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Start off here talking about some of the growth rates that we saw in the most recent quarter. We did see pretty decent revenue growth, particularly on the organic side. We have decent growth and margins and of course decent growth on the bottom lines. Invest as though, we're raising a lot of questions here about what the cost structure is going to look like for the quarters going forward and whether you can maintain that for your outlook.
Yes, well, this stage, the costs that are really sort of causing us to pay very close attention is in the first place, of course, Coco. There's a lot of discussion. There's also some sugar and some labor costs. But as it relates to the year, I would say on Coco, we're.
Fully edged now.
We have a pretty good idea of the sugar costs, and labor is also pretty clear to us. So we feel that our forecast for the year, staying in line with our financial algorithm, is going to be sustainable and that we will deliver a year as originally announced.
On the point though, of cocoa prices, even though you may have locked in your prices for the year, if we do see prices remain elevated, and most folks in the market seem to think that coco's going to kind of stay where it is right now for the next few months. When does that become an issue for you as you start the plan for twenty twenty five and beyond.
Well, it is already an issue.
The big question, of course, is how to hedge for twenty twenty five. We have a number of different techniques that we use. We monitor the market very carefully, and then we will lock in the right moments. It is expected that coco will come down eventually.
That's probably going to.
Be more around the September October timeframe. Why because that's when the main cocoa crop will be become clearer and people will have an idea what it's going to look like.
There is a mid crop. There's two crops of coco in Africa.
The mid crop looks like it's pretty good, which we are having data around now. That's why you've seen cocoa come down a little bit in recent weeks or days, and so the big moment is September Oclober.
In the meantime, coco will go up and down.
There's not a lot of trading taking place, there's a number of traders exiting, so at those moments we will take the necessary steps for next year.
So Derek, is that been that you're hedged throughout the rest of this year, Yes, but not in.
Twenty twenty five. Yeah, already a part of it.
I can't go into our hedging strategy, of course, but yes, we have already taken some positions for.
Next year based though on the volatility. And I'm assuming it's very complicated to hedgemo prices are so whippy like this, is that why you're increasing your non chocolate offerings, like you need to put more money into that.
Yeah, well, we will need to continue to support chocolate.
As you can imagine, even if we hedge well and so on, where our cocoa prices this year versus last year and where it will be next year.
Versus this year, there will be an increase.
So chocolate crisis will continue to increase at least for the remainder of this year in twenty five, and so we will have to advertise, we will have to promote,
we will have to support our chocolate business. At the same time, seventy percent of our business is not chocolate, and that of course, is an opportunity to offset whatever could potentially happen with our chocolate business, and so yes, pushing that, having new offers, innovative promoting that is going to be quite crucial for us to balance the whole equation.
Well, those are some of the input costs. Let's talk about the consumer side of this, Derek. As you know, there's been a lot of concern that a lot of consumers are scaling back, spending their trading down to slightly cheaper brands. And I know that Mandal's had to do quite a few promotions. It's not just on the chocolate side, but on some of the cookies and biscuits and other things out there as well. Is that promotional and those discounts.
Are those going to continue throughout the rest of the year.
Yeah, Let me talk with the consumer.
If you look at the global consumer, I think the consumer is gradually getting into a better place. We clearly see the consumer confidence in Europe, for instance, going up. In the emerging markets, remarkably, consumer confidence is strong and
off take is strong too. So it's really about the US consumer and the US consumer the ones that are decreasing their frequency in the category is the lower income consumers, they have seen a gradual erosion of their available income, and so they need to be very careful about what they spend on, when do they spend it, at which price level are they going to spend it? And so that is clearly the group of consumers that we need
to pay attention to. And yes, that means we need to have our packet right prices, do the right promotions, advertise our brands and so on, and it's really all about how do we make sure that these consumers stay in our categories, in our brands, and that they do that with the right frequency.
So, yes, that seems so fast.
Yeah, Derek, that seems a lot like we're going to get into a value war. Is that what we're going to wind up getting into here, Well.
We're going to remain clever about that.
We don't want a value war.
Again, just like between chocolate and the rest of our business, seventy five percent of our businesses outside of the US where things are very different, So we.
Don't need to go into a value war in the US.
It's not necessarily about getting into a war about against our competition. It's about the fact that the consumer as soon as you surpass a certain price point, they switch off, and it's going to be about hitting those price points and making sure that that generation of interest for them.
In order to maintain that interest and generate that interest going beyond just price. There's a question of availability, and I know last year you guys had to make some changes with your distribution points to make sure that people who wanted your snacks actually had the ability to get them. Are you still expanding those distribution points out this year?
Yes, we are, and in fact we're doing that in most of our markets.
Even in the US.
Last year we lost some what we call TDPs, that is distribution points, so we're getting those back in these months as we are right now, and at the same time around the world, but mainly in the big emerging markets. The opportunity for us to complement our same store sales and growth that we have with news stores is a huge opportunity for us. So for in just in this first quarter, we've added one hundred thousand news stores globally to our range of our products are being sold.
All right, Derek, we only have time for one more question. I have to ask you the question that I think every food maker, snack maker is being asked, and that is about the rise of weight loss drugs. These GLP one inhibitors that at least for a certain cohort of people out there, are reducing their appetites and theory the amount of money that they're spending on products like yours. Are you seeing an impact?
No, we're not seeing an impact, as you can imagine. We monitor this quite carefully. We have models, we discuss with the drug makers. We follow very carefully the consumers that are on the drugs, how do their habits change?
And for us, knowing the things that we.
Know today and the curve that we see of adoption of the drug, everything is in line with our models, and those models predict that in ten years time it will have an effect of between zero point five to one percent of our volume, which is basically a margin of error for us. So now things can change, But so far we've been monitoring this for the last year. We do it every quarter. Things have not been different than what we have been forecasting.