All right. Good afternoon, everyone. Thanks for joining us today. So it's a pleasure to introduce our next speaker. With us today is Vita Coco's Chief Executive Officer, Martin Roper. Martin has served as Chief Executive Officer since May 2022, and has been with the company since 2019. Vita Coco was founded back in 2004, and they are the market leader in the attractive and fast-growing coconut water category. They have a full pipeline of products, including some alcohol innovation, that fuse functional benefits with authentic and better for you ingredients, and just recently posted a strong Q1 with a beat and raise. So thank you for joining us today. Thank you for having us on. So, Martin, hoping you could maybe start with the big picture and, you know, talk about the health of your consumers recently. You know, in your last earnings call, you mentioned that some consumers are shifting to channels with a higher private label penetration. So curious to hear what you're seeing, maybe how, you know, have elasticities evolved, and then, you know, what are you expecting for the consumer as the year progresses, as you think about your business? Sure. So, you know, what we see is obviously based on a small company's view of what's going on. And just talking about the coconut water category, the category itself seems very healthy, with volume, you know, up high single digits. And within the category, where our brand is healthy, also up roughly the same. But private label is a little healthier on a volume basis, not necessarily for us on a reported revenue basis because of price changes year on year, but on a volume basis, very healthy. So when we look at what's going on, obviously, we have a little better visibility to the total category than is visible from the scan data. You know, it looks to us like private label is benefiting from a slightly larger price gap to branded than existed this time last year. And then the sort of channels where private label overindexes, which for our category are club, ALDI, Lidl type discount, and a couple of other major retailers. The private label business is very healthy, and their business is very healthy, and so our assumption is there's some maybe channel shifting going on to more value channels, which I think is also being reported by the retailers, but we don't have hard data on that. So that, I think, is our reference point to that. And we just view this as sort of a transition year, whereas the price gaps go back to what they were pre-COVID. And, you know, we expect, you know, the, the growth rates then to normalize with brand and private label growing the same, unless we can gain share. So that's how we think about it. Okay. And then as you look at the coconut water category in general over the last few years, it's, you know, it's grown considerably. There's no question. So as the category growth leader, you know, what steps are you taking to drive this continued growth, you know, over the next, let's say, 5 or 10 years? And hopefully, we're here to talk about it. Yep. So maybe separating international from the U.S. I think in the U.S., we're, we're 50% share of tracked channels. Our number one priority is to grow the category. We look to do that by both bringing new households into the category through education as to the benefits of coconut water and, sort of you know, or the reasons to, to drink, but also to increase the occasions for existing consumers who have coconut water in their households. So it's sort of a dual strategy of grow the category and then grow share, share within it. On the share side, we're trying to expand our distribution, make sure we're appropriately priced and featured, and obviously spending money on marketing our brand and our, our brand benefits relative to other products. As we look out on the long term, we think the category has some tailwinds behind it from just demographics. We overindex with ethnic households, so African American, Hispanic, Asian. We also overindex with younger households, where head of households is in the 20s, 30s, and 40s. And I suppose that's not really that surprising because the brand was founded in 2004, so it's only 20 years old, and we probably missed out on those folks in the 50s and 60s. But we do have this sort of inbuilt trial mechanism, where a lot of drinkers discover coconut water on Sunday morning at college, post-hangover. And I'm seeing some smiles in the audience from those who went to college and had fun, and then not from those who didn't. But anyway, and so our households are staying, you know, we're, we're maintaining the age of our households by feeding this, this young, and then we're trying to convert them into more occasions. So a lot of occasion-based marketing, trying to persuade people to trade up to smoothies or use it as a post-workout, beverage, or use it in cocktails. And so a lot of our marketing you'll see, it talks about functional benefit. It's also talking about the occasions to increase the velocity per household. Internationally, I think it's a little different. The U.S. market is a little more developed. I think we talked on our quarterly call a little bit about Europe. In Europe, we have a very strong business in the U.K., where we have over 80% share, but the market, from a penetration perspective, is behind the U.S. So, there, it's all about education, and we're obviously not going to gain share as much. But in the rest of Europe, the category is even less developed, and there, there is a category. Actually, private label got in very early. Mm. Now they really need a brand to come in and invest in the category. So we're trying to fill that role, and we're having some early success, I think, in Germany, but it's got a little bit more of a long-term play, and that, I think, helps us in our long-term view that this business can, you know, double at some period of time. Yeah. Okay, that definitely makes sense. And, you know, thinking about your, your guidance, you know, you just reported very strong Q1 results, and early in the year, you raised your top line growth guidance to, you know, 1, you know, or by 1 point to 1%-3%, and that does include Vita Coco coconut water and then the private label coconut water volume growth this year. So I know you mentioned there was still some of the private label oil business in your Q1 results... So can you maybe provide some, I don't know, rough numbers for us to help us understand the size of this coconut oil business and how much that will impact the full year results moving forward? Because I know that's weighing a lot on the top line growth, you know, that you've laid out. Yeah, I think yes, one, we are transitioning out of the oil business. That transition started in Q1 and will complete in Q2. We are, you know, fortunately, using up a lot of the packaging materials and the other stuff that's in process, right? I think when we announced that that business was leaving, we sort of said that we expected, you know, branded growth and private label coconut water to offset that, and that was how we encouraged people to model it. We were very uncomfortable giving a dollar amount because it's one specific customer, and that we felt was inappropriate, given our relationship with that customer, to actually tell the world how large their oil business was. So I think it's modelable. I think the analysts have done a great job modeling it. Thank you, Bonnie, and everyone else. Right. And so we're not really gonna quantify it. But it will be a drag in, you know, Q2, Q3, Q4, and Q1 next year, from a comparison perspective. And we certainly, in our full year guidance, believe we can overcome that through growth of the rest of our portfolio. But it's certainly a drag, and it's a little bit of a downer for us, but it is what it is. And then the other point I'd make about the oil business, so the oil is a little bit more of a commodity private label play. It's a little more competitive. It's a little easier for the suppliers to compete in, and there are more competitors on it, so it doesn't quite have the moat that our- Yeah ... coconut water, supply chain has. And because of that, the margins on it were more commodity-type margins. So, on the plus side, one of the benefits of, not that we ever like to lose business- Right ... one of the benefits will be the margins will look a little healthier, and the profitability of the business will look a lot healthier, and it'll be a little cleaner portfolio. Yeah. No, that makes sense. And then, you know, I know you've highlighted some new customer wins recently. Mm-hmm. Maybe touch on how much that's helping to provide some offset. Then I'm curious, why are some of these new customers choosing your company? Yeah. What have they shared with you? Yeah. So I think in the last two years, we've added a couple of major new customers in the U.S., and then also added, and maybe more visibly in our P&L and the way what was being reported, it shows up in international private label, where there is solid growth. I'm taking them differently. You know, we have the retail relationships in the U.S., we're, you know, the largest supplier of branded coconut water, and every once in a while, someone will come to us and say, "We want to try private label, and would you supply it?" And we will typically say yes, if the account is of a significant size, where it's a meaningful business, because we don't want to get into the complexity of small SKUs. So that's sort of what's going on, and there's some business in the U.S. we don't have. We did have a win about 18 months ago on a major private label customer, which was helpful. It doesn't necessarily offset the oil business, so it's gonna be just, just murky because the oil business was, I think, as we indicated, with Walmart, one of our largest customers, so it wasn't an immaterial piece of business. But, I think the margins on that side will be better. Mm-hmm. In Europe, we basically built a branded business out of the U.K. and initially tried to build the brand into France, Spain, and other countries, and struggled a little bit in those countries and, but built a very successful business in the U.K. About 3 years ago, we flipped to, "Let's try and build a private label business in Europe and then build the branded business off it." And we've had some wins, particularly in Germany, that have allowed us to establish a German team, a commercial team, put up a German warehouse, and actually start to supply that market in a more effective and efficient manner, which improves the margin of the business and allows us to pitch branded. We've had some bites, right? Yeah. So now branded has some authorizations. We still need to go fill them because that's the way it works. But we're actually pretty excited that the German business could be a nice contribution to growth over the next couple of years, and we're trying to work out how to duplicate that success in Benelux and then in France and Spain. So, why we can compete? I think supply chain of these products, obviously they are sourced from the tropics, so it's a very long supply chain with a lot of ocean freight and logistical challenges. They're also largely produced in factories that are quite remote, so it's somewhat hard for the factories to build their own private label sales forces out, or even for retailers to necessarily go visit them. Sure. But we have people on the ground. We have a team in Singapore that's about 30-35 people that basically supports the factories from a quality perspective, from a technological perspective, including advising on CapEx and stuff, and then also does all the logistics of moving these hundreds of containers around the globe. And so we're well positioned to sort of manage that for a retailer. Our view is, if that helps our factories by providing them with more business, whether it be oil or coconut water, that's good, and if we can make margin, then that works. And so we're open to it, and we continue to bid on oil business on a global basis and also on private label business on a global basis, because we feel an obligation to try and take as much of this from those, our suppliers as we can, because of these exclusive contracts that we have with them. Definitely a competitive advantage and pretty complex, not so easy to replicate. It's complex, and it's hard to get there, and it's a lot of travel. Right. Okay. Switching gears a bit, wanted to ask about some of the distribution gains you've seen and some of the opportunities that you foresee in the future. Just any more color on that and how these distribution gains maybe look versus previous years? Yeah. So last year we had a lot of gains, particularly on the multipacks. Okay. And that was a significant driver of growth, as I think you've alluded to in your reports, and we've put in our investor deck. I think this year we expect to get incremental distribution on those multipacks because they aren't at full distribution or what we call optimized distribution, relative to the singles. But some of the set scheme change processes seem a little delayed this year, with some decision making delayed and then the timing of execution of those decisions. So I don't think it's shown up yet, and it's not even necessarily visible to us on exactly what's gonna happen. We continue to try and drive distribution in the convenience store channels, pushing the juice product, which is a canned product, through those channels. And we also launched juice into food and mass. And so that's, adding incremental new distribution, but it's a little early to tell how that's, how that's going. And then also in, North America, we launched, Treats, which is a strawberry cream, sweet coconut milk drink, that is a Target exclusive. And so that's currently there, and we're watching that. Obviously, again, five weeks in and hard to tell what's going on. But that, we're trying to see whether we can take the Vita Coco brand from pure, sort of hydration recovery to maybe something a little more, see where we can take it to. And there's certainly an interest among consumers around sweeter, more indulgent type beverages. So it's interesting, and we'll see where that goes. Yeah. Okay. And as you look at the different channels and maybe where you're under-indexed, is it still within the C-store channel? Would you argue, Martin, is that an opportunity still that you foresee? Yeah. If so, you know- So- Where are you at in that product? Well, I think our ACV is at 50%. I don't have the numbers in front of me, but that's the number that rings in my mind. And on our canned juice product, it's only, like, 17. So obviously, that's a big opportunity. Now, the convenience store channel is, you know, it's a subset of the total channel, so I don't know whether it's 15, 20%. I know that you cover this channel and our- Yeah expertise in this. Mm-hmm. Mm-hmm. Mm-hmm. So I'm gonna guess that's roughly what it is of grocery, right? There are obviously opportunities there. As you get into convenience store and you go down, you know, you hit the large ones like 7-Eleven, for which we have a great relationship with. They just took our 1-liter product, which is exciting to have a 1-liter in convenience store, which we probably would never have imagined. Yeah ... but it's there and it's pulling. But as you go down through all the convenience stores, you get to lots of small cold points. So it is hard work, and as you put it in, some of those it works in and some of those that it doesn't. Like, obviously there are different demographics and economics of the consumers, depending on the marketplace. So I think we're in that period where our first push on convenience is sort of landed, and now it's grinded out. Add some, lose some, a little bit maybe because of the demographic. Add some, lose some. So that's where we are. And we're trying to push it, but it's a multi-year process to close those gaps. But there's opportunity there, and there's certainly... You know, if it is 15% of grocery, there's another what? 7 percentage points there to get, and so that'd be nice to get over a few years. Then with the spring resets, you touched on this, that they do seem to be happening a little later this year than previous years. Has that been your experience as well with your business? So I think historically, pre-COVID, we thought most of the sets happened in March and April. Correct. Then during COVID, nothing much happened, and frankly, it was who has product, right? Sure. It was everything sort of ground to a halt. Now, post-COVID, people are getting back into the- Yeah Swing of things. I think also some beverage retailers are thinking about, you know, how they've structured their beverage set. Mm-hmm ... and does it make any sense? There was a period of time where that bottled water just took over a whole aisle, and maybe that's too much, maybe it's too little. Maybe they need more premium products. Maybe they should expand the set that we're in. Maybe they should, they should move it back with the beverages 'cause it got moved away when water expanded. So all these things, I think, are up in the air a little bit for some of the major retailers. And because of that, I think some of the decisions are taking a little longer because they may be more complicated. It's not as easy as- Right Yeah, you should obviously get another multi-pack in. Okay. Yes, we all agree. Now, is it in this set or is it in that set, and what does it mean? I think those things are delaying things a little bit. I must admit, I think as we get into the summer, I think it unlikely that maybe some of the sets actually take place. Right. Because, again, you would know this well, you know, when you get into the summer, the distributors are so busy just- Yeah ... trying to get product into the store, that no one has time for set- Weather ... for reset. Right. March. So we might be moving this year to September, in which case- Yeah ... maybe it sticks at September, or maybe we skips a year. I don't know. It's just- Mm-hmm ... what we hope to get at the start of the year perhaps isn't what we're currently seeing happening, not because it's not going to happen, but because it's delayed. With all that said, as you said, we raised guidance, so we still feel good about the business. Yeah. It's just messy out there. And so just the visibility that you may have, whether it's indications, do you feel good about the space gains being up this year for your business in terms of shelf space versus prior year, right? Yeah, I think when you look at our, you know, category deck that we presented to retailers, I think you'd have to be sort of living on a different planet not to believe that you should give us more space. Yeah, right. Right? Different category. And you do the same analysis. Yes ... that we do, and obviously, we're in sales mode and- Right ... and, and, and- Yeah ... you're doing it from an analytical point of view. But, we think we have a very good argument for more shelf space, particularly on the multi-packs. And, you know, sometimes, you know, the set decisions don't get made on timeframe that you would like, and that's not, you know, nothing bad about anyone. Everyone's busy, everyone has different priorities, but we think it will happen. It will happen over the next couple of years, and that opportunity is there for us to gain share in the category and also help category growth by having broader availability. Remind everyone, in terms of the category growth expectations you have for coconut water, is it high single digits, realistically? Yeah, I think we said mid- to high-single digits. Yeah. We've given ourselves a range. Okay. Right? I think if you look back at it historically, it seems to be on that growth rate over the last 10 years. There was certainly a period of time when it didn't look like that in the scan data, but the growth was happening in non-scan channels. Right. You know, during that time period, Club and the discounters, like Aldi and Lidl, Trader Joe's, built pretty significant coconut water businesses. As we see it all. So our view is that the category has been growing every year for the last, you know, I don't know, eight years at that, you know, 5%-10% volume growth rate, and then there was a period of time when there was some pricing, too. Mm-hmm. And so it feels very solid, and it feels driven by underlying consumer growth and household penetration and everything else. And it's happening in a way that is, you know, sort of repetitive, predictable, et cetera. Obviously, you can't predict the future, so I don't want to go there, but it just feels like it's not boom, splat. And it feels like it's part of people's lifestyles and adoption, and is fueling off genuine desire for natural product, natural hydration, and people incorporating coconut water into their daily lives. Mm-hmm. And, you know, thinking about what you just said, is it, one of the barriers, is it just trying to drive trial also, and trying to get your... Do you think, you know, I'm thinking about your household penetration, where it's at, where it can go, and it's part of the opportunity still to get the consumer to, to try your product? Yeah, absolutely. I think, you know, when we look at household penetration, the last data we've shared was actually from last year, and it was Numerator data. At that point in time, Numerator was saying the category was around 21%-22% household penetration. Vita Coco was around 11-12. That was relative to cranberry juice, which is in the 50s, and orange juice, that's in the 80s. So, there's obviously opportunity to take a juice product to broader distribution than it currently is. It is largely going to be about education as to why, and why these products are better for you than those products are, and/or more enjoyable and/or more flexible in usage. And, you know, I think that's a long-term education game that you could expect slow and steady build from, because, again, if it happened overnight, it would be boom, splat, right? And so that's what we're trying to do in driving occasions and driving education. And yeah, our plan is to try and get there. And you touched on something earlier about just in the context of the category and the growth, it's more volume driven. You know, historically, there was certainly some pricing with, you know, what we've seen. But, you know, when you look at your guidance this year, I don't believe it takes into account any material price increases, right? And so could you maybe talk through that decision? And I'm asking in the context when some of, you know, the other non-alc bev companies, you know, they're not putting in the similar price increases that they did prior years- Yeah. but they're still putting in some. Yeah. Curious to hear. I think, you know, starting point would be, like, over the last 3 years, I think our price at retail has maybe moved, like, 6%-8%, and that's in total, not per year. And that compares to the other beverage categories, which I think are removing high single digits per year to double digits per year. Yeah. And many of our, sort of, other public company compatriots have reported revenue growth based on pricing. Our revenue growth has been driven by volume and continues to be so. So why is that? Well, a couple of reasons. One is, our cost issues were largely ocean freight and transportation issues over the last 3-4 years. Our cost of goods, absent transportation, directly, has been flat to down, and that's what we hope to continue. And the reason for that is, that we're sourcing in the tropics where we're driving efficiencies. We have an engineering team in Singapore that drives that, a technical team that improves yields and reduces waste. And we're growing, so we can leverage the investments that the suppliers have made. And coconut water is a by-product. Coconut water is an offshoot of other coconut processing, and for those suppliers, they're happy that we are growing and taking more coconut water, and they are making significantly more money as we make, take significantly more coconut water, and they're buying the coconuts for the other things. So we're not so attached to the coconut water supply and demand situation, particularly in Asia. So because our cost of goods is largely flat, that also applies to the private label supply situation. So it sort of anchors private label pricing to be flat, and if private label is flat, then you'd have less room for maneuver for year-on-year price increases. During COVID, we had a $65 million cost absorption on the transportation side. I think that's the number, + or - a couple of million. Just a little mind-blowing in the context- Yeah ... of a $400 million revenue company. We chose to keep our pricing, our branded pricing, for the first year because we thought it was transitory. I remember talking to you- I know. This is transitory. It's going away." Anyway, so it didn't go away, and so then we eventually decided to take 8%, which was the first price increase that we'd taken in 10 years. That price increase stuck, and it's taken, and, Mm-hmm ... we haven't rolled it back. And it's covering other costs in our system. But beyond that, we don't feel a need to take price and to change the private label price gaps. Mm-hmm. Some of what we're seeing- Mm-hmm ... today is that some private label went down a little bit when the cost of goods went down last year, and so the price gaps were a little larger, and you're seeing a little health of private label- Yeah ... volume growth. So we like the gaps as they are, where they are, and we're going to monitor it. I think, you know, if we think there's an opportunity to take price, we will, but equally, if we need to promote, we will. And we'll just play it by ear, depending on what our inventory availability is. Yeah. Okay, that makes sense. And then gross margin expansion, and Q1 especially, was very impressive. It was up nearly 12 points, and you did raise your, your 2024 gross margin guidance. Now, in the context of that, you also called out some ocean freight pressures. Mm-hmm. Recently, they are supposed to be most acute in the second quarter. So curious to hear how, you know, freight rates have trended more recently and any, you know, upside or downside risk to ultimately your gross margin guidance for the year. We provided guidance for the earnings time, and what I would just say on the guidance is, obviously, it's our best guess of what's going to happen for the year at the time we make it, and I'm not planning on updating that today. Mm-hmm. And so we basically look at what we thought the outcomes were going to be based on what we knew at the time, and we go from there. The gross margin improvement that you saw in Q1 was a function, largely a function of a little bit of pricing, but mainly the participation of the transportation cost pressures, which still existed in Q1 of last year. And so that was the driver. And then also a little bit of branded growth relative to private label growth and the mix of the business and the start of the oil business going away, which I mentioned was lower gross margin. I think as we look out on the balance of the year, we, there's a fair amount of uncertainty on what ocean freight could be. I think you asked specifically what's happened since- Yeah. two weeks ago, which just feels like yesterday. Yeah, it really does. So if you look at the indexes, which is what I typically refer investors to, and we talk about the Drewry Index, which is D-R-E-W-R-Y, that spiked last week, and it was up a little bit the week before. So it appears to have declined since January, February, and then to have flatlined and then to maybe come up a little bit. And by spike, it's all pretty marginal. And so, so we're looking at it and going, okay, and, that certainly somewhat represents the prices we're being asked in the marketplace, but we don't necessarily pay what we were asked. We bid it out, and we bid it out competitively, and we build long-term relationships with carriers that will work with us. The indexes tend to, we believe, reflect more spot prices for small shippers than actual prices for large shippers. Yeah. We don't necessarily pay spot rates, even if we're not contracted. We are bidding on a monthly basis this, "Hey, I have 200 containers to go to port B. Yeah. Do you want them?" And then I call another carrier. So that's sort of, sort of how we think about it, and we're currently happy operating that way. We would be happy to enter into a long-term contract with a carrier if they offered us a rate we thought was advantageous for a 12-month commitment. But we still believe in the short term that there's excess supply capacity relative to demand, and there's more downward pressure on pricing. So yes, we're seeing what's going on in the indexes, but we're currently playing, you know- Yeah ... staying the course. But it's interesting, I'm not sure that's always as understood, just given your size and scale, your ability to negotiate, and you are under or significantly under contracted, right? Yeah. Prior to COVID, we were typically contracted for 70%-80% of our needs. Yeah, I remember that. And we used to contract in April and in September on a 12-month basis in sort of layered stacks. Post-COVID, we've stayed under contract. We do enter into agreements with carriers to service certain ports. So we are shipping from, you know, I described the factories, they're in rural locations. We're shipping from small ports. We need the feeder vessels to visit. Mm-hmm. And so we do, on some lanes, you know, negotiate three-month commitments to say, "Will you service us weekly? If so, we will do this." But for the most part, we're negotiating with the big carriers: "Hey, we have 200 containers for Asia to L.A. Do you want them? Do you not want them?" And because it's a sort of marginal revenue business where they've got capacity and they want the containers, there's some opportunity to negotiate those. What about any increased transit times, you know, for some of these ocean lanes? You know, that's, I think, led to some delayed product arrivals and maybe less than perfect, you know, inventory levels or service levels. You know, where are you at with your service levels currently- Yep versus, I don't know, historically? I think, you know, there's a number of things going into our current service levels. I'll start off by saying that our service levels aren't as good as they were this time last year. Okay. And they're not where we want them to be, right? We have less inventory that's apparent from our balance sheet. And so then the question would be: Okay, why do you guys have less inventory? What happened, right? And it's a little complicated. I think on the one hand, you know, just, you know, as we indicated by raising guidance, we, the demand is slightly ahead of where we forecasted or what we thought it would be. There was a period of time last year when we thought we were losing a major private label coconut water business. Yeah, that's right. We downed tools. We stopped production. As it happened, we weren't asked to stop supplying, and therefore, we still had the demand, but we didn't produce. Yeah. That shows up, you know, on our balance sheet as lower inventory levels, but it also shows up as service issues. Mm-hmm. I think the growth, the private label has been a little stronger than many of our customers thought it would be. So we have some service issues there, but I think they're manageable, but it will take a little while to work our way through. So it's, it's just complicated, and there's a number of things going on. The transit times you refer to are largely the Asia to East Coast and Asia to Europe. Mm-hmm. So both those markets have lost 2 weeks' worth of inventory on the East Coast of America and in Europe. And we would typically run, you know, with 4 weeks on core SKUs and up to 6-8 weeks on non-core SKUs. So that will affect the service levels on the core SKUs, and that's what we're seeing. And so, okay. So we will adjust, you know, promotional cadence and price promotion where we can. Like, some retailers insist on it, and others are more flexible if you don't have the product. Yeah. They don't want to- Sure to persuade people to come in to get product they can't get. So we'll adjust that as on the balance of the year, but it's gonna be... you know, it's gonna be suboptimal this summer, probably through the fall. So yeah, that's what I was gonna—just thinking about the peak summer selling season. Mm-hmm. Is there some risk then, that you foresee being able to supply or is it not to that? I think we baked in- Mm-hmm -to our guidance, the risk we saw. But I think what we were clearly sort of signaling was we don't expect our service levels to be perfect, and we expect it to be somewhat constrained. Okay. But we're still raising guidance, so okay. Yeah. This is the problem we have- Yeah You know, it's in the big scheme of things, it's a good problem to have. Okay. All right, kind of back a little bit to the gross margin topic. Because of how strong they've been, and, you know, you have, you know, indicated that long-term gross margin outlook, you know, really would be the high 30% range, and you got there pretty quickly. You know, as I think back, I know. Well, it's not wood. I know. Yeah. A few quarters ago, you know, you're still guiding, right? Gross margins to 37%-39%, but- Yep. You know, as I think about the next, I don't know, 3-5 years, you know, how do I think about peak gross margin levels, if I dare to put that out there? You know, what will be the drivers of margin expansion above that high 30. I think on a quarterly basis, you'll see some noise just based on timing of promotions and everything else. I'm going to talk full year gross margins. Mm-hmm. I think when we went public, and since we've alluded to a desire to get gross margins to the high thirties, approaching forties. Yeah. I think we've obviously had a couple of quarters in the 40s, so certainly we're looking at that and going, "Okay, this is good." Is our long-term guidance so right? I think we're benefiting a little bit right now from the decline in the oil business, and some sort of lack of pricing promotion that's associated with the inventory situation. So in those environments, I think, you know, aspiring to, you know, high 30s to low 40s is fine, but in a normal promotional cadence, maybe not. So that still needs to be worked out. So what goes into where it actually ends up? I think the mix of business is important. So as we grow branded business in Europe, then it's possible that will help our gross margins relative to the private label margins, and we'll have to see how that bakes in as to whether that helps the high 30s margin number. And also in the US, the private label margin is significantly lower than that, so the mix changes. So as long as that mix stabilizes, and then we start growing branded faster than private label, which is what we did for 3, 4 years there, then that will help that margin. So is it, you know, feasible to dream of margins that start with a 4? Yeah, we can all dream. And is there a path to get there? I think the other thing I would say is, and we haven't talked about it, but part of our strategy is grow the coconut water, maybe double the coconut water or whatever- Mm-hmm. -and not lose sight of that, but at the same time, innovate off that platform with other products. And the nature of innovation and startups of other products, like, you know, something like this, the margin on something like this won't be 40% early on. Right. But certainly, when we think about what categories we want to go into. Mm-hmm. We want to go into categories that are premium priced, but consumers will pay for functionality and where there is a margin. Mm-hmm. So that if it does reach scale, we have more branded business with margins in the 40s. And so playing that out, if we are successful at unlocking one of those wins, then the margins should be in the 40s. But that's a series of ifs- Right. not a commitment. Yeah. So it's a lot to think through, and I know we're getting close to time, but I did want to ask about the innovation- Yep. the portfolio, because you have come out with some impressive innovation recently. Mm-hmm. You know, think about balancing all of that. You know, are you kind of trying to focus on maybe is it bigger bets or is it more this approach at this point, kind of seeing what could work? Because, I mean, you're in coconut juice, coconut milk- Yep. -alcohol, sports drinks, et cetera. Yeah, yeah. Uh. So we always prioritize it with what we want to do with the Vita Coco brand- Yeah -which is a coconut water brand, and can go places that are coconut, associated. And we're trying to work out how far we can take that. So, for instance, our coconut, our Vita Coco Treats is: Can we take this to sweet, decadent dessert? Mm-hmm. You know, while still being a beverage. Our second priority is sort of organic innovation of new brands. And there we're outside of coconut water. And, you know, when I think about it, I look for categories that are maybe fragmenting or about to fragment. So large categories that are about to fragment, where we can play in a niche of 1% or 2% of that, where that would be meaningful to us, like $100-$200 million in revenue, but not meaningful enough that the big players who exist in those categories are going to come squash us before we get there. Because, you know, the last thing you want to do is launch stuff into... And then be squashed immediately because it's such a great idea, and you had a great execution, but you don't have necessarily the muscle to get there. You want to start, go for categories that maybe look too small to other people, but you can prove they win. Mm-hmm. So that's how we think about it. And so, PWR LIFT, which I have here as an example of that, is protein-infused isotonic. And, you know, we think there's an opportunity for that play within the isotonics, which I think is close to a $10 billion business. Mm-hmm. If we got $100 million, that for us is life-changing. Yeah. If we can do that once or twice over the next five years, then we probably double our business. Yeah Just with that initiative, quite apart from the fact that the core is healthy and growing. So that's how we think about it. Make sure it has positive margins, that we like the product, that it's better for you, charges a premium, delivers margin, and there's an opportunity maybe to win if you move, you know, smartly, quickly, but maybe with caution and patience, so you don't... You know, we're not in the business of spending a lot of money to blow something up and have it fail on us. We'd rather spend money slowly and build something from the base. That makes a lot of sense. And on that point, organic and/or via acquisitions, I'm thinking about your balance sheet. Mm-hmm. You're still, you know, continuing to look opportunistically, I imagine, for potential M&A and- Yeah. -tuck in? Yeah. Yes, I think, you know, we think that we have the commercial capability, particularly in North America, to basically tuck in a beverage-type business or a coconut-type business, and leverage both synergies but also help it scale. So we continue to... You know, we look. When the opportunity is right, we will probably do something, but the opportunity needs to be right, both in the value we can create and the price we have to pay for it, and whether or not it, you know, dilutes our focus on the core business, right? So, we will pursue all the paths of organic innovation and M&A, as ways to try and diversify our platform within the natural beverage space, and to build on the commercial capabilities and excellent team that I'm so fortunate to be part of. Yeah. All right. Well, this was great. Thank you so much for your time. Thank you, Bonnie. Thanks, everyone, for joining us. Thank you very much.