John Baumgartner: Joe, I wanted to ask about elasticity. You noted the downside to sales from international that was tied to the price increases, but I think elasticity isn’t something we’re really seeing in the US up to this point in the category at least. And I think we’re also even seeing better lifts on promo relative to pre-COVID. So are there any would you say discrete factors impacting non-US markets that are driving the volume pressure or is it just general headwinds that could hit the US later in 2023? And I guess I’m also thinking about
Joe Scalzo: You’re talking about what are we seeing in New Zealand and Australia, is that the question?
John Baumgartner: Exactly. International markets, exactly. I guess I’m looking at it in terms of the inventory reductions too, because it feels like based on sell-through, the environment in the US would be better than retailers are hunkering down.
Joe Scalzo: Yes, let’s start with — let’s start with our Australia and New Zealand business. We are the market leader there. Atkins is the number one brand. Number three brand Quest, quickly in a move — going to move into the number two, number one position. So we have a very, very good business. We have a general manager there that has been leading that business for over a decade. We feel really good about the business. If you understand the business in Australia and obviously we’re lucky with Geoff coming on Board, Geoff is the Kiwi, so he knows the markets pretty well. In fact, he just came back from a trip from New Zealand. It is a two-retailer marketplace, Woolworths and Coles own the market. And we’re not seeing in our category there much pricing.
So when we came in with a price increase, we got put our second one. We got put in the penalty box with one of the two retailers. So it’s not pricing elasticity as we expect, right, lose distribution, lose promotion opportunities, right? So that’s what’s going on there. In the US, we’re seeing elasticities for the most part on our two businesses like we would have expected with a little sensitivity in a few areas. So we’re just keeping around those chips being one of them and/or kind of confection snack bar business being the other. And we’re just watching it, it’s slightly elevated, typically what you see with the price increases, you see full elasticity early, you’ll see a burn rate so it starts declining over time. So when those products we saw slightly elevated and we’re just watching the decay rates now.
John Baumgartner: Okay. Okay. And just to build on that, from the category level at retail, just given the limited elasticity, the lifts on promo, are you seeing anything or do you expect to see any benefits for the category in terms of higher visibility, display in the store, maybe more momentum to out of the (ph), anything coming out of COVID as retailers sort of reset these aisle and categories that you think had sustained growth for your areas going forward? Thank you.
Joe Scalzo: Yes, Look, it’s a great question. So, if you just step back and think about this from a category management story from a customer standpoint, so we’re in the part of the store where most of the other categories think cough, cold, oral care are infrequently — less frequently purchased categories. So, things that are store food, weekly shopping. The aisle that we’re in, more like monthly shopping, right. And so one of the roles this category — the reason each HPC loves this category, it is a foot traffic driver to the aisle. So we actually bring people to the aisle at a greater rate than their normal shopping patterns. So we serve a purpose for them and helping them build basket in a part of the store that’s a higher-margin part of the store, better — just part of the store they want to build the business in.
