TRANSCRIPT: ConAgra Brands’ Q1 FY25 Q&A Earnings Call

Just trying to get a sense of, is it execution? Is it the portfolio? What are you seeing out there that’s giving you that advantage right now?

SEAN CONNOLLY: Hey, Ken. It’s Sean. Our snack business is larger than I think people realize, and it’s also quite a bit different from other snack businesses in a couple of ways. Number one, it’s extremely focused on permissible snacks of protein and fiber-rich snacks, and number two, it’s a non-DSD snack business. So we kind of stay out of the chip space, and we’ve been kind of building scale in the permissible snack space for years now. We have a substantial business.

So what we’re seeing is, more broadly in snacks, there’s a clear pivot toward healthier permissible snacks, and in particular, anything that’s rich in protein or rich in fiber seems to be among the top priorities in those people who are consuming snacks. Obviously, snacking is a huge space. We’re very excited to add the fatty to our mix, because that kind of gives us an even more premium meat stick product. But meat sticks, as you can see in the prepared remarks, is the fastest-growing snack subspace of all snacks, and that’s where the bulk of our business is.

[KEN GOLDMAN:] Okay, thank you. And then quickly on frozen food, there’s a lot of comments being made in the industry about scratch cooking and how that’s picking up, partly because of the cost of eating away from home. I understand that, but what are your data showing about frozen food? It would seem to me that scratch cooking costs more than a frozen dinner. So do your data show a pickup or a significant pickup in consumers really shifting from restaurants over the last few months? Is that an accelerating trend? I know, Sean, you thought it would happen. I just don’t know quite how much you’re actually seeing in the data.

SEAN CONNOLLY: Well, I think it’s a really interesting question, because our demand science team is constantly giving us this data. And what we’re seeing is interesting. A year or so ago, we did see some behavior shifts toward more scratch cooking. And I’m talking very affordable stuff, a bag of rice, a pound of ground beef, things like that. Our products, like cans of tomatoes, would do well in that environment. But from what we’re seeing in the data now, the scratch cooking behavior shift we saw a year ago seems to be running its course.

And specifically, what we’re seeing now is there’s a pivot back to more convenient items. Even some of the strength you guys point out in the perimeter of the store tends to be things that can be prepared in less than five minutes. So consumers have pivoted back to convenience, which we are capitalizing on in our frozen space. You know, I pointed out that frozen has been a growth engine for over 40 years, in large part because of the convenience and affordability. We see that consumer pivot happening.

We are more active, as we should be, as the leaders in frozen than just about anybody else in the space. And we’re gaining as a result. So, you know, we invested to kind of nudge consumers back to this practice. But we had tremendous confidence that of all the consumer benefit areas we’ve tracked in the last 50 years, the single most unshakable one is the need for convenience. And that’s what we offer with our frozen business.

OPERATOR: Thank you, Sean. Our next question comes from Andrew Lazar from Barclays. Please go ahead with your question.

[ANDREW LAZAR:] Great. Thanks so much. Good morning.

SEAN CONNOLLY: Morning.

DAVID MARBERGER: Hey, Andrew.

[ANDREW LAZAR:] Sean, so it’s clear, you know, Conagra’s made obviously very good progress on large parts of the portfolio, right, most notably frozen and snack domains. But this progress has maybe too often been clouded by sort of various other parts of the portfolio, like maybe a little bit of a leaky bucket at times. And some of those businesses, I think, would seem to be at least appear to be less core, at least from the outside. And I understand each business plays a different role within your portfolio. But maybe in light of your much more, it sounded to me, pointed remarks in today’s prepared commentary around getting back to portfolio reshaping. I guess I’m curious if we should take this to mean maybe now there’s a greater appreciation to the benefits of portfolio reshaping, like even if it comes with maybe some near-term earnings dilution, but longer-term growth and sort of value creation. Because if I’m not mistaken, you definitely made more of a direct point, I thought, in today’s prepared remarks than I’ve seen in the past. Thank you.

SEAN CONNOLLY: Yeah, let me unpack that for you. First, I will say that having a Hebrew National issue in grilling season is kind of like getting a flat tire on the way to your wedding. It’s unfortunate timing, but just like the flat, it’s a minor issue and you have to deal with it and you keep moving.

With respect to the portfolio reshaping, as I’ve said many times, our true north long-term has been perpetually reshaping our portfolio for better growth and better margins. And we do that three ways. Number one, we invest in the businesses we own, especially innovation, as you all know. Number two, we seek to acquire faster-growing businesses in snacks or in frozen. And number three, we divest slower-growth assets.

So as I mentioned in our prepared remarks, our strong cash flow and our balance sheet progress have put us in a position to put more focus on this. But, as I said, all while continuing to make progress getting to our leverage target of 3.0 times. So, you know, that means that when it comes to acquisitions, we’re really not talking more than bolt-ons. And you saw that with Fatty this quarter. And as for divestitures, if it’s a slower-growth asset or not a strategic fit, it’s a candidate to go if an exit would generate a number at or above intrinsic value. So we’ve done quite a bit of this over the years, and we’re very disciplined to ensure that if we do it, we’re going to create value and not destroy value. And, you know, now that we’ve got the cash flow or the balance sheet in place, we think we can be more active reshaping and continue to make progress on our balance sheet and hitting the debt target.

[ANDREW LAZAR:] Thank you. And then a quick follow-up. Obviously, even if we take out the Hebrew National Disruption, organic for the quarter maybe came in, I guess, a little bit. I mean, it was sequentially improved, as you thought it would be, but still maybe not quite where maybe you’d hoped it had been or where street estimates were. It sounds like 2Q also, right, is some gradual sequential improvement, but still a greater amount of reinvestment. So it just seems like more of the pressure than even maybe you might have thought at the start of the year is going to be in the second half. I guess what gives you the confidence or the visibility that sort of the full-year reiteration is sort of the right approach, given it seems more second-half weighted, but maybe I’m seeing that not in the right way. Thanks so much.

SEAN CONNOLLY: Yeah, and no question, there was a lot of noise in the quarter, which is why we’re trying to unpack it today. In terms of the organic dollar sales miss versus consensus, Andrew, it’s two places, and Dave will unpack this in just a second after I make another point. One is mix, and the other is food service, what you guys were expecting in food service. But the bottom line from my vantage point is that after Q1, we are largely where we expected to be.

While we didn’t expect the Hebrew National disruption, to me, that is not as noteworthy as the fact that our investments are working quite well, our scan volume was positive in frozen and snacks, and our share performance was outstanding. So, you know, it’s not lost on me. There’s a lot of noise in the quarter. That’s why we’re endeavoring to unpack it in detail so we can enable clarity on the core fundamentals. So back over to Dave to kind of talk about this, the other two factors I just mentioned.

DAVID MARBERGER: Yeah, so, Andrew, when we originally gave guidance and we gave some color on Q1, we were trying to give some perspective on we didn’t expect Q1 to be strong. It was going to be our lowest sales quarter. It was going to be our lowest margin quarter. We had some wraps on SG&A. So we tried to put that out there. But as you know, we don’t give specific guidance on Q2. So other than the Hebrew National situation, we were in line or better than our internal plans for Q1. It was just different than consensus. And so, you know, we’ll manage that.

As we look going forward, I gave some color on the call in terms of Q2 and then full year. I did make the comment that Q2 would be our highest trade merchandising quarter of the year. It’s also our highest sales quarter of the year by a good amount. So that’s part of it. We do expect some of the key variables going forward. We do expect our absorption to start to moderate and get positive. That’s really important because absorption was a headwind in Q1. That tamped down our gross margins because volumes have been down. But as volumes inflect and get positive, we’ll start to see that as more of a tailwind than a headwind. So that’s a big part of our forecast.

We talked about sales mix in Q1 being unfavorable. We expect that to normalize as we move forward as well. Our productivity, we were very pleased with that in Q1. And we expect that to continue to accelerate as we move forward. So it’s pretty much right now playing out like we thought. The two big differences are, one, the Hebrew impact, the lost sales of $27 million and then the overall additional cost and lost profit of $11 million that hit in Q1. And then secondly, we took up our forecast for inflation 20 basis points.

So those two things, given the momentum we see in productivity, given our expectation that absorption will start to flip, and what we’re seeing so far with the strong ROI on our merchandising and our expectation that volumes are going to continue to improve each quarter, we feel like we have a line of sight to offset. The two headwinds with Hebrew and inflation, and that’s why we’re holding guidance. So there’s a lot there, but it’s pretty consistent with the way we originally built the plan for the year.

OPERATOR: Thank you so much. Our next question comes from Alexia Howard from Bernstein. Please go ahead with your question.

[ALEXIA HOWARD:] Good morning, everyone.

SEAN CONNOLLY: Good morning.

[ALEXIA HOWARD:] So two questions. The first one is just about where price mix goes from here now that we’re lapping the tomato product price increase, especially as I think you commented that the trade spend investments are going to be higher next quarter. And then I have a follow-up.

DAVID MARBERGER: Yeah, so as we mentioned, Alexia, we expect our overall sales to continue to improve going forward. So we expect volume improvement each quarter.

So year to go, we expect volumes to be positive. We do expect for the full year that price mix will be negative, but that rate of sort of decline that we saw and year-on-year decline that we saw in Q1 should start to moderate going forward. So yes, we have higher merchandising in Q2, but it is a higher sales quarter as well. And it’s going into, it’s the holiday, beginning of the holiday season. So there’s some more seasonal promotion there. So I don’t want that to be taken out of context, that it’s above what we planned. It’s just the way it flows Q2, we have more spend given the sales and the seasonal dynamics.

[ALEXIA HOWARD:] Got it. And then as a follow-up, more of a sort of taking a step back question. For a number of years, you’ve been focusing less on advertising and promotion within the FG&A line and maybe a little bit more on promotion, although I recognize that today you laid out that promotional spending is still pretty rational. I think in fiscal 24, your advertising spend was at about 2.5% of sales, 2.4%, which seems lower than the peer average. The share trends are looking good, but is the category growth being affected by some of that pullback, particularly in light of the fairly significant pullback that you saw this quarter? Thank you, and I’ll pass it on.

SEAN CONNOLLY: Yeah, sure, Alexia. The investment we make in brand building, which is how I’ll frame it as opposed to what’s in the A&P line below the line, is in multiple places in the P&L. The place where we put probably significantly more emphasis in some of our peers in terms of investing in brand building actually goes into COGS, and it shows up in higher quality product innovations, more innovation, and higher quality packaging innovation.

We are probably more relentless, and we have greater scope in terms of the magnitude of the innovation we do on an annual basis, and that has been the key to us driving category health over time. Look at frozen as an example. Almost 10 years ago now, we said we’re going to turn the frozen category, frozen meals category, from a decliner to a grower. That has happened on the back of unmatched innovation as opposed to unmatched A&P.

Now, within the A&P line, what we’ve done over the years is we’ve taken the rate from 4-ish to 2.5 largely by eliminating non-working dollars and eliminating low ROI investments like traditional inline TV. Instead, we focus our A&P investments largely in the digital social realm, in particular in the last number of years as you’ve seen TikTok, Insta, working with influencers, because our brand resonance and our innovation success has been terrific. It’s just we manage to do that as efficiently as we can so that we can continue to invest more in the COGS line in the form of kind of unmatched innovation.

OPERATOR: Thank you very much. I’ll pass it on. Our next question comes from Lee Jordan from Goldman Sachs. Please go ahead with your question.

[LEE JORDAN:] Hi, good morning. Yes, it’s Leah. I just wanted to follow up on the snacking discussion. Great to see the share gains you called out in that category broadly, but meat sticks is a notable one missing and you noted it’s a high growth category. Maybe you could comment on how you see the competitive environment there, the positioning of Slim Jim today, and any potential outlook for more distribution opportunities and more color on how the new fatty addition plays into all of that.

SEAN CONNOLLY: Yeah, great question. Here’s what’s happening in meat snacks and meat sticks specifically, and it’s super interesting. The category is really poised for material growth because you’ve got an $80 billion-ish overall snack space, and there’s a lot of potential shifting that we’re beginning to see here from more carb or sugar-laden snacks into protein snacks broadly and meat sticks specifically. When categories experience explosive growth like that, one of the first things you’ll see is the addition of more varieties.

So, if you think of a large category like cookies or back in the old days cereal, you would see a lot of varieties emerge as categories grow. That’s a normal thing, and that’s what we’ve seen in the meat sticks world. One of the new additions to the meat stick space was fatty smoked meat sticks, and so we’ve been tracking that business since its inception. It’s additive to what we do with Slim Jim because Slim Jim skews to a younger demographic.

Fatty is a more sophisticated product, more premium product that skews to an older demographic, so it’s incremental, and we thought it was a terrific fit to our portfolio with Slim Jim and Duke’s. As I said, now we’ve got the trifecta smokehouse, which we’re already the market leader in the fastest-growing snacking space of meat sticks, and now we’ve got another arrow in our quiver.

[LEE JORDAN:] Great, thank you. And then for my follow-up, also in the prepared remarks you said you expect the consumer to remain challenged. Have you seen any shifts in behavior across your brands given the wide portfolio? And then just given this assumption that they remain challenged, I guess why should promotional activity not revert back further to historical norms given they’re still below kind of 2019 levels? Are they responding to promotional activity differently anyway in the current environment?

SEAN CONNOLLY: Sure. Well, what’s happening in the world of promotions is kind of predictable in my eyes because promotions were suppressed because there were supply chain issues. They’ve moved back toward pre-pandemic levels, but I think the key thing for me to see is that it kind of remains rational. Our promotional activity has been very specific. Number one, it’s been targeted and frozen, and number two, it’s been about quality merchandising frequency and not depth.

It’s really kind of a reminder effect that it has in the shopping experience, but one of the things that we’ve seen when we mentioned the consumer’s challenged is there is still value-seeking behavior happening, and we have a broad and diverse portfolio, and we have some products that offer exceptional value. Some of those products are the products that we have promoted and we put on display, and what we’ve seen when we’ve done that is incredibly high lifts versus what we might have historically seen. That’s one of the things that is creating the mix effect on a dollar per unit basis that Dave talked about, but that’s perfectly fine in our mind because those products, while they might be a negative mix at dollar sales, the gross margins tend to be equivalent, so what we’re really doing is offering a value-seeking consumer a tremendous value through the form of promotion and getting really good lifts, which is great because we bring households back to our portfolio, and that’s ultimately what we’re trying to do for the long-term cash flows of the business is keep that relationship strong with our households.

OPERATOR: Great. Thank you. Our next question comes from Nik Mody from RBC. Please go ahead with your question.

[NIK MODY:] Yeah, thank you. Good morning, everyone. I was wondering if you could just kind of opine on all the noise between the out-of-home and in-home. You have, obviously, restaurant traffic has been weak. We’ve seen a lot of the food service businesses that many consumer companies have struggled over the past few months and quarters, but then you also have these very sharp price points at some of the QSRs and value meals, and I have to assume that there’s some interplay, so I would just love your observations on kind of what you guys are seeing from that standpoint from a consumer behavior perspective.

SEAN CONNOLLY: Well, I think in the simplest sense, as people seek value, you do see trade-downs, and one of the obvious trade-downs you see is within away-from-home eating and the types of restaurants people eat at, more toward value types of restaurants, and then from away from home into the grocery store, and so we’ve seen that. Our focus in food service, as you’ve heard in our remarks today, in this kind of unusual environment has been to protect the margin that we worked so hard to claw back after COVID and after the pricing super cycle, and we’ve managed to do that. One of the ways we’ve managed to do that is by exiting some unprofitable business, which obviously pressures the top line, but we think it’s the right thing to do for the long term, but the food service dynamic you’re poking at is really just, it goes under the banner of continued value-seeking behavior. It’s happening from away from home into the store, and then it’s happening within the stores, but ultimately, what people will pivot to are the benefit areas that are most necessary for them to live their lives, and as I mentioned, convenience is pretty much at the top of the list.

[NIK MODY:] And maybe if I can ask Dave a question just on the input costs and anything that you would highlight in terms of things that are moving in the right or wrong direction, just to kind of give us a state of the union there would be helpful.

DAVID MARBERGER: Sure. So to take it from the top, we had originally estimated our overall inflation, and that’s everything, that’s materials and our manufacturing and our transportation warehousing. We had estimated that as a 3% increase for the year. We’re now estimating at 3.2%. The biggest changes in some of the material areas, and really for us, it’s coming down to just a few things. We spend a lot on beef in our inputs, and we’re seeing double-digit inflation even higher than we originally estimated, and it’s just a supply issue, just the lack of herd expansion, lower cattle weights from the heat. We’re just seeing the impacts of this on our forecast for beef, and it’s a big spend for us.

Another one is sweeteners. There’s just tighter supply conditions driven mostly by the drought. So double-digit inflations in these what are big input categories for us. We’re seeing some other more moderate inflation areas like chicken. We’re seeing inflation in milk, but that’s a smaller spend for us. So it’s really coming down to a handful of categories that we watch closely, and we manage everything we can do. If we can take positions and try to manage that the best we can, we do, but that’s our latest call on where we see the overall inflation.

[NIK MODY:] Super helpful. I’ll pass it on. Thank you.

OPERATOR: Our next question comes from Peter Galbo from Bank of America. Please go ahead with your question.

[PETER GALBO:] Hey guys, good morning. Dave, thanks for the detail on the beef cycle. Always a fun topic. I maybe just wanted to make a clarification on Hebrew National. You know, just given the seasonality in that business, and Sean, I think in your comments, it shouldn’t be that we expect really a meaningful rebound now that it’s kind of behind you in the rest of the year. It’s kind of we have to wait more until grilling season of next year, you know, and I think you had a similar issue with fish sticks a few years ago, so maybe you can just clarify that.

SEAN CONNOLLY: Hot dogs is a business that has a baseline, but on top of that baseline between kind of Memorial Day and Labor Day, Pete, there is a seasonal spike. So if you miss out on a good chunk of that, you don’t get it back to the following season. You’re absolutely right.

[PETER GALBO:] Okay, thanks, Sean, for that. And then maybe, Sean, you know, you spent some time talking about snacking, and Slim Jim is obviously a pretty important product in the convenience store channel. There’s been a lot of debate, I think, amongst investors just around kind of the cyclical versus structural nature of convenience store kind of traffic decline. So just curious, anything you’re hearing from the demand science team or just views there on how you’re thinking about, you know, that channel specifically within snacking? Thanks very much.

SEAN CONNOLLY: Sure. Well, it’s obviously a huge channel in the snacking space. But as you all well know, there’s been a fair amount of channel shifting, literally from the onset of COVID through today. At the beginning of COVID, it was because people were moving out of big stores into small stores because they thought it was safer. And then after COVID passed, then we had the pricing super cycle, and then it was the pursuit of value. So you saw more volume moving through club stores and mass merch.

And you also saw food service at peak of inflation cycles, not food service, convenience can be challenged, because people get their gas and they may not go into the store. Those tend to be kind of cyclical transitory dynamics. So we try to remain agile. I think what we’re seeing right now is to the degree there’s any temporary softness in convenience stores, you tend to see strength in mass merchant club as an example. So it’s just a, we’ve got huge businesses with all of these customers, we’ve got to be agile and kind of meet the shopper where they are.

OPERATOR: Thank you. Our next question comes from Robert Moskow from TD Talon. Please go ahead with your question.

[ROBERT MOSKOW:] Hi, thanks for the question. Dave, I was wondering if you could help us in refrigerated frozen, just how to think about price mix going forward. Have you fully lapped the price rollbacks that you, I think you had last year in frozen entrees and maybe some other categories? And therefore, does that kind of level off? And then also, is there more deflation pass through in margarine, I guess? Do we, are you still living with that for the next few quarters? And then a quick follow up?

DAVID MARBERGER: Yes, so Rob, so in terms of the cadence of price mix for refrigerated and frozen, we’ll still see some kind of reduction negative price mix in Q2. As we sort of go through Q2, we’ll start to wrap. So the second half, we will be fully wrapped on that. So we shouldn’t see kind of the down driver on that in terms of timing. What was your second question?

[ROBERT MOSKOW:] Is there like a deflation pass through just on like commodity related oils in this division, like for margarine, for example?

DAVID MARBERGER: Yeah. So we’ve seen deflation in our edible fats and oils. And so we have passed that through. That was in my comments today. We’ve had a pass through price reductions on our spreads businesses, which are obviously prominently oils.

[ROBERT MOSKOW:] Okay. So that continues for the rest of the year, unless there’s a change in the underlying commodity.

DAVID MARBERGER: Yeah, but that’s where, you know, after Q2, we’re wrapping on that.

[ROBERT MOSKOW:] Oh, you’re wrapping on that too. Okay. Okay. And then a follow up. There’s a discrepancy, I think, between the IRI data and the Nielsen data on your meat snacks sales. Your presentation today says things look pretty strong. Nielsen’s a little different. Like, is this a, do you think that this data, is your meat snacks business up year over year in the quarter overall in retail and in your shipments?

SEAN CONNOLLY: Rob, I can’t speak to the difference between the two data sources. We’re just kind of showing you the strength we’ve got in the business overall. But, you know, we’re very pleased with where we are and we’re very pleased to add fatty to the mix. But, you know, as you can see from the data, the universe we compete in is significantly outpacing the broader snacks universe. And we are participating in that.

DAVID MARBERGER: And just for Slim Jim from the IRI data, for the quarter, we’re seeing volume increases, you know, kind of little below 1% volume increase in Slim Jim.

[ROBERT MOSKOW:] Okay. What about dollars though, Dave? Is that up as well or is that down a little?

DAVID MARBERGER: Dollars are down slightly.

[ROBERT MOSKOW:] Okay. All right. Thank you.

OPERATOR: Our next question comes from Tom Palmer from Citi. Please go ahead with your question.

[TOM PALMER:] Hi. Thanks for the question. You noted the higher lifts from items on promotion. And I guess ultimately a portion of the percentage of sales on promo are driven by consumer decisions and not just what’s on shelf. I was wondering about the frequency of promotions on shelf relative to pre-pandemic levels. Do you think that’s kind of back to full levels or do you think maybe we’ll see some changes there still to come?

SEAN CONNOLLY: Well, the quality promotion that we try to drive on, and particularly it’s been on our frozen business and mostly within our biggest frozen businesses, single-serve meals, we try to drive quality display. So we try to, in addition to just our normal shelf space in the frozen aisle, we try to get into the end caps because that is ultimately what drives the highest lifts as opposed to just a tag on the shelf that has a modest price decline. So it’s quality display at the end of the frozen aisle is really what we’re after to drive those maximum lifts.

[TOM PALMER:] All right. Thanks for that. And a quick one on Arden. It was a bit light of the implied run rate for the year. I know there can be fluctuations, but this was the lowest in almost three years. Just any kind of thoughts on when we might see the rebound in that business and if there was anything notable to think about in one cue that maybe drove the slight downside?

DAVID MARBERGER: No. And I mentioned on my comments, and we’ve talked about it before, Arden’s results can fluctuate based on volatility with the wheat market. So the core business of Arden in the milling and selling of flour products at a margin is very strong. They do a great job servicing customers. The remaining business is this commodity revenue, and that’s the more volatile part of the business, and it can be volatile where it’s a bit down and then it can go the other way and be positive.

So we’re holding our forecast for the year with Arden. There is going to be some volatility, but we were a little bit softer than we wanted to be in Q1, but we’re holding the year right now because the volatility can really swing both ways.

[TOM PALMER:] All right. Thank you.

OPERATOR: Our next question comes from Max Gumport from BMP Paribas. Please go ahead with your question.

[MAX GUMPORT:] Hey, thanks for the question. With regard to the expectation for volumes to improve through the year, is that really a category dynamic or is it a market share expectation?

SEAN CONNOLLY: It’s a mix, Max. We’ve got a good percentage of our categories are growing, which is great to see. But the share, as you saw in our numbers, share strength is broad-based, particularly in the key domains of frozen snacks.

[MAX GUMPORT:] Right, yeah. And on that market share, you’re right. I mean, it does look quite impressive. I think that was a highlight for the quarter. I’m curious what you think the key drivers are for the outperformance on a volume basis. And then do you think there’s any help you’re getting on volume market share because you perhaps invested in price first? It feels maybe similar to what you were talking about a couple of years ago with also taking price first and lapping that price increase first. I just wonder if you’re still ahead of your competitors in that cycle.

SEAN CONNOLLY: It’s a good question. It’s a different answer in each of the domains. So if you take the frozen space first, what we see happening in the frozen space is the category has returned to growth driven by ConAgra, basically. The category goes in frozen as we go. So what we’ve done there is not deep discounting. So I would not put it under the heading of major price incentives. We saw the consumer desire to get back to convenience. We saw the fatigue on some of the scratch cooking. And so we nudged them along by giving them a shallow discount, but importantly, getting the product to, you know, in the end of the aisle in a display so we could remind them.

And we’ve seen good responsiveness there. And that’s typically is what happens. That drives strength in the category and outsized strength for our portfolio. In snacks, I think you’re dealing with a little bit of a different dynamic because we started later in terms of more merchandising support on snacks. There it’s been about price pack architecture to help the value seekers. So in the case of Slim Jim, it’s selling smaller sizes, things like that. But the big tailwind on our snacking business is when it comes to share and overall growth is just what we talked about earlier, which is the pivot toward permissible snacking, particularly high protein, high fiber choices.

[MAX GUMPORT:] Great. Thanks very much.

OPERATOR: I’ll be back. And ladies and gentlemen, at this time, we’ll be ending the question and answer session. I’ll be turning the floor back over to Melissa for any closing remarks.

MELISSA NAPIER: So once again, thank you all for joining us for our call this morning, and please reach out to Investor Relations with any additional questions.

OPERATOR: And ladies and gentlemen, with that, we’ll be concluding the question and answer session and presentation for today. We do thank you for joining. You may now disconnect your lines. Thank you.

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