Greetings, welcome to The Hershey Company fourth quarter 2020 question and answer session. I'd now like to turn the call over to your host, Ms. Melissa Poole, Vice President of Investor Relations for The Hershey Company. Thank you. You may begin. Thank you. Good morning, everyone. Thank you for joining us today for The Hershey Company's fourth quarter 2020 earnings Q&A session. I hope everyone has had the chance to read our press release and listen to our pre-recorded management presentation, both of which are available on our website. In addition, we have posted a transcript of the pre-recorded remarks. At the conclusion of today's live Q&A session, we will also post a transcript and audio replay of this call. Please note that during today's Q&A session, we may make forward-looking statements that are subject to various risks and uncertainties. These statements include expectations and assumptions regarding the company's future operations and financial performance, including expectations and assumptions related to the impact of the COVID-19 pandemic. Actual results could differ materially from those projected as a result of the COVID-19 pandemic, as well as other factors. The company undertakes no obligation to update these statements based on subsequent events. A detailed listing of such risks and uncertainties can be found in today's press release and the company's SEC filings. Finally, please note that we may refer to certain non-GAAP financial measures that we believe will provide useful information for investors. The presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Reconciliations to the GAAP results are included in this morning's press release. Joining me today are HERSHEY'S' Chairman and CEO, Michele Buck, and HERSHEY'S' Senior Vice President and CFO, Steve Voskuil. With that, I will turn it over to the operator for the first question. Thank you. Our first question is from Nik Modi with RBC Capital Markets. Please proceed with your question. Yeah, hi. Good morning, everyone. Happy New Year. A couple questions. First on just trade spend and just thinking about, obviously things have been pulled back quite dramatically, in 2020. As we think about 2021, I'm just curious in terms of your discussions with retailers, how you're talking about trade spending. One of the things that we've been looking at is kind of this reset of price sensitivity, given that no promotions have effectively been in the market for the past nine to 10 months. Just wanted to get your thoughts on that. The other question is just if you can give us a kind of roundup of the innovation program that has already been announced, just so we can get a sense for the program in 2021. Thanks. Sure. Relative to trade spending and promotion, we didn't have any meaningful shifts in promotion activity. Our levels for the year were pretty consistent with prior year. We were basically flat. The IRI data will support that. I think there's a little bit of a disconnect in the Nielsen data. We don't really expect any material changes as we go into next year as well. Then as you look at innovation, certainly I think some of the bigger items we have, KIT KAT flavor, which has done exceptionally well for KIT KAT on a global basis. We have the stuffed REESE'S products, and our REESE'S innovation tends to also always be quite strong for us. We have a permissible line of products to really address that benefit of better for you that we are underdeveloped in across our portfolio, and that will include KIT KAT THiNS, which is an addition to what has been an already launch of a successful platform with REESE'S THiNS. We are also relaunching our sugar-free line to zero sugar, really focusing on HERSHEY'S and REESE'S, and launching HERSHEY'S and REESE'S organic products. Those are the highlights for the year. I would say overall, if you looked at our innovation, the level of innovation is about comparable to prior year. Excellent. Thanks, Michele. I'll pass it on. The next question is from the line of Ken Goldman with J.P. Morgan. Please proceed with your question. Hi. Good morning. Thank you. Two for me, if I can. First, I wanted to think or ask about the early holiday shipment that benefited 4Q. Obviously, I think over the 4Q, 1Q 2021 period, it's overall a big benefit to you. I don't think of it as early shipments. I am curious, how do we look at the potential for a difficult comparison in 4Q 2021, right? Should we expect maybe some of these additional orders that you received this year to kind of revert to normal if your competitors are maybe better able to fill demand going forward? Ken, if you think about the Easter that we'll be shipping for in Q4, that 2022 Easter happens to be one of those incredibly long Easters. Typically, we tend to ship a bit more in the Q4 prior to a long Easter. We don't expect that there's going to be a material difference from a year-to-year basis because of that. Thank you. Just for my follow-up, your commentary on cocoa butter costs was, I think, more constructive than some observers maybe expected, which is great. I'm hoping you can expand on that a bit, and maybe this is for Steve. Just how do we think about your all-in COGS inflation this year versus 2020? Sure. Yeah, I'm happy to take that one. Yeah, clearly facing on an all-in basis, facing more inflation this year than last year. As you know, we've got a hedging program which mutes some of the cocoa impact as the LID flows through. We have some longer-term contracts on things like freight and warehousing. That said, neither hedging nor contracting is going to fully cover the exposure that we have in inflation. I think if I take freight as an example, we look at things like demand planning and how important that is, and to the extent our plans deviate from the way volume comes in and having to go to the spot market, for example, where we have less cover. There's some risk there. Net-net, more inflation. We've got a pretty good level of cover, and that's included inside of our guidance. We're not fully covered either on the commodity side or outside of commodities. Great. Thanks so much. Our next question is from the line of Andrew Lazar with Barclays. Please proceed with your questions. Good morning, everybody. Hi, Andrew. Hi. I guess first off, it seems as though HERSHEY'S's building in a fair amount of reinvestment spend for 2021 in both media and other capabilities. Maybe can you give us a sense of the magnitude of this sort of reinvestment and, maybe more importantly, the ability to sort of flex up or down, really depending on how things play out this year? Steve, do you want to talk about that? Happy to take that one as well. Yes. On the media side, and I'll say media and SG&A in general, we're probably looking at something like mid-single digits across those pieces. On the media side, clearly, we want to defend and extend our share gains. We were thoughtful in how we deployed media last year. We made some reductions kind of mid-year. We actually turned it up a little bit towards the end of the year. We want to make sure as we go into this year that we've got enough to defend and extend share. On the SG&A side, we kind of think about it in two buckets. I'll say things like normal corporate expense, travel, will be very tight year-over-year. There, we use zero-based budgeting format, watch headcount, all of that. We talk about the investment side. The investment side, we do have some capabilities that we want to continue to fortify. S/4, the ERP program, drive some OpEx through the SG&A areas. More expansion of our digital capabilities, which came into play quite a bit over the course of last year. Then the analytics and insights that, again, we talked a lot about that last year as well, but continuing to extend our capabilities in those spaces. So, could it flex up or down? I think as we get into the year and we see how the shape of the P&L and we see how the top line delivers, we probably have some latitude and flexibility there. I would say we have pretty firm investment plans, at least in those areas as we start the year. Great. Then just lastly, I'm curious what drove the decision to take a bit of pricing on sort of one portion of the seasonal business. Should we also assume, I would think that this does not necessarily preclude HERSHEY'S from looking at other parts of the seasonal portfolio at some point, if in fact, it deems necessary to do so down the line. Just trying to get a sense of what goes into that sort of decision-making process. Thank you. If we step back and think about seasonal pricing holistically, let me just remind you that we had priced the Halloween portion of season, and Halloween is our biggest season. That had occurred previously. That's about roughly, call it, 10% of our season. We mentioned that with pricing holiday, Valentine and Easter, we're capturing at least another 10 points. There are certain parts of season, some of the everyday items, that got priced along with prior instant consumable pricing action. At this point in time, with this recent pricing action, we really have priced almost all of season in the past year or so here. Great. Thank you very much. The next question is from the line of Robert Moskow with Credit Suisse. Please proceed with your question. Hi, thanks for the question, and congrats on a really strong year. You provided some helpful color on your cocoa buying and cocoa liquor and butter. It sounds like these hedges are protecting you this year. Is there an extensive step-up in 2022? Is it possible that more pricing will be needed when the full effect of the LID comes into play, not just for you, but maybe for the overall industry? Steve, do you want to talk about that? Yeah, happy to. I don't want to get too far ahead and get into 2022. Obviously, I think we've said in the past, our range of hedging could be anywhere from three months to 24 months. That flexes across commodities. I don't want to get too specific in 22. As we know, hedging helps smooth impacts over time. At the end of the day, as the LID flows through and sticks, eventually that's going to come into play into cost. Hedging can smooth that out. To the extent the cocoa price picks that up, eventually, that comes through. That ties into the broader strategy Michele just talked about in pricing and looking at the overall P&L and other things like cocoa sourcing and recipes and things of that nature. Rob, let me just clarify one thing. The LID is fully in play this year, so the hedges don't really impact that at all. Part of what's offsetting that is the hedges we had even possibly prior to the LID going in or taking advantage of dislocations in supply and demand throughout the course of 2020. There were times when the cocoa market had come down for beans and things like that. That's really there. Just to be fully clear, the LID is 100% in the cost base for 2021, but you have some of those hedges with supply and demand imbalances, as well as that cocoa butter dynamic, which is really where the offset is. As you think about 2022, those will be the two variables to kind of keep an eye on of what could cause those costs to change more so than the LID. That's right. Okay. I'll follow up on that. Maybe one follow-up. Can you give us a sense of where you think inventory levels are right now at the trade? Are you still a little bit below normal inventory? Are you at normal? Maybe a little more color on, I think in the prepared remarks, you say you might ship above consumption in the first half and below consumption in the second half. Steve, can you help us a little bit more on that? Yeah, that's exactly right. We ended the year with inventories in the trade a little below historical averages. As we look to the next year, we see that could be a bit of a tailwind in the first half and a headwind perhaps in the back half of the year. Okay. All right. Well, thank you. The next question's from the line of Alexia Howard with Bernstein. Please proceed with your questions. Good morning, everyone. Hello. Hi there. It seems as though the top line particularly came through better than expected versus the guidance that you gave last quarter. I am just wondering, what was favorable versus where you were three months ago, in terms of how the results came through in the fourth quarter, and then I have a follow-up. Sure. Alexia, the most significant portion of our over-delivery in Q4 was seasons. It was probably about two-thirds of our over-delivery, and I would call it somewhat one time in nature, if you think about it. There were two parts to that. One was, we did have retailers requesting early shipments so that they could make sure that they had adequate supply as they came into 2021. Those shipments were incremental. We also had exceptionally strong sell-through, both for Halloween and for holiday. That has kind of a knock-on effect, where we then have less discounting required post the holiday and less cannibalization of the everyday business, so you kind of get back to the everyday business even more quickly. Those investments and the focus that we put, both in terms of media and in store merchandising to drive category growth during the season really paid off for us. That was the single biggest factor that was different than we had anticipated. Great. Then as my follow-up, I just wanted a little bit more color on China. You talked about the change in the go-to-market model there, and I think you're talking about using local distributors to get the product out. Is that instead of going through the retailers, or is it? I just wanted to understand a little bit better exactly what the changes are over there. Also, how big is China today as a percentage of overall sales? Thank you, and I'll pass it on. Really the shift is relying less on a large own retail sales force and instead really focusing more on a master distributor type of arrangement, which is just more efficient and more effective. Clearly, we will give up some level of sales. There will be some slippage in taking that approach, but we think it is the most efficient and effective way for us to get our product to consumers. Relative to the size of China, Steve, do you want to hit that? Yeah. Today it's about 0.6% of company sales. I think in the past, if we go back to early 2020, we probably said it was about 1% of sales. If you think about between then and now, you got two things. Obviously, COVID had a pretty big impact on that business for us in the first half, and again, particularly because we were concentrated in the gifting space, which was hit early last year. The second piece is part of moving to the new model and some of those transition changes. Great. Thank you very much. I'll pass it on. Thank you. Our next question is from the line of Michael Lavery with Piper Sandler. Please proceed with your questions. Good morning. Thank you. Just curious to get a little better sense of some of the sustainability of your share gains, and just would love to understand how much you feel like it's innovation driven, execution driven. Is it the higher marketing spending? It's some amount, it's probably all of those, but how much of the marketing efficiencies you saw last year are you still seeing? Is that an important piece of what's driving some of the share momentum in 2021? How should we just think about all that together? Sure. I think our share gains really are, as you mentioned, a factor of many different components coming together. First of all, we do have incredibly strong brands and very strong operating capabilities and executional capabilities. I think as I look at the year, we've got a broad portfolio, and we are able then to leverage that portfolio and pivot as needed to whatever occasions are resonating most with consumers and families right now. Certainly this past year, there were a lot of those at home occasions, things like s'mores, where people were staying home, being with their family at home in a smaller environment, doing movie nights, products like Twizzlers. Seasons turned out to be incredibly important for consumers during this very difficult time where they wanted to cling to as much normalcy as possible, and the seasons are really about traditions and rituals and connections with family and close friends. As you mentioned, we also made strong investments over the past several years in a lot of capabilities that allowed us to understand consumers, improved our ability to forecast where consumers were going to go, and then really execute well in our supply chain, apply data and analytics to our sales and retail coverage, data and analytics to our media, in ways that we believe some others can't. Early on, we had discussed with all of you that we made that decision to lean in and capture opportunities as much as possible during COVID, take the opportunity to create new occasions for consumers, and really partner with our retailers to make sure we were there for them when they needed us with our retail sales folks in store, stocking shelves, and meeting their product needs when some others couldn't. Clearly, all of those things together were really important for us. As we look at that, I would say, in the past, typically might gain 10, 20 basis points of share in a year. Obviously, this year, 160 basis points of share and 130 on our chocolate business, where we already have a 45% market share. As we look into 2021, we believe that the share growth will continue prior to the lap, which is really basically up to Easter. Post-Easter, we believe that the share will moderate as we lap those 2020 gains, but it's going to be our goal to profitably sustain as much of the share as we can going forward. Okay. Thank you. That's helpful color. Just to follow up on your portfolio shaping, you mentioned in the prepared remarks, interest in better-for-you. Obviously, some of how you're doing that is THiNS and portion sizes that are organic type driven. As far as M&A, how should we think about maybe in broad strokes, what to expect from any bigger push into better-for-you there? Yeah. If you look at our M&A strategy, clearly, it is focused on us capturing incremental snacking occasions. Some of the ways that we look at that is clearly, we do have a pretty sizable business in sweet, indulgent type products. As we look at consumers' broad snacking needs, clearly, salty, savory, and better-for-you are opportunities where our portfolio is underdeveloped. If you look at our past history of acquisition, you would see that many of our acquisitions have been focused in that space. SKINNYPOP is a great example of that. Clearly, that is a focus area for us within our M&A strategy. Okay, great. Thank you very much. The next question comes from the line of David Palmer with Evercore ISI. Please proceed with your question. Thanks, congratulations on the year. Could you comment specifically on how much you think of your share gains this year or this last year, 2020, was because of the supply chain advantages you might have had versus the competition? If it were supply chain, or at least mostly supply chain, you would've expected diminishing share gains through the year, the opposite seemed to have been the case. I have a quick follow-up. Yeah. It is difficult in a year like this past year to precisely pinpoint exact amounts to any one factor just because there was so much going on. Clearly, we know supply chain was a piece of it. Frankly, though, we also believe how we pivoted our portfolio and really shifted spending and shifted focus on our portfolio to the exact right items that consumers were looking for. The role that we were able to focus on with seasons and how much that resonated with consumers during that time. It's difficult to pinpoint. There were opportunities for products on shelves. I guess I would say, I think it's fair to say some of that was probably short-term benefit, and then there are other components that have somewhat of a longer-lasting effect. For example, if you do well in a season in one year and your sell-through is quite strong, typically, the buy that you get from retailers the next year tends to be pretty strong as well. If you're able to gain shelf space and get incremental items on shelves, typically, if they're performing well, you have the opportunity to keep them on a sustained basis. While some of the benefits, I think, are short-term, others will have that enduring effect. Yeah. Thank you. Just a follow-up on some of the comments you made about the advertising spending as a percentage of sales going up to 2021. Clearly, there's been a lot of changes out there in terms of the depth of digital marketing and the perhaps more exact return on investment you can get or calculate from those. I'm wondering at this point, after many years of declining, not just for HERSHEY'S, but for the industry, ad spend has come down as efficiency was more the focus. Do you think that you can get to a point where you can get a flywheel going where you spend as much or maybe even lean in on advertising as a percentage of sales as you get a better sense of the returns on these types of spendings? Thanks. Yeah. Our approach on media spend is this is a category, and we have brands that are incredibly responsive to media. If you look at ROIs on media being driven by scale, profit margin, and lift/responsiveness, we win on all three of those. We are one of the highest spenders on advertising as a% of net sales within the industry, and we really believe in that. At the same time, we challenge ourselves constantly to get more from our money. Over the years, we have transitioned from 100% television advertising probably 12 years ago to we are now down to probably 40%. I think about 60, 65% of our spending is digital. The other factor that kind of plays in addition to being more efficient through digital, which has enabled us to do a lot of very targeted things, such as targeting media based on how sell-through is during a season or targeting zip codes, et cetera. You have the other factor going on, which is the cost of media in the marketplace and inflation and kind of playing through that. If you think about 2020, our spending was down a little bit because we pulled back on some parts of the portfolio that we thought just weren't relevant, like refreshment this year. Part of our increase is restoring some spend levels in some of those areas, and that's part of what's driving up some of our spending as well. Got it. Thank you very much. The next question is from the line of John Baumgartner with Wells Fargo. Please proceed with your questions. Good morning. Thanks for the question. I guess first off, Michele, I wanted to go back to the zero sugar product. Can you share a bit in terms of what's enabling that relaunch? Is there anything there recipe-wise that's different? Then where do you expect it to price relative to the baseline portfolio, and is it fair to think that it's, I guess, at least gross margin neutral relative to the base? Yeah. A lot of the proposition is kind of relaunch rebranding, to think about this as a product that we launched many years ago, more as sugar-free for diabetics, which is what that was about, I don't know, call it 20 years ago probably. Really the bulk of the relaunch is about repositioning sugar-free in a way that is more contemporary. You look at beverages and zero sugar and lots of other categories. I mean, those products are just positioned entirely differently in a much more contemporary way, and that's really our goal. We actually think that the products are pretty good tasting too, and we're getting good response from consumers. It is a lot about the repositioning of them. I'm sorry, what was the latter part of your question? Just in terms of the profit contribution, is it sort of neutral from a gross margin perspective relative to the base? Yeah, it's in the same zip code. That's right. As I say, the repositioning isn't going to be a whole new P&L there. Okay, great. Just follow up in terms of retail assortments. I think part of the strategy has been smarter execution that allows for some muscling out of shelf space at the front end from lower velocity, lower profit categories for retailers. I think since COVID-19, you've seen some pretty sharp declines in distribution points for mints and gum. Has anything changed in that environment, whether it's uptick in hand sanitizers or anything else that maybe forces you to pivot in terms of how you're thinking about shelf gains at the front end in a COVID-19 world? Thank you. I would say mints and gum, clearly there was pressure on mints and gum relative to COVID as a segment. Part of what you might be seeing is how frequently something scans and versus high frequency, which can sometimes impact what distribution actually looks like. Sometimes it's there and not scanning. We haven't had any kind of material changes in our brands and portfolio, broadly. We feel pretty good about our portfolio. It's largely focused on ICE BREAKERS as a key brand, which has strong points of competitive differentiation in the product and does well in the brand. We're feeling pretty good about where we are in distribution overall for us and our brands. Okay. Thanks, Michele. The next question comes from the line of Chris Growe with Stifel. Please proceed with your question. Hi, good morning. I just had two follow-on questions for you, if I could. I'm just curious, Ken asked earlier about the incremental shipments that occurred in the fourth quarter. Is it as simple as looking at your consumption and comparing that to what you reported to understand how much that seasonal shipment pattern changed? Were there other factors that inventory replenishment, that kind of thing, and I think you mentioned that some non-measured channels that may have affected your shipments in the fourth quarter? Yeah. Non-measured was the other piece. Seasons was the biggest component, non-measured channel, which we believe was driven by inventory replenishment. There was also the minor area of there were more shipment days in Q4 versus the prior year, and so that contributed as well. Okay. Thank you. Just another follow-on was in relation to the international division. Do you expect international sales growth this year? You talk about achieving market stability in 2021, I guess I'm curious also on that question, excluding China, so to understand kind of how the other markets are faring given the uniqueness of China. Yes, we do expect modest international sales growth, which ex China would be even higher. As we discussed, we'll be living through some changes, the impact of some of the changes in the model, but we do expect modest growth internationally. Each market is a little bit different. We continue to feel good on a long-term basis about international. It's an important part of our business. It drives incremental. It's an incremental source of growth for us. As I said, each market's a bit different. India, we saw some nice rebound, and a strong finish to the year. While certainly, earlier in the year, India suffered through a lot of COVID related pressure. In Brazil, constant currency sales were good. They were double digits, but FX has been a challenge. Mexico really is the market that's contended or has tended to have continued COVID pressure, where the category sales have remained soft even though that they are improving. A lot of that is driven by two factors. Store declines, traditional trade store closures, and less of those family celebrations where chocolate has traditionally played such an important role. It's a little bit of a tale of multiple cities as we look at each piece around the world, but in totality will lead to modest growth. Okay. Thanks for all the color. The next question is from the line of Jason English with Goldman Sachs. Please proceed with your question. Hey, good morning, folks. Thank you for sliding me in, and congrats on a strong finish to the year. A couple of quick follow-on questions. We've honestly already covered a lot of ground. First, in response to one question, I forget who asked it, in terms of glide path for market share. You mentioned strength up to the period would be until that COVID, and then a fade from there. Just for clarification, are you talking about a fade in gains, or do you expect your market share to flip into net losses as you give back some of the outsized gains from this past year? I would say our goal, we expect we will continue to gain share through the lap, and then once the lap hits, we are going to be focused relentlessly on trying to profitably sustain as much of the share gain that we can. Obviously, it's hard to predict what will happen, what will be going on in the marketplace competitively, et cetera. Category mix alone could pressure our share a little bit, as gum will likely rebound versus '20, and we are under-developed in gum, so that mix shift alone puts a little bit of pressure. I guess that's probably the only specific thing I'd call out. We will be executing, and it's one of the reasons that, as Steve mentioned earlier, that we are really making sure we have significant investment this year so that we invest into trying to maintain those share gains. That's helpful. Thanks. One more related follow-on. I think in response to Mr. Modi's question, you mentioned that you held your trade spend flat for the year. It's our understanding that some of your competitors did not do the same, that they actually pulled back on some trade and pulled back on some merchandising activity, suggesting that you likely gained share of trade spend, share of merchandising, share of activity in the marketplace. A, is that understanding well-placed or misplaced? If it is sort of the reality of what happened last year, any indication that some of those folks who pulled back may be leaning back in? Yeah. It is a fair statement that we won some competitive merchandising, absolutely, as we had good product to deliver for retailers and for consumers. We really won share in every aspect of the business, velocity, promotion, shelf space, seasons. Pretty much across the board, our share gains were pretty pervasive. Yeah. Well done. Thanks a lot. I'll pass it on. Thank you. The next question is coming from the line of Bryan Spillane with Bank of America. Please proceed with your question. Hey, good morning, everyone. I guess just two quick ones on capital allocation. First, share repurchases. I think in the prepared remarks, you talked about 2021 kind of being a more normal year. Are share repurchases or reducing the share count part of the build to the earnings growth for 2021? Well, maybe that's it. Do share repurchases create any of the earnings leverage? Yeah, they do. Again, more going back to a historic level, recent history. Last year was unusual on capital allocation, probably on a number of fronts, just being cautious on share repurchase, among other areas. As we look to 2021 and plan this year, we're expecting share repurchase to revert to a more normal level. Okay. Again, our goal is not to warehouse cash at the end of the day. We want to deploy it for profitable growth, and share repurchase becomes one lever in creating some good constructive tension in that equation. We'll warehouse some cash for you in our living room if you'd like. To the other, just capital spending. Again, I think we're going to be at $550 million for this year. Maybe can you remind us, I know it's been elevated because you've been investing in some capabilities and some manufacturing capacity, just kind of where we are in this CapEx cycle. Is $550 kind of a good number to run out going forward, or is that still kind of reflective of a more elevated capital spending? Yeah. It's more elevated. The answer is somewhere in between. You remember last year, we started targeting $450-$500 for CapEx. Again, one of the areas we were a little bit cautious on was projects last year, and with COVID and pressure on resources, we had to reprioritize some things last year. The net effect of that was a little bit less CapEx in 2020, and that CapEx pushing into 2021. For the main project there, two of the biggest, ERP being one and work on supply chain, the total project cost didn't change, it shifted more into 2021 and therefore you can imagine some shifted into 2022 as well. This year is unusually high. I think we're going to see elevated CapEx sort of above our long-term algorithm, probably through 2023, 2024. We're going to talk a little bit more about that in CAGNY in a few weeks. We'll give some more color on capital and where it's headed, but I would expect an elevated level for the next couple of years before we get back down to what's inside of our algorithm. Okay. Just last one tied into capital allocation. Maybe a bit of a follow-on to the question that was asked earlier about M&A. With interest rates being so low, it sort of changes the deal dynamics a little bit, right? We've seen a couple of acquisitions, either rumored or on the tape in the last few months that are very accretive because we're borrowing at under 2%. In some cases, it's under one. With that kind of backdrop, does that at all impact maybe the appetite both in terms of just doing deals, but also size? We've got this unusual opportunity. There's plenty of liquidity. Does that at all kind of change maybe the way you're thinking about M&A today versus might've been a year or two ago in a different environment? Sure. I'll start and Michele can add on. I think from an appetite standpoint, we have the appetite, and the second piece, we have a great balance sheet. We generate a lot of cash. We've got flexibility. We like where we're at, and so we're poised for the environment that we're in. I think Michele did a great job earlier kind of pointing to where those hunting grounds are, and we're aware of the external environment and where interest rates are and what may or may not be hitting the market, and we want to be able to participate in that growth just like everybody else. Anything to add to that, Michele? Nope. I think well said. All right. Great. Thanks, everyone. The next question is coming from the line of Ken Zaslow with Bank of Montreal. Please proceed with your questions. Hey, good morning, everyone. Good morning. Morning. Hello? Yeah, good morning. Can you talk about your pipeline for packaging innovation, how that should impact pricing, not just in 2021 but also 2022, and how deep it is and just the thought process on packaging innovation and the pricing that is assigned to that? Yeah. When we think about packaging innovation, we think about pack types which are designed to meet specific consumer occasions. For me, I would encompass it as part of price pack architecture, which is as we look to capture incremental consumer occasions, how do we have certain packs that enable that so that there's a value to the consumer that our products now better meet an occasion or a need. If you go back and look at, we went from lay-down to stand-up bags. Not only was it easier to shop on shelf, but it was also, once it got into the home in the pantry, much easier to use, much easier to see, less messy, those types of things. We will look at pack configurations in terms of size, like is there a smaller size that is used for certain occasions or certain demographics versus a larger pack? We'll do that on a brand-by-brand basis. I would say that our pipeline is largely kind of focused on what we would say price pack architecture. As such, what we try and do from a strategic perspective is make sure that we are at least margin neutral. That would be our goal. If we can get price realization, obviously that's the focus. Short of that, we want to be margin neutral. Great. I appreciate it. Thank you very much. The next question is from the line of Rob Dickerson with Jefferies. Please proceed with your questions. Great. Thanks so much. Just starting to have some great questions, a lot's been asked. I guess in the prepared remarks, you had mentioned the bar business, I guess naming ONE as the brand, and you had stated that it seems like some maybe retailers shifted space to protein drinks and powders, right, through just to meet the COVID demand shift. Also saying kind of given those discussions with retailers, the expectation is that kind of that bar business would come back. Just asking kind of broadly speaking, as you look at that bar category, relative to protein shake powders, are those conversations with retailers fairly pointed such that they're suggesting, "Oh, this is what we're doing for this period of time, but as we get through, let's say Q2 or what have you, we would look to reallocate back to certain brands and certain bars"? Is this kind of more of a, "Well, yeah, it's going to probably come back. Let's kind of wait and see how everything develops"? That's kind of a question, I guess, for bars, but then also more holistically for the entire store. Yeah. I think retailers are always looking to try and optimize their space according to what the current consumer demand is. Hey, nobody knows what the curve of the pandemic is going to look like, so I can't tell you a specific time when it will shift, and obviously it will shift at different times with different retailers, too, based on who their consumers are. I would say it's less that we have a definitive timeline, and we are focused on one, on how we make sure that we've got the right support behind the brand and the right innovation relative to minis, which we think is a big idea, and also plant-based, which are on trend, so that as the category does come back, we are well positioned to capture that. Okay, fair enough. I am fairly impressed with kind of all the different areas that you're focused on in 2021, right, and kind of on the go forward, right? You're talking about a little bit more sugar-free potentially, right? Obviously there's an ESG angle, you've got some plant-based innovation, maybe more on the bar side. You've mentioned before touching potentially increasingly into baked snacks. I guess, Michele, the question is, as you step back, right, it seems like HERSHEY'S continues to evolve, right, into more of a broader snacking business, obviously outside of the core chocolate and confection. As we get through 2021 and we think about 2022, very simplistically, would you argue that the point here is to kind of get HERSHEY'S bigger in the store in a bunch of different areas, such that you are increasing overall distribution points on the go forward for broader HERSHEY'S? Do you feel like as you step back to the whole company, yes, obviously you're looking for increased distribution, but maybe there's a little bit of infill on a SKU, maybe on sugar-free, and maybe you take one out in Kisses. I'm just trying to right size kind of that increased distribution opportunity given all the different spaces that you're focused on. Thanks. That's it. I guess I would say first and foremost, our number one priority is always our core confection business because it is the mothership. It's our profit engine. We have tremendous strength. It's growing. It's in consumer demand. We always start there. With that as the foundation, we really look across all the capabilities that we have as a company relative to consumer insights, to taste science, to ubiquitous distribution, all of that, and say, "How can we leverage that to capture more and more incremental consumer occasions?" I think that's where you see us with a targeted focus on, okay, something like Better For You should capture an incremental occasion, an incremental consumer. I would think about that as kind of more incremental. If I look at flavor variety on the core, to me, that's a little bit more where we rotate in, we rotate out. We have one slot for that, but it's not a permanent incremental. Some of our expansion into other categories, i.e. Better For You and savory, yeah, I look at those as gaining incremental distribution points more broadly in the store by meeting incremental consumer occasions. I think incremental occasion's important for us, leveraging the capabilities, and then importantly, making sure that we do a very measured expansion. We want to focus on confection, add an area, and then really play to win there, and make sure we don't spread ourselves too thin. Similarly to what I would say we do in international, where we have a focused select set of markets that we've prioritized that we really want to play to win as opposed to spreading ourselves too thin. All right, great. Thanks so much. Thank you. At this time, I'll turn the floor back to Melissa Poole for closing remarks. Thank you so much for joining us this morning. I will be available throughout the day to answer any follow-up questions you may have. Thank you. This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.