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#Just to clarify in terms of the guidance what you said is the margin in the US snacks segment is going to come up in line with North American average.
I think that number is closer to 400-plus basis points, so I am not sure what numbers you're looking at there, <UNK>.
That's a net impact.
So obviously there's a lot of moving pieces in there.
There is a shift of activity out of SG&A into price reduction to retail to reflected the transferred activity that retail is now picking up, and there's also investment into a stronger pull model.
And <UNK>, maybe you'd like to talk a little bit about some the pull model ideas that we have there in terms of where we're going to reinvest in the marketing area.
When you mentioned several areas of reinvestment, it is all of the above.
And I think it is driven by how the shopper shops in more channels, but also how the shopper shops when it comes to click and collect in our mainstream retail channel, and we need to give more of our resources especially behind big brands like Cheez-It, Pringles, Rice Krispy Treats, which are really differentiated offerings.
We need to get more investment behind those brands to go meet the consumer and the shopper how they're shopping.
And spend less of that money, if you like, in a distribution system and move more of that to pull.
Quite frankly in those brands, when you look at their incrementality and the profitability, there's a lot of growth to be had that we can't get at today because of the focus of our resources, quite frankly.
So it is all of the above including new package formats, more investment in food, more advertising, more shopper marketing, that's where we're leaning.
So to clarify there, it would be more brand building driven as opposed to promotional, not trades but more of a pull perspective.
Thank you.
So we can't comment on what our competitors will do.
This was the right decision for us and it's the right decision for us again because 40% of our sales today are already through warehouse, we are seeing better share, better growth, better service to our customers in that warehouse system.
We also have a world-class warehouse system here in the US which is very capable and very good at servicing high merchandising categories like cereal and Pop-Tarts.
So we believe that we are well-positioned to make this transition and this transition is not dependent upon what our competitors do, it's the right thing for us to do.
And on the customer side, I've spoke to a lot of customers, they are aligned and in agreement this is the right strategic move.
If you talk to customers, you know how much their retail environments are changing, a little bit of a seismic shift in how they have to move to meet shopper needs, how they are working hard on their replenishment systems.
Quite frankly, this felt exactly like the right time for our business to make a big strategic move like this.
Yes, there will be disruption, yes there will be competitive action, but I think this is exactly the right thing for us to do, with a forward-looking lens on how the shopper shops and how our customers are changing their shopping.
There is obviously a margin benefit to the a company of moving from DSD to warehouse, but remember we had to invest back into a stronger pull model into the marketing elements.
We still have to invest in the warehouse model so while there is some percentage of sales in DSD there is also a percentage of sales required to support the warehouse model, so there is a number of moving pieces here.
We think the guidance we have given on the margin improvement in snacks is appropriate and gets you to the right ballpark of where we will end up.
So yes, we did talk about the deflationary environment in the UK and I mentioned earlier that we are seeing some transactional currency exposure, particularly because we import Pringles into the UK from the eurozone.
We have also talked about revenue growth management.
Across the globe and specifically in Europe we are taking some actions around revenue growth management to manage our profit and loss performance.
And you may recall within the prepared remarks, I mentioned something about the Q1 may be a little bit slower start as a result of elasticity in Europe and we are referring specifically there to potential price elasticity as we work with retailers on pricing action, we are working through the marketplace.
It would occur through the second quarter and the third quarter.
So as we go through this transition not every customer is transitioning at once.
We are working with each individual customer based upon their readiness for the transition to enable them to have the transition as effective and efficient as possible, so across the second and third quarters these transitions will occur.
And you will see more of a run rate happening in Q4.
I thank you.
Good morning, <UNK>.
So revenue growth management covers a number of areas.
It covers both more effective trade space, price architecture, brand mix, et cetera.
And we started the implementation in 2016, across 2016 you can see the improvement in price mix was negative in the front half, it was more stable in the back half.
In 2017 we do expect positive price mix at a consolidated level, despite the adverse impact of the DSD transition from DSD to warehouse.
So still on a consolidated basis we still expect positive price mix.
As I said, it's a combination of four or five different variables.
It is not just one item that is going to drive that improvement.
Operator, I think we have time for one last call ---+ question rather.
Hello, Rob.
It is <UNK>.
I think you're probably talking more about the wholesome business in the more recent past.
We look at our wholesome business, as I said Rice Krispy treats is doing great, Nutri-Grain is doing well, those two parts of the business are doing fine.
K was still a drag through last year.
As we come in to the beginning of this year, we have renovated even more of our food.
Where we have renovated so far we have seen better performance, but we do have some legacy foods that are part of our wholesome snack platform that is still going to be there.
But we have new protein bites and protein bars coming here in January.
I think there is eight different items.
We're back on air in February or at least digitally, talking to consumers again around the Special K brand from a wholesome point of view.
So the whole restage is continuing, we're bringing more new food to life, and our aspiration this year is we can go from being down double digits to down low single-digits to flat on Special K as we reinvest, as we reinvest in the brand for food and advertising.
On Special K wholesome snacks.
Is to, yes, significantly cut the decline this year as we go forward.
It would be down double-digit last year if you look at the Nielsen data, and yes our aspiration will be somewhere less than five this year or flat if we are good.
Thanks, everyone, and please do not hesitate to call 269-961-9050.
I will be around all day.
