Duane Portwood: Yes, I think so right now, currency is year-on-year, isn’t too much of an impact, probably a little bit of a pressure in Q1. And then if current spot rates hold, then that should kind of level out as the year progresses. So that could probably be either a help or hurt at this stage. Volume, we think we have a good plan, a good budget, good operating budget in terms of volumes that we’re going after and how we’re supporting them. We are anticipating some, like I said, some decrease in our Ingredients business. If we were to get better quota and the like, then we could more aggressively go after that business and do a little bit better from an EBITDA perspective. I think the — we have good execution plans in place and kind of are on track with what we’re doing in Decatur.
So again, I think we’re pretty balanced in how we’re approaching that. If we can execute a little quicker, that might be a little bit better from an EBITDA perspective vice versa, if we don’t execute it like we want. But again, I think it’s a pretty balanced portfolio. So really, the big — probably the big driver will be volume growth, and there is certainly opportunity to beat the numbers that we have out there and beat the budget if that can come to fruition.
Scott Mushkin: Perfect, thanks for taking my questions. Appreciate all the color.
Operator: Our next question is from the line of Ryan Meyers of Lake Street Capital Markets. Please proceed with your questions.
Ryan Meyers: Hey, good morning guys. Thanks for taking my questions. First one for me, just wondering if you can talk about what you’re seeing from a demand perspective across the different product categories and maybe the different channels?
Michael Franklin: Yes, from — as we finished Q4, it was a bit of a microcosm for the full year 2022 in terms of as we think about North America, the non-major channels continue to grow nicely. The major channels, we continue to work through and make sure we’re servicing our customers in those channels appropriately. As we enter 2023, the areas of focus remain the same. And right now, I think we feel pretty good about the demand in the marketing and trade investments that we’re putting behind the demand in North America. From an international perspective, we gained share in almost every market throughout last year, and those were in markets where we already have a pretty high share to begin with. And the teams continue to again operate well, stock shelves well, and the like.
So the demand is there even in Europe where kind of different macroeconomic environment going on, share is very healthy and actually growing. So again, as we — as demand doesn’t — is not really the issue as far as that goes. And then from a Flavors & Ingredients perspective, as I said in my remarks and kind of some other questions, the team has done a great job of opening up new avenues for the liquorish extract and that continues to grow and continue to deemphasize tobacco and the like. So product demand is pretty healthy across the board. And in North America, we just got to help that out with good execution.
Ryan Meyers: That’s good to know. And then the price increases that you guys have implemented, what kind of feedback have you got from your larger customers and maybe how receptive have they been to these price increases?
Duane Portwood: I think, I guess, Mike, you can correct me where I’m wrong. So more than half of the price impact for 2023 is the full year impact of price increases that have already been implemented, executed throughout 2022. With the new price increases, it’s customer-by-customer, SKU-by-SKU battle. I would say — I would — I guess, I’d characterize it as those conversations aren’t getting easier. They’re getting more difficult and some of the conversations are successful as far as getting what we asked for. Some of them are less successful of getting maybe a little bit less than we asked for. But it’s not — I wouldn’t say we’re still living in interesting times, maybe three, four years ago, talking about price increases, you just — we wouldn’t even get past the first five or six syllables, whereas now the conversation continues to be fulsome, but they’re not easy conversations.
Ryan Meyers: Great, thanks for taking my questions.
Operator: Thank you. Our final question comes from the line of Alex Arnold with Odeon Capital. Please proceed with your questions.
Arthur Arnold: Hey guys, thanks for taking my questions. A bunch of it has been covered, but a couple of sort of housekeeping ones. Is there any thought about costs in your guidance related to the Alabama shutdown or is that something that we’ll find out as it comes?
Michael Franklin: We do have as I mentioned before, for 2022 the challenges and the opportunities that we had with Decatur, Alabama, were kind of front and center and obviously, a big use of cash as we completed 2022. The cost to fully exit and then get our co-packers sped up like they need to be set up, it’s incorporated in the adjusted EBITDA guidance. Now I am adjusting those costs out to put a finer pin point to it, is that we had around 22 million and change of cash add-backs related to the Decatur in 2022. In 2023, I expect that to drop in half with about 50% of those costs being borne in the first quarter of this year. So I expect dramatic improvement actually in the cash cost of what we’re doing from a supply chain perspective and a big majority of that will be finished or I should say, about half of that will be finished in Q1 and then through — as we look at Q2, Q3 and Q4 kind of even spend there given the timing of what we want to do with Decatur.
So that’s where we — that’s how we see the year progressing there.
Arthur Arnold: Okay, great. And then in terms of cost of goods, are there — are you seeing any abatement in your supply chain?
