Pamela Kaufman: Just in thinking about some of the headwinds that may be abating over the couple of quarters, do you have an estimate of how much you think that Snap may have impacted your overall growth or industry growth? And also just the improvement in on-shelf availability, how much of a tailwind can that be to your growth outlook?
Jeffrey Harmening: Yes. I think, Pam, I’m not going to — this would be unsatisfactory, so I apologize, but I’m not going to try to quantify either one of those two things only because there are so many there are so many moving pieces. We’ve got — we are lapping pricing as well in the external environment. But I would say the SNAP benefits are pretty modest. They’re there, but they’re pretty modest. But look, I’ll take a modest benefit at this point. The on-shelf availability should also provide a modest benefit to us. But again, that will be over time and it won’t be a one-time event. And that will really start kind of the end of April, beginning of May, we would start to see the benefits of that into our first quarter. And so I think as we talk to you in June, hopefully, we’ll give a little bit more satisfactory answer about kind of what we’re seeing because we will — we have seen both of these things play out for a period of time.
Pamela Kaufman: Okay, understood. And then just on corporate expense, on a pretty notable reduction year-on-year. What’s contributing to that? And should we be extrapolating these levels going forward?
Kofi Bruce: I appreciate the question. The primary driver in the quarter was a reduction in our incentive-based comp accrual as we obviously are tracking a lower top line performance and comping last year. where we had to increase it pretty sizably on outstripping our top and bottom line performance last year. So I expect this to be a benefit that we’ll see specific to the quarter. The other item is related to our recall insurance recovery, which we booked in the quarter. So those are specific to the quarter, and I wouldn’t expect that to be part of the base expectation going forward.
Pamela Kaufman: Okay, thank you.
Jeffrey Harmening: You bet.
Operator: We’ll go to the next question from John Baumgartner at Mizuho Securities.
John Baumgartner: Good morning. Thanks for the question. Jeff, I wanted to come back to the value-seeking consumer. And in North America retail, the areas where volumes have still been lagging. You look at cereal, go, frozen snacks where category pricing is up one-third to 50% in 2019. What can we do at this point? Any levers left to maybe enhance the volumes that are a bit more independent of the macro. I mean can you go to the pack change as you’re doing in pet, can you innovate or market consumers into higher prices? Or is it just that some categories overshot on pricing, relative to what consumers can bear and now it’s down either taking prices the other way or just waiting for consumers to grow into these levels financially?
Jeffrey Harmening: Yes. Thanks, John. A couple of things I would say. The most important thing I would start with is that what you see in all the categories you mentioned, is a significant change in input cost inflation. So we’ve been the recipients of quite a bit of inflation over time. More than 30%, in fact, I think, is 32% over the past three years or so. So the cause of prices going up really has been input cost inflation and the prices that we received. As we look category-by-category, we don’t think we’re out of line to where we were pre-pandemic actually. And I think as important as consumers seek value, they seek in a variety of ways. The most important way are the benefits that our brands provide. And so part of the reason that we continue to invest in media and marketing and will continue to do so is that our brands have value and what they provide materials, provides heart health.
And Pillsbury provides quick, easy, convenient meals at dinner time. And so that’s the most important thing. But then more specifically, consumers also look at value in different ways when it comes to pricing and some want to buy in bulk. So it’d be going to a mass store to buy big boxes of cereal, for example, for the lowest price per ounce, where they’ll be buying 80 packages of fruit snacks at a time at a warehouse store. Otherwise, they feed the soccer team. Otherwise, they may be stopping off at a dollar score store, a discount store to buy a one pack at a time. And so there’s not one monolithic consumer. Every consumer looks for value in their families in a variety of different ways, including trying to feed their families at home. So we don’t think that our pricing has gotten ahead of inflation.
In fact, it hasn’t. And we feel good about where we are in the categories. I think what we have to do is lap some of the one-time on self-availability, things we’ve seen now, we’ve lapped pricing. And once we do that, we feel good about our ability. And I think you see that in the third quarter. We — in North America retail, we grew market share in about 45% of our categories in the third quarter, which is a significant improvement from what we had seen in the quarter before. And hopefully, as we lap some of these other factors, snapping on self-availability, we’ll see continued improvement.
John Baumgartner: Alright. Thanks, Jeff.
Jeff Siemon: Okay. I think that’s all the time we have. Before we wrap here. I think I’ll pass it back to Jeff for some closing comments.
Jeffrey Harmening: Yes. So well, thanks, everyone, for the time this morning. I guess I would start by saying we’re encouraged by our third quarter results, particularly improvement in competitiveness in our categories. We’re competing effectively and we thought that we would. And a lot of this is driven by lapping some pricing from a year ago and our ability to continue to execute well. We have innovated well. We have grown distribution. We have done — we’re executing our plan well. As we look to the fourth quarter, I mean, there are some timing issues as we talked about with expense — the timing of expenses. But broadly speaking, we would expect our third quarter sales to kind of play out in the same magnitude that we saw in the third quarter.
