Ladies and gentlemen, thank you for standing by, and welcome to the Campbell’s First Quarter Fiscal 2021 Earnings Presentation. At this time, all participant lines are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference may be recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Ms. Rebecca Gardy, Vice President, Investor Relations. Ma’am, you may begin.

Good morning, and welcome to Campbell’s first quarter fiscal 2021 earnings presentation. I’m Rebecca Gardy, Vice President of Investor Relations. Following the completion of this call, a copy of the presentation and the replay of the webcast will be available at investor.campbellsoupcompany.com. A transcript of this earnings conference call will be available within 24 hours at investor.campbellsoupcompany.com. Turning to slide 3. Today we will make forward-looking statements which reflect our current expectations. These statements rely on assumptions and estimates which could be inaccurate and are subject to risks. Please refer to slide 3 or our SEC filings for a list of factors that could cause our actual results to vary materially from those anticipated in forward-looking statements. Because we use non-GAAP measures, we have included in the appendix of this presentation a reconciliation of these measures to the most directly comparable GAAP measures. On slide 4 you will see our agenda. With us on the call today are Mark Clouse, Campbell’s President and CEO; and our Chief Financial Officer, Mick Beekhuizen. Mark will share his thoughts on our overall first quarter performance and in-market performance by division. Mick will discuss the financial results of the quarter in more detail and review our guidance for the second quarter. We will close the call with an analyst Q&A. And with that, I’ll turn the call over to Mark. Mark?

Thanks, Rebecca. Good morning, and welcome to our first quarter earnings call for fiscal year 2021. I would first like to wish everyone all the best as we head into the rest of the holiday season. I know I am grateful this year for the entire Campbell organization, especially our colleagues in the manufacturing plants and our distribution teams, who have been producing and shipping to meet the higher demand the pandemic has brought while prioritizing the safety of our people and following our heightened in-plant protocols. Turning to the results. As you saw in our press release, we reported another strong quarter from both a sales and profitability perspective, with growth across all our key metrics as we continue to execute in a volatile environment and against our strategic plan. Our strong top line growth combined with gross margin expansion and value capture synergies, despite the impact of ongoing COVID-19 related costs, led to better-than-expected adjusted EBIT growth, up 18%, and a 31% increase in adjusted EPS to $1.02 per share. It also was a strong executional quarter where we were able to strengthen supply levels to allow our retailers to improve inventory going into the crucial soup and holiday season. In addition, we announced that our Board approved a 6% increase in our quarterly dividend, reflecting the company’s strong earnings performance, cash flows and increasing confidence in our long-term growth prospects as well as our continued commitment to shareholder returns. Organic sales in the first quarter increased 8%, led by 12% organic sales growth in Meals & Beverages, reflecting our continued investment in our brands to attract and retain new household as retailers also rebuilt inventory levels. Turning to our Snacks division, we drove solid growth with organic sales up 4%, reflecting sales increases across the majority of…

Thanks, Mark. Good morning, everyone. As Mark just shared, we had a strong start to fiscal 2021 with another quarter of strong sales growth, driven by elevated consumer demand, gross margin expansion, despite the COVID-19 cost headwinds and robust adjusted EBIT and adjusted EPS growth ahead of expectations. I’ll now review our first quarter results in more detail and provide guidance for the second quarter. For the first quarter, reported net sales increased 7% to $2.3 billion. Organic net sales increased 8% in the quarter which excludes the impact of the sale of the European Chips business. Adjusted EBIT increased 18% to $463 million as higher sales volumes improved adjusted gross margin performance and lower selling expenses were partially offset by increased marketing and slightly higher adjusted administrative expenses. Adjusted EPS from continuing operations increased by 31% or $0.24 to $1.02 per share, reflecting an increase in adjusted EBIT as well as lower net interest expense. Breaking down our net sales performance for the quarter. Organic net sales increased 8% from the prior year. This performance was driven by a 6 point gain in volume across the majority of our retail brands, offset partially by declines in food service. Lower levels of promotional spending in both segments drove a 2 point gain. The divestiture of the European Chips business negatively impacted net sales in the quarter by 1 point and the impact from currency translation in the quarter was neutral. All-in, our reported net sales were up 7% from the prior year. Our adjusted gross margin increased by 100 basis points in the quarter to 34.8%. Favorable product mix, which drove a 30 basis point improvement in our adjusted gross margin, was largely driven by the increased contribution from our soup products within our Meals & Beverages segment. Separately, we…

Thank you. [Operator Instructions] Our first question comes from Andrew Lazar from Barclays. Your line is open.

Hi, there. Maybe to start with Mark, in the vein of exiting the pandemic in a stronger position than the company entered it, you’ve talked about a number of compelling metrics such as household penetration and repeat and buy rate as well as habit changes by consumers. I’m curious really more what you’re hearing from your key retail partners around how they view relevance of key categories and not so much in today’s crisis per se, but what they’re telling you about once things normalize and how that compares to maybe a year or so ago? And then I’ve just got a quick follow up.

Thanks, Andrew. Yeah, I think if you look at how we’re viewing the indicator as we kind of come through the pandemic and why we’re continuing to see a growing level of confidence kind of with each month and with each quarter, I think that’s very consistent with what retailers are experiencing as well. If you look at kind of the macro trends that we point to, they recognize like we do this kind of infusion of millions of new households that are now cooking at home that are building confidence in that area, becoming more efficient and looking for meal solutions to become very, very prevalent. So that’s one example of a macro that we’re trying now work? together to bring to light whether it’s in the retail environment or the online environment which we did a lot of work on around Thanksgiving, I’m sure we can talk about that a little later. But also, the dynamics, the other macro dynamics that we look at that are continuing, like I said, to build confidence is almost regardless of the timing or the sequence of events relative to vaccines or how the pandemic unfolds over the months ahead, we do expect and I think retailers would agree that a sustained view of in-home eating, whether that is because people more slowly returning to normal life or the fact that more people are going to be working from home or this dynamic of more in-home socialization which has been driving certain segments of snacking at a very aggressive rate, all of these dynamic as we continue to go forward we expect to be maintained. And I think the other element that’s very relevant in the planning with customers right now is that we recognize the economic strain across the country and the impact that that has on people making decisions relative to value, which has resulted in a much higher sourcing obviously through the pandemic, but even projected ahead of people sourcing meals from grocery stores where we see a terrific opportunity to build upon the behaviors that have been created in the near term as we think about building momentum out of it. So I would say, Andrew, for us and I think for most retailers, we do not see this as a kind of episodic moment, and I think as time has gone on, you see more and more in the numbers, I talked about the repeat but one of the things that’s most significant in our numbers is the dramatic nature of the return to our brands from younger households and millennials specifically. They have the highest increase in buy rates and the highest increase in repeat rates of any of the consumer demographics that we see, and I think that, again, bodes very well for our ability to retain a meaningful number of these households going forward.

Thanks for that. And then just a quick one. Within the 5% to 7% sales growth forecast for fiscal 2Q, could you put a little bit of perspective or color around that and kind of how soup might fit into that or what the expectation around soup is within that 5% to 7%? It sounded like you’re now in a place where retailers have rebuilt inventories for the coming sort of few winter months and such. Just want to get some perspective there.

Yeah, sure, Andrew. I think as you look at Q2, and as you look at inventory in particular, I am very happy with where we have been able to get to as we go into Q2. The honest answer is we’ve made some thoughtful and I think appropriate decisions in Q1 that may have had a little bit of a short-term headwind on share in some cases as we moderated some promotions but the goal in mind was that in the most critical part of our soup season which is really in the second quarter period as well as going into the holiday period, that we were in a much better position and I think we achieved that. Now, again, I would say that we’re continuing to watch demand and as we project these numbers it is difficult to anticipate what demand is going to look like as it goes forward, but I think we continue to expect demand to be elevated and I think in Q2 we would expect at least on the Meals & Beverages side to have our sales, our net sales a little bit more in line with consumption as we did a lot of that heavy lift on inventory in the first quarter. Now I think on Snacks the story’s a little bit different as we have said before, we thought it would take us really through the entire second quarter into the first half to get inventory fully back on some of those businesses. It’s an interesting dynamic in snacking because you look at the total 4% or 5% in market growth rate, which looks a little lower than relative food dynamics in the industry. But when you start to pull it apart, what you see is those segments that have been more impacted by COVID like salty Snacks, where for the quarter our business was up 11% in market, or our more indulgent products like cookies where we were up 8% in Q1, offset of course a little bit by those away from home Snacks that have been a little bit more softer than the impact of those that are more relevant in the moment. We’ve got some pressure on supply there that we’re rebuilding. The good news is we’ve added capacity in many of our facilities, done a good job navigating but I would expect there to be some inventory rebuilding continuing on snacking as we go into the second quarter. So I think what’s called the 5% to 7% a prudent view of a variety of different variables but of course the good news is I think we’re in a much stronger supply position so we can adjust to a higher end of demand if we see it. We’re ready for that. Again, feel very good about some of the trade-offs we made in Q1 to get us to this position in Q2.

Thank you. Our next question comes from Ken Goldman from JPMorgan. Your line is open.

Good morning. It’s Tom Palmer on for Ken. First, just wanted to ask on guidance. You suggest relatively flat margin year-over-year, just given you’ve got EBIT growing comfortably to sales. Would have expected maybe a bit more of a flow-through given mid single digit sales growth. Maybe give some color on what might limit margin expansion next quarter. For instance, are we looking at a big step-up in marketing and promos? Is cost inflation becoming more of a headwind?

Yes. So thanks, Tom. I’ll start it and then let Mick give you a little bit more of the ticks and ties to the number. But I would say that although we made, as I said in Q1, some choices from a promotional standpoint to enable us to kind of be ready for the key part of the year as we think of when promotion activity is very important, so as we go into Q2 I would expect us to be in a position where we’re with a fully loaded promotional calendar that is really designed to be competitive, that’s back to kind of fully supporting the brand as we need to. Although in Q1 I think you see some uptick relative to in gross margin relative to the reduction in promotion, I think that will go away a bit in Q2. I think underlying all of our fundamentals on the business, though, remain very strong. So on top of our cost savings initiatives, very good about our productivity, our ability to navigate and balance COVID costs. We’re continuing to feel very much in control of that situation. And so really the headwind if you will on margin is much more related to the investments we’re going to make.

On the one hand, as Mark mentioned with regard to the promotional spending and then the second piece is further down in the P&L more with regard to the marketing and we were continuing to support obviously our brands. You saw that in Q1, in Q1 you saw that we had a 1% increase in marketing and selling expenses. That was really kind of underlying within that was 17% increase advertising and consumer promo. But then within that, there were offsets from a cost savings perspective. If I look more at Q2, I probably expect a little bit more of an increase on the marketing and selling side.

Tom, just as a point of reference to that, that’s really already started and I think the good news is that what should come along with that is the improvement on the share positions which was a bit more mixed in Q1 but as we exited the quarter and even into the more latest IRI data as you look at that, November, you see some pretty significant pivots. Like for example, one of the places that we made a lot of tough calls was on our Ready-To-Serve and in particular our Chunky business where we did see some softness on share through the latest four weeks we’re up over a share point of growth on our Ready-To-Serve, even stronger on our chunky business where we’ve kind of got all of the cylinders firing now from a promotion, marketing, all of the above. You see similar sustained momentum on Pacific, on condensed and even on the Snacks business as we mentioned in our comments, we’re seeing improving trends as it relates to Goldfish, which obviously has been a little bit of a trickier one as the consumer dynamics have impacted that one a little differently than they have some of our other businesses that we’ve had to adjust for. But I think the good news is there’s great evidence that that’s already driving the kind of impact that we want in-market and I think that was the game plan. So, so far, so good.

Great. Thanks for all the detail. Just a quick follow up, actually to Andrew’s question. So you’re guiding to slightly lower organic sales growth in the second quarter. You characterized it as prudent. Maybe I can just ask this explicitly. To what extent does your guidance assume that underlying takeaway decelerates relative to last quarter versus less help from timing items, like inventory build or Thanksgiving compares?

I think we expect Q2 to continue to be an elevated level of consumption. I think what you see us probably planning or kind of adjusting a little bit is a more consistent run rate on consumption going forward with a little less contribution potentially from inventory. But I will tell you, again, if you look at the more recent trends, we’re feeling very good about performance through Thanksgiving and we’ll continue to watch that unfold as we go. And like I said, the good news is in this quarter or in second quarter I think we’re going to be in a very good position to kind of adjust to higher demand levels if necessary. And again, as you can appreciate in this moment, it’s a lot of unchartered water so we’re trying to get the balance right, but I think the idea that you should definitely take away from us that as we continued to progress through the year, we’re growing in our level of confidence and belief in ability to continue momentum going forward.

Thank you. Our next question comes from Jason English from Goldman Sachs. Your line is open.

Hey. Good morning, folks. Thank you for slotting me in, and congrats on another strong quarter. Just a couple of questions, clarification of kind of what’s been said. First, want to make sure I heard you right on some of the comments, answers to the last question. Of promotions, net price benefit of promotions added 125 bps to GMs this quarter. You said that benefit goes away next quarter. GMs were up 100 bps. My interpretation is you’re effectively suggesting that gross margins will be flat to down modestly going forward. Did I hear that right?

Yeah, I’d say closer to more flat is kind of where we’re expecting. Obviously, we don’t guide directly to gross margin. There’s a couple variables in there that are tough to pin. I do expect, though, that what I would say broadly is where we did make some of those decisions to moderate promotions in Q1, we will not be making those decisions in Q2 as we’re now more kind of in a stronger position for inventory. So I would expect to see a more historically robust level of promotions in Q2.

Building on that promotion comment, do you think we’re at a point where you can operate consistently with a lower level of promotion than maybe you did pre-COVID or should we expect that promo line to slip to a deflationary headwind later this year and neck year?

I don’t think that we – I think we’ll continue to evaluate and I think I talked about this in the year-end period, where as we were exiting 2020 and certainly as we’ve navigated the first quarter of Q1, what we’ve tried to do is be as thoughtful and surge call as possible in balancing both the marketing expenses and the promotional lines and where we felt like there were opportunities to perhaps drive a little bit more on the marketing side, a little less on the promotional side, certainly in Q1 where we made a little bit more of a decision on a couple businesses, all right, we need to get back to strength going into a more important part of the year, and of course doing all of this very much in conjunction with our retail partners, I think what you’ll see is a total investment line for the company that remains very consistent and I think that’s – we’re spending at a level that I believe we feel good about. Whether or not you’ll see some balancing between line as we continue to work through, okay, where is the best ROIs, what’s the dynamic in the marketplace competitively, all of those elements I think will influence it, but I would not expect you to see radical changes in investment for us going forward, other of than the continued sustained spend that we’ve kind of put into our base now. Does that make sense, Jason?

Yeah, I mean, to my ears, I heard there’s a likelihood that promotions come back, price goes negative and you cut A&C to offset that. I don’t want to put words in your mouth but that’s kind of what I’m hearing.

Yeah, I think there may be some balancing on certain businesses, but I also think the that our total A&C level as we look at it from a full year perspective is at a pretty good level. I do think there may be some calibration there, but I wouldn’t expect it to be significant.

Understood. God it. Thank you very much.

Thank you. Our next question comes from Bryan Spillane from Bank of America. Your line is open.

Hey. Good morning, everyone. Maybe just to follow up on Jason’s question and that last point around A&C and maybe just tie this also into e-commerce. Just Mark, you’ve done a good job capturing millennials and incremental household penetration with millennials. How is the advertising mix? How have you adjusted the advertising and how you’re spending on advertising to affect that? I guess what I’m – underneath the question, is it less traditional TV, more digital, more social media? And if that’s the case, does that sort of imply that you don’t necessarily need to spend in A&C at absolute levels that you did in the past and maybe tied to that also in terms of e-commerce, if this has become kind of a platform or I’m sorry a level that’s higher than it would have been previously, how does that factor in how you’re thinking about how you spend promotional dollars going forward, meaning is it less end caps and more in support of the click and collect?

That’s a great question. The short answer is, it’s been a pretty meaningful shift as we think about where – and not just purely because of e-commerce but also because of just simply how millennials shop and how they view the world of engagement with brands. So even if they’re still shopping traditional retail, the ability for us to be more effective with our spend in digital is significant. So if you take Q1 as an example, from a year ago we doubled our investment in digital spending and it now represents over 50% of the total spend in A&C. So that’s a pretty dramatic shift for us, from where we would have been historically and the great news is, given a lot of the work that we’ve done in the last two quarters, we feel like our understanding of the ROIs and the impact that it’s having is giving us great confidence that we can drive tremendous efficiency within this line item and as you point out, one of the things that’s always been great about digital is if you can unlock the right content, the right placement, you can tend to drive some impact or more impact on an investment level, maybe a little more modest than what traditional TV campaigns cost. And if you translate that to really how it’s working, we’ve made pretty significant investment too in a lot of partnerships where our dollars go further. So you might have seen over the holiday, we had great program with Instacart which has been one of the faster growing third party shoppers where we had a – their home page was basically a Campbell’s page on if you spent $25 on all of our kind of holiday products, you got free delivery for the trip. And those…

Thanks, Mark. If I could just slip one in for Mick. The CapEx, I don’t know if I missed it. Did you give an outlook on capital spending for the year?

I didn’t, but we did that last time around and I am still, based on Q1 spending that was pretty much in line with our original expectations.

Okay. Great. Thanks. Have a happy holiday, everyone.

Thank you. Our next question comes from Chris Growe from Stifel. Your line is open.

Hi. I just had two questions for you. The first one, and it’s a built of a follow-on from earlier questions, was I think about this rebuilding of inventory that’s occurred at retail. That’s obviously availability of product. Have you also been able to increase your SKUs, those got paired back during the height of the pandemic? Are you back to what you would call a normal sort of shelf set or maybe you want the shelf set to be sort of going forward?

I would say we’re probably 75% of the way back. We have made up a lot of ground in the first quarter which is what we expected and, again, I think a lot of different metrics to measure how we feel about Q1, but perhaps one of the ones that’s most significant to me was our ability to execute in a very complex environment at a very high level where we were rebuilding inventory, bringing back SKUs that we had pruned or put on hold during the heart of the pandemic. And so although you still see a TDP decline head over head, you see that improving with kind of each month and that is representative of us coming back with the SKU as well as some innovation that’s kind of intermingled there. But I’d say we’re still – there’s probably about a quarter of items that we’re working on but some of the really important ones, for example, on Prego, one of our most unique and differentiated products that we’re back fully in business is our alfredo or our white sauce within Prego. Makes a huge difference for us on share and you see that in the numbers as we’ve been able to come back. But there’s a variety of examples like that where we’ve been able to improve supply and/or create enough room that we can bring some of the meaningful complexity back. As I’ve said before, I do think there is a percentage of those TDPs that we probably in the end will – if we’re going to replace it, we’d rather do it with innovation. So I’d say a big step forward in Q1, but still with a little bit of room to go.

Okay. That was helpful. Thank you. Just a second question. In the gross margin bridge, you outlined this net pricing benefit 120 basis points. Does that quantify, does that incorporate the benefit of lower promotional spending? For example, is that one of the factors within that? So because that was about a 2% benefit overall. Want to get a sense of is there an underlying net pricing increase in your business and promotion is separate of that, if that makes sense.

Yeah, no, it’s a really good question. I mean, basically, just think about that 120 basis point net pricing increase as lower promotional spending. There’s no -- underlying price movement, yeah. I mean, sometimes you see movement between promotion, the EDLP in some places. So you see if you look at any given moment on pricing in the quarter you would see some numbers that might defy what we’re describing but if you net out the total impact to the business on the places where we had backed off on some promotional spend, you see that in pricing numbers and that also of course translated into the margin as well.

Okay. That’s very helpful. Thank you, and happy holidays to you as well.

Thanks.

Thank you. Our next question comes from Steve Powers from Deutsche Bank. Your line is open.

I guess two questions. Maybe the first just to circle back on framing of the second quarter guidance. In the first quarter Meals & Beverages showed that it’s capable of doing a $1.3 billion plus in revenue when everything comes together. As we look forward, given the accelerating demand this winter, supply capabilities you built over the last nine months or so, is there any reason to think that that absolute dollar level of sales in the segment won’t be higher in Q2 versus the first quarter. Assuming there’s not, I guess the second kind of parallel question that implies only very modest growth in Snacks in the second quarter, if any at all, if my math is correct. So just love your thoughts there. It sounded like you thought Snacks would really catch up would consumption, but it seems out of sync with how I’m thinking about the second quarter numbers. So any help there would be great.

Yeah, it’s a little choppy. But I think I got it. If you kind of pull the pieces of the business apart and look at kind of what’s the underlying assumptions are in Q2, if you look at our overall enterprise and market consumption for the quarter, we’ve been in that 7% to 8% range. I think as we look forward and again always the benefit of seeing time pass from month to month, depending on where the elevated level of demand stays and whether it’s consistent with that, obviously we would be at the higher end of our guidance range. I think what we’re suggesting is that you may see a little bit less of an incremental contribution from inventory rebuilding in Q2, but conversely, I think on the Snacks business, you will likely see some very I think improving and strengthening numbers as well as the fact that you’ll have some inventory recovery that’s going on in the Snacks business in Q2, a little more so than the Meals & Beverages side. So if you take those two together and try to average them out, there’s – depending on where you peg that overall demand level, you lean more toward the higher end, anything else kind of in that range. So we’re providing kind of a perspective and like I said, I think we’re certainly trying to be pragmatic but at the same time I think there’s that difference of pivot between the two divisions. Again, just to reiterate what I said earlier on snacking, I think sometimes in the COVID world where you see kind of this consistent high single digit, double-digit numbers, snacking is a little different and as I said, within the segments you have some segments like salty Snacks which are behaving that way where we see double-digit growth kind of quarter in, quarter out, our more indulgent products although we are facing a little bit of headwind on supplies as relates to cookies, have performed in the high single digit ranges and then Goldfish, remember, partner brands remain a point of a headwind as we continue to moderate those down. I think those are the things that are moderating the overall total number in Snacks a little bit lower than what it might feel like as we kind of describe the performance, but I think the balancing act between that kind of revolves around this underlying in market growth rate of in the higher single digit range and I think we’ll watch that very closely as we go through the quarter and I would imagine that would be a pretty good proxy for investors to kind of anticipate where we are in this as well.

Thank you for that. Hopefully you can hear me okay. I guess the second question I had was as we look a year from now, we’re all hopefully going to be operating in an environment with relatively full vaccine distribution, significantly improved social mobility and I’m curious whether you can expand on what you’re doing now to ensure that when that day comes you’ve been able to retain as much of the unexpected demand you gained in 2020 as possible of. I mean, are there specific initiatives you can point in to? Are you finding yourself actually able to do everything you would ideally want to just given the ongoing supply constraints, demand volatility, just the other potential distractions that you’re facing?

Yeah, no, that is a major question for a lot of investors, and I would just tell you guys, as we’ve continued to move forward, I absolutely am building a higher degree of confidence in our ability to retain households and I’ll point to kind of three big areas. The first is these macro trends that – whether it is cooking or quick scratch cooking as we call it, in-home eating, just imagine the number of businesses and how slow the return may be to an office environment, regardless of the timing of when a vaccine may be here and the number of millions of incremental lunches and in-home of snacking occasions that we’re going to be able to be very well positioned to meet, I think there will be pressure economically, however you want to describe it, that’s going to create a value proposition where shopping for your meals from the grocery store continues to be a very attractive and affordable way to eat. I also think we can’t underestimate the migration that has happened back to traditional brands in the grocery store. I know there’s a lot of speculation on whether private label availability is the bigger hindrance. But I can tell you that as we look at every metric of sentiment with our core brands, where consumers have come back or new consumers have come in, sentiment is quite positive. This does not in any way strike me as a moment where they’re buying us because something else is not available and so I think it’s then switching to the second big reason to believe is all of the actions that we’re taking right now. Our increase in marketing, our shift to digital, our understanding of what’s working. If you look at this soup season, it is…

Thank you. Our next question comes from David Palmer from Evercore ISI. Your line is open.

Thanks, and great conversation so far on that advertising consumer promotion piece. Just wanted to follow up on that and just big picture for Campbell, your A&C spending will be probably highest levels in eight or nine years if we take the increases here in the first part of this fiscal year. It’s a bit of a reversal for not just Campbell, but for the food space overall. And, Mark, you’ve seen this in several seats now where a food companies were taking down advertising spending for most of that decade, 2014 to 2019 and I guess to some degree that reflected a lack of confidence that advertising and consumer promotions were working. And you mentioned the shift to digital. Is it as simple as that channel, perhaps, versus TV? Could you speak to that and why the ROI would be better today and why you have confidence in that? And I have a quick follow up.

Yeah, no, I mean, look, this is a – it’s a great question and a fairly healthy conversation on its own. But I will tell you that, no, the answer is not just move the money to digital. And therefore, it’s going to work better or you’re going to be successful. What is so important in this is really understanding the intersection of content, placement and then how you’re linking it with the shopping behavior. Those three things to me are the big insights on how you make the digital spend more efficient and improve the ROI. And a lot of times I think people felt that it was as simple as maybe I should put my TV ad on Facebook or of I should just, if I’m there where consumers are, it’s going to work, and the answer is that does not work. It requires all three of those things to come together to really have the impact that we’re seeing now and even for us, I think as I’ve said many times where we may have been asked a couple questions on why we continue to spend A&C and supply issues, part of the reason was that we really felt we needed to continue to be out there and making sure that we fine-tune what’s working so that when we find ourselves in the position we’re in today, where supply is back in place, we are loaded and ready to go as it relates to really understanding it. And I think condensed soup is probably the single biggest example of that in the portfolio right now where you see dramatic sustained growth, you see it in millennial targets, our ROIs at our investments and the greatest of the activity that we have out there is just terrific. So I’m -- again, you learn all the time. The one thing I’ll say about digital too, the minute you think you’ve got it figured out you’ve got to stay nimble and moving and agile with where consumers are going but I think we’re in a very good position and I feel good about the impact we’re having.

Just a follow up. I think in your question and answer with Jason touched on this. There’s going to be – there will probably be some room that you need to have on promotion spending coming out of this period on the back end, on the bricks and mortar side of things at least. You had some plans in terms of merchandising and organizing the shelf that probably were delayed. So not only would you get back to maybe a run rate that would be more pre-COVID level in terms of bricks and mortar merchandising, but you had some bigger plans too. Could you give us a sense of that and how much room you have to create promotions for that? Thanks.

I think the answer is we will continue and are working very closely with our retail partners to really figure out shelf sets for the future and that’s with the mindset that these categories are going to be quite important and highly relevant and so, yes, you’re right, in were a lot of things that we were in the midst of working on that we want to make sure that we incorporate the consumer learnings from this period but, yes, I would expect that as you see us come forward in the next year or so, we’re going to be working quite hard on ensuring that we are setting the shelf for the future and that we’re creating enough room within both our portfolio and our promotional calendar to really address that in the most consumer focused way.

Thank you. And our next question comes from -- thank you. Our last question comes from Rob Dickerson from Jefferies. Your line is open.

Great. Thanks so much. Good morning. Mark, I just had a kind of a bit of larger, longer term strategic questions around the Snacks business. I know last quarter you had alluded to improved learnings in terms of efficiency in the supply chain over the past call it seven, eight months. Obviously, you still have some cost savings coming through, through the end of next fiscal year. And then at the same time, I think last quarter you had mentioned maybe some potential visibility on further efficiencies within Snacks, call it distribution hubs, what have you. So you’ve kind of just generally speaking kind of given the margin profile of the Snacks business, but the attraction so-to-speak of that business as well for consumers maybe even as they shift to more on-the-go and volumes could improve but how do you view the incremental potential efficiency gains on that business to hopefully be able to margin up that business over time, kind of vis-a-vis a lot of other Snacks business that may be able to or already are generating a higher profitability profile? Thanks. That’s it.

Yeah, no, thanks for the question, Rob. I mean, I think in its most simplest form if you think about the strategic runway for the company, I think there are a couple big things that we believe will be fuel and enable us to continue to deliver against our expectations and one of those we talked a lot about today which is our ability to retain households really solidify the Meals & Beverages portion of our business as a steady contributor within the portfolio which we believe very strongly that we can accomplish. I think the other area of opportunity is for us to continue to sustain and hopefully accelerate growth on our Snacks business while we continue to improve the margin. If you look at the margin of our Snack business even after all of the – I’ve said this from the very beginning when I got here and was asked how do you feel about the synergies, my answer was I feel pretty good because even at the end of the synergies you’ve got a margin structure that looks lower than what I would expect for Snacks businesses and we know there’s reasons why and there’s some structural elements there that are not insignificant, but the idea that we can continue to accelerate growth on that business while we also improve the margin is very much our focus going forward. And I think there will be a variety of things that we’ll continue to look at and do, but we do feel good that there is drill sites and opportunities, and I think as time unfolds, we’ll talk more about that. But I think for right now I would agree with you, we kind of see the same thing and as I think about big next chapter elements for the company. I think those are the areas where we’re going to want to continue to focus.

Thank you. And that does conclude our question-and-answer session for today’s conference. Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation, and you may now disconnect. Everyone, have a wonderful day.