The Kraft Heinz Company (KHC) Earnings Call Transcript & Summary

Well, good morning, everyone. It's a huge pleasure to be here with you today. Thanks for joining us. We have been really looking forward to sharing with you what we are doing at Kraft Heinz and we are very happy to have the chance to finally share it. For many months, we have been on the road to transformation. Along the way, we encountered a range of challenges, the COVID-19 pandemic among them. But in many ways, we now have even greater momentum than we could have imagined just 6 months ago. We have to say that we are excited about the future ahead for Kraft Heinz. I have been asked many times why I took this job as CEO. Well, what attracted me was possibility, the possibility of that transformation and a turnaround. And today, I feel even more passionate than I did when I took the job last year that we will reach our full potential. What you are going to see is a new and different plan, a plan to unleash the full power of Kraft Heinz. It's a significant transformation for our business. We are going to share with you today a new approach, a new strategy and a new business model. We are positioning Kraft Heinz to deliver amazing results through new experiences. We have a new outlook based on a new formula for success. The new formula relies on 2 fundamental things: our scale, where we have leadership, size, high penetration, reliability and operating efficiency, but we have not taken full advantage of this; and secondly, agility, which we are building. This is about integrating the business. It's about speed. It's about innovation, relevance, efficiency in execution. We believe that putting these 2 forces together, scale and agility, together will make Kraft Heinz much more relevant and very efficient and we will deliver better results, unlocking higher gross profit that we can reinvest strategically in growing areas. At the end of the day, what we are building is simple, it's all about growth. We are rebuilding consistent organic net sales growth of low single-digits. And we are doing it profitably to consistently grow adjusted EBITDA. By growing both organic net sales and adjusted EBITDA, we are generating strong cash flow to support our dividend to reduce our debt and of course, fuel the strategy that we are going to share with you. Well, that's easy to say, but how are we going to make this happen? Well, that's why we are here today. During this Investor Day, my colleagues and I are going to share with you: first, an assessment, an assessment of where we are now, our overall strategy and our outlook for the future; second, we will show you what we are building, starting with our people and our new ESG strategy, and we'll share our exciting new consumer platforms and productivity improvements; third, we will share how we are going to bring all this to life, specifically, with some great examples in U.S., Canada and our international zones; and finally, we'll describe why we are so excited about our future. You'll hear what this all means in terms of numbers, our financial plan and why we are confident about the returns we can generate for shareholders. And of course, we will be taking your questions and after each one of these major sessions. Well, welcome to our Kraft Heinz 2020 Investor Day. Presenting this with me today are our Senior Leadership Team members: Rashida La Lande, who leads our ESG efforts in addition to being our Global General Counsel and Head of Government Affairs; Nina Barton, our Chief Growth Officer; Marcos Eloi, our Chief Procurement Officer; Mitch Arends, the Head of U.S. Manufacturing; Carlos Abrams-Rivera, our U.S. Zone President; Rafael Oliveira, the Head of our International Zone; and of course, Paulo Basilio, our Chief Financial Officer. So let's go and let's talk about where we are today. We have invested time that was necessary to really understand our business and our prospects. We analyzed Kraft Heinz and the food industry across regions, categories and brands. We went deeper in marketing to understand the consumer, and we analyzed our operations, sales, other functions and talent across the whole company. We reviewed our business from the bottom up, studied tens of thousands of consumer inputs from surveys, focus groups, in-home conversations, in-store observations and talks with our customers. We evaluated 70 trends across the broader market and across Kraft Heinz, performed deep-dive reviews of more than 40 of our brands and conducted more than 200 retail store audits. This exhaustive analysis was to answer 5 very important groups of questions. We wanted simple answers to these questions. And those answers are the basis of everything you are going to see today. The first set relates to people and purpose. We asked the question: Do we have the right people and capabilities for this moment and beyond? How do we live our purpose through ESG? With our portfolio, we asked where can we invest to grow faster and how do we grow our brands? In productivity, we considered: can we be more innovative and more efficient? And can we better leverage data and technology? Next, we asked: are we good partners? And can we sell more effectively? All of this led to questions around our performance, that are: what is blocking consistent performance? And how good is our operating leverage? All very good questions, and ones we have heard from investors, as well. In asking these questions, we discovered some very important insights that are guiding us in the transformation that is already happening at Kraft Heinz. Let me go a little deeper on each one of these 5 areas. Starting with people and purpose. We have many fundamental strengths in this area. A deep culture of ownership and accountability which is precious, especially when you are building agility. We have a culture of meritocracy. We found that our people around the world have a passionate commitment to ESG, but we needed a clear ESG strategy and goals. And as you'll hear shortly from Rashida, we now have that. We also learned that we have big opportunities to fill gaps in critical skills and expertise, which we have already done. We were working in silos, but now we are working as one team. Our people, generally speaking, had similar backgrounds. But now we have a greater diversity of perspectives and backgrounds. And we saw we had a big opportunity to integrate ESG into every part of our business, which we are now doing. The second set of questions, we examined, was related to our portfolio. We have tremendous strengths when it comes to our portfolio. It is large and has tremendous breadth and depth. We have many billion-dollar brands. We have strong and valuable anchor brands to build around. And we have a strategic collection of international jewel brands in markets around the world, but we learned there's much more we can do to unlock our brands' potential. And we have restructured our activities to do just that. We have simplified the way we look at our portfolio and organize our business. And of course, it all begins and ends with the consumer. Our mentality as a company has shifted from focusing on discrete products to anticipating and meeting consumer needs. We are using more consumer data, and leverage that through our knowledge to understand and to meet and to exceed consumer needs. And we are accelerating to grow faster in faster-growing consumer spaces. A good example of this is our penetration. We have 97% penetration. That means that 97% of the households in America have Kraft Heinz products in them. That's higher than Amazon Prime, which is 82%, and much higher than the food and beverage industry, which is about 65%. Look at this scale. We have to take even better advantage of it. We must get more of our brands bought more often, in more places, across the population. Another example of where we can do more with our brands is product and geographic markets where we play in. Look at where we play. We are in categories and in countries that are growing around the world, from sauces, meats, cheese and meals, to coffee, beverage and nuts, and they are growing even faster in the emerging markets, where we have only about 10% of our sales. There is a big opportunity to accelerate growth in emerging markets, and we are already doing that, as you'll see and you'll hear from Rafael later. The third area of questions related to our productivity. Our strength here is our production scale. We have 80 factories around the world, half of them are in North America. In R&D, we have strong capabilities and technical knowledge. And we have an industry-leading track record in quality and in safety. Our opportunity is to change our mindset from cost reduction to continuous improvement. Yes, we will reduce costs but by working better and smarter every day. Yes, we have very good R&D, but we need to focus on more meaningful innovation that makes a bigger difference. Innovation with a bigger payoff. We also are better integrating our supply chain with the rest of our business, such as manufacturing, logistics, procurement and all the commercial areas. And we are working to enhance our digital capabilities across the organization. The opportunity is to integrate our powerful capabilities and build a real culture of continuous improvement, all to unlock efficiencies in the system. The fourth area we looked at was our partners. We are strong in food service formats and channels, and we have been growing our e-commerce presence and capabilities. Our e-commerce business is already more than $1 billion, and it's growing more than 100%. We are taking full advantage of this moment of unbelievable growth. But we have to build stronger partnerships across all channels. We must improve customer satisfaction while we help our partners and ourselves to grow. We are getting better at long-range planning with our customers. We have a big opportunity to enhance and grow our relationships. Well finally, performance. At times, we have led performance in select categories and geographies where we play, and we have industry-leading operating margins. But we have to be more consistent and better at allocating our resources. We must be more strategic in how we make choices. We cannot be democratic, not be democratic in our resource allocation. We will invest more and more efficiently to drive growth. And that means devoting even more resources to our core brands to drive greater results. In the past, we put a lot of money into new brands that really did not move the needle. We will not do this any longer. We also will improve variable cost management. Later, Paulo will show you how we are going to do that. We have the engine to drive profitable growth. But it needs adjustments that we are now making. We learned that we have very, very valuable assets and many powerful competitive strengths, and we learned that we needed a revolutionary new approach to get more out of capabilities and assets. We are unlocking the power of competitive advantages related to our scale, and we are revolutionizing the way we operate to bring agility. It's a powerful combination, scale with agility, a combination that is driving our evolution and leading to an entirely new way of thinking about our business, a new strategy and a new operating model that is driving our choices and priorities, new consumer platforms and improving our results and outlook. The new business model of Kraft Heinz is actually very simple, but very different from the way we operated in the past. It all starts with people, people with purpose, a team that will have a positive impact on our communities and our world. We have built a deep bench of talent, and we continue to attract people with deep expertise. We are investing in our people, living out our ESG beliefs. You are going to hear more about this from Rashida and me in a few moments. We have a consumer obsession, putting consumers at the heart of everything we do. We are simplifying and unifying our consumer platforms, moving from more than 55 categories of products under 6 platforms to respond to consumer needs and create growth. In parallel, we are improving our operational efficiency with our Ops Center. We are driving better integration, improved planning, streamlined processes, generating $2 billion in savings to reinvest in the company and in our consumer platforms. Our partner program is powering our go-to-market expansion through better processes and improved capabilities and great reach across channels and geographies together. This is how we will fuel our growth. We are strategically putting the funds we get from increased operating efficiencies back into the system, into our brands and into the consumer platforms. We are investing in enhanced digital capabilities and new technologies and analytics. All this will fuel and accelerate profitable growth for the long term. You are going to hear a lot more about our consumer platforms today from Nina, from Carlos and from Rafael, but I want to give you an overview of what this means. It's all about understanding, meeting and exceeding consumer needs and reorganizing our business to do that. We have moved from viewing our business through the lens of more than 55 separate categories to managing a portfolio of 6 consumer-driven platforms that are based on how consumers live their lives and how they eat today. And let me be clear, this is not a future vision. We are doing this today. We have already restructured our company to begin operating this way, right now. Two of these platforms, Taste Elevation and Easy Meals Made Better are global. The others are focused on U.S. and Canada. You can see on the slide the size of these platforms in terms of their sales. As I said earlier, we are investing differently across these platforms. These platforms are centered around 3 key objectives: to grow, to energize and to stabilize. Nina will explain the actual platforms themselves, but let me comment on how we will prioritize them. Grow represents about 50% of our sales and is where we will prioritize investments going forward. These are platforms where we are already growing in both emerging and developed markets. Their highest growth is coming from Russia, from Brazil and China and you'll hear more about these from Rafael. Energize represents about 30% of our sales. These platforms are primarily in the U.S. and U.K., where we are rejuvenating brands that we see have potential for growth. Stabilize represents about 20% of our sales with platforms that play out differently by country, but largely in the U.S. and Canada. I have explained how our commitment to continuous improvement is enhancing our efficiency and our competitive advantage. We are building this mindset into our culture so it becomes a natural part of our DNA. We are unlocking this consistent improvement in procurement, manufacturing and logistics to fund reinvestments and growth across our business, while maintaining our industry-leading margins. We expect this to lead to more than $2 billion in savings between '20 and '24. These net savings will fuel our growth by reinvesting in our brands, in our business, and some of [Audio Gap] What does all this means for our growth and for our shareholder returns? Well, the result of all of this, profitable growth. A return to consistent organic net sales growth of about 1% to 2%, with adjusted EBITDA growth of between 2% and 3%, which will generate 4% to 6% adjusted EPS growth over the next 5 years, and we'll have at least 100% free cash flow conversion. This will support our dividend, will support our ongoing debt reduction and investments in our strategy. Well, we have a clear plan to accelerate growth at Kraft Heinz. We are well aware of the challenges that we needed to solve as part of this turnaround. And we are aware of the questions you have had about our performance in the past. For example, we know we relied too much on inorganic consolidation, on external factors to drive growth. Today, we are committed to expanding organically by implementing the operational and market strategies I've just outlined. And through a smarter, more strategic returns-focused approach to investing in our business instead of just cutting costs. The whole mindset of this company is now focused on growth. With people, we often had siloed functions with capability gaps. Now we are taking better advantage of integrated and cross-functional expertise. Our portfolio had us managing more than 55 fragmented categories. And now we are managing the business around 6 consumer platforms, built around consumers, what they live and how they eat today. Before, we treated marketing as an expense. Today, we are viewing it as a strategic and creative business investment it is. When working with partners, we sometimes operated with a transactional mindset. Today, we are investing even more in strengthening and planning relationships. In the past, we took advantage of our size and scale, often approaching it with a cost-cutting mentality. Today, we are using our impressive scale to power agility. And instead of only dropping savings to the bottom line, today, we are reinvesting those savings in the business to fuel our growth. You can see we are doing a lot. A lot of things that are setting a new direction for the company. I have defined the fundamentally different business and operating model, and I'm so excited to lead this organization forward, along with my colleagues. And I have conviction that this is the right plan forward. We are already seeing the results of these fundamental shifts. Our full year 2020 is coming even stronger than we expected. Without a doubt, COVID-19 tested us. How we responded gives me confidence, confidence in our team and in our future. Our business is executing well through COVID because our transformation was already underway. And we are investing in our brands and in our future. From attracting great teams, to collaborating more, to placing consumers at the center of our business to more strategically allocating our resources, we are making changes that matter. As you can see, we are building a strong foundation with much room to grow. We have a clear strategy, a 5-year road map with detailed plans setting our path forward. And we have aggressive but achievable goals from growing organic sales to improving adjusted EBITDA to generate significant cash flow and meaningful adjusted EPS growth. We are all extremely excited for the future. Now let's look at the first building block of our new strategy, people and ESG. So let's begin with what we are building. And a reminder, at the end of this chapter, you will have the opportunity to ask questions. I will begin by talking about our people and then Rashida will update you on our ESG goals. So well, let's start with people. When you think about people, it's impossible not to think about culture, and culture is a collection of different things. You need to strengthen that culture with a vision, with a purpose, with finding your values, have a clear set of leadership principles on what we expect from our leaders and how we will win. This leads to people initiatives that make a real difference to our business. I believe we have now the right people and the right structure in place to transform Kraft Heinz into an innovation and marketing-driven company. This is why I want to walk you through the parts of the story myself. We started by facing the brutal facts. We did our research last year and our Global Employee Engagement Survey didn't show us a beautiful picture. Our people told us that they didn't understand our strategy, that we needed to enhance career development opportunities because those were not clear to them. We needed to increase collaboration among departments and teams. And we had to reduce the turnover. Well, the numbers speak by themselves. You see that 47% of employees said, "We did an excellent job anticipating new products and services." Obviously, that means 53% didn't. And only 56% thought we did an effective job on sharing information across functions, and that's very low. So we had to take action and we did. That has led to a new approach of empowering and reinvesting in our people. And as part of this action, we created a road map to lead the way, a strategic plan, including the critical elements we needed to rebuild a high-performance organization. When we talk about people, we talk about attracting and retaining great talent. How do we reward and better recognize them, investing in their learning and development, helping our people to grow great careers and setting them up for success. And we started with, well, my own team. We restructured the Senior Leadership Team. In some cases, we redeployed top talent that we already had within in the company, people with critical skills we needed for our turnaround. For some, we went outside for talent, bringing in people with external perspectives and refreshing ideas. And some, we kept in existing roles giving us stability in key areas. We also identified that we had 65 other essential roles, critical roles that we needed to deliver our plan. All of these 65 roles have been filled with amazing people, with 25% of them coming from outside the organization. And these external leaders come with an average of 22 years of experience and expertise. So we now have a very solid team. I told you we needed to excite and inspire our team with a new vision, one that would inspire our leaders and all of our people to move with the passion, speed and agility that we need. So we defined our new vision: to sustainably grow by delighting more consumers globally. Sustainably means we want to grow and grow better year after year. And when we talk about growing, we mean on top line and bottom line. And we are going to do that by delighting more consumers, putting them first, and we will do that globally, a big opportunity to grow across the world. Our vision helps us direct our business forward. And when we combine this with our new purpose, let's make life delicious, it's a way to say we take pleasure in the work we do every day. This has been very, very well accepted by our people. Our purpose inspires our people. And it reflects the positive impact we, at Kraft Heinz, want to have on the world. Food plays a very important role in society, and our people are helping to build that. We also redefined our values. And these are the beliefs that make clear our shared company culture. Our purpose comes alive when we live our values. And without going through the details of each one, you can see they all are driven by the power of we. Our first value is we are consumer obsessed. This is intentional. It all starts with the consumer because they are the heart of the Kraft Heinz story. And finally, we defined our new leadership principles. Before, there was the thinking that great leaders are the ones achieving great results. But great leaders also are responsible to building great teams, breaking silos. They have to inspire their teams, and they have to understand the future and navigate without hesitation toward the future. These are very different leadership skills that we require, and they will be part of how we measure and compensate our leaders because how we win matters. We also improved our learning offerings for all employees. We delivered innovative training and learning experiences through our online corporate university. We created several academies that help our people build the functional capabilities that they need and drive our business forward. As part of our cultural transformation, we are creating a mindset of continuous learning and providing the resources to support that. And finally, we invest in our leadership, leadership programs to accelerate the growth of women in our organization, leadership programs to accelerate our next generation of leaders and leadership programs to better prepare and train newly promoted people managers, which was a big gap. We are very pleased to see that these people initiatives are bearing fruit. We did some mid-year research and found a very, very different picture than before. Our people told us that now they see clearly a new strategy and is being openly communicated to the entire organization. We have been breaking down the silos, and they are proud of that. They are working teams and cross-functional teams. They are proud that we are recruiting great talent with the required experience and greater diversity that we have much richer planning and training. And they see transparency around performance which they hadn't seen before. Well, just look at the numbers. Well, now 92% agree that it is much easier now to collaborate, 89% feel they are supported by their managers, 87% believe our new values will guide the company in the right direction. Well, the results, we have had 33% improvement in retention and we had a 10 percentage point improvement in employee satisfaction. This is especially impressive at a time when a lot of companies are suffering from working apart from each other because of the pandemic. But people here tell me all the time that, "Even though we are all working remotely, we feel closer than ever." Again, this is a journey. But we are very, but very happy with the speed in which we are transforming our company. As you can tell, I'm passionate about people. But I'm also very passionate about the positive impact that we at Kraft Heinz can have on the planet and in the communities where we do business. Now I'm thrilled to have Rashida La Lande walk you through our commitment to our ESG goals.

Thank you, Miguel, and hello, everyone. My name Rashida La Lande, and I am the Global General Counsel and Head of Environmental, Social Governance and Government Affairs for Kraft Heinz. Companies like Kraft Heinz have the power to help shape the world for good. We are a global business, but we are also global citizens who believe in helping to create a healthier, more sustainable environment. We're taking a fundamentally new approach to Environmental Social Governance. At the heart of this approach is using our scale and agility to maximize our positive impact on the world. We are fully integrating ESG into our business as we work to deliver our goals by 2025. And our goals are all centered around that continuous improvement mindset that Miguel mentioned earlier. Our ESG efforts line up under 3 broad pillars: environmental stewardship, responsible sourcing and healthy living and community support. Our strategy reflects one of our company values: We do the right thing. We're striving to do what's right in all aspects of our business, creating high-quality products made responsibly. And at the same time, we're honest and transparent about where we've fallen short. That's why we have taken the time and been thoughtful and deliberate about where we can make the most difference in the future. Going forward, we will increase transparency around our ESG efforts. We'll be sharing clear metrics with stakeholders about the progress we're making against our goals. As senior leaders, we're creating internal scorecards that link achieving our ESG targets to KPIs that measure our leadership team's performance. Our Board of Directors is holding us accountable. The work we're doing and the level of attention we're directing at ESG reflects our commitment to improve, to do better and to be better. When it comes to environmental stewardship, operational efficiency is an area of focus. We are keenly aware of the impact of climate change and how we can do our part. Today, we're announcing a goal to purchase the majority of our electricity for our operations from renewable sources by 2025. And we are seeking to decrease our water usage by 20% in high-risk areas, our waste by 15% and our energy usage by 20%. We are already off to a good start in 2020 with the expansion of our solar footprint globally, reaching 2.6 million kilowatt hours of clean energy per year across 3 sites in China and using 86 million gallons less water per year through our efficient water system installed in our plant in Newberry, South Carolina. We're also using innovation to reduce the impact that we have on the environment. We continue to make great strides, recommitting to our goal of producing 100% recyclable, reusable or compostable packaging by 2025. Partnering with packaging experts, organizations and coalitions, exploring ways to decrease our use of virgin plastic and increasing our role in the circular economy. Today, more than 70% of our packaging is recyclable, reusable or compostable. We see real opportunities in responsible sourcing, holding our suppliers and ourselves accountable for continuous improvement. Kraft Heinz is the #1 purchaser of commercial tomatoes in the world. We also have the largest share of the global commercial tomato seed market. Our seeds have been bred the same way for almost 100 years: high quality, high yield, less water and pesticides needed and no GMOs. The tomatoes in our iconic HEINZ Tomato Ketchup are grown from HeinzSeed, seeds that are unique and proprietary to us. So we're taking what we call a seed-to-bottle approach when it comes to producing it. We're committed to making our ketchup even more sustainable through our sustainable agriculture practices, from how we purchase and grow seeds in the fields, work with farmers across the globe to grow the world-class tomatoes that we use, to the bottles that make it onto consumer tables. In terms of animal welfare, although we neither own nor manage farms, our approach with our suppliers is guided by the 5 freedoms. Encouraging the adoption and adherence to policies focused on the mental and physical well-being of animals in our supply chain. I am also happy to report that we have made great strides in our approach to palm oil. 99% of our palm oil is traceable to the mill and 100% of it is certified sustainable, commitments we will continue to emphasize given their importance to human rights and preventing deforestation. Feeding the world is at the heart of our healthy living and community support pillar. We've set global nutrition guidelines that are based on globally recognized dietary recommendations from the World Health Organization, U.S. National Academy of Medicine and the European Food Safety Authority. We're working to meet these guidelines by focusing on healthy, product innovation and renovation. But we've already achieved a lot of success. We're proud of surpassing our 2023 goal of 70% compliance, exceeding it and reaching 76% compliance 4 years early. Now we're working to achieve 85% compliance to global nutrition targets across our portfolio of products by 2025. We will get there by eliminating more than 60 million pounds of sugar from our products and reducing sodium by 5% in certain products, where we believe these changes can be most impactful. We'll do it by simplifying our ingredients and increasing our plant-based protein offerings. And when it comes to giving back, we take what we know best and do well, producing high-quality, great-tasting food to change lives around the world. The fight against global hunger is near and dear to our employees' hearts. Our Kraft Heinz's Micronutrient Campaign produces and donates powders with essential vitamins and minerals. Working with Rise Against Hunger and several other non-profit partners, we have provided close to 600 million meals to people in need all over the world since 2016. And we're recommitting to eradicating food insecurity by setting a goal of providing 1.5 billion meals by 2025. During the early days of the COVID-19, we committed to giving $12 million in cash and product donations globally, all to make sure people have the food they need during this unprecedented time. Since then, we've continued making additional financial and in-kind donations to local communities and food banks around the world. We at Kraft Heinz take our responsibility to feed people very seriously and it is the cornerstone of everything that we do. ESG is all part of our long-term journey, and we're committed to doing the work needed to make our goals come to life. Now I'd like to turn it over to Nina Barton, our Chief Growth Officer, who will walk you through our new consumer platform. [Presentation]

Thank you, Rashida. Good morning. I'm Nina Barton, Chief Growth Officer for Kraft Heinz. I've been with Kraft Heinz for over 9 years and I've been in the consumer industry for over 22. I am so excited to introduce you to our consumer platforms. They are a central part of our transformation, a fundamental mind shift for Kraft Heinz and a powerful way to fully harness the scale we have across categories. I'll start by explaining our shift from category to a consumer mindset. Then I will give you an overview of our 6 new platforms that are the basis for creating new experiences for consumers based on how they live their lives and how they eat today. And then I will show you how we are deploying these platforms across the company. First, let's discuss the consumer-obsessed shift we are making based on a deeper understanding of consumers' needs and how we're reorganizing our business to meet and exceed them. From the earliest days of Kraft Heinz, we have viewed our business largely through the lens of categories, based on the outdated hierarchy of product types. For example, ketchup, gravy or pasta sauce. We tried ineffectively to manage more than 55 categories, focusing on discrete consumers' needs, with siloed goals of winning in certain subcategories. We were trying to innovate, produce, market and sell a huge range of products, individually tackling more than 55 categories. We were fighting too many small battles, diluting our efforts and slowing us down. This narrow focus caused us to miss the larger, more holistic consumer needs that would truly shift the business. And our size was working against us instead of our scale working for us. By 2019, our innovation was taking longer and yielding much smaller results than that of our competition, 50% smaller in fact. So we posed some fundamental questions about all our products and how they fit into consumers' changing lives. And we learned that consumers didn't view our products though rigid category definitions. They look at products more broadly, focusing on how they used them and how they integrated them into their lives. They were asking themselves, "How can I save time cooking dinner tonight? How can I make my salad taste better? What should I snack on before dinner?” To answer these questions, we needed to fundamentally rethink how we approached our business. And the shift was a simple but meaningful one. We reoriented our business viewing it through the eyes and perspective of the consumer to create better food experiences for them, taking into consideration the meal occasions they were creating and their broader needs. We looked at their needs today and anticipated what they might be in the future. Let me give you a powerful example. Let's take peanut butter. In our Canadian business today, we are the leading brand with a 66% share of the $270 million peanut butter category. Over the past few years, in an effort to drive growth, we have focused on product innovation, creating new types of peanut butter. Our last few launches were flavor varieties, including chocolate, honey and extra roasted. These innovations only gained about 1% gross market share on average and did not grow the total brand. Why? Because we were only looking at the market of peanut butter. Now if we shift our lens to the consumers' needs, we focus on answering a different consumer question: "What will make my morning tastier?" The answer opens up a world of possibilities for us. The consumer has many choices in morning spreads for toast, ranging from butter and margarine, peanut butter, cream cheese and jams and jellies. By using this lens, the size of the market is much larger, over $700 million. Our research-based insights uncovered that growth in the breakfast toast occasion was linked to sweeter offerings and that led us to accelerate the launch this year of hazelnut spread. To date, this has grown rapidly to a 13% share of the sweet spreads market, far surpassing any other innovation we've done in peanut butter. And this has been close to 100% incremental to our core business, which means we are driving real growth. As you can see from the example, this approach unlocks a major competitive advantage for us. It increases our consumer relevance by focusing on a core consumer need. It also creates 3 additional advantages. It drives focus, creates discipline and leverages our scale. This will all drive consistent organic sales growth for Kraft Heinz. Consumer obsession is at the heart of this approach. We know that in order to drive this growth we need to get closer to the consumer, to put her in the center of everything we do and deliver amazing food across all of our brands. Our new focus on consumer obsession is a critical enabler to deliver this. We concluded that platforms are the best way to accelerate the response to those consumer needs at scale. Let's take a closer look at what we mean by platforms and what our new platforms are. A platform is a lens we created for our portfolio based on a grouping of real consumer needs. For example, ketchup and peanut butter both add flavor to food, but they are used in different host foods. Ketchup is used on the burger and peanut butter on toast, and they both have opportunities and commonality as they are joined by taste. We are now organizing ourselves around 6 platforms, springboarding off the common consumer needs across products. These platforms are modular and can be shaped and customized by zone, truly allowing us to optimize our iconic and growth brands around the globe. Our 6 new platforms are: Taste Elevation, Easy Meals Made Better, Real Food Snacking, Fast Fresh Meals, Easy Indulgent Desserts and Flavorful Hydration. They vary in size, with Taste Elevation being our largest. And they have different regional footprints. Taste Elevation and Easy Meals Made Better are global and Real Food Snacking, Fast Fresh Meals, Easy Indulgent Desserts and Flavorful Hydration are U.S. and Canada-focused. Let's look at what consumer needs each platform meets, what kind of categories and brands are in each platform and how big the sales are. Taste Elevation helps the consumer who wants to add more flavor and texture to their favorite host foods. Products in this platform address the essential consumer need to add flavor in many forms to favorite host foods, such as a burger or salad. With a value of nearly $7 billion, it is our biggest platform, and it has one mission, to create products that enhance the taste of food. Heinz, our powerhouse global brand, lives here, as do categories like ketchup and peanut butter, since they add taste. Easy Meals Made Better helps families find the balance between easy and fresh, with nutritious foods they can feel great about. It tackles the age-old question of, "What can I make for my kids dinner tonight that they will eat and that is good for them?" And it gives the consumer more convenience without the guilt. Easy Meals Made Better represents $4.3 billion in sales for Kraft Heinz globally and houses our powerful brands of Kraft Mac & Cheese, Classico, and Ore-Ida. Next is Real Food Snacking, which taps into the trend of between meal eating or snacking as replacements for meals. We know that consumers continue to snack more and more. And we know that by offering solutions that are tastier, more substantial, with increased protein and better nutrients, we'll meet the next wave of consumer growth. Fast Fresh Meals was created to help the home cook put meals on the table faster without compromising freshness. It addresses the reality of modern life that everyone is crunched for time, whether they're at home with a family or kids or live alone and are managing busy lives. Some of our most iconic and popular brands, like Philadelphia and Oscar Mayer, are in this nearly $6 billion platform. They appeal to consumers who like to cook but can't spend all day prepping or preparing meals in the kitchen. Fresh and easy are their mantra, and they're not willing to sacrifice one for the other. Easy Indulgent Desserts bring sweetness and joy to our consumers' lives. In one of our most delicious new platforms and in these challenging times, who doesn't need a sweet treat in their lives? Brands in this platform like Jell-O and Jet-Puffed offer indulgence pure and simple, and bring a taste of joy to everyday tables. And finally, Flavorful Hydration, arms our consumers with products to quench their thirst and feel great about their choices. From kids' favorites like Capri Sun and Kool-Aid to the plant-powered fruit appeal of our new Creative Roots brand, to water enhancers like MiO, these products offer a range of beverage options with appeal across generations. So there you have it, 6 amazing new platforms that serve both to simplify and harness the scale of our great portfolio. As you will see across the rest of the day, each platform has specific and exciting plans for growth. But we know that to deliver consistent, organic sales growth, we can't stop at just meeting consumers' needs today, we need to anticipate where they are going next. So we are investing in many pillars to create the next wave of growth. New business models like supper up, direct ship to home meals that are perfectly prepared to put into your Instant Pot, and Heinz to home direct to consumer help us to connect effortlessly to our consumer in their house. We are also investing in developing solutions in rapidly accelerating consumer areas like plant-based products and proteins, and food that will do more to help our consumers' health and well-being. So finally, let me take you through how we will bring this transformation to life. How will this all work? As Miguel mentioned earlier, our platform strategies are centered around 3 key priorities: Grow, Energize and Stabilize. These priorities are driving and guiding where and how we're investing in our business. Our Grow priority represents about 50% of our sales globally and includes our Taste Elevation, Easy Meals Made Better and Real Food Snacking platforms. These are all large and growing markets that are in sync with consumer trends. Our portfolio of iconic global and local brands in markets around the world give us an advantage to win big in these platforms. The addressable market is large and growth will be enabled by the strong capabilities we already have in brand and manufacturing as well as our strong share position. Our Energize priority represents about 30% of Kraft Heinz sales. The Fast Fresh Meals platform and Easy Meals Made Better internationally fall under this umbrella. It's a sizable market but has a lower growth potential. Kraft Heinz has a strong position with brands, including Philadelphia and Oscar Mayer in the U.S. and Canada, but we need to better differentiate our products through renovation and revitalization. We are investing judiciously to improve performance and plans are already underway in these brands. Our third priority, Stabilize, represents about 20% of sales. Flavorful Hydration and Indulgent Desserts live here. These 2 platforms have lower growth potential but higher consumer loyalty. We are investing selectively in these brands to stabilize sales. We will grow, energize and stabilize these platforms by using 5 levers: innovation, renovation, marketing investment, revenue management and distribution approach. Over the next 5 years, our overall marketing investment will increase by 30%. But as Miguel said earlier and I've just explained, this investment will not be spread evenly among Grow, Energize and Stabilize brands. Instead, to maximize return and ensure we deliver the highest, most sustainable top line growth, we will prioritize investment in the higher growth platforms where we have a market advantage. And we will use the full suite of tools differently to maximize growth. This new platform approach is a bold transformation for Kraft Heinz, a revolution in how we manage and grow our business. We're moving from merely using data and insights to inform our actions on product categories, to reorganizing our business based on richer understanding of consumers' needs. We're moving from making innovation and marketing investments across more than 55 different product categories to focusing on 6 specific consumer-driven platforms. We're going from an investment model that's sometimes operated without rigorous prioritization, to a model that's far more robust and disciplined. And we're moving from the days where we didn't fully take advantage of our impressive size, to a business model that fully leverages the scale of Kraft Heinz, one of our strongest competitive advantages. I am very confident in this transformation from category to consumer platform. And it will position Kraft Heinz for consistent organic sales growth well into the future. Thank you. I will now turn it over to Paulo Basilio to take you through productivity and Ops Center. [Presentation]

Hello, everyone. I'm Paulo Basilio, CFO of Kraft Heinz. With Nina having just outlined our platform strategy, it is my pleasure to introduce you to our productivity opportunities. We call it Ops Center, the key source of fuel that will ignite the growth engine that Nina described. We are using powerful tools to improve our performance and transform our business model, things like robotic process automation and becoming more digitally enabled in everything we do. But what we want to focus on today is the big opportunity we have from simply getting back to the basics, to established, tried-and-true principles and processes, things we already have underway to drive better integration and streamline processes across our company, initiatives that will unlock value creation in procurement and execution efficiencies in manufacturing and logistics. So let me describe our focus. Since last year, we have been discussing how important it is to turn around our gross profit performance given its relevance to our EBITDA decline. The primary cause of this decline has been our supply chain performance. We were not able to implement productivity initiatives to offset cost inflation. So we lost efficiency in procurement, manufacturing and logistics. We were late to transition from integration-driven consolidation to ongoing productivity plans. We are now switching our focus from fixed to variable operating cost. We have long-term efficiency initiatives, and we see a clear path to improve our gross profit gap and strengthen our competitive advantage. Our starting point is a large and robust supply chain with many scale advantages in procurement, manufacturing and in logistics. It's a massive operation, but it was fragmented. We were operating in independent silos with limited connection to the business and limited connectivity across supply chain teams. We needed a framework to integrate our operations with the rest of the organization. So we created the Ops Center as a critical piece for our new operating model. The purpose of our Ops Center is to align plans and practice across the organization, streamline day-to-day management and the processes behind our operations and deploy technology to ensure continuous improvement. The Ops Center will bring together our value chain on an end-to-end basis from marketing and R&D to procurement, production and distribution to sales. The backbone of the Ops Center is integrated business planning. Integrated business planning is not new to the world, but it is new to Kraft Heinz. We are now implementing those processes and practice to connect and align all of our teams. I truly cannot say enough how about Ops Center is transforming our operations and our mindset. We are forming strategic, long-term collaboration with suppliers. We are creating a fast, adaptable and integrated supply chain with greater end-to-end visibility to drive continuous improvement. And we are going after variable cost productivity. In short, we are leveraging our scale through agility. So how big is the opportunity? We have identified $2 billion of gross productivity efficiencies to be captured in the next 5 years. Roughly $1.2 billion will come from procurement and another $800 million from manufacturing and logistics efficiencies. So without further delay, let me turn it over to Marcos Eloi, our Chief Procurement Officer, to detail exactly how we are unlocking value creation in procurement.

Thanks, Paulo. Hello, everyone. I'm Marcos Eloi, but to everyone that I know, I'm just Eloi. After 20 years working procurement, I joined Kraft Heinz a year ago, and I can tell you how excited I am about the opportunity we have here to build true partnerships with our suppliers and also to turn our procurement organization into a competitive advantage for our company. We are deploying a comprehensive approach to unlock significant value, building a strategic procurement organization integrated with our stakeholders, both internally and externally, driving value for our company. We are implementing a collaborative approach with our key suppliers, focused on developing efficiency initiatives, innovation that support our brands as well as ESG-related opportunities that Rashida showed you earlier. Our transformation journey is well underway, and it's focused on the most critical aspects of our strategies. Starting with our people. As Miguel presented earlier today, this is very important for us. We need to make sure we have the right talent in place to deliver this strategy. I'm very happy to say that since I joined a year ago, we have transformed our procurement leadership team, complementing existing expertise with new talents to create a diverse and top-tier leadership team, with an average of 23 years of expertise in their fields. And we are not only attracting great talent, but also developing our teams to enhance our capabilities and engage our people to deliver this plan. Next is our operational excellence. Integrating with the business as well as standardizing and enhancing the way we operate across the whole company, optimizing our global scale with the agility of our zones. As a consequence, we are unlocking value, both on the top and the bottom line, a crucial step in developing a sustainable and long-term pipeline of initiatives. To deliver our objectives, we've mapped 4 key initiatives enabled by our supplier collaboration model, and they are focused on boosting our sourcing excellence, revamping our approach to external manufacturing, building a procurement center and implementing design to value as a distinct opportunity. I'll give you some background on each one of them. I will start with sourcing excellence. We identified an urgent need to elevate our procurement capabilities to address unexplored opportunities, enhancing our sourcing results while strengthening our relationships with key suppliers. We're building solid strategies for key categories that take advantage of both our global scale as well as the agility of our zones to identify and capture efficiencies locally. We are also building our digital transformation road map and investing to enhance our current systems as well as increasing the adoption of some of our current tools, like e-auction, to address effectively our broader spend and drive efficiency. At the same time, we are working to secure our growth agenda by addressing key risks on supplier dependencies. Moving on to the next initiative, I want to discuss the change in our approach to external manufacturers. We have around 350 suppliers across the company, spending approximately $2 billion annually. Our external manufacturers should be an extension of our company, but we have been dealing with them in a very transactional way. This is changing. Relationships with our external manufacturers will now be driven by a streamlined process. On the first step, we are deploying a straightforward make-or-buy methodology, strategically evaluating whether we choose to outsource our production or not. If we decide to outsource, we will define the best approach, selecting the right partner for what we need. Then we will evolve the way that we manage our relationship. It shouldn't be that different than the way we manage our own operation, with the same process and methodology that you will hear from Mitch in our next chapter. Lastly, we will collaborate with our external manufacturers to enhance their performance and also to co-develop innovation. Our next initiative is the procurement center, where we will have the benefit of creating efficiency through centralizing our indirect spend. With more than 20,000 suppliers, this is a heavily fragmented spend. By centralizing it, we will ensure proper visibility and control to drive consolidation of this spend with contracts. And with automation, we will streamline our procurement operations to drive price savings. For example, we identified several cases where the same materials have been bought across the company with up to 20% to 30% price difference. That's exactly what we are expecting to optimize and capture those opportunities as a result of this project. We are implementing the procurement center in our North American operations as we speak, and we will roll out this project across our international zone within the next 2 years. Finally, we are implementing a comprehensive design-to-value methodology to drive more value engineering opportunities as well as to feed our innovation pipeline. With a cross-functional approach, we are using our consumer insights and competitive benchmark, addressing both our cost structure as well as our product design. And this is not just to take cost out, but also to add value to our products and brands. Last year, we ran our first pilot in the U.S., covering only 25% of our spend. As a result of this pilot, we were able to identify a pipeline of initiatives that doubled the size of our engineering savings that we normally implement every year. Now we are rolling out this methodology to other categories in the U.S. as well as in our other zones. As we look to focus on revitalizing relationships that will benefit both Kraft Heinz and our key partners, these projects will be enabled by a strong supplier collaboration program, evolving our relationships with key strategic suppliers to co-develop initiatives that drive efficiencies, innovation and sustainability, supporting our future growth. To implement this program, we're already engaged with a selected group of strategic suppliers, which together represents around 40% of our total spend. The response from those partners on this approach has been really positive. In summary, we have 4 clearly mapped and designed initiatives. And as I said before, our journey is well underway, and we are confident that we will be able to capture $1.2 billion in procurement efficiencies over 5 years, beginning already this year, enabling our value creation, strengthening the collaboration with our partners and living the values of our company every single day. Now I will pass along to Mitch to describe how we are unlocking execution efficiencies in manufacturing and logistics. Thank you very much.

Thank you, Eloi, and hello, everyone. I am Mitch Arends, Head of U.S. Manufacturing. I've been with Kraft Heinz for 10 years and almost 25 years in the CPG industry, predominantly on the operations side of the business, and I'm delighted to have the opportunity to talk to you today about the major transformation underway in our manufacturing and logistics operations. As Paulo outlined earlier, based on our performance over the past 3 years, we knew we had to make a major transformation and change our mindset within operations. We identified 3 key opportunities and programs to bring our performance back in line with both industry-leading benchmarks and our own expectations, and this is already being proven out by the way our people have responded and, ultimately, the way we have been able to serve our consumers during this COVID crisis. Our transformation began in late 2019 and has carried strongly into 2020. This allowed us to navigate in a far more nimble and connected way, largely thanks to the implementation of our key programs that I'd like to share with you today. Our key efficiency metric for our factory's performance is overall equipment effectiveness or OEE. In 2019, we lagged the industry. However, in 2020 alone, we've already reduced this gap, with an ambition to close the majority of this gap by 2024. When we look at yield, it's important to consider the gap versus perfection of the controllable opportunity. In 2019, we finished with a sizable opportunity. Through the initiation of our champions program, we've already realized a portion of this opportunity with the ambition of realizing over half the total opportunity by 2024. We can accomplish this by furthering the partnership between operations, procurement and research and development. When you look at our operations as a whole, supply chain losses is our key metric for overall supply chain effectiveness. In 2019, we identified a significant global opportunity. We put an immediate full-court press on this opportunity. And through key activities and routines, we've already reduced this gap significantly. Overall, the Ops Center program will allow us to build an operational excellence machine so we can turn these types of results into sustainable year-over-year improvements. We will leverage our scale and experienced leadership in our operations center, allowing us to integrate our opportunities across the supply chain to deliver results. First, we have deployed the first wave of the Kraft Heinz management system, our homegrown integrated work system, focusing on owner-operators and leveraging simple but effective Six Sigma tools that drive efficiencies in our factories. Second, we are creating a strong, continuous improvement mindset, focused on opening the gap to perfection. Through our champions program, we will leverage both benchmarking and technologies to enable our future. All our areas will be benchmarked inside and outside to ensure we have challenged ourselves to drive our continuous improvement machine. Third, we have developed our integrated planning system to keep our focus on driving long-term success for all operations while also connecting operations to the entire enterprise. And supporting all these initiatives is our newly optimized organization structure designed to ensure our strategies across the globe are fully aligned through our global leadership team and allowing the regional experts to execute the strategic vision. Now I'd like to deep dive on each of these initiatives. First, in manufacturing. Our KHMS system will fuel the foundation of our improvement. From the plant floor to the strategies and initiatives we deploy, our ambition is to create a world-class integrated work system, enabling continuous year-over-year improvement, driven by owner-operators, to safely deliver quality products to our consumers through the creation of a best-in-class work system. Founded on the principles of the best of Heinz and the best of Kraft's heritage, KHMS builds on the foundation of 6 Sigma and performance management systems, while also benchmarking with the external market to ensure the right way of working for our company. And with new experienced professionals like Flavio Torres, our Global Head of Operations, we have experienced leadership to guide us, as Flavio has led large operations in a successful and sustainable manner. And let me add, KHMS has been instrumental to ensure our preparedness when demand accelerated due to this COVID pandemic. Additionally, the creation of standardization and rigorous disciplined processes, from the plant floor up through the operational leadership teams, we will enable a data-driven framework that will carry us from old fragmented ways of working to our new operational excellence program by improving production execution at the line level, servant leadership on the plant floor, robust maintenance systems founded on reliability, lean manufacturing principles to guide inbound supply, efficient plant schedules and lean transportation and net warehousing networks, a safety and environmental pillar to drive a culture of safety and environmental responsibility and a food safety and quality framework to ensure the desired consumer experience. We have already started to see the value of this journey as evidenced by our efficiency gains. But we know that in order to reach the ultimate goal, we need to harness the power of our 19,000 operations employees. This foundation, built on owner-operators, with the right tools and processes, will be the fuel for our system in driving consistent improvements. Now let me explain a bit about our champions process. Our champions are made up of subject matter and technical experts across the company. Each of these experts have a deep understanding of the products, technologies and assets. By pulling them together, we can unlock the opportunity to build on performance. This process is creating a clear price and performance visibility in each cost category. This gap illustrates the full end-to-end opportunity in Kraft Heinz. For example, in yield, we will drive this action through a culture shift of data by focusing on the loss to perfection. Similarly, we will follow the same methodology for labor efficiencies, utility practices and deploying new technologies. Two weeks ago, we had the Champions Virtual Workshop to prepare the 2021 plan. Over 200 of our experts from the different functions identified projects to support our 2021 productivity commitments as well as laying a strong foundation for our future. Now shifting to how a standardized and disciplined manufacturing network will unlock our next major transformation priority, our integrated business planning system. As Paulo introduced, and you'll hear more about from Carlos, IBP is a process that builds on a single plan to operate the company. Specific to our supply chain, our processes were not well integrated across the different functions which created inefficiencies. Through IBP, we are changing the narrative. The process will drive us to a single plan, spanning over a 24-month horizon that is fully aligned with the entire enterprise. We started on this journey earlier this year and will be fully implemented by year-end. By driving out the inefficiencies in our processes and breaking down the operational pillars of the supply chain, we are able to drive lean principles throughout operations to significantly reduce our supply chain losses, again impacting our waste footprint. Supporting these new initiatives is our organizational reinvestment. We have organized ourselves to optimize and leverage best practices, both inside and outside Kraft Heinz. Our global center of excellence will define the strategy, develop analytics and KPIs to drive improvements and lead both our benchmarking efforts as well as our digital transformation. This is further supported by the creation of zone technical centers, which serve as the experts in all manufacturing processes, technologies and standards. These teams will continuously evaluate the opportunities to drive a zero-loss mentality and form the framework for training and deployment of all our employees. I should add, this group has already trained 200-plus yellow belts, 50 green belts and 20 black belts, not to mention commodity and packaging experts in our factories that will fuel the problem-solving activities in our plants and our move to a fully defined KPI tracking and data-driven culture. In our logistics organization, we have embedded lean experts focused on driving efficiencies from travel patterns and distribution strategies to the investment in automation and self-guided vehicles. These programs will deliver significant efficiencies. From the foundation of how we will work with KHMS to our integrated business planning tools, our commitment is to a culture of continuous improvement in which we'll harness the power of our people, the best ideas inside and outside of our company to drive a zero-loss mentality and deliver $800 million in new gross savings, combining leadership, knowledge and methodology as enablers of excellence. Through this rigorous and disciplined structure, best-in-class processes, leading-edge tools, we will truly activate our organization to deliver year-over-year sustainable results as we turn our enterprise into a strategically integrated global powerhouse and deliver $2 billion in gross savings. Thank you. Now let me turn it back to Chris for Q&A.

Thank you, Mitch. This is Chris Jakubik, Head of Global Investor Relations at Kraft Heinz. We're now going to have all of our speakers that have presented so far available for the first of our 3 Q&A sessions. I will apologize in advance for any choppiness we may encounter because we're spread across 4 different locations. Also, we may come back to some of your questions later in light of what Carlos, Rafa and Paulo will present later today. And I may combine some questions so we can cover more ground. So let's get started. The first question we're going to take is for Miguel. The question is this. A lot of investors think the problems at KHC were caused by too much cutting. Miguel, in your initial assessment, how much underinvestment do you think there was? And how much needs to be brought back, especially in areas like headcount?

Look, I'm asked very frequently this question in different forms, and maybe the most common one is, are we going to rebase or not the company? So let me be direct with you. We are not rebasing the company. But with that in mind, let me tell you or give you a little bit more information. First, what you asked about headcount. We are not reducing or increasing headcount. We believe that although we are a lean -- we have a lean structure, we like it that way, not to be cheap, but actually because we believe we are much more efficient that way. That helps a lot our culture of ownership, our accountability of our people, the simplicity and reducing bureaucracy. So we like it and that is the way to operate. Eventually, in areas where we are going to grow like in China or in Brazil, you have to grow headcount with expansion, but that's it. Now another question that you always ask me is about CapEx. Do we have to increase Capex? And the answer is yes, we are going to increase CapEx. Paulo will tackle that point later on. And the third one that you ask me very frequently is about marketing. Are we going to increase investments in marketing? On that one, let me give you a little bit more color. I would prefer to actually to be asked if we are going to increase our ROI in marketing, which goes beyond growing the investment. And for that, I think we have to do a couple of things that we are already doing. Firstly, improve the copy, right, the quality of our communication and for that, we reduced dramatically the number of agencies we work today and we are hiring great talent to our company. We -- in the last 3 months, we defined 3 new heads of what we call the Chief Growth Officers for international, for Canada and for U.S., and we are building amazing teams in marketing. That's the first. The second one actually is media. Can we buy better media to have a better ROI? And I'm pleased to say that after almost a year of negotiations, we finished our first pitch on media. And from next year on, we are going to have 30% more media for the same budget, which is great. The fourth thing is a location in marketing. In the past, we had just around 30% of media as a percentage of total marketing, and that has to increase. And finally, the fourth is, okay, but with all of that, do you still have to increase our marketing investments? And the answer is yes, we do. And our intention is that in the next 5 years, we will grow about 30% marketing investments. Paulo is going to talk about it later. But we'll pay that from within the company. So we don't have to rebase the company. Thank you, Chris.

Thanks, Miguel. Second question that we're going to take is on brands. The question is, can you explain the role of the brands within the platforms? Is the plan to grow or renovate or stabilize all the brands within a platform based on the role of the platform? Nina, maybe you can start off on that one.

Yes. It's actually -- it's a great question. The way we thought about our brands in this new construct was really within each of the platforms. So let me give you an example. If I look at the platform of Easy Meals Made Better, we have a whole array of brands. And some of those brands, we expect to grow. And some, we will have different roles within it. So for example, our Mac & Cheese business and our STOVE TOP business, we will manage those very differently. What we expect in totality is that platform to grow. But as we look at the brands, they will play different roles as we push investments to different areas. So what we really understand is that the net result of the platform is to grow, but the role of the brand, based on the consumer trends and where we want to make investments, will go into different areas. Thanks, Chris.

Okay. So let's take the next question on -- more on costs. Question is, how much of the $2 billion of savings is expected to come from big 4 commodities? And what level of inflation are you assuming in your plans? Maybe Eloi, you can start that one.

Thanks, Chris. Actually, none of our savings are focused on commodities, big 4 or non-big 4. Let me put it that way. If we look at the commodity side, so we have our mechanism in place, our hedging mechanism in place in order to protect ourselves, also to give visibility to our commercial teams, right? On the efficiency side, on the initiatives, we look for the whole supply chain and look for efficiency on that, right? None of the 4 initiatives that I mentioned before are focused on commodities. So on the second part of your question, when we put together this plan, we expect more than offset the inflation going forward. So basically, considering what we have planned, offsetting and more than offsetting the inflation going forward.

Okay. Great. Let's follow up with another one on supply chain. The question is, since the pandemic, Kraft Heinz has had a variety of supply constraints. Please explain the size of these issues and the fixes that will allow the constraints to be eased. For example, did Kraft's Labor Day promotions go on as planned? Are promotional levels being restored to pre-COVID levels? Mitch, maybe you can start with that one?

Sure. Sure, Chris. I guess I'll start with speaking more to the production side, and the commercial -- Carlos or someone could speak more to the Labor Day holiday promotional activity. But as it relates to our ability to produce. Since this -- let me start with really, since this pandemic started. I can tell you that we started with -- very early with very robust strict protocols, following with really a response from our employees that not only follow the protocols to ensure a safe working environment, but also to ensure that we were ready to produce at the need that not only our company needed but our country needed. So as we have moved through time here, we have largely produced almost in a lot of our factories 20% more than we were a year ago, and that trend has continued. So overarchingly, I would say that the organization has responded. We're on a recovery path in production. And I think we'll get back to a full service very soon here as we enter through the fall season.

Great. Great. I want to make sure we fit in a question here from an investor on ESG. In the presentation, you outlined a new set of ESG goals. How do you expect to track your performance to meet those goals? And how is this being built in the management compensation? Rashida, you want to start on that one?

Thank you, Chris. I like that question actually. It goes to the heart of why I'm excited about our ESG goals going forward. When we designed these goals, we did it with the enterprise strategy in mind. They were designed to integrate the goals into our strategy. And as a result, that means that as we set the goals for the team, our employees around the world, the ESG as well as our strategy are in their KPIs and in the goals that each individual has. In addition to that, we're reporting monthly to each other and also to the Board. And people like Eloi, myself and Miguel have KPIs that are designed to figure out whether or not our ESG goals have been attained.

Let me just complement that question, Chris. I think now ESG is very important and plays a very important role in the company moving forward. And I think that it's not only Rashida that is excited about it, but all of us, starting with myself, that to make it clear to the entire company how important this is, how ESG is important. I have one of my personal targets linked to ESG performance. And well, that's just the beginning.

So Miguel, let's follow up with one more along those lines on culture. The question that came in is the presentation talked about creating a strong culture, but this usually takes a lot of time and usually leads to a lot of turnover. What is the culture you're trying to build? And how similar or different is it to the past? How long do you think it will take to get where you want to be?

Well, I have to agree with the person that asked this question that changes in culture take time. And -- but what we did was to first understand the reasons for the turnover, why we were having a high turnover, and if this was linked to culture or not. And what you saw in that research was that people were concerned because they could not see a north, a strategy and they could not see their progression in the company in the future. And we act on it. The truth is that with -- by releasing and sharing with our employees what the values are about, the vision, by sharing the strategy, by sharing leadership principles, we are talking about our culture. And I have to say that our people are very excited about it. And when we showed the results that engagement is increasing substantially and turnaround is decreasing substantially, so we are -- we decreased year-to-date 33% the turnaround in the company, well, I think that's the best proof of that.

Great. And I think I want to change gears a little bit here and go back to the platform piece that Nina presented. And the question that came in is, how did management determine which platforms went into each role? And how will marketing and investment levels be determined going forward?

Thanks for the question, Chris. This is something that actually was a large discussion for us. And as we started this process, we looked at 2 sets of criteria. We looked at sort of one bucket, which was the attractiveness of that area. So thinking about things like the profit or the growth of consumer trends in that area to understand how attractive the area was. The second thing that we looked at was our right to win. So looking at our capabilities from like a manufacturing standpoint or from an R&D standpoint and our current market share, helped us to understand which of the areas that we should invest behind. And so as we look to place platforms in Grow, Energize and Stabilize, we use these 2 areas to help us determine which to place where. Thanks.

Great. Let's come back to supply chain a little bit. And the question is on the programs that Mitch had laid out in his section. The question is, how is the KHMS program that Mitch talked about the same or different from Kraft's Six Sigma program before the merger? Are the efficiency targets set out today going beyond what Kraft achieved in the past? Mitch?

Yes. Okay. Yes, Chris. So the first part of the question, let me start with what KHMS is and what we've built is -- part of the question is we did build on our past. As we -- if you look at legacy Kraft, legacy Heinz, we had a strong Six Sigma culture in both companies and rolled out programs. And then also in legacy Kraft, the whole performance management. But what we've built with KHMS drew upon that and is really a path forward by drawing on the past, benchmarking to the outside and creating the best for us or best for Kraft Heinz system to drive us forward as we kind of roll out what we believe is, in my mind, the best work system available for us. And Chris, could you -- what was the second part of the question again?

It was the -- are the efficiency targets set out today going beyond what Kraft achieved in the past?

Oh, yes. So in our recent history, I would say that we were more focused on fixed efficiencies. And then if you look at the variable side is -- and the way I like to think about it and the way we are looking at it is really the path forward. And what we see on the variable side is this huge opportunity for us. And I hope I laid that out well when I spoke to you guys earlier around the opportunity. And that opportunity is transcending on that variable side in our efficiencies as we see this large opportunity. And it's evidenced even in this first year, as we're in the first year of this rollout, is we've seen a nice 5% OEE gain, as an example, across the different programs.

Great. I want to try and squeeze one more in here. It's related to supply chain. It's a question that I get pretty often, it's on third-party manufacturing. And the question is, Kraft Heinz has had a significant reliance on third-party manufacturers in the past. Will the new strategy lead to relying more or less on external manufacturing going forward? Eloi, I think you touched on that in your presentation.

Actually, the number of external manufacturer is not a target or objective, right? So it should be actually a consequence of our strategy. The whole event on the way we are going to manage our external manufacturers is related to the way that we are collaborating with them, the way we are selecting our external manufacturers and also the way that we define whether or not we need to go into our external manufacturers. So when we put this together, we should be able to manage our third-party manufacturers in a much better way than what we have today, which is very generalized, very transactional.

Okay. So in the interest of time and keeping us on track, we'll end it there for now. So let's take a 5-minute comfort break. When we come back, we'll have a short video before Carlos and Rafa outline how we are going to get there through our plans for the U.S., Canada and international zones. [Break][Presentation]

I'm just so glad to be here today. I'm Carlos Abrams-Rivera, President of the U.S. Zone. And for today's presentation, I'm also representing our Canadian business. When I joined Kraft Heinz in February, I knew the potential of the company I joined and the quality of the people I'll be working with. What I didn't know was that over the last 7 months, we will remake the company, come closer together and review our promise to be the soundtrack in America's kitchens. Today, you'll hear about the comprehensive plans already in motion in the U.S. and Canada and get a sense for our future. It all supports our ambition to drive sustainable, profitable growth. I'll start by giving an overview of our U.S. and Canadian businesses and then outline the steps we've taken to become a stronger, more agile organization, strengthen our capabilities and redeploy our talent, create focus and clarity around how we run the business, grow, energize and stabilize our entire portfolio and deliver exceptional value to our consumer, customers, employees and shareholders. Between the U.S. and Canada, we generate nearly $20 billion in organic net sales and more than $5 billion in adjusted EBITDA. So we have the scale and the resources to make impactful choices that will drive growth. Open almost any refrigerator, pantry or freezer in America, and you'll find our brands. From Kraft Mac & Cheese, to the goodness of Philadelphia Cream Cheese and Kraft Peanut Butter, our brands help make life delicious. These are relevant, recognizable brands with millions of loyal fans across generations. We also have a solid portfolio of emerging and challenger brands. These brands have incredible growth potential and play a specific role within the context of our portfolio. Take Primal Kitchen, for example. This mission-driven brand provides lifetime solutions. These are products that provide a wide range of delicious, innovative keto and paleo options in a growing market. The combination of well-known powerful brands, emerging brands and challenger brands means we capture more consumers more often. We're providing people with a wide range of solutions to fit every single need. Today, as Miguel shared, we lead the industry in household penetration in the U.S. at 97%. It would be easy to assume there's little room left to get to more of our products into houses, but it's the opposite. We have seen the strong growth in the last 6 months across established and emerging brands. In fact, since March, 70% of our brands have increased household penetration. And it's not just loyal customers buying our product, we're also gaining traction with new buyers, earning repeat rates that are higher than our peers over the same period. Our new buyers are younger, they have more income, they are diverse, and they're from smaller households without kids, areas where we're typically under indexed. So while the uptick in buying is partly driven by the pandemic, we are intentionally fueling this trend with sizable communication investments and media choices, and we'll continue to leverage our momentum. I'm so proud of how our teams have come together since the start of the crisis, working around the clock to increase production, protect our colleagues and feed families. And our work continues. We're taking care of the most vulnerable population, donating millions of meals and pledging financial assistance to organizations that are alleviating hunger and food insecurity. We have significantly stepped up our commitment to fostering diversity, including partnering with organizations working to create positive change, particularly in African-American communities impacted by social injustices and disproportionally affected by COVID. These initiatives are critical to our commitment to put people first. So while we have a lot to be proud of, there's still work to do. We must reverse downward sales trends and position the company for a bright future. Going forward, we will be focused on creating consumer solution, not just products; helping increase our share of specific consumer needs, from individual snacking to family gatherings at home or away from home; prioritizing what we do and how we go to market, so we can be there where consumer need us. Further, we are rewiring our business to be more collaborative and efficient, putting a greater focus on solution-driven innovation, while at the same time, making a healthy investment to renovate our core business. As a team, we're creating a cycle of growth as we feed the brands, increase our return on investment, improve end-to-end efficiencies, drive greater value for our partners and improve profitability overall. To bring our plan to life, we made changes to reflect the company we want to become. So let me share a little more about how we are evolving our structure, approach and culture within the Kraft Heinz model. Guided by our new purpose, values and leadership principles, we started by creating a dynamic organization that is forward looking. At the beginning of the third quarter, we implemented our new operating model, designed around our platform-based strategy, which empowers our business units to increase focus on creating consumer solutions. First, we defined the roles needed to deliver value for our enterprise strategy, outlining clear responsibilities and decision rights, plus reviewing existing talent to ensure we were set up for success. We also searched externally for complementary skill sets and expertise that will accelerate our transformation. Our new operating model also require invigorating and centralizing key support functions in areas like consumer insights, sales and revenue management. And we did this without incurring incremental costs by leveraging pockets of efficiency. In the last 2 months, we also introduced new processes and ways of working to deliver clarity and consistency. To transform, we needed to be clear on what area throughout the company had to be enhanced. So we are turning our attention to strengthening and building new capabilities at the organizational and individual level. Our capabilities road map clearly lays out what we need to do to win in several critical areas with significant investment planned around each effort. Our new organization is now our reality. We also bolster our leadership teams by bringing its seasoned functional experts in sales, procurement, marketing and communication in the U.S. and experts in operations and marketing in Canada. Combined, these leaders bring more than 100 years of industry experience to Kraft Heinz. Creating an entirely new business model took substantial effort from across the organization, but in doing so, we are reimagining our future. Centering ourself around consumer platform will unleash the power of our scale. We have completely shifted our thinking from how do we grow share of brand to how do we create food and beverage solutions which unlocks enormous white space across an entire business. Accounting for half of our net sales today are 3 platforms: Taste Elevation, Easy Meals Made Better and Real Food Snacking. These are highly advantaged, high-growth, high-profitability opportunities that we can disproportionately invest in. There's also opportunity to energize our Fast Fresh Meals portfolio where, today, our performance trails category growth. We have the right brands and the right to win, but we need to put a lot of attention against renovating our core. This will help us spur profitable growth. And finally, stabilizing our Easy Indulgent Desserts and Flavorful Hydration businesses will improve flat or declining sales. The changes we're making to our business and our brand is transformational, not incremental. In a minute, I will provide color around what we're doing in each platform. But first, a view into how we have evolved our approach. Within each platform, we'll use 5 levers to capture the greatest opportunity and drive growth. This allows us to distort our resources to maximize the respective platform penetration. It also provides the broader view of where and how consumers interact with our brands. Each area will be grounded in rich database insights that can be leveraged across the business, allowing us to quickly scale and positively impact multiple brands or categories at once. In the past, we focused almost entirely on new product development and gaining share in predefined categories, the outcome of which was limited consumer appeal and low incrementality and prevented us from putting energy against the greatest opportunity. Now we'll be closer to 60% innovation and 40% renovation. This is a significant change to our vision. This is a significant change to our previous approach. For innovation, we are focused on fewer, more impactful and better-designed solutions to solve consumer pain points. For renovation, it's about making meaningful changes on our big brands. We've also transformed how we'll show up in market, moving to an omnichannel approach that surrounds consumers. You can expect our marketing to be bolder and breakthrough with more vibrant, relevant campaigns that reinsert our brands into culture. And to do this, we're making sizable strategic investments, with the priority being our growth and energize platforms. Where people can find us, we'll also expand. We will broaden our retail footprint to include all formats while growing our presence in away from home and e-commerce. To make this possible, we're strengthening our customer and supplier relationship to create joint value, a critical priority. And last, we'll use revenue management as a growth driver, leveraging price size architecture to capture incremental sales and better respond to consumers' definition of great value. This thinking also require an aggressive review of the number of products we make, market and sell. We have already started this work and have so far eliminated more than 1,100 existing SKUs, roughly 20% of our business, in a few months which helps reduce cannibalization and increases efficiency in procurement and our operations. So you see, it's this new approach to growth drivers that will collectively drive stronger results. Now let me explain how we are executing against this model for each of the platforms. I'll start with Taste Elevation. When it comes to this platform, it's all about how do we add more flavor and texture to favorite foods. Today, we are the leader, thanks to our strong mix of iconic and challenger brands. We have a different mix of manufacturing capability and innovation know-how that help us win and really position us great for the future. Taste Elevation is unique in that our consumers enjoy our brands when dining out and in their own kitchen table. In fact, what we learn in foodservice will only strengthen our in-home performance. Until now, we really haven't fully leveraged this scale. Our understanding of how consumers shop and the trade-off they make reframes our innovation approach and how we go to market for this platform. Instead of working within a narrow set of existing category parameters, we're focused on delivering on taste by introducing bold flavors and craveable textures. We're thinking about how to give consumers an immersive sensory experience regardless of the dish or time of day. Our research shows that 75% of flavor enhancers use for a protein base center-of-the-plate food like chicken or burgers. But the participation of Kraft Heinz products in those types of food is considerably lower, so we have enormous runway to go. We're already experts and now have new places to play in. Burgers are the perfect example. We command 70% of the ketchup market, so you might think there's limited upside to capture given our strong share. But we're included in less than half of all burgers being made by consumers. I know, sounds a little surprising not putting ketchup on a burger. So by looking at it this way, we move from a ketchup leader to a burger fighter as we compete with an unlimited number of options that can make a burger taste delicious. Our new approach aims to own the space between the bun. From condiments to pickles to Kraft American Slices, no one else in the market has the scale or the culinary know-how to elevate the burger. Let me give you a sense of how this new thinking translates into actions. We know that today, consumers are having to search across different aisles of the store to what to put in their burger. So we are innovating to create a simple burger pack with classic and new flavors, giving consumers convenience and enable them to experiment with their burger build. We're also renovating products to include fewer and healthier ingredients to complement on-trend proteins. Whether you prefer your burger with all beef or plant-based, we're creating a solution for you, including sauces to meet specific needs like no sugar added or lower sodium. And working with our retail partners, we can improve the consumer experience by creating in-store destinations. We actually have seen this work in Brazil, and I'm excited for how we can bring these learnings to U.S. and Canada. And finally, we're using away from home as a source of innovation and insight. In Canada, we created 2 ghost kitchens, working with chefs to integrate our Kraft Heinz products into new food offerings. This format gives us direct and immediate consumer feedback, a much more agile way to source new ideas. So by synergizing product development and go to market, we are poised to grow burger share and the overall portfolio growth. When it comes to mealtime, people want fast, easy meals that still taste good and are nutritious. Our Easy Meals Made Better platform is all about delivering on this ask. Today, we hold the highest share in multiple categories and have a portfolio of iconic, familiar brand as well as up-and-coming brands in growing markets. This brand loyalty and trust is a huge advantage for us. Our research uncovers 2 things. First, the definition of convenient has evolved. It's more than just saving time. It now includes fewer steps and less mental energy. Second, we learned what was the more convenient the food, the higher the guilt as people felt they were having to compromise. No matter what, people want to feel good about what they're eating. They're really looking for this. In my own home, dinnertime brings great joy and sometimes stress as we balance food choices, time pressures, wellness. I'm sure it's the same for you. This platform solution aims to marry delicious meals, added convenience and remove the worry. From our existing portfolio of brands like Classico, Ore-Ida and Mac & Cheese to our ambition to unlock new technologies in this space, we're looking to dial up the feeling of a home-cooked meal and make it worth it to consumers. But here's the thing, we all want it all: foods that are customizable, come in a variety of serving sizes, taste great and that we are proud to eat and serve our families. We can deliver on exactly just this. Let me use Mac & Cheese to show you what I mean, even though there's plenty of examples. Insights and consumer feedback led us to reimagine what a mealtime solution could look like and tackle several different needs. Using the lens of wellness, we turned what's in the blue box into a better-for-you product without compromising taste. Real cheese and whole grains make Mac & Cheese a winner for both parents and kids. While our new gluten-free options do not sacrifice flavor for a lifestyle need, and it's truly breakthrough for the category. We also took our Mac & Cheese Cups, an entirely quick and easy meal and made it even more convenient, particularly for young adults. Microwaveable Mac & Cheese has been growing ahead of the category. While many consumers tell us they wanted bigger portion sizes, so we quickly developed Big Bowls, one of our most successful Mac & Cheese innovation that's on track to be the biggest category launch in 3 years. And these are just 2 examples of how we're leveraging scale and agility to quickly deliver new products to solve consumers' pain points, bring joy and add value to our retail partners. Getting these products to market also shows the strength of our R&D and operations teams. And our final growth platform, Real Food Snacking, is all about food that's healthier, crave-worthy, convenient and loved. There's plenty of salty and sweet snacks today, but very few options at scale that are wholesale and offer familiarity from both a food and a brand standpoint. We can own this space. We have a portfolio of recognizable and dependable snack brands with high household penetration rates. We also have a strong emerging brands that address growing wellness trends. So we can grow by expanding our distribution network, introducing packaging innovation and enhancing the right pricing strategy to capture greater share of snacking. To bring this vision to life, we started by unifying snacking under one platform. This creates cross-utilization of insights and scalable innovation in underserved existing categories. The result is nutritionally dense, tasty and convenient in-between meal options. Partners with a sharper expertise will also be vital. So rather than chase oversaturated areas, we are focusing our priority around unmet needs. Consumers want healthier snacks, but are disappointed in the limited number of delicious options. And what kids love and parents want is almost never the same. However, it is clear that less processed and more real is worth paying for. To win, we have to refresh our core brands and reintroduce satisfying, better-for-you options while accelerating innovation and spend on our premium brands to win over adults and kids. Real food snacking presents a huge opportunity for us. The area we're focused on is growing twice as fast as the rest of the snacking category. The combination of health, taste and familiarity is why we are so uniquely positioned to own this space and create a new paradigm for impulse snacking. Today, it's challenging to find better-for-you snacks in easy-to-use formats in a centralized location. Consumers are repurposing existing products to fit their snacking needs, underscoring the opportunity, case in point, Lunchables. Insights show that 40% of consumers use Lunchables as a snack but don't eat the whole pack at once. Creating singular compartment opening makes snacking flexible, and innovation is only part of the equation. We also thought about new entry price points to go after impulse snacking. Smaller portion, $1 packs with meat, cheese and cracker make for a quick bite in a grab-and-go format and solve 2 challenges. This single-serve packs drive incremental growth and expand all retail options like entry to C-store, where we lack a meaningful footprint today. Regard [indiscernible] easily find our entire portfolio of wholesale snacks. And finally, I'll be remiss if I didn't mention the positive impact of packaging changes to our business. Our vision of reducing a significant amount of plastic tonnage from our snack packaging provides a better consumer experience, reduces costs and gets us closer to our ESG commitments. Switching gears to how will we energize our core. We know that people like to cook, but have limited time to prep and don't want to compromise freshness. Enter Fast Fresh Meals. Today, our portfolio has a strong presence across entire refrigerated case, led by powerful brands like Oscar Mayer and Philadelphia. But we have a sizable opportunity to grow share of meal occasions across entire portfolio. Renovating our cornerstone brands to meet consumers' demand for fast meals with minimal processed ingredients is necessary for our long-term outlook. We have successfully done this before with Philadelphia, and we see that as a model of why it's possible. Consumers don't think in categories, so why should we? Fast Fresh Meals represent almost 30% of all in-home eating occasions, and demand for home-cooked meals continues to rise. But people have less time and want more cooking suggestions than ever before. Our opportunity is to alleviate this pain point, making meals fresher, healthier and easier. A focus on key meals like breakfast and dishes like sandwiches is where we can win. In fact, 8 dishes, including lunch meat sandwiches and grilled cheese, account for 60% of all meals within this platform, places where our brands can shine. When it comes to Fast Fresh Meals, we're guided by 2 simple principles: it must be as fresh as possible, and it must save shoppers time and effort. This changes the role we play and how we anticipate disruptors like technology and cooking methods. We are creating semi-prepared meals with minimally processed ingredients that require fewer than 3 steps and only 15 to 45 minutes to make. So critical to energizing this platform is the full renovation of a brand close to my heart, Oscar Mayer. I actually started my corporate career at Oscar Mayer and know its potential. This is a $2 billion brand, so energizing, it can really make an impact in our results. We're already busy renovating and innovating Oscar Mayer with a focus on product superiority. And we are creating a masterbrand omnichannel campaign with a clear visual identity, supported by double-digit media investment set to start in the next few months. There's also tremendous synergy across platform, leveraging all of our food brands to own the breakfast and lunch space. For example, pairing Oscar Mayer deli meat and Claussen pickles, along with different spreads and condiments from our Taste Elevation platform results in a great-tasting sandwich. And finally, from a marketing standpoint, new partnerships and bold creative will reinsert Oscar Mayer brand into culture, like our recent Front Yard Cookout campaign, a hugely successful, socially distanced consumer activation. And rounding out our focus, we are stabilizing platforms where we see an opportunity to selectively improve brand performance with a consumer solution lens. Easy Indulgent Desserts being a prime example. Consumers tell us that desserts bring them joy, particularly when they can be shared. Brands like JET-PUFFED, Jell-O and Cool Whip embody that feeling of fun and are sweet treats that satisfies craving and makes recipe easy and special. Our definition of stabilizing means be more intentional with what we do in these categories and importantly, where we invest our time and money. A great illustration is how we have evolved the JET-PUFFED brand to become a snacking brand, allowing us to capitalize on the existing consumer habits. Today, nearly 60% of consumers use marshmallows as a dessert snack as opposed to an ingredient. On-trend flavors plus new resealable packaging lends itself to this behavior. It also gives consumer more reasons to indulge in the brand and the ability to share with someone they love. A complete branding overhaul and creative campaign better showcases the playfulness of the brand and makes us stand out at retail. And just like in my house, moms and dads everywhere want to keep their family hydrated and feel good about what they serve. With our Flavorful Hydration platform, we intend to be the leader in kids' single-serve beverage and the adult beverage mixes category, so we can address growing demand for simple drinking solutions. Here's a look at what we are doing with this platform. With MiO, we start with water. By using flavor to drive water consumption, we are providing adults with a zero-sugar, zero-calorie solutions and an alternative to carbonated soft drinks and expensive flavored water cans. We also continue to innovate around consumer needs, like including vitamins or caffeine for energy. For kids, a Capri Sun pouch is the ultimate beverage with all-natural ingredients that delight both parents and kids. And from [Audio Gap] we launched Creative Roots, which uses on-trend coconut water, and it will be a disruptor in the kids' beverage category. In addition to providing simple, balanced hydration solution, this platform reflects our ESG commitment to reduce sugar in our products. To summarize, our platform strategy for the U.S. and Canada, we are prioritizing and accelerating growth in tailwind platforms: Taste Elevation, Easy Meals Made Better and Real Food Snacking; energizing the Fast Fresh Meals business where we have now kept up with consumers' evolving needs; and stabilizing our Flavorful Hydration and Easy Indulgent Desserts platforms with select and precise investment. To help propel us forward, we have substantially increased our media investments year-to-date while distorting over half of that increase to our growth platforms. To fully drive our growth cycle, we need fuel. Fuel comes from the relentless pursuit of efficiencies. Productivity will be key. Next month, we kick off our new Integrated Business Planning process. IBP creates a singular process that allows us to be more efficient in our data collection and analysis, extend our horizon of planning and eliminate much of the duplicative and unnecessary work that happens today. The process also enables us to assess and adjust for capacity constraints. With demand, supply and finance all in sync, we'll be able to make better, faster decisions that advance the business. But all of this will be for naught if we don't translate our platform-centric approach to an omnichannel leadership. What our customers will see is stronger thought leadership, sustainable category growth and improved collaboration. We'll bring unique, ownable platform-led insights that translate to new category opportunities, creating a connected digital and in-store shopping experience; accelerated category leadership and collaboration, which will result in faster, stronger innovation cycle, as mentioned, fewer, bigger, better; and meaningful core product renovation that infuse excitement and growth; and finally, improve end-to-end efficiencies, reliability and joint value creation across the supply chain. Our revamped go-to-market strategy also require an internal reset and transformation of our own sales organization, the goal being to be leaders in customer planning while delivering best-in-class execution. Said at a different way, to be indispensable for our customer. We identified, along with feedback from our customers, key areas of opportunity in how we organize our business as well as gaps in our sales processes and capabilities. We also saw a need for stronger discipline in our time line and improved operating speed. As we organize to win, one of our big moves was to invest in the creation of centralized customer development and revenue management teams. By creating the centers of excellence and scaling critical capabilities, we will step change the way we show up for our customers. We are positioned to partner and plan in different and meaningful ways, with elevated insights and omnichannel solutions and with a faster clock speed than ever before. We've also been intentional in our actions to rewire and transform our customer planning cycle. In the past, we didn't always account for our customer strategies and time lines as we build our marketing and brand activations, resulting in suboptimal execution and growth. We have now brought to life the customer and the shopper to the beginning of the process, helping identify mutual growth opportunities earlier on. All of this translates to stronger insights, collaborations and solutions, leading to enhanced execution and sustainable growth. We are now organized to win, have the right planning process in place and have the discipline needed to consistently deliver. Part of our omnichannel approach, e-commerce plays a central role in our partnership initiatives and growth plans. In just the last 3 years, we have seen substantial increases in our online business, with e-commerce share exceeding brick and mortar. Overall, our U.S. e-commerce business is delivering triple-digit growth. To put the enormity of the opportunity in perspective, we have sold nearly 90 million pounds of Mac & Cheese alone this year, which is equal to the weight of 41 Statues of Liberty. As we've already done, we'll continue to invest and accelerate our e-commerce capability to anticipate and deliver on consumer needs. Our strategy in the U.S. is centered around building out our core competencies across the value chain, while investing in expertise and building capabilities. Ultimately, we'll drive outsized growth through innovation, experimentation and disruption. We truly left no stone unturned in evaluating how to best build the company of the future. To achieve low single-digit organic net sales growth, we'll adhere to 5 guiding principles that aim to create focus, balance and discipline. These principles are: simplify our portfolio to create greater focus and efficiency across the value chain, from SKU reduction to platform prioritization; leverage our flagship brand to win big, using critical insights to generate solutions that demonstrate category leadership and deliver value for consumers and customers; balance innovation and renovation to unlock potential to maximize top line growth and profitability; follow clear brand roles and investment guidelines so we put the right dollars against fueling the right priorities and achieve impactful ROIs; and staying disciplined in trade spend and price to generate long-term value for our partners with a mutually beneficial outcome. Adhering to these principles creates a very different financial model that's fueled by top line growth in historically flat categories for the U.S. and Canada. Our biggest upside will come from accelerating efforts across our 3 growth platforms, which when combined, makes up half of our net sales in the U.S. and Canada. Putting a focus on this high-growth, high-profitability platform where we have solid brand equity will help us quickly achieve positive, sustained growth in these businesses. Energizing our Fast Fresh Meal platform with a particular focus on our hallmark brand, Oscar Mayer, and desire to own breakfast and lunch occasions, positions us to capture more share with a growing category. This will help turn sluggish net sales and show improved results. And in platforms like Flavorful Hydration and Easy Indulgent Desserts where we have low or declining share, we plan to stabilize net sales so they are no longer a drag on the business. Now in doing all of this as well as reinvesting in the business by making targeted investment in marketing, research and development, capacity and innovation and driving down operational cost results in low single-digit organic net sales growth. Listen, we have put our people, our consumers at the center. We have a powerful portfolio filled with iconic and challenger brands. Our leadership team is aligned and working in concert to bring our vision to life. We're investing in the future, with talented, driven employees leading the charge, all working as one team. And at every turn, we're using our scale and agility to our advantage. This is who we are and how we'll operate going forward, with clarity and conviction, driving profitable, sustainable growth in the U.S. and Canada. This is the new Kraft Heinz. And now I'll turn it over to Rafa Oliveira, President of International.

Thank you, Carlos. Hello, everyone. I'm Rafa Oliveira, President of Kraft Heinz International. I'm super excited to be here to describe how our international zone is a key engine of growth for Kraft Heinz. We are proud to share how we are taking advantage of the enormous expansion opportunities we have across the globe by deploying leverageable, proven best practice through a successful, repeatable model. International is geared to grow. As you'll see in the next 20 minutes, we have the presence, the platforms and a plan to lift our performance. You'll see how we are deploying the Kraft Heinz model to accelerate growth around the zone. I'll share concrete examples from developed markets like the U.K. and emerging markets like Brazil, Russia and China. I will conclude with some financials on the growth expected from the region. And you'll see why we are so excited about the potential we have in our international zone. We define international as the world of opportunity outside of North America. It's a diverse, vibrant and exciting region with lots of macro and micro differences, but with some commonalities, too. And it holds lots and lots of opportunities. Kraft Heinz, there's over $5 billion of business in the zone with an EBITDA close to 20%. We have physical presence in more than 35 countries, and our products are sold in more than 100. The opportunity is enormous. We have huge potential yet to be realized. We divide our international business into developed and emerging markets. 60% of our sales comes from developed markets and 40% from emerging markets. We have a very strong presence in some of the larger developed markets, including the U.K., Australia, New Zealand and the Netherlands. In other developed markets, such as France, Italy and Spain, we have a strong local brand that complement local flavors and cuisines across these markets. Our Heinz brand enjoys strong awareness, and we will continue to grow in all these developed markets. But the really big opportunity is in emerging markets. We have a strong foundation in some of largest emerging markets with local brands and in many cases, a local jewel brand. In these markets, we will leverage our scale to grow far more aggressively. You heard from Carlos that in North America, we operate across 6 platforms. In international, we play mainly across 2: Taste Elevation and Easy Meals Made Better. In the last 4 years, we've delivered solid net sales CAGR of 4% in Taste Elevation, which represents more than half of our sales. In Easy Meals Made Better, our performance has been negative. We also have a tail of smaller categories that have been a drag on our performance in international. We've isolated these smaller other categories, and we are working to optimize returns from them. Overall, international performance has been slightly positive. But with relentless focus on areas where we can really win, we can and we will do much better. So how will we grow? We will focus on one platform, Taste Elevation, where we want to become the undisputed global leader. And we will prioritize investment in a few selected emerging markets that offer the most attractive return on investment. In this platform and in these markets, we can truly leverage our scale as a global company and our agility as a local player. To take advantage of this huge opportunity, we are implementing the Kraft Heinz model around the world. You've seen this model in previous presentations: our people and organizational structure, consumer platforms, operations center and go to market. Before we created the international zone, we had 24 regional teams, all operating independently. This generated a lot of duplication and inefficiency and made it very hard to benefit from our scale. Today, we are one integrated team with 6 business units, 3 in developed markets, 3 in emerging markets. As one international zone, we share best practices, copy paste what's working and quickly stop what isn't working. Through the business units and the local country teams, we are taking advantage of the agility we get by being close to our consumers and our customers. We are moving fast, operating as one international team drives our scale, and our experience ensure our agility. We have brought in a new Chief Growth Officer. Cristina Kenz has more than 20 years of successful experience at leading global food companies. Cristina's knowledge and energy complement the deep internal expertise of Jacques Pradels, our Head of International Sales, who has been with us 20 years. All our leaders have at least 15 years of consumer goods experience. Some have more than 25 years of success at Heinz. The second part of the Kraft Heinz model is the consumer platforms. As I mentioned, international plays in 2 of the company's global consumer platforms: Taste Elevation and Easy Meals Made Better. Taste Elevation is our core platform, with 55% of our sales. It's a truly global platform with presence in more than 50 countries, but it has enormous headroom for growth. Why? Because Taste Elevation is an $80 billion market internationally, and we have less than 4% of it. There is huge potential for us here, and we are aggressively going after it. Right now, within Taste Elevation, we are growing in more than 90% and gaining share in more than 70% of the markets where we are present. But we are present in only 35% of the existing international Taste Elevation markets. That leaves a lot of untapped market potential. Today, we are the #2 in sauces in international market, but we are growing twice as fast as the largest player. We will become #1 through our focus in Taste Elevation. We are going to deliver on this ambition by building on our strong position in the foodservice channel and our iconic brands. Foodservice represents 40% of the international Taste Elevation market and contributes nearly $1 billion of our sales. This channel is important for 2 reasons: it provides scale, and it helps build brands. This is where people try out new tastes. By expanding our presence in the foodservice channel, we will increase our exposure to our brands and accelerate our position in Taste Elevation. We are immensely fortunate to have the iconic, much-loved and trusted Heinz brand in our portfolio. Heinz has a rich heritage with over 150 years of history, but it's also modern. It brings out joy everywhere, and it continues to grow. We also have many local jewel brands that enjoy #1 or #2 position in their markets. Our local jewels provide scale and connectivity to local cuisines. They all enjoy very high brand awareness. In our larger markets, our local jewels have an awareness close to 100%. Heinz is consistently above 90%. This brand recognition gives us huge confidence that we can grow in Taste Elevation. Our strategy for each of our international consumer platforms is different. In Taste Elevation, the core of our business, we will accelerate growth investments, focusing on emerging markets, targeting foodservice channel and advancing our premium brands. In Easy Meals Made Better, a sizable and profitable platform with close to $1 billion in sales, we will selectively invest in key categories like beans and soup in the U.K. and Australia. These are grocery essentials that we will update and energize with tactical innovation, while maintaining the great ROI we have on our revenue management and sales execution initiatives. With the other categories, we are assessing options to address the decline in performance. This may include streamlining noncore initiatives that were absorbing resources and dragging down our performance. The third pillar of our Kraft Heinz strategy is the productivity gains that our new operational model can deliver. Here, scale and agility are again the drivers of opportunity. We have created an international Center of Excellence in the Netherlands, staffed with some of the most experienced supply chain professionals. This dedicated team supports and shares best practices with the local teams and provides efficiency benchmarking. We are confident that over the next 5 years, we can drive north of $500 million of gross savings that will help fund the growth across international. And finally, we come to the go-to-market pillar in our Kraft Heinz model, critical for the international zone. The developed and emerging markets require a different, yet linked action plans. Developed markets are about partnerships, optimization, strong brands and category leadership. Our recent investments in category management capabilities in the U.K. have had positive results. Adjusted EBITDA has grown single digits every year for the last 4 years, and retailers now look for us for category guidance. We believe we can export this model to additional developed markets across international and achieve similar positive results. This is a big opportunity for our future. Emerging markets are much more about expansion. We will increase our presence in more points of sales across the markets. At the same time, we will continue to advance our premium brands. Let me now share a few examples of how our model is working in both developed and emerging markets. First, the U.K., a developed market in which Kraft Heinz is a food leader. We have more than $1 billion in sales across Taste Elevation and Easy Meals Made Better. We are the leader on these platforms mostly due to the strong brand equity Heinz has in the country. Developed markets are all about optimization and partnerships. In the U.K., we have been working closely with our retail partners, delivering best-in-class revenue management, partnering with popular artists such as Heinz Ketchup superfan, Ed Sheeran, and testing and enhancing e-commerce models. We are top 2 or 3 in every brand survey in the country. And I'm not just talking about food brands, but all brands. In food, we are the undisputed #1. This hugely strong brand has delivered strong top and bottom line results, plus market share gains in every one of the past 4 years. We are copy pasting this model of brand development and customer partnerships from the U.K. across all developed markets. The U.K. will be our innovation hub. It's where we launched our new Heinz Seriously Good Mayonnaise, which has disrupted the market, reignited growth in the category and grown to 20% share in just 4 years. Now we are excited about conquering the other 80%. The U.K. model will lead our expansion into adjacency categories, again, to be exported elsewhere. In the U.K., we launched a direct-to-consumer venture. We have a good e-commerce business there in partnership with local retailers, that has been growing ahead of the industry. But 5 months ago, as the COVID pandemic started to hit harder, we launched the DTC model to serve Heinz lovers across the country. The beauty of this model goes way beyond sales opportunity. It is a chance for us to stay close to consumers, to build communities, test innovations quickly and collect insights. The model is performing very well, way beyond our expectations. And last month, we replicated the model in Australia. This is a type of initiative that our solid U.K. base can deliver fast. Fast is actually an understatement. From concept to launch, it was a mere 3 weeks. The international zone enables us to quickly replicate this across different countries. The U.K. will also be our model for sustainability partnerships, such as the collaboration with Tesco and Loop on sustainable packaging. This type of collaboration is our model for the future, initiatives that help consumers, communities and the environment. I'm super proud of what our team has achieved in the U.K. And not just for the results themselves, but as a model of what we can do with the right discipline on profitable growth. Now let me move on to talk about emerging markets, our real high-growth opportunity. I'll share 3 exciting examples from our highest potential markets: Brazil, Russia and China. Brazil is an exciting country. It has a large and growing market for Taste Elevation. We are the leader in ketchup and pasta sauce, and we have room to accelerate growth a lot. In foodservice, we are still small and have huge headroom to take advantage of. Two pillars explain our success in Brazil. First is our go-to-market model, which we call Cruzadas. We have developed a detailed mapping of consumption and execution to expand across the country. This model require a huge amount of work with technology and data mining and can now be applied in many other emerging markets across the world. We hired and trained a sales force and developed store-by-store KPIs. The sales force expands region-by-region as the KPIs are met and exceeded. Given the size of Brazil, there is still a lot of room for us to grow. Our numerical distribution in the country is only 8%. Now that we have the model that works, just look at the space for acceleration. The second pillar is the premiumization of the market with our brands. We introduced Heinz as a premium brand, growing penetration based on the strength of our local jewel brand, Quero. We have been disciplined about selling Heinz only in places where we know consumers are willing to pay for it. As you can see in the line chart, we have consistently gained share, and now we have 35% of the Brazilian market. This is good, but there is still a lot more to go. We will achieve double-digit growth in Brazil. We will do this by expanding our Cruzadas distribution model, advancing our premium brands to our burger platform and doubling our foodservice presence based on the work of our new dedicated foodservice team with locally focused R&D. Cruzadas is self-fueling. As we grow, the increased scale enables us to continue to invest in distribution and eventually to expand into new categories. This growth is also fueling our P&L, enabling us to invest more into the brand. The second example I want to share with you is Russia, another large and exciting market, where we have the leadership in ketchup and condiment sauces. But we are still only 7% of the total Taste Elevation market. What is most interesting about Russia is our successful foodservice model, which we developed in the country. This model is centered around the chef. With a special sales force that is made of chefs, we get much closer to our customers. Supported by dedicated R&D and a flexible supply chain that enables fast innovation, we have been growing at double digits in the quick-serve restaurants channel in Russia. Our chef sales force is a critical competitive advantage. In a few cases, we would have lost tenders based on price, but customer chefs have overruled their procurement teams because our own chef sales force and our capacity to deliver innovation. Quite simply, if we own the chef, we own the kitchen. And if we own the kitchen, we own the customer. Our foodservice model in Russia is solid, but we still have a lot of room to expand and accelerate our growth. Our model not only supports our ambitious distribution and innovation plans for the country. Importantly, it can be exported to other countries, and we're already making this happen in countries like China. I've left the best and most exciting for last, it's China. It's a great opportunity for Kraft Heinz. The market for Taste Elevation is big. No, it's actually huge. It's a $17 billion market that is growing fast. We have the brand and the local presence, but we are still massively underpenetrated. The local market is mainly soy sauce. It has strong margins, but still not yet consolidated. Chinese culture evolves around food, and most foods are based on a lot of sauces. We have the Master's brand, a strong local jewel brand that is the market leader, but is present in only 2 provinces in the south of the country. They are large and wealthier provinces, the type that the rest of China aspires to. We see enormous potential to grow, taking Master's to more provinces. We will do so by leveraging some of the other pillars that are driving growth elsewhere, our distribution model, foodservice, premiumization and innovation. We strongly believe we have the right tools to accelerate growth in China. I'm really super excited about our prospects there. Our growth plan is to be the #2 Eastern sauces brand in the country with our local jewel. And we want to be the #1 brand for Western sauces in China as we are in other international sauces markets. We believe our strong Heinz brand will enable us to unlock vast potential of Western sauces in China. China is the #1 opportunity for growth for international, and we are confident we will deliver. Let's now look at what all this means to our financials. Our confidence in our future growth is based on 2 key factors: the integration of our international zone and the relentless focus on our highest-return platform. The integration of our international zone enables us to achieve efficiencies and to share best practices. As you saw in the few examples I shared, we have a successful foodservice model in Russia that we can quickly replicate in Brazil. We have a strong go-to-market model in Brazil that we can quickly replicate in China and Russia. We have a winning category management model in the U.K. that we are copying in Australia. The examples go on and on. This rapid replication will unlock a lot of growth. And we can do this efficiently because we are copying best practices instead of having to build from scratch. The second factor underpinning our growth is the focus on our highest potential platform. We are prioritizing investment in high-return areas where we know we can win. And just as importantly, we are ending projects that were dragging down performance in other categories. We will accelerate investment in Taste Elevation, copying best practices to capture untapped markets. We are confident that we can achieve high single-digit top line growth in our successful Taste Elevation platform. In Easy Meals Made Better, as we reenergize our portfolio and optimize our revenue management strategies to reinvest in our brands, we expect top line performance to remain flat. This platform will continue to drive profitability in developed markets. For the other categories which are underperforming, we will minimize or end investment in low-return projects. Simply ending some unsuccessful projects across the globe will automatically improve our performance in those tail categories. We are confident that this disciplined focus on high-potential platforms will result in mid-single-digit growth within the international zone over the next 5 years. By now, you can see why we are so excited with the potential growth in the international zone. We have doubled down to accelerate growth. We are focusing on Taste Elevation, where we have a proven strategy, but still have significant room for expansion. We are quickly leveraging our learnings across the zone, taking advantage of our scale with local agility. We are expanding better, further and faster in higher-growth consumer spaces and higher-growth markets. This is how we are unleashing the full power of Kraft Heinz International. Thank you for your attention. Carlos and I will be happy to take questions.

Let's start our second Q&A with a question for Carlos. Carlos, the question is market share losses have been and continues to be a problem for KHC. How will your platform approach allow you to regain market share versus private label or competitors with more category focus?

Well, thanks, Chris, and thanks for the question. I mean I think -- when I think about private label, I guess for me, it's less about how we fight private label, and the reality is about how we coexist with private label. Ultimately, what we're trying to do is make sure that consumers understand the value that we bring to them. And the value that our brands come with is basically making sure we have superior quality, that we have brands that have a high relevance and that we continue to drive consistent, great communication. And a big part of how we're doing with our platform is doing just that, is us making sure that we looked at our business from a perspective of how consumers -- how we're going to bring new value and benefits to the consumer because we are anticipating what they're looking for in terms of food solutions, beverage solutions, so we can do it better than anyone else. But it's also important for us to stay focused on how we communicate consistently great to consumers. And let me go back to something that Miguel spoke at the beginning on his section, which is regarding ROI of our communication. So for us to also make sure that we drive the difference that we have with our brands is making sure we drive high efficiency of the marketing and spending that we are. By making sure that when we share the communications with our -- of our brands, consumer feels like they're getting clarity of how we bring great value, whether that is if they're looking at our brands through the Super Bowls or they're looking at our brands in YouTube, they're still going to see a great high efficiency coming from the -- from our business that separate us from everybody else. And to the point, I think, to mention, Chris, around -- about our -- some of our, I think, branded competitors and how we differentiate, I think that was part of the question. What I'll say is this, I will say is, this is where actually our scale plays to our advantage is because now that we have a full clarity of our platforms, we can actually be able to take all of our scale and bring it to consumers in a much different way than anyone else around any of our peers. So to be honest, that actually is going to be a strength as we go forward.

Yes. Let me follow-up on that because there's another question here that's related to market share. And the question is this, pricing and price gaps have led to market share losses in the past. Does your platform approach make you think about price gaps differently or do you expect it to change your pricing strategy?

So let me start, I guess, with maybe what is not going to change. What is not going to change will be the way we think about making decisions on pricing. They're data-driven. They are making sure we are advancing the priorities that we have in terms of distribution, in terms of the key period for our brands as well as making sure that we are thinking about the balancing of our profitability of our business as well. So that is not going to change. I think what you'll see maybe changing is, and I spoke to this in the presentation, which was a much more disciplined approach to revenue management. And I think that actually is going to pay off for us because now we have centralized revenue management. We're going to think about pricing in its broader definition. So that we make sure we have -- that using price architecture, kind of different price points for different part of our brands. And in a way that it kind of allows us to basically access more consumer through the discipline of that revenue management. And I think that's actually -- when you combine that discipline with our platforms, that actually allows also for us to win in the marketplace.

Great. Great. So let's shift gears a little bit to Rafa. Rafa, a question here is, how is the company performing in emerging markets given recessionary conditions? And how does this impact your growth expectations, if there is a significant reliance on the foodservice channel going forward?

Hi, Chris. It's a very good question. How to respond to that? I'm actually quite happy with our response. We were very quick after -- when the pandemic started to establish a cross-functional team to respond to a potential recession scenario. So this team involved multiple functions, but also multiple geographies, analyzing data and very detailed to see how the consumer -- and putting the consumer in the center of everything and see how the consumer is going to behave. And here, it came clear -- it became clear for us that agility and scale can play in our favor a lot. So we really analyze a lot of the consumer trends that have been happening and will likely continue. Some of the consumers' trends that accelerated, right, if you think about health and wellness, personalization, some of the -- looking for value. Those trends and performance definitely accelerated, and the same applies to -- in emerging markets. So I'm quite confident that we put a scenario in place or scenarios in place that will allow us to respond very fast to this, again, taking advantage of our local presence, our agility and the integrated team. So our performance so far in the crisis has been quite good. I mean we've been responding very well within emerging markets as well. And I'm confident like if recession hits, if it hits anywhere, we should be ready. We'll be prepared.

Let's stay on the subject of emerging markets. I've got another question here. And -- about emerging markets. It's, at one point, Kraft Heinz had a plan to take its U.S. brands like Planters and Kraft more global. Is that still the plan over the long term or is the thinking different now?

Well, Chris, I mean, we did test and learn a lot of those brands and different approaches in the past. But based on these learnings and how it has gone, we -- and how we are moving -- modeling everything now on a more centralized way. I mean we realize, and as I said in the presentation, Taste Elevation is our strength. It's where we really have the capability, the insights, the know-how, the brands. So this is really where we're going to focus, put our efforts on. And we are very confident we can win on that. I mean, on Taste Elevation. Again, it's critical that we're going to be leveraging proven best practices from one country or one region to the other. And then consequently, like I'm very confident that with this focus on Taste Elevation repeatable model, we have a very much harder chance, a much stronger chance to win.

Right. Thanks. So we're going to come back to Carlos here with a question on recent performance. The question is, while COVID clearly accelerated KHC's transition efforts. Actually, I think that it should say transformation efforts, I think, it should say. How can investors be confident that the pandemic is the only reason things look better right now, but that underneath, not so much has changed on the core business?

I'm sorry. Can you repeat that one more time? I don't...

Yes. Yes, sorry. So while COVID clearly accelerated KHC's transition efforts, I think, it's transformation efforts, how can investors be confident that the pandemic is not the only reason things are looking better right now, but that underneath, not much has changed on the core business?

Got it. Thanks. Listen, I think that what we're seeing right now, it is a tremendous amount of change in terms of how actually consumers are behaving in terms of eating at home. So let me start there. I think that, that obviously has been something that we haven't seen in the past and has been a dramatic change on our industry. I think what -- as -- what we are doing about it is making sure that as those consumers who may not have experienced our brands or haven't experienced for a while continue to stay with us. So it's not just making sure that as they are -- because of the pandemic, they come to our brands. But it's because, in fact, as they are looking for new choices and new opportunities to find solutions for their homes and their families that we are there with the kind of brands that they love. So we are doing certain things to make sure that continues, whether that is increasing our investment in our communications to make sure we retain them, continue to drive renovation of our brands and be smart about the kind of innovation they're looking for. So we are very much paying close attention. And actually, a lot of the research we have learned through this process of our platforms actually help us better understand what else they're looking for. So as we think about renovation of our brands, we're very much paying attention to what they need at this particular moment. The reality is that it's hard to really to say it here and say, okay, what percentage are we going to retain as we go forward? Whether that is 20%, 50%, whatever it might be. The reality is though that we are taking specific steps to make sure we retain them, that we are talking to them differently, that we are making sure we actually make -- highlight the value that our brands bring to them that is unique to us and that we continue to stay on top of renovating our businesses so they continue to come back to us.

Okay. Great. Thanks, Carlos. Back to Rafa, and it seems like we're getting a lot of questions on emerging markets here. Question is, if a big part of the emerging market expansion plan is using the foodservice channel to accelerate penetration, won't this also limit or dilute profitability or cap margins in the international business?

Yes. Good that we're getting questions on emerging markets. We're really excited about that. So not at all, to answer your question about foodservice, not at all. I mean, foodservice, it can be a profitable model. And the reality, you have 2 parts of foodservice. You have the back of the house and the front of the house where you most likely show your brands. And although sometimes the back of the house might be lower margin, but you also need to support marketing on the back of it. So consequently, the EBITDA tends to be very similar. And we've proven that in Russia. We are very confident on our model centered around the chef in Russia. That has been very successful in partnership with the restaurants there. But even more important is their capacity to export this model around the world in places like Brazil, in places like China, in Middle East. So we really see foodservice as an enormous chance to -- a profitable channel for us. And we shouldn't forget that foodservice also brings, like I said in my presentation, it is where people try taste first, they try new products. And then it's a chance for us to expose our brands with very strong impression. So very confident on the potential of foodservice here, including profitability.

So let's take one more question around that. And it's -- it relates to China that you highlighted. The question is, similar to most CPG companies, China is a big focus of your emerging market growth plan. The company has tried this before, so what is different now? Why do you think distribution gains are more -- will be more possible or successful now versus past efforts?

Chris, have tremendous and again, enormous opportunities in China. I'm super excited about it. And the reason I think it's -- is it will be more possible now is because we are taking models that we know it works in different places and applying, of course, adapting to the local level. So for example, I give the example in my presentation on the model in Brazil -- of the distribution model in Brazil, we call Cruzadas. I mean we are taking this model and, of course, adapting, but applying to China. That gives us a lot more confidence. Apart from the fact that we have the strong local brand, we know more about the market. We are putting the consumer and the -- in the center of all the decisions. So again, I really think we have a very strong chance here to succeed big time in China, and I'm very confident about that.