Carlos Abrams-Rivera: Good morning.
John Baumgartner: First off — good morning. Wondering if you could provide an update on the outlook for efficiencies. Just given the over delivery in 2023, what’s included in the guide for 2024. And as you think out to this next round of improvements, specifically the new overhead savings from automation, fixed assets. How are you thinking about the timing for when those benefits begin to accrue?
Andre Maciel: Great. So thanks for the question. As we said, 2023 are very solid year. We delivered close to 4% of efficiencies as a percentage of COGS. And we do expect 2024 to be another year where we will be delivering ahead of the 3% COGS that we have outlined. I want to make sure that you understand that not only this is a consequence of the complete ways of working changes that we have done in supply chain, more focused on variable costs and continuous improvements. But also we are — we still have some efficiency opportunities that are coming through as a consequence of the pandemic and all the inefficiency generated by that. That helped in 2023, and that is still going to help a little bit in 2024. But beyond that, there are a lot of things happening on the supply chain space, difficult to name only one because given the share size of our COGS, but we do have initiatives coming from network optimization in the U.S. We have a very complex distribution center network, more than 80 distribution centers overall.
We do have initiatives in automation. In fact, we have a very strong partnership with Microsoft trying to do — using technology to allow us to make faster decisions. And if that improves labor usage and reduce yield losses. We have a lot of opportunities on value engineering to continue to make sure to offer the right type of attributes to consumers. So, there is a lot of different levers. We’re going to touch on a few of them next week in CAGNY, but I think we are very pleased with the quality of the pipeline we have in supply chain now.
Carlos Abrams-Rivera: And I think you will see is that how the investments we have been making in technology, the partnership we have been making in digital are basically fueling a lot of that efficiency in a way that actually creates some benefit for us for now and to the future as well. And again, will impact that even further when we are together in Florida.
John Baumgartner: Okay. Thanks for that. And then just quickly on international. The emerging markets vol mix was pretty solid in Q4. But I’m wondering if you can speak to the vol mix in the developed markets, what you’re seeing in Europe from category performance, private label competition and the consumer dynamics there sort of giving you confidence in the international guide for 2024. Thank you.
Carlos Abrams-Rivera: Happy to. I think if we think about what we have mentioned in terms of value and how consumers are looking for value in the U.S. is similar as well, too, in terms of consumers in Europe. I mean, they are looking for that value as well. And we are continuing to make sure that we’re bringing that value through the critical brands that we have, like our Heinz business in the U.K., for example, and how we continue to bring the products to the market that bring a number of improvements on our quality of our products as well as focusing on the benefit that we bring. So, for example, a product like HEINZ Beanz and the fact that brings kind of such a benefit around protein, that’s something that is kind of now shifting in terms of how we think about that product.
The fact that we’re also bringing within certain part of our categories, new entries by leverage to our brands. So, in baked beans we will have not only the HEINZ Beanz, but we also have HP baked beans. And that allows us to actually play in a couple of different areas with consumers, both at a more mainstream as well as to more value. And then in places like Germany, we’re also introducing new benefits to consumers as they are looking also again for value, whether that is Heinz Mayonnaise in new channels in the discount spaces, but also making sure that we continue to bring the innovation consumers are looking for from us. Like our Heinz Tomato Ketchup with zero sugar. So, we are approaching it with the same sense as we do in the U.S., which is let’s make sure we’re in the right channel with the right assortment.
And at the same time, let’s focus on bringing — and focusing on the benefits that we bring with our products.
John Baumgartner: Thanks Carlos. Thanks Andre.
Carlos Abrams-Rivera: Thank you.
Operator: Thank you.
Anne-Marie Megela: Thank you very much.
Operator: I would now like to turn the call back over to Anne-Marie Megela for any closing remarks.
End of Q&A:
Anne-Marie Megela: Thank you, and thank you, everyone for your interest. We look forward to seeing you next week.
Operator: Thank you for your participation. You may now disconnect.
