Steve Oakland: Yeah. I would say that, there’s both of those, Rob. The capital that we — that we’ve guided to will facilitate the capacity to meet that number. We have balanced those two numbers. So we will have plenty of capacity to meet that growth rate. And then, the capital and the TMOS work, we haven’t talked a lot about TMOS, but TMOS is in its early stages, but we’ve got a lot of success so far. So we’re very confident in the margin expansion. We can get that without taking price to the customer. I guess is the real answer there.
Rob Moskow: Okay. The 3% to 5%, is it mostly volume embedded in that assumption or do you also include like a 2% kind of run rate for inflation?
Pat O’Donnell: Yeah. We’ll have cost savings initiatives in there to help offset inflation in that, so I think how we’ve operated sort of — the current environment, that’s how we tend to work with our customers to help us.
Steve Oakland: But historically, Rob, I think what your question is, historically, those categories have grown at 3% to 5% and it’s mostly volume driven a little bit of inflation.
Rob Moskow: Mostly volume. Thank you. All right. Thanks.
Operator: Your next question comes from the line of Bill Chappell from Truist Securities. Your line is open.
Bill Chappell: Thanks. Good morning.
Steve Oakland: Good morning, Bill.
Bill Chappell: First one kind of a follow-up on pricing. What we’ve heard and I think everyone’s heard over the past few months is, I guess, one retailer or a couple retailers took pricing from the manufacturers but didn’t raise it at the store level, just to kind of accelerate or some customer traffic, accelerates some private label share. Did you see that in any of your categories and it showed is has that now reversed as we moved into 2023?
Steve Oakland: I would say in a macro, Bill, it’s hard to say each individual item on each individual retailer, there’s a couple of especially, the hard discounters and some of the large mass customers have been really aggressive on private label. There’s no question. But I think most of our pricing has been passed through. The gaps remain healthy, but most of our pricing has been passed through. I mean, there’s an occasional market on an occasional item that someone gets hot. But I wouldn’t say that’s the norm, I think it’s the exception.
Bill Chappell: Got it. And then second one, on Pat’s commentary on the supply levels, I mean, the service levels, I was a little surprised you said they wouldn’t expected them to be back to normal by the end of the year, that’s I think that’s still 10 months away. So, I mean, is there any major obstacle roadblocks from that happening sooner or maybe give a little more color of why it would take that long for everything to be back to normal?
Pat O’Donnell: Yeah. And maybe the context for that was we wouldn’t expect every single plant. I don’t think that that means when you think about the fact we’ve got half of our plants today. We’ve got sort of glide paths in place across all those plants. And there’s a handful at our challenge where we’re putting in a little bit more capital or a little bit more repairs and maintenance over the course of the year to help get us to those glide paths. And stabilizing some of the market so from a labor perspective. So I don’t think that means as a totality, you wouldn’t sort of wait out to an improved — much improved service level. But it will take us probably the better part of the year to get everything fully up.
Steve Oakland: Yeah. And we hold ourselves to 98.1, which is a pretty aggressive target in private label. So I think there’s a couple of places. One place we do want to touch on. I know our top line number wasn’t quite what we had hoped it was going to be. I think it was solid 22%, but not what we’d hoped. We had a couple weather events in the fourth quarter. Obviously, we had a hurricane which affects our pickle business and some of our other things, but we also — we have a cookie facility in a buffalo suburb of Tonawanda, New York. And that community got hit with what 5 feet and 6 feet of snow. We had damage in that facility that we couldn’t get fixed and that would lingered into the month of January for us. And so we’ve had a few things that we’ve got to get — we’ve got to get to and we are in the midst of that.
But there were a couple of things outside our control that hit us that maybe softened our sales number. It was not demand driven. There was plenty of demand in the quarter. We just had a couple of categories that Mother Nature got in the way of.
Bill Chappell: Got it. Do — you think you could be in the 70%, 80% of your businesses at the service levels you want maybe by mid-year? Is that
Pat O’Donnell: I think that’s very comfortable.
