Hello, and welcome to the Vita Coco Company's first quarter 2024 earnings conference call. My name is Steven. I'll be coordinating your call today. Following prepared remarks, we will open the call to your questions with instructions to be given at that time. I'd now like to hand the call over to John Mills with ICR. Thank you, and welcome to the Vita Coco Company first quarter 2024 earnings results conference call. Today's call is being recorded. With us are Mr. Mike Kirban, Executive Chairman, Martin Roper, Chief Executive Officer, and Corey Baker, Chief Financial Officer. By now, everyone should have access to the company's first quarter earnings release issued earlier today. This information is available in the Investor Relations section of the Vita Coco Company's website at investors.thevitacococompany.com. Also, on the website, there's an accompanying presentation of our commercial and financial performance results. Certain comments made on the 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. Also, during the call, we'll be using non-GAAP financial measures as we describe the business performance. The SEC filings, as well as the earnings press release and supplementary earnings presentation, provide reconciliations of 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 now turn the call over to Mike Kirban, our Co-founder and Executive Chairman. Thanks, John, and good morning, everyone. Thank you for joining us today to discuss our first quarter 2024 financial results and our commercial plans and improved performance expectations for 2024. I want to start by thanking all of our colleagues across the globe for our continued incredible performance and for their commitment to the Vita Coco Company and to our mission of creating ethical, sustainable, better for you beverages that uplift our communities and do right by our planet. Our first quarter results reflect that our strategies are working and that our customer relationships are as strong as ever. Our priorities of driving growth in the coconut water category and initiatives to grow our share of the category are visible in the healthy retail scans in our major markets. In the first quarter, according to Circana, the Vita Coco brand grew 9% in the U.S., and in the U.K., the Vita Coco brand grew 16%. In addition to strong branded retail growth, we're experiencing strong growth in private label coconut water volume, which validates our strategy in private label and allows us to play in the value space, as well as our dominant position in premium coconut water. Our first quarter net sales were in line with our expectations, with the gap of branded shipments to scans due to the timing of promotions and cycling of opportunistic promotional activity in 2023, which Martin will comment more fully. Our priorities for 2024 remain the same as those we communicated in our year-end results. We aim for our coconut water business to grow volume in line with the category growth of mid- to high-single digits, with the continuing transition out of a key private label oil relationship, providing a headwind, offsetting expected strong coconut water growth. Our commercial initiatives around Vita Coco Multi-Packs, Vita Coco Farmers Organic, and Vita Coco Juice continue to perform very well, as seen in U.S. Circana scans that we highlighted in our investor deck, which was posted to our investor relations website today. We have also invested in growing our core business in away from home, which is an under-penetrated channel for us. We've recently assembled a larger, more experienced food service team, which we hope will allow us to deliver greater penetration in this channel. I'm excited about the progress we're making in new areas to grow our business over the long term. We recently launched PWR LIFT in the New York City area and are happy to see it in our local bodegas and to be able to sample and promote it in our home market. This is back to my roots of hustling the streets, and I'm reminded of not only how hard it is, but how fun it is and how successful we have been historically with this approach. Our New York team is certainly having fun building this brand the old-fashioned way. We also very recently launched Vita Coco Treats, a delicious and refreshing beverage that is a further exploration of where our brand can go. The launch is initially exclusive to Target, and although it is too early to tell what velocity will be, we're very excited with the early scan results. While these two initiatives are not expected to be material to our 2024 results, the results to date give us confidence that our innovation approach should help us meet our long-term growth algorithm for branded net sales of mid-teens%, building on the long-term health of the coconut water category. Our international business remains healthy, with strong performance in Europe, led by the U.K, offset by weaker shipments in Asia, as in-market inventory levels were drawn down. We intend to increase our investment in Europe, particularly Germany and Benelux regions, to gain share of the category there and to help expand the category growth, which is still in its early stages of development. On top of the strong business performance, we just released our third...... impact report, which we believe does a terrific job of laying out where we are and what we are focused on from a sustainability and social impact perspective. I'm really happy that we are maintaining our momentum, and that with the creation of the Vita Coco Community Foundation, announced last week, we'll be able to solicit support from our customers and suppliers to potentially further our efforts in these areas. 20 years after launching Vita Coco, coconut water remains one of the fastest growing beverage categories, both in the U.S. and the U.K., and Vita Coco is the number one brand. We are well positioned to lead and grow the category in these markets and to grow our share further through a combination of branded and Private Label growth, in addition to the opportunities that we see in less developed markets that have populations that match our consumer profile. I believe that we are in a stronger position than we've ever been to accelerate our growth. Now I'll turn the call over to our Chief Executive Officer, Martin Roper. Thanks, Mike, and good morning, everyone. We are very pleased with our strong start to 2024. We achieved net sales growth of 2% in the first quarter of 2024, driven by both Vita Coco Coconut Water and private label coconut water growth. This growth was achieved on top of the first quarter Vita Coco Coconut Water sales growth of 17% reported in 2023, which benefited from some opportunistic brand promotional events. Importantly, the net sales results are in line with our expectations when we laid out our full year guidance. Our first quarter gross margins were exceptional, benefiting from lower transportation costs and branded pricing effects, where promotional cadence was reduced relative to prior years. Gross margins also benefited from a decline in the importance of the private label oil business, which traditionally operated on significantly lower margins. As expected, our net sales performance was hampered slightly as increased transit times for ocean lanes going around Africa, delayed product arrivals, and servicing persistent strong private label coconut water demand ahead of retailer forecasts has been challenging. Both these effects have resulted in lower than optimum inventory levels and less than perfect service levels. We are working to rebuild our inventory in market to more normal levels, but given the length of our supply chain, this will not occur until later this year. The strong private label coconut water demand that we are seeing is, we believe, partially driven by the slightly larger price gaps to branded than at this time last year, and by consumers shifting to channels with a higher penetration of private label coconut water availability. From a cost side, our finished goods are in line with expectations, but we have seen elevated ocean freight rates ahead of 2023 levels, mainly due to the diversion of shipping away from the Gulf. These costs started in ocean shipments early this year, but appear to have already peaked and now be in slow decline. The rates we are seeing today remain within the underlying assumptions provided in our guidance. Our current approach to ocean freight is to negotiate spot rates monthly on most routes, with limited commitments to longer term contracts where we need to guarantee capacity on certain lanes. We are prepared to enter into longer term ocean freight agreements if we see competitive offers. We have entered into new supply contracts and extensions of existing contracts to support our growing capacity needs and our plans for 2025, and are in discussions on potential additional supply as we remain positive about the long-term growth that is in front of us. With that, I will turn the call over to Corey Baker, our Chief Financial Officer. Thanks, Martin, and good morning, everyone. I will now provide you with some additional details on the first quarter 2024 financial results. I will then discuss the drivers of our improved outlook for the 2024 full fiscal year. For the first quarter of 2024, net sales increased $2 million, or 2% year over year, to $112 million, driven by Vita Coco coconut water growth of 1% in net sales and private label growth of 6%. On a segment basis, within the Americas, Vita Coco coconut water increased net sales by 1% to $70 million, while private label decreased 3% to $24 million, as we have started to see the impacts of the transition of private label oil. Vita Coco Coconut Water saw a negative 3% volume decline, offset by 4% net price mix benefit, while Private Label increased 4% in volume, which was partially offset by price mix changes, driving year-to-date net sales decline of 3%. Our Americas Vita Coco Coconut Water scan trends remain very healthy, and we believe our shipments in the quarter reflect the absence of some promotional activity in untracked channels relative to 2023, same time period, a decrease in DSD inventory levels during the quarter, and timing of shipments to key retailers. For the first quarter of 2024, our international segment net sales were up 20%, with Vita Coco Coconut Water growth of 1%, where strong growth in Europe was partially offset by volume softness in Asia. Private label revenue grew 93%, which continues to benefit from new business gains at large European retailers. On a quarterly basis, consolidated gross profit was $47 million, up $14 million versus the prior year period. On a percentage basis, gross margins were a very strong 42% on the quarter, an improvement of approximately 1,200 basis points over the 31% reported in Q1 2023.... These increases resulted from branded pricing, mix effects within private label products, and decreased global transportation costs. Moving on to operating expenses. First quarter 2024 SG&A costs increased 5% to $28 million, primarily reflecting increased people expenses. Net income attributable to shareholders for the first quarter 2024 was $14 million, or $0.24 per diluted share, compared to $7 million, or $0.12 per diluted share for the prior year. Net income for the quarter benefited from increased gross profit, partially offset by increased SG&A costs, a lower year-on-year impact from unrealized FX derivatives, and higher year-on-year tax expense. Our effective tax rate for the first quarter 2024 was 21%, which was flat to the prior year. First quarter 2024 adjusted EBITDA, our non-GAAP measure, which is defined and reconciled in our press release, was $21 million, or 19% of net sales, up from $9 million, or 8.2% of net sales in 2023. The increase was primarily due to the gross profit improvements previously discussed. Turning to our balance sheet and cash flow. As of March 31st, 2024, we had total cash on hand of $123 million and no debt under our revolving credit facility, compared to $133 million of cash and no debt as of December 31st, 2023. The decrease in the cash position was due to the net increase of working capital of $20 million and the purchase of treasury shares of $10 million, partially offset by strong net income. Working capital was driven by an $8 million increase in accounts receivable, as well as a $4 million decrease in accounts payable and accrued expenses. Both are due to the seasonality of customer and vendor payments. Inventory increased by $6 million, as the inventory delays Martin discussed earlier have resulted in higher inventory in transit to our markets. Based on our year-to-date performance and our confidence in the health of the category and our Vita Coco brand, we are raising our full year guidance. We now expect net sales between $500 million and $510 million, with expected gross margins for the full year of 37%-39%, delivering adjusted EBITDA of $76 million-$82 million. The guidance reflects our current best assumptions of the marketplace and our global supply chain costs. While we are confident in the underlying strength of our business, we are providing a wider range on EBITDA to reflect some uncertainty on the transportation cost side. We will actively manage our promotional activity to balance our product supply and our pricing, which will allow us to deliver the gross margin guidance while absorbing higher ocean freight costs, which will begin impacting our P&L in Q2. We expect disciplined SG&A spending throughout 2024, with full year SG&A flat to slightly increasing year-on-year. We may adjust our SG&A spending if we see improvements in ocean freight quicker than expected, or if we see productive investment opportunities to strengthen the business for the long term. We anticipate our cash balance will remain healthy through the year, allowing us to fund any potential M&A opportunities that emerge, support further share buyback activity, and continue to invest in our business for long-term growth. With that, I'd like to turn the call back 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 strength of our Vita Coco brand. We are confident in our ability to navigate the current environment and excited about our key initiatives to drive growth. We have strong brands and a solid balance sheet, and we are well positioned to compete domestically and internationally. Thank you for joining us today, and thank you for your interest in the Vita Coco Company. That concludes our first quarter prepared remarks, and we will now take your questions. Thank you. At this time, we will conduct the question-and-answer session. To ask a question, you will need to 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. Your line is now open. All right, thank you. Good morning, everyone. I- Hey, Bonnie. Hey, Bonnie. Hi. I had a question on your guidance. You just highlighted some timing impacts in the quarter on your Vita Coco, you know, the coconut water. So I guess I wanted to first understand if all of these impacts should unwind in Q2. And then for your full year guidance, you know, what does that imply for Vita Coco water? I think, you know, you mentioned you're growing in line with the category, or hopefully above, so does your guidance imply high single-digit growth for your branded coconut water for the year? Yeah. Hi, hi, Bonnie. Great question. Yes, I think we expect the category to grow high single digits, and we would certainly hope that the brand would match category growth, you know, very closely. First quarter, there are difficult comparisons to last year on branded shipments and sales, and those largely relate to some promotional activity last year that was opportunistic. We had inventory, retailers had space, and we took it, and that did not reoccur this year. And then a little bit just related to timing of shipments to where we're in a retailer direct shipment environment, to- ... there, and then also a little bit to, we believe, DSD inventory in the U.S., probably was flat to down during the quarter, where typically it would build. So a couple of difficult comparisons, and that sort of explains, in our view, the shipment growth number on branded versus the scan growth, which remains very healthy. Right. So I guess just to clarify, so that sounds good. So then, are you already starting to see that improve? You know, now we're in, I guess, a month into Q2, so you're feeling good about the full year and kind of starting to see shipments more or less match what you're seeing in the scanner data- Yeah ... moving forward? Yeah, what I would say is in how we've described the update of our guidance, it's based on our year-to-date knowledge. Okay. All right, and then just maybe a second question from me on gross margins. You know, obviously, very strong in Q1, and of course, you know, you mentioned Q2 is expected to be dragged by some of the recent increases in ocean freight, et cetera. So curious if you could maybe just provide a little bit more color in terms of the magnitude of the headwind. I mean, I'm just trying to think about Q2 in the context of maybe even last year. Should we assume gross margins, you know, in, in the second quarter? You know, will they be below last year's gross margin, or is it just kind of a step back from the really high margins you saw in Q1? Thanks. Yeah. Bonnie, it's, again, it's hard to call quarter-to-quarter. We updated the full year guidance on what we expect. Q1 was abnormally high with the combination of low ocean freight, no impact yet, higher branded pricing. So we will see that start to step back in the quarter with the highest ocean freight in the quarter, but the kind of detailed quarter-to-quarter is harder to call. Okay. And then we land in that range for the full year, 37-39. All right. Thank you. I'll pass it on. All right, thank you. One moment for our next question. Our next question comes from the line of Christian Junqueira of Bank of America. Please go ahead. Good morning, everyone. You have Christian on for Brian. Thanks for taking our question. Yep. U.S. retail sales for the coconut water category are up 9%, which is, you know, very strong. You know, any details on, like, what are you guys doing to support this type of growth? Increased advertisements? Is it, you know, benefiting from all the work you've put into the category already, like introducing multi-packs, or you guys sourcing share from other hydration options? Just any color you could provide would be helpful. Thank you. Yeah, I think we've spoken about before, we source from multiple categories, right? And that continues as we source from juice, we source from sports drinks, and we source from enhanced waters pretty equally. That continues. We see that, you know, continuing and demand is there. You know, we've talked about the fact that, you know, coconut water is really mainstreaming and becoming a mainstream category, and we think that that, you know, is playing out and that's what we're seeing happening as the category continues to grow and coconut water continues to be the fastest growing category in the beverage aisle right now. Yep. Yeah, I would also add, I think we're seeing, you know, a healthy category in most of the major markets that we play in. Yeah. So the U.K. is growing. We see growth happening from a smaller base in other countries in Europe. So there's certainly, you know, from our perspective, something going on globally in coconut water in mature economies. So that's going on. Obviously, our goal is to gain share and to accelerate that growth, and that's how we invest our money. We're very focused on driving new trial, education of consumers, and new occasions to sort of both increase household penetration and also increase buy rate. And I think all of those efforts, like, you know, sort of show up in our household data as the, you know, the results that we want are showing up there, right? Increased households, increased consumption rates. We're just gonna keep driving that, and hopefully, that maintains this, you know, great momentum we have. Very helpful. Thanks, guys. All right. Thank you. One moment for our next question. Our next question comes from the line of Jim Salera of Stephens. Please go ahead. Hi, guys. Thanks for taking our question. I wanted to ... first ask about some of the flex on marketing. Because I think if I think about the biggest driver of incremental sales, it probably has to come from, you know, increased communication of use occasions, and it sounds like the extended shipping times and the lower inventory levels maybe limits what you guys can do on the incremental ad spend. Should we think about, you know, getting inventories refilled first before you can turn up the volume a little bit more on advertising? Yeah. Yeah, demand, demand is there, and right now it's about building inventory and being able to support the demand. Yeah, Jim, as we think about the full year, like, we're gonna modulate both our price and promotional cadence, certainly maybe a little bit of marketing spend on channels which directly generate demand, right? Like maybe the e-commerce channels and stuff like that, based on what inventory we have available, either promoting items that we have in stock or pulling back a little bit. But that is certainly something we're monitoring, and our expectation is that our, you know, supply sort of constraints will ease sort of towards the middle end of the year. But this is something we're watching closely. Okay, great. And then if I could ask you a question on private label. You guys mentioned, you know, seeing some consumer shift into retail formats that have more private label coconut water. Do you have a sense if those are existing coconut water consumers that are just buying private label in a format with more private label? Or are they shopping in a value concept, but they're actually new to the private label category as a whole, in that, you know, when economic conditions normalize, that might be an opportunity to get a trade up from private label into branded? I think, I think our belief is that, you know, those sorts of channels where you're typically buying a multi-pack, you know, tend to lend themselves to consumers who are already familiar with the category, because, because it's a multi-pack purchase. We certainly believe that you can trade consumers up from private label to branded, and, you know, we look at that as an opportunity, and we think and then we monitor the price gaps, you know, carefully. Long term, we just think it's indicative of the, you know, the, the health of the category. Private label in our shipments is sort of, you know, helped by both our inventory position relative to other suppliers and the addition of new accounts, particularly on the international side, that are generating very strong growth. We certainly recognize that private label volume growth is ahead of branded growth, partially because it's operating at slightly lower price points than this time last year. But it's very healthy, and we just view it as part of a very healthy category and are very happy we're playing in both sides of it. Yeah, I was- Okay ... just gonna add, Jim, consumers are coming into the category, so the category is increasing households, and the brand is increasing households. They're coming through multiple channels, but it's the underlying health of the category that's supporting the growth of both branded and private label. Mm-hmm. Appreciate that, guys. I'll hop back in the queue. All right, thank you. One moment for our next question. Next question comes from the line of Trevor Sahr of William Blair. Please go ahead. Hey, thanks. Trevor here for Jon Andersen. My question was just on the multi-pack rollout. Wanted to hear maybe some context from you guys of performance so far, whether that's been meeting expectations. We're seeing some good trends in the Circana measured channel data, but wanted to kind of hear from you guys how the multi-pack rollout has been and any distribution gains to come this year and next regarding that. Yeah, I think, you know, we're very happy with the progress of the multi-packs and the impact both on our business and our share, given that we're one of the few brands that offers multi-packs in food and mass. And we've seen also very good wins, that those wins are, you know, the size of those wins is sort of laid out in the investor deck. I think it's fair to say that we hope for more distribution this year. Some of the retail sets are a little delayed, so it's a little unclear when that's gonna get delivered. But we're optimistic that the velocities of those items and the profitability of those items for retailers, you know, justify closing the, you know, the ACV gaps that we have on those items relative to our singles. We're gonna keep hammering away at that. We've also presented that. We do expect some wins as the resets happen. It's just too early to know exactly when they're, those are gonna get completed. Okay, great. Thanks. That's all for me. Thank you. One moment for our next question. Our next question comes from the line of Eric Serotta of Morgan Stanley. Please go ahead. Hey, thanks, guys. Want to circle back on multi-packs. A quick question here. The absolute contribution in the quarter for your slides was a little bit less than the run rate last year. Wondering, were multi-packs in particular or as part of the broader picture impacted by some of the promotional timing and inventory issues that you spoke about? And then on the private label side, you know, you've spoken in the past about private label as being a, you know, a door opener for your branded business. We're probably coming on a year now of pretty robust private label growth, and just wondering what you're seeing in terms of if private label is, in fact, helping unlock some branded customers. Thanks. Yeah, let's see. On the sort of multi-pack question, I think we're happy with the trends and the contribution that multi-packs are having to our business. We certainly have some sort of supply challenges on a couple of the multi-packs that is probably limiting, you know, retail execution. We alluded to, I think, on the call that we moved a major distributor incentive out of Q1 to later in the year. And so that, you know, would, you know, reduce the retail execution and promotional activity that might, you know, help the scan numbers. So, you know, I think we look at the scan numbers and we're not worried in any shape or form. It's a function of all of these things, and it's reflective of a very healthy category, and we think a very healthy brand. As Corey mentioned, all the household numbers that we have show good year-over-year trends. As it relates to Private Label, when we talk about our Private Label business is, is, is healthy, very healthy. We've gained accounts we've gained that have opened doors for us are mostly in the European markets, and we are, you know, basically making good progress with our brand in those markets, too. And so, you know, I think in our remarks, we talked about Germany being an exciting opportunity beyond just the U.K.. I think each of these markets is at different stages of coconut water development, and so the U.K. is potentially ahead of where Germany, France, and Spain are. But the Private Label business for us in, in mainland Europe is opening some doors, and the branded sales trends that we're seeing as we sort of, you know, have an opportunity to participate in those markets are encouraging. So I think our long-term goal in those markets is to build the number one premium, you know, coconut water in those markets from, you know, frankly, almost, you know, nothing and, you know, grow the category to the same penetration as the U.K. or the U.S., which would mean that Europe could be as large as, as North America. That's the long-term goal. Great, and then just a quick follow-up. In terms of that, distributor incentive that moved from first quarter to later this year, should we expect that in the second quarter or the third quarter? And, you know, in terms of, any color you could give us in terms of order of magnitude, in terms of the impact on your, sales growth and whatever quarter that's gonna fall in? Realize it's incorporated into your guidance, but would help us in terms of quarterly cadence. Yeah, so I think it's currently, you know, planned for Q3, but it's subject to move based on supply chain inventory, demand, and product availability, and, you know, all those sorts of factors. Really hard to quantify, you know, what the impact might have been, and so a little uncomfortable doing that. It was a program with our largest distributor, so it wasn't a national program, but it was our largest distributor, which covers a significant part of our DSD business. And again, very hard to quantify the exact impact. Got it. Thanks for the color, and, I'll pass it on. Yeah. Thanks, Eric. Yep. Thank you. One moment for our next question. The next question comes from the line of Michael Lavery of Piper Sandler. Please go ahead. Thank you. Good morning. Hey, good morning. Hi, everyone. Just wanted to follow up on the juice cans that at least in convenience the ACB build has been a little bit slower than we might have expected. Can you just give a sense of what some of the challenges are there? Is there a way for it to break through? Or what should we expect kind of looking ahead a little bit? So I think, as we've said before, building distribution and convenience is a long, slow, hard game. We launched, you know, nationally last year, and we made really good progress. I think, you know, what you then have is some of that distribution doesn't stick for reasons that maybe it wasn't quality distribution or whatever. So you get a little bit of churn. The fact that it's still growing, I think is a positive to us. Certainly impacted a little bit by the distributor incentive that I previously mentioned, 'cause we didn't have a big push. But the actual scan data is very, very healthy. Juice cans up 34% in the quarter. So the velocity is just starting to build, and that gives us a lot of confidence. And obviously, we're gonna keep pushing. So, but it's gonna be a long, slow build, and that's how we think about it. No, that's helpful color. And just one more back on multi-packs. We see the breakdown on slide 9, which is really helpful of just kind of what drove growth. But some of that, obviously, in this quarter had you know, some promo shifts or different things might have impacted it. Can you just give a sense from a incrementality perspective, the consumer behavior on multi-packs? It seems like it's driving more occasions. Is it that simple? How does the consumer interact? And you've got the base business obviously holding up, but you know, where do multi-packs go from here in terms of the sustainability of the kind of growth that it's been doing? Yeah, I think, you know, obviously it's a larger purchase, and so therefore it sits within our, the more sort of high volume coconut water consumers. And it's provided them with a better shopping experience plus, you know, a value opportunity, right? Because there is a slight discount. When we launched them, the discount was much bigger than it is today, so we've been able to close that and still maintain these velocities. We think it helps us in growing the category and having more coconut water in people's homes, because there's less chances of being out. So it's all good. I think we've talked about before, that it's probably a two-year plan to close all the distribution gaps with some of the delayed resets. you know, maybe that's now gonna be three years, so maybe a little slower than we anticipated, but we'll see how that goes this summer. But we feel very good and, you know, our read on it, you know, from a supply planning perspective, is we need to expand our ability to produce them, and so we're working hard on that. Okay. The idea is over time, there'll be, there'll be new multi-packs coming into the system also. Different formats, different flavors, these type of things, so that will continue to build. One other thing on behavior, we believe that is bringing more product into the home, which is bringing more users in each home for the many different occasions that we continue to educate consumers on for using coconut water. No, that's helpful. Great color. Thanks so much. Thank you. One moment for our next question. Next question comes from the line of Gregory Porter of Evercore ISI. Your line is now open. Hey, guys. Thank you for the question. I was wondering if you could maybe just provide a bit more color on the private label price gaps, kind of versus, you know, versus your branded products and, you know, how you've seen that change. It's something you talked a bit about, you know, earlier on the call, but just was wondering if you could provide more color on, you know, the quantum there and, you know, how you plan to respond, if at all. Thanks. Sure. I think what we've said historically is that Private Label pricing tends to track COGS or costs, right? And so it swings as the costs move, and there's a lag on that. And so, you know, I think when we look at where we are today, current Private Label to branded, you know, price gaps seem to us to be appropriate and pretty much mirror where they were pre-COVID. And so we think we're back to a more normalized sort of, you know, price gap situation. You may remember during COVID, we did not move the branded pricing that much, but the Private Label COGS would've moved quite a bit. And so we think we're back to normal. We're start to see that, you know, we're still lapping a period last year, when the gaps were a little tighter. And so probably end of Q2, Q3, we'll start to lap where we're normalizing in the year-on-year comparisons are the same. We think, you know, some of the growth of private label is that, but some of it is also channel shifting. And then some of it is the fact that we've gained accounts, right? So it's a combination of all things, and in total, we expect long-term private label and branded to grow at pretty similar rates. Great. Thanks, guys. Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. One moment 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. First for me on- Hey, Eric. Right. First for me on ocean freight. Could you comment on your mix of spot versus futures contracts for shipments here, and then maybe how you expect that to evolve for the rest of the year? And then, just kind of related, I think last call you talked about sort of increasing the supply that's coming from Brazil. Obviously, that's kind of a longer term initiative, with Brazil obviously being where ocean freights are least expensive for you guys to the U.S.. Could you just provide some commentary on how that process is going? Maybe quantify that impact for us? That'd be great. Thank you. Sure. On the ocean freight side, our position as it relates to sort of coverage on contract on ocean freight remains pretty much what it was last time we spoke to you. We have not entered into what we would regard as long-term ocean freight contracts, which, you know, we would typically think about as 12 months. We continue to operate on what we would call spot, but as we talked about last time, does not necessarily reflect what you're seeing on the indexes. You know, we're basically in a situation where month by month we are communicating with carriers to say, "Hey, we have 200 containers to go from A to B, what's your price?" And we're bidding them off against each other, and that is resulting in rates that are below what are reported spots, and that we think are competitive. We have entered into shorter term arrangements on certain lanes where we need to guarantee capacity and particularly guarantee that the ships stop at the ports that we need them to. But those are two, typically two-three months commitments on specific lanes. So at this point in time, we remain, you know, very under contracted on a forward, going basis. And the reason for that is that when we've asked for, sort of long-term, proposals, to us, those proposals look unreasonable as to what we think the overall, the pricing is likely to be over the next 12 months, given the excess capacity that exists, in the shipping ocean, you know, business, and given the consumer demand for those containers, you know, we still believe we're in a overcapacity situation, and that we are better off operating as we are than committing to long-term contracts that, you know, are being proposed at higher rates than we're currently paying. And then as it relates to increasing supply from Brazil or anywhere, our objective currently is to, you know, as we see growth continuing well into the future, is to increase our supply in all of our regions. You might see, you know, that we announced a couple of deals in the Philippines over the last several weeks to expand supply there. And we're looking at new supply partnerships in other places also as we continue to expand supply and, you know, prepare to keep up with the continued demand. Okay, that's helpful. And then just last question for me on sort of innovation and new use occasions. So, you mentioned the sort of exclusive new drink at Target. I guess just first on that, I mean, is this something that you expect to remain exclusive with Target? Might this expand to other retailers or channels, you know, should we see something similar to this partnership with Target elsewhere? And then just kind of touching on the usage occasion of coconut water as an alcohol mixer. Obviously, last year, you know, there was the partnership with Diageo and a few, I guess, featured cocktails at some summer events. Can you comment on plans for this year of sort of, you know, continuing to educate the consumer on the coconut water use occasion as an alcohol mixer? And maybe any specific comments on the Diageo partnership would be great. Thanks. Yeah. So, Treats, Vita Coco Treats, we're really excited about the initial results, but it's early and it's initial results. What we're doing there is, you know, looking at a new occasion for consumers, which is, you know, using basically a coconut milk beverage as kind of a, you know, mid-afternoon treat type of thing. Initial results, scans at Target are great. Probably better than we might have expected going in, and so we're excited about, you know, looking at it and continuing to expand it over the course of the year and into next year. As it relates to Vita Coco as a cocktail mixer, that's something we've been working on now for going on two years. It's become a significant part of our communications, you know, our consumer communications, and it's working. And we're putting... You know, we spoke about the fact that we're building out a bigger food service team, and part of that is, you know, making sure that as bars and restaurants and clubs start putting cocktails on the menu, which we're seeing happening everywhere, Vita Coco is the choice, and is through the right distribution systems to be able to get there and, and be the, the primary coconut water that's used for that occasion. So it is an important occasion and a growing occasion, we believe, for consumers. Great. I appreciate that, color. Thanks for taking my questions. Thanks. Thanks. Thanks. Yep. Thank you. One moment for our next question. Next question comes from the line of Eric Serotta of Morgan Stanley. Your line is now open. Hey, just a quick follow-up. In terms of the top-line guidance increase, was that attributable just to private label or branded or, both? Any color around that would be helpful. It's both, Eric. It's just us taking a look at, you know, the underlying health of the business, the year-to-date performance, and trying to give you guys the best information we can on where we expect the year to land. Got it. Thank you. All right, thank you. I am showing no further questions at this time. I would now like to turn it back to Martin Roper for closing remarks. Thanks, Steven. I'd like to thank you all for joining our Q1 earnings call, and we look forward to talking to you when we report our Q2 earnings. Thanks very much. Thanks, guys. Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.