General Mills, Inc.

Good morning and welcome to General Mills' fourth quarter fiscal 2025 earnings conference call. All participants are in a listen-only mode. After the speaker's remarks, we will conduct a question and answer session. To ask a question at this time, you will need to press star followed by the number one on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the call over to Jeff Seaman, Vice President of Investor Relations and Corporate Finance. Thank you. Please go ahead.

Thank you, Julianne, and good morning to everyone. Thanks for joining us today for our Q&A session on our fourth quarter fiscal 25 results. I hope everyone had time to review our press release, listen to our prepared remarks, and view our presentation materials, which we made available this morning on our investor relations website. Please note that in this morning's Q&A session, we may make forward-looking statements that are based on management's current views and assumptions. Please refer to this morning's press release for factors that could impact forward-looking statements and for reconciliations of non-GAAP information, which may be discussed on today's call. I'm here today with Jeff Harmoning, our Chairman and CEO, Kofi Bruce, our CFO, and Dana McNabb, Group President of North America Retail and North America Pet. Before we open for questions, I'm going to hand it over to Jeff Harmoning for a few opening remarks.

Yeah, thanks, Jeff. And I thought I'd start this morning. There's a lot going on up and down our P&L within our business, and then certainly a lot going on in the broader world. So I thought I'd just take a couple minutes to summarize what we're trying to accomplish. The first and most important thing is really returning to volume growth. specifically in NAR. And we're really encouraged by what we've seen. We started to invest in value in Q3 of last year with Pillsbury and Totino's, topped by really good advertising. And we liked the results of that so much that we decided that we'd expand the value investments we made in soup and cereal and fruit snacks in the fourth quarter. And we saw the results there that we expected. And so as we go into this year, we're kind of just continuing the formula we had in the fourth quarter, which is which is to expand some of the value investments on targeted businesses that we saw. But also, really importantly, backing that up by significant consumer news. In fact, I think our new product news and our core renovation news is the best that I have seen since I've been the CEO. And we use our remarkable experience framework. We talked a lot about these in our prepared remarks. Certainly, our launch into fresh pet food, all the protein innovation we've seen in our portfolio, renovating Haagen-Dazs stick bars and so forth. It gives us confidence that we can get our business back to the kind of growth we're looking for. Even importantly, as we're doing all this work in NARA, we did see share growth in our international businesses this past year, as well as food service and health share and pet. And so, you know, that gives us a lot of confidence. We're backing up all of this investment with record levels of holistic margin management and also productivity initiatives. So we're not sitting still on that front. But we know that it's an investment year, but we're very confident that these investments will pass. given what we've seen over the last couple of quarters. So with that, let's open the floor to questions.

Great, Julianne, you can go ahead.

Thank you. As a reminder, to ask a question, please press star followed by the number one on your telephone keypad. Our first question comes from Ken Goldman from JPMorgan. Please go ahead. Your line is open.

Hi, good morning and thank you. You know, it's certainly exciting to see, you know, blue go national from a refrigerated standpoint. You know, one of the things you had talked about previously in the past to paraphrase is, you know, you were always, I think, confident in the revenue opportunity. It was a little more on the margin and cash story that was, you know, less tested. So I'm trying to get a better sense, if possible, of, you know, if something has changed or you've learned a little bit more about the margin potential there. And then as a corollary to that, just trying to get a little bit of sense for your merchandising strategy for that, just given, you know, the obviously limited shelf space for that particular category. Thank you.

Yes, let me let me talk a little bit about this Jeff, let me talk a little bit about the past and Dana view any follow on comments to follow up a little bit about our marketing plans, but. We're very excited about this launch, this big national launch. We learned a couple of important things in that last test market. One was that the Blue Buffalo brand really resonated. The second, we could make great products. So our repeat rates were really good. I mean, we had dogs standing in front of refrigerators because they were so excited to eat this stuff. So we know that that works. Because we launched recently, we really didn't have the scale to market the way we needed to to generate trial. As we go into this national launch, this gives us the opportunity to launch at scale. You asked about the financials. We have learned a lot. It's been many years since we tried that test. We've actually been studying the market ever since. One of the things we've grown quite a bit more comfortable with is that over time, this investment will take a couple of years in generating trial. That's the most important job to do. But having done that and achieving scale, we're confident that we can build a profitable and growing business. If we weren't, we wouldn't get involved in this endeavor. But it'll take a little bit of investment, but we believe that we have the right activities to do it. Dana, you want to give any insights into that?

Yeah, well, as you said, the learning really helped us to build a stronger consumer proposition. And we really think that we have a path to an attractive financial model for a fresh business at scale. What we are coming with is launching Love Made Fresh nationally. It will be in all 50 states. We have a wide variety of formats and flavors to drive appeal. And these formats have been designed for maximum flexibility. And why that's important is because we know that 80% of pet parents who use Fresh, they use it with other food formats. So they'll top it, they'll mix it, they'll sometimes use it on its own. And then 55% of those users, they want to use Kibble and Fresh from the same brand. So we're really confident that Blue Buffalo has a right to win here, that we've got a unique proposition. As Jeff said, we have improved our go-to-market approach and we're committed to investing in building quality, trial, and awareness. We have had really strong reception from retailers. And as we come to market, we're going to be the biggest pet brand that's across dry, across wet, treats, and fresh. So we're still early days, but we're excited to share more about this launch as we get closer to the date.

Great. Thank you both.

Our next question comes from Andrew Lazar from Barclays. Please go ahead. Your line is open.

Great. Thanks. Good morning, everybody. Morning. Jeff, I think the level of reinvestment plan for fiscal 26 is certainly deeper than most had anticipated. And I understand the organic top line growth priority and the investment behind fresh. My question is, how do you ensure that the margin profile that comes with this reinvestment is being done in a sort of responsible way, rather than giving up too much margin that may be tougher to ultimately rebuild? I guess, are there certain aspects of the reinvestment that maybe you see as more one-off or temporary in nature? that give you confidence that you can rebuild this margin in a reasonable timeframe versus being maybe at a structurally lower level sort of going forward, if you will. Thank you.

Sure. Andrew, this is Kofi. Good morning, and thanks for the question. Let me give you just a few thoughts. I think we see a few of the factors. There's certainly a lot going on underneath the hood, and we provided a fair amount of that detail in the prepared remarks. Underneath the hood, there are a couple of factors that we would see as maybe more temporary in nature. First, as Jeff alluded to, the fresh investment, well, multi-year investment, we would expect that once we build scale, we'll be at a point of profitability and return on that investment. Second, as we think about the nature of tariffs, We expect to be able to mitigate some of the effects of tariff, but not all within the year. So that'll put a little bit of drag from a timing perspective. But again, not something that we see as structural necessarily long-term. And then third, just a reminder that on the divestiture of Yoplait, we expect there to be a little bit of a stranded cost drag as we are getting at some of the costs and eliminating some of those costs this year, but we'll have a tail end of fiscal 27. So those are the factors that I think are important to take in even as you measure what is an important and significant investment behind getting growth restarted. Got it. Great. Okay. Thank you for that. Appreciate it. You bet.

Our next question comes from Peter Galbo from Bank of America. Please go ahead. Your line is open.

Hey, guys. Good morning. Maybe just a quick clarification and then a question. Kofi, I think on PET specifically in Q4, you know, you talked about the inventory bill that retail that you're expecting to reverse. So is that a full reversal in Q1? I just want to kind of understand the magnitude there. And then Jeff, you know, like there's been obviously a lot of lumpiness, I think, in the reported figures on PET. So maybe you can just give us a broader sense from your prepared remarks on just the state of underlying PET and how you're thinking about the different verticals within that, just again, given some of the lumpiness that we've seen quarter to quarter. Thanks very much.

Yeah, thanks for the question. You asked Kofi the first one and me the second, but I'm going to take one for the team here and answer both of those. You know, as we look at inventory levels, first, our inventory levels in pet are in a good place, kind of broadly speaking. As we look throughout all of last year, there was relatively any, you know, very little movement. If you look across here in our levels of inventory at retail for our pet food business, Our pet food business, since we bought it, has really had a lot more lumpiness, is your term, in the levels of retail inventory. And that's really largely due to the fact that it has a high proportion of e-commerce sales, which tend to be more volatile than do things going through grocery stores and mass merchants and so forth. And so I would expect that the lumpiness quarter to quarter will continue. And to the extent, will it reverse in the next quarter or not? Maybe. And we just want to be transparent about last quarter and that we saw three points of inventory build last quarter as we head into this quarter, and whether that will dissipate at the end of this quarter or not, we'll see. One thing I have decided to do is to not predict what's going to happen with pet inventory from quarter to quarter, having been fooled a couple times. So it's a fair question, but I want you to know our inventory is in a good place, both on our retail business, our human food business, and our pet food business, and there's always going to be some level of variability as we go quarter to quarter.

Great. Thanks, Jeff. And just anything on the underlying pet kind of performance? Oh, yeah. Sorry.

I got so excited about that answer, I forgot. I'm really excited. I'm really encouraged that we got our pet business, you know, back to stability. And we grew it a little bit this past year in our shareholding. And some of the things we've done have really worked well, like the advertising on life protection formulas worked well. Our cat business is back to mid-single-digit growth, and the cat population is growing, so that's important. We've integrated Tiki Cat effectively, and that's growing well. Edgerton Cooper is growing well in Europe. We're bringing back that to the U.S. So we have a lot of things that are working really well. I think pointed in the right direction, our marketing is quite good in the pet food business now. There's some things we still have to work on. Wilderness improved, but it's not all the way back to bright. And certainly our treats business would be the same. But I like the direction of travel of our pet food business, even without this launch of fresh pet food. And it's important because, you know, our goal this year is to grow the core of our Blue Buffalo business and add the add this new fresh launch on top of that and and we're encouraged by what we see there's still more work to do but we've we've gone from a business that had declined the prior year to one that we grew a little bit and now we're looking to build on the successes and and you know continue to work on the things that aren't working exactly the way that we had thought great thanks very much our next question comes from peter graham from ubs please go ahead your line is open

Thanks, Operator, and good morning, everyone. I was just hoping to get an understanding on just kind of the organic revenue phasing for the year, just in the context of the down one, the plus one, and kind of starting off, I think, in kind of this down 3% range. So just curious how you're thinking about the phasing of growth as you move through the year. And I guess specifically, do you expect to see a return to growth at some point in time? And then just related in the prepared remarks, you outlined an expectation for category growth to be similar and not to get too specific. Are you simply assuming, you know, what we're seeing today continues? Or do you expect to see some sequential improvement, but where you land for the year ultimately is similar to what we saw in 25?

Thanks. Yep. So I think it's important to note that, you know, as we exit this year, we had about two points of, you know, trade expense phasing in our organic sales number as we exit the quarter. So as you think about kind of the setup for next year, we will have trade expense phasing comps as we work our way through the first half of the year. And obviously, as we made investments in the second half of this year, those comps will ease. So I would expect that to be reflected in the progression of our top line. So I think that's a critical point. And then the second is, as we think about categories, we are laser focused on what we can control, which is our competitiveness. So we're not counting on a significant rebound in categories as we work our way through the year.

Our next question comes from Chris Carey from Wells Fargo. Please go ahead. Your line is open.

Hey, guys. How are you? I think kind of a holistic question, then more of a quantitative follow-up. From the more holistic side, you're probably the most intentional when it comes to pricing reinvestments in the space. And I think it's really a couple questions related to that. First, what are you seeing from a competitive response to some of these early actions? And then secondly, you know, how do you, you know, ensure that this isn't a race to the bottom with, you know, branded competitors or private label? And then the more quantitative question is, you know, in the context of, you know, really strong HMM 5%, you've got the incremental $100 million of savings, but obviously like substantial pricing reinvestments key, just frame, you know, kind of like gross margins versus G&A and how you see those line up stacking up through the year. Thanks so much.

Love it. Let me take the first part of that question, and then when it comes to margin versus SG&A, I'll pass it on to Kofi, and he can tackle that. On the pricing, it's a really good question, and I appreciate it. There are a couple of things to keep in mind. The first is that even in the fourth quarter, as we looked at our price mix, it was down 3%. in North America retail and down 1% as an enterprise. And we talk about pricing actions and is it going to be a race to the bottom? It's not going to be a race to the bottom. And the order of magnitude is about that much. We're also investing a lot in advertising this coming year and new products and all the rest. So it's not just about pricing. It's about investment and making sure that we get trial on all of our good marketing initiatives. The other is that You know, in every category, it's not as if we are leading pricing actions down across the board. We're taking targeting actions in specific categories. I've talked about this before, but just to really give another example. For example, in pet food, you know, we were over a price cliff on our wet pet food, and we got under that price cliff, back in line with competition. But we didn't have any pricing action on life protection formula because that wasn't a good place. And the same with our cat food business. And so when we look across our categories, the actions really are targeted to specific items, specific areas, and specific categories. And really, just to get us back in the zone of where our marketing is going to be effective. And so our brands are generally premium brands, and they should be because we've got great brands. But the marketing works really well when the price is kind of in the zone. And And kind of getting that in the zone is the first step. But even more important than that, really, is that once having done that, You know, how good is our marketing? How good are our new products? How good is our core news? And that's what we're really excited about because it's that combination of getting the pricing in, but then also making sure that your marketing is great on top of that, that's going to lead to better outcomes. And we saw that with Pillsbury. We saw that with Totino's. We're confident we'll see that with many of our other businesses we head into this year. In fact, we already have. I mean, if you look at North America retail, we're just three weeks into the year, but I think about 80% of our North America retail business is gaining pound share already. in this quarter.

And then on your question on SG&A, we would expect SG&A to grow a little faster than our top line as a result of reinvestment, a portion of the reinvestment going back into increased media behind our fresh pet launch and certainly behind our brands and innovation in North American retail. In addition, just as a reminder, the incentive reset will be a big drag As you look at the corporate unallocated line and SG&A, so those factors will be the primary drivers of the increase.

I'll just add, this is Jeff Seaman, I have one clarification. As Jeff said, our price mix in the quarter, North America Retail and Nielsen was down about three points. And for the quarter at the company level, excluding the trade timing, price mix was down one. So I think that was the point. Down three in total, two of that was trade timing. So excluding trade timing, price mix was down about one in the quarter.

Okay. Thank you, all three of you. Thank you so much.

Our next question comes from Robert Moscow from TD Cowan. Please go ahead. Your line is open.

Hi, thanks for the question. Jeff, I wanted to know if you think pricing can get back into positive territory at some point during the course of the year. You know, it's hard to get the algorithm to work without having some pricing power to some degree. So maybe you could talk about your philosophy in that regard. And then secondly, I wanted to ask about the assumptions on how big the fresh business can get in pet. James Meeker & You know, when you started working on this, the category was probably growing at around 25% but our channel checks indicate that it's more like 12 to 13 now, including DTC so does that have any impact on on your expectations for how big this business can get longer term thanks.

James Meeker & yeah so um. So, Rob, a couple of questions, a couple of answers to those really, really important questions. You know, I'm about to tell you things that I know that you already know, because you've been doing this a long time as I have. But, you know, over the long term, to get an algorithm to work in the food space, what you need is about half your growth from volume and half your growth from pricing. I mean, you get pricing and mix and all that. So you need both of those things over time. There's a period of time when we saw a record in There's a dog in the background. I'm sure being fed blue buffalo is probably asking for blue buffalo. But if you look over time, you need a mix of price mix and volume. We saw when we had record inflation for a period of about three years, all we had was pricing and there was no volume. Now we're in a little bit of a period where there's a lot more volume than there is price mix, given the consumer sentiment and kind of where we are. But over time, those things tend to level out. So you're right. over the course of time, to get the P&L to really work the way you want it to, you need a mix of pricing and you need a mix of price mix and a little bit of volume as well. But this is a period where we're going to need more on volume, just as we did more on price mix when we had record inflation a few years ago. And so you're right, but we're in a period of time where we know what we need to do. In terms of what comes next and tariffs and inflation. I mean, your guess is kind of as good as mine. I mean, what's going to happen with that? We're not really sure. I mean, All of our options are still open as to how we deal with the inflation we see in front of us. If inflation continues to pick up, then yes, we go to productivity and HMM and all those things. But we have a great strategic revenue management toolkit. And so we'll be very willing to work with that as well to the extent that we need to. But it's a pretty unpredictable environment right now. So we're not really sure how that's going to play out. But know that we're agile enough. with enough of the capabilities to make that work. Your second question about fresh pet food, you talked about the growth rates and how they've slowed to 12%, I might add, and how we think about that. The first I would say, vis-a-vis where we started looking at fresh pet food a few years ago, the category is about twice the size. So the pool, the pond of which we'll be fishing in, would be about twice the size as it was a few years ago. So that would be the starting point, which gives us reason to believe that, you know, our fresh offering has a chance to be a really big offering. And growing 12% is nothing to sneeze at. And the continuation of humanization of pets is an ongoing trend. It's a 20-year trend. And it manifests itself in a lot of different ways versus how treating works to wanting natural pet food, which blue buffaloes serve, to wanting fresh offerings, which we're about to get into. And so we're confident that this humanization of pet food is going to continue, especially because it's particularly relevant among Gen Z and millennial consumers. And so, you know, as they form households more and more and they bypass, we're confident that this trend will continue.

And the only thing I'd add to that is that the fresh segment is a $3 billion segment now, and our data indicates it'll be $10 billion in 10 years. And so there's still significant growth in this segment to get. We believe Blue Buffalo has a right to win here, and it can help spur on that category growth.

Okay. Thanks, Dana. Thanks, Jeff.

Our next question comes from David Palmer from Evercore ISI. Please go ahead. Your line is open.

Thanks. First, a quick one and a clarification off of a line in slide number 38. You said category growth below long-term expectations and similar to fiscal 25 reflecting lower price mix. What was your category growth all in for fiscal 25? And I ask that because it looks like lately the category growth on a weighted basis for mills would be over 2% lately, just looking at the MULO Plus data, which would be in line with your algo. So it looks like, you know, hearteningly, the categories that you're in are doing pretty well. So just curious about what sort of category growth assumptions you are seeing.

Hi, Dave. It's Jeff Seaman. Yeah, that references our global growth exposure, kind of take our categories and geographies combined. And yes, in the U.S., human food, I'd say our categories are a little bit shy of maybe where we would expect our long-term growth to be with volume in line and price mix not quite maybe to the level that we would have expected normally based on our go-forward category mix. Pet category-wise is growing, but modestly, less than what we would expect long-term. Maybe it's about 1% today. We'd expect 3-plus percent long-term. And then some of our international categories, China in particular, and even Europe growing a bit less, China down, and Europe maybe a bit less than long-term. So when you take that in aggregate, that was the remark about overall category growth across our enterprise being a bit below where we would expect long-term, that 2% to 3% growth rate.

So if we were to kind of keep it simple and thinking about your business in terms of getting your sales trends in line or better than your categories, 26 versus 25, you know, for all of us look, trying to think about whether, you know, how you're thinking about the musket rights for this year, what categories and brands perhaps we'll get the most improved awards. What are going to be those, it looks like from your slides, you had a lot in snacks, Totino's, maybe even cereal. You mentioned pets on firmer footing. But what are really going to be the must-get rights from a total sales perspective that you're looking for improvement into 26? And thanks.

Yeah, so let me take that. I'm kind of looking for improvement across the board, to be honest with you. And I think we can get there because our marketing is better, our new products are better, our value is going to be in the right place. And I mean, we win when our biggest, most important categories get better. And so as you look across our global brands and our local gems, that's where we expect to see the improvement. I mean, you can't really get the growth we're kind of looking at by growing your small businesses really well. You really need to grow your biggest, most important businesses as well. That's where I would expect to see improvement, but I would also expect to see it broad-based. And I think we have the initiatives to back that up. And... We feel good about the starts of the year, and we'll see how it progresses, but so far I would say that importantly, what we have to do is grow in line with our categories. We think if we do our job right, we can hopefully get our categories to grow a little faster, but we're not counting on that. What we're counting on is just being more competitive within our categories, but because we're the leader in so many categories, to the extent that our marketing efforts really stick well, hopefully we can drive a little bit more improvement in category growth as well, but we're not counting on that.

Okay, thank you.

Our next question comes from Scott Marks from Jefferies. Please go ahead. Your line is open.

Hey, good morning, guys. Thanks so much for taking our questions. I have two quick ones. The first, I guess, on the innovation front, I guess we saw a lot of products that are putting protein front and center. So just wondering how those are performing thus far in kind of initial launches and markets where you're getting into. And then secondly, on the price investment front, we've heard some of your competitors speak to investing around key events and key seasons as opposed to more kind of steady state investment. So just wondering how you're thinking about that and whether you see different consumer responses throughout the year at different points in time. Thanks so much.

Yeah, so I think from a new product standpoint or a new standpoint, you're absolutely right. Protein is a trend that people are really looking for right now. We see mid- to single-digit growth across the grocery store from protein items. And while I'm biased, we make protein taste incredibly good. So what you're going to see in the plan coming this year is almost $100 million worth of ideas. We have really strong protein across most of our big categories. I'll use Cheerios protein as an example. That's only been in the marketplace for six months and has far exceeded our expectations. So we are bringing new SKUs into the marketplace starting now. So we really believe that this is a trend that is here to stay and that we are well positioned to win with this trend. So that is how we're thinking about new products.

And then price steady state versus kind of seasonal. Wow.

Right. I mean, as Jeff has said, the plan for this year is really to make sure that we have really the right price value and then very strong news, innovation and advertising across the entire year. But we also know that when the consumer is struggling, parents won't sacrifice spending. in the seasons they want their families to have a good halloween or a good valentine's and so we will make sure that we are leveraging seasons where appropriate we have about 50 percent more seasonal innovation in our plan this year and i think that will be important to complement the innovation and news that we have throughout the entire 52 weeks thank you our next question comes from max dumport from bmp paribas please go ahead your line is open

Thanks for the question. You're truly stepping up your investment posture as you're prioritizing turning volumes positive. And it's nice to see that in the platforms that you started investing earlier, like refrigerated dough and Latinos and dog food. You're seeing that improved volume performance. The question is, though, taking refrigerated dough as an example, that the improved volume is not outpacing the price decline. So even though refrigerated dough is a great example of a place where you turn volumes positive, Chris Wanner, Dollar sales really are still struggling at least in the Nelson data we're looking at and given the midpoint that your guidance calls for. Chris Wanner, Flat organic sales growth i'm trying to get some for what's giving you the confidence that in these as you roll out these investments more fully you'll see a more favorable relationship between volume and price, thank you.

Yeah, so you're right, Max. The fact that our volumes have increased ahead and our volume shares have increased ahead of our dollar shares is certainly true. And it's something that we expected. It's something that we had modeled. In fact, the modeling that we did, you know, it turned out to be, you know, very, very accurate to what has actually transpired. But the modeling, you know, doesn't always, doesn't just end with, you know, how you invest in price. What we would expect is that over the course of the first half of this coming year that our volume shares will outpace our dollar shares for the very reasons that you talked about. That's why, though, it's so important that as we get into the second half of the year, particularly the fourth quarter, starting in the second half of the year, that we keep our marketing investment up, that we've improved our new product profile. Our new products are up 25%. That would be our expectation in North American retail at 30% overall as a company. And and why we have more core news, because once we allowed the pricing, our assumption is that our dollar shares would then begin to grow. And that really happens when you get your your your investments in the right zone on value. But then when you add on top of that really good marketing, which we have. And so the first half of the year, we would expect that our volume growth will outpace our value growth, our sales growth. But then that will start to reverse as we continue to invest in new product marketing and great advertising and core business news.

Great. Thank you. And your guidance, it's clearly embedding a pretty big step up in investment spend in FY26. And it feels like a portion of that is around the national expansion into fresh pet food. Is there any way you could quantify that? just how much investment is going behind that national expansion into fresh pet food? And I'll leave it there. Thank you very much.

It's a fair question, but we're going to pass on that for now. Just know that this is not a test market. It's a national launch, and we fully intend to make pet parents aware. As long as with our marketing investment, we're going to spend the money required to get the trial because we know the repeat is going to be really good. And so we're not going to give a number on that, but just know that it's important to get the trial. And that really comes with good marketing, but significant levels of marketing investment. Okay. Thanks very much.

Our last question today will come from Michael Lavery from Piper Sandler. Please go ahead. Your line is open.

Thank you. Good morning. Two quick ones. Maybe just following up on the launch spending comment, can you give a sense of how you evaluate and balance organic innovation versus acquiring a fresh pet business? Obviously, the consideration set is extremely limited to go acquire, but How do you just think about which is the better way to go or what drove you to come back after a test a couple years ago to launch now?

Yeah, look, in general, the ways to grow your own brands organically, to buy your way into growth through M&A, which was also done successfully. Or use equities that other people have to enter categories that we have with ghost and cereal, for example, for protein. And we've done all three of those things effectively. And so as we think about what profile to take, we ask ourselves, do we have the right to win? to do this organically? And with Blue Buffalo, the answer is a resounding yes. We found that out during the first phase of the trial. The second is, do we have the capabilities in order to win? And we've been doing refrigerated products since like the beginning of time, I think since the 50s. So this idea of getting refrigerated, we know how to run a refrigerated network. And so we certainly know how to do that. And then we look at the investment profile, and do we think we have the investment profile to be able to enter a category successfully? And in this case, we think we do. And so that's what we evaluate as we look at all of our growth opportunities. We like to be able to grow organically. That's the most important thing for us to do. But we're really pleased that we think we have an offering in this case that will be significant, that will be innovative, that ties really well with the blue equity. But in other areas, you've seen us do M&A over time because we felt like we needed to enter a category like we did with Blue Buffalo originally and thrilled that we did that.

I know that's helpful. And can I just come back to one other comment you said about hoping for improvement across the board? Where does Salty Snacks fit into that? It didn't really get much mention. I know it's a smaller piece of the portfolio, but Is that just more challenged because of a discretionary component or some reason that it isn't maybe getting some of the same investments? Or how does that just fit into your thinking and strategy for the year?

Yeah, so thanks for the question. What I would say for SNAC broadly overall, in a tough economic environment, we see that it's a bit more of a discretionary spend. And so our categories and our businesses have had a tougher time this year. And the onus on us is really to do what Jeff talked about, which is to get our value proposition right across all our snacks portfolio and then make sure that we have the best marketing new products and news to make sure that we're worth it for the consumers to buy. From a salty snack standpoint, it didn't have a great year this year because we just had undersized participation in some of the largest growth trends. So what's working in salty snacks right now is really bold flavors, having the right value sizes, and then, of course, making sure that you use that news to ground merchandising and display. And I think we're all really excited about the salty plans that are coming this year. We renovated three of our top flavors, significantly increasing flavor intensity. We have spicy innovation coming. Think spicy dill and Chex Mix and hot and spicy Chex Mix. And we've got a partnership with Tabasco and Bugles. We've got value coming in tubs for Chex. So we've just got really good salty innovation. And I think you'll see our performance improve significantly in the upcoming fiscal year.

Okay, thanks so much.

Okay, I think we're going to go ahead and wrap there. Appreciate the time and attention, and as always, we'll be available for follow-up calls today. Julianne, I'll pass it back to you.

Thank you. This concludes today's conference call. You may now disconnect.