PepsiCo, Inc.

Good morning and welcome to PepsiCo's first quarter earnings question and answer session. Your lines have been placed on listen only until it is your turn to ask a question. In order to ask a question or make a comment, please press star followed by one on your touchtone phone at any time. You may remove yourself from the queue by pressing the pound key. Today's call is being recorded and will be archived at www.pepsico.com. It is now my pleasure to introduce Mr. Ravi Pamnani, Senior Vice President of Investor Relations. Mr. Pamnani, you may begin.

Thank you, Operator. I hope everyone has had the chance this morning to read our press release and listen to our prepared comments, both of which are available on our website. Before we begin, please take note of our cautionary statement. We may make forward-looking statements on today's call, including about our business plans and 2020 guidance and the potential impact of the COVID-19 pandemic on our business. Forward-looking statements inherently involve risks and uncertainties and only reflect our view as of today, and we are under no obligation to update. When discussing our results, we may refer to non-GAAP measures which exclude certain items from reported results. Please refer to today's Earnings Release in 10-Q, available on pepsico.com, for definitions and reconciliations of non-GAAP measures and additional information regarding our results, including a discussion of factors that could cause actual results to materially differ from forward-looking statements. Joining me today are PepsiCo's Chairman and CEO, Ramon LaGuarta, and PepsiCo's Vice Chairman and CFO, Hugh Johnston. We ask that you please limit yourself to one question. And with that, I will turn it over to the operator for the first question.

Thank you. As a reminder, if you would like to ask a question, please press star then the number one on your telephone keypad. Our first question comes from the line of Dara Macinian of Morgan Stanley.

Hi, gentlemen. Hope you're well in this environment. So, Ramon, I just wanted to touch on the market share opportunity in snacks and beverages going forward. It sounded like the momentum was pretty strong through February pre-COVID and in the COVID environment, but I was hoping you could discuss if there's opportunity for improved share structurally longer term as you look coming out of the COVID crisis. Theoretically in snacks, there's a shift to larger trusted brands. which is in your wheelhouse and you've got the DSD distribution advantage. So from a retailer and consumer standpoint, there could potentially be a shift there. And then in beverages, theoretically, less exposure to the away from home channel and some of your competitors should enable you to invest behind the business. So just sort of curious if you could run through how you're positioning yourselves for market share advantages coming out of this COVID crisis and if you think there could be some structural improvement. longer term beyond what you've already seen over the last year or so?

Yeah, good morning, Laura. Yeah, it's a good question. Obviously, in a moment when it's hard to predict where the category will go in the coming months, then share of market becomes clearly the number one priority for the organization. And as you were saying, the investments we made in the business last year both in our, you know, structural capabilities, but also the strength of our brands and, you know, in particular markets, gave us a lot of momentum. And, you know, as you saw in Q1, it was our fastest growing quarter in a long time, even if you deduct the last couple of weeks where we had a positive impact from the stockpiling in the U.S. So you would If you were to ask our people on the ground, share of market is the key variable. We see ourselves, as you were saying, it's a moment where large brands that people trust, you know, strong supply chains and go-to markets like we have. Very importantly, the talented people that we have in the marketplace experience and very – I think superior teams probably in the marketplace should give us an edge in terms of competing in this, you know, few months ahead of us where there's going to be a lot of volatility. And being agile and strong, I think it's going to be a very positive opportunity for us, yeah.

Our next question comes from the line of Brian Spillane of Bank of America at Merrill Lynch.

Hey, good morning, everyone. And maybe just to follow up on Dara's question, as I was listening to the recorded message, I guess what I took away from it was, you know, there's going to be still some investment in SG&A this year, some of it in response to the environment. Some of it may be the opportunistic in terms of market share gain. I guess, is that a correct characterization of it as we're thinking about as the year unfolds and sort of the pressure points or the stresses in the P&L? You're looking to sort of spend in SG&A this year because you want the business to exit stronger, and also there's going to be some investments to adapt to the environment.

Yeah. Hi, Brian. Good morning. Now, of course, we're – I mean, we were in an investment position, and we were very selective, obviously, where we're putting the investments and, you know, trying to look for the highest ROI investments everywhere around the world in the different categories. We're not planning to change that position. Even, you know, we might have opportunities ahead of us that, you know, tell us that probably the best decision would be to even double down on some of those market opportunities where we can take maybe a short-term advantage now and which will be structural gains for long-term. On the other hand, we're looking at all our discretionary costs with a lot of intensity. And as we said on the note, we're looking holistically and very intentionally at necessary costs in our P&L at this point. both obviously to things that are necessary, we're going to stop them, but also to have the flexibility to reallocate into areas of the business where we see acceleration. For example, we're seeing obviously, as you're hearing from everybody else, e-commerce being a high growth channel at this point. So we're reallocating resources from other parts of the P&L into e-commerce and capturing consumers in that particular channel, and then obviously we'll keep investing to retain those consumers as they probably stay in the e-commerce. There are some brands that are benefiting from this more consumption at home, like Quaker. I think we want to invest in some of those brands that are getting consumer tailwinds now because we want to retain those consumers with the brands as we exit the crisis situation. So, yes, our mentality was going into the crisis was a mentality of attack. I think we continue to be on the attack, I think, mentality. Obviously, putting some strong criteria of ROI to those investments and being very, very kind of tough with every single line of our P&L to make sure that whatever is unnecessary is not there anymore.

Our next question comes from the line of Bonnie Herzog of Goldman Sachs.

Thank you. Good morning. I have a few questions for you guys on energy drinks. You know, you're certainly stepping up your game here with, you know, the announcement you made this morning to distribute things. So, hoping, you know, you could give us a little more color on you know, how you're going to manage the energy category with the different brands. Now you've got, you know, Rockstar and now distributing Bang and then eventually Mountain Dew. So curious to hear, you know, how you're going to prioritize these different brands and how you see the different positioning of them. And then could you guys give us a sense as to, you know, how you're going to hit the ground running now that the Rockstar deal is closed? I'm just curious. you know, if your plans have changed given everything going on with COVID, also as it relates to Mountain Dew. Thank you.

Yeah. Good morning. Yeah, let me give you a sense. I mean, this is consistent with what we have been saying in the past, that we see the energy need state as a very large need state that will stay for many years. I think consumers will need energy during the day in developing markets, developed markets all over the world. and that we're going after that consumer location with multiple vectors. We're playing with the coffee category, and we continue to think that the coffee category is a great opportunity to capture a lot of locations there. So with our partnership with Starbucks and some of the innovation we had there, we've been very successful to play in energy needs state. Obviously, we had our own innovation with Game Fuel and some other innovations we had in the past. The Rockstar deal gives us the opportunity to play with more of these spaces that energy provides. So, yes, we'll have the Rockstar portfolio, which I think – has been underinvested in the past. So now there are more incentives for our people to drive that business, and we're going to invest in Rockstar. So that's going to be a good segment for us. Obviously, Bang is going to be a beautiful addition to our portfolio in terms of a differentiated brand that has a lot of momentum in the U.S., in particular channels, a lot of opportunities still in terms of additional distribution and some channels that are not available. So I think our distribution muscle will give PANG an additional push, and there's clearly a lot of consumer positive reception to that brand, so we'll benefit from that. And then, as we said in the past, we have a brand in our portfolio, Munch & You, that I think has a lot of opportunities in that space as well. And it's kind of natural for Mountain Dew to play in the energy boost category. So you will see some more innovation of our Mountain Dew brand to play more intentionally in that space. And that's how we think about, you know, the multiple tools that we can use to play into what is a huge need state. And I think we'll continue with, you know, people moving to megacities and people having very hectic lifestyles.

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

Yeah, hi. Good morning, everyone. Ramon, I was hoping you can talk about go-to-market, and I'm thinking more on the Gatorade side. I mean, clearly, you know, having availability in a time like this has been critical, and so when you think about warehouse versus DSD of Gatorade between the channels, small format, large format, and some of the tests that you're running in the Midwest, I was hoping you could just kind of opine on how you think this should evolve in the future, given that this could potentially happen again at some point in the future?

Yeah, that's a great question. I think probably the difficult logistics situation that we've seen in the marketplace in the last few weeks in the U.S., but across the world, has probably brought more light to the opportunity that we have in finding better ways to move our Gatorade products into the stores. And although we have been with great collaboration with all our customers and our partners to find solutions to get that brand quickly into the stores because there is a lot of demand for it, we've seen some bottlenecks. So as you say, we're considering multiple options. Obviously, the final decision is always a, combination of top line growth and additional cost and complexity to the organization. So it's a complex decision given the size of the brand and the complexities from the logistic point of view. It's a very seasonal brand that has a lot of a volume between, say, May to September, right? So it's a huge spike to a logistics system. So it is a big strategic decision. It's one that we're, as you say, we're testing different options. We're giving it, you know, a lot of thinking time. And the decision will be made together with our partners in the retail space and obviously internally looking at all the different variables. It's a potentially big unlock for Gatorade, but also a difficult decision from many points of view.

Our next question comes from the line of Andrea Teixeira of J.P. Morgan.

Hi, good morning, and thank you for taking my question. I hope all of you are well. So I was hoping if you can talk about the strength in that home consumption. So I'm assuming your shipping is still below your demand and you are not worried about any stock, this stocking in the second quarter. So I was just thinking in your outlook of the low single-digit decline for the second quarter, are you just assuming as we cycle through the immediate consumption channels they're still going to be very much impaired through most of the second quarter. And if you can give us an idea what happened in some of the places where the restrictions were lifted. Thank you.

Hi, Andrea. Good morning. We're seeing a lot of uncertainties on how the economies will go back to normal, right? And... as you can imagine, we have multiple scenarios on what could happen. There are a lot of scenarios that say that it's not going to be so linear as what you're saying that economies will go back to opening right away and that's going to be it. There might be some scenarios where there will be ups and downs in the ways the virus spreads and there will be some particular local areas that could be more exposed in particular moments of time and so on. It might require some additional, you know, lockdown decisions or other sort of decisions by the government. So, you know, the fact that we're saying that we see uncertainties on geography channels and categories is because, you know, many of our scenarios are not as linear as you're saying. You're right in pointing out that most of the impact in our category, especially beverages, is related to lack of mobility of people, and then there are particular channels that are very linked to mobility and transportation, and obviously some of the out-of-home food. Consumers are moving around. There will be more consumption, especially in convenience and gas channel, and a bit more on workplaces where we have a good business as well. So that should improve, assuming that the consumer will be able to continue to move around for the foreseeable months. But the reason why we're seeing more uncertainty is because we don't think it's going to be a straight line once people go back to moving around. It's going to be a restricted mobility, I think, and with potential, you know, second waves in some particular markets. That's why we're staying cautious, and we prefer to have that, you know, that kind of a flexibility in our guidance at this point.

Your next question comes from the line of Kamal Gajawala of Credit Suisse.

Everybody, good morning. Can you talk a bit more about the bang deal? It obviously makes sense and congratulations on becoming a lot more meaningful in the energy space in what seems like a fairly short period of time. But maybe just some more specifics. It looks like it's a distribution deal and historically distribution deals have favored the, you know, the founder or supplier a bit more than they favored the distributor. Is there a path to ownership? I think there's been some deals in the past where a lack of a path to ownership has been detrimental. And maybe just some other basics as in, you know, time horizon, how long is this deal? Is it perpetual? Things like that. Thanks.

Hugh, do you want to give your perspective, please? Yeah, happy to do that, Ramon. Good morning, Camille. A couple of things. Obviously, we're not going to disclose all of the details of the deal. The way I'd characterize it is I think it presents great upside for the bang people. It gives them broader and deeper distribution than what they've had to date. It also represents a nice win for us, and it really helps us fill out the energy portfolio as we move to a more assertive posture on this category. In terms of any four deals or sort of M&A contemplated, none of that is in there. So we expect this to sustain for a good period of time. And the last comment I'd make is unlike the Rockstar deal, we really don't have – meaningful restrictions in terms of the way that we manage our portfolios. So we certainly feel as we take a more assertive posture, we have the freedom to operate in the energy space a great deal.

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

Great. Thanks. Good morning.

Good morning.

In the prepared remarks, you guys have talked about developing an emerging market, feeling, you know, pressure, and that was sort of something you were thinking about, discretionary and coming under pressure, and how the macroeconomic could hurt categories. So I just wanted to get a little bit more on that, your thoughts around, because I think category development of packaged snacks is a big part of the kind of long-term plan in international markets and the investments that you've been making, and particularly to promote and support some of your bigger brands, make them, you know, a bigger global footprint. So I know it's still pretty early days in all of this, but if you could just talk about D&E market development for snacks, you know, as we think about how this crisis unfolds. Yeah.

Hi, Lauren. It's a bit of, as you're saying, still very early, right? If you think about Latin America or Middle East, Africa, Eastern Europe has been in the crisis for a bit longer. parts of Asia. What we're seeing in short term is twofold. One is there's a good part of the universe of outlets that we service that are shut down or partially shut down during the lockdown. So that impacts a numerical distribution, but also the initial, you know, channel selling and that impacts our sales. then if you think about the consumer occasions in those markets, developing markets, there's a lot of on-the-go occasions in those markets, especially it tends to be a younger population that buys our products, snacks especially, and a lot of the occasions have to do with moving around or either from school to home or, you know, hanging out with friends on the streets. I mean, those kind of occasions are big. And those are somehow limited, right, in the current realities. So that is being impacted. Structurally, we don't see any challenge to this, right? What we see is actually probably the opposite. I think we have, as I was saying at the beginning, very strong supply chains in most of these markets, and the brands are quite established. And we're very good at – managing the affordability levels in those markets. So where price points, where, you know, pack price is very important. We have a lot of flexibility in our snack business to adapt the price points and the packs to, you know, to whatever the currency impacts are in the cost and the price point. So I think there is a lot of know-how. I think we see it as an opportunity for us to even go deeper in our distribution eventually, and to double down to accelerate a share of market in a lot of the geographies where we participate. So we see some short-term impact because of the distribution challenges that I told you at the beginning. As soon as the retailers are back to business, and we see that happening in many markets after a couple of weeks, obviously they cannot not be opened from the family income point of view. They go back to opening their stores and then life goes back to normal. So we think that this could be actually a boost to our acceleration of the per-calf development, our market share presence in a lot of international markets. The relative size of our business versus competitors tends to be quite large in a lot of our snack businesses. And we see that as an opportunity today.

Your next question comes from Rob Ottenstein of Evercore.

Great. Thank you very much. Guys, at a time when a lot of companies are suspending or cutting their dividend, cutting, you know, or stopping share buybacks, you guys have basically committed to your initial guidance on those. $2 billion of share buybacks, which is just a tremendous financial strength. My question is, given how the world has changed, how you're thinking about capital allocation now and priorities, does opportunistic M&A make more sense? How are you weighing all these things in terms of priority, also including perhaps even stepping up marketing, which was, you know, increased a lot last year. And, you know, in Q4, you said it may or may not be increased ahead of sales this year. That was something you were considering. So just kind of big picture how you reevaluate in capital allocation. Thank you.

Q, you want to take that one?

Yeah. I'm happy to.

Rob, in a lot of ways, there really isn't much change in the way that we think about capital allocation relative to what we've talked about in the past. You're right, we do have terrific financial strength. We've actually been in the debt markets, both short term and long term and are able to get money at extended maturities at quite attractive rates. we do have the financial flexibility to continue with the share repurchase as well as obviously pay the dividend. In terms of the capital allocation priorities, it's really number one, invest in the business, and we'll do that as we see opportunity to do that. Number two, we'll pay the dividend. Number three, we'll continue to look at M&A, but as always, we're very selective in the past and as in the past. And for the number of things that we look at, we execute against very, very few. And then last share of purchase. So no real change in that regard. And thankfully, because of the way that we put together the balance sheet, because of the strength of the cash flows of the company, we're in a position to continue to execute cash return to shareholders.

Our next question comes from the line of Vivian Acer of Cowan. Hi, good morning. Thank you for the question.

I was hoping to dive a little bit deeper on your commentary around increased at-home per capita consumption during your prepared remarks around consumers eating more breakfast and snacking more at home. That seems to be apparent in the meals and data that's come out today where salty snacks continues to grow, though it did decelerate. But I think it does kind of raise the bigger question that it seems like some categories are seeing a pantry load and a deload, like with sports drinks down in the current four-week period and some still stronger. So as you're thinking about the second quarter, which categories do you think can sustain higher levels over capita consumption in the at-home occasion, and where do you expect to see some pantry destocking? Thank you.

Good. Yeah, let me try that. We're seeing, yeah, as you're saying, both obviously our Quaker range increasing penetration massively. So the number of families that have bought Quaker in the last six weeks has gone up a lot. And we're seeing, obviously, I mean, there's one clear reason, right? People are cooking at home, and therefore they're using the product more. And we're seeing the cycle of repurchase also good. So I don't think there's much stocking in the house. as long as people continue to have breakfast or continue to cook at home. And we're emphasizing in our marketing not only the breakfast opportunity, but also the cooking and the recipes where our oats can be part of that cooking opportunity. And this is here in the U.S., but it's also in Latin America where we've moved 100% to recipes on oats and some of our Quaker products. You know, the good news for us is we've made a lot of positive changes to Quaker products, right? We reduced sugar. We reduced artificials. We improved the formulas. I think we have better taste in products as well. So hopefully this is an opportunity for the consumers to reassess the brand and to give it a structural boost. So, you know, we're dedicating our marketing investments to that particular product. particular trial and repurchase of the Quaker range of products, which I think are extremely good and great tasting. Then when you see the snack products, obviously, I mean, there's many more occasions in the family, you know, with the kids at home and with, you know, we all taking breaks during the day between our busy days and then occasions watching TV together. as a family or whatever. So there are a lot of occasions at home now that they were not there six or seven weeks ago. So we're also emphasizing in our advertising the opportunities that this next category gives consumers to have moments of enjoyment during this confinement. We're seeing our multi-packs, our variety packs increasing massively. We're seeing our Tostitos brand, our dips going up a lot. I mean, obviously, every single brand, but those are where we're seeing highest growth. And the beauty, to your point on stocking, the beauty of our snacks is that, you know, it can only last for, you know, a certain period of time, and they have expiry dates. So consumers will eat them. You know, they will not stock them forever. So we see the cycles of repurchase also very clear on the snack business and Those are products that people buy, put in the pantry, and they get consumed by the whole family.

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

Hey, good morning, guys. Hope you're well. Ramon, looking out over the horizon, and I guess building on some of the comments you made in response to Andrea's question, I was hoping you could elaborate a bit further on your early thoughts around an exit strategy from current lockdown conditions, specifically in North America and Western Europe, maybe building on any lessons learned from China and commenting on whether that strategy and its timing is likely to vary at all snacks versus beverages in your view. And I guess I'd also love any thoughts you have or expectations around how your approach and the timing may differ across markets, whether based on consumer, customer mentalities, your competitive standing, or just governmental policy? Just what does the exit strategy look like?

My point was more about the fact that, you know, will it be very linear or not? And I think as we're obviously looking at all the different scenarios and as we're – imagine managing the company now is – A lot of scenario planning and a lot of options and staying super agile. That's kind of the way we're empowering the front line, being super agile and just playing scenarios. I mean, that's the way we're managing the company today. So in our scenario planning, I mean, the chances of, you know, every country opening up and every state opening up and not having second waves, I think, are low. Right. I mean, you think the virus, the virus still around. We don't have treatments and we don't have vaccines. So until we have good treatments and good vaccines, we should be very cautious. Right. And therefore, you know, it's going to be down to a lot of billion of people, individual behaviors, whether we get contaminated or not. So that's what I meant when I said we need to be careful that we don't project straight lines. The moment the state opens, we're all free and the business will come back. I think there's going to be a lot of iterations. Our approach to this is, I would say, extremely aggressive on the commercial side in the sense that we want to be the first knocking at the door of every single store that opens with our mechanics and our salesmen trying to fix the equipment and refill the coolers and putting our racks in the first position and making sure that every consumer that walks into that store buys our products. So that's from the commercial mentality, that's how we're approaching this opportunity of restarting a lot of points of sales. From the safety of our employees, obviously, we're being extremely cautious. And we want to make sure that our people are extremely well protected and that we care for them in a way that is better than anybody else. So those are the tensions in the business. On the one hand, protecting our people 100%. On the other hand, being the most aggressive commercially so that when a store opens in any state, in any country around the world, we're the first company that knocks on the door. to place our equipment. And that's the balance that we're trying to be the best at. And that's why I was referring earlier at the beginning that having very good people on the ground, extremely talented, very experienced, with a lot of, having been through a lot of ups and downs in the marketplace, gives me a lot of confidence that we can deliver in an advantage way. And that's, you know, that's how we're thinking about all this complexity ahead of us.

Your next question comes from Laurent Grandet of Guggenheim.

Hey, good morning, Raman and you. Innovative format to reach your results this morning, like that. I have a follow-up question on energy, actually. On bank, how much will you be able to distribute immediately? And how fast are you planning to exit from existing distribution agreements? And then, clearly the upside in energy is primarily affecting the U.S. Could you help us understand how international could benefit from the Rockstar acquisition? I think some countries like in the U.K. and in the current distributor has been communicating that there was no change to its distribution agreements. And also why bank distribution deal is just for the U.S.? So what's the plan basically for international energy?

Yeah, Laurent, good morning. Listen, I won't give you a lot of details on the details of the, you know, the movement from the existing distribution network of bank to our network, but it will be progressive. It will start in some channels as early as early May. And I would assume that, you know, by the beginning of Q4, it should, you know, pretty much be in our tracks. I mean, that's how we're thinking about it. There will be exceptions, but, you know, that should be – that's our ongoing assumptions. Internationally, we have, you know, very strong energy businesses in many countries. with our own brands, Sting or Adrash in Russia and all of Eastern Europe, pretty strong brands. Now, the Rockstar brand and formulations give us another tool to penetrate that market. It's going to be elevated as, you know, one of the priorities of the company internationally in our beverage business. And, obviously, we will be applying – the framework that we apply to any opportunity in our beverage market, which is stronghold, battleground, or challenger markets, and make sure that we segment the way we operate our priorities commercially in those markets based on that framework. So we'll do the same with Rockstar. But you should, obviously, long-term, you'll see more markets carrying our Rockstar brands internationally, and being a bit more of an active player in the energy category.

Your next question comes from the line of Sean King of UBS.

Thanks for the question. Mountain Dew, I guess, returned to growth. Is this the sustainable inflection we were looking for, or is there an aspect of pre-COVID pantry loading to help drive that?

We've been investing a lot in Mountain Dew, and obviously there's a return on that investment. The growth in Q1, there's been a very good innovation for us that has been zero Mountain Dew, and that seems to be getting a lot of good reception by consumers, and we knew that we were losing some segment of consumers to other non-sugar brands. So the fact of having a zero proposition in Mountain Dew, I think it's getting some of those consumers back into the franchise. Our marketing is also obviously helping us to get consumers into higher frequency levels. I think the fact that we now have more freedom to innovate in Mountain Dew and be a bit more intentional about energy would also give us another vector of opportunity for Mountain Dew. So I wouldn't say that we are You know, we're 100% out of the, you know, woods in Mountain Dew, but I see a lot of bright spots in how the brand is performing in particular channels. It is now impacted a little bit more than others in convenience stores. I mean, that brand has particular higher penetration in impulse channel and convenience stores. So the fact that convenience stores are down, in traffic and obviously given the current transportation limitations, that impacts Mountain View a bit more than other brands. But obviously as soon as people are driving around and moving around, we'll see that brand coming back and we'll be ready with our commercial programs when that circumstance occur.

Our final question today will come from the line of Bill Chappell of SunTrust.

Thanks for taking my question. Just a quick question on kind of commodity outlook and any changes you're doing or thinking about in terms of near long-term hedges and how we should look at it in terms of, you know, is it largely the benefit largely offset by currency in terms of kind of your outlook? I realize you're not giving guidance, but just kind of how we should think about it or is there more We just have yet to see as it kind of flows through the supply chain over the next two, three quarters. So any color there would be great.

Do you want to take that, please?

Yep.

Yeah, I've got it. Hey, Bill. As you know, we've been sort of systematically buying for a number of years now. We tend to be six to 18 months out. Right now, we expect low single-digit commodity inflation, both for Q2 and for the balance of the year, and that includes transaction FX. At this point, we're about 80% covered on market-traded commodities and about two-thirds over the entire basket. We haven't made any huge material changes. We did go a little bit longer on oil as the market went so far down as to be in a lot of cases below the cost of production. But other than that, I would expect us to continue to run our systematic forward buying program because it has set us up well for predictability and cost as well as predictability and pricing in the marketplace. So I think that strategy continues to serve us well.

Pretty good. Thank you all for joining us today and for the confidence that you've placed in us with your investments. We hope that you all stay safe and healthy, and we look forward to updating you as the year progresses on our performance. Thank you very much. Stay safe, please.

Thank you for participating in PepsiCo's first quarter 2020 earnings Q&A session. You may now disconnect your lines and have a wonderful day.