Why don't we kick this off, our next fireside chat with Kraft Heinz. With me today are Chairman and CEO Miguel Patricio, CFO Andre Maciel, and EVP and President of North America, as well as CEO-elect Carlos Abrams-Rivera. Welcome, gentlemen. It's really great to be with you in Boston, and congratulations to you, Carlos, on being the next CEO, effective the start of 2024.
Thank you.
I think that's a really good place to start on CEO succession. Maybe first to you, Miguel, why is now the right time for Carlos to be appointed CEO, and for you to move to non-executive chair?
Well, it's the right time because it's the right thing to do for the business. That's why it's the right time. It is the right thing to do for the business, Andrew, because first, Carlos is ready to become the CEO, and when you have someone in your team that is ready, we need to start thinking or to start moving in that sense. It's the right thing to do also because I think the combination of Carlos, the CEO, and Miguel as chairman, will be a stronger combination. It's the right thing to do as well, because you know, this at the end of the year, I will be in the company for almost five years. And in this first five years, I think I was probably the right person to be in charge.
We went through a lot. The company was, you know, on the bottom, and, with lack of hope and belief and also a lack of talent, that's definitely not the situation today at Kraft Heinz. We have a strong company with a strong team, very engaged, doing great things. But I believe that moving forward, we'll need some different skills. I could definitely stay a couple of more years as, as head, as CEO, but I, I thought that it didn't make sense to postpone this moment because, again, Carlos is ready, because I believe that this new phase, he will be a better CEO than myself would be. So that is really the reason behind it, Andrew, and, and, so I think that we, we both are gonna be a great team together at Chairman.
Thank you. So maybe that brings us over to you, Carlos, as you take the helm, maybe I'd love some perspective on sort of your vision on where you see Kraft Heinz going, and how are you gonna get there?
Well, after those words from Miguel, let me just first say thank you, Miguel.
Well, self-deprecating as well.
It's always, and by the way, that's the way he is. You know, and he has been such a great leader for us at Kraft Heinz, and when Miguel talks about the belief the company has, it is because of the way he has shaped the company and truly brought the belief back in the company. You know, I've been here now at Kraft Heinz 3.5 years, and first of all, I should say it's quite a privilege and honor to be elected CEO. I began my career over 25 years ago in what was then Kraft Foods. You know, and as I went to different companies and being part now of Kraft Heinz has been the greatest honor of my life. You asked, Andrew, about strategy.
You know, over the last 3.5 years, you know, I worked side by side with Miguel. The strategy, the values that we have launched are strategies that I completely endorse and support, whether that is our focus on our 3 pillars of growth, of the U.S. growth platforms, our emerging markets, our foodservice business, that continues to be something that I fully support and I see us continuing as we go forward, full stop. I think right now, the way I've approached in these months before officially taking the role, Andrew, is doing a bit of a listening and learning tour. So spending incredible of time traveling across the world, listening to our teams and what's working, not working, and how we can do better.
You know, I think some things that I believe that we'll be able to now within the same strategy, but accelerate as we go forward. I think, Andrew, in particular, I know you have heard closely how we have done this work on Agile@Scale, for example, in North America, how we have reengineered the company with the right technology-enabled tools for us to improve our performance. I think those are areas that we can drive more globally now as we go forward. I think the focus on efficiencies that we have done so well over the last few years, also enabled by technology, that's an area that we're gonna be able to accelerate as we go forward as well and think about where we can truly leverage our scale. You know, in North America, we have spent our time renovating our brands.
I think at this point, we have renovated over 90% of our portfolio over the last three years. And I think that, supported with strong innovation, I think is an area that the focus on brands with great products, resilient, resilience, qualification into equity and the innovation to support that, I think is something we'll continue. And then, you know, we see joint partnerships being a truly acceleration for us at Kraft Heinz. And, you know, we have done that in places like a joint venture with NotCo, where it allows us to get into plant-based and leverage our North America brands. There may be opportunity for us to think about partnerships, more globally in our company as well as we go forward. But again, things that are true for us, that we potentially can accelerate.
But one thing that I'll tell you that will not change is my commitment to the culture that Miguel has brought to the company. I think this sense of ownership and collaboration that Miguel spearheaded for us is something that I'm committed to and will continue to strengthen as we go forward.
Great, thanks for that. And maybe to start off a little bit with, your largest segment in U.S. retail. Company's long-term top line growth algorithm calls for 2%-3% organic net sales growth, driven by about 1%-2% growth in U.S. retail growth platforms, 7% growth in Foodservice, and about 13% growth in emerging markets. Putting aside sort of the near-term volatility in the industry at this point, I guess, what are the key drivers to be able to deliver that growth in U.S. retail specifically? And how do you think about the balance in U.S. retail between volume and price, sort of thing going forward?
Yeah. I mean, I think for. Let me give, give you the picture first, I think, of the platforms and how we look at it. You know, we have these three areas where growth platforms account for about two-thirds of our business in the U.S., and that includes things like Taste Elevation, where our sauces are, Easy Meals, where our Mac & Cheese businesses and brands like Lunchables and Philadelphia. And those continue to do well. In Q2, they grew Taste Elevation 8%, Easy Meals 6%. And if you look at, at even now, combined, we actually grow and share with those businesses as well. And we see Lunchables business and cream cheese business actually improving as we go through the end of the year here. So those are areas that we have invested resources, we continue to see improvement.
If you look at our business like Energize, where essentially is our Oscar Mayer business, it's about 15% of our business, and we think of that as an area that we need to make sure we maintain a focus and discipline on profitability. So in Q2, we grew high single digits in EBITDA, even though there were some top-line challenges in Q2, as maybe some of our competitors didn't focus on margins as much as we did. But for us, it was important to make sure that we continue to stay that focus on gross margin and improving the profitability of the business. And then there's brands that are in our, you know, we call stabilized business, and those are things like Desserts and Flavor Hydration. And those businesses, in fact, in Q2, our dessert business grew 2%.
Our Flavor Hydration was flattish. So those are businesses that we're going to continue to support, because we cannot allow them to be leaky bucket in our business. So for us is, how do we make sure we continue to stay focused on renovating those businesses? And Jell-O has been the last one we've done, in which we renovated the business, and in fact, focus a lot more on us being right in the right shelf with the right assortment. And a lot of our focus right now is making sure that as we think about our volumes, that we're not only protecting what's happening in the promotional calendar, but also what's happening in terms of the everyday displays in our stores. That is part of the success as we go forward.
First thing that you're gonna see from us, Andrew, is how do we continue to support our business with the right innovation that allows us to drive the very volume. You know, we see that in our long-term algorithm, the assumptions, we have about half volume, half pricing. And that's gonna come out of us being able to no longer cycle the pricing that we did last year and that we did at the beginning of the year. But it also is us continuing to invest in our brands. You know, in Q2, we invested about 23% more in marketing dollars. We continued to invest in R&D, another 10% year to date in our resource in R&D, and more for driving innovation that is sustainable for consumers as well, too.
We have much better, stronger consumer insights that allows us to have innovation that actually drive the volume that we're gonna continue to see as we go in the future.
Great. In the context of the 1%-2% U.S. retail long-term growth algorithm, what are your expectations for each of the Grow, Energize, and Stabilize sort of subsegments?
You know, rather than, I think, the way I'll tell you is that we have a different role within those particular categories, versus trying to give you a stance for a specific number. You know, for us, the growth platforms are going to be the places that we're going to disproportionately drive our particular growth. And those are going to be places that not only because we believe we have an advantage, but also because places we can actually leverage at global scale. I mean, truly, in a taste elevation platform, where we have our Heinz as a cornerstone brand of that particular platform, it's a business that we're growing everywhere that we go. And that is true whether you're in Brazil or whether you're, whether you're in Middle East, or whether you're in Poland.
We are growing those brands in a way that is, that truly can leverage our global scale and our expertise in taste elevation. And we're seeing in both taste elevation and Easy Meals as well, Lunchables and cream cheese, as the kind of the areas that are going to be driving the particular growth. For us, is, as I mentioned, in a stabilized business, is making sure they are, you know, in a way, protected, so that we continue to make sure they don't create that kind of disadvantage for us. In the past, we haven't thought about it that way. In the past, I think some of the businesses we have kind of let go too much. If you think about, for example, even our coffee brand, which is part of our stabilized platforms, you know, we are actually investing quite a bit of innovation in coffee.
In fact, you know, whether it's our retail to our in-restaurant to retail platform, in which we have now launched IHOP into retail, which is growing significantly our opportunities to bring innovation in this year. Whether it's bringing new to the world ideas, like it is our Iced Latte for Maxwell House brand. Those are areas that allows us to make sure that we have improved distribution in our Stabilize categories. We'll make, but while balancing the amount of resources that we spend behind them. And as I said, in our Energize platform, Oscar Mayer is, we are spending money in marketing to continue to build a strong Oscar Mayer brand, but making sure that we stay focused on the profitability of the business. I think for us, we cannot lose.
We cannot be prisoner of the moment and not think about the long-term viability of the business, which will come from our protecting that gross margin.
Right. Maybe a couple on, on sort of the topic of promotions and, and pricing. I guess, why are KHC's promotional levels currently sort of lagging that of competitors? Is it strictly supply related, or does KHC plan to maintain structurally lower promotional levels?
Well, I mean, for the most part, and I assume, Andrew, that you talk specifically about the U.S.
Correct.
So I'll connect to that. You know, if you look at our business today and you compare it to 2019, today we're about 10 points better than we were in 2019 in terms of level of promotions. And for us, that is critical. And the way we are able to do that is by us making sure that all the investments we have made in AI-enabled solutions on how we think about revenue management, make that any investments that we make in promotion have a high ROI. In fact, our ROI has improved 15 points from a year ago. So we continue. We are promoting more, but in a disciplined way, and that continues to gonna be our way that we're gonna move forward.
If you compare that to our competition, I'll say what we've seen so far is that versus 2019, you know, our branded players are probably like 4% down from 2019. So they have actually quite a bit of more aggressiveness in terms of their promotion calendar. Private label actually also about flat to 2019, so they also are promoting more. Now, we need to make sure that, again, we are playing this game for the long term and protecting those margins. There is some variability within categories in which you'll see, depending on particularly in the season. So normally in Q4, you may see a little more promotion that happens, but it's always gonna be with that level of discipline, even maintaining kind of that mid-30s promotional levels.
But throughout the year, you'll see that, you know, Q2, Q3 are times that we have less promotional events, a little more in Q4, but, but technically, you know, you'll see more of that kind of mid-thirties. And Andrew, anything else that I missed?
No, you said the most things. So, the answer, the direct answer to your question is, is structurally, we believe that we're going to be operating at lower levels as 2019. Remember that we have increased promotions like $1 billion from 2017 to 2019, the U.S. alone, and a good chunk of that was very negative, return promotions to us and customers. So I think with all the investments we have made in technology and people in, around the world, particularly in the U.S., have 50 people dedicated to pricing and optimization in the U.S. alone. We put millions of dollars in, in a proprietary solution that we have visibility for 100,000 events that we run in the U.S., that we continue to learn from the past events to improve the calendar forward.
We are very confident we can maintain a lower level of promotion moving forward while increasing the lifts that we have for the dollars that we're deploying. As we have said in earnings, the promotions will be higher in the second half versus the first half, in part also because service levels are mostly recovered by now. But that's in line with the guidance. And because inflation keeps moderating, we believe we are gonna be able to at least grow the gross margin that we have right now into the remainder of the year.
As you talked about, we've seen promotional levels in certain categories return to 2019 levels from some competitors. We've also seen price gap remain elevated since you raised prices in certain categories earlier this year. So are there any categories in particular where you see, you know, an unusual level of promotion or competitors acting somewhat irrational?
You know, I think the one place that maybe we've seen that disproportionate kind of level of promotion, I would say, is within the meat business. I think the cold cuts business is one where, you know, we, I mentioned earlier, we made investments in marketing, we have made investing on the. We could have taken those dollars and put it back into promotional dollars. We didn't think it was the right thing in order for us just to rent volume, and some of our competition decided they wanted to do that. So for us, it was important that we maintain the discipline of how we protect our margins. And even though in the short term there may be some volume impact on, on cold cuts, we think that is the right thing for us to do for the long term.
Now we are also gonna continue to support those businesses, but just not to the degree that it would impact our ability to do business for the long term.
As you mentioned, given the company needed some of these pricing actions to protect profitability, I guess how do you do that? If it does, you know, could you ultimately need to return some price, depending on where underlying, you know, commodities go?
Our price, as we said, price for the year is behind us. We implemented that at the beginning of the year, so there is no more price needed. We have already contemplated, as we just said, more promotions in the second half of the year. But as inflation keeps moderating and the supply chain efficiencies keep over the expectations, remember that we raised the bar from $400 million to $500 million this year. Year to date, first half to date, we're ahead of predictions. So we're doing very well, and this has helped us to protect the gross margin moving forward. As inflation continues to moderate, we have room there to be deploying more promotions if that's what's needed while protecting the profitability.
You know, it's, it's interesting, you know, as the benefit from pricing has now started to wane, right, for the industry, a number of companies have seen sort of a delayed, let's say, recovery in volume, but these are all up to their initial expectations. I guess, what do you believe is, is driving this dynamic? How are you thinking about the progression of top line trends in U.S. retail, sort of broadly speaking, over the next six to 12 months? Because we're, we're not necessarily seeing some dramatic trade down to private label. We're not necessarily seeing some dramatic shift to away from home eating. It doesn't appear consumers are, at this stage, eating fewer calories. So there's lots of theories that are kinda out there, but it still, I feel like, is a puzzle to a lot of investors in the room.
You know, there's a lot of travel over the summer. Consumers are guarding against waste a little more. They're kind of hunkering down. Lots of different sort of theories out there. But, what's your sense maybe on, for, for broadly speaking, why some of the volume recovery has been a little bit, maybe less rapid than, than a number in the industry have had hoped for?
I mean, there was a couple of events this year, right, that affected volumes, and then I'll get specifically on how our consumers see it. But certainly the pricing that we had taken, you know, is one of those that had an impact on price on volume, and it snapped the reality of pulling back on the snap, but also quite a bit affected the volume that we saw. And that was something that we expected, and in fact, that was within our guidance of how we think about returning to historical level of elasticity, as we said in the second half.
I think others, others might have expected that to stay for longer, but we kind of assumed that it was gonna go back to the critical levels and still a bit better today than it was in historical levels in, in terms of elasticity, but returning to those levels. I think what I'll tell you, though, that we are seeing, is that what was happening in the, in the past couple of years, too, is that when you think about a family who was putting a number of items on the table for lunch or for dinner, the number of ingredients that you were having during that time, I think, used to be more than it is today.
Number one, so rather than have a steak and salad and dessert and everything together, they may be choosing to have less number of meals, less number of plates in that particular occasion. The second thing that we're seeing is that the actual calorie consumption have shifted. So if you think about the fact that today we are seeing places where, for example, our pasta sauce business are growing, where consumers are now focused more in terms of getting more carbohydrates, maybe less protein, in order to have a more filling opportunity to actually drive value within the family. So those consumers who are focused on the cash flow, they're also thinking about how to make some trade-off in terms of the actual total calorie consumption, and maybe cheaper, maybe less volume as well.
If you wanna have a bowl of pasta rather than a steak with a salad and the potatoes, like, all those things have a shift in terms of the amount of volume that people are eating. But the actual calorie content may be a little bit different for the family.
Got it. Maybe to close out our discussion on U.S. retail, would just be, discussing on market share. The last couple of conference calls, you've kind of broken out where your shares are improving, where, where you expect shares to start to improve.
Yeah.
Based on whether it be capacity related or service level related items and whatnot, and then where you've got a smaller bucket, where there's still more work to do on the underlying business to improve share. Maybe you can just kind of update us on where you see, sort of the share progress right now?
Well, standing, you know, I mentioned earlier, taste elevation, easy meals, growth platforms, you know, continue to do well. In fact, you know, together they're actually now growing share again. If you look at our business that have had service concerns, like a business like Philadelphia cream cheese, we're actually seeing the improvements sequentially, even as we're going through this last month. Going into the end of the year, this will be the first time we'll be able to promote Philadelphia cream cheese in the last four years. We just haven't been able to truly unleash the power of that brand because of some service challenges we've had in the past. We see those things sequentially improving.
The other brand that is part of our growth business is our Lunchables business, and as we speak right now, Andrew, we are seeing expansion of facings in some of our key customers that are resetting their shelf to increase somewhere around 40% of our shelving as we continue to bring the right assortment to consumers and customers. So those are things that you'll see sequentially improving. We're also going to see improvement because we're going to be cycling some of that pricing as well. That is gonna be improving as well as it goes towards the end of the year. And in fact, our share from the low in April of this year already has seen improvement as we go into August. The other thing I'll add is that we internally focus so much on the Nielsen and tracked channel. We're also seeing growth in non-tracked channel.
Whether that is some of our club businesses that are non-tracked, whether that is in our dollar store that are non-tracked, which we have expanded our distribution in order to better serve our consumer. Because we know consumers are making choices right now, but not only the type of products they're using, in the type of formats in which they're using, but also in the channels in which they're going. So that doesn't sometimes even give you the full story of what's happening to the business because of also those non-tracked channels as well. I think the challenge that we have continues to be in us staying focused on our discipline on, on places like Oscar Mayer. That is something that may be a more of a short-term situation until we truly can leverage the opportunity on Oscar Mayer for the long term.
The reason that one is particular is little chance, not only because of the pricing of our competition, but also what we are seeing is some of the growth that we're seeing in the category is more in the low-end type of products, and that's a way we're still servicing that in the low 90s. So there is an opportunity on service improvement in the low end of our products and a more value-mass products and cost combined, that we'll see them much improved by the end of the year.
Okay. Maybe we switch gears a little bit over to some of the remaining pillars of growth, like Food service and emerging markets. Whereas, I guess previously, Food service was seen as sort of just another channel to sell your items in. Obviously, KHC has become much more, Food service has become much more of a strategic focus for you. Maybe you could talk a little bit about this pivot and why you view the Food service channel as so critical.
Miguel, do you want to go?
I'll go. It's so critical first because, you know, for the market, for the industry, about 25% of the industry is back of the house, which basically you don't have your brands and margins are much lower. But for us, that's very different. It's 50/50. We have 50, 50 % of our business is front of the house. Basically, when you go to a restaurant, there's a bottle of ketchup in front of you. And that is why it's so critical, because you are teaching consumers the taste of your brand. That is important everywhere in the globe, and especially in countries where we are expanding, like emerging markets, where we are teaching consumers, you know, the taste of ketchup, the taste of mustard, the taste of mayo.
And that is why we like this channel so much. It also grows 50% faster than retail. And you are right, and in the past, Andrew, it was very, it was a very transactional type of relationship, where we would sell, you know, packs of ketchup. Today, that's very different. I mean, we have a very good team. We changed radically the talent that we had, and we made it, you know, an engine for our growth. It's critical for our success, and we continue bullish on it.
Yeah, I mean, and listen, just to complement Miguel from that, this is an area where it truly can unlock a number of things for us. First of all, it can be a place that actually drives a lot of innovation, and we're seeing that not only here in the U.S., but in emerging markets. In Brazil, for example, we have partnerships with some of the top burger chains. In order for us to understand what is consumers kind of really looking for, we take the best products, and actually we bring it into retail. That formula of us looking at the Foodservice channel as a place of driving insight and innovation is something that we're just starting to see the full potential it can do for us. We also, it's a place that we're continuing to investing in terms of bringing innovation solutions to consumers.
You know, I think, you know, over the last six months, we've talked about bringing a new, new to the world idea of Heinz Remix, which is we create 200 different sauces with one machine. That allows us to get data on what consumers are actually choosing to make their sauces, that then we can use that as another way for us to bring innovation into retail. At the same time, we also know that when we go to emerging markets, a great way, what Miguel said, for us to expand the, the potential of our brands, is to make sure that we are in the right channels of foodservice, that allows us to create that kind of demand for consumers, so we, we continue to grow the retail side of the business as well.
I think for us, that we're just starting to see how big this potential could be, and an area in which we have now been able to grow share, expand margins, and simplify the business. The last thing I will say, Andrew, is that part of that refocus on our Food service business has been also for us, making sure that we're thoughtful about the channels in which we're going to grow. So we have shifted from channels in the past that made it a bit of a waste, whether that was us creating, you know, different kind of products, very much customized to small restaurants, to now making sure we have simplified our portfolio.
We're closing the number of SKUs by 50% through 2019, and going into new channels, whether that is taking Lunchables to schools, whether it's having partnerships with hospitality, so that we can have stronger relationship with fewer channels, but we can then expand our margins in those.
You also changed your, your go-to-market strategy in emerging markets pretty, pretty radically. You know, I think it historically was more of a land grab, and now it's a much more focused and disciplined sort of approach. Can you talk a little bit about that pivot in strategy in emerging markets, and so what you're seeing some of the earlier returns?
Yeah, emerging markets is another critical part of our strategy, and first, because they grow faster than non-emerging markets, but also because 60% of our portfolio is elevation, and really with the Heinz brand leading it. The Heinz brand is one of these unique brands in the world that although our footprint is really not global, we have a global recognition for the brand. So even in countries where we basically do not distribute Heinz, like Ecuador and Colombia, the brand has very, very, very high awareness and also consideration. And that exists, I think, in part because of the American influence, the culture, because of Hollywood, because of our presence in front of the house, and which is incredible.
I mean, and so we need to, we need to grow our footprint around the world. That chance is there for us, is there for us to grab. We recently announced a partnership with AB InBev's BEES, which, which we are taking very seriously and very closely, and it's working well. Because that it will be a model for us to take our products and our brands to countries where we still do not have really a presence. And if that works, and if we can scale, then we can build operations in those countries. So yes, we see today emerging markets in a very different way. Again, far less transactional, not only selling or grabbing, but really strategically on how we're gonna build our business from place to place and really from behind plan.
And I think for us, the way is Latin America. I mean, it's a business, a place that, you know, many of us in have worked at and understand very well, and we are seeing how we are growing and growing margins as well. I think that you see where we have developed this market development model, in which we know how do we actually start working with Foodservice to create the demand, and we invest behind the right distributor partners in order to grow the business, and then come back and actually invest in the SG&A in order for us to really lever distribution, you know, through the country. You know, we see the model that started in Brazil.
We have expanded to Chile, and we have still so much opportunity in Latin America. I will tell you that they make a little way for us in emerging markets. Our Middle East and Eastern Europe business is also growing significantly. It is clear for us that we're always crushing the circle of what it could be, but feel very comfortable because we have a model that we know can work, and we can, and can travel.
We're also involved in some newer big idea innovation with talked about February, Home Bake and Crisp Microwave for cheese. It's still a little early, but what are we seeing there in terms of early returns?
Well, I think that for us, the. Our continued transformation is gonna be written through innovation. And, and I'm very excited about we're seeing, because we approach this in two different ways, Andrew. I think one is, how do we take our brands and bring them to new spaces, where until now we have really, really looked into? You know, we have Kraft Mac & Cheese brand, and now we're launching Kraft Mac & Cheese in the frozen aisle, and it is doing spectacularly well. We are now, you know, we have had Lunchables over 30 years. We are now moving, taking Lunchables and bringing into Canada as a way for us to kind of expansion to new marketplace with a brand that we know.
This idea of us kind of leveraging our brands and bringing to new, new countries, new locations, is a way for us to drive that innovation in a very distinct way. We're also focused on driving this single innovation platform. And I'll give you the best example of me is the 360CRISP™. It is an innovative technology that we have patents behind, that allows us to make sure we take out of the microwave something that will taste like you have grilled it. So the first foray to that will be this year, with a 360CRISP™ on a grilled cheese, and you'll be able to take it out of the microwave and feel like you just actually put it in the stove in order to heat it up.
So it is a way for us to take a technology, leverage it across an entire number of brands, in order to create, you know, a scale to that innovation as well. And you're seeing that in, I mentioned earlier about our coffee business, and this idea of going from restaurant to retail. What we have done with IHOP is another example of us bringing innovation in a whole different way of thinking, for us to continue to build the business as we go forward. We're very excited what's to come, and you'll see a lot more from us as we go into 2024.
Maybe the last one here to, I guess, what's the company's potentiality for M&A at this stage? And sort of what kind of assets you're looking for. You know, the last couple have been more emerging market, Food service, sort of oriented. Is that kind of where the food is likely to be going forward, or are there some other things you can even in U.S. retail?
Well, absolutely. I truly believe that in food, more than any other type of CPG, M&A is critical. And it's critical because consumer needs change in a much faster way. I mean, the way that we eat today is very different the way we were eating years ago. And as a consequence, you always have to think about what's gonna be the new growing category and what's gonna be the new planning category, and be fast on buying, fast on diversity. And so the answer to you, Andrew, is yes, definitely on both sides of opportunity. We made 4 small acquisitions in the last 18 months, and it's not a coincidence that four out of the four were acquisition. It's not a coincidence that three out of the four were in emerging markets and were in Foodservice. So, yeah, you should expect more about that and more from that.
All right, well, we're out of time here. We've got a lot more we can cover. I want to get into productivity as well. Why don't we do that in the breakout? Please join me in thanking Carlos for being here today.