Our business is 51.2 points of market share. And in fact, our growth in market — unit market share in the last quarter was 1.7 points which is almost the total equivalent private label. So we like our position, our market and the market structure there. We like our brands and we feel great about it and it’s been a growth juggernaut for us for the last 5 years and I see no reason why that won’t continue. In terms of Birds Eye and vegetables, vegetables is one of the categories where earlier in the year, we saw consumers exhibit value-seeking behaviors. So for example, we saw some trade down from fresh and frozen vegetables to canned vegetables despite the obvious quality trade-offs. But Birds Eye is also one of the businesses that we are investing against with a clear focus on the superior relative value of frozen vegetables versus other choices.
In fact, the advertising we’re running now is directly comparative as I mentioned to you previously and features the clear benefit of our Stay Fresh flash freezing process which basically freezes time for the consumer and keeps our vegetables at the peak of freshness until the consumer is ready. So it’s a clear advantage. And in the most recent 4 weeks of scanner data Birds Eye grew overall share even though our focus is really on the value-added tier. So we’ve got investments there. We’ve got momentum there and it’s an important brand and you’re not going to see us slow down on the marketing support and the innovation front.
David Palmer: I just wanted to follow up on Ken’s question. Maybe one way to ask how is what ways are you going to be really reviewing your business in the coming months as you contemplate how you’re going to be guiding fiscal ’25? Is it simply just volumes getting closer to flat overall in the business? Or are there any areas of the business you would be particularly focused on that you will be — that will really help you think about how you guide for ’25.
Sean Connolly: Well, I think the way I think about it, principally, David, is we are an ROI-minded management team we are not bashful about putting investments out there to support our brands if they drive the impact that we want to see in the marketplace which in turn drives the return on investment. So where we are in our typical annual operating planning process is brand by brand, looking at the market fundamentals on what’s happening within the brand dynamics, the competitive dynamics of the category, what do we know about the need for those consumers in those categories to have some kind of stimulus to kind of nudge them back to their normal behaviors. And what kind of lift can we expect. So we do that on a brand-by-brand basis and that ultimately leads to our investment profile.
So we’re in the midst of that right now. we are — we’ve obviously run a lot of what you might consider to be test markets starting in Q2 in terms of those investments and understanding what those ROIs are. And we’re racking it up right now. But I think what’s encouraging is we are seeing responsiveness and we are seeing good ROI. And I think that bodes well going forward.
Operator: The next question comes from Chris Carey with Wells Fargo.
Chris Carey: One thing that did stand out was that the inflation impact to margins did get a little bit worse quarter-over-quarter — can you just expand on that if that’s driven by commodities, non-commodities, I think you mentioned tomatoes with respect to some incremental pricing. Just any context on what is driving that and if there are any nuances.
Sean Connolly: Yes, I’ll make a quick comment, Chris and flip it to Dave. Obviously, inflation has slowed but we’re still in an overall inflationary environment and some things more recently have inflated and that has led to taking some price. So you get the benefit of that. But it also — there’s a lag effect. So we’ve kind of taken you all through that, the mechanics of how that works. And that’s part of it, right? As you get — when you get new inflation, you take new pricing, you got a bit of a lag effect, so you get a little bit of margin pressure in the early days while you’re waiting for that to get reflected. And then you see a pretty rapid inflection from that point on. So that may be a piece of it, Dave, do you want to add more color to.
Dave Marberger: Yes, just a little color. So Chris, yes, we — our inflation rate as a percentage of cost of goods sold for the quarter was 2.9%. And which drive the 1.9% margin impact that you see in the materials. So we’re still on track for — we said full year approximately 3%. We’re still on track for that, maybe a tick above that. But the inflationary areas you mentioned, tomato as we’ve talked about that, we’ve taken pricing. That was a big driver of the price mix in Grocery & Snacks for the quarter. We’ve also seen inflation in more broadly in vegetables in different ingredients and sweeteners starches. We have some inflationary areas. These things ebb and flow. We still — and we’ve talked about this in the past, we still have inflation in our manufacturing operations, both with our labor and overhead and transportation is relatively flat, a little bit inflationary.
So we’re pretty much in line. It is slightly higher but generally, we’re managing it to the full year expectation.
Chris Carey: Okay. Perfect. Just — and then a follow-up regarding the comment on pricing, just you mentioned tomatoes among other things, in the grocery and snacks business. How would you characterize the positive pricing there in the quarter? Was that due to your anomalies in the base period, anomalies in the quarter itself? Or are we looking at what appears to be a more durable positive price mix for that division from here on new pricing or lingering pricing which is now being fully reflected in the P&L. Thank you very much.
