Q1 2022 General Mills Inc Earnings Call - Question And Answer Session
I've taken in order to help address address that rising inflation and how our profit will comes in will be determined I think about how much exactly does inflation go up and exactly wanted to was pricing hit.
In terms of as we look forward I think the important thing is that there are a couple of things that are really clear to us one is that inflation inflation is going to continue.
Through the balance of our fiscal year, which is to say the first half of calendar 'twenty two that much is clear and it's going to be broad.
The second thing is clear is that we've done a really nice job with pricing so far and.
Our prices are going to go up for the for the remainder of the year as we see inflation going up and so you're starting to see that at the end of Q1 and by hitting Q.
Youll see more pricing and our job is to as we've done for the last three or four years. It just kind of stay in the middle of the boat, which is to say.
We're not going to chase sales growth at the expense of profitability, nor are we going to be slaves to profit margin at the expense of things like driving our brands in this balance of driving sales growth and profitability has served us well over the last few years and I would argue during the pandemic has served us, especially well and we're still in the midst of it so I think I'll stop there.
Otherwise it will probably be a filibuster, but I. Appreciate you starting question Yeah, No very helpful. And then just a very quick follow up.
With some of the incremental pricing.
Retailers, obviously, you always say the same thing, which is you know they're open to pricing when things are structural as they see structural versus let's say truly transitory and things of that nature. So I guess, if you've kind of gone back to the well so to speak because there's a lot of others have as well.
Are those conversations changing at all broadly speaking in terms of what is sort of acceptable are thought of as transitory versus structural things that one would need to price for just curious perspective on that thanks. So much.
Let me give you an overview and then John if you have anything to add I would welcome your commentary as well.
Ideally you would not like to go back to retailers and multiple times or consumers.
With price increases, but we're clearly not an ideal market.
Market and everyone understands that not only is our inflation, but everyone understands it's also dynamic and it really probably use that word 15 times this morning, but.
And AMIC market and so people understand the need to revise plants and make sure that we're staying current and we all see we're all seeing the same cost for those transportation costs or labor costs, our ingredient cost I mean, we're all seeing the same kind of cost whether it's the CPG companies or retailers. So.
It's never easy, but I think there is an understanding that we're not we're in a market that is continuing to change John due to any any color you'd like to add to that.
I think thats exactly right, obviously retailers are seeing increased cost inflation as well and one of the things. We're really proud of is the strategic revenue management capability that we've built over the last five five years or so.
It's differential in terms of the information we have the data the talent and the stories that we can put together when you come to retailers with.
Rationale that makes sense in fact, they tend to listen and we're really leveraging the entire restaurant toolkit as well. So obviously, we've taken some price increases, but we continue to look at promotional optimization mix at Tpa and then leveraging all of those different tools. So so far so good we like the way that the conversations have gone we've gotten the majority.
How you can accept it and more importantly reflected in the market. So that's a trick as well. So we are really working well with retailers will continue to take the inflation to deal with it as we move throughout the year.
Thanks very much.
Our next question is from the line of Ken Goldman with Jpmorgan. Please go ahead.
Hi, good morning, Thank you.
With the understanding that you don't provide specific quarterly guidance are there any items.
Coffee that we should be particularly aware of as we model. The current quarter I guess, especially as we think about unusual comparisons with last year with the timing of pricing by segment I just want to make sure we're sort of minimizing.
Potential surprises there.
Sure and thanks for the question.
Obviously as you can think about.
In particular, the first half second half perspective on the year with Q1 coming in stronger.
Then we expect that on both the top and the bottom line, we would expect a little bit more balanced year in terms of flows.
Margins.
And that we're seeing more of the cost obviously in a cost increase coming in in the back half offset by a little bit stronger performance in the first half and we do still expect our pricing.
Realizations come in sort of full force in Q2.
And against the inflation expectations. So just to give you a little bit more color, we don't want to get any deeper on a quarter by quarter basis.
Yes.
I appreciate that thank you for that and then as a follow up.
You showed in your chart.
Sorry, you showed a chart in your slides and how difficult the labor market is obviously.
Your inflation outlook is being raised today largely because of that we are anecdotally in its very early but hearing that perhaps the worst is over the over the labor situation.
Given some benefits rolling off giving back to school, obviously labor is still incredibly difficult to secure I guess I'm just asking is it worsening anymore.
Are you seeing a peak in that.
And those challenges just curious how to think about that going forward from here.
Yes, I would think the no. It's a very fair question, Kevin I guess, we foresee labor challenges persisting for quite a while I mean, especially as you look at logistics.
There's a shortage of truck drivers here in the U S and thats not going to be for awhile Theres a shortage in shipping containers as we look at global transportation, you can see them on pictures and the La Porte. So that's not going to that's not going to be go away for a while and and while we have seen a little bit of loosening in the labor markets. Once that government spending is kind of.
Decrease does not going to solve the whole that's not going to solve the whole dilemma.
Suggest that the challenges, we have with labor and labor inflation that going to persist for.
For some time.
We have not really seen a abate significantly at this point.
Makes sense. Thanks, so much.
Hi.
Our next question is from David Palmer with Evercore ISI. Please go ahead.
Thanks, Good morning in your transcript you mentioned.
Your service levels, Werent quite where you wanted them to be so I wonder what is the average out there in service.
<unk> in the industry and where do you think general mills is versus normal and.
For today for the industry, but also normal versus itself and is there any sort of outcome from this is it is it are you below where you'd like to be in terms of ship sales or are there penalties happening.
Great question. John noted you want to do you want to take that one.
Yeah, absolutely so David what I would say is that our service levels are certainly better than they were at the beginning of the pandemic, but still quite a bit off of where we'd like them to be which is in the high nineties and really we're seeing a wide widespread impact everything from raw material vendors challenges that our internal manufacturing co packer manufacturing or distribution network.
And it's almost whack a mole right now so we have literally hundreds of disruptions in our supply chain is that it really changes on a daily and weekly basis. So we've gone back to some of the practices that served us well in gaining pandemic we've stood up.
The control towers at the working level on a daily basis on a weekly basis at the more senior level to really dig in and work with their teams to solve these issues and we do expect these issues to persist throughout the year, what I like is the way that were performing and I think we're outperforming versus maybe if I can.
Others in this space. So we are probably somewhere in the <unk> in terms of total service levels and what I would tell you is that it varies widely across categories and majority of our categories were actually in the Ninety's and then performing well we have a few that we have capacity issues. We have she would have ingredient issues that are really dragging us down. So we continue to work.
Closely with retailers in fact, the bulk of our discussions right now with retailers are really around service and making sure that we can ship the product that our consumers are ultimately looking for so I like the way that we're performing at the same time the data will be a challenge as we continue to move throughout the rest of the year.
And then just a follow up on pet food, maybe a good time to go over where you think the big picture strategy and opportunity is now that you've closed on me the treat the acquisition.
Where are your market shares maybe by major pet segment, and where do you see that opportunity where do you see that market share.
Going to from your major segments and I'll pass it on thank you.
Sure.
Blue Buffalo, the first thing I would say is that our our organic business on blue Buffalo performed quite well in the first quarter. I mean, we were up 20% and gaining market share really across all the different segments, having said that I think it's important also to reflect that for pet we probably had our easiest comp of the year. This past quarter. We've only grew about 6% in the first quarter last year and 18 in the second quarter.
So as good as I feel about Blue Buffalo I feel great about it.
I wouldn't model, a 20% growth for us for you know from here on out because the comparisons get quite a bit steeper as the year goes on but blue Buffalo in itself is performing quite well, we really have opportunities across the segment, we oriented over index in dry dog food and we basically under indexed in every other sub segment of the category. So there is.
Opportunity.
And I would say with the <unk> acquisition when we when we first looked at it several months ago.
We liked it once we had bought it we got a closer look we really like that now that we have and we like it even more than what I can tell you is that the growth of 20% is.
As you know kind of exceeded our initial expectations and.
It's got a good management team and you know there we not only bought some nice brand.
Good portfolio, but a good team and with that acquisition really helps us do is cement our leadership in <unk>.
Treat part of the dog category and something we wouldn't have been able to get to by ourselves and so it's very complementary bolt on product format and customers where bloom.
Blue Buffalo is set so so the more we got to see it.
Good after after spending that kind of money to make an acquisition, but we feel good both about blue and about the recent acquisition of the types of pet food business.
Thank you.
Thanks.
Our next question is from the line up for Michael <unk> with Piper Sandler. Please go ahead.
Uh huh.
In fact that broad pricing across really it looks like every category and segment can you touch on just what you're seeing as far as the elasticities and certainly your sales are holding up but any surprises any any variation it looks like.
The consumer demand really remained strong but.
Especially just looking ahead anything we should maybe watch out for where there could be some.
A little bit more volume pressure perhaps.
Michael what I would say is you made an observation I think which is really important which is that the pricing that we've realized in the first quarter is broad and I think that speaks to what John was talking about earlier on our strategic revenue management capability and the fact that our capability is significantly better.
Across our company than it was four years ago, and you see that in market, we get out to market faster and we've got out there effectively as we look at and talk about elasticity of demand. It is still early.
We don't have a tremendous amount of data points, yet having said that it seemed to us as if demand is holding up quite well, it's holding up a little bit better than we had thought and if I. If I think through the logic of that particularly here in the U S. You see that you know restaurants restaurant traffic is still down.
The food costs from away from home eating are going up at least as fast as they are at home eating because of labor.
Or that they face the same pressures we do from a from.
From an ingredient stamp so when you see broad based inflation not only and at home eating but also perhaps even more so in away from home eating where where restaurants many of them not only do they see inflation, but they're having trouble staffing all of their all of their restaurants.
It seems to US that this is an environment where at just the elasticity is at least so far it seems to us are a little bit lower than what we have said notwithstanding size is small and we will continue to monitor that but that's what we see in our.
In the World right now pretty much true across the world whether it whether it's here in the U K or in China or Brazil.
Okay, that's great.
Follow up on your comments about the <unk>.
Digital programming and the unique position we have with all the data you get from the receipts for box tops can you give a little bit more sense of how you can take advantage of that and really put that data to work.
Well, what we're able to do whether it's the buddies by Blue Buffalo, whether its box tops for education or whether it's what we're doing in China with our haagen Dazs Omnichannel approach to shops that we can we can better meet consumer demands and we can give them things that are more specifically interesting to them.
And then more specifically specific things you can give to consumers the better off you're going to be in.
Tracking their sales and not only that particular things like box tops for education. We can also partner with our retail customers because a lot of them have first party data now and we can combine the data that we have with the data that they have in order to to customize.
Offers to consumers that are to the benefit of them. Realizing of course, all the privacy laws and so forth. So I don't want to go into much more depth on that other than to say that it's the next evolution of marketing and we talk about connected commerce and I think for some it sounds like a buzzword, but we wanted to give you a couple of clear examples of that here at least here at general Mills is not a buzzword.
We're taking we're taking an active approach to.
Okay, great. Thanks, so much.
Yes.
Our next question is from the line of Christopher <unk> with Stifel. Please go ahead.
Hi, good morning, Thanks for the time.
Chris I just tie I just had a quick question if I could in an environment, where you're seeing stronger revenue growth and that's translated into stronger profit growth as we saw in the first quarter I just want to get a sense around investment and I'll just take many forms marketing or investing back in the business sort of white space and you've got a lot of investment back in the business. The last few years.
So I wanted to get a sense of.
As we think about your opportunities for say incremental marketing or something along those lines wouldn't continued stronger revenue growth prompt you to want to reinvest more heavily as the ultimate question.
Great. Thanks for the question. So let me think about structurally where we are in the year, we're confident that we have.
Strong support behind our priority brands.
I would expect to retain that even as we do see additional cost pressure come in.
And on the basis of everything we know we still believe that we have strong ideas and we're going to continue to support those I think is as we roll forward here. We will also continue to support our capabilities investments around data and analytic analytics. So.
At the core of our expectations and our guidance.
Preserved our expectations for the year.
Okay. Thank you and just a final question if I could in relation to the incremental cost inflation that you expect for the year. You also talked about some more SRM actions and obviously you still have a tremendous savings. So the inflation that's coming through do you believe you can offset that with your SRM initiatives this year such that costs.
Roughly offset by the SRM initiatives plus HMA.
Yeah, So I think.
I'll start with just the recognition that the environment remains dynamic on the cost side. So we are we are seeing cost changes.
Moving through the system rapidly we are at this point, we did have our best call on on the cost picture for the year moving up from seven two to seven 8% and we've got plans to address what we can see and the best thing I can tell you is that we are prepared to act should should it change further which is in a very good.
Possibility in this environment given how much we've seen it move here in the first three three months of the year.
And then just one follow up on the coffee the incremental inflation is that across the remaining three quarters. There is perhaps more heavily than say Q2, just to understand how the cost the incremental cost run for the year.
Yeah, So I'll give you that perspective.
It is going to impact the second half of the year, a little bit more heavily.
In the first half as you can expect given the combination of our hedge positions and.
Okay.
Where we would expect to see this exposure more heavily hit us so that.
That is part of why we would give you the perspective that we sit a little bit more balanced in the profit picture between the first half of the second half.
I heard that before I want make sure I understood. It. So thank you for that I. Appreciate your time this morning.
Thank you for your interest.
Our next question is from the line of Alexia Howard with Bernstein. Please go ahead.
Yes.
Good morning immediately okay.
Yes, yes.
Perfect Alright.
The first question I had was really around the.
The categories of the business instead of holding or gaining share I think he setbacks.
Your priority.
Ah, you're holding or gaining share in key tag, but those I'm, just wondering which fragrances are not priority and is there an overall number for the company overall and then I have a quick follow up.
Yes.
Not going to give it down to the decimal point, Alexia <unk> priority or not but I would say that our priority businesses are the overwhelming majority of our businesses. So they are the most significant part they represent the top 10 categories for us in the U S and our top categories in Europe, and Asia, and Brazil and they include all.
All of the global categories as well as the local gems that we talk about it. So it's the vast majority of our categories and so when we say, we're gaining share you know roughly 65% or so of our categories. You can be confident that as most of our that is most of our categories throughout the world all of them, we say prioritized, though because it doesn't include some but it includes all the biggest most.
Important categories for us.
Okay. Thank you very much and then I think you said earlier.
Sure.
The question about service levels there.
Certain categories by equal capacity constrained.
<unk> ingredients.
Are you able to just give us a little bit more color on where those ingredients.
Happening is it bringing things in your from emerging market and then domestically as it has.
Issues, mainly because of labor.
Getting parts into.
In the machine, but I'm, just trying to figure out where the pain points are from a supply chain perspective. Thank you very much and I'll pass it on.
Yeah, Yeah, I would say, let's say that you know there are a couple of categories, where we have supply constraints only because demand has been is that high for such a long time, but I'll give you a fruit snacks as an example of that here in the U S where we grew share in massive amounts of share two years are out.
<unk> was high before the pandemic has been high during the pandemic and certainly high right now and so we've had to go out and add more capacity, which we're going to do later, which we signed off on a year ago, unless we come to market a year, but that takes a long time to get through so fruit snacks will be a great example of one of those places and desserts right now would be another example, where.
The dessert category has been really strong for us and so we have capacity constraints and when it comes to when it comes to ingredients, it's a little bit here and a little bit there. It's not it's not one particular ingredient all around the world.
It's really a combination of small things as I think John Doody athlete, describing those whack a mole I mean, theres a lot of others.
Ingredient shortage here in a little bit there on one labor shortage here in a truck that's not there and so it.
There's no geography or category, where we see it it's a little bit of everything in from what we understand I think probably most of our competitors in most of our retail customers are experiencing something very similar.
Great. Thank you very much for the color I'll pass it on I appreciate that thank you.
Thanks.
Our next question is from the line of Steve powers with Deutsche Bank. Please go ahead.
Hey, Thanks, guys.
Not to belabor, it but just to round out the comments you've made thus far on costs and cadence can you just talk about where cost completion ran in the first quarter relative to your call for seven 8% in the year and then if possible. The same thing on <unk> savings relative to the 4% full year impact expectations, and then I've got a father.
The project.
Sure. So so our HMS.
Brad roughly in line with our full year forecast and then I think as you look at cost inflation. It was a touch lower.
Still elevated.
So not not I don't want to get too precise.
But I think it's a touch lower than we expected it to be for the remaining three quarters.
In the original inflation clause is relatively balanced.
Okay. Okay that helps and then just going back to pet treats in the Tyson brands as you said off to a very solid strong.
<unk> can.
Can you expand just on your expectations. There is it mainly as you plug those businesses into the Blue Buffalo go to market model and just any context on timing as to how you see that process unfolding.
Yes first of all I would say it's off to a strong start.
And.
What I'm really pleased with the way that the Tyson team, we inherited in the Blue Buffalo team are really working together already even if we had unplugged and into our system and as I as I indicated earlier there is certainly a talented team that we did that we brought over from Tyson, we feel good about them, but we haven't flooded him into our whole system, yet our either our distribution system or how.
That.
Our omnichannel system, and so that's going to take a little bit of time.
Have an exact date for that the key for US is that we maintain our execution of that business, because it's executing quite well on its own.
While we bring it in piece by piece to some of the Blue Buffalo business isn't some things will integrate with some things we want and.
But what I can tell you right now is that the teams are working very well together and it's we're only a couple of months and but we would like to start we're off to an end.
And I think once we are able to plug into some of our capabilities to two.
This is a business where the strategic revenue management, which we really haven't quite done yet or holistic margin management, which we havent done yet or and plug it into the sales team and add to their capabilities. We think that there's you know there's a quite a bit of room for growth.
Okay very good thank you very much.
Yes.
Our next question is from the line of Nik Modi with RBC capital markets. Please go ahead.
Thanks, Good morning, everyone I wanted to ask a question about.
You've been talking a lot about whack, a mole, which.
I think it's pretty clear given the environment, but the whack a mole it seems like it's becoming more normal.
Do you think about disruptions weather events.
The shortage labor issues are probably going to persist longer.
But other countries in the U S trade war impact of ingredient cost.
Just curious like do you think the industry in general needs to go to a mini capex surge really appropriate to supply chains and capability to make sure that they can.
Can deliver consistent results through this when I was talking about who's going to be probably a volatile environment.
Many years to come.
Yes.
Nick your observation that that it's a volatile environment across all of the things you indicated I think I think that's exactly right.
What I would say is I think in environments that are difficult general mills that tenant performance best and you saw that during the beginning of the pandemic I think you'd see it with our first quarter release, and I'm certainly hopeful that youll see it in the subsequent quarters and people talking about strategy all the time, but execution is pretty important and.
We are executing really really well and it's because we're addressing all of the things that you just talked about now the question is how to address it.
Capital, maybe one area in some places automation be maybe an area in some cases, but I would also tell you that the coordination amongst your supply chain and your marketing functions in your sales function that's as important as.
As adding capital expenditures capital expenditures or automation or things like that and so.
I do believe that the.
The challenges that we see right now are I think they are the new normal for the foreseeable future.
With the supply chain, we have and with the restructuring that we just did which kind of addresses the holistic business here in North America, I think our chances of executing well will remain high.
Thank you.
Our.
Next question is from the line of Robert Moskow with Credit Suisse. Please go ahead.
Hi, Thanks for the question and congrats on the results, that's certainly much better than I expected.
I wanted to know about the hedges Kofi.
Kofi I think you've said that you are about 50% hedged for the year in the back half of the year can I assume that that means that you're you're generally like zero percent hedged in the back half and then what kind of things do you hedge and what do you not hedged maybe you could remind us because.
Like trucking logistics costs.
Are those part of the hedges or is it really like just ingredients that you hedge.
Sure.
Sure So I'll start by it.
A gentle correction of our hedge levels worried about 66% so roughly two thirds covered on a year.
Fragrance Dominion and volume expectations. So.
I think to your question about what we cover.
I think generally in the <unk>.
In ingredients on commodity side, we'll be able to hedge that or where there are markets some of those ingredients.
Two long term contracts, which gets you effectively the same thing.
As we look at it.
So logistics side, obviously, we do have.
Long haul and short haul trucking contracts in our network, obviously with the labor pressures there.
There is there is upward price pressure on that entire complex just as a result of the shortage of drivers to get to drive trucks and.
Frankly, even labor time load trucks and shipping containers on the other side so.
We are we are covered partially through the contracts that we have.
Key is making sure that we continue to execute most of our our routes on contract and we are seeing a little bit of pressure as a result of having to do more.
Off contract and off.
Off network as a result of it the labor shortage any impairment.
Okay that makes sense and what happens when a supplier like us late or where have to charge premiums to you because of logistics challenges is that had stores that that not hedged.
No generally no and that is part of what I think one of the things that John has.
As spoken too pretty clearly.
The entire network in coming in and out.
Is it under similar pressure so that's a place where we do see some incremental operating costs in this environment.
Okay makes sense, thanks for the clarity.
Sure.
Our next question is from Jonathan Feeney with consumer edge. Please go ahead.
Good morning, Thanks very much.
Yeah, Jonathan in the years before.
The pandemic had the.
Pleasure of covering some of the retailers too as well as food and I think the conversation was.
Relentlessly data versus relationships. It was all about elasticity in private label shares in.
Retailers getting smarter omnichannel, creating more data and it basically forcing retailers to change their shelf that more frequently based on all this.
Maybe put more quantitative factors, then qualitative and but.
Six months it seems like there's this narrative in the industry that seem to retailers are unhappy with case fill rates it's difficult.
Industry pricing wise.
A very good performance to have a minor relative performance to have a minor gross margin decrement year over year, but some others are much worse. It feels to me like the pendulum has swung and now it's well that data is less important I mean elasticity is to your point earlier excellent private label shares are in free fall and most of these categories.
<unk> sure you would think if that's where you look at the big inflation, but I lived through in <unk> seven in 2011 like these kinds of indicators would have.
Suggested dramatically more pricing protecting it maybe even expanding gross margin on a two year basis, certainly versus pre pandemic levels, a better utilization et cetera. So I guess I wanted to comment.
About is that am I wrong about the analytics first of all is that right about that kind of pendulum and you had a conversation between you and your retail customers.
Do you think that in a more normal environment swings back to where hey, there's more people buying your product elasticities are good and that suggest more pricing power over time. Thanks.
No I guess, Jonathan let me take a crack at that overview and then John noted to the extent you you want to add on when I think about the.
Data versus relationships when it comes to retail customers I think about it the same way as I think about brick and mortar retail and e-commerce, which is at the end.
And especially in food, where yes, we have equal, but 85% of our ecommerce grocery stores. So you need to be good in E Commerce and you need to be good at the physical distribution of our product as well, which is why we talk about connected commerce. The same is true of what we're going through with retail customers right. Now, yes data is important it will be coming.
It'll it'll remain important data keeps getting better for our retailers it keeps getting better for us that will certainly play a role, but you only trusted data people, you're actually trust and so.
Retail relationships. We have are also important because as we go to market and talk about what's going on in the environment, we need to make sure. We have those those relationships. So they are both important as we think about elasticity of demand, we'll see we're kind of in uncharted territory to be honest with you and that's why.
Just the miles are always based on historical data, which is useful to a point, but only to a point and that's why I made the commentary earlier about <unk>.
We're seeing we're seeing inflation broadly across our products, but also across.
Restaurants, as well and Thats why I made the comment about service levels, our restaurants, and the ability to get labor because.
It seems like in that environment. It feels like elasticity should hold up pretty well in the house, so far but we will see what is to come John due to anything you want to add on either of those topics.
Yes, it does.
The only thing I would add is I think prior to the pandemic. There was a narrative that big brands were challenged and I would say.
First of all consumers like our brands and we continue to build them and innovate and build our brands and that's worked for US. The other thing I'd say is for retailers there is power in having scale. So.
They can a retailer can make a call to us and we operate across 25 different categories in the U S and that's been helpful. In the supply chain side, we can work on all of those categories that really drive scale and make sure that we are operating well to service their shelves at the same time, we can focus on capabilities, whether that'd be kind to ecommerce and digital marketing.
Our e-commerce, so I think retailers are recognizing or have recognized that having powerful.
Partnerships with some big manufacturers is beneficial to them really three months of work. It's good for us it's good for them as well.
Thanks, very helpful and because I appreciate it.
Thank you.
And speakers our final question for today will be from the line of Rob Dickerson with Jefferies. Please go ahead.
Great. Thanks, so much.
So just for just a quick question.
Turning to dissect category dynamics a bit.
Obviously, you have access to the fact remains is unknown, but it seems as if maybe there is.
Encouraging.
Yeah, the total so to speak at.
At the same time, though you're saying here at home demand and there is a bit elevated.
Then we also see either cereal meals and baking decline a bit.
Obviously, if it isn't.
Isn't shocking relative to the year ago quarter I'm just curious.
Think about the guide and you dissect it category to category.
Is it fair to say as we move forward over the next few quarters or so or mobility increases that yeah. Its rational to think that maybe meals and baking in cereal.
Still a bit more pressured relative to kind of fluid COVID-19 rate versus snack than maybe the snacking part of the portfolio actually continued to perform despite shifts in.
In mobility, that's the first question.
Yes, I would say Rob that broadly speaking our all of our categories Europe was over where they were a couple of years ago and at the same time, you are right as consumers get to be more on the go category. There are more on the go as we've seen an uptick in those in Ferrari, That's our BARDA category for example, and whether Thats in Euro.
Or whether that's in U S. We've seen the same kind of trend, but I think importantly, either whether you look at baking in when you look at cereal.
Trends versus a couple of years ago are pretty good and the ones for on the go categories are improving as you suggest John Doody anything you wanted to add to that commentary.
No I think you've hit it I mean, obviously, it's dynamic and when we competed as many categories as we do there's a lot of moving parts and all the things that Jeff is really stress is the deals that we want to compete effectively in all the categories. We compete in so that's what we're really focused on them obviously.
That's knocking has really rebounded and were seeing good growth there and there is a big important categories like cereal, where again over a two year basis, we arent growing which is great and we think there are some dynamics with kids getting back to school and are focused on convenience, we'll see that category continue to.
Accelerate which was selling in August so we like how we're competing is probably in the U S. We've grown share and grew at 50% of our business in Q1, and we've done it for four years in a row. So again this wasn't just a pandemic driven.
Performance, we like the way that we're competing and will continue to focus on October four.
Okay perfect. Thank you and then.
Quickly.
I think in the prepared remarks.
You stated that you know.
The ongoing process and search for potential.
Go forward acquisition.
But then also potential divestments, so I guess just very broadly speaking.
Now that we have kind of a timeline on yogurt divestment.
Would you say you're kind of like largely done with that that's what piece of the portfolio optimization efforts or.
Are you always looking let's say.
And specifically looking at certain pockets that could still be up for divestment potential metric. Thanks, so much.
Yeah, Rob I guess it'd be done what I would say is that we're looking to close the.
The right transaction at the end of this year and we just closed the acquisition with with.
With <unk>, we feel good about those things.
I would view our portfolio shaping as kind of an always on capability I mean, similar to what we view as strategic revenue management used to be episodic until we've made it always on and the same will be true with our portfolio shaping I'm really proud of what we've done in our base business not only this quarter, but the last few years, but it is also clear to me that we need to do that and continue to reshape.
Our portfolio and some of that would be through acquisition I think this tightened acquisition is a great a great example of that and.
So to the extent that we think that the investments are better spent in priority category versus those that orange prioritize will look at additional divestment opportunities as well and so we will continue to compete effectively in the categories. We're in and we'll continue to look for M&A opportunities I think one of the things I've been most pleased about over the last couple of years is that we've been able to do both effectively.
And you know whether it's the startup Tyson or why we moved our way we've done with Blue Buffalo, We're keeping our eye on the ball as we've divested yoplait, we've done all of that and so on.
There are some companies that can say that but I feel good about that combination for us and we will continue to look at that into the future.
Alright, thanks, so much that.
Yeah.
And speakers I'll turn the call back to you you may continue with your presentation or closing remarks.
Great. Thanks, so much we were going to wrap up there and thank you everyone for the time and good questions. This morning.
And a follow up please feel free to reach out to me throughout the day otherwise we look forward to speaking you with you again next quarter. Thanks, so much.
Okay.
And that does conclude the conference call for today, we thank you all for your participation and kindly ask that you. Please disconnect your lines have a great day everyone.
Yes.
Right.
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