CAG
#Matt, when we look at acquisitions, we start with the strategic rationale, right.
So if you're talking about a synergistic acquisition, we are going to go through our acquisition criteria to make sure it makes sense strategically.
And then, obviously, all the financial metrics makes sense.
Like every other company, we are all looking at what's on the table right now in terms of potential tax reform.
Obviously, there is nothing solid, right.
So, all you can do is scenario plan, but that is clearly not driving what we are thinking about for acquisitions.
It starts with strategy and financial hurdles and then we just look at scenarios and how it could impact acquisitions as we move forward.
I think just by its nature there is some volatility in that industry, but if you look at Ardent Mills for the third quarter we had a very solid third quarter.
The volumes increased.
They took advantage of market opportunities to build share and they are recognizing operating efficiencies at the plants which, a year ago they were actually investing in their infrastructure.
So we are seeing some of that pay off.
So pleased with the progress they are making, for sure.
Let me start, <UNK>, as you look at the quarter, overall we had about 70 basis points of price/mix benefit as a Company, really coming from our International business and price increases that we took there in the last quarter.
If you look at both Grocery & Snacks and Refrigerated & Frozen and you peel the onion back, we did have price realization benefits in both of those segments.
So we had 50 basis points of price benefit in Grocery & Snacks and 90 basis points and Refrigerated & Frozen.
We did have some offsets related to mix and that really just comes down to that certain items had a higher average net sales per unit than the average.
So that's really a timing thing for the third quarter.
We feel really good about the progress we are making in both our pricing and our trade efficiency and we are seeing that this quarter.
It was masked a little bit by the mix, but that is a timing thing.
You know, <UNK>, I feel really good about where we are.
We'll obviously get into specific guidance next time.
But just principally, if you think about it, when you reset your top line for a higher quality foundation, it ought to be just that.
It ought to be a higher-quality foundation from which you can build.
And then when you initiate a new innovation program like the one that we've really mobilized and some of you got to see at CAGNY and you layer it on top of that stronger foundation where you've taken out a lot of the things that were holding you back previously, I think it sets you up for success.
And that's why we, at our Investor Day, gave the long-term topline algorithm that we did is we believe did that what we are doing this fiscal year is essential in terms of creating a foundation off of which to build.
And what we are doing in <UNK>'s area with the growth center of excellence is an important investment so we can actually lay those bricks on top of that stronger foundation.
So ---+ and in the supply chain, our supply chain team has been doing an outstanding job of delivering productivity for years now and as <UNK> Biegger pointed out at our Investor Day, we anticipate additional benefits and realized productivity going forward as part of our program.
So you put all that together and I think Conagra remains a very compelling investment for our investors and we've got very solid shareholder value creation potential here.
Well, we are not giving guidance on 2018 today, but I have spoken to the market many times about how I think about our A&P spend, vis-a-vis some other companies I worked for.
Our A&P budget is ---+ I think it's very robust.
It's competitive.
We've been in the mid-4s.
It's not the kind of A&P rate that, in my mind, require some kind of A&P rebase.
Now what we have been doing on A&P, though, is trying to get more effective and efficient within our existing spend.
So <UNK>'s team has a very aggressive program to shift more of our A&P budget from nonworking dollars to working dollars.
That is happening very effectively.
And then within the working dollars, we are changing the way we use A&P.
Not only are we very disciplined in which brands we apply it to, but we are much more digital, social today than traditional TV.
The mix of marketing tools that we use is different.
It's more effective, and the net of all of this is, I feel like our overall and P level is about right while it continues to get more effective.
Yes, <UNK> we are not going to give guidance in terms of sales next year or by quarter, but what I do want to point out ---+ I've said this before is that as you think about ---+ a big part of what we've been doing is walking away from deep discount promotions.
Well, promotional activities are long-lead-time planning items with customers, so there is not one given quarter where we lap it and it's over.
It varies by customers.
Some customers have their events locked in out further into the future than others.
So we'll continue to titrate off of these types of super hot deals and that will go on for a while until we get it out of our base.
But, obviously, a lot of the heavier lifting in that regard will be behind us as we exit this year.
But there will still be ---+ we still have certain customers in certain regions on certain SKUs who even this past year have done deeper discount deals and we'll navigate our way out of those over time.
So, that's kind of a principal point around how this thing unfolds.
In terms of the building blocks to an improved top line, one is, to get some of the weaker businesses out of our base, to create a more stable foundation.
And, two, is to begin to really get ---+ re-engage the consumer to shop our brands off of the shelf based on the merits of the brands not based on the depth of the discount on deal.
And you're seeing that begin to happen already.
As you look at the velocities on base that we are seeing today, they are higher and what that really is indicating is that we are succeeding in reconditioning our consumer, the shopper, to re-experience our brands in a full-priced, non-merchandise condition.
And when you then layer on top of that new marketing and new innovation, we think that's the right way to run a branded portfolio.
Yes, those ---+ that was related to our SG&A, and as we mentioned, that we've obviously ---+ our SG&A is very favorable and that's been planned but we've had some additional favorability, primarily from open headcount.
We are filling a lot of positions and we are in the process of doing that.
So as we continue to fill them, more of those costs will come in in Q4 and into next year.
So that's really what we are referring to there.
Well, thank you, and apologies again for the technical difficulties we had.
As a reminder, this conference is being recorded and will be archived on the Web as detailed in our news release.
As always, we are available for discussions.
Thank you for your interest in Conagra.
