Ramon L. Laguarta
Chairman and Chief Executive Officer at PepsiCo
Yeah. Good morning. Dara. Let me take a go, and then maybe Hugh can add some comments. Clearly, obviously, if you look at Q4 and Q1, the elasticities that we're having in the business are better than historical and better than what we had planned. So that's why we're raising our guidance for the year. This is valid both for developed markets and for developing markets. We were very concerned about developing markets, but if you see the numbers in LatAm, in Africa Middle East and APAC, we're seeing good elasticities there as well, so positive.
However, we think the consumer is very early in this process of adjusting to the new inflationary environment. I think there's going to be more consumer new behaviors adapting to the new realities. There are going be channel mixes, changes. There's going to be probably packaging mixes changes and some other decisions. Consumers will stop doing certain things they were doing, going out more, maybe traveling and so on. So we think we're early in the process. I think our categories do normally quite well in inflationary. And what makes us feel confident is that the last few years, we've invested a lot in the brands. And we've invested a lot in some new capabilities around revenue management, also understanding better opportunities for waste reduction in the Company. And we've improved a lot our execution capabilities in the store, with more information and better executional tools.
So I think we feel that we're early in the process. At the same time, we feel rather confident that we can manage through this with a good balance between net revenue management, holistic cost management. And our number 1 objective is to keep the consumers with our brands. And obviously, if we can get new consumers to our brands, even better during this process. So that's how we're approaching this in the short-term. And then, you were asking about long-term. These are the goals that we're setting for our teams. While we've said that, we have very experienced leaders in the market, and this is clearly a battle that you fight market-by- market. And that gives us again, I think, a better position to win versus other companies that are facing the same kind of inflation.