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#Good morning <UNK>.
Thanks, <UNK>.
Great question, so let me just clarify one thing.
On Kashi, the Kashi wholesome snack bars actually grew in the first quarter, which is a sign of the strength of the brand, particularly when you have great food going up against it.
On the Special K business, if you look at some of the softness in consumption we've had in our US snacks business, it does largely come down to Special K.
There's some good news in there.
If we look within wholesome snacks, Special K bars is a primary source of weakness within that category for us.
We've come out with new Special K bars here at the beginning of the year.
We've lost some distribution and some retailers, but where we've maintained the distribution, the velocity's up strong, which would suggest we've got good food that's delivering upon the promise of Special K and we have more innovation coming in behind Special K in the middle of the year.
If you come to crackers, similar story.
We've renovated Special K Cracker Ship offering.
We've lost some distribution on those products, but where we've maintained the distribution, the velocity is up strongly again, which also suggests we have great food out there.
I think what we're seeing is a transition.
The good news is where the food's in play, we're seeing good velocity.
Now our job is to rebuild the distributions based on having great food in the marketplace.
I think that's fair.
We're essentially on plan in our US snacks business in the first quarter.
I think the upside had more to do with some great performances in the international businesses and seeing a bit of trends come out of our US cereal business.
Good morning <UNK>.
There is a couple factors driving that.
If you look at the consumption data versus the shipment data, there's two reasons for difference there in the first quarter.
One has to do with strong growth in the nonmeasure channel.
I realize that Nielsen covers most of the business, but there are some large customers and meaningful channels that are not inside that data.
So we've seen some very good growth in those businesses.
Secondly, a lot of what's happening is driven by the phasing of innovation year on year.
So last year, innovation went out in the first quarter.
This year innovation for snacks is much more mid year, and what's happening there is we will see that innovation going Q2, that will give us more of a consumption drive and more of a shipment drive as soon as we fill the pipelines for that innovation.
Last year, innovation went in in the first quarter, suppliers ships in Q4, so we actually burned through inventory in Q1.
We get good consumption coming from behind that innovation in Q1 last year.
A little bit of a timing issue within the year that's driving what you're seeing there.
We do expect better results.
I would caution on some of the April data because the shift of Easter can distort one week versus another, but we do expect to see improving consumption trends in our snacks business over time.
So historically when we've benchmarked the Company to our peers, we've actually come away a little bit leaner quite frankly than a lot of our peer group.
Clearly we have a new model with the 3G model and Kraft and Heinz.
We are watching that closely and learn and reapply what works.
We're not going to blindly follow those actions.
As you're thinking about our business, we're doing Project K, reinvesting for growth.
As we talked back at CAGNY, we only need low single-digit growth to drive mid single-digit operating profit, and we believe that's the right way to sustainably grow and drive these businesses over time.
To answer your question, we continue to look, to learn, but we're going to drive Project K for now and then see if more ideas come to us based upon what we see in the marketplace.
A great question.
As we shared with you earlier in the presentation, we've made some pretty important structural changes to better address the growth opportunities in Latin America, and they're quite simple.
First is high-frequency stores.
Traditionally we've had pantry size boxes of cereal going through most of our direct accounts.
50% to 70% of all food sales go through HFS as I mentioned earlier, only 20% of cereal sales.
And for us less than 20% of our snacks, so that is the biggest opportunity.
To be able to drive volume growth, <UNK>, in HFS, we need to have the right size, the right pack at the right affordable price, and that's what we've now put in through the core of our cereal brands to address high-frequency stores.
And as we ramp up Pringles, having Pringles also in affordable sizes for high-frequency stores is going to be absolutely critical.
I think so.
I think it's making sure that our products are affordable and accessible where consumers and shoppers shop every day in our region.
Yes, so you're right.
Our gross margins were flat in the first quarter, and we have said guidance for the full year is that our gross margin will be up slightly.
Our Project K is a little bit lower in the first quarter versus how it will play out over the next three quarters, and our rate of productivity savings in the balance of the business.
So excluding Project K also gets a little better as we go through the balance of the year, <UNK>, so that contributes to slight gross margin improvement as well.
We're making good progress on Kashi.
As you mentioned we are renovating some of our core foods today.
The good news is that we have a strong team in place in California, and we are making progress both on the renovation front which we expect to have for Kashi largely this year, but also on the innovation front bringing new foods to market.
You look what's happening to Kashi, we have seen a significant loss of distribution over the last year, but our velocities are stabilizing.
And as we bring in new innovation mid year, we expect to start to improve our distribution as we go forward.
So mechanically, we're going to see a decline in Kashi this year.
That's really loss of past distribution as opposed to a weakness in the underlying brand or foods, and as we start to rebuild through innovation I think we will start to see the business return to growth.
That's probably more a 2016 discussion than a 2015 discussion.
The good news as we go talk to retailers about the innovation about what we're doing on the brands, there's real excitement about what we're doing, and we're seeing improving support from retailers as well as we go forward.
Thank you.
Thanks for the question.
We are executing the largest restructuring program in the Company's history taking out a very large amount of costs and reinvesting that back in the business to drive long-term growth.
You've seen that through our investments back in sales capability, investments in our food.
You've seen our top line trends starting to improve with growth across our international business and some of our US businesses, so we're on track with our plan to return to stable growth over time.
We believe that's the best way to create value for shareholders.
Thank you.
Curt we always will do what we think is the best way to create shareholder value, and we are ---+ our beliefs drive exactly like programs to achieve that outcome, and that's what we're absolutely focused on as a company.
I think you're seeing improving trends in this quarter, and that's our goal as we go forward.
So appreciate the question.
Gary, I think we better wrap it up, please, if we can.
Okay that's it.
Thank you.
We will be around to answer questions over the next day or two if anybody has follow-ups.
Thanks.
