Good morning. My name is Phyllis, and I will be your conference operator today. At this time, I would like to welcome everyone to The Hershey Company's First Quarter 2013 Results Conference Call. [Operator Instructions] Thank you. Mr. Mark Pogharian, you may begin your conference.

Thank you, Phyllis. Good morning, ladies and gentlemen. Welcome to The Hershey Company's First Quarter 2013 Conference Call. J.P. Bilbrey, President and CEO; Bert Alfonso, Senior Vice President and CFO; Dave Tacka; 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 2012. 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. 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. As a result, we will discuss 2013 first quarter results excluding net pretax charges of $10.6 million or $0.03 per share diluted, primarily related to costs associated with Project Next Century, non-service-related pension expense and acquisition and integration costs. Our discussion of any future projections will also exclude the impact of these net charges. With that out of the way, let me turn the call over to J.P. Bilbrey.

Thanks, Mark, and good morning to everyone on the phone and webcast. I'm pleased with Hershey's first quarter financial and marketplace results, which represents a solid start to the year. Despite a tough year-ago comp and a shorter Easter season, net sales increased plus 5.5%, driven primarily by volume. Sales growth in the U.S. and key international markets were on track versus plan and the broader launch of Brookside products got off to a fast start. Earnings growth was slightly greater than we anticipated, driven by solid gross margin gains. We're well positioned to deliver on our financial commitments in 2013, as the investments we've made in our business in Q1 and over the last few years continue to pay dividends. As it relates to yesterday's personnel announcements, I'm very excited. These moves are consistent with our philosophy of leadership development. These senior leaders are Hershey and industry veterans with deep knowledge of our business. They all had an integral role in the development of our integrated business management process and insights-driven performance model that guides all of our business decisions. Importantly, this will enable us to further leverage their unique skills to drive Hershey's accelerated growth as we evolve into a global company. Our company is structured for accelerated global growth, and we're fully aligned on how to achieve our goals. I look forward to working with all of my colleagues in building on our solid performance. Bert will provide you with financial details, so let me discuss category and Hershey marketplace performance. The confectionery category continues to perform well with recent gains exceeding the category's historical growth rate. The category continues to be driven by the steady investments in the form of advertising and innovation for most major manufacturers. Given the high household penetration, impulsivity, as well as…

Thank you, J.P., and good morning, everyone. First quarter results were solid, with consolidated net sales of $1.83 billion, up 5.5% versus the prior year and in line with our expectations. Adjusted earnings per share diluted of $1.09, up 13.5%, was a bit better than expected due primarily to solid gross margin gains and the timing of some SM&A investments. J.P. provided details related to our marketplace performance, so I'll focus on the review of the P&L, balance sheet and cash flow. As expected, first quarter sales gains were driven primarily by volume increases that contributed 5.3% benefit, including about 2 points from the broader launch of Brookside products in the U.S. food, drug and mass channels. Net price realization was a 0.5 point benefit and foreign currency exchange rates was a 0.03 point headwind. We continue to see consistent growth in our key international markets as they contributed about 1.5 points of the already mentioned 5.3% growth, excluding the impact of foreign currency exchange rates. Our U.S. seasonal business continues to be strong, as we followed up a solid fourth quarter holiday season with an improved Easter sell-through. As J.P. mentioned, initial analysis of the data indicates that Hershey Easter market share was about flat and in line with our expectations. It is worth noting that in a shorter season, we do not get the full benefit of our packaged candy line as purchase frequency is impacted by fewer days. Turning now to margins. In the first quarter, adjusted gross margin increased 240 basis points, driven by lower commodity cost of about $35 million and solid supply chain productivity. As previously stated, while it's still a bit early in the year to predict where dairy prices could go, we have good visibility into our cost structure and there is…

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

I wanted to ask about, specifically, the costs per unit. And as those might course over the year, you've really seen -- I guess, my first question will be, this improvement in cost per unit you've seen here with 5% volume growth and a much smaller, I think, let's say, 1% group growth in adjusted COGS, how much of that is Project Next Century and how much of that is just, would you say, is input cost? And over the rest of the year, should we expect a similar trajectory in cost as we look at it that way?

Yes, Jonathan. We've -- we slightly increased our adjusted gross margin by about 10 points and, obviously, off an already strong level. In the first quarter, we actually saw very good performance on the productivity side, so we gave you sort of an indicator of the $35 million in terms of commodity cost reduction. But we did have really good productivity in the quarter as we were just getting underway in Next Century last year and starting up the plan. So we previously said that this year's total productivity included about $25 million of Next Century and about $75 million overall. I would tell you that the first quarter was a bit better than if you divided it by 4, so that certainly helped. And as we get through the year, your point is a good one, we also are getting -- it's largely a volume year as we see it at this point and we do get good absorption, particularly on our big brands like Reese's or Hershey, where we have great productivity because of the scale. What you expect to see going out further is probably a little -- a bit lower on the expansion in the second quarter because our volume tends to be the smallest quarter. And while we do produce a lot, that's mostly Halloween product, which gets hung up on the balance sheet and sells out in the third. So it should be solid all year long, little bit lower, certainly, in the first quarter and the second and solid in the back half.

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

Hey, Bert, with your new role, can you talk about what initiative and strategy you'll be taking? And is there any different direction? Or how do you see your role going? I mean, it's a new position for you and I just want to kind of -- we may not get another conversation with you that readily, so I just kind of think about your big picture thoughts on what you're going to be taking on as President of International?

Yes, we've actually -- obviously, talked about a lot internally. I think part of what you're going to see is a lot of continuation because we've all, as a senior management team, spent a lot of time together on our international strategy. The intention of the role is a bit of our -- of how we're evolving into the international business. It does give us -- or will give me, obviously, the ability to look at Latin American and Asian regions on a more combined basis. We're very focused on the rollout of our 5 global brands that we started to talk about, about 6 months ago. And the good news is that we have very solid teams in place at both the Regional President level and below that at country management. And so we see that putting more resource as a company against that international growth trajectory. The ability to assess things across regions, which today we do, primarily at J.P.'s level, but now we'll have some extra insight against that. But I think strategically, you're going to see broad continuation. And obviously, as things evolve, I'll have the ability to assess where things may ebb and flow. But that's the way we're thinking about it.

Do you think there'll be more geographic expansion? And do you think there'll be greater probability of acquisitions globally?

We are already pretty focused on the markets that we talk about continuously, China, Mexico, where we're making our biggest bets, certainly followed by Brazil and a little bit slower burn on India. J.P.'s talked in the past about other markets that are interesting for us. There is a set -- there are Southeast Asian markets that are interesting, to a lesser degree, Eastern Europe. We know that Western Europe, not for us in terms of the cost benefit. M&A, we're focused clearly on trying to develop growth that's inorganic, primarily in our category and possibly adjacent categories where we can get some capabilities and local brands. So it'll be primarily in the focus markets where we are today.

Your next question comes from the line of Robert Moskow with Crédit Suisse. Robert Moskow - Crédit Suisse AG, Research Division: I looked at the Nielsen data and I got kind of a head fake by how strong it was. And even when you're giving us the information here, I'm a little confused. So if the category was up -- if your business was up in retail, 9.4% with Easter and still up 8.6% without Easter, but then your shipments are only up 5.5%. There must have been another element to this that caused you to be shipping below the rate of consumption. And I want to know, is there a mismatch on pricing? Maybe the pricing got pulled forward into fourth quarter for you, but the consumer saw something else in the first quarter. Is that what it is?

I think, Rob, the way to think about it is, first of all, we had -- we like to be able to ship to consumption as close as possible. It's always the goal. However, the retail takeaway was very broad across the entire portfolio and also across some of our biggest brands. So there's really 2 things to think about. First of all, in the quarter, you had a lot of price relative to what in the first quarter last year still would've had the promotional activity. We had some new item introductions in the first quarter that weren't in this quarter. And so you really saw at retail a higher percentage of products sold at full revenue, which is good for retailers as well. And then the other item was lower inventory. And so normally, we would probably have something in the range of 4.9, 5 weeks of inventory. And we believe this particular quarter, we had probably somewhere in the range about 4.4, 4.5. So that inventory was a bit lower, which also impacted shipments there as well. But we think those are the 2 biggest items that we have. I don't know, Bert, if you want to add any other perspective, but that's really what we're seeing. And so we feel quite good about the fact that the share results were what they were, and we don't see that we've got any issues in the marketplace in terms of not being able to supply demand.

No, J.P., that sums it up. I think the little bit of -- mostly the price that you're seeing is -- Easter was the very last of the seasons that we got a bit of price on. If you'll recall last year, the first one was -- or rather Valentine, sorry for the confusion. Valentine was the last season where we saw some pricing. While most of that ships in the fourth quarter, retailers see it in the first quarter. And so that's the bit of pricing that we did get. Otherwise, all the other pricing has slowed through.

No, we didn't get the pricing. It's what's scanned, what you would see in your Nielsen data.

Correct. Robert Moskow - Crédit Suisse AG, Research Division: That's what I thought. And -- but I think, John, you were saying -- or J.P., you were saying that there might have been some inventory burning at the trade. Is that what you were implying?

Well, I wouldn't think of it as major burning, but what we did see is a lower inventory level than what is usual, and we really see it as being the strong offtake that we got. And then we have the ability, obviously, to come in behind that. As I said when I opened, we usually like to forecast as closely as possible shipments to consumption as we can, and in this case, Q1, as we had hoped, had a strong category growth and then we were able to obviously grow share during that quarter and build on top of that. And so it just took us to a lower inventory level than we're usually at. I think that really -- I don't think there's any mystery beyond that. I think that really accounts for the difference, if you look at the promotion pricing versus previous year and then the inventory drawdown.

Your next question comes from the line of Alexia Howard with Sanford Bernstein. Alexia Howard - Sanford C. Bernstein & Co., LLC., Research Division: I just wanted to ask about your investment levels in the markets outside of North America, particularly China. I know that when Campbell went into China and Russia for the first time, they were tapping investment levels at a certain number of pennies per share per year. I believe you're still in investment mode in China. Is the plan to sort of manage that investment at a certain absolute level going out, maybe with a view to reaching breakeven in a certain number of years? So I just want to get a sense of the path to profitability there. And then as a follow-up question, in some other segments we've been hearing about increased price-based competition and from categories, particularly in China. Have you been seeing that at all? Or is it really just a matter of fairly easy environment to take pricing and raw distribution?

Sure. Alexia, let me start and then Bert can pick up, if he likes. In terms of our model in China, as you've heard us talk in the past about how we think about these concentric circles and economic density and building out our organization and adding brands. So we don't really think about it at this point in time in terms of how many cents per share. It would be in terms of our investment level. What we're really looking at is how do we build a consumer-centric portfolio? How do we get an organization that can execute against that portfolio? And then how can we advertise behind it in a way that we believe those investments are good for us? And we've consistently said we don't want to get out over our skis, so we don't want to plow into an investment level that's fixed nor do we want to be constrained by that as we see opportunities. So I think you would continue to see us in an investment mode in China. As you know, we believe we have good gross margins in those businesses that we can grow into when we're not in an invest mode. But that really is not going to be the case, I don't think in the immediate future, so we're very satisfied with this. We continue to turn on advertising and build our portfolio. Our Hershey bars, as an example, is doing terrific as we've begun to expand that. And then we have what we think is a very exciting new item introduction in China that will be later in the year that we'll talk to you more about in coming time. But we really feel good about the profile of China. Alexia Howard - Sanford C. Bernstein & Co., LLC., Research Division: Great. And then in terms of the pricing competition? Any step-up there or not -- you're not seeing that?

No, I think that -- we continue to be headed down the track of what we think is good for our brands. You'll see different promotion activity in the trade that some brands may choose to do, but I wouldn't see that as a trend necessarily, from our perspective.

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

Wanted to talk a little bit about Brookside. Very exciting brand launch and something that looks to be unique in the category. J.P., I was wondering if you could start off and just talk a little bit about when is the last time Hershey launched a new brand with the significant marketing budget that you're going to put behind Brookside? And then just to follow on, on the line of logic on Brookside. Can you also comment -- give us your perspective on what you would expect the incrementality of a product like this to the entire chocolate category into your franchise?

David, we're very excited about Brookside in the launch, and we believe the investment levels that we're making are appropriate for what we believe the potential for the brand is. So I don't necessarily have the historical perspective, so I'm going to kind of put that to the side. But we believe that the Brookside brand has enormous potential. We're off to a good start. We're making it broadly available in the marketplace. We're seeing good repurchase behind the early trial that the consumer has in the U.S., and we're going to continue to do consumer testing as broadly as possible to see where the relevance of the brand can continue to play. But we've got a lot of runway in front of us. We've got a lot of work to do, but I would just tell you that from what we see of the early customer reaction, consumer reaction, offtake, repurchase, we're just awfully encouraged, and we think this could be a very big brand. I -- we had some discussions internally on what we think that number is. I'm not going to share that right now because we've got a lot of execution, David, in front of us to make this story come true, but really off to a terrific start.

If I may just follow up on this just one other way. My impression is that given the ingredients here and how different it is from other products in the category, that we should be thinking that this kind of a new product has a greater incrementality to your franchise than, say, other new products. Maybe if it's brand extension on one of your other lines, they might be good, but they might actually take away some sales cannibalistically when you do a new product launch of that sort. So is it a fair point to say that this is really a different type of new product versus what we might have seen over the last few years from Hershey?

Yes, I think that's right, David. And it's around -- if you follow it from a dark chocolate standpoint, it's a big -- it has a potential to be a big dark chocolate brand by itself. If you think of the halo effect of the good things inside and all the benefits that you get from dark chocolate within the category, I think it does have a lot of incrementality to it. And then because of the halo effect of the great things in the center with the fruits packed in and the dark chocolate antioxidant benefit, it allows you to think about it more broadly than as a chocolate item only, and we're certainly exploring that and trying to understand more. So we think it has a lot of incremental potential for the company as an adjacency, as well as incremental business for us within the core category where we compete.

And if you could just make one clarification on the points of distribution. Is it correct to think that this product is more -- or it's -- the availability in the food classes of trade is really where we're going to sell this product into a lesser extent in convenience stores? Or maybe I'm just trying to get at how much representation in convenience stores will it actually have.

Well, we think packaging is obviously important. We'd like to see it in convenience. We have convenience packaging that will be in the future of the brand. And so right now, we have a lot of work in front of us to get it across the channels in distribution where we're currently focused on. But yes, this should be a multichannel brand with packaging that makes it readily available to the consumer when they're looking for a great tasting product.

Your next question comes from the line of John Baumgartner from Wells Fargo.

John, looking at some of the measured channel lately, it looks like Bliss sales are down quite a bit. I'm not sure that more of a comparison issue there, but just wondered if you can walk through your strategy in terms of trade-up, anything you're seeing there.

Well, as you've heard us talk about in recent times, that the trade-up segment, as we used to define it, has largely blended into premium and mainstream. And so I think that segment has changed a little bit. Bliss volumes are lower than they were a few years ago and, I think, having to compete in more of a mainstream-type environment than they had before and so that's changing a little bit. We continue to be very committed to the Bliss consumer and so we see the brand as continuing in our portfolio with a meaningful presence. One of the things you're starting to see now is the premium segment is growing a little bit again and I would anticipate that to continue. But again, that also had a little bit of suppression of pricing, but I think that will ultimately be back where it was. And then I think what will be interesting to see is if there's as much delineation as there historically was around this sort of middle segment, which we call trade-up, and I don't know how to predict that one necessarily. But we do see that Bliss plays an important role. There's competitive brands, which consumers also look for, and so we think it gives us a position to continue to compete there.

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

In recent times, the state of the U.S. and global gum category, it certainly stands in contrast to the U.S. and global chocolate category. I'm wondering, from your perspective, if you're sort of writing the case study of the diverging fates of these 2 categories? What factors would you attribute to these diverging fates? And I ask partly because Hershey seems to be leaning a little bit into this weakness with some investment there. I know you're not the leader and obviously the big buckets are cyclical factors, secular factors and just the stewardship of the leaders in these categories.

Well, I'm not going to try to get too deep into gum strategy. As you know, we play a modest role there. We've said in the past that we think gum is a segment that's driven by innovation and advertising and news, and we think that's why our gum has done pretty well, as modest as that business is. And so we continue to be excited about our mints business which, despite the fact it's a smaller segment, we continue to grow there and largely that's around innovation and advertising and it needing consumer usage, occasions and also preferences, I suppose, around how they interact with the product. So I think there is a big challenge for the gum segment to understand what's happening with the consumer. And I know there's companies out there spending a lot of time against that. But I certainly don't have the answer for other folks on some of that. So we're going to continue to be very focused against our mint business. And we're really excited about how it's performing. It's great front-end item. It's good for retailers. And that's probably as much as I should say about the gum segment.

And when you're thinking about gum and mint, it's real -- and I know that it plays more into your portfolio to be going after mints harder. But are you even -- are you more excited about the receptivity of innovation on the mint side? Is that -- is it fair to say that the future seems brighter on that side of the 2?

Yes, it's certainly the case for us, and there's still a large gum category out there. It is a larger category than mint. But this, for us, is a great way to play. We think it's a global opportunity, and we have what we think are some pretty exciting innovations that continue to innovate around what some of the strengths, as we understand consumer insights around mints relative to gum, that will continue to leverage that. And so we feel pretty good about where we're spending our time. These are profitable brands. And so that segment's working really well for us.

Your next question comes from the line of Thilo Wrede with Jefferies. Thilo Wrede - Jefferies & Company, Inc., Research Division: I might have missed it in your comments, but is the Brookside distribution in regular retails on your grocery stores, is it already where you want it to be? Or is there still further expansion opportunity?

Well, there's still further expansion opportunity. We usually look to make sure we have about 60% ACV as we start thinking about turning on advertising. We've got advertising on now. And we would expect Brookside to have broad-based distribution levels across all channels. But we still have space to go to get that as deep as we wanted. Thilo Wrede - Jefferies & Company, Inc., Research Division: So we're not -- don't manage to find the product in some channel checks. It's just a matter of time until you get on the shelf from those stores as well then?

Yes, absolutely. And if it's not near a store near you, you give us an address and we'll make sure it is. Thilo Wrede - Jefferies & Company, Inc., Research Division: Then the other question I had for you, J.P. Did I understand you correct that this new product that you initially talked about is targeted at China? It's not for the U.S. market?

Well, it will start -- we'll actually -- on what I was referring to, we'll actually use China as a lead market and then we would hope to see that as an item that's more broadly available as we believe the usage occasion is one that's globally relevant. Thilo Wrede - Jefferies & Company, Inc., Research Division: Is that the first time that you used China as a lead market for new product introduction that you intend -- ultimately intend to go global with?

Actually, we've had a couple of different instances where we've had products come from our international businesses. Brazil is certainly one where we've taken some products other places. And we see that being relevant in China as well as we explore some different areas there.

Your next question comes from the line of Eric Katzman with Deutsche Bank.

Congratulations to everybody on their new positions. I guess I wanted to ask just more of a broader-based question about China in particular, but maybe it applies to some of the emerging markets. Obviously, as I think you stated, that CAGNY, Mars has 40% to 50% share in China. Mondelez is, on record, is spending a lot of money. I think Ferrero and Lindt and others have been spending aggressively. You're spending aggressively now. I mean why -- is that the reason why you're a little bit more cautious on margin outlook in emerging markets? And how should we think about one player that's got the vast majority of the market or a big chunk of the market and everybody else spending aggressively to get their fair share? I mean, how does this all play out in terms of margins? I mean, the sales are great as you're doing a good job. But ultimately, what kind of profit can you really get out of these markets if you're spending aggressively behind it?

Yes, I think, Eric, the way that we think about it is that, unless you're talking about China in particular as you referenced, if you look at the history over the last 10 years, certainly, the last 5 years, and you look at the acceleration of market growth, we believe that just from a category standpoint in market, the story is still very much about market growth. Now you'll obviously -- you have Mars, who has the first-mover advantage, very nice business there and a leadership share. At the same time, that share is representative of a market, which has doubled in the last 5 years anyway and will continue to grow over time at an impressive rate. So I think part of the work to be done here is really around category growth, bringing the consumer into the category and then making sure we're participating in that category. So where we're really, I'll call it, thoughtful and balanced is, is that in our model where we do have gross margins that are acceptable today and yet we're in an investment mode, we have the ability to balance that as we go forward. So as we've talked about turning on advertising in focus markets, we're very satisfied with the response we get from that brand, from those -- from Kisses, as an example. But we don't have a broad enough portfolio yet to be satisfied with our overall returns there. And so as we continue to balance investing in our sales organization, investing in our brand development and then not expanding at a rate that we'd get out over our skis, we think it's a very good way for the company to participate in the China market. So we're not necessarily saying, "We're going to go be #1 by a specific date." That could be a really costly and foolish thing for us to do. We want each of these markets to be successful for us. We want them to be rewarding for our shareholders, and therefore, we have a pretty planned approach. And we don't want to get out of balance with what is a very precious North American business. And so our approach, I think, frankly, is very advantaged and at the same time maybe not the same choice that everybody would have because they may have legacy businesses that don't allow them to look at this in the same way that we do.

Okay. And then on a more shorter term -- just on a shorter term, Bert, I guess, you kind of sounded like there was a fair amount of delay in spending on some of this international SG&A, in part U.S. as well. The tax rate is higher. You have a very tough comp in the second quarter. And as you noted, it's typically seasonally a small quarter so you don't have as much leverage. I mean -- or did you give -- I got cut off, but did you give any kind of guidance on second quarter earnings? I mean, is it a low-single-digit EPS kind of growth rate? Or what are we talking here?

Yes, we don't -- we haven't given quarterly guidance and not moving towards that. But I think you captured all of the data points that we try to provide. And so while we do expect earnings growth in the second quarter, it will -- it won't be comparable to what we're expecting in the other quarters.

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

Just a general question. The CMG category, as a whole, has seen very strong sales trends and obviously, you gained an impressive amount of market share in that context. If you look more broadly at what you'd consider the snacking category overall, can you give us a sense of how you think about both the CMG category and your own market share performance in that bigger snacking picture? And I guess if you were to assess any adjacencies you might have, what other snack categories do you view as your strongest competition for share of impulse purchases?

Well, I think -- the general comment I would make is that CMG has held up very well within the overall snacking universe. So for whatever interaction there is across any of those brands, we've certainly continued to have -- category performance is good and that we've continued to do well, obviously, within the category. I think the big piece of that really is around the fact that we continue to offer an affordable indulgence. The category has benefited from the amount of advertising and attention from all manufacturers that it's gotten. The innovation has been, I would call it, stickier, in that it has been productive. And so that's had a nice effect on a go-forward basis. So I continue to be very optimistic about the category. Certainly, we feel good that the first quarter has given us the evidence that the category is going to perform well. We've said that we're interested in adjacencies. Those adjacencies would certainly be close in for us. Most likely you wouldn't see us going real far field in the things that we might not feel as comfortable with as the businesses that we're in and things that are close to that. But we think, as we talked about Brookside, that we think Brookside has a very nice, healthy halo advantage that could expand into adjacencies. And also, the single serve element of our business in singles and standard bars and other items that are on-the-go nutrition are things that we're interested in as well. So I think overall snacking continues to look very positive to us, and we're going to participate in that overall segment.

Our next question comes from the line of Rob Dickerson with Consumer Edge.

Just one quick easy question from another follow-up. So I know, obviously, there are a lot of questions on the international part of the business. I think at CAGNY, you actually -- you reconfirmed the net sales target for '17. But it looked like you've brought the profitability down, but I guess it was originally low mid-teens to low double digit. So I'm just curious, I guess one is, the sales target is still there for '17. It would seem like the profit target has come down. And then two, just very -- excuse me, very simplistically, when should we expect the international sales to be broken out, I mean, just in terms of materiality?

Yes, let me try to put some context around that. A couple of things that we've done in terms of targets, right? One is we put an aspirational target of $10 billion out there, which we certainly have a lot of energy against. The other thing that we've talked about is that our organic business gets us to something south of that and then we're hopeful that we can have some value-creating M&A that gets us actually to the $10 billion. So we haven't given a very, very specific target around what that organic is. All we've really said is that it doesn't get us all the way to the $10 billion. In terms of our investment pace, at CAGNY, we're pretty transparent about bringing that down slightly because we think it gives us the ability to invest at a faster pace and actually move that organic target up closer to the $10 billion. So there is a little bit of alignment between the 2. Our view is based on where we think that the market will provide the best return for top line growth and a path to profitability. So China, we've talked a lot about and J.P. has given some context around that today. It's in investment mode. Other markets like Mexico, where we have profitability, we really just want to take that to a greater level. And so our ability to be able to continue to have fast-paced top line growth in these markets and invest behind those so long as we're getting that type of growth is how we think about the business. And we can ebb and flow that investment for whatever reason we don't think we're getting the types of returns in terms of business growth and market share that we anticipate.

Okay, perfect. And then just kind of a follow-up on some of the discussion around retail segue versus reported. I thought you'd said earlier, and maybe I'm mistaken, but I thought you said that you still saw a little bit of pricing in Q1. You said it's a year-over-year effect from Valentine's Day. Was that right? And then if you have -- that's the case, pricing was up 50 bps in Q1. It's like should we be expecting, I guess, to see kind of a similar rate of pricing growth throughout the year or more or less? Or how do you think about that?

No, you shouldn't. Our reference to pricing, and granted I may have confused folks by throwing Easter in there, which wasn't relevant, Valentine was the last season that we actually got pricing on. Most of that, for us, ships in the fourth quarter. So you would've seen most of that pricing there. But it scans at the retail level in the first quarter, so we were trying to explain the difference between our 5.5% growth and about 3 points higher in retail. We did get a little bit of pricing because some Valentine obviously does. And we also had some promoting -- promoted items last year when we had the early in the year launches from particularly our Crunch 'n Chew product around Jolly Rancher. So there was a bit less promotion as our product launches were not effective January 1 like they were last year. We actually launched those products late December, so you should not expect to see pricing, at least based on today's plan, going forward. We're talking about is that basically a volume year, although that could change.

Operator, we have time for one more question.

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

Bert, congratulations to you and to everybody else who was promoted. It's definitely well deserved. I just have one question. Just you -- just trying to square a couple of numbers related to what you said about international. So x Canada was up 10% and then China, Brazil, Mexico were combined, up 20%. So I guess the export markets would've been -- were they actually down in the quarter? Is that sort of how you go from 20% to 10%?

Yes, we had a couple of export markets that were actually where we actually gained distribution last year. We had new accounts, primarily in Asian markets. And so those we expected would be down a bit just based on some pipelines to last year in terms of new accounts. And so we continue to think that for the year, we're still going to be in the 15% to 20% range. But the first quarter had a bit of anomaly from that perspective.

So that was more of a timing -- year-over-year timing thing more than anything else?

That's correct.

Okay. And then just the 20% growth in China, Brazil and Mexico, in aggregate, just how much of it is being driven by volume growth and I guess volume growth driven in part by just distribution gains and/or trial, people using your product for the first time? And just if you can give some context in terms of how much pricing. Is there any pricing in that 20%?

Yes, I'm not going to comment on the pricing, but I would tell you that in China, in particular, while we had good volume growth in Kisses, one of the things that we did last year was we turned the advertising on for the Hershey brands, Hershey bars, in the fourth quarter. And so we did see some distribution gains. But more than that, we saw velocity gains in the existing distribution in China. In Brazil, we launched a chocolate-covered wafer product late last year. Our capacity also increased because we've put some capacity in place. And so you're seeing distribution gains vis-à-vis new product growth, but most of it would be volume.

Thanks for participating in today's conference call. Matt Miller and myself will be available for any other follow-up Q&As that you have. Thank you.

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