PepsiCo, Inc. (PEP) Q4 2020 Earnings Report, Transcript and Summary

Good morning, and welcome to PepsiCo's Fourth Quarter Earnings Question-and-Answer Session. Your lines have been placed on listen-only until it is your turn to ask a question. [Operator Instructions] Today's call is being recorded and will be archived at www.pepsico.com. It is now my pleasure to introduce Mr. Ravi Pamnani, Senior Vice President of Investor Relations. Mr. Pamnani, you may begin.

Thank you, Operator. I hope everyone has had a chance this morning to review our press release and prepared comments, both of which are available on our Web site. Before we begin, please take note of our cautionary statement. We may make forward-looking statements on today's call, including about our business plans, 2021 outlook, and the potential impact of the COVID-19 pandemic on our business. Forward-looking statements inherently involve risks and uncertainties and only reflect our view as of today, and we are under no obligation to update. When discussing our results, we may refer to non-GAAP measures, which exclude certain items from reported results. Please refer to today's earnings release and 10-Q, available on pepsico.com, for definitions and reconciliations of non-GAAP measures and additional information regarding our results, including a discussion of factors that could cause actual results to materially differ from forward-looking statements. Joining me today are PepsiCo's Chairman and CEO, Ramon Laguarta; and PepsiCo's Vice Chairman and CFO, Hugh Johnston. We ask that you please limit yourself to one question. And with that, I will turn it over to the operator for the first question.

Thank you. [Operator Instructions] Your first question comes from the line of Bonnie Herzog of Goldman Sachs.

Thank you. Good morning, everyone.

Good morning.

Good morning. I had a question on your marketing, and how we should be thinking about your ad spend levels this year. It seems quite obvious, I guess that you can operate now at lower ad spend levels. So I guess I wanted to clarify with both of you that you expect to pull back on the absolute level of your ad spend this year. And then how should we think about this from a long-term perspective, especially when I think about it in the context of the overall health of whether it's your categories, and certain your brand equity and how you're going to maintain that? Thanks.

Yes, good morning, Bonnie. Yes, this Ramon. Listen, the advertising levels, I don't think we are maximized on -- [technical difficulty] in the investments. What we think is that the A&M line has opportunities for optimization, especially in what we call, Non-working, and we're working hard on optimizing that part. And obviously, we're working on optimizing the return on investment on the advertising part of the media that impacts the consumer. One of the decisions we took this year was, and if you look at Frito-Lay, for example, or some of our international business, we actually increased our A&M. And the reason for that is that within the formula for success of our portfolio we have to have our large brands growing at a decent pace, at the market level hopefully, and for that we need to keep them modernized, we have to keep innovating on those large brands. But also, we need to invest in the growth spaces of the category where sometimes we need to create new brands. And that requires a well-funded, a kind of support package to get those brands up and running. For example, if you think about the Frito portfolio, obviously we want to grow our Cheetos, Doritos, Tostitos, Lay's, Ruffles at a very good pace, and I think we're doing that. But at the same time we need to build healthier portfolios, some brands like Off the Eaten Path or Smartfoods or PopCorners or Bayer, all those brands need to grow to have a portfolio in the future, the same with our beverage portfolio, with Bubly or with some of the smaller brands we're creating. So, that's how we're thinking about our A&M optimization, obviously on the non-working, get the maximum ROI on the working part but ensure that we can support both the large brands and the smaller future brands in a way that we have a sustainable growth for the future.

Your next question comes from the line of Dara Mohsenian of Morgan Stanley.

Hey, guys. So first, just a detailed question, as we look at your earnings guidance for 2021, it's in line with the long-term algorithm despite having nearly $800 million in COVID costs in 2020 that I assume will drop off significantly. So, just trying to understand why there couldn't be upside to the long-term algorithm should those costs drop off, if to assume reinvestment or higher commodities or other factors? And then second, Ramon, just sort of further on the question you just answered, we did see a pretty big shift in A&M spend at the Frito side this year, obviously pullback in beverage given the COVID situation. So I'd love to hear your thoughts on the ROI behind the higher spend in Frito, and if you think you're getting significant incremental revenue from that or the yield on those investments as you shifted the allocation within the portfolio, in 2020? Thanks.

Great. Okay, Hugh, you want to take the first part, on the how we're thinking about the short-term, long-term, and in our algorithm.

Yes, I'm happy to, Ramon. Good morning, Dara. Dara, obviously that there is a lot of items that are in our P&L, we've identified the COVID cost as something we wanted to call out because it was extraordinary. There will be COVID costs and significant COVID costs still in 2021. So you really can't pull all of that to the bottom line. In addition to that, we're [pouring some] [Ph] to the A&M, as Ramon mentioned, in the snack food business and a bit in the beverage business as well. But as we [technical difficulty] given the level of uncertainty, we felt like our long-term algorithm from a revenue and profit perspective was an appropriate goal for us. And I think if we hit these numbers as we expected I think it'll be a good -- [technical difficulty].

Yes, Dara. And so, that's -- we're thinking about, obviously, maximizing the short-term, but not at the expense of the long-term. And I think it's -- and to start a year thinking about our long-term algorithm is a good way to start focusing the company on a sustainable performance for many years. So that's how we're thinking about it. Then with regards to the marketing ROI, listen, we're getting much better at measuring the ROI in our marketing spends. And we think that -- actually we're, based on this measurement, we're getting much better at the ROI delivery of our investments. We're putting tools, and we're putting kind of performance metrics to our marketing teams. In particular, where you were saying about Frito, Frito has a very low level of advertising, I mean full A&M actually below 4% for a brand -- for a business that has so many multiple brands and has so much growth potential if you think about the share of macro-snacks that we have. So, I would think that if you think about the levers of growth for Frito in the future, I think A&M and an increased A&M should be part of it. As we think about our push model, it's pretty optimized with our DSD execution capabilities. I think on the pull side, we have opportunities probably to maximize the frequency and to maximize the other consumer connection with our brands and Frito versus what we do with other -- with some other parts of our business. So that's how we'll be thinking about the A&M investments at Frito.

Your next question comes from the line of Andrea Teixeira of JPMorgan.

Thank you. Good morning. So my question is on the use of capital, as you emphasize the buybacks and you're focusing more on CapEx, on investment in capacity to meet demand or perhaps M&A. So if you can comment on your capital allocation, Hugh? And Ramon, I was positively impressed with Europe and the recovery momentum there. Is that going -- do you think it's going to go and continue into 2021, and embedded in your guidance? And conversely, what are your thoughts on the deceleration in LatAm?

Okay, let me start with the geography part, and then Hugh, you can talk about the capital. There the, I would say, Europe, we're seeing different Europes. Now we're seeing Eastern Europe quite strong, I would say Russia extremely -- extremely strong, Turkey very strong. Some parts in Central Europe much better, by Central Europe I mean Germany and some of the more developed Europe. We're seeing the south of Europe very impacted by, obviously, the lack of tourism and people not going there for weekends or longer vacations. So that is how we see Europe. When we look at '21 we think, obviously, as mobility increases we're going to see even better performance in Western Europe. And hopefully we can continue to see the good performance in the East. What we can see in Europe across the board is we're becoming more competitive, our share of market performance both in beverages and snacks was very good this year, so we managed to gain share almost in every single market, which is actually the metric that we're following the most in a period of time where the markets go up and down depending on lockdowns, et cetera. In Latin America, actually Brazil has been very strong throughout the year. And we feel very good about our Brazilian business also in terms of share of market, but also category growth has been very, very positive in Brazil. Mexico, at the beginning of the pandemic, we suffered a little bit in the [cap pillar] [Ph] part of our business, so the more kind of smaller fragment trade, we saw traffic down and that impacted our sales given that we have a very good distribution and availability in the market. The business came back to much more solid performance in the last quarter in Mexico. And although we've been gaining share across the year, we're seeing also the category recovering in Mexico. So hopefully we see a much better performance in Mexico this year in absolute terms, relative terms, I think we'll continue to gain share in the market. So those are the two big markets in Latin America, you get a good sign from those two. And Hugh, you want to talk about the capital principles that we have?

Yes, happy to, Ramon. Overall, our capital allocation strategy hasn't changed. We've talked about this many times. Number one, make sure that we fund the business to compete and grow. Number two is dividend. Number three is tuck-in M&A. And number four is share repurchase. One and two, obviously we've talked about in terms of our guidance. I would not expect, from the standpoint of the third one, I would not expect much in the way of M&A as we go through the course of this year and certainly nothing large. So, from that perspective, I think we have got a lot to digest right now. We're happy with where the portfolio sits. And then, last in terms of share repurchase, obviously we're trying to balance our debt rating versus our cash return to shareholders. We felt like the dividend increase was important. And at the same time, given the level of M&A that we had over the last couple of years, balancing that out with the debt rating, we made a decision that we're going to have significant share repurchase in this year. That's purely based on balancing the debt rating with our return to equity shareholder; nothing more that driving that decision.

Your next question comes from the line of Kaumil Gajrawala of Credit Suisse.

Hi, would you guys mind providing some insights on how you are looking at the commodity cost environment? Where you are seeing maybe raw material inflation? And then, how you plan on addressing it through pricing or mix or trade spend?

Hugh?

Yes, I am happy to take that, Ramon. Kaumil, obviously there is some pressure in commodities. We're viewing commodities as manageable right now. I'll remind you that we do forward buy on areas where we can of about -- typically about nine months ahead. But, we can't forward on everything. And obviously there is inflation in certain aspect of our cost structure. That said, the overall mix is as manageable between pricing and the balance of the P&L such that we don't expect it to be disruptive for the algorithm this year.

Your next question comes from the line of Bryan Spillane of Bank of America.

Hey, good morning everyone. I guess I had a follow-up question just related to Andrea's question around cash flow. And Hugh, maybe can you talk about the CapEx levels and will they be elevated from multiple years? And then, I guess maybe on some color on just where like where that incremental CapEx spending is going. Is it capacity? Is it capability? Just trying to get an understanding of whether or not we are going to be with an elevated CapEx cycle for awhile? And then, also just where the capital is going?

Yes. Ramon, would you like to handle a little.

Yes, please, go ahead. I'll add to it.

Okay. Bryan, a couple of things on that, yes, it is elevated. We sort of have been running as you know about 5% of sales and now we are running a little bit north of 6%. And couple of big drivers behind it. Number one is the IT and digitalization spending that we are doing. That will be elevated for a couple of years as we sort of get through the combination of an ASP upgrade as well as a whole variety of digitalization efforts that we have going on in our supply chain and selling system. The second piece is primarily around growth capacity. And we expect that to be elevated for a couple of years. If you look at the way that we used to run the business, we ran capacity pretty close to the edge. And as we pivoted to more a growth strategy, we're taking capacity utilization down little bit to enable us to capture more of the growth opportunities that are out there. So, that's a big piece of the spend. And then, the last is productivity CapEx as we are looking at automation and looking at putting more capabilities into the plants that will yield cost savings that obviously is a big driver. So, I would say I would expect the capital spending to remain elevated for the next couple of years. And then, I would expect it to return back to our typical norms.

Your next question comes from the line of Laurent Grandet of Guggenheim.

Hi, good morning, Ramon and Hugh, and congrats on the strong hand of the year. I'd like to focus my question on the energy category. So, in 2020, we saw you making an effort to move into the energy category with the acquisition of Rockstar and the agreement to distribute Bang. So, could you please update us on where you stand in your journey to become a leading energy player, like to understand your view on the Rockstar revamp? We saw the Super Bowl ad, but like to understand a bit more on that, and obviously, your assessment of the situation we span, but also what are you planning to do with other brands like Dew and DNH category?

Yes. Thank you, Lauren, and yes, a good question. Listen, let's talk first about Bang quickly. We're surprised by this move by VPX and especially given that, it was a very good performance value PBNA on the distribution metrics, but at the end of the day, we plan to continue to be in the distributor of Bang until October 23. And we're going to do our best to make that brand well distributed in the marketplace, but the core of our energy study was never Bang it's a distribution cherry on top. It was obviously what we could do with our brands after the acquisition of Rockstar kind of free adapt from some of the contractual obligations we had. So, the first pillar is obviously Rockstar. Rockstar re-launch both in the U.S. and its expansion internationally as of our core energy kind of mainstream proposition. I would say the integration of Rockstar into our supply chain is starting to happen. It's going to be a bit of a process until we got all the formulations and everything into our system, but obviously that's going to make it a better supply chain in itself. From the consumer point of view we are -- you saw we're planning to invest in the brand. I think we found a consumer space where it's going to be a bit quite differentiated and then were you are improving the formulas and we're improving the building different propositions for multiple spaces in that kind of mainstream energy. At the same time, you will be seeing shortly some announcements on Mountain Dew launch in the spring time. This is going to be the first big move for Mountain Dew into the energy space. We're very happy with the way the product concept, the support package and the support we're getting from our customers in terms of the launch. So that, that there would be a good event and it will be the first move of Mountain Dew and there will be future moves as well from Mountain Dew into the energy space. Obviously, one of our big pillars in energies are Starbucks partnership, which is I think is at an all-time high in terms of their relationship and the market performance. We continue to innovate on the -- kind of coffee, energy, Triple Shot, Double Shots. And we have some good ideas that will I'm sure will make into the market shortly. So, and then we're looking at other brands in the sports area and some other kind of spaces within the energy management, energy up, energy down that I think we can have a multiple set of solutions and brands that drive consumer solutions in a space that is obviously growing and as a lot of consumer pools. So, it's important for us, as we said, both from the growth point of view and the margin expansion point of view, and we feel good about the steps we're taking brick by brick to build a solid foundation for us to play in energy over many years. So, that's pretty much long, and you will see more news from us in the coming weeks.

Your next question comes from the line of Vivien Azer of Cowen.

Hi, thank you. Good morning. I was hoping that you could touch on your agreement with Beyond Meat and explain kind of the aspirations there in terms of the partnership as well as any embedded economic impacts in your 2021 guidance? Thank you.

Yes, great question. Yes. As you think about we're creating spaces for future growth, one of them is plant-based snacking, plant-based convenient solutions. We've seen that Beyond Meat was the right partner in terms of -- we did a lot of due diligence in terms of R&D capabilities and kind of willingness to share with us in the future. And we have high expectations for that. There should be no implication for our 2021 kind of investment or high sales is going to be still a small business for us in 2021, but we plan to be in the market within this year.

Your next question comes from the line of Lauren Lieberman of Barclays.

Great, thanks. Good morning. I was curious as thinking back to kind of your longer term plan, Ramon, that you laid out now almost exactly two years ago. Is it fair -- I think first order of business was seemingly to kind of shore up and reinvest in your bigger franchises. And I felt like the language in the prepared remarks today, there was a little bit more emphasis on -- it's stepping up the investment in the more -- and some of the ancillary, but critical growth opportunities, whether it's smaller brands or kind of healthier segments of the categories. Can you speak to the degree to which maybe the environmental last year kind of accelerated the support you were giving to your big brands and the impact that that really had on accelerating, I guess your progress vis-à-vis your long-term goals? I'd be curious to hear sort of a progress report. Thank you.

Yes, that's great. Good question. Listen, if you think back and you see the growth opportunity for PepsiCo, we are -- you think about the large LRB category globally were about less than 10% on a $600 billion category, growing out of 4% or 5%. And pretty much the same with micro snacks, a large category, $500 billion-$600 billion globally and we are less than 10%. So, growth as the lever for the long-term value creation of these companies is clearly the number one. , : If you just think about other models that we're working, clearly our SodaStream has been a fantastic acquisition for us, and it gives us a platform not only to have a sweet spot between better for you and better for the planet, which I think is going to be a sweet spot of growth globally, that also a new way to customize drinks. The same we're thinking about, for example, the questions I just got on beyond me then the partnerships. So, we're building a lot of future opportunities for our portfolios to grow. At the same time, we don't want to keep our eyes off what are the core brands that drive the majority of the growth in absolutely dollars of this company and that have a massive runway for growth in the future. So that gives you a sense of how we're thinking about growth. Growth being our number one value creation; profitable growth, obviously, and I think we can do that over time by also creating those smaller spaces, where I think we can enter and win in the future.

Your next question comes from the line of Kevin Grundy of Jefferies.

Great, thanks. Good morning, everyone, and congratulations on a strong year. Ramon and Hugh, for that may I just building of the last question around sort of balanced growth. I wanted to come back to the margin opportunity at North America beverages, because this has come up. So I want a number of times on previous calls. In your prepared remarks today, it's been more about delivering a better balance and improving profitability. Last quarter, I think it seemed to me at least the tone was more on improving profitability. So, I just want to get a better understanding here if the current commodity cost environment, which you commented on a moment ago, as well as the spending intentions of your key competitor because one would argue that they probably never been more constrained than they have been this past year. So I'm just curious if this is will be another year of sort of really limited margin enhancement, given these factors at North America beverages and want to get a better understanding of how bigger priority this is for the organization and then when can we expect to return to this sort of elusive mid-teens operating margin. So thanks for that.

Great, listen, let me take it first, and then, Hugh can add. I think the conversations were started about a couple of years ago was we want to make sure that we got PBNA to be a growth engine. And I think, brick-by-brick, we've been able to build kind of make sure our brands are all growth brands. And I think we're there and the latest quarter five plus growth shows that, okay, we're most of our brands are performing at a very good level, that was critical, because we thought that, there's no way to cut your costs in a way that is sustainable. So, now we have, I think good, good machine that has the right local execution capabilities, and the good brands and innovation now, we have the intentions to work obviously, on the margin expansion of PBNA. That is a priority for us, a priority for the business. We see this business long-term in mid-teens. We want to do it in a sustainable way where we keep growing with a category and expand our margins. And we have, obviously ideas on how do we be able to categories, segments of the category that are highly more profitable, how we get better at selling the right pack in the right place at the right price. So, our revenue management capabilities, we have a lot of cost opportunities in the end-to-end supply chain management, and also the way we support the business in some of our G&A expenses and a little bit of on our A&M as you mentioned, optimizations are all of that should give us the opportunities to continue to grow, add the category, and it's starting to expand the margins, this year should be a year where you see already some movement in that regard. And as I said earlier, we see this business getting into the teens margins over the long run, and without sacrificing competitive performance.

Your next question comes from the line of Nik Modi of RBC Capital Markets.

Yes, good morning everyone. Ramon, I was hoping you could just talk about, what's going on at retail in terms of assortment, SKU management at the retail level, because it seems like retailers are finally starting to focus on higher velocity items, and really trying to simplify their shelves, because they all learned the lessons of COVID, and not having enough stock of higher target brands. So just wanted to get your perspective on that, and some of the things we've heard from retailers at Quaker has been under a little bit of space pressure. So just hoping you can provide some clarity there.

Yes, I think listen, obviously, we all had to take a look at our supply chain, right during this year, because it's been a challenging year from the supply chain point of view, given the number of infected people that we had in our supply chain, and so on. So, simplifying our portfolios has been a solution to continue to have elevated levels of supply to our customers, which has been our focus. I think as we go forward, and consumers move back to more of a bit of more of a normal life and physical stores, continue to be a meaningful part of their shopping experience, I think consumers will go back to experimenting a little bit more. And they will be looking for innovation and smaller SKUs. So I think we're going to see a small, slow return back to a bit more complex portfolios. But I think we've all learned that maybe the tail of their portfolio was not really delivering the returns that we needed to have for every SKU that we had in the marketplace. So I think there's going to be an optimization of the portfolios, but an increasing complexity as well versus what we have today, even though the consumers will be asking for a bit more experimentation and especially in our categories, where variety is a key driver of purchase.

Your next question comes from the line of Steve Powers of Deutsche Bank.

Hey, great, thanks. Maybe just two things, first, Hugh, if you could given the higher CapEx that you mentioned, just your thoughts on free cash flow and free cash flow conversion for the year I guess, I'm thinking that a round about 80% free cash flow conversion is a reasonable place to start for the year consistent with 2020. But any thoughts you might have as to why that could be materially higher or lower? And then, Ramon, just because maybe can you talk a little bit about the Gatorade franchise, it had a really strong 2020, behind Zero, and other initiatives. And I'm curious to how you're thinking about it into '21. And maybe as part of that you mentioned, kind of a sports energy convergence and your answer to Lauren's question, and it looks to me like you're increasingly positioning 24 to play in that area. So maybe you could talk a little bit more about how those lines may be blurring. Thank you.

Okay, Hugh, you want to?

Yes, I will do. Obviously, Steve, we didn't give specific cash flow guidance, but I think generally speaking, the profile of our cash flow will be similar to what you saw in 2020.

No, hold on, let me just say a few words on the Gatorade. I think Gatorade we're seeing Gatorade, clearly, growing very fast. Part of it is our innovation; especially Zero has been an amazing innovation is proud that $1 billion retail sales value already for a year, I mean, that's a meaningful sizable innovation. And we're seeing obviously people exercising more. And obviously, that's helping us drive additional consumption. As we think about the future of Gatorade, we couldn't be more excited about what we see obviously, moving into other spaces, like I said, Natural. Obviously, you mentioned energy, those could be spaces. But where we see the biggest opportunity for Gatorade is in creating more of a personalized solution for athletes, and kind of amateur athletes like most of us, and creating a much more engaged relationship where we become advisors of the athletes of their hydration needs of all their nutrition needs. And we see an opportunity to create much more of a full ecosystem of engagement with the consumer, we provide solutions, we provide products, and we provide information. And I think that's the real future of Gatorade, which is a massive brand that has so much trust from consumers, I think we can leverage that trust in providing much more than just liquid hydration.

Our next question comes from the line of Rob Ottenstein of Evercore.

Great, thank you very much. Just first a follow-up question on Energy. And that is can you talk about, as you look at your guidance for 2021, how much does your energy strategy built into it? What is the impact that you're modeling for Rockstar and Mountain Dew on your 2021 guidance? So that's just kind of follow-up question. And then, the bigger picture question is how do you assess the impact of people staying, spending more time at home, on the snacks business? How much increased demand did you see in 2020 from that particularly in the U.S. and the likelihood of that continuing? Thank you.

Hugh, you want to start with the energy?

Energy, I'm happy to, Robert in terms of being one of the impact items for PBNA quickly the energy strategy is important to us. That's broad based, it's Rockstar, it's what we might do with Mountain Dew and obviously, the contributor as well, in terms of overall PepsiCo, yes it matters but I wouldn't call it a make or break type of item for the company this year. If things don't go as well as we expect, I think we've got enough other levers that that will be fine. It's important for PBNA to be sure.

Yes, on the impact of the kind of the new mobility habits on snacks, I would say, we've lost a lot of high profit volume in both the convenience channel and the away from home channel. I mean, we always talk about beverages, but snacks had a pretty good impulse and away from home opportunity that we've lost and though that was high margin. On the opposite side, we're obviously seeing more consumption at home both kind of indulgence in terms of kind of at the end of the day, there's people need a break or during the day or during the day some break. And we are seeing more solo consumption, so more multi-pack small portion format. At the end probably bit of a net positive for the category. But, not massively in terms of what we are seeing across the world. Maybe a bit more developed -- in developed markets where we have more in-home consumption, maybe a more positive impact. But in developing markets where there is more of an away from home consumption, a negative impact. So, that's how -- for company those are the drivers depending on how the per capita consumption is built between in-home and out-home on the different occasions.

Your final question comes from the line of Chris Carey of Wells Fargo Securities.

Hi, good morning. So, I just wanted to follow up a little bit on PD&A, and specifically around pricing and promotion. So, three quarters running of strong net pricing in the division. And I guess -- and you can see this showing up in the data as well. I mean are you getting more comfortable around the concepts of using price as more of a lever in PD&A over time? And then, maybe specifically, we are at record low promotions across the categories including you're your portfolio in North America. Do you think that you can keep these promotional levels lower as a strategy? And just in general, how sustainable you think these low promotions are? Or, whether we're going to see some sort of reversal in 2021 and that's factored in your outlook? Thanks.

Yes. I think strategically we see the beverage category trying to understand better the consumer and give the consumer what he or she needs for every occasion and with the right pack and right price. That's a hugely lever of growth for our partners -- retail partners and for us. So trying to build kind of a profitable growth along the lines of the value we create for the consumer from the particular occasion. That's a big driver of opportunity. I think we have -- we are getting at that at PD&A and globally across the world understanding the really the drivers of every occasion and what is best and what is the portion, what is the sizing, what is the -- what will drive purchasing and consumption. So, that's a strategic driver. In terms of the promotional effort, I think we simplified promotional calendars with our customers everywhere given the simplification of the supply chain that we had to do. I think we have all learnt that there is some opportunities there. But, I am sure there will be a little bit of additional promotional efforts as the world opens up again. But, I think we've all learnt that the relative price of the beverage category in some format in the U.S. even you compare to other markets around the world was very, very low. And so, I think there is a strategic journey to make this category a bit more higher valued in general terms. And that's the journey that we are all in and that will obviously drive additional value for our retail partners and for ourselves.

Ladies and gentlemen, this concludes our question-and-answer session. I would now like to turn the call back over to Ramon Laguarta for any closing remarks.

Yes, I wanted to thank you all of you for your support during the year and for your investments in PepsiCo. And hopefully, everybody stay safe, and all the best to all of you. Thank you.

Thank you for participating in PepsiCo's fourth quarter earnings question-and-answer session. You may now disconnect your lines and have a wonderful day.