Rob Moscow: I wanted to know, you said that you learned lessons from the Golden Flake supply chain disruption during the transition, but I get the sense that there’s going to be a lot more supply chain optimization to come, probably more consolidation. So there’s going to be a lot of these moves coming. Can you be more specific as to what you learned and why you feel confident that you can obviate these types of issues going forward?
Howard Friedman: Yeah, thanks for the question, Rob, and welcome back. We missed you last call, but glad to have you back on and with us. Look, I think there’s a couple of things as I look, you’re right, when we look at our supply chain and we understand our overall cost structure, that there are things that we’re continuing to evaluate on ways of working and being able to drive greater productivity. But there were several key learnings that we had in the quarter, and some of them, as is frequently the cases, seem somewhat obvious on the face, but obviously get a little bit more complicated as you get below. First, through our history, we’ve done a lot of plant acquisitions, and plant acquisitions tend to be the foundation of a lot of our metrics.
Closings are a little bit different, and I think we’ve learned a bunch of things about how they vary. But number one really is around making sure that we understand the right KPI or performance indicator as we hit a gate, specifically with respect to safety stock, right? So we felt pretty good about what the number needed to be, but we, I think, underestimated and didn’t appreciate the cycle that it took to start to build the production and make sure that the product was flowing through our network as effectively as we needed it to as it moved back into the southern markets. So I think we need to be more conservative there as we go forward. You know, second is making sure that we have redundancy. We’ve talked about trusted co-man partners and making sure that we have some supply chain redundancy in the event that we need it, to make sure that if we stumble even a little bit that there’s somebody behind us that we know we can — that can meet or augment our demand as we transition.
And third really is around the dedication, having a dedicated team. Well we had a dedicated team on it and they were working through the transition, making sure that that team has got the ability to make calls at speed, to understand the metrics and are dedicated specifically to this transition until we get through and we’re stable. I think we might have been a little more optimistic a little too soon with respect to when we could rotate off and get back to speed. So all those things will be built into our future. We’ve learned a lot. We have a quantitative view of the lessons learned and have a team that now has more experience as we look forward.
Rob Moscow: Howard, are these moves things that you kind of have to do one at a time or do you have the resources to do multiple consolidations at once?
Howard Friedman: So I think we have the resources to be able to do multiple consolidations at once if the conditions dictate. Certainly from a firepower capacity production capability, we have the capability to look and understand how to meet the consumer demand. I think a lot of it is more just when does the market, the consumer market and the customers say it’s a good time to do it and when we’re confident that we’re clear on how the project needs to affect us moving forward.
Rob Moscow: Okay, great. All right, thank you.
Operator: Your next question comes from the line of Peter Galbo at Bank of America. Your line is open.
Peter Galbo: Hey guys, good morning. Thanks for taking the question.
Howard Friedman: Good morning, Pete.
Ajay Kataria : Hey, Pete.
Peter Galbo: Howard, I just, I wanted to maybe unpack a bit more your comments around the channel shift. I know you kind of gave it as rationale for maybe some of the softness in the quarter and it’s also though in the outlook as a reason for kind of why the sales side has come down. So I just was hoping you could elaborate a little bit more there. Is this a channel exposure problem that’s specific to us? Is your relative share of, I don’t know, some of the club non-measured is lower than peers just and that’s why you’re seeing some of the shift, just anything more you could do to kind of help unpack that?
Howard Friedman: Yeah, thanks for the question, Pete. Look, I think in order of magnitude, the channel shifting is relatively speaking a much smaller impact to the, to our go forward look and I think it is largely something that depending on how you look at it is either a cause for, is a cause for optimism. Because really channel, while we are growing nicely in a lot of those unmeasured channels, they are relatively speaking smaller for us. So much like an expansion geography, as we’re growing quickly in those channels, the ability for them to really positively impact us just takes a little bit more time. We’re lucky to have a hybrid distribution model around DSD that we can flex there and make sure that our merchandising and our promotional environment is solid, but in terms of overall impact to our business, they are still developing much like an expansion geography would.
