PRODUCTIVITY IN ALL WE DO

The strategic need for investment to strengthen the long-term health and competitiveness of our brands, the short-term need to manage through significant cost increases, and the ongoing need to drive balanced top- and bottom-line growth, including margin expansion, underscore the importance of productivity.

We have developed a strong productivity muscle over the last decade, completing two $10 billion savings programs. Productivity is now fully embedded in our operating model and is embraced in every part of our operation.

We are getting more productive, for example, with our marketing spending. More efficient and effective communication enables us to reach target consumers when and where they are most receptive to our advertising. This leads to higher quality engagement, and when orchestrated across media platforms, avoids excessive advertising frequency that is, at best, wasteful spending and, at worst, an annoyance. As we continue to integrate data and analytics and artificial intelligence, brand teams will be working to make our marketing investments even more efficient and effective to reach more consumers with improved demand creation at equal or lower cost.

There are also significant opportunities in cost of goods sold. Real-time formula flexibility is helping improve superiority and reduce cost. We are also able to reduce transportation costs through real-time optimization of truck loads, dynamic routing and sourcing optimization. We are embracing SKU rationalization to drive both top- and bottom-line growth.

We remain fully committed to productivity as a core driver of balanced top- and bottom-line growth and strong cash generation. We cannot let up here. Productivity will remain a significant part of our work, especially now.