Scott Marks : Good morning, wanted just to follow up on some of the SKU rationalization conversation. Obviously, to Jason’s point obviously, seems like it’s been going on for a little longer and deeper than expected. Just wondering what this does in your confidence regarding kind of go forward volume growth potential and is this SKU rationalization kind of replaced one for one on shelf with a Power Brand item or some other innovation? Just trying to get a sense of that, thanks.
Howard Friedman: Yeah, so Scott, the first thing is, it has always been our belief that this year was going to be a year of SKU rationalization. If you went all the way back to Q1, we were around 400 basis points expecting to step down basically 50 each quarter, but we’ve always given a sense that we would be in the 300-ish range this year as a drag to our print. So, at least from our perspective, SKU rationalization is consistent with what we’ve been saying would be this year. But I, again, look forward to the holiday gift from Ajay when we stop talking about it. Second, with respect to retail brand and partner brands, there’s a couple of things. They are not one for one replacements because in some of the cases, they were rationalization actions that we took as we acquired RWG and a couple of other places where the retailer was using the brand, continues to want to, but we had alternative uses for the capacity.
So, being able to strengthen and build out our tortilla chip on the Border brand, we needed the capacity, which is why we started to shed them. So, in some cases, the retailer maintained their brand, they just went elsewhere, which makes it a little bit different from a assortment management than say us pruning a SKU that is a tail SKU for us and replacing it with a higher performer.
Scott Marks : Got it, thanks so much, pass it on.
Howard Friedman: Thanks, Scott
Scott Marks : And welcome.
Operator: Your next question comes from the line of Bill Chappell with Truist, your line is open.
Davis Holcombe : Hi, good morning, this is Davis Holcombe on for Bill Chappell.
Howard Friedman: Hi.
Davis Holcombe : I was wondering if you guys, — I was just wondering if you all could provide us with a little bit of an update on the partnership with Publix.
Howard Friedman: Yeah, so look, we continue to feel really good about our Publix relationship. They have been excellent partners for us, we’ve been enjoying not only our core distribution, but also obviously been building out, you can see that in our consumption and market share trends around them. And they’ve been expanding our distribution into additional SKUs and additional items, broadly. So I think we feel really good about how the business is performing. I think what is equally important to us is being able to continue to prove to ourselves and to others and to all of you that when we enter into a market with an anchor retailer, that their shoppers and the consumers then stick. And so you see that in our household penetration gains, you see that in some of our buy rate improvements, and you see that in our power brands. So, so far so good.
Davis Holcombe : Excellent, and also I was just wondering if you could talk a little bit about some of the trends you all are seeing in Salty Snacks, like potato chips versus pretzels versus tortilla chips?
Howard Friedman: Yeah, so I mean, look, I think overall, what we continue to see is the category remains resilient and it continues to be a great place to operate. If you look at the potato chip trends overall category, the segment is up, call it 6.5% in the quarter. We’re up a little bit less than that, which we talked about earlier, is a lot about the lap of the Utz brand in our core. Tortilla chips really was a, we’re now, we’ve been talking the first half of the year where we were lapping activity prior year that we projected that we would go stronger in the back half. The good news is the visibility we thought we had is now translating into category or subcategory growth that we’re seeing. And then pretzels is growing, but that’s really a place where we continue to have opportunities as the consumer is shopping price points and moving up and down the price ladder.
While we feel really good about things like our barrel business, we do over index to a higher relative price points and have some work to do on the flex side of the business to make sure that we’re hitting lower price points in the ladder. And then the last two things I would say is, look, our Cheese Snack business and Pork Rind business are not where we wanted them to be. They’re kind of two different issues. Cheese is really about a lap from prior year, which we’ve been experiencing for a while now, but we’ve said we should be getting through it now. And then Pork Rinds, we talked a little bit about on the supply chain side are the optimization actions that we took really disproportionately affected Golden Flake, which is really a shorthand for Pork Rinds.
But beyond that, I think everyone’s talked about the consumer continues to shop for value. We’ve seen some channel shifting all in our prepared remarks is kind of what we’re seeing across the segments.
