But what we’ve seen so far is that, that is more than offset by the migration of the franchise, especially as we’ve gotten complete distribution on our Fresh From the Kitchen product and some of the other more premium products we’ve added the lineup. So on balance, we believe that there’s continue to be mix gains rather than a mix headwind. Our data, we obviously showed you the data through the end of September. We’ve had the complete nutrition product in the market in October. We’ve seen what the sales look like, and we still feel very comfortable that it is not dilutive.
Jason English: That’s good stuff. I appreciate that. And by the way, congrats on all the operational improvement, I should open with that because obviously making great strides, and I want to make sure those are recognized. And it’s great to see the driving margins, sticking on the new more value-oriented product. Is that margin neutral, margin dilutive or penny profit neutral, penny profit dilutive?
Todd Cunfer: It is margin neutral.
Scott Morris: So we think that’s going to open up a lot more penetration, bring people into the portfolio and then keep some people using it on a more consistent basis. Performance has been extraordinary. It’s very new and performance has been extraordinary already. And from where we’re able to watch it so far, the results have been excellent. And again, I think that across the portfolio, there’s lots of mix and trade-up opportunity. Those items are more available. We’re adding things on the other end of the entire spectrum on our portfolio on the higher end of the spectrum. We’re seeing great growth with those items. Large dog is a great example that was called out too. So we’ve got all that and then eventually going to, as I mentioned earlier, we’re going to start adding these cases in and like these bulk packs. And it’s going to change the dynamics of the business, bringing it more and more kind of mainstream and main meal.
Jason English: I hear you. It makes sense to me. Cool, thank you. I’ll pass it on.
Scott Morris: Thank you.
Operator: Thank you. Our next question is from Michael Lavery with Piper Sandler. Please proceed with your question.
Michael Lavery: Thank you. Good morning.
Billy Cyr: Good morning.
Michael Lavery: Just looking at the household penetration growth by income bucket. And in the last 52-weeks before this complete nutrition launch, you already have that lowest end consumer household penetration up 17%. And so I guess what’s driving that? And with this launch, how much higher do you think that should go? If there’s already that good momentum, is that really where you see a kick up to some much faster pace? And how do we think about the magnitude of that?
Scott Morris: So look, as part of our strategy over time, we want to make sure we have an incredibly wide portfolio of products that really span different price points, different offerings and also different benefits to consumers and what they’re looking for in products. So we want to make sure we have everything out there. One of the things that we have the opportunity to do now is as we get more and more scale, we have the opportunity to bring products that are even more value-oriented and build that piece out. And what we know is that sometimes, the initial price point is a little bit of a shock for some consumers. So the goal is to bring them into the franchise let them kind of migrate through and then migrate up over time and use more of our products every single day.
Michael Lavery: Okay. That’s helpful. Just for the consumers’ understanding, I’m looking at your slide with complete nutrition package. And obviously, it doesn’t say nearly as good or almost as good as some of these others, but how do they understand the differentiation between this and the rest of the portfolio. Obviously, the price point conveys a bit of that message. But what’s the right way for them to understand how they’re different and what the value proposition distinctions would be?
Scott Morris: I mean really, it’s definitely — people make assumptions on products, a lot of times based on price points. So that’s probably the number one and leading indicator and having an aggressive price point is a piece of it. But one of the other key pieces is we have brought a little bit more whole grains, complete carbohydrates into this product. And we’ve kind of called that out on the front. It’s very small, and it’s subtle, but it’s very focused. And it can be — it is to Freshpet, our incredibly high standards. It is kind of meets and exceeds our standards. I will be feeding my dogs complete nutrition on and off. It’s going to be rotated in. It’s an incredible product that we’re proud of, but we can also offer a value, which can keep some people out of getting into the Freshpet portfolio.
Michael Lavery: Okay, thanks so much.
Operator: Thank you. Our next question is from Bryan Spillane with Bank of America. Please proceed with your question.
Bryan Spillane: Hey, thanks, operator. Good morning, everyone. Actually just two really quick ones for me. One is — and I think this is inferred in all the commentary made, but I think I just want to make sure clear, based on where you stand today in terms of cost inflation and productivity. It doesn’t sound like another price increase is contemplated. So I just want to make sure that, as I was hearing that correctly.
Billy Cyr: Yes. I mean, obviously, until we price our chicken, we can’t say for sure. But our read of the tea leaves would suggest that we will not be taking pricing at least not in the first part of next year. So we feel comfortable about where we sit from a commodities perspective based on the markets and the small portion of our commodity costs that we’ve already locked.
Bryan Spillane: Okay. And then the second question, in the prepared remarks, Bill, you talked about there was a discussion about, kind of, balancing demand stimulation with not overheating the supply chain, basically, right? So can you talk a little bit more about that? Just how do you, I don’t know, like what does the dial look like? How do you turn the dials to make sure you’re not overstimulating demand? And I guess, what are the bandwidth, right, in terms of just how much you could actually exceed the 25%. Just trying to get an understanding of kind of how you approach that?
Billy Cyr: Yes. I mean one of the benefits of this business is it’s probably one of the most reliable and predictable businesses that I’ve seen in my 30-some plus years of CPG. We don’t do any trade promotion, no discounting. The single biggest driver, and by far, the vast majority of the growth comes from advertising investment. And so our dial is advertising investment. It’s not literally you turn it on and tomorrow, you see it, but if you turn it on, you start adding the users that will contribute meaningful volume over the coming months. And so that’s the way which we can control the demand going forward. And that’s where we spend the bulk of our time is literally laying in advertising spending against what we think our capacity needs are going to be.
