap for a year, have that be an impact, but it was a minimal impact on profitability because it just wasn’t a highly profitable business.
Rob Dickerson: All right. Super. Thank you so much. I’ll pass it on.
Operator: Thank you. Our next question comes from the line of John Baumgartner with Mizuho Securities. Please proceed with your question.
John Baumgartner: Good morning. Thanks for the question.
Michele Buck: Good morning.
Steve Voskuil: Good morning.
John Baumgartner: Maybe first off, Michele. I just wanted to come back to the market share in chocolate, because we’re seeing in the Nielsen data, their share gains accruing on an accelerating basis for premium brands and even private label, which is pretty unusual. And it’s coming at the expense of the more mass price offerings. To what extent do you think the strategy needs to respond more broadly to these shifts, be it through more promotion, maintaining a larger brand investment for longer? It sounds as though your view is it’s more of an innovation timing issue that reverses out next year to your benefit. But is there a chance that a larger pricing or promo pivot might be required going forward?
Michele Buck: So as we look at the market share overall in confection, certainly, we’ve had a negative impact from category mix with faster growth in refreshments and sweets. And with the incremental capacity we’ve added going to be able to unlock more of the potential for us on share within sweets. The innovation that we’ve talked about, in addition to helping the everyday business innovation drives merch and so that’s going to be very helpful in terms of helping promo. And then also we’re working through the one retailer partnering very strongly to make sure that we can adhere to some of their direction and at the same time, make sure that we’re recognizing the impulsive and expandable nature of our category and making sure that we have the right plans to take that into account.
We have continued to invest in our brands, and we will continue to going forward. So at this point in time, I wouldn’t say that we’re anticipating a very large, substantial change in our investment levels. We have strong levels in trade and consumer on the margin, we are always open to adjusting those as we see fit. And we also are really focused on making sure that the allocation is as strong as it possibly can be between trade and between media as we look holistically. We haven’t seen a big, huge increase, frankly, in premium, a bit of an increase in private label, but it continues to be a very small part of the category.
John Baumgartner: Okay. And I guess just following that line of thought with the just merchandising adjustment at the retailer. You mentioned it wasn’t confined to Confectionery, but I mean Confectionery is also pretty valuable to retailers for profit and velocity. Do you have a sense for which categories benefited from this adjustment? It just seems odd this happens ahead of the holidays given the importance of the category and then your own innovation and capacity ramping next year. I mean, I don’t know how surprising that decision was for you, but I’m just sort of curious like what, who sort of benefited from this change? Do you have any sense?
Michele Buck: So no category really benefited, because it was an overall reduction in merchandising. So it was more of a focus on consumer experience for more open aisles and also to enable growth and support of omni-channel and the digital business from a picking of products. So we are counting on trying to drive and the retailer counting on increases in everyday velocity to be enough to offset that. And we’re certainly partnering really closely to make sure we have all the right programs and plans jointly to jointly drive the category, as you mentioned, it’s highly profitable. It is expandable consumption and there is an impulsive opportunity. So we continue to work hard to drive that.
John Baumgartner: Thank you.
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. Thanks for squeezing us in. Can you maybe offer some commentary around the dots distribution, gaining permanent distribution at club? I know very attractive kind of value proposition for consumers. Is there a lot of bigger wins like that on the table? And does this help you kind of accelerate the value proposition when you go to retailers to say that you can have it in a large concept?
