Dara Mohsenian: So, on the coffee side, you were very clear and comprehensive in your remarks on the second half improvement and what drives the improvement versus the first half. But in theory, it’s a pretty big dichotomy. So, I guess it just be helpful to hear how much visibility you think you have at this point in coffee, particularly relative to some of the first half disappointment, maybe rank order some of the factors you mentioned in terms of driving that sequential improvement? But also just longer-term, broader context for the volatility we’re seeing this year and what you think it sort of means for future growth prospects, as we look out longer term? And then be, I’m sure coffee will get a lot of the air time as usual.
But we probably be remised if we didn’t touch on the US refreshment and international strength in the first half of the year. How sustainable do you think are the factors there that have driven the strength as you think about go forward trends from here? Thanks.
Robert Gamgort : Okay. I’ll take both of these. I think it’s always helpful and I feel like I’d remind everybody that’s on many of our calls, but I do think it’s helpful step back and look at the coffee category over the longer term that gives you the best context. It is always short term volatility, particularly in the COVID and post-COVID world. But if you go back and it’s in our press release if you go back and you take a look at pre-COVID, 2019 to our latest period, the CAGR on Pods is mid-single-digits, CAGR on brewers, about mid-single-digits. And so there is a lot of bumpiness and it’s been tough for all of you to navigate through the pluses and minuses over the past couple years. But that context is always helpful and it always serves us really well to look at the longer term trends, which is this is a growing category driven by zoomers converting from brewing by the Pot to brewing by the cup.
We are the drivers of that. Our partners benefit from that. Our retailers benefit from that, so does Keurig, because we participate in 80% of those transactions. So, that’s the most important thing for everyone to always takeaway when you look at any quarterly results on the business. In terms of the back half of the year and visibility, it’s a really good question. The area that’s been most challenging for us over the past couple years is predicting consumer mobility. And it’s not a concept we even thought about prior to COVID. So be able to match up consumer mobility against in-home coffee consumption we had to learn a lot there. And then also being able to predict it is really a difficult thing to do given the economists are having a tough time doing that.
But I think that noise is largely behind us, which is the most important takeaway from this conversation and we should see a normalization in category growth, as behavior from consumer perspective also normalizes. The one area where we have had and still have the most visibility to is our margin. And I know that’s been another area where there was pressure on the business that we explained as we look forward and we understand coffee pricing in advance, we understand our pricing. And we also knew that the agreements that we had with our partners and our private-label partners, as well is that we have the ability to recover inflation, but it had a lag effect to it. And there’s only so much that you can talk about before you want to see the proof.
