Hello, and welcome to The Vita Coco Company's second quarter 2023 earnings conference call. My name is Crystal Love. I'll be coordinating your call today. Following the prepared remarks, we will open the call to your questions with written instructions to be given at that time. Please stand by. Thank you. Welcome to The Vita Coco Company second quarter 2023 earnings results conference call. Today's call is being recorded. With us are Mr. Michael Kirban, Executive Chairman, Martin Roper, Chief Executive Officer, and Corey Baker, Chief Financial Officer. By now, everyone should have access to the company's second quarter earnings release issued earlier today. This information is available on the investor relations section of The Vita Coco Company's website at investors.thevitacococompany.com. Also on the website is an accompanying presentation of our commercial and financial performance results. Certain comments made on this call include forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and beliefs concerning future events and are subject to several risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Please refer to today's press release and other filings with the SEC for a more detailed discussion of the risk factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. During the call, we will use some non-GAAP financial measures as we describe business performance. The SEC filings, as well as the earnings press release and supplementary earnings presentation, provide reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures and are available on our website as well. With that, it's my pleasure to turn the call over to Mike Kirban, our co-founder and executive chairman. Mike? Thanks, Clay. Good morning, everyone. Thank you for joining us today to discuss our second quarter 2023 financial results and our current expectations for full year 2023 performance and long-term growth. I want to start by thanking all of our colleagues across the globe for their continued commitment to The Vita Coco Company and their dedication to our mission of creating ethical, sustainable, better for you beverages that uplift our communities and do right by our planet. Before addressing our performance and expectations, I want to reiterate that we believe we have a strong strategic position enabled by our category leadership in coconut water in the better for you functional beverage category, which in America's tracked channels, is in excess of $30 billion. We're very happy with our performance in the first half of 2023. Among our growth strategies, delivering coconut water growth through increased usage occasions remains the highest priority, and I'm excited about the progress we're making with both our commercial initiatives and our marketing efforts. In the second quarter, we saw consolidated 21% net sales growth, bringing our year-to-date net sales growth to 18%. We remain very bullish on the coconut water category in the United States, where, according to Circana, the coconut water category is posting one of the healthiest growth trends, outperforming major categories like energy, CSDs, sport drinks, and bottled water in dollar growth rates, while also being one of the few categories growing in volume and price. For the quarter, our Vita Coco Coconut Water brand is leading the coconut water category growth, with U.S. retail dollar sales up 18% and our market share improving to 51.9%, while the category is growing 15%. Our brand has never been stronger, our focus on consumer expansion via occasion-based initiatives is highlighted in our marketing efforts in the second quarter. I'll highlight four examples from the quarter that we're super excited about. Firstly, we launched The Coconut Grove, an immersive experience on Roblox, where consumers can farm and harvest virtual coconuts. Over 22 million people visit us in the metaverse, driving over 75 million impressions to date introducing a new generation of consumers to our brand. Secondly, we collaborated with Bluestone Lane to launch a coconut water cold brew exclusively at their cafes across the U.S., blending their signature cold brew with the refreshing taste of Vita Coco original coconut water for a perfect summer drink that is already a top three iced beverage in their locations. This is another initiative that demonstrates the versatility of coconut water and the appeal of our Vita Coco brand to food service partners. To demonstrate the opportunities in the away from home channel across all day parts, we have partnered with on-premise locations in key summer destinations with a focus on alcoholic cocktails mixed with Vita Coco and are seeing great adoption in the bars with incredible social media amplification. We also launched a pop-up pub on London's South Bank, where consumers had the opportunity to sample our custom cocktails all summer long. Finally, our collaboration with Bloom, a leader in the greens nutrition market, highlights the benefit of Vita Coco Coconut Water as a liquid base for powdered products, which is generating amazing organic social media content with 34 million impressions online. These initiatives build on our previously announced collaboration with Diageo. Vita Coco Spiked with Captain Morgan is seeing significant marketing activity during the key summer selling season, with an estimated 750 million media impressions in H1 alone and 1.1 billion PR impressions and counting from the start of our Tropical Takeover Tour. Our PWR LIFT launch in Southern Texas continues to build momentum and supports our learnings on how to succeed in the enhanced isotonic category. We have focused investments and dedicated market development teams working with our DSD partner, KDP, as we endeavor to achieve success in this market. It is early, but we're excited by our learnings and the progress we're making. We have consistently talked about the goal of growing our branded business as our priority and our desire to reduce our reliance on our private label business, which is typically lower priced and lower margin. In recent negotiations with our largest private label customer, the proposed terms required to maintain the business were contrary to our margin targets and long-term goals. We have therefore jointly made the decision to transition the supply relationship at this time. We greatly value our long-term partnership with this customer, who remains a key retailer for our branded products. We're more enthusiastic than ever about the strength of our core business and are especially excited by our branded initiatives, where we see opportunities for even faster growth. However, it is unlikely that these initiatives will fully offset the net revenue lost from this large private label customer in the immediate term. As this decision was reached very recently, we're still developing the transition plans and building our 2024 commercial initiatives. Based on information, we believe that we can deliver mid-teens adjusted EBITDA growth in 2024 over the adjusted EBITDA communicated in our updated 2023 guidance, with improved gross margins over 2023 levels, and we can accelerate our trajectory towards our long-term EBITDA margin targets. While the timing and magnitude of the impact on net sales is hard to quantify, we estimate that we will see some impact starting in Q4, and that our 2024 net sales could decline as much as mid-single digits. This preliminary estimate captures our current assumption on the timing of this transition and the current assessment of the offsetting impact of successfully implementing our 2024 growth initiatives. We'll update our view on the impact of this decision with our next earnings release. By then, we expect to have a better understanding of the transition timing and better visibility to the speed and size of our 2024 growth initiatives. As demonstrated by our track record, we're confident that our continued prioritization of margin accretive growth over margin dilutive growth can only strengthen our business going forward. Finally, I'd like to reiterate my excitement for our accomplishments this year and our momentum for the balance of the year and into 2024. We're stepping up investments in our brands and in the long-term health of the business by continued focus on branded growth. We believe that we are uniquely positioned as one of the few fast-growing, profitable beverage companies of our size, with the talent and commercial capabilities to maintain growth, to innovate new opportunities, and to act as an acquirer of complementary beverage brands that could benefit significantly from our relationships, capabilities, and financial resources. Now, I'll turn the call over to our Chief Executive Officer, Martin Roper. Thanks, Mike. Good morning, everyone. For the second quarter of 2023, we achieved net sales growth of 21%, driven by strong Vita Coco Coconut Water growth of 23%. This performance was achieved against a very strong second quarter last year, where the Vita Coco Coconut Water net sales grew 21%. In the Americas, our Vita Coco Coconut Water net sales grew 24% for the quarter, including 21% volume growth, reflecting the continued success of our commercial initiatives, such as the additional promotional activity mentioned in our Q1 earnings call, coupled with a single-digit contribution from price increases. Our strong execution at retail and our consumer engagement efforts continue to produce strong results at retail, with an 18% dollar growth rate of Vita Coco Coconut Water in Q2 2023 in the U.S. Circana scan data at a 14% volume growth rate. The strong performance is across all track channels, as shown in our investor deck, and with strength in the underdeveloped regions that we believe is indicative of future growth potential. As shown in our investor deck, the growth is built on a healthy balance of velocity, growth, pricing, and distribution gains. Internationally, we are seeing similar strengths of Vita Coco Coconut Water with 8% volume growth for the quarter. Strong performance at retail has driven retail dollar share of the total coconut water category to over 80% in the most recent four-week period for the first time ever, according to Circana U.K. Turning to margins, in the second quarter of 2023, our gross margin was 37%, which represents a significant improvement over the 25% reported in the second quarter last year, and an improvement over the 31% in the first quarter. This increase was primarily driven by more favorable ocean freight costs and improvements in domestic transportation costs, plus the benefit of branded pricing taken in the fourth quarter and middle of the second quarter last year. During the quarter, strong volume performance and optimized inventory levels allowed us to operate our supply chain more effectively and efficiently than in prior quarters, which benefited our domestic logistics costs in addition to year-on-year rate improvements. After the significant decrease in spot ocean freight rates in the second half of last year, we saw continued declines in rates in the first quarter, and then a more stable environment during the second quarter. At the end of the second quarter, spot rates for most lanes were close to historic pre-COVID levels. As we've discussed in previous quarters, we remain selective in entering into ocean transportation contracts, except where we need to guarantee capacity, and expect to return to our historic approach of contracting for some of our needs once the contract offers are more competitive with spot prices than they are today. The strong volume performance of the business in the first half allowed the benefits of the ocean freight improvement to flow through our PNL faster than expected, with an improvement in supply chain efficiencies also happening more quickly than anticipated. Turning to our outlook, we remain confident in the strength of our core business and excited by our branded initiatives and new and developing private label relationships. We continue to believe that our supply chain is a competitive advantage and provides a unique combination of service, reliability, flexibility, and cost. We intend to continue to seek and support private label supply arrangements that are mutually beneficial, but our priority remains our branded growth initiatives, which should make us stronger and more resilient, with less dependent on private label demand in the future. In line with our emphasis on prioritization of branded growth, we are updating our long-term financial algorithm to mid-teen branded growth, which we define as consolidated net sales minus private label net sales, and adjusted EBITDA margins to high teens, which will benefit from a greater mix of branded sales, gross margin, and SG&A leverage improvements. We're really happy with our current performance. Our second quarter results and our increased full-year guidance that Corey will explain reflects the strengths of our core business as brand volume, net sales, gross margin, and adjusted EBITDA are all growing. With that, I will turn the call over to Corey, our Chief Financial Officer. Thanks, Martin. Good morning, everyone. Let me provide you with some additional details on the second quarter financial results and the drivers of our improved outlook for the 2023 full year. Starting with revenue, we continued to see strong performance in the second quarter, with net sales of $140 million, an increase of $24 million or 21% year-over-year. This was driven by Vita Coco Coconut Water growth of 23% and private label growth of 24%. Within the Americas segment, Vita Coco Coconuts Water strong retail performance resulted in $95 million of net sales, an increase of $19 million over the prior year period, while private label increased $4 million- $24 million. The growth of Vita Coco Coconut Water continued to be volume led, with 21% volume growth and 2% net price mix benefit. Vita Coco Coconut Water benefited from strong retail sales and incremental promotional activity. Private label experienced a strong quarter, driving 17% net sales growth on volume growth of 22%. Private label benefited from a combination of velocity gains in existing stores and increased store count at strategic retailers in the U.S. and Canada, which more than offset the lost stores disclosed in Q3 of last year. Our international segment had a very strong second quarter as well. Reported net sales were up 24%. Growth was led by private label, up 72%, where we gained new distribution with strategic retailers in Western Europe. Vita Coco Coconut Water also had a strong quarter, growing net sales 14%, led by strength in the U.K. Total international volume growth was 18%, with Vita Coco Coconut Water delivering 8% volume growth and private label volume growing 54%. For the second quarter, consolidated gross profit was $51 million, up $22 million versus the prior-year quarter, and gross margin was 37%, up from 25% in prior year. Gross margin exceeded our expectations as volume strength accelerated the flow of global transportation savings to our PNL, and our supply chain operated very efficiently with lower inventory levels, which led to savings within our domestic logistics costs. Moving on to operating expenses. Second quarter 2023 SG&A costs increased by $6 million- $30 million, which reflects investments in incremental resources to support the growth of the company, including increased people costs, investments in sales and marketing, and costs associated with the secondary stock offering in the quarter. As previously indicated, our full-year plan includes an expected increase in marketing and sales execution investments, some of which represent a catch-up from the low levels of last year. Year to date, we were not able to execute all planned marketing and organizational investments, resulting in benefits in SG&A spending versus our expectations. We plan to invest in a disciplined manner with incremental spending planned over the second half of the year. Net income attributable to shareholders for the second quarter of 2023 was $18 million, or $0.31 per diluted share, compared to $1 million or $0.02 per diluted share for the prior year. Net income for the quarter benefited from positive net sales and gross margin improvements discussed previously, partially offset by increased SG&A costs. The quarter benefited from a $4 million increase in the unrealized gain related to derivative instruments, which was offset by an increase in tax of $4 million, reflecting an ETR of 19.2% on the quarter. Non-GAAP adjusted EBITDA in Q2 2023 was $24 million, up from $7 million in Q2 2022. The $17 million increase was primarily due to the significant cost of goods per case equivalent decreases and increased volume growth and pricing, partially offset by increased SG&A spending. Turning to our balance sheet and cash flow. As of June 30th, 2023, our first half strong operating performance led to an improvement in cash flow, resulting in total cash on hand of $48 million, compared to $20 million on hand as of December 31st, 2022. The increase in net cash was primarily driven by net income. Working capital year-to-date has used $2 million of cash, as inventory decreases $27 million and accounts payable increases of $15 million, were offset by a $47 million increase in accounts receivable due to timing of customer payments and the seasonality of our business. The inventory decrease was the result of sales volume growth, coupled with the normalization of the global supply chain, allowing us to more efficiently manage our days on hand and reduce overall inventory. We ended Q2 with inventory in the low end of our targeted range. We expect inventory to return to more normal levels in terms of days on hand as we progress through the balance of the year. Let me touch on a couple of small items before turning to Earl. In May, we completed a successful secondary offering for Verlinvest Beverages S.A., an investor in the company for over 15 years. We are delighted that Verlinvest remains a significant shareholder and is continuing their representation on our board of directors. We are also pleased on behalf of the company that this offering has diversified our investors and increased our publicly available flow. As a result of this offering and our strong stock performance, we will now be treated as a large accelerated filer, starting with our Form 10-K for 2023 at the end of this year. This is a change we expected and are well prepared for. As we look to the balance of 2023, despite some uncertainty on private label transition, our branded business remains very healthy, with strong consumer demand for our products, which is allowing us to raise our full year net sales guidance to 10%-12% based on mid-teen branded growth, offset by private label weakness in Q4 from the transition previously discussed. Our expectation for gross margins for the balance of the year has also improved as our transportation costs remain stable, our supply chain operates efficiently, and our branded products are expected to represent our largest share of our business. As a result, we expect gross margins in the second half to improve slightly over Q2 and be between 35% and 37% for the full year. Our revised non-GAAP adjusted EBITDA guidance is $56 million-$60 million. This reflects continued prudent investment in SG&A, which we expect to grow at a rate higher than our expected net sales growth on a full year basis. I will now turn it over to Martin for his closing remarks. Thank you, Corey. To close, I'd like to reiterate our confidence in the long-term potential of The Vita Coco Company, our ability to build a better beverage platform, and the strengths of our Vita Coco brand. We have just completed the best quarter in our history. We have plans to both expand gross margins and grow adjusted EBITDA in 2024. We believe that exiting next year, we will have an even stronger business with higher quality growth and a more favorable margin profile. Thank you for joining us today. Thank you for your interest in The Vita Coco Company. That concludes our first quarter prepared remarks. We will now take your questions. Thank you. We will now conduct the question and answer session. To ask a question, please press star one one on your telephone and wait for your name to be announced. Once again, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Bonnie Herzog of Goldman Sachs. You may now ask your question. All right, thank you. Good morning, everyone. Good morning. [cross talk]. Morning. I guess my first question, I just, you know, wanted to better understand the decision to transition away from a private label customer. You know, you mentioned you're gonna be less dependent on private label moving forward, which I think makes sense, but could you give us a sense of what percentage of your private label business this customer represents? Then, if I heard you correctly, you're expecting, you know, a short-term impact primarily on your top line, that's gonna impact, I guess, 2024 results, but you do expect to deliver upside to your mid-teen EBITDA growth target, albeit I assume your EBITDA base is going to be lower moving forward. Just maybe walk through that for us again, please. Thank you. Yeah. Yeah, thanks, Bonnie. Couple of things. We're not gonna break out what percentage of our business this customer is, so I just wanna be upfront with that, but, you know, for competitive reasons, et cetera, et cetera. What we are acknowledging is that they're one of our, you know, two largest customers. They're a very significant private label customer, but they also have a very significant branded business. The second thing I wanna say is, is this is very recent news, and we're still processing it. We don't want to have all the answers today, but we did try to give some guidance for everybody for modeling purposes as to what we think an outcome in 2024 could be. Again, that's an initial assessment, we're not providing guidance, but, you know, we wanted people to have an idea of what we thought. You know, complete information on the transition and timing, you know, speed, speed of it, et cetera, is still, you know, developing. We're in the, in the middle of dealing with that. Having said all that, you know, one, you know, private label business is typically, you know, lower margin than branded business. We, you know, expect our margins to improve next year because mix of business will be significantly lower on the branded side. From a, you know, a growth perspective on net sales, we provided mid-single digits down because it is a, a significant piece of business. We do believe we can grow EBITDA through a combination of both our branded growth initiatives, improving gross margins, and so we wanted to provide visibility to that. You know, let me, let me also add, we do like private label business that fits our model. Yeah, we continue to bid on private label business and win. We're still pretty comfortable that we're very competitive in that arena, and we would continue to do so. I think with this particular customer, you know, we would be happy to service them again in the future, under mutually agreeable terms that fit our model and our supply chain. We remain open to that. That's how we're thinking about it, right. Okay. No, that's helpful, and I, I understand. I think, I guess the. I think I may have misstated. We expect the business mix to be lower private label, so if I misstated, I do apologize. I guess I'm not sure, but that's what I would assume. Thanks for the clarification. I guess- I think your assumption would be right, Bonnie. Yeah. Yeah. I just got corrected in the room. Oh, too fine. Okay, so all right, well, that's helpful. Then I guess, you know, the positive here is, like you, you alluded to, is, you know, it really does allow you to improve your gross margins moving forward. There may be some choppiness here, but, you know, thinking about that in the context of your, you know, your long-term gross margin target of high 30%, you know, love to hear maybe what you think is a realistic timeframe of when you might be able to reach those margins. You know, maybe just this announcement today, does that accelerate, you know, that, that opportunity? Thinking about any other cost efficiency initiatives you have in place to accelerate the timeline? Yeah, I think... Our gross margin for the quarter was 37%. You know, depending on definition, that could already be perceived as high 30s, right? Let's assume that by definition, it isn't, right? We expect the product mix to move over the next 12 months to more branded. That will enhance the margin. We still have a little bit of cost to come through. I think we said in our prepared remarks that, some of those costs had accelerated into Q2, right, benefits. We still have some of that. I think we're pretty comfortable that, you know, gross margins in the high 30s is achievable, and potentially it could go a little higher, depending on exactly what happens with the product mix. Again, because this is relatively, you know, developing news, we haven't done sophisticated modeling, and we don't really fully, you know, understand exactly the transition schedule, so how fast that could happen. We just, again, tried to provide an adjusted EBITDA guidance to help everybody in their modeling. Okay, that's helpful. I have many other questions, but I'm gonna pass it on. I'll get out of the queue. All right. I'll get back- Yeah, I'm sure. Thank you. Bye. Thank you. Please stand by for our next question. Our next question comes from the line of Jim Salera of Stephens. Your line is now open. Hi, guys. Thanks for taking my question. Hey, Jim, ... talk a little bit on the marketing side. You know, you have this nice step up in profitability, should free up some resources for you. You kind of got a lot of balls in the air with different product launches and different partnerships. Could you maybe just give us an idea of maybe the rank order, the priority of marketing spend, and which one of these initiatives you wanna support and how that looks? Yeah, I would say the number one thing that we're investing against, and focusing on is driving new usage occasions for our core Vita Coco Coconut Water. We have other initiatives. All are going well, all are getting investments, but this is the primary objective. We think the category can be a very large category, we think it could be a very mainstream category, and for us, it's about demonstrating to consumers all the different usage occasions, and that's what we're investing the most heavily against. Yeah, just building on that, you know, what Mike said, we've got a category that's growing volume and revenue. We're gaining share in it, so we see that as the, you know, best use of our sort of invest or best prioritization of our investments. Yeah. Okay, great. Maybe if I could drill down specifically on PWR LIFT. Mm-hmm I know a lot of people that, that consume it and love the product. I know that kind of limited availability, and most of the people I talk to buy it on Amazon. Can you give us any sense- Yeah ... for kind of what the ramp is there, especially because that sports drink category is so expansive, and I think you have a really differentiated product offering there? Yeah, we love it too, and we just upped investments on Amazon specifically because we think it's a good place to really get trial and understand consumer feedback and all of these type of things. That's an area we're investing. We're also investing quite heavily in Texas through our test launch there with KDP. Then we'll continue to expand it from there into next year. The investment for where it's at, we believe is, is quite significant today, because we're really trying to get learnings, talking to consumers, getting feedback, executing against that feedback, such as packaging changes and things like that. Then when it's ready, we believe we could invest more heavily against it and expand it on a more national level. Should, should we think about that expansion as kind of tangent geographies from Texas? You go Texas and then one state over, or is it more, you know, it's, it's in retailer X, and then once we get it into retailer Y, it kind of springboards out into a much larger geography? I think it's, it's likely to be more retailer-specific, and I say likely just to, you know, these plans are still being developed in partnership with retailer discussions and distributor discussions. I think it's more likely to be retailer-focused, to continue to build the brand at retailers that have a, you know, a drinker that's looking for that, you know, post-workout recovery, and, also retailers that are willing to sort of give us, you know, permanent shelf space. I think it's more likely to be retailer initially, and then as we prove the model, that we, we think there's some really interesting green shoots there, then it'll be a lot easier to go broader. Okay, great. Thanks for the time, guys. I'll pass it along. Thank you. Thank you. Thank you. Please stand by. Our next question comes from the line of Christian Junqueira of Bank of America. Your line is now open. Good morning. You have Christian on for Brian. Thanks for taking our question. It would be helpful if we could spend some time on gross margins. How much of a drag were promotions to gross margins this quarter? Do you guys plan on promoting at the same level in the third quarter and fourth quarter? It would also be helpful if we can spend some time on cadence. You guys guided for sequential improvement for the third quarter, which is really helpful, but my question is more on the fourth quarter. If I, if I look at the business's performance over the years, it looks like gross margins always decline sequentially in the fourth quarter versus the third quarter. Should we expect that to transpire this year? Thank you for taking our question. Thanks, Christian. There was a few things in there, but I'll start with gross margin in the quarter. As we called out in Q1, there was an incremental retailer promotion that straddled a bit Q1 and Q2, and that did suppress margins slightly. For the most part, our promotional activity outside of that one unique event was consistent year-on-year, with increased price points to deliver the pricing you see coming through. Then for balance of the year, we've provided in the guidance, increased margins above Q2. The quarter-on-quarter cadence is a bit hard to call, especially with the transition, but we're comfortable that through balance of the year, you'll see margins higher than the 37 we delivered in Q2. Thank you. Thank you. Please stand by for our next question. Our next question comes from the line of Jon Andersen of William Blair. Your line is now open. Good morning, everybody. Good morning, Jon. Two, two questions, then I'll, I'll, I'll step back and listen. On the private label news today, I know in the past you've talked about the importance of private label or the rationale for being in private label, in the sense that it, it was important in developing the relationship with, with a retailer and, and gave you some additional influence with respect to kind of the category and price tiering. You know, in light of today's news, how are you thinking about that? Does this kind of change the dynamic at all with this large retailer? Then second question is, kind of putting the, the mix implications aside, from a gross margin standpoint, do you have more benefit to go moving forward, based on incremental ocean freight and domestic transport savings? Again, putting mix aside, just on the freight and the domestic transport side, is there more benefit to come there driving the gross margin rate higher? Thank you. Yeah. Let me answer a couple of your questions, and then maybe I'll just refer to Mike to talk, talk about the relationship with the retailer, which I believe remains, you know, very strong. First of all, you know, private label, I think historically, has helped us build scale in our supply chain. Obviously, we're much bigger and have, you know, had, you know, multiple years of double-digit growth, so our supply chain is very robust, and we're, the branded side, seeing that growth continue. You know, we're in, I think, pretty good shape. We continue to bid on private label relationships that, you know, fit our capabilities and are seeing again, some green shoots there, particularly in Europe, where they're opening up doors for the branded business and particularly in Germany. So we like it, and we will continue to like it. Obviously, it needs to work for both parties. You know, that isn't always, you know, certain that's gonna be the outcome of those processes. Obviously, we engage in those processes under terms that we think we can, you know, fit our model, and as we win business, we're obviously happy about it, and when we lose business, we're obviously unhappy about it, but that is somewhat the nature of the business. I think, from a supply chain perspective, we're in pretty good, good shape, and our growth sort of, you know, reassures us that we can utilize the relationships we have and, and continue, continue to grow. On the margin question, the, we saw, you know, more benefit in Q2 than we have perhaps we had anticipated from the transportation cost, sort of recovery to more normal historic levels. Ocean freight, spot rates are now close to, to historical levels, so I think we've seen the most of that. We haven't yet, as we said on the call, on, in our prepared remarks, started entering into contracts to sort of lock that in because the contract rates are still above spot rates, and we're basically, playing the spot market except where we need to secure capacity for service reasons. In the other transportation bucket, which, you know, for us, includes domestic transportation, port fees, warehousing, inbound and outbound logistics, those costs have not, you know, fully returned to historical levels. We did see a pretty significant improvement in our efficiencies related to those costs, like, you know, how full the trucks were, you know, how small detention and demurrage costs were, et cetera, et cetera. As the supply chain you know, flowed and as our inventory levels came down, some of those costs sort of improved in, in Q2, and our hope would be that we can maintain those gains. On some of those costs, it's unclear if they do return to historical levels. You know, diesel is still high, truck drivers' wages are still high, port fees went up, warehousing costs went up. Ultimately, I think this stuff will, will return to norm, but it may take a little longer than the sort of very significant acceleration in, you know, or return to, to historical levels that we saw in ocean freight. I think there's a little bit of upside there, but we certainly have seen most of the upside so far. Then I'll just turn it over maybe to Mike, just who can comment on, on, on the retailer relationship, which I, I certainly would describe as strong. Yeah, I think, you know, Martin mentioned, I mean, you know, private label historically was a way for us to gain scale and quickly grow our supply chain, and also build relationships with these key retailers. This retailer specific, specifically, it remains a important customer for us on the branded side. Our branded business has been growing with them significantly over the years and including this year. We actually believe that, that, that branded growth will even accelerate. At the same time, with their private label team, it's a great relationship. We're gonna help them transition and see. You know, help them do as best as they can in that transition. The relationship is strong, and it's an important customer and remains so. Thank you. Thank you. Please stand by for our next question. Our next question comes from the line of Michael Lavery of Piper Sandler. Your line is now open. Thank you, good morning. Good morning, Michael. I just wanted to check in on the cans, the juice launch, which I know was kind of primarily focused in C-store. It looks like on, I suppose it's slide 10, that ACV is around 19% now. Do you have a sense of how that compares to the trajectory you might have expected? Also just where, you know, kind of what headroom is there? Is that something that could still be double or triple that, or is it kind of, you know, in the range you might expect? Where do we just, you know. How should we think about where it goes from here? There'll be double or triple that. Yeah, we're, we're joking 'cause we, we set, you know, challenging targets for our sales force that tries to go out and deliver. Look, you know, I, I think 19 is a good accomplishment, but it doesn't meet our expectations. I think in the same slide we put in where the Tetra 500 ML is in that, in that class of trade, which is at 54, and I think that. Cans should get there over time. Cans should get there over time. Yeah. Mike will tell you that we're not going fast enough, and I'll tell Mike that the team is working really hard at it. Then we'll arm wrestle about it and have a good laugh, right? The convenience class of trade for a company like us going through a DSD network, it's a slow build. There's lots of cool points, there's lots of incremental distribution to get, and then you make sure it gets serviced, right? Particularly with a new item like this, we're also supporting it with trial, tastings, features to get, you know, adoption, right? 'Cause it's, it is a, you know, a new product, at least obviously, for our brand. Within this, class of trade, it's also, you know, opening some doors. I think we're pretty encouraged. I think we're seeing, you know, if you look at, you know, weekly data or, or, you know, the, the velocity is improving. It's still probably lower than we would like, but it's improving week by week. So we're encouraged. So I think that gives us optimism that as part of a multi-year plan, we can try and close that gap to the 500 mL Tetra distribution. Okay, that, that's helpful. Maybe just checking in on Spiked as well. I know it's, it's quite new. If I understand it correctly, technically, that's Diageo's product, so you have some limitations in how much control you have, obviously, but you're working together with them. Can you just give a sense of how that's unfolding and, and you know, kind of, what momentum you're seeing there? Yeah, I think, like you said, it is Diageo's. We don't get a ton of data, but what I will tell you is the marketing cover that we're getting from them is so significant, and we think it's been quite beneficial in driving the awareness around this specific usage occasion of cocktails mixed with coconut, using coconut water as a mixer, and we think it's actually adding a lot of benefit. I think I talked about in the script something like 750 million media impressions, 1 billion PR impressions. It's been really helpful. In terms of volume and sales, we don't get a ton of data on it. I think it's doing well. I'm seeing it, you know, anecdotally, I'm seeing it out there, others are seeing it out there. It seems to be moving. The amount of media coverage has been tremendous, I think, for our brand, and I think it's, it's been quite helpful for that occasion, specifically. We support the objective. Okay, thanks so much. Thank you. Please stand by for our next question. Our next question comes from the line of Chris Carey of Wells Fargo Securities. Your line is now open. Hi, everyone. Just one quick question from me. I guess, you know, on the, on the private label piece, it's been sort of well, covered at this point, but, you know, is this gonna be like a multi-year headwind, you know, as you continue to scale your, your branded offerings and, you, you know, look at the, the margin structures of private label more, you know, closely going forward? You know, just thinking about resetting the long-term sales algorithm to focus only on branded. I just wonder, you know, is this retailer dynamic a one-off or I know you said that, you know, there continue to be interesting private label opportunities, but, you know, I just, I just wonder if this is a multi-year workdown as you, as you grow branded. Just any thoughts on the long-term nature of private label versus branded? Thanks. Yeah. No, we don't believe it is a multi-year workdown. We're actually really excited about private label. Some of our private label business, we've won some significant private, private label business as of recently. When private label works in, within our margin structure, it works, it works well. obviously not as, you know, an overwhelming percentage of our business. We want branded to continue to outpace the growth of private label, which it's doing. When private label works within our margin structure, it works well, and, and we continue to win private label business and go after private label business, both in the U.S. and as you see in the, in the international results, also international. Okay, thanks so much. Thank you. Please stand by for our next question. Our next question comes from the line of Eric Des Lauriers of Craig-Hallum Capital Group. Your line is now open. Great, thank you for taking my questions, and congrats on the very impressive quarter here. Thanks, Eric. You previously stated that you'd remain flexible on price increases going forward, you know, as you're looking in the back half of this year and into 2024. I'm just wondering if you could kind of walk us through some of those puts and takes here, you know, as you're looking at the results at the retail level, and then of course, you know, with this news of the transition of private label. You know, on, on one hand, you know, the, the brand is continuing to benefit from this, you know, improved affordability relative to adjacent categories. On the other hand, you obviously have room to continue increasing. Just kind of wondering if you see a, you know, strategic opportunity to sort of, you know, continue sourcing market share by taking less share than peers? You know, is this kind of like, hey, you know, we've, we realized this, the strong benefit over the last, you know, call it six-12 months, and now you're kind of more than happy to take price in line with other categories? Just wondering how you're thinking about it. Thanks. Yeah, I think we're, we're pretty happy with how everything has reacted to our pricing that we took last year, both Q2 and Q4. You know, we continue to monitor it, and there may be some opportunities certainly, you know, in pricing between mixed packs and singles and stuff to, to optimize. We currently don't have any sort of formal plans for pricing. We'll certainly, we'll monitor what is going on in other categories, where I think we're seeing, you know, pricing activity slow with some significant retailer pushback. Our pricing hasn't changed that much and really just covers our inflationary costs, you know, we're not expecting retailer pushback. I think what we might see is some private label pricing, decreases just as their costs improve. We're gonna monitor it. Well, we'll monitor it and monitor the gaps. We don't see a lot of interaction between our brand and private label where they exist, and, so we're pretty comfortable with that. We'll just monitor the gaps and, and stay on top of it, and if we see opportunities, we'll take them. Okay, great. That makes sense. Just my last question, just wondering how you're thinking about working capital, into the second half, if there's anything to call out from a modeling perspective. I think you mentioned that you're looking to get inventories back to a more historical level, just kind of given the significant, private label transition, I'm just wondering if there's anything else that you guys are foreseeing, that's worth calling out here. Thank you. Yeah, it's Ed Kolh. I think you touched on one. We do expect inventory to return to more normal levels as we, as we balance customer service with, with a low level in Q2. Also, accounts receivable, which nets a little bit with the payables, is a bit high right now. That's timing of specific customer payments. Finally, on the private label transition, it's too early to tell the timing around year-end and the cutoffs, but we do expect maybe a more normal view to our working capital, except for that, as we end, end the year. Great. Thank you. Congrats again. Thanks. Thanks, Eric. Thank you. Please stand by for our last question. Our last question comes from the line of Robert Ottenstein of Evercore ISI. Your line is now open. Great, thank you. Thank you very much. couple of cleanup questions, I guess. you know, love to get your, your views, you know, through, through the eyes of your business on the state of the consumer, the competitive environment, and what levers you believe you have to, you know, adjust to actual, you know, current or potential changes in either of those factors. Thank you. I think, I think, you know, based on the fact that volume growth is, I think, the highest amongst pretty much any other beverage category right now, the consumer seems quite healthy. We're excited about that. You know, coconut water and, is, is growing faster than water, energy, sparkling, pretty much anything right now, and Vita Coco is leading that. I think, you know, consumer seems quite healthy and, and that's even with some price that we've taken over the past year. We feel good. You know, it doesn't seem to be, doesn't seem to be slowing down. It seems to be- Yeah, I think, I think in our category, we're, we're obviously not seeing anything yet. I think as we talked about in prior quarters, we're giving our consumer with the multipacks sort of a value option if they're willing to upsize. As I think you can see from the slides in the investor deck, we continue to see that strategy paying dividends in terms of growth of multipacks. To date, we haven't seen anything. I think we've also said historically that we think that coconut water is part of people's, you know, our consumers' lifestyles and it's certainly affordable. You know, I think we see... We expect to have some insulation, but obviously we haven't seen anything yet, and nor have we been through a cycle like this, whatever the cycle is gonna be, right? We'll see. Terrific. Congratulations on continued great results. Thank you. Thanks. Thanks. Thank you. I will now turn the call back over to Mr. Martin Roper for closing remarks. Thanks, everybody. Thanks for joining us, and for your continued coverage and interest in our company, and we look forward to talking to you again after Q3. Everyone, have a great day. Thank you. Thank you. This now concludes today's conference call. Thank you for participating. You may now disconnect.