Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Chris Growe – Stifel Nicolaus
Chris Growe – Stifel Nicolaus
Regarding what I’ll call the volume price balance in the quarter clearly you’re volumes are a little worse then expected but I know also North America had some timing factors that led to that. Is there a way you can tell me what volumes would have been ex the North American factor and how you would see generally Heinz pricing which you put in place then the related volume weakness? Is that the right balance right now if you take out that North American factor?
Art Winkleblack
It is the right balance. As I mentioned, we’re about 6% organic growth year to date. We expect to finish the year at about 6% organic growth. Q4 will be stronger then Q3. Certainly there were some timing factors. As you think about it with North America down we estimate roughly about 4.5 percentage points of the drop in North American volume was related to the timing and the price increases on our write up.
Probably two percentage points or so related to Smart Ones and then a bit on an impact from the pantry de-loading, trade de-stocking, things like that but those are hard to quantify. I think we’re striking the right balance and we feel good about where we’re going to end up for the full year.
Chris Growe – Stifel Nicolaus
On retail de-loading or de-stocking have you seen that in your business in this quarter?
Art Winkleblack
As you look at the chart we showed on total US Grocery sales across all categories you saw in the quarter that grocery unit sales were down about 3.5%, in January they were down about 4.5% so that can speak to one of two things going on. Either a shift to the unmeasured channels which I think there was some of that. Also I do think that there was some pantry de-loading going on by consumers as they just got jolted by the economic situation. Certainly we’re hearing about some of the retail inventory trade de-stocking I think there is some of that but its very hard to quantify that. It was a factor but probably not big.
The other point I’d made on that, as you know, it’s a finite thing because the consumers pantry can only go down to so low a level and retail inventories can only go down to so low a level. I think that’s a temporal thing.
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