Great! Ready?
Yep.
Okay. Good afternoon, everyone. Thank you for joining us. I'm Sue Maklari, the housing and home building analyst at Goldman Sachs, and I'm happy to have Jim Peters, the Chief Financial Officer of Whirlpool, with me this afternoon. We're gonna start with some questions, and then we'll open it up to the audience if anyone else has any questions for Jim. Welcome.
Cool.
Thank you for coming.
Thank you, Sue. Thank you for having me, and thank you for joining me, folks.
Yes, so given we are at a consumer-focused conference, why don't we start by talking about the health of the consumer and what you've been seeing in terms of demand over the last couple quarters?
Yeah. And so here's what I'd say is in general, I think the health of the consumer is relatively good right now, but there are factors that affect our industry that aren't necessarily driven by that. And what I mean is that a big part of. If you take our industry and our business, we are about 2/3 of our business, or, you know, typically closer to 50%-55%, but it's now around 60%, is replacement, and that's just the nature of our business, and so you've got a consumer that's out there no matter what. Another 15% is what I would call new home sales, and that's driven obviously by housing starts and other things. But the biggest part of the discretionary consumer for us is driven by existing home sales.
And that's why I say, there are factors that impact the consumer that's, you know, the more discretionary one in the marketplace for us, but it's not necessarily always the health of the consumer, it's things like existing home sales, and that's the biggest driver for our discretionary segment. And the thing that drives that is mortgage rates. And so right now, with mortgage rates elevated, we're seeing that consumer, which is in about a third of our business, that really just isn't in the marketplace because they don't have the catalyst today. They don't have the need yet, and they're waiting to actually, you know, buy a different home and all that, and then that's what will drive them to purchase.
Overall, I think the health of the consumer is still relatively good, but the underlying factors that drive our industry aren't necessarily positive right now.
Relative to that, do you think that the range of price points that Whirlpool has is a competitive advantage in this macro?
I think it is, because if you think through the different segments I talked about there, when you've got a large replacement industry, the consumer is a distress purchaser. It's not a planned purchase. So your ability... and we have brands that run across the whole spectrum, but Amana is our value brand, and then Whirlpool and Maytag are our mass brands. When you've got consumers that are in that segment that are looking, those tend to be the brands that they go towards, and they tend to be at the price points that those consumers will look to. Now, when the discretionary picks up, what we see is more of our mass and our premium businesses pick up, and that's our Whirlpool and Maytag brands that I already talked about, but also our KitchenAid brand, and KitchenAid does very well in the premium segment.
As consumers are in the marketplace because they bought an existing home, they're looking to replace a whole suite of appliances, possibly in their kitchen. And that's when they look to Whirlpool, to Maytag, and even to our super premium brand, JennAir. So I do think having the multiple brands that play at all the price points really lets us play across all those segments, as well as with the builders. I said 15% of our business is new home construction, and we've got over 50% of the top 100 builders in the U.S. under contract, and it gives them price points or brands across all the price points that they can use in everything from starter homes to multi-million dollar homes with our brand portfolio. So it also really allows us to win in that segment.
Yeah. And maybe staying on the major domestic appliance segment for a minute, can you talk through the value of promotions today, and maybe how that's changed as we've moved through the last few years?
Yeah. So I think if you look at the promotions within our industry, and maybe if you were to rewind it 10, 15 years, the industry got more and more promotional, and especially around things like Black Friday, but then it spread to Memorial Day, Fourth of July. As you got to 2019 , it was probably at a peak level. As you went into the pandemic, what we saw as the supply chains were constrained, the promotional environment dried up because nobody had enough product at that time to be able to meet that level of type of promotions. Coming out of that time period, we saw the promotions begin to normalize back to levels that they were in 2019 , and probably last year, they hit that level.
Now, what's different now is in 2018 and 2019, the appliance industry still was in a growth type of mode. Right now, for the reasons that I mentioned, is yes, you've got replacement, but the discretionary side is down, which has made it a relatively flat industry, and that would say that promotions don't necessarily make sense in this environment right now. Despite the fact that the industry tends to be, has returned to the level of promotions we saw before, they don't necessarily make sense, they don't drive incremental overall demand, and you're trying to incent a consumer who's making a distressed purchase to get in the market. They're already in the market.
So one of the things that we did earlier this year is that we came out and said: We're gonna take an effective promotional price increase, or we're not gonna support the level of promotions we had been supporting up till now, because we just didn't think it made sense, and we didn't think it was driving incremental consumer demand. And honestly, the impact on margins just was not helping us out. So we did that, and it's been successful so far, and we will see margin improvement in the back half of the year due to it.
Maybe turning to the small domestic appliance business, which is part of the growth story, and you know, the longer term trajectory, can you talk to how Whirlpool positions itself within KitchenAid and what the competitive advantages are?
Yeah. So we've always tried to keep KitchenAid at a premium part of the countertop or the small appliance segment. Our cornerstone product within there is the stand mixer, the KitchenAid stand mixer, which is an iconic product, sold throughout the world. Price points in the U.S. starting at $250, up into $500-$600 type dollar type of range. And outside the U.S., sales were up to double that. So that's really been the basis of our business, but then we also have blenders, we have food processors. We've just launched a new line of fully automatic espresso makers and semi-automatic espresso makers. Semi-automatic starts around $600 up, and fully automatic is $1,400-$2,000. Also a new grain and rice cooker that we launched into the marketplace.
So as I said, we've really tried to keep that in the premium segment, because if you look at the countertop space, the mass segment is very crowded, very low margins, sold more in retailers where you don't see necessarily the premium products. And so we've really tried to keep ours more at that higher end, but that's also what allows us to keep our margins at 15.5% for that business. And is also why we do think that segment will continue to grow, and we think it could be 10% plus growth.
Maybe sticking with this, how do you think about the value of brands in this industry? And what do you do to support those brands?
Yeah. So I'd say, listen, brands obviously are valued because it's something that a consumer recognizes, it's something that a consumer understands. But I think in our industry, product is as or even more important than the brand, because the brand is based on the reputation, and the strength of the brand is based on the underlying product. And especially when consumers are in the marketplace only every five years or so, what they really base a lot of their decision upon is the quality of the product, the experience they may have had with products of that brand, and the reputation of those products and those brands. And so again, I think without strong products, you can't have strong brands.
The good thing for us is we have both, but we invest more and more probably in our product portfolio, and now we're focusing and investing additional in our brand portfolio, because we feel we've got the underlying product portfolio that gives us the strength that we need. But I do think the importance of the brands, and you'll see, we use specific brands in specific parts of the world because they are so strong, and they have that high level of consumer recognition. And so in Brazil, for example, we don't sell under the Whirlpool brand, it's Consul and Brastemp, and those are two local brands that we've had for an extended period of time, but they have a high level of recognition.
Even in a Brazilian market, they refer to something that's of high quality or good as, "Well, you know, is it a Brastemp or not, or is it at that level?" Again, I think that's why brands are so important in our industry, is just the awareness and the recognition that you get from the consumers.
What about innovation? Can you talk about what innovation means in this industry, and how you make sure that you are continuing to push that forward?
Yep. So I think for years and years in this industry, where innovation really was, is it was focused, first off, on bringing different products to the marketplace, and the examples that I use is things like front-load washers in the U.S. You didn't see that, but that was a European-based product. But you saw that in, let's just say, you know, around 2010, really, or it's not 2010, but early 2000s, more move into the U.S. marketplace, and it was different configurations. Then capacity was the next biggest frontier. Everybody was trying to get to higher capacities on washing machines, on refrigerators, on ovens, et cetera. I'd say performance is now really where the innovation is being driven, and it's more about performance in terms of, you know, what benefits does the consumer get from the appliance, and how does it make their life simpler?
And if you really step back and say, what are some of the bigger things we've brought out recently, where we've focused on, that we do believe impact the consumers' lives, is, you know, we brought a dishwasher to market a couple of years ago that has a third rack on it that actually has active washing within it. And you can put things more than just silverware. You can put cups, you can put bowls, but it actively washes up there. The next thing, you know, that I'd cite is, after COVID and the pandemic, we saw a lot of people getting pets, and everybody now all of a sudden had pets.
We brought a washer to the marketplace, the Maytag pet washer, that has a filter in it that takes pet hair out of your laundry, and that's actually been very successful in the marketplace. You know, other things that we're looking at is what we call SlimTech, which is a thinner wall on refrigerators, because we do believe it'll allow us to get that last little bit of capacity out of some of those refrigerators today. So we're constantly looking at things that will help, you know, the consumer in their day-to-day life, and it's something that we feel they'll utilize, they'll get benefits from. You know, I could go into other things that we've done in cooking and that, but that's really what drives us versus the big capacity increases, because the box can only be so big.
You know, energy is an area we continue to focus on, but that's more due to regulatory requirements, and I'd say maybe at some point that'll have a bigger consumer pull to it.
How do you think about some of the trends that have come out of this pandemic that are continuing and will become longer term normalizations in there, and how you respond to that?
Yeah. I'd say there's a couple things that we've seen, is one, the increase in the amount of cooking at home has been sustained. And we know via connected appliances, that consumers are using their appliances more, and they're cooking more in their home. We also see that in our KitchenAid countertop business, that consumers continue to cook more in their homes. So we do see that as a sustained benefit. Additionally, what I would say is that people are wearing more clothes that you wash in a washing machine today. And while many of us in the room here may have some stuff on that needs to go to the dry cleaner, that is not the norm, and that's not what you're seeing in office.
Even though more people are coming back in the office, I still think you're seeing a lot more casual wear, which then affects the overall laundry business for us, because consumers are washing more within their homes. So we are seeing trends, and I mentioned the pet thing, and people have more pets. So we've taken that Maytag product that was on a top-load washer, and we're now bringing it to front-load washers. We're bringing it to dishwashers, actually, because we're gonna have, you know, a cycle within a Maytag dishwasher that you'll use to sanitize your pets' toys and bowls and all that, but also then won't leave any bacteria within the dishwasher. So there's a lot of trends we're seeing that we are kind of adjusting to, and we do think will continue.
The other side of this is that you've been very focused on costs and on realizing efficiencies in the business as well. Can you talk to some of those efforts?
Yeah. So I would say, listen, a big part of what we've gone through recently is we've been transforming our portfolio and our business. Part of what we did with that is we divested of our EMEA business, which was about 20% of our revenue. We've always been a very cost-focused company, but with that, it really gave us a catalyst to say, "Okay, we need to look even more broadly at our cost structure and our organization," because EMEA was our most complex business we had within our portfolio. Think of the number of countries, et cetera. So as we've gone to simplify that, simplify our structure, we've been able to really take a lot of cost out, and that's giving us about $100 million of cost benefit within this year of just simplifying our organization.
Additionally, we continue to look to drive more efficiencies within our factories, and a big part of that was coming out of the pandemic, is you just had a lot of disruption in your factories, and you had a lot of disruption at your suppliers, and with some of the suppression or the lower demand we've seen, we've had to adjust some of our production schedules recently. That's created inefficiencies that we see a lot of opportunities to take out of within our factories. Also, on any given year, we tend to go after about 50-100 basis points of material cost within our business. Just looking to replace, you know, use either lower-cost materials, use less materials, switch suppliers, whatever it is, so we're always in a continuous cost kind of mode.
But what I would say is, we've said this year, we expect to take out about $300 million-$400 million, and over the next two years, in our recent Investor Day, we talked about another $300 million-$400 million over that next two-year window of time, we believe we can take out.
And as you think about that 9% consolidated margin, EBIT margin goal that you set with the Investor Day, how much of that is reliant on the macro and an underlying improvement in the demand versus the company specific?
Yeah. I'd say more of it is company specific. Because, you know, what we did assume, we did assume a little bit different starting point than we thought. We thought we'd see some growth in the industry this year, but we haven't assumed a significant recovery yet within the housing market that would drive... We've just assumed normal industry type of growth, which is 2%-3%, with that time period. And that's really what, when we laid that 9% out, we said: Listen, we believe the industry will just grow at about that rate, and at some point, you could see an increase due to just an improvement in the housing market. Now, as I said, the start has been slower than we expected, but we do expect that to pick up here.
But the bigger drivers for us are more just the cost takeout actions and then the pricing we've taken in the U.S. recently.
And one of the things you noted is that you've actually gained share with the really big home builders in the U.S. Can you talk about what's driven that share gain and the sustainability of it?
Yeah. I think a couple things is, one, obviously, I talked about the brand and product portfolio we have, and I do believe that plays very well in our favor, and we've always been one of the top two players in this segment, but the second thing is just the improvements we've made within our supply chain and the stability that we now have that we didn't necessarily have during the pandemic period, which allows us, because the key thing for builders, and I know you know many of you probably have listened to or talked to some of the different builders, is they need reliable suppliers.
We are the last item to go in the house before they close on it, and if we can't get the appliances there and get them installed properly when they need them, they can't close on the house. And so that's probably the biggest driver for us, is we have a strong logistics network, we have local distribution centers, we have good installation capabilities, and so we're able to service them at a level that nobody else in the industry can. And that's allowed us to become the leading player with the home builders.
One of the other things that you noted is that you do have a global footprint, and you've made some changes there in the last year, year and a half or so. Can you talk about the global set today and how you think about the various geographies you're in?
Yeah. So, here's what I would say is that, you know, the way that we look at our business now, and historically, we looked at it as a truly global business.
Mm-hmm.
And that we thought we had to be in every place around the world, and we had to have that so we could get global scale. What we've really realized is regional scale is the most important thing, but utilizing global capabilities. And what I mean by that is we produce most of the appliances that we sell very close to where we sell them. Many of the products can be specific to those geographies, and that drives you to a little bit different decision than if you were trying to do, you know, products on a global basis. What I would say is that when we look at things that we can do globally, or the capabilities that make sense, we do have some global architectures.
And we're able to utilize some of those architectures in multiple places, and that may be things like wash systems or cooling systems, but we can do different configurations with those around the globe. We have global engineering capabilities because the engineers that work on refrigeration products in the U.S. also can understand refrigeration products that are sold in Brazil or India or places like that. And so, you know, it may be different products, but we can get the leverage on that from an engineering perspective. And then procurement. You know, we also really leverage our capabilities globally to just get some size and scale within procurement. But again, as I said, the rest of our business, we really focus more locally and regionally, because those products are specific to market. They're manufactured nearby, just due to transportation costs.
And then many of our selling teams, you know, there aren't global retailers, to be honest. Most of the retailers are also country or regional based. So that's the other thing, is our sales and marketing organizations are very focused on those geographies.
The other thing, too, is would you say that some of your geographies are perhaps more focused on growth, and other geographies are more focused on, say, profitability and cash generation and how that all comes together?
Yeah. I would say, listen, if you take U.S., Canada, which is our North America business, is focused probably more on. I mean, we're the number one market share player. We're focused on strong margins and growing at or slightly above the industry.
Mm-hmm.
And focusing more on our premium brands and our premium businesses there. If you take markets such as India, Mexico, Brazil, those are high-growth markets, and so we're very focused more on a balance of really trying to grow disproportionately to the market, continuing to gain market share, still with healthy margins, but those are more growth markets for us. And so we invest in a little bit different way in those type of markets, but we see those as in the future, that we'll continue to leverage because there's the level of penetration is significantly below what you might see in the U.S. or Canada.
The mix within those markets is still at more of what I'd call an entry to mass level, and we wanna make sure we capture it and grow in the premium as those premium segments grow there, so a lot of the markets and how we may approach them are different, but the end goal is really to get ourselves to a point where we grow with or above the market, but we definitely expand into the more premium categories wherever we are, and to try and at least have a number one or two market share type of position in many of these markets, because that allows you to do extremely well, and then that's what we found is if you're one of the top two players, you do extremely well in a market. It's harder if you're the number three, four or five player.
What does that mean from a mix perspective, as well, as you think about those margin targets and the cash?
You know, what I would say is that, you know, again, as I said, we're really trying to drive our business more and more to the premium side, and whether it's through growing our countertop business which is very premium, focusing on within the U.S., growing our more premium brands. Outside of the U.S., really focus on trying to make sure we capture more of the growth in the mass to premium segments. So overall, I mean, we're really looking to drive a much higher mix, and that's where when we looked at places that we've exited out of, such as EMEA, we just didn't have the mix there, and the mix, you know, the opportunities weren't there to drive the mix to the level we needed.
What about on the working capital side? As you think through a lot of these efforts, what will it mean from a working capital perspective and the ability to hit the $1 billion or the over $1 billion of free cash flow target?
Yes. So here's the thing: As we simplify, and we reduce down the number of architectures that we have, as we focus more on very specific markets out there where we know we can be significantly profitable, as we focus on markets where we're more efficient, that allows us to reduce working capital in the end, and that allows us to really keep our inventory levels lower. Because the biggest thing for us in our industry is inventory levels.
To be honest, your receivables on that side is just a mix of your retailers, but it's pretty standard. Your payables, that's a mix of suppliers, but it's also relatively standard. The biggest thing we control are inventory levels. And if we simplify our product architectures, if we simplify our portfolio of businesses, it really allows us to control inventory much better. And that allows us to be much more efficient from a cash flow perspective. I think the other thing that you see is, as we focus on these more profitable markets, with the higher margins, just naturally comes better cash flow. And I think that's the other thing that, you know...
It's one of the biggest improvements we will have in our free cash flow from this year to next year. It will be that we've divested of our EMEA business, which was consuming about $250 million-$300 million of free cash flow every year. This could be due to losses within the business, restructuring we had to do, investments we had to do above and beyond to try and fix the business. This year, as we sold it, we had to unwind multiple working capital financing programs and other things that were in there before we sold it. I think that's gonna be one of the biggest improvements to our cash flow overall. It is just that we're focusing on our higher growth, higher margin businesses. They do naturally generate better cash flow.
Mm-hmm. And a piece of that cash is obviously targeted to the deleveraging of the balance sheet. But as you think about investing in organic growth and the various needs and the goals you have, how do you think about balancing all that?
Yeah. I would say, listen, our first priority is always fund the business, and that means we invest in engineering, we invest in capital expenditures to bring new products to market. And that's about combined 5-6% of our business between those two are of our revenue that we invest in those. Our next biggest priority has been returning cash to shareholders, and the dividend has been something that we have consistently paid for the last 69-70 years. We've only raised it or held it constant, and that's always been a focus of ours. Deleveraging is also, right now, a strong focus of ours, because after we did the InSinkErator acquisition, we had higher levels of leverage. Then once you step back from that, looking at other inorganic opportunities is our next priority.
Because we just did a significant acquisition of InSinkErator, that's moved a little bit lower on the priority list. When we had our leverage levels much lower, and we were then, you know, doing inorganic opportunities, was a much higher priority for us. So we always kind of balance all of that out and try and, you know, say where we are and what the opportunities are, how do we best take advantage of them?
So I'd say, you know, if I really look it from a capital allocation perspective and a use of cash, those are the five different priorities that we've had, and the one I didn't mention in there is share buyback, have always been the same five. It's just a matter of, you know, we move them up and down the list at different points in time, depending on where we are and where our industry and our business is.
Yeah. And how do you think about some of the other avenues that you could get into over time?
Yeah, I mean, we've talked about, listen, we're in countertop appliances. We want to continue to grow there and expand, but we want to stay in the premium. We're in commercial laundry. We really look at the commercial appliance business and say, there's probably opportunity over time for us to expand and grow within that space. And then, you know, as we look at the major domestic appliance industry, I'd say where we really want to focus there is growing more in the premium areas and continuing to expand, continuing to grow our JennAir brand, continuing to grow more under the KitchenAid brand.
But definitely, if you see, you know, a lot more of our investments, and next year, you'll see we're gonna bring a whole new line of KitchenAid appliances to the marketplace. That's more about the aesthetic look of KitchenAid and really bringing it to the next level and making it more customizable than it is today.
So I'd say that's where we really see, you know, the investments and where we want to drive the growth within our own portfolio. But countertop and commercial are the two areas outside of the major domestic appliances that we think fit well for us.
And how do you think about supporting growth within the current footprint? You know, what's needed from a CapEx perspective and the ability to manage?
Yeah. Here's what I would say is, I think right now we're making a lot of the right investments. I mean, over the last, y ou know, we launch over a hundred new products every year into the marketplace.
Mm-hmm.
And I think you'll continue to see that type of cadence out there. But as I said, what we now want to see is more and more of those products coming at the premium price points and within our premium brands, but I think if you look at, let's just take KitchenAid, the KitchenAid countertop business, as an example, and I'll talk a little bit more, you know, in there. As I mentioned earlier, stand mixer is where our strength has always been, but now the new products we're launching are the fully automatic espresso makers that sell at much higher price points, the semi-automatic espresso makers, the grain and rice cookers, countertop ovens, a whole cordless line that's coming that's similar to many of the.
What it is, is it's a, you know, the smaller handheld kitchen appliances that you use, but it's using a similar type of battery pack to what you see in power tools, which gives the consumer a lot of flexibility and a lot of convenience.
So those are the kind of areas from a product perspective that we want to invest in to drive that incremental growth above and beyond where we are today. And then I could go through a whole series within our major domestic appliance business, which is very similar to things there that we want to, you know, drive. But I think those are all good examples, just within one segment of our business, of how we're trying to drive that organic growth.
One of the other things that perhaps distinguishes Whirlpool from some of your peers is that you are fully distributed. You're going through retail channels, you're going through, as you mentioned, builders, all these different, you know, end markets. What is the benefit of having that exposure as you think about the move to mass premium, and how you can leverage them in order to hit those targets?
Yeah. We want to be where the consumer shops. And, I mean, that's what it simply comes down to. And so if the consumer is shopping online and wants to buy direct from the manufacturer, whatever, we're going direct to consumer in many places. If the consumer wants to shop in major retailers, we want to make sure we have a balanced presence across all the major retailers in any geography. If the consumer is shopping through, you know, some other channel, such as an online e-commerce retailer, which it's not so big for appliances in the U.S., but outside the U.S., it is a lot bigger. Here, it's more the brick-and-click type of retailers within the U.S., we want to be present there.
So that's really what our strategy always is, is be present where the consumer shops for appliances and make sure it's a good experience for them.
Mm-hmm.
Because in the past, we've also looked at different channels that have maybe tried to enter into appliances and said, "You know what? We don't think that the consumer experience will be good, and we don't think it will necessarily take off," and we haven't participated in some of those. And so that's where we really, truly try and stay focused, is: Where's the consumer gonna shop? Where will the experience be good for them? And then how do we anticipate, and then how do we help make that a better experience?
Yeah. Okay. Let's open it up and see if anyone has questions in the room.
Can we talk about capacity?
Hope they have a microphone.
Mm-hmm.
Thanks. Maybe a question on capacity additions in North America. I think there's still an increase of production capacity coming online, especially from Korean players. Do you expect that to have any impact on market shares?
I would say no, because from what we've seen, as that kind of came online, and a lot of it already is online, we didn't see it impacting our market share. The bigger thing that impacted our market share during the pandemic was just our ability to get components and parts. Because everything that we could produce, we could sell, but we had capacity constraints that we just weren't able to overcome, and now that we have healthy capacity, or, you know, we don't have capacity constraints, we really don't see an impact to our market share coming due to any additional capacity. I think, the other thing is that if the industry begins to grow, listen, I think we're positioned well in terms of the capacity that we have.
And I think that you're about to see a time period where the industry will start to grow, and so I'm not really worried about the additional capacity that's come online because I think there's gonna be lots of opportunities within the industry.
Other questions?
Yep.
Do you expect that there will be more industry consolidation? Would that help alleviate some excess capacity?
Uhm.
Both here and also globally?
Yeah, I do think there'll be more industry consolidation. I don't know if it's necessarily due to the capacity and all that, but I think it's just due to, if you look at there are certain players that are more or less relevant in certain geographies, and you are already seeing some, you know, consolidation that's taken place. I think also you see some of it as certain players try and pursue establishing a basis or a presence in different geographies. But I don't think it's necessarily a capacity play that you're seeing that's driving the consolidation. You know, also in this industry, you continue to have a lot of smaller players out there in different geographies around the world, and over time, many of those do get acquired by some of the bigger players.
It's not a big type of consolidation thing, but I think you'll always continue to see some of that, whether within Europe or in Latin America or other parts of the world. I don't expect, I mean, within the U.S., I wouldn't expect any major consolidation or that, because I think right now, even from a regulatory, antitrust type of perspective, I don't know that there's a lot of opportunity or a lot that could occur within the U.S. I think most of it you might see will occur more outside of the U.S. in terms of industry consolidation.
Building on that for a minute, do you think that post the pandemic, there's a greater appreciation for domestic production and the ability to be servicing from the U.S. to the U.S.?
I do, because listen, if you look at it, transportation costs have fluctuated up and down and that's a big impact. Just being able to produce product, to have it closer to the consumer, to not have to deal with some of those fluctuations, I think has gained a little bit additional benefit, if you want to... Just shortening your supply chain down.
Mm-hmm.
I mean, honestly, I think people have seen the benefit of that throughout. So, is it, is it significant yet? No, because there's still a fair amount of imported product.
Mm-hmm.
But I think it has become a little bit more of a trend to bring more production at least closer to where the consumer is.
Yeah, and that's...
You see markets outside the U.S. that tend to... I mean, India. India has done a very good job in terms of trying to just drive more local production via more of the regulatory environment and things they've put in place, but more of an India for India. Brazil has always been like that. So I think you're also seeing what I'll call our geographies or locations that are becoming a little bit more protective, and trying to really drive more local production. That's also outside the U.S. that's driven it.
Yeah. Yeah. Okay. Any last questions? No.
All right.
All right.
Thank you. Thank you very much, folks, and have a great day.
Yep. Thank you.