Advantage Solutions Inc. (ADV) Earnings Call Transcript & Summary

Good afternoon, and welcome to Advantage Solutions' Second Client and Customer Insights Call. As a reminder, today's call is being recorded, and we have allocated 1 hour for prepared remarks and Q&A. At this time, I'd like to turn the conference over to Tanya Domier, Chief Executive Officer for Advantage. Thank you. You may begin.

Hello, everyone. Thank you so much for joining Advantage Solutions today. As a reminder, Advantage is the leading provider of outsourced sales and marketing solutions to consumer goods companies and retailers. We have a strong platform of technology-enabled competitively advantaged services like headquarter sales, retail merchandising, in-store sampling, digital commerce and shopper marketing. And we do this for brands and retailers of all sizes. We help them get the right product on the shelf, whether physical or digital and into the hands of shoppers, however they buy. As a trusted partner and problem solver, we help our clients sell more while spending less. And we've never been more essential helping to navigate a very wide range of outcomes post COVID. We're really excited to be here today to share timely and provocative insights from our latest survey of CPG manufacturers and retailers. At a time of unprecedented change and definitely record uncertainty, we'll share our perspectives on pricing, cost inflation, supply chain disruption, labor pressure and other top-of-mind themes. Here to walk you through our findings and take your questions are Jill Blanchard, our EVP of Client Solutions; and Dan Riff, our Chief Investor Relations and Strategy Officer. Before I hand things off to Jill and Dan, I just wanted to share some of the survey highlights that I found most intrigued. First, manufacturers and retailers expect increased sales over the next 2 quarters compared to both 2019 and 2020 levels. Elevated at-home consumption and price increases are the largest driver of the expected increases. More retailers than manufacturers expect growth to be driven by factors more in consumer's control, things like increased spending and pantry loading. Manufacturers have a slightly different view, expecting growth to be driven by factors more in their control, such as improved supply chain and innovation. Supply chain challenges, as we all know, continue across CPG and retail. 9 out of 10 manufacturers are currently experiencing transportation and manufacturing labor challenges, and more than 60% of manufacturers report that they can't handle an increase in demand over 5%. 39% of retailers will be increasing their weeks of supply on hand. The next thing that I know is top of mind for all of us is inflation. And as we all know, inflation is the primary driver behind price increases. 92% of manufacturers report that they plan or have taken at least 1 price increase since the beginning of COVID, with 16% taking 3 or more. Most price increases are in the 6% to 10% range with some going higher in the second and third round of their price increases. Beyond price increases, reduction in trade spending and supply chain efficiencies are the top 2 ways that manufacturers will offset inflation. So those are some of our survey highlights. There's a whole lot here to dig into and discuss. And for that, I'll turn it over to Dan and Jill. Dan?

Before we dive a bit deeper, I want to provide some context to investors navigating these choppy post-COVID waters. First, if these seem like unusually uncertain times, they certainly are. We've seen unprecedented change in disruption across consumer goods companies and retailers. I've heard it described as all hands on deck all day, every day. That feels about right. There's an unusually wide range of outcomes from here in both dimensions that companies can influence and control and in external unknowns outside their control. CPG planning used to be population plus inflation plus or minus 2%. Now we're hearing of 4 or more scenarios that range by 20% end to end. And previously unforeseen challenges keep emerging, no resin available for screw caps, no water for Chinese factory workers, no chips for electronics, et cetera, tough sledding for sure. There's very little consensus except that the path ahead will be bumpy, but CPGs and retailers aren't fully aligned and that clients are starved for input and insights. Not only are they making unprecedented decisions, but they are doing this in the most isolated working conditions of our time. Jill and I talk to C-suites every day about these trends. As we dig into some of those insights together today and share more from our survey, we'll shed light on temporary versus longer-duration themes, industry-wide versus company-specific challenges and opportunities, resolvable controversies unfolding into 2022 and beyond, and suggestions or questions you can ask the companies you're investing in. We do hope this color and perspective is valuable. Advantage is helping our clients and customers navigate uncharted waters and solve unprecedented challenges every day. Given how much of the solution depends on execution in the field, there may not be a better time to be a low-cost scaled provider of solutions that extend all the way to shelves, especially when you're a hidden gem of a newly public company trading well inside of 9x EBITDA. With that context and the quick picture of Advantage Solutions, I'll hand it over to Jill Blanchard, our EVP of Client Solutions.

Thanks, Dan. Okay. So let's dive into the data. So first of all, let's look at volume expectations in each of the 4 quarterly surveys that we've done so far. We asked the CPGs and retailers for their expectations for year-on-year dollar sales growth. This time, we asked about their expectations compared to both last year as well as pre-COVID. And for the first time in our surveys, the retailers are largely aligning with manufacturers and expecting growth both compared to pre and during COVID. More manufacturers and retailers expect higher dollar sales compared to pre-COVID than during COVID, which is not something that we would have expected to be saying today if we rewound the clock to last year. Last year, we all thought that it would be impossible to anniversary some of the more positive COVID-driven volumes and would eventually expect to get back to pre-COVID levels. So it's clear that both parties are anticipating lingering and/or longer-term effects for at least the next 6 months. So let's take a look at some of the growth drivers. Year-on-year price increases are a big driver of the expected dollar gain. Beyond this, though, retailers are more reliant on consumer behavior, citing growth drivers such as increased at-home consumption, increased consumer spending, continued government stimulus and pantry loading, those are the light bar -- the light blue bars on the right-hand side. The manufacturers, however, are more reliant on levers within their control, things like improved supply, distribution gains and innovation. This provides a pretty interesting perspective into how each party is looking at what is driving their future. So let's now look beyond pricing actions and look at offset rising -- offsetting rising costs. Beyond pricing, which, of course, is at the top of the list here, as Tanya has said upfront, reduction in trade spending and investments in supply chain efficiency received the top vote as levers to use to offset inflationary pressures. 69% of manufacturers plan to reduce trade spend over the next 6 months, mostly driven by supply challenges and the need to fund digital, and 8 out of 10 manufacturers are going to be implementing supply changes, with half of those being drastic changes. The manufacturers are laser-focused right now on getting the product on the shelf. Many of our manufacturer clients bet my joke about how their salespeople are now forced to be supply chain experts as most of their sales conversations aren't about innovation and trade, but more about supply chain. So let's get into some details on price increases. With price increases at the top of the lever list, here are some details. On the left-hand side of the screen, you'll see that 92% of manufacturers have taken or will take at least 1 price increase, with 16% of manufacturers having or planning to take their third price increase or even more. Food manufacturers are a bit more aggressive than nonfood in that only 86% of nonfood manufacturers have taken or plan to take an increase yet. In the chart on the right-hand side of the screen, you can see that the majority of the price increases are taken in the form of list price, yet, we did see some manufacturers taking pricing in the form of trade productions in the first 2 rounds. We're also hearing from our manufacturer clients that they're looking at more nontraditional approaches, things like changing payment terms. And so they're really being forced to get pretty creative out there to offset inflation. So let me move now and talk about the size of the increases. The majority of the price increases are in the 6% to 10% range across all 3 rounds of price increases for second and third, with nonfood manufacturers leaning a little bit heavier to the lower end for the first round increases. And our conversations with our manufacturer clients are more commodity-driven clients tend to be in the second and third price increase groups and with heavier increases. We also asked our manufacturers if they're seeing their price increases reflected at shelf. And the majority said 80% to 90% of the increases. But what's interesting is the percent of manufacturers that are seeing less than 50%. For third round increases, 1/4 of the manufacturer respondents said that they're seeing less than 50% of this increase at shelf. So let me now pass it to Dan to talk about the state of supply.

Thanks, Jill. Definitely powerful insights on growth, pricing and costs, and I'm sure we'll get some questions from the audience as we wrap up. I'll cover a bit on supply chains now. I guess what's fascinating here and across the survey is the wide divergence again between manufacturers and retailers, in this case, on supply levels and fill rates. I described manufacturers as saying the current quarter pretty solid, certainly better than COVID. Next quarter is expected to get even better on supply chain elements. Retailers, though, are saying it's still awfully tough out there and 2022 won't start much better. To double-click on this, more than half of CPGs think they'll be above 90% fill rates next quarter. Just 10% of retailers expect and believe that. And CPGs believe sub-70% fill rates, a common pattern during COVID and unprecedented before that, will be resolved fully next quarter. Retailers are pretty skeptical. This matters a lot as stable supply chains and improving fill rates rebuild goodwill between CPGs and retailers, reestablish trust and reestablish partnership across the value chain. That would yield more constructive pricing and promotion discussions, uptake of innovation and sharing of data and collaborative insights. Based on these findings, we are quite aligned yet. There was a gap last survey as well. And so far, the more cautious take of retailers in terms of the path to normalization has been the one that's played out. They just seem to be leaving more room for the unplanned, and the unplanned continues to occur, mostly as headwinds rather than tailwinds. Turning to some of the drivers of supply chain challenge. Excuse the pun, but the biggest driver of the challenges is transportation. That's been all over the headlines. We even had a C-suite client suggested Jill and I last week that he was going to get his long-term innovation team truckers' licenses to fill the gap. His stance was who knows what post-COVID consumers will demand 3 to 5 years from now from us. We do know we need drivers to ship goods that are in demand today. Other headwinds are the usual suspects from the headlines, and they're collectively pretty pervasive: labor, commodities, packaging, and many of these are often tied to outsource global and leaned out parts of supply chains, challenging to navigate as an individual producer. On the labor front, I think a lot of us expected a return towards normal after stimulus dried up in September and folks top their couches again to seek paychecks. But right after that, another 4.5 million Americans quit in the last cycle. So the safest assumption from here maybe we're not fully safe yet on workforce. Just to drill down on how nimble manufacturers might be from here, again, recognizing that they have more optimistic expectations than retailers. As demand stays elevated post-COVID, there's some, but not a lot of slack in the system. Supply chains are actually still pretty fragile. Backup plans are reasonably scarce, and the reinvestment to shore these up, build buffer capacity, replenish buffer stock and get more nimble, these generally just take time, time and hundreds of millions of dollars, at least according to some of our clients. I'd frame this as generally fragile to say the least and certainly an area to watch as demand stays elevated at-home. Next, I'll pass it on to Jill for a bit of category level detail and a deeper dive into e-commerce.

Thanks, Dan. So retailers are paying close attention to how consumers shop. Grocery today is very different than pre-COVID. There is less out-of-home eating since some of those meals eating occasions are now being sourced in-home. It's not surprising that the top 3 departments that retailers plan to expand are fresh, things semi-prepared meals to bring home and beverages and alcoholic beverages. Products consumed in great quantities outside the home pre-COVID, but with less occasion to do that now and predictably going forward. Let me switch now and talk about retailers winning online. Manufacturers have many requests for digital investments across the top retailers, but a few rank at the very top in terms of winning retailers online as determined by manufacturers, namely Walmart, Target and Kroger. Manufacturers see their ability to leverage fulfillment options like click-and-collect, as well as put a focus on online shopper experience and services as key to their ability to win online. While manufacturers were only allowed to vote for their top 3, other retailers that didn't receive these top votes should look to mimic the initiatives that these 3 have put in place to win the digital heart of manufacturers. Another key thing that retailers can do to win the digital hearts and wallets of manufacturers is online sales data. One of the keys to a manufacturer's decision to digitally invest with a specific retailer is their ability to measure the return on the digital investment. Key to this is visibility to the online sales data. 55% of the retailer survey respondents make their data available today, which is great, and 45% don't, with only 13% of that 45% planning to make their data available in the future. Retailer challenges are confidentiality and getting the systems work to make the data available. We work with many of our clients on creating the online sales picture, and it's not easy. It's a patchwork effect to identify these sales, which works for a macro view, but is more challenging for a micro view, relevant for things like retailer digital return on investment. So I'm going to turn it over to Dan now for closing insights.

Thanks, Jill. Before we pivot to Q&A, I want to wrap up with 3 highlights on the outlook for 2022 and some suggestions for questions you might ask companies that you're investing in. First, on the outlook. The base case is steady foot traffic with heavier baskets. 71% of retailers expect modestly elevated foot traffic to sustain into next year and much more of the growth to come from larger basket sizes as growth continues on growth from COVID. On promotion, supply chain and retail media are driving -- supply chain and retail media are driving reductions. 70% of CPGs plan to pare back their promotions, either because they can't produce to the elevated demand that might result from promotions or they're resizing the pie to fund the retail media networks Jill just highlighted and get a hold of some of that data where retailers are sharing it. There's still a bit of standoff on the return of a steady stream of innovation. CPGs are eager, but retailers aren't always ready and waiting just yet. So there's a bit of a divergence there. And obviously, we haven't seen a lot of new product introductions post-COVID just yet. Before we take questions, I'll hit a few areas to -- you might want to explore with your companies a bit deeper based on these findings. We'd encourage you to dig in on how pricing might unfold into 2022. Folks were sharp and asking Nestle about that this morning in terms of what happens when hedges roll off. On the math, we've seen very little of the pricing necessary to get through '22 with anything like healthy margins. Probing on data and insights companies have on new and unseen price points and elasticity, I think, is critical, how share will shake out given some can supply at 50% and some at 90%, and that may drive brand preference in different ways than previously. Digging into that reinvestment that many companies are planning or due to announce that will help them shore up and create more nimble supply chains. And just talking broadly about the lessons companies have learned from operating in a more dynamic COVID and post-COVID environment and how much they might retain in terms of scale at staying nimble. With that, I'll pause here. Operator, we can turn it to questions from the phone. And if folks would rather they can e-mail me at [email protected], and I'll share your questions.

[Operator Instructions] And we have one question from the phone line coming from the line of Andrew Lazar with Barclays.

And really appreciate you guys doing this and sharing the insights. I guess, first off, I don't know if the survey focused too much around elasticity. But as you guys know, so far, it's early, but in response to a lot of the pricing actions, most manufacturers have talked about elasticities that are pretty negligible or certainly below historical levels and below what many of them had forecast them to be. I'm curious if or what, if anything, you're seeing, even if that anecdotally around how elasticities are shaping up as, let's say, these second and third round of price increases are kicking in? And if you're seeing elasticities sort of kick up in response to that or not? And then I've just got a follow-up.

Jill, do you want to lead off there? And then I'll chime in.

Yes. Sure. Yes, I can start. So first of all, thank you for the question. I'll tell you this is quickly making its way to the top of the chart of concern in that, you're right, elasticity as of late has been negligible because it's more about being able just to get the product, and if you could even get the product that you're trying to get, right? But as pretty much of 92% of the store begins to take a 6% to 10% increase, our manufacturer clients are looking and saying consumers are going to start making different decisions about both their product and channel they're buying. And consumption is going to be consumption, but they'll switch it later. So I just actually was in a call before this call with the client, and this was the big topic of the call is what do we think consumers are going to be doing at some point, they're going to have to make some price -- more price-conscious choices. So I'd say it's -- we're not seeing that yet. But we're all -- if we had to look through what I call our blurry crystal ball, I believe that we are on the verge of some very non-negligible price deal list.

And then -- yes, sure, keep going Dan.

Yes, sorry, just to comment on some of the recent data, I would -- I'm sure you've noticed and others have written on this. There is a record wide gap between PPI and CPI. So manufacturers are certainly seeing less retailer resistance in passing through. I don't think we've seen the full bite of consumer resistance because CPI flow-through hasn't been uniform. And as stimulus rolls off, I think a base case that we've discussed is maybe premium demand pivots back to base or mainstream brands, mainstream goes to value and private label stop shrinking if supply chains there are intact. But again, TBD, because stimulus is just rolling off and that PPI, CPI gap is still yet to close.

And then I think towards the start, there was a bullet that said I think it was 39% of retailers anticipate either holding more, I can't remember the wording holding more, or building safety stock or holding more inventory. I was hoping you could just click in on that a little bit. I didn't know if you meant sort of over time, i.e., once capacity allows them to sort of build more inventory that they would hold more kind of in an ongoing way, so that they don't run into some of the shortage issues that they did more recently or trying to get a sense of what was sort of beneath that bullet?

Yes. I could jump in on that one, if you will. So in the survey, we asked retailers about what they were doing pre-pandemic with respect to days of supply at retail shelf as well as days of supply at the warehouse -- or sorry, both weeks at warehouse. And so with respect to days of supply at shelf, most pre-pandemic were in the 7- to 14-day range, if not even more than 14 days. So 60% of retailers were 7-plus days. And -- but for the 40% that were less than that though, 31% of them do plan to increase their days of supply at retail shelf. That's the shelf answer. And then if I can, I'll switch to the warehouse answer. So most retailers pre-pandemic kept 2 to 4 weeks of supply and 77% of retailers going forward will make no change or an increase. So very few were going to be decreasing that. Most are either keeping that the same or increasing that.

[Operator Instructions] We have Lauren Lieberman with Barclays.

I will start with the commentary on the degree to which pricing -- manufacturer price increases are not being reflected on store shelves. So I was just curious on what your view is or what your conversations with retailers are like on that front may not be showing up in the data because that wouldn't seem to be a sustainable situation given retailers traditionally razor-thin margins and the seeming likelihood that there is still a lot more pricing coming through across an array of categories, things that are still just being announced and coming into market in the next couple of months.

Sure. I'll, I guess, add a bit. I think the widest gap seems to be in the perimeter so a bit less than our sort of collective branded coverage, and they've been hesitant to flow through in those sort of more commoditized categories really pushing too much price. There's some normalization in the center between CPI and PPI. Close eye from retailers on price gaps to Walmart, which are a little wide and what Walmart's intentions are, given their ability to grow a very, very high-margin retail media business 100% year-on-year, which provides a lot of fuel for things like absorbing price and price gaps if they choose, again, no insight into Walmart strategy, but I think that's an eye of where retailers are focused as they flow through their own CPI hikes. There's a hope that private label supply chains kind of revised and can pick up demand that may downshift by category when CPI flows through, a bit of a waiting game there as folks try to get those -- those are just more challenging businesses to run in times of turmoil. But as that catches up, CPI flows through, demand may shift down a tier, but retailers would disproportionately benefit from that uptick in private label.

And I could add a little bit more information as well, Lauren. So in the first round of price increases, 19% of manufacturers saw 100% of it being back to shelf, but in the third round, 25% did. So it's gaining. And then if I look at the bottom of that spectrum and the first round of increases, 8% saw none of it passed on. But in the third increase, everybody is seeing something passed on. So we are seeing a shift from first, second to third increase and retailers passing more of that on at shelf.

We have one question that came from e-mail, which is, what is going to separate winners and losers from here? I assume and we'll talk to CPG on this. We've touched on one piece, which is supply chain, the ability to quickly tune up supply chains and gaining visibility and control that allows for more nimble flexibility. The other, which we didn't talk a lot about, but comes up a lot with clients is just relentless sales execution, again, to shelf. Those who've invested alongside remember probably me harping on sales execution being a bigger source of advantage than brand building, marketing and innovation, which is what people tend to talk more about. And really through time, but especially today, it is a nice sight on the shelf and those who can sort of resource availability and adjust to sort of new trends in velocity and market share driven by other supply chain challenges we think will emerge winners. And that's not the most sexy or strategic offerings, but that tends to be sort of the mundane essentials that will differentiate winners and losers into '22, we think.

And it looks like we have one question from the phone line from Karen Short with Barclays.

Sorry to inundate you with Barclays people, but I missed this if you said it, but can you just talk a little bit about what you think the trajectory on slotting fees will look like? And what -- so what it is today versus what it was in '19? And then what you think slotting fees will look like going forward?

Jill, I don't know, I don't have anything top of mind, but go ahead.

Yes. Yes. I mean, so that one is sort of similar to the price elasticity question, I mean. One of the reasons that we do this survey every quarter is the hot topics changed pretty drastically from quarter-to-quarter. And I anticipate that to be another one of the hot topics coming forward because to date, there hasn't been much change, but manufactures are concerned that there is going to be a big area of change going forward, similar to price elasticity, consumers not really are -- not really reacting to that now, but having too soon. So expect that to be a topic in the next survey for us.

Are you -- but are you seeing any stance change from retailers in terms of like the faster-moving SKUs just positioning wise from retailers on an indication that slotting fees will increase? Or just too soon to tell?

I'm going to say -- I'm just going to go with too soon to tell -- too soon to tell and too few data points to form a hypothesis, I'm a former researchers, so I tend to do that. I want to make sure that we're putting something out there that we've seen multiple times. And yes, we just don't have enough data to make a call on that one, Karen, I'm sorry.

A couple more from e-mail. One, which we touched on, but I'll hit a little more thoroughly, and Jill may as well, which is, is there potential for sustained trade promotion rationalization or optimization? Is this time different? So we're certainly seeing temporary pauses and shallowing of discounts where supply can't fill demand. And again, as we highlighted, some movement of a relatively fixed marketing pie from trade to retail media. And as we've highlighted, we have a fairly innovative partnership with Eversight, which we think is sort of best in plan at trade promotion optimization and client receptivity to exploring this is high. The intent is not permanent reduction in budgets, but possibly different approaches for now that make more sense for the current environment. I think there are win-wins that could take place with a different marketing mix that had less trade dollars, but it's too early to call whether that goes down in aggregate, I think. Jill, I don't know if you had other thoughts from the survey on trade.

I mean I would just say, I mean I think it's probably fair to say that at any point in time, we could always look and say, trade dollars need to work as hard as they could possibly work, but today, they really do, especially in light of price increases. And as Dan just said, a reduction even if it's a temporary reduction in trade funding, promo dollars, so trade promo dollars have got to work far harder than they've ever worked before for manufacturers to both stay afloat and continue to offset inflation. So even though we've said that in the past, now it's got triple the meaning that it did before.

Great. One more from e-mail. A number of elements of the sort of marketing budget were curtailed during COVID. Some of those may persist, not just trade, we found we could sort of do more with less. Is sampling and demonstration among those? Obviously, the largest portion of half our business pre-COVID, 95-plus percent U.S. market share in sampling and demonstration. I would say the answer from the field in real time is decided no. There is incredible pent-up demand to -- after a 15- to 18-month low, to bring back product demonstration and trial, either brands that were less available due to supply chain hiccups or the early emergence of fewer, bigger innovations, and this remains the lead primary lever in the marketing mix for our largest demonstration clients, someone that just put up the best 2-year stack comps they have ever had last period. So this is full steam ahead, recovering as fast as labor supply can fulfill it, see no issues with demand, just the opposite coming out of this very high ROI opportunity.

I don't know, Dan, if you want me to jump on to that, but I can just pair it a couple of things that we're hearing from our clients with respect to this. One is pre-COVID, many clients -- I mean, pretty much everybody always has an innovation cycle, but some had some really big innovation about [hit] market. And so they're really relying on that to bring their big innovation back. And the other one is finding a way to differentiate and stand out, which right now is harder than it ever was before. And this is a big medium that clients are looking at to do that.

[Operator Instructions] And there are no more questions over the phone line. Dan, are there any questions -- actually, I have one on the phone and it just came in from Vincent [indiscernible].

Can you hear me?

Yes.

Just have a question on -- have you done any work on how much elevated stimulus SNAP and elevated unemployment benefits helped out kind of food at-home in '20 -- in this year? And then as we think about kind of these stimulus and SNAP rolling off over the next couple of months, how you think about that will impact the trajectory going forward?

I'll give a kind of a macro answer and then turn it over to Jill. I would say it wouldn't make people at-home more than away-from-home. If anything, stimulus dollars may drive them kind of away from 15 months of grocery consumption. It would probably drive them up a tier. So this challenge in private label, in particular, is part supply -- on the supply chain and part demands. Even the lowest income consumer has had fuel for their abundant at-home consumption taking place at least in the value tier of brands. Jill, I don't know if you have more perspective on that. I have not seen studies in detail of how much -- it's hard to correlate that given all the other moving parts.

So yes. No, I was pretty much just going to say what you said. And no, I haven't seen any studies on that. I can't say that we -- I think that we all have been -- scratched our heads a bit and figuring out and looking at the labor market, right, what is driving behavior. So with respect to government stimulus being there or not being there. So hard call at this time, and we haven't done or seen any specific studies on that yet.

Okay. Great. And then just as a follow-up in the last kind of inflationary period. I mean, how many price increases is like the max amount or the average amount? I mean, we're coming up on 3. I'm just trying to understand, when do retailers start to push back on pricing increases?

So I can -- go ahead, Dan.

Just on the -- sorry, just a multi-decade perspective because we did this debate internally a lot, too. There really just isn't a period of protracted inflation since the '70s. We saw sort of blips that caused some margin compression with less brave pricing in 2011 and 2014, but nothing like this. I mean we're sort of at 4, 5 decade highs in the drivers of this and the need. And retailers are -- again, as Lauren pointed out, thin-margin businesses that need to comp the comp. So if they can't do it with volume, they are going to be more receptive on price just for their own fundamentals and financials. But I'll turn it over to Jill for more thoughtfulness than that.

Yes. I mean it's -- so throughout -- from the beginning to today of the first, second and third round, let's say, COVID-driven price increases that we've seen, there was increasing concern in the beginning that retailers would not accept that, then there was some concern that, "Hey, if I waited until Q3, Q4, maybe they're going to hit some sort of maximum number." And what we've seen so far is that retailers are largely accepting very fact-based driven price increase presentations. The difference between now and maybe a couple of quarters ago is that manufacturers have to check more boxes to get the price increase through and that's something that we're really advising our manufacturer clients on is to get ahead of it in terms of the time frame. If you've got a 60-day notification window, it's going to take you longer to get through more boxes to check to get there. So it's not that they're not taking it. It's just a more cumbersome process today with retailers than it was a couple of quarters ago.

[Operator Instructions] And Dan, not sure if you have any questions over the -- via e-mail?

No, that's it. Just want to say thank you to everyone for participating. We're always available for follow-up on the broader ecosystem and on Advantage Solutions in particular.

Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.