Good morning. My name is Lisa, and I will be your conference operator today. At this time, I would like to welcome everyone to The Hershey Company Third Quarter 2012 Results Conference Call. [Operator Instructions] Thank you. I would now like to turn the call over to Mr. Mark Pogharian. Please go ahead, sir.

Thank you, Lisa. Good morning, ladies and gentlemen. Welcome to The Hershey Company Third Quarter 2012 Conference Call. J.P. Bilbrey, President and CEO; Bert Alfonso, Senior Vice President and CFO; and I will represent Hershey on this morning's call. We also welcome those of you listening via the webcast. Let me remind everyone listening that today's conference call may contain statements which are forward-looking. These statements are based on current expectations, which are subject to risk and uncertainty. Actual results may vary materially from those contained in the forward-looking statements because of factors such as those listed in this morning's press release and in our 10-K for 2011 filed with the SEC. If you have not seen the press release, a copy is posted on our corporate website in the Investor Relations section. Included in the press release is a consolidated balance sheet and a summary of consolidated statements of income prepared in accordance with GAAP. Within the Notes section of the press release, we have provided adjusted pro forma reconciliations of select income statement line items quantitatively reconciled to GAAP. As we've said within the Note, the company uses these non-GAAP measures as key metrics for evaluating performance internally. These non-GAAP measures are not intended to replace the presentation of financial results in accordance with GAAP. Rather, the company believes the presentation of earnings, excluding certain items, provides additional information to investors to facilitate the comparison of past and present operations. We will discuss 2012 third quarter results excluding net pretax charges of $34.9 million, or $0.10 per share diluted, which are primarily related to the Project Next Century program. Our discussion of any future projections will also exclude the impact of these net charges, non-service-related pension expense and acquisition and integration costs related to the Brookside Foods. With that out of the way, let me turn the call over to J.P. Bilbrey.

Thanks, Mark. I want to thank all of you on the phone and webcast for joining us today. I'm pleased with Hershey's third quarter results. As we anticipated, Hershey's U.S. marketplace performance accelerated in the third quarter. Hershey chocolate, non-chocolate, mint and gum retail takeaway was up in the measured channel universe of xAOC+C-stores, resulting in market share gains across all segments. Retail and core brand net sales volume trends continued to sequentially improve. This growth is driven by the faster growing channels like convenience and dollar, which are pacing ahead of the more traditional classes of trade. Before we get into the details, I'd like to give you an update on a couple of announcements we've had since our last conference call. On September 28, we acquired the remaining 49% stake in the Hershey Godrej joint venture. We're very excited about the opportunities that exist in India. The Mahalacto and Nutrine candy brands and the Jumpin juice and soy-based beverage brands are good businesses and in growing categories. Similar to what we've done in other international markets, we'll make disciplined brand building investments and improve upon selling capabilities and expand distribution. We'll focus on expanding margins via aggressive cost control and margin enhancing innovation while also evaluating the global Hershey portfolio to determine the best products for the India consumer and marketplace. We've learned a lot over the last 5 years and have gained valuable consumer insights that will serve us well. We believe we have the right brands, products and people to give us the ability to grow in the marketplace as we fully control our future. Moving on to sustainable cocoa. Earlier this year, we announced that Hershey's Bliss chocolates will be Rainforest Alliance certified and available to consumers by year-end. Bliss joined Hershey's Dagoba organic chocolate,…

Thanks, J.P., and good morning, everyone. Hershey posted another quarter of quality results with consolidated net sales of $1.75 billion, up 7.5% versus the prior year, generating adjusted earnings per share diluted of $0.87. The 7.5% net sales gain was driven primarily by the continued growth of our core brands and new products. Net price realization, primarily in the U.S., was a 3.9-point benefit, in line with our estimates. And volume, excluding a 2.3-point benefit from Brookside, was up 2.1 points. The organic volume gain was driven by new products. Core brand volume trends have improved sequentially throughout the year and were slightly up in the third quarter. In addition, foreign currency exchange rates were a 0.8-point headwind. Adjusted gross margin in Q3 increased 70 basis points. Net price realization, supply chain efficiencies and productivity improvements were partially offset by increased commodity costs. Versus last year, input costs were about $30 million higher in the quarter and relatively in line with our expectations. We have good visibility for our cost structure for the remainder of the year, and we continue to expect higher input costs in Q4 versus last year. However, our current inflation outlook for the full year is slightly better than our previous forecast. Combined with our cost savings and productivity programs, as well as year-to-date price realization, we now expect adjusted gross margin to increase 120 to 140 basis points for the full year versus our previous estimate of 100 to 120 basis points. In the third quarter, adjusted earnings before interest and taxes or adjusted EBIT, increased about 6%. This resulted in an adjusted EBIT margin of 19.3%, a 30 basis point decline versus last year due to planned investments in brand building and go-to-market capabilities. Specifically, advertising expense increased about 12% versus the year ago…

[Operator Instructions] Your first question comes from the line of Jonathan Feeney with Janney Capital Market.

I wanted to dig in a little bit on the thought about 2013, your long term guidance. Because when I look at -- and I'm kind of a broken record on this, but when I look at the trajectory of what costs have done and how strong the pricing has been and now with volume working a little bit better and obviously raising for Q4. Can you tell me, are there any explicit factors I'm missing as to why you wouldn't see more gross margin expansion in 2013? Because when you do the arithmetic, you get to a little bit more aggressive gross profit growth trajectory.

Yes, Jonathan, this is Bert. I -- we haven't really given a range on gross margin expansion, and we typically wouldn't this time of year. We are signaling that we certainly expect gross margin expansion. And frankly, we think it'll be at a pretty good level. But I think we're going to maintain what we typically do is to give a lot more color around that and provide a range in January. But right now, I think what we're trying to provide in terms of some information or some color is the fact that it's not an inflationary year, which the last 2 years have been, and that we still have strong productivity coming through.

Great. And if I could just ask 1 follow-up. A competitive landscape, gaining some significant share here, does that maybe give you caution going into 2013? I mean, picking up 1.1 points a share this quarter is excellent. I mean, are you going to be able to sustain that? And how are you feeling in the marketplace in Halloween competitively?

Well, first of all, we feel good about Halloween. The programming that we would've expected to be out is all materialized. The early sell-through while it's not the whole season, we certainly are seeing sell-through. And as I said in my comments, we expect to grow share in Halloween once again. So from a Halloween standpoint, we feel as if we're very much on track. We've also had good results from our innovation that we've had. Most of ours has been in the second half of the year. You know that from a competitive standpoint, there was a lot of innovation early in the first quarter. And then we get off to the start of the year with good innovation as well. So we'll have Brookside, which we'll be expanding in the U.S. and we're very excited about that. As you know, we've had the manufacturing expansion project that doubles our capacity on Brookside as we go into 2013. And then we feel good about our overall new product pipeline. So it's always our goal to grow share, and we also feel -- the one thing I would just end on is we also feel good about the progress we're making in our conversion. As we said, we hope to be back to about 100% on volume growth somewhere around the first of the year, and all indications with sequential improvement each quarter would suggest that's going to happen.

Your next question comes from the line of Alexia Howard with Sanford Bernstein. Alexia Howard - Sanford C. Bernstein & Co., LLC., Research Division: As I look out to 2013, you mentioned the last couple of years were inflationary years, and we've seen the price increase go through in 2011 and 2012. For next year, I'm assuming the algorithm will change with less price growth and more volume growth. Could you maybe just talk about, of the 5% to 7% top line growth, roughly how much do you expect to mean maybe price and mix effects by trading consumers up to higher price products versus volume?

Well, I don't think we'll comment on exactly what we think the split will be. But we would hope that as we get into 2013, volume growth, of course, will be an important piece of the overall growth. And we continue to be on track for that to happen. We -- as Bert mentioned, as you think about gross margin, and we're not giving specific guidance, that we do believe if you look at the overall commodity complex with the exception of dairy, which there is no futures market on, we have good visibility and we would expect while there will be volatility, it will move more in a more modest range and probably more sideways than it has for a while. But we continue to believe that we're still in a longer-term bull market, but you might see a bit of moderation here for a while. Alexia Howard - Sanford C. Bernstein & Co., LLC., Research Division: And then just a quick follow-up. On the commodity cost outlook for 2013, how locked in are you for next year at this point? Obviously, I think you have longer-term forward looks on cocoa, but the dairy market is pretty volatile here. Can you just give us a sense for how confident you are that the other numbers will be pretty flat to down?

Yes. Alexia, we don't provide specific hedging figures for competitive reasons, and obviously many of our competitors don't provide any information whatsoever. What I would say is, our K says we're normally in that 3- to 24-month range. The fact that we're already signaling that we're fairly confident around gross margin expansion is that we have reasonable coverage within the amount of information that we're able to provide. And you've seen that the commodities have seemed to level out a little bit. Cocoa is a little higher than it was recently, [indiscernible] sugar spot prices. And the spot price is obviously not indicative of how you might project this. But peanuts are a little better, sugar is a little better, dairy is the one that's going the other way based on higher corn. But overall, I would say even energy, the basket itself is a bit more stable to down. And we hope to -- we're expecting to benefit from that.

Your next question comes from the line of David Palmer with UBS.

All right. A couple of questions. In the measure channel data, it looks like extensions, Rolo Minis; Simple Pleasures, of which is not an extension but a brand; and then Jolly Ranchers varieties, those are doing great, something like a few points of growth in total from those. Air Delights doesn't seem to be lapping as well, which surprised me. Could you comment on the sources of innovation lift? Obviously, you can see more of your business than we can.

Well, I think your comments are correct, in that we feel really good about the -- those most recent innovations. I think with regard to Air Delight, we're still trying to work through our communication messages. We think the product's a terrific product. It's a form that does well in a number of different countries around the world. We do well with it in Brazil. And so, we're really working through what we think the messaging is. So I wouldn't say that it's something that we're not committed to because we're very committed to getting it figured out, but I think it's also different enough and new enough that it's going to continue to take some work for us. And -- so that would be my comment there. We feel really good about the emphasis we put on the breath freshener and non-chocolate business we have this year. As you mentioned, in non-chocolate, we're up about 9.2% versus a category up 3.5% in the most recent 12 weeks. And in breath fresher, about 20%, with the category up about 13% across xAOC. So those have worked really hard for us. And then we're very excited about what we have coming in 2013. So again, we've talked about our philosophy on innovation, and we want to make sure that we stick with these things, that we advertise in the second year and really look at them as long-term as possible. Churn is not really good for the category. And if we can have a stickier innovation, it's really better for everybody. And we feel good about the things that we've been doing over the last several years and certainly this most recent freshman class of innovation.

And a second question on Brookside in particular. It looks like ACV is 37% in measure channels and it was representing about 70 basis points of your sales in the last 12 weeks. I'm trying to think about how you are thinking about the potential lift of this product. It seems that it would be able to be doubled at least in distribution. And then maybe an advertising push or marketing push might get you even more. So 1 to 2 points of lift from that product. I mean, how are you thinking about what that can do for you in '13?

Well, I really like the way you're thinking about it. And just to give you a sense of our own confidence competence as I said in my earlier comment, we have doubled our manufacturing capacity for the brand. We've -- it's been exceeding our expectations so far. And so we have, outside of Costco, really the U.S. expansion coming in 2013. And then, we're hopeful that this brand can play even broader than that, although we're taking it one step at a time, but we're very positive about the contribution Brookside will make.

Your next question comes from the line of Ken Goldman with JP Morgan. Kenneth Goldman - JP Morgan Chase & Co, Research Division: Can you talk a little bit more detail about how you performed in C-stores in some states like California where retail gasoline costs were higher? I'm just curious to what degree you were hurt by that? Or maybe you even picked up some velocity by consumers filling up more often? Just curious how that went.

Well, I'm not sure that I can add a lot of value on California specific. If you look at total CMG, the category in the 12 weeks was up about 4.3%. Hershey was up about 8.9%. We gained 1.3 share points in that time frame. And so we continue to hear very positive things from the C-store channel as we talk to operators. And so I would just say, Ken, that these guys are positive. I would anticipate that if gasoline -- we have pretty consistently said that we don't believe gasoline prices in our category have really negatively impacted how we've been doing. Now as we see that gas -- the price of oil is moderating and gasoline may come down a quarter or more. If we've been wrong about that all along, then I guess, we should get a nice tailwind from that. But -- so those would be my only real comments. But I feel good about the way we continue to perform. And more importantly, that channel feels good about the way they are performing.

Yes, Ken, this is Mark. The only other thing I would add, J.P. mentioned that C-store CMG takeaway was up 4.3%, and that's with gum being a mid-single digit tailwind for the category. So that means chocolate, non-chocolate and mints in C-stores grew greater than the historical growth rate of 3% to 4%. Kenneth Goldman - JP Morgan Chase & Co, Research Division: And then one follow-up regarding gum there, Mark. Are you guys seeing anything -- there's been some innovation in the category, there's been some more focus from the branded leaders on value items. I realize gum isn't a huge deal for you, obviously, you'd rather it do better than worse. But are you seeing any signs of life in the category? Anything from the leaders that is giving you some hope there? Or is it just too early to tell?

Yes, Ken. I don't think that we see anything different than the comments that probably all of us have batted around. It's a category that innovation is important. When there's innovation, there tends to be advertising. And those are the basic drivers within the category. And so if we begin to see something different there, then the expectation may be different.

Your next question comes from the line of Matthew Granger with Morgan Stanley.

Just 2 questions on Asia. First, just wanted to get your latest thoughts on capacity utilization levels in the region and in China specifically, and how you might choose to address your capacity needs, whether you think that something you anticipate reaching a decision on during the next few quarters. And just to revisit the JV in India and your decision to buy out your partner's interest there. In the past, you talked about having some concerns about the quality of the brands and the pricing power that they had in the market. And I guess, just in the context of those prior comments, I just wanted to get your thoughts again on the benefits of bringing those brands into your overall portfolio.

Well, let me address Asia first. So we've made a long-term commitment to our Asia business, more importantly, China. The joint venture project that we have with Lotte and our factory outside of Shanghai is essentially fully utilized. And we continue to look at our Asia footprint for manufacturing. We were at a point where we need greater capacity to meet the needs of our domestic business. So where that plant has supplied product to some of the other Asian markets in addition to China, we'll probably think of that more as a China domestic plant, and then look at how we expand manufacturing under some combination of a new footprint. And there's several options that we're looking at there that could include additional manufacturing in China for China or in Southeast Asia. And as those things become clear to us, certainly we'll communicate what that is. In our India business, first of all, we simply feel good about being in control of our own destiny there. And we've commented on the background of that some. We have a portfolio there that doesn't really have any of the Hershey brands, with the exception of Hershey's Syrup, which does very, very well in the Indian market. And so we're in a couple of states in the south. We have a very basic sugar confectionery portfolio, with the exception of a couple of very interesting beverage brands, which we're optimistic about growing. And so what we're really focused on is building out our sales capability to broaden our footprint, bring what we feel are stronger brands -- Mahalacto is a good brand. And we believe that we can communicate some brand benefits behind that. And so, really distribution penetration in a broader geography, increasing our sales capability and then communicating with consumers around those brands, which we feel bring benefits, and then expanding the Hershey portfolio as appropriate in those markets is really what our plan is. I think India is a country for us where it's more of a journey than an event. And so that's really how we think about it.

Your next question comes from the line of Chris Growe with Stifel Nicolas. Daniel Stephen - Stifel, Nicolaus & Co., Inc., Research Division: This is Dan in for Chris. This is actually Dan for Chris. We were curious, do you expect heavy SG&A spending again next year? I mean, should we think about it at a rate much faster than sales growth?

Yes. I think when we were last talking about that from a future perspective was back in June. And given our plans, particularly outside of the U.S., although to some degree in the U.S. as well, we think of SG&A as an investment area over the next couple of years, which would be a bit higher than what we're projecting for sales growth in that 5 to 7 range. The reason for that really are more in terms of sales capability and sales force expansion in markets such as China, continuing to do our market research and putting infrastructure on the ground as we expand the 5 global brands into more of the countries where we operate. So could be somewhat comparable to what we're seeing this year in terms of an annual rate. So I would say, yes, slightly above what we think of as sales growth. Let's say, in the next year or 2 -- when you look at the back half, I guess, of the 5-year plan that we talked about in June, we would expect about that point to be getting leverage out of SG&A. Daniel Stephen - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And then just a quick follow-up, is there anything unique in the phasing of the SG&A investment? I mean, is it going to support -- is it going to be lumpy at all? Or is it going to relatively even through the year?

This year, it was a bit lumpy, I would say, in terms of year-on-year growth, right? We started in the first quarter, it was single-digit, and then I think we were at about 10% to 12% for the last couple of quarters. And we expect it to be somewhere in that range in the fourth quarter. So I think you're going to see it be mostly even but there is some lumpiness, and you saw that this year in the first quarter.

Your next question comes from the line of Robert Moskow with Crédit Suisse. Robert Moskow - Crédit Suisse AG, Research Division: I wanted to know a little more specifics on India and China. Can you tell me specifically what you're investing in for 2013 for China? And what kind of a step up could that deliver in terms of sales? Or do we really have to wait until '14 before the platform gets significantly bigger? And then secondly, as you talk to your U.S. retailers about global brands and your commitment behind these global brands, has that helped you gain distribution for hard candy items that may not have been emphasized as big as before?

Well, let me talk about China first, and then we'll talk a bit about the global brands and how that's worked for us. We're still very much in an invest mode in China on several fronts. So you may recall, in June, we talked about expanding our 5 global brands. Certainly in China, the expansion of our portfolio is very important. KISSES is a primary footprint -- or really a primary portfolio brand for us today, and so we'll be expanding that portfolio beginning in 2013. We're also increasing our sales capability and coverage as we put more feed on the street, and we're increasing our advertising across more cities than we've had before. So those are 3 pretty big fundamental investments that we'll continue to make in China. And then I think if you come back to one of Bert's comments earlier, we will -- if you look at our current 5-year plan and you start to look at the real leverage on these investments, it's really going to be more in the second half of that 5-year plan, although we expect strong net sales performance out of that kind of portfolio expansion. So while I don't want to project a specific number of category growth obviously across those key markets placed into that, but this is a market we want to win in and really grow our business, and so we're very dedicated to that. In terms of global brands, the one example that I would give you is, Walmart has a program in some of their different markets where they put in an American type portfolio in the stores. So brands like Reese's in Japan have benefited from that, part of our portfolio has benefited from that in Europe. And you see other retailers which have similar types of programs where they have U.S. sections and U.S. brands. Costco is certainly another brand that does that in some of their Asian markets as well. So where we have customers that -- retailers that we work well with here and they have some of those specific kinds of programs, our brands tend to benefit from that.

Your next question comes from the line of Jason English with Goldman Sachs.

I wanted to ask really quickly on advertising. You're on track this year to have grown advertising investment at nearly a 30% CAGR since 2006. This comes at a time when many staples companies are talking about opportunities to find efficiency savings to this line. So first, can you talk about the returns you're getting out of this investment? And second, do you believe you're close to a point where we could start to get some margin leverage on advertising spend going forward?

Well, first of all, let me just talk about that decision philosophically is, we believe that it's been very good for the category and certainly a key driver of why our category has maybe performed differently than some other areas in the store because it's supported [indiscernible] with strong in-store merchandising, it brings people into the stores. So we feel good about the philosophy that we've had about being a brand building company and being able to invest in those brands. And I also remember, in that number, we're expanding advertising across a broader part of our portfolio and in markets that we've never made advertising investments before. So there's a lot of different parts to that. The other comment I would make is, we are very rigorous about measuring the ROI of our advertising. We have sophisticated models that help us understand lift and certainly isolate that. We wouldn't continue to be advertising the way we are if we didn't think we were getting a good return on investment. And then because of the level of investment we're making in the category, we're actually getting a higher GRP delivery versus the actual dollars that we're investing. So there's also efficiencies beyond the dollars that you see. Our actual GR delivery rates are higher actually even than the spend, so that's another way to think about the leverage that we're getting off of that advertising.

I appreciate the philosophy. I appreciate it quite a bit. It's a healthy sort of investment. But it must come with some degree of diminishing returns as you continue to ramp it. Is there a point where you say, "Enough is enough. We've kind of reached a steady-state." And are you close to that point?

Well on some brands -- so think of it as an S-curve and there's a point in that S-curve by which you move from growth levels to maintenance levels and then a point where the variable spend wouldn't be very efficient. So we're just continuously reviewing what is the right point along that curve. And then also remember that we've introduced innovation around our core brand -- innovation, a lot of that has been around core brand. So you also get a halo effect, you get a benefficient -- an efficient use of being able to move that advertising from purely core into some of the innovation and also try to tweak the investment that way. There's a point by which the advertising doesn't have an effective return. We certainly don't feel as though that we've reached that point. And I'll reassure you that we're quite rigorous in making sure that we don't waste a single dollar.

Our next question comes from the line of Ken Zaslow with Bank of Montréal.

I may have missed it, but can you just talk about why your SMA was actually lower than your expectations? Was it -- did it have to do with any investments internationally? And have you -- you have your international investments in lower or higher than your initial expectations? Just if you could just address those 2 issues.

Yes. Ken, I think overall, it was a bit of timing between the quarters, and so we're focused on completing some of that work in the fourth quarter. And it's a mix of U.S. and international. So it's not really more pronounced in one or the other. There continues to be sales force expansion, and that is primarily an international focus. But market research around product launches and some of the work that we're doing around advertising new brands, those are the primary areas. And so while we thought we'd be a bit higher in the third quarter, we think some of that sort of levels off in the fourth. So it's not really, to be honest, focused in 1 market versus another, other than, again, with that caveat of sales force expansions primarily outside of the U.S.

So just to be clear, your rate of investment internationally has not changed in any way? And there's nothing that gives you any evidence that you should be slowing or increasing or -- your commitment to international has not waned at all.

No, I would say that -- I actually said that while the rate itself of investments are higher just given the different base outside of the U.S., the planned investments and how we're thinking about it in terms of completing this year and working on the things that will help us to grow next year aren't really different.

Our next question comes from the line of Andrew Lazar with Barclays.

I know that M&A particularly on the international side is a high priority for use of cash. It has been for a while. And I know your midterm international goals in terms of the sales that you're looking for would certainly require some activity in that level or in the M&A side over the next couple of years. So I'm just curious, any change there that you're seeing in either the pipeline that's out there? Or availability of potential assets? Or changes in multiples, that change of thinking there? Really just trying to get a sense if anything's changed there since we haven't talked much about that today.

Yes. Andrew, I don't know that there's been a significant change. We continue to have discussions around M&A opportunities in the areas that we've discussed in the past, local brand, good sales force capability and distribution and those types of things. I would say that the multiples are not that different. They continue to be higher in Asia than you would find in other markets for the obvious reasons, expectations around higher growth rates. We're -- continue to focus on the use of cash in the M&A space. We don't include it in the model. And then we've kind of -- I guess, given some feel for the size of it in the -- on our aspiration of a $10 billion number that we put out there. But I would say it's steady as she goes. We're hopeful that we can make M&A part of our value creating formula, and that's the way we think about it.

And then just a quick follow-up. Just maybe sort of an update on just how the sort of the joint venture, if you will, that you've got with Ferrero around some of the distribution and warehousing and things. And just how has that played out? Has it delivered on kind of what your sort of hopes had been? And to the extent that there's some other opportunity along those lines, would this I guess experience suggest that there's more that can be done, whether with that player or other ones down the line?

Yes, I would say that it's progressing well. We talked about the development of a distribution center in Canada. We're executing against -- both parties are pleased with the progress we've made in terms of carrying the product together, and we're realizing the savings that we thought we would. It's logistics-based. I agree with you that those are the types of opportunities that we think are available to us in other markets. As you said, whether it's with Ferrero or someone else, these sort of pre-competitive collaborative arrangements that save money for both parties, I think we'll -- you'll see more of that in the future.

Your next question comes from the line of David Driscoll with Citi Research.

I'd like to start off with the -- going back to Brookside a little bit. Can you -- and I think you mentioned this earlier but I missed it, the timing of the new lines that you're adding, when do they come on stream?

Well, Dave, we're building inventories now in anticipation of our launch in the U.S. That's still enabling us to meet what is a growing existing business. And in early Q1 is when that will really be up and running at capacity. So that's why we have the U.S. launch happening in the first quarter because we will have the ability then to feed demand behind that expansion and distribution build.

Will you have the full slate of the Brookside product lineup included in the "first quarter launch?"

Yes, the line as it exists today will certainly be fully available. And we're always looking at what the total portfolio for Brookside could be.

And then just continuing on this. The current Brookside in the United States is mostly in Costco, and so the incremental focus would be getting all the other food classes of trade -- I think that's the primary focus of it. How does C-store and other classes of trade fit in with Brookside?

Well, the initial launch would be focused on the channels that you described, but we believe Brookside, especially because of its hand-to-mouth usage, has a place in C-store. And we're evaluating what those packages ought to look like.

And final question, is this a mix positive product for the portfolio?

Yes, Brookside is a very attractive product for us from a gross margin standpoint.

Your final question comes from the line of Bryan Spillane with Bank of America.

Just a question on the volume trends or the volume trajectory for your base business. So if you look at volume growth in excluding new products, in excluding acquisitions in the U.S., it looks like it's improved a bit sequentially. If you could just give us a little bit of color in terms of where it stands now relative to kind of where your expectations were related to just elasticity taking a lot of pricing in the last 1.5 years? And how do you feel about the volume -- kind of where volumes have recovered relative to the pricing you've taken? And then if you look into, I guess, 2013, part of the model is going to depend upon that volume improving, just what gives you the confidence that, that occurs in '13?

Yes, I would tell you that we're about where we thought we would be. And I use the word about, this is not a perfect science. So as we would look over this whole timeframe since we took the pricing, I really emphasize what we've said all along that we think by the end of 2012, we'll have achieved conversion to volume. And so we've seen some quarters where versus the model that might be up or down slightly. But actually, we feel pretty good about where it's at. It was up in this most recent quarter, so we feel good about that. And we think it will continue in 4Q to where ultimately we're predicting it to be. You saw that in the mix numbers across the total business. And our core brands really are tracking again about where we thought it would be. So we don't feel any differently than what we've been communicating.

Okay, there are no further...

I guess -- thank you for joining us for today's conference call. And Matt Miller and myself will be available for any follow-up questions that any analysts and investors will have. Thank you so much.

This concludes today's conference. You may now disconnect.