Hello, and welcome to the Vita Coco Company's third quarter 2024 earnings conference call. My name is Steven. I'll be coordinating your call today. Following the prepared remarks, we will open the call to your questions with instructions to be given at that time. I'll now hand the call over to Alex Liscum with ICR. Thank you, and welcome to the Vita Coco Company third 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 third 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, there 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 releases 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 will use some non-GAAP financial measures as we describe the business performance. Our 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. Additionally, please note that within the quarter, the company began using Circana's expanded MULO Plus retail scanner data, which offers 15% more expanded coverage of the U.S. retail landscape, including greater coverage of retailers with larger private label programs, and results in a reported category size approximately 40% larger than the prior reported data set. All investor deck exhibits and script references have been updated to reflect the new data set unless otherwise noted. And with that, it is my pleasure to now turn the call over to Mike Kirban, our co-founder and Executive Chairman. Thanks, Alex, and good morning, everyone. Thank you for joining us today to discuss our third quarter 2024 financial results and our performance expectations for the balance of 2024. I want to start by thanking all of our colleagues across the globe for our continued strong 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 priorities of driving growth in the coconut water category are visible in the healthy retail scans in our major markets, where coconut water remains one of the fastest-growing categories in the beverage aisle, delivering double-digit growth. Year-to-date through end of September, according to Circana, the Vita Coco brand grew 8% in retail dollars in the U.S. and grew 19% in the U.K. As we previously discussed, we were hampered by significant inventory shortages during the quarter due to limited ocean container availability earlier this summer, which resulted in a slowdown in scan growth. Our team, our distributors, and our retail partners did an incredible job weathering this storm, and we are quickly recovering and starting to better fill consumer demand for our products. For the last four weeks, as visible in our investor deck slide five, branded scans quickly rebounded, and we believe that this is a sign that demand for our products and the category as a whole are stronger than ever. In addition to strong branded retail growth, we've seen strong demand for private label coconut water. Our private label business remains a strategically important aspect of our business and allows us to benefit more fully from our category growth initiatives. We should see our private label coconut water shipment trends improve as we put the supply chain challenges of this summer behind us. Our priorities for growth remain unchanged: adding households, expanding occasions, acceleration of our international businesses, and innovation. 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 highlight in our investor deck. One highlight is Vita Coco Juice that is gaining share at retail with 39% growth year-to-date. The introduction of our Vita Coco Coconut one-liter pack into a key convenience store chain this year has been incredibly successful. We believe that it is now one of the highest-performing items in their juice store. Our newest innovation, Vita Coco Treats, a delicious and refreshing coconut milk-based beverage, has produced promising results at a key retailer through the summer, despite challenges on supply, which are now behind us. Given its strong performance, we've decided to broaden the availability for 2025 to more retailers and are receiving positive indications of interest from these retailers. We're excited about the initial reception for Vita Coco Treats and for the future of innovative coconut milk-based beverages, which could offer us another path for long-term growth. Our international business remains healthy, with strong performance in Europe led by the U.K. and Germany. In Germany, the category has grown over 50% over the last year, according to Nielsen, and we are now the leading branded coconut water at three times the size of our closest competitor. We intend to continue to invest in international markets where we have a strong brand position and can benefit from driving category growth. Despite continued volatility in the global supply chain, we are encouraged by the recovery in our inventory availability that we started seeing in late September and which has continued into October. While we still have a lot of work to do, I expect that product on retailer shelves and in distributor warehouses will start returning to normal levels soon, and I'm excited for a strong finish to 2024 and what I believe will be a very exciting 2025, and now I'll turn the call over to our Chief Executive Officer, Martin Roper. Thanks, Mike, and good morning, everyone. I'm excited to report another good quarter and to be able to raise guidance based on our expectations for a strong finish to the year. I expect this momentum to continue into 2025. Let me start by providing some color on the ocean freight container availability and costs that we saw during the last six months. As we discussed at our last earnings call, in May, June, and July, we were only able to obtain approximately 85% of the ocean containers we had obtained in the same period in 2023 and saw significant price increases for those containers. This three-month container shortfall against our actual requirements, which had been for expectations of approximately 10% growth, significantly squeezed our safety stocks in market, which were already unusually low due to strong performance in the first half of the year. This also reduced inventory at distributors and on retailers' shelves. Fortunately, in early August, we saw greater availability in containers, although at unusually high prices, which allowed us to start to pull the inventory that had built up at supplier and to move significantly larger volumes of product to market than in prior months. Container availability continued improving in September, such that in the two months, August and September, we obtained more containers than we had obtained in the previous three-month period, May, June, and July. We also saw container pricing slowly drop from their highs of early August. While the impact on our in-market inventory lags container shipments due to transit times of four to eight weeks, late in September, our shipments to customers began to recover, and our shipments on a weekly basis on most key items started to match or exceed retail scan performance. We have seen container availability at source continue favorably in October, similar to August and September. The East Coast port strike in early October constricted flow of containers into the East Coast for a couple of weeks, but that backlog is slowly recovering. At this time, we believe that inventories both at our warehouses and at distributors and retailers still remain below optimum levels, particularly on some SKUs. We expect this situation to improve gradually through the end of the year if consumer purchases continue on their current trajectory. Given we operated most of the quarter with limited inventory, we are pleased with our third quarter performance. Net sales were down 4% in the third quarter, with growth of Vita Coco Coconut Water offset by weakness in private label shipments. The private label shipment weakness was due to the decrease in private label coconut oil business that we previously communicated and limitations on our private label coconut water inventory, as private label demand in the first half had exceeded our and our retailer partners' expectations, which resulted in our stock levels entering the third quarter being significantly depleted. This, coupled with the container shortages, significantly impeded our ability to meet private label demand during the quarter. While it is difficult to triangulate based on our analysis of the scan slowdown for brand and private label relative to expected trends, we estimate that we lost between 5% and 10% of net sales growth during the quarter due to the inability to fulfill customer demand. As Mike mentioned, and it is highlighted in our investor deck, during the quarter, we also saw a decrease in the growth rate for U.S. Retail scan sales of Vita Coco, which we believe reflects the combination of inventory challenges and the reduction of promotional activity. The impact of the inventory challenges is also visible in TDP trends during this period. In the last 30 days, we've seen some improvement in retail scan growth and TDPs, which we believe reflects the early signs of recovery of inventory at retail. We believe that our third quarter shipments are not reflective of the overall consumer demand for our branded and private label products and that we should see stronger trends as we rebuild customer inventory, restore our promotional cadence, and ensure that there is ample product on retail shelves. Additionally, our branded promotional activity during the quarter was significantly reduced relative to last year and included a decision not to participate in a major branded club customer promotion this fall, decisions made due to the inventory constraints. This resulted in a significant decline in dollar sales and an associated increase in pricing in the new expanded Circana Plus data. Although these promotional decisions in aggregate are beneficial to gross margin, they likely resulted in lower net sales and scans for the quarter. Our third quarter gross margins were healthy, but down versus the first two quarters of the year as the impact of more expensive ocean freight that started in the second quarter began flowing through to our P&L. The aforementioned reduction in promotional activity, together with reduced marketing investment, helped us to offset some of the gross margin pressure from increased ocean freight costs. From a cost side, our finished goods costs, excluding ocean transportation costs, year-to-date are in line with our expectations. We currently believe that ocean rates are still at unusually high levels relative to long-term averages, and therefore we are continuing to not commit to any long-term fixed-rate contracts. However, we are exploring additional capacity commitments and floating rates to attempt to insulate us from events such as the capacity constraints we saw this summer. If we see competitive fixed-rate offers for long-term contracts that make sense to us, we would be willing to enter into fixed-rate agreements. Based on the inventory we have in transit and our confidence in the category and Vita Coco brand trends, we're raising our four-year guidance for net sales and Adjusted EBITDA. We believe that the strong category growth is a positive indicator and supportive of our long-term growth algorithm for branded growth. In anticipation of such growth, we have added production capacity for 2025 and 2026 to provide greater supply chain flexibility than we had this year. 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 third quarter 2024 financial results. I will then provide an update on our outlook for the full year. For the third quarter 2024, net sales decreased $5 million, or 4% year-over-year, to $133 million, driven by private label declines of 37%, partially offset by Vita Coco Coconut Water net sales growth of 8%. On a segment basis, within the Americas, Vita Coco Coconut Water increased net sales by 5% to $94 million, while private label decreased 42% to $16 million, as we saw the impact of reduced supply on key private label water SKUs and the transition out of the private label coconut oil relationship that we had previously indicated. Vita Coco Coconut Water saw a 3% volume increase and a 2% net price mix benefit, while private label sales declined 42%, driven by a 32% decrease in volume and a 14% price mix reduction due to the coconut oil transition. For the third quarter 2024, our international segment net sales were up 19%, with Vita Coco Coconut Water growth of 31%, where we saw strong growth across our markets. Private label sales declined 11% due to supply challenges on private label coconut water, and the transition out of the private label coconut oil relationship impacted our shipments. On a quarterly basis, consolidated gross profit was $52 million, down $5 million versus the prior year period. On a percentage basis, gross margins remained very strong at 39% on the quarter, despite higher ocean freight costs, as previously mentioned. This was down approximately 200 basis points from the 41% reported in Q3 2023. The reduction in gross margin resulted from higher ocean freight costs, partially offset by better branded net pricing and mix effects of private label products. Moving on to operating expenses, third quarter 2024 SG&A costs decreased 5% to $31 million. The reduction was primarily driven by disciplined marketing spending, as we adjusted our spending in light of reduced product supply. We would expect to increase our investments as we see improved inventory at retail. Net income attributable to shareholders for the third quarter 2024 was $19 million, or 32 cents per diluted share, compared to $15 million, or 26 cents per diluted share for the prior year. Net income for the quarter benefited primarily from an unrealized gain in FX derivatives versus a loss from the prior year and decreased SG&A costs, partially offset by a lower year-on-year gross profit. Our effective tax rate for the third quarter 2024 was 25%, versus 21% in the prior year quarter. This represents a year-to-date ETR of 24%, versus 20% last year. The increase was driven by the jurisdictional mix of the pre-tax profits and the impact of higher non-deductible expenses this year related to covered employees' compensation compared to last year. Third quarter 2024 adjusted EBITDA, our non-GAAP measure, which is defined and reconciled in our press release, was $23 million, or 17.3% of net sales, down from $27 million, or 19.5% of net sales in 2023. The decrease was primarily due to the gross profit performance previously discussed, partially offset by lower year-on-year SG&A spending. Turning to our balance sheet and cash flow, as of September 30, 2024, we had total cash on hand of $157 million and no debt under our revolving credit facility, compared to $133 million of cash and no debt as of December 31, 2023. The increase in the cash position was due to the strong net income year-to-date, partially offset by an increase of working capital of $30 million, and a year-to-date repurchase of shares valued at $12 million. The working capital increase was driven by a $27 million increase in accounts receivable, which is due to the timing of customer payments, and an inventory increase of $14 million. Our Q3 ending inventory increased $20 million from the unusually low levels at the end of Q2, as the recovery we began to see in container availability resulted in more finished goods inventory on the ocean and transit to our markets. Based on year-to-date performance, improving inventory levels, and our confidence in the health of our category and our Vita Coco brand, we are raising our full-year guidance for net sales and Adjusted EBITDA. We now expect net sales between $505-$515 million, with expected gross margins for the full year of 37%-39%, delivering Adjusted EBITDA of $80-$84 million. This guidance reflects our current best assumptions on marketplace trends and our global supply chain performance and assumes a continued improvement in inventory through the balance of the year. Ocean freight costs have come off the high seen in July but remain unusually fluid. Our latest estimate is that the impact of these elevated ocean freight costs will be approximately $14 million of increased transportation costs on a rate per CE basis in the second half of the year over the equivalent first half rate per case equivalent. Approximately 30% of these costs hit in Q3, with the balance expected to impact our Q4 performance. We expect disciplined SG&A spending to continue in Q4, with full-year 2024 SG&A flat to slightly down to last year, as we don't expect to restore the full investment and marketing spend mentioned earlier. We anticipate our cash balance will remain healthy through the balance of the year, allowing us to continue investing in our business for long-term growth, fund any potential M&A opportunities that emerge, and support further share buyback activity. Finally, as of today, the company has purchased 112,702 shares, bringing our total repurchase to 534,246 shares for an aggregate value of $12.8 million and an average share price of $23.97. And 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 and the coconut water category. We are confident in our ability to navigate the current environment and are excited about our key initiatives to drive growth. We have strong brands and a solid balance sheet, and we are well-positioned to drive category and brand growth both domestically and internationally. Thank you for joining us today, and thank you for your interest in the Vita Coco Company. That concludes our third quarter prepared remarks, and we will now take your questions. Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will need to press star 101 on your telephone and wait for your name to be announced. To withdraw your question, please press star 101 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. I have a question. Bonnie, Bonnie. Good morning. I had a question on your new guidance, which implies around 14% top-line growth in Q4, which is certainly a big acceleration, and then even a greater acceleration on EBITDA growth in Q4, which suggests greater leverage. Now, I know you touched on this, but just hoping you could expand on the drivers of each a little further, as well as maybe the setup for next year in terms of container availability. Thanks. Sure, Bonnie. So the growth, as we talk about in the script and the investor deck, we are seeing recovery of inventory, and we're starting to see at retail recovery on shelf of product. So there's a backwards flow if we've got to fill the shelves up, and we've got to fill the back rooms and the distributor warehouses. So that's going to result in very strong growth as we finish the year, and depending on the flow of inventory into early next year. And then that will deliver. We will see higher ocean freight in Q4, but the volume growth will deliver leverage through balance of the year to support the EBITDA guidance. I think, importantly, the category remains healthy, as you can sort of see in the scans, still growing double digits, and we're going to hopefully catch up to that because, obviously, we lagged back during the quarter. I think the second part of your question was related to ocean freight going forward. Obviously, highly uncertain. Ocean freight rates today, as you can see in the indexes, are still, let's say, a factor of two above historical long-term averages and are still way above what they were in the first quarter last year and at the end of 2023. We still have an ocean freight headwind if these rates remain sticky. Okay. Fair enough. And then just one quick clarification. So just the EBITDA leverage also, I assume, has to do with what you called out, meaning the pullback on SG&A or maybe getting greater leverage on that or efficiencies. I imagine that's part of it. And I guess I'm trying to understand if you pull back on marketing spend, do you foresee, as you get the containers' availability in Q4, do you think you'll step up a little bit more in spending in Q4? I think our comment on how we're dealing with the inventory, and then Corey can just talk about the SG&A guidance that we provided, we're still very tight on inventory. There are still SKUs we don't have inventory for. There are still customers who are, I'll use the word upset with us, but they understand the situation, right? But we are still not fully meeting customer demand and therefore consumer demand. We expect that to improve through the quarter, but given that, I'm not sure we will turn on any significant marketing activity in the balance of the quarter. Obviously, there are some things we're committed to do that we have to do, but that's how we're thinking about it, and we will obviously monitor it because we don't really know how consumer demand will respond and whether the inventory will build quickly or slowly, etc. So we're just going to monitor it and manage it appropriately. And I'll let Corey comment on the guidance. There's not a large change in the SG&A, Bonnie, as we referenced in the guidance. We're flat to slightly down on a full-year SG&A basis, and we're down year-to-date. So it's not a huge change from where we've been assumed in our guidance. It's very much related to very strong top line as we recover inventory, offset by the ocean freight pressures on a gross margin side. Okay. That's helpful. And then just maybe one quick final one from me, and then I'll pass it on. I also wanted to understand in the quarter if the supply constraints primarily impacted your private label business, or was this also an issue for your branded water business? Maybe you could just help us understand the impact on each. Thanks. Yeah, so I would say that it was uniformly across most of our factories that we were unable to obtain containers that we needed to support both our branded and our private label business. Now, obviously, there's a little bit of differences by specific factory lane and geographic location and the timing of when those things hit, but it was uniformly across our business, and certainly, our branded growth was a little better than our private label declines, which was more, I think, a function that private label inventories were very tight entering the quarter and then were exacerbated by what happened, and that's somewhat because private label had maybe grown faster than our customers expected, and we expected in the first half of the year, and we had benefited from that, and so that caused some problems. But uniformly, the ocean freight containers affected us across the board, and the reported results really more reflect our inventory position entering the quarter. All right. Thank you so much. I'll pass it on. Thanks, Bonnie. Thanks. Thank you. Our next question comes from the line of Chris Carey of Wells Fargo Securities. Your line is now open. Hey, good morning, guys. I wanted to ask about Q4 gross margins and kind of like it's about Q4, but really on the go-forward. So it's an incredibly, incredibly wide range that you could see for Q4. I think just given your comments on SG&A, it certainly seems like you're going to be at the high end of your full-year gross margin range. Maybe you can comment on that. And then maybe more importantly, what does this entail for the exit rate on gross margin going into next year? Should we view Q4 as a worst kind of quarter trough? This is a point in time, or is this the sort of gross margin that you're going to be looking at as we get into the front half of next year, and you're really not going to be able to start seeing some sequential recovery into the back half? So really just trying to contextualize how low we're talking in Q4 and what it means as you go into the front half of next year as you look to deliver on profit objectives for next year. Thanks. So, Chris, I'll talk to the guidance a little bit. Martin can jump in. There is an incredible amount of fluidity in the ocean freight market, the container flow, and that combination of cost and top line. We indicate in the script a good amount of ocean freight hitting Q4, which will impact gross margins. If you follow the index, which I know you do, you would have seen a spike, quite a strong spike in July that has been coming down. So as we've talked in the past, that rolls forward about a quarter. So that spike is hitting in Q4. So we're not providing guidance on next year, but you would see kind of the high point of ocean freight, at least in the near term, in Q4 coming down as we go into next year, but lots of variables still going on in the market. Yeah. And looking forward, obviously, it's very hard to predict what's going to happen. But loosely speaking, the ocean freight rates that we're experiencing in October, November, maybe September, October, November will hit Q1, right? And so to Corey's point, we would just refer you to the indexes to sort of interpret what's going on. But the point we would make is the current rates that you're seeing in the indexes and that we are experiencing, and again, we don't say we're experiencing the index rates, are still orders of magnitude double or more of the long-term historical averages. And if you look back to the rates that were being seen in the end of 2023 and the start of 2024, those were closer to historical averages. Certainly, as we lap those rates, if you assume the current rates continue as they are, our gross margins will be negatively affected versus the periods we reported. And then how long that goes on for, obviously, is dependent on how long the rates stay where they are. Now, with all that said, the rates have been dropping since I think the first week of August, and they've been dropping in different ways by different lanes. Asia to Europe has dropped faster than Asia to East and West Coast. We're not totally sure why, much like we're not totally sure why the rate spiked in the first place. And then the other point we have is that some of our lanes of Brazil to the U.S., which just behaves differently, and there isn't any real good index we can refer to on that. We're looking at it, and we're certainly paying higher than we paid this time last year and higher than we paid in the first quarter this year. And if that were to continue, that would be a negative impact on gross margins. The peak rates that Corey referred to were the sort of May, June, July, early August rates. Those will largely hit in Q4. That's the sort of, I suppose, the way to think about modeling it. But obviously, since this is an external market, we don't really have great visibility for what's going to happen next week or even this week when those rates get reported tomorrow. Okay, then just one follow-up, then I'll get back into the queue, so do you have a sense of where you might be landing on the full-year gross margin? Because, I mean, we're talking about hundreds of basis points of range in Q4, and if not, which is fine if you don't want to go there, can you just talk about the flexibility that you would have in the SG&A structure if there is that much variability in the Q4 gross margin such that you'd be delivering on the profit objectives that you're raising today? That's it for me. Yeah. So, Chris, we provided also a range of EBITDA, which we think gives us the flexibility to deliver within that range. So there's volatility in the gross margin line, but we think we can manage that within the EBITDA range. SG&A, there's always some flexibility, but not a ton, right, especially within this point of the year. So that's going to be pretty much in line with what we've guided to. Okay. Thanks. Thanks a lot. Thank you. Our next question comes from the line of Eric Serotta from Morgan Stanley. Your line is now open. Great. Thanks. In terms of the top line, can you get a little bit more granular in terms of how you're thinking about next year and kind of plans to continue the momentum that you've had? You've done a great job expanding households and occasions and certainly one of the only categories in NARTD that's experiencing real volume growth here. But sort of other than just kind of doing more of the same, can you get a little bit more granular about how you keep this going in 2025 and beyond? Yeah. So, well, one, we like how it's going. And so if we can maintain it by doing more of the same, that would be great. But obviously, we're endeavoring to accelerate it and/or maintain it longer than perhaps otherwise would be expected. It starts with the category, which is quite healthy, has been growing double-digit volumetrically in North America for the last five years and doesn't seem to be slowing in any shape or form. And that is sort of the grounding for all of our planning for next year. How do we maintain that? How do we get our fair share of that? And how do we keep it going, right? And you mentioned our priorities are expanding households, increasing velocity per household, increasing availability so that people can buy coconut water in more occasions. And on the velocity side, it's very much an occasion-driven messaging. So we're not really changing any of that. We're still pushing the multi-packs into mass and food because there's still opportunities there. We're pushing, or we tested treats this summer with a key retailer, actually a couple of key retailers, one more sort of promotional temporary and one on a semi-permanent basis. We like what we see, so we're offering it to more retailers. We do see an interesting opportunity in coconut milk-based sort of beverages that we'd like to play in. And it's too early to tell whether the retailers will jump at that, but certainly, we like the results we saw at the retailer. We continue to push our canned juice product. This year, we expanded it to a couple of mass retailers and a couple of food retailers. It's performed well at certain retailers where the demographic works. So we're trying to expand that. We're also trying to, in the convenience stores where it's been now for like 18 months, we have plans to upgrade the offering in the convenience store to maybe enhance velocity a little bit, but it's sticking, right? Then sort of finally, in the sort of core business, the one-liter Vita Coco Pure, which was in a convenience store this year for the first time, I think surprised us, surprised the retailer. It looks like there's a real opportunity for one-liter in convenience store for coconut water. We're going to try and execute on that. That's sort of what we're thinking, but our final plans aren't really firm. We certainly haven't heard back from retailers yet. Until we do, we can't commit to anything. But I think it all starts with the category is healthy, and our goal is to maintain that health and maintain share or grow share to the extent we can. If I could just add the opposite of granular, I think big picture, and we've talked about this many times before, is that we really believe the category is in its infancy. When you look at it, it's a fraction of the size of other juice categories like cranberry and orange and so on, and we think that the category is just mainstreaming, and there's an opportunity to continue to build it out and one day get to the size of some of those other larger juice categories as we build this. We don't see any reason why we can't, so we think we're in the early days of building something that we think could be quite a large category long-term. Great. And then just following up in terms of housekeeping on gross margin, I know a lot of questions on that already. You guys called out that you pulled back on promotions. I think you called out the club promotion that you didn't do this year. Can you give us an idea of the kind of order of magnitude that things like that, the reduced promos had on gross margins or price mix this year and this quarter and sort of the impact that you expect from that kind of normalizing next year and, I guess, offsetting some of the volume recovery that you're hoping for? Thanks. So I think we're a little uncomfortable getting that granular. What I would say is that it was a major customer. And if you were doing your store checks, you would not have seen a major promotion at a major club store. And you can correlate the two data points. Historically, if you were doing store checks, you'd have seen us in that club store over the last, like last year, three times, and then this year it's twice, right? So it's pretty big and pretty material and benefited gross margin this quarter, offsetting the ocean freight. And I think we'll just leave it at that rather than get into specific details of size. Great. Thanks again. I'll pass it on. Yep. Thank you. Our next question comes from the line of Jon Andersen of William Blair. Please go ahead. Hi. Good morning, everybody. Thanks for the question. Thanks. Good morning. Morning. Year to date, the international business has been powering forward despite some slower growth in the Americas. Could you just talk a little bit about what you're seeing there from country-level trends and maybe some of the initiatives that you've been driving internationally through this year and what your expectations are or plans are for that part of the business looking forward as well? Sure. So the U.K. business has been a business we've been operating for quite a long time now, and it's done well. It's really started to accelerate the last year and a half or so as households are expanding and as we're seeing the category, again, really mainstream in the U.K. So that's had a nice impact from a solid base as it's grown quite significantly. I think we spoke about several other markets in the past, but we really like Western Europe. We like the fact that the consumer is there. The category is becoming more global. Awareness around coconut water is becoming more global. And as we look at some of these markets, Germany was one of the first ones that we entered just a few years ago with one guy and a very simple strategy, and it started to build. And it started to build pretty quickly. And we're seeing it really start to take off now. And we don't see why we can't replicate that model in other Western European markets. So that's a big focus for us. As we're entering some of these other markets, we'd like to see Germany continue to expand, one day be as large or larger than the UK, and then see these other Western European markets catch up quite quickly. So that's a real focus for us. We've talked about some decline in Asia, but we're looking at restructuring the route to market there, and that's coming along well. And so we see the opportunity for this category to be quite significant in all of these global markets. And we believe we're the ones that have the opportunity to build that business and build the category. Thanks. That's helpful. On slide 11 in the quarterly earnings deck, you share some stats around ACV performance, third quarter 2024 versus third quarter 2023. Just broadly speaking, it kind of looks like ACV levels have kind of plateaued across some of the main product forms. Is that a function of, well, number one, is that a function of some of the supply constraints that you've experienced this year? And/or do you think going forward, at this point, the story is more about maybe average items per location and velocity per location as opposed to ACV growth from here going forward? Yeah. It's a great question. I think the ACV numbers perhaps were not as large as we would hope to report. If you look at slide five, we sort of report TDPs as an illustration of the potential inventory impact that retail obviously now. It's hard to say there's direct causation, but you see it on the scan numbers, and you see it on the TDP numbers that obviously there was a reported distribution loss. We don't think we lost shelf space because the shelf space is still there. It's just the product isn't on it on a daily basis. So I think it's more that. I think we feel pretty good about our ACV coverage and our progress and the momentum on our key initiatives. But certainly, given the impact of inventory this quarter, the growth impact of those initiatives, both in volume and in maybe moving the ACV needle a little bit, weren't as good as we would have liked. Okay. Last one from me. As you think about 2025, and Martin, I think you referenced kind of confidence in the long-term algorithm for the branded business. Can you just kind of remind us how you're thinking about the long-term algorithm for the branded side of the business? And then when you referenced additional production capacity coming online for 2025 and 2026, how much incremental capacity are you expecting to bring online to support growth in 2025 and 2026? Thanks. Yeah. So our long-term algorithm or goal for branded growth is mid-teens. I think we believe we can get there based on a category growing low-teens in North America and internationally growing faster, right? So that's how we think about it. Maybe North America grows a little faster earlier in that long-term and international contributes more growth later in that sort of long-term algorithm. We entered this year with the capacity that we thought we needed given some of the discussions we had had last year about potentially losing a large private label coconut water customer, and as a result of which, we had less capacity than would be optimal. And everything ran pretty fully. I think we normally like to run at like 80%-85% of capacity, and that's not where we have been running this year. It was obviously impacted by sort of the squeezing on the container freight side, both on a cost and availability side this summer. This year has been particularly tight. Back in, I think, March, April, we clearly communicated that we were going to add capacity, and we continue to do so. We're trying to get back to that 80%-85%. Obviously, that's based on our expected growth rate. Whether we actually get there will be a function of does the category grow slower or faster, and are we able to add all that capacity in the timeframe? This quarter, we talked about 2026 because we're planning 2026, right? We're merely signaling that we're confident and comfortable with planning for that growth and putting the capacity in place to support it. It's really this year, it's just been about ocean freight availability. Capacity hasn't been the challenge there. I think when you're running, let's say, in the 90s of capacity, then if there's any disruption, you don't have the flexibility to react, and so I don't think how we ran well. We're very happy with all our supplier relationships and how we ran this year. We would like to have spare capacity normally in the system, so we're going to try and get back to that. Makes sense. Thank you so much. Thank you. Our next question comes from the line of Jim Salera of Stephens. Your line is now open. Hi, guys. Good morning. Thanks for taking our question. Morning, Jim. I wanted to ask maybe a handful more questions on inventory. If I just look at the balance sheet on a dollar basis, I think inventory is up like 40% quarter over quarter. But presumably, and Martin, I think you touched on this in your prepared remarks, that that's because it has a higher unit cost because of the elevated rates whenever you got some additional containers available. Can you give any color on a unit basis how much the inventory is up quarter over quarter and if you can offer a split in North American inventory versus international? Jim, the primary driver, and you don't really need the underlying details, is it's on the water. We view it as a positive sign that the inventory production that we've had over the summer is coming. It just didn't reach. It is up $20 million quarter on quarter. It's a big number, but it's in transit from Asia into the operating markets. Okay. And then, I guess, if we follow that through, is it safe to say that while inventory will improve in 4Q, it's not going to be quite where you want it at the end of 4Q? So we should still see incremental inventory build in the first half of 2025 such that shipments should probably outpace consumption in both 4Q and then some period in 1/25? So I think that's true of our sort of inventory available to ship, but not necessarily true of our total inventory on the balance sheet, if that makes sense. Okay. Right now, as Corey alluded to, at the end of Q3, we have an unusually large amount on the water because of the number of containers we were able to obtain in August and September. Most of those containers are on the water. Those will move into market and be available to ship in Q4. It all depends on how fast that flows out and what our end numbers are as to where it is. We would expect the on-water amount to return to more normal levels sort of by the end of the year. Hopefully, that means our end market inventory is better, but maybe hopefully it means it isn't because demand is so good that we can't keep that we're still not struggling to keep up, but we don't catch up, right? So again, we don't really know, but that's the dynamics here for the modeling. Okay. That's helpful. And maybe if I could squeeze in one more on just a promotion. You guys called out the club promo that you kind of had to forego because of the inventory levels. Is that something that would just be seasonal and so basically you just missed it this year and it'll be back on next year? Or is it possible that if inventory is in a better spot, you could potentially run that promo in the first half of 2025? Or does that kind of mess with the cadence and other stuff you have going on? So this particular retailer who we would like to call a partner, I suppose, runs promos periodically, let's say quarterly for argument's sake, but it might be more frequent or whatever, right? And in order to meet their demand, we need six to nine months planning because it is a very large opportunity. Again, it's not like we're carrying that inventory on the off chance that they want to run something. So the answer to your question is no, it's unlikely to pop up unexpectedly, right? But we engage in planning with them on potential timings. And we would certainly hope to be considered for the same time slots that we received in 2023 and 2025, which would be an incremental time slot to what we agreed to in 2024. And it was a joint discussion. We saw what was going on, and we just said, "Look, we can't support this. It would be foolish to run. Got it. Perfect. Appreciate all the help, guys. I'll hop back in with you. Thanks, Jim. Thank you. Our next question comes from the line of Eric Des Lauriers of Craig-Hallum Capital Group. Please go ahead. Great. Thank you for taking my questions. First one for me, just another question on international dynamics. So obviously, both U.K. and Germany remaining very strong. How should we think of, I guess, what inning the German and U.K. markets are compared to the U.S.? And then in terms of other Western European markets, you mentioned you started in Germany a few years ago. Should we think of other Western European markets as being a few years away from having a significant impact, or are there perhaps some others that are a bit further along than just very beginning stages here? Just wondering how to think about the sort of prospects for other Western European markets in the quarters and years ahead. Yeah, so I think U.K. is quite developed, and so distribution is quite developed in the U.K. Consumer and consumption per consumer is growing in the U.K. And I think that's adding a lot of the growth there, but the distribution is quite developed. As we look at other markets, the other markets we've been, if you think about some of the other Western European large countries, large consumer markets, we've been developing those over the last 12-18 months, so laying a foundation. And everything is just happening a little faster these days because I think of where the category is just from an awareness level on a global level. And so we see these markets starting to potentially have more of an impact quicker than they would have a few years ago. So we're excited about the opportunity. We think that over the next couple of years, the international growth will have more and more of an impact on the P&L as they start to develop quicker. All right. That's very helpful. And then just last question for me. Just kind of zooming in on the acceleration in revenue growth expected in Q4. Obviously, there's replenishing of inventory levels. Is it fair to assume a stronger rebound in private label sales quarter over quarter versus branded sales due to that sort of tighter inventory? Or are both private label and branded inventories kind of increasing at a similar rate, and thus we should expect private label inventory levels to, I guess, just take a bit longer to replenish? What I would say, that's really hard to model. It depends on a whole bunch of things, not least of one of them, which we haven't mentioned in the Q&A yet, which is transit times, which are unusually long. And what happens on transit times because some of the private label is produced at certain locations. And so it all depends on those lanes. So I think we would hope for inventory recovery across the board. We're certainly not prioritizing production or anything. We're trying to take care of all of our customers, is how I would put it. And that would hopefully involve some recovery in private label shipments relative to the trends we saw Q3, but exactly how that plays out relative to brand item. All right. That's helpful. Thank you for taking my questions. Awesome. Thanks. Thank you. Thank you. Our next question comes from the line of Michael Lavery of Piper Sandler. Your line is now open. Thank you. Good morning. Good morning. Hey, morning. Just looking at slide five, obviously, the category outperformed in the period where you had the inventory headwinds. I guess, can you just help us understand? It would seem if you're attributing your deceleration and softness to the inventory availability, what did the rest of the category do differently that put them in a better position to maintain the growth rate that you showed there? Obviously, we don't have great visibility, but one at 45% share, 50% share on the old data set, our slowdown would pull the category down. That's what's pulling the category down. It looks to us like initially some of our competitors had more inventory entering this period of time when they should have seen similar things to what we saw, whether they saw them to the degree we saw. Obviously, it's impossible to know what their arrangements are. I would say towards the end of the quarter, you're starting to see some of them struggle either on the supplying private label SKUs to retailers or on the branded side. You're starting to see that. And so my hunch would be, and it's a hunch as opposed to fact, is they started with better inventory, and then as they probably suffered some of the same issues, it starts to show up. I think as we have been clear, we started with inventories unusually low, and it flowed through very quickly for us. That's helpful and makes sense. But I guess you also touched on how you haven't been doing as much or almost any longer-term contracts. Does that impact availability, and could that be a difference? And then I'd love to understand a little bit too. You mentioned how for next year, you're looking at more some flex rate options that seems like it might secure the availability better, but not quite be the same as a long-term contract. Can you just maybe help us understand exactly how that works and also what the cost implications of that might be? Yeah, so obviously, we don't know how competitors either on the branded side or the private label supply, how they deal with contracts. I think historically, we had to enter COVID fixed price contracts for 75%-80% of the lane, and that sort of guaranteed capacity, right, or at least locked it in, and we thought that was a sensible approach. When the rates went crazy, we stopped entering into fixed rates agreements while still trying to preserve some commitments on capacity. I think it's fair to say that in the May to July period, while some of those commitments were met, some of them were rolled, and we didn't get the commitments, so we've had discussions with the carriers as to how can we make these commitments firmer. We're also talking internally as to whether we should commit for more than 75%-80% of the capacity on these lanes. Obviously, what's the downside? What's the penalties? If there are penalties, can we roll those commitments, etc.? So we're having all of those discussions, and we're just merely trying to indicate, I think, that we're trying to, through the relationships of the carriers, get firmer commitments on capacity so this squeeze doesn't happen. We're trying to plan to build inventory and market to more normal levels, maybe raising inventory on key SKUs. But to actually get there, we'll probably take six months, seven months because it doesn't happen overnight. And we're also still talking to carriers about potential fixed rates agreements. If those rate agreements are at the current rates, we still think they're unusually high. So we're not that excited about entering into them. So that's sort of how we're thinking about it. Yeah. Okay. Yeah. Thanks for that. And then just quickly on private label, can you give us a sense? The one and two Q volumes were up more modestly, not too significantly, but then, of course, down significantly. Can you give us any sense of how much is from the discontinuation of the oil in the quarter versus the inventory headwinds to try to understand sort of an ex-oil volume decline? Yeah. We're a little reluctant to quantify it because it relates to one customer, and we think that would be unfair to that relationship. I think I would point you to what we said last year in Q2 and Q3 when we sort of quantified losing all that customer's business and then just the oil business, right? And that's how to back into what it might be. I think importantly, we continue to ship oil to them through Q1. So we will lap that number starting Q2 next year, but until then, that is a drag. And then as it relates to if you look at our Q2 shipments, that number reflects largely private label coconut water with a little bit of oil business to other customers. So that's sort of a baseline. And then you see what we did in Q3, which is related to availability of inventory, primarily of the private label coconut water on the private label revenue side. So that's how I would sort of think about it. And yeah, we're just unwilling to quantify the number beyond what we said because it's a single customer. No. Thanks for that. Yeah. We can kind of do the math you're talking about, but it's obviously quite lumpy, and there's a few moving parts. So just trying to get a sense. Maybe could you just talk about what you mentioned, 2Q ship some oil? If we're trying to think of how to model 4Q and 1Q now to kind of round out the lap, any callouts on pacing or timing of just how to think about what the history would be that you'd be going against there? So a couple of things, Michael. First, to go back, in my prepared remarks, I referenced a 30% decrease in volume on private label. And as we've talked about, the volume is much more driven by the water than the oil because of the weight and price. And so that should give, and then the bulk of the oil was sold only in Q1. There was very little private label oil post Q1 in the financial. To that customer. To that customer. Yeah. We have to have private label business, but that customer basically. Those should be more steady. Yeah. Dropped off. Those would be stable. That's a really helpful clarification. Okay. Thanks. I'll pass it on. Thanks, Michael. Thank you. Our next question comes from the line of Bryan Spillane of Bank of America. Your line is now open. Thanks, operator. Good morning, everyone. I guess there's three topics. Hey, guys. Hey, guys. There are three topics I wanted you guys to give us some color on. One is Vita Coco Spiked. The other is just visibility on all of this with freight and boats and availability. And the third, if we should be considering tariffs at all. So maybe the first one, Michael, just on Vita Coco Spiked. Can you give us now, it's kind of where you think that brand stands, what the potential is? Is the Vita Coco brand really extendable into ready-to-drink alcohol? Just kind of your thoughts on it now as we kind of think into next year. Yeah. No, we did this, what was it, almost two years ago now. And we think it was a really great kickoff to our communication around mixing alcohol and coconut water. It helped us. There was a large marketing push, quite a few dollars spent on our partner's part in terms of marketing Spiked and marketing this concept of coconut water and spirits. We coupled that with a large communication push about cocktail mixing and obviously quite a bit of on-premise sales and marketing that we've done since. We've seen coconut water and cocktails become a large usage occasion over the last two years for us, and we think is driving quite a bit of our or a bit of our growth these days. So we're excited about that. The actual product, Vita Coco Spiked, has not been incredibly successful. It was a licensing deal, and it hasn't been incredibly successful. The category is very crowded. Not to say that a ready-to-drink version of Vita Coco with spirits can't work. This one has not been an incredible success, but we think it helped us really get this concept and this usage occasion off the ground. So we think for us, it's been successful, but the product itself has not been a huge success. Is there a chance to actually reboot more as a mixer, getting bartenders to craft cocktails with it? And rather than go the ready-to-drink approach, is there a thought behind actually having it more as a potential base for a mixer line? That's exactly what we've done, and we've been quite successful with it, and it's growing. And we have a team against it now, and it's starting to show up in more and more bars, on more and more cocktail menus and mocktail menus. And that's become a big focus for the organization. And like I said, I think we believe a big usage occasion for Vita Coco. So yeah, absolutely. I guess as we're thinking about, there's been a lot of discussion about boats and freight rates today, probably more than you all would like to talk about. I think, Marty, you might have mentioned at some point earlier that you're not quite sure why rates have moved up the way they have. The whole thing just seems a little bit shrouded, I guess. I guess with that in mind, just as we're thinking about your marketing and merchandising plans for next year, are you having to caveat it or put some sort of pause around things because of that uncertainty? Just, I guess, trying to get an understanding of retailers' willingness to lean into any kind of promotions or merchandising programs if we're still sort of dealing with product availability. So I think we hope that next year we'll be able to return to more normal promotional cadence. Our view on ocean freight is that the long-term averages seem to us to be more reasonable assumptions for long-term business plan. There's a lot of capacity being built by the carriers as a result of their very rich profits during COVID as it relates to the recent rate spike that the primary impact of that, other than affecting us and other customers, seems to have been to enrich the profitability of the carriers. But it sure looks like everyone expects that to be short-term. So for our long-term planning, that's how we're thinking about it. Obviously, in the short term, if rates remain high, we'll have to look at what to do, including taking pricing to cover it if we think it's more than permanent. At the current point in time, as you'll see in the indexes, the rates continue to drop. The rates to Europe have dropped faster than the rates to the U.S. We don't know why, and we sort of expect the rates to the U.S. to continue to drop, but we can't bet on that, so it's something we're monitoring closely and trying to build plans for next year that give us some flexibility to react to whatever is going on, including potentially taking price, so is it fair to say that the lack of visibility is more around cost than it is availability right now and as we're looking into next year? Yes. Availability has gotten much better and is much less of an issue already and becoming less and less of an issue for us. The price remains elevated compared to, like Martin mentioned, historical levels and compared to where we were a year ago. But availability is coming back on. That was a short-term thing, lasted a couple of months, clearly messed us up and put us in a tough situation, but we've weathered it, gotten through it, and we feel we're now building inventory and getting back into a much better position. Okay. So you know you're going to have both. You're going to have product and be able to merchandise. Really, the question next year is going to be more around what the margin might be. And I don't want to put words in your mouth, but you want to prioritize filling customers' orders and consumer demand. And if there's some margin volatility, while it's not perfect, the trade-off is going to be, I think, right, to service the demand versus holding back because of freight costs. Yeah. I think we're very focused on trying to maintain category growth and consumer interest. And again, our long-term view is that the cost side should resolve itself. Okay. And the last one, just on tariffs, just because it's been topical, or at least in the news cycle. So just anything that you are thinking about in terms of contingencies or, I don't know, in the event that there's a blanket tariff, just what are your thoughts about how you'd handle that? If there's a coconut tariff, yeah. I mean, we would take price or operate the business a bit differently, but we think that we're not really planning on anything right now. We would watch it, and if the coconut tariff comes into effect, we would likely take price. We would have a very justifiable reason to take price, and we would be able to move that into the market. And it would affect, obviously, many other. Other categories. Yeah. Categories. Another category. All right. Cool. Thanks, guys. Thanks, Brian. Thanks. Thank you. As a reminder to ask a question, you'll need to press star 101. Our next question comes from the line of Robert Ottenstein of Evercore ISI. Your line is now open. Great. Thank you very much. Two questions. First, we're hearing that Walmart and Target are doing pretty big shuffling of their beverage aisles and shelf space next year. So in that context, wondering if you could talk about whether the coconut water space, the coconut area, overall, do you expect to gain for that category to gain shelf space next year? And obviously, particularly whether you expect to gain more than others, more of your fair share of shelf space. And then the second question is we saw a lot of attention and excitement about PWR LIFT at NACS. Love to kind of get a little bit more sense of the commercial plans there, how big a push that's going to be, how big that can be. Thank you. Yeah. So on shelf space, we've had some preliminary communication from some of the retailers as to what they're thinking. But until they finalize those and execute, it's really hard to tell. So I think we have a really good story on the health of the category and the growth of the category and the growth of multi-packs. There's some discussion in some retailers maybe that coconut water moves to a different set, which would probably be better for us from a volume foot traffic perspective, but might result in less singles being on shelf, which as long as we preserve some singles, we'll probably be fine. So there's lots of moving pieces there. And until those get resolved, as you say, these things take time. It's really hard to talk about. But I think generally we feel good about the conversations we've had with retailers about shelf space. And then PWR LIFT, still like it. I'm still drinking lots of it. And we like where it is. We haven't announced plans for next year yet. I don't think it will be probably material to our P&L outlook when we talk to you in the next quarter. But we continue to work, and there's something in protein and beverages, and we're determined to try and unlock it. All right. Thank you. I'm showing no further questions at this time. I would now like to turn it back to Martin Roper for closing remarks. All right, Steven. Well, thank you for hosting. Thank you, everyone, for joining us, and we look forward to talking again next quarter. Cheers. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.