Good afternoon, everyone, welcome to Monster Beverage Corporation's 2021 Virtual Investor Meeting. I'm Roger Pondel with PondelWilkinson, the company's Investor Relations Representative. For those of you who we usually see in person for this meeting in New York, we miss you, we certainly hope that everyone listening in today is healthy and remaining safe. It will be my pleasure momentarily to introduce the company's Chairman and Co-Chief Executive Officer, Rodney Sacks, Vice Chairman and Co-Chief Executive Officer, Hilton Schlosberg. Following their presentation, there will be a very brief break before starting the live question- and- answer session, you will be given instructions by the operator on how to queue up. Before I turn the call over to Rodney and Hilton, I want to remind you that certain statements made in today's presentation may constitute forward-looking statements within the meaning of the U.S. Federal securities laws as amended, regarding the expectations of management with respect to the company's future operating results and other future events, including revenues and profitability. The company cautions that these statements are based on management's current knowledge and expectations and are subject to certain risks and uncertainties, many of which are outside of the control of the company, that could cause actual results and events to differ materially from the statements made today. For a detailed discussion of risks that could affect the company's operating results, see the company's reports filed with the Securities and Exchange Commission, including the latest annual report on Form 10-K for the year- ended December 31, 2019, and the subsequently filed 2020 quarterly reports on Form 10-Q. The company assumes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. With that, it is my pleasure to turn the meeting over to Rodney and Hilton. Good afternoon, ladies and gentlemen. Thank you very much for attending, the Monster Beverage Corporation 2021 Investor Update Meeting. I'm Rodney Sacks, Chairman and Co-Chief Executive Officer, and with me today is Hilton Schlossberg, Vice Chairman and Co-Chief Executive Officer. As you will have noted from the description I just used and the news issued by the company shortly before this meeting, Hilton has been elected by the Board of Directors of the company as Co-Chief Executive Officer of the company with me. As most of you all know, Hilton has served as a co-leader of the company with me for decades. In addition, the company has elected Tom Kelly as the Chief Financial Officer of the company. With that, I would like to introduce and hand over the call to Hilton, who will take you through some of the slides, and then I will come back. As we have previous meetings, we will handle the presentation jointly together and from slide to slide and interact with each other, which we thought was a good way of getting through the slides and getting you a full view and description of what we're trying to get out to everybody. Thank you. Thanks, Rodney. Glad to be here with everyone today. It's just sad that we can't meet in person and that we have to conduct this meeting virtually. It's been a highlight of our calendar to be in New York freezing for these investor calls. At least, we're still here in California, and we look forward to welcoming everyone to our stockholders meeting later this year. By then, we hope that things would have eased up significantly. Turning to our COVID employee wellbeing, one of the issues, and we've mentioned this on previous calls, is that we have been committed from the start of this pandemic to the safety and wellbeing of our employees. Starting from health and safety, and I'm not going to read all these points because they're available for you guys to read. Starting with health and safety, employee communication support, we were really concerned about the morale of our employee base. We achieved this in a number of factors that we've highlighted on this slide. From business processes, our flavor manufacturing facilities, our co-packers, warehouses, and shipment facilities have been operating throughout. Quality control, AFF, which is our flavor manufacturing facility, and our warehouses have remained operational with enhanced safety protocols. To- date, we've not experienced any significant raw material or finished product shortages, and the supply chain generally remains intact. As always, innovation has remained a huge priority. One of our big endeavors from our Monster Energy Cares platform in 2020 has been philanthropic support. We made a special effort to donate our beverages to first responders, to hospitals, to frontline workers working in the various medical facilities, and we've done that in over 40 countries. We're really proud of our efforts during this time, but our instructions always were, let's deliver product where it's safe to do so. We've delivered and donated over 4 million cans in over 40 countries to first responders and hospitals and those groups of people who are working on the front lines of the pandemic. We've supported the military as we always have done, and the National Guard. What we've done is we've also engaged our Monster athletes and talent on Zoom calls to boost morale for our military troops around the world. We have continued supporting all of our ongoing charitable efforts around the globe and will, for the foreseeable future, continue to do so. We're really proud of this program and we've had honestly hundreds and hundreds of letters and emails complimenting us on the work that we've done in this regard. Rodney, you want to pick up? Sure. Thanks everybody. The beverage landscape in the last quarter has been quite interesting because despite the earlier difficulties everybody went through in the year in the beverage industry, the beverage industry has generally rebounded quite in a healthy way. As you can see from these numbers, there is positive growth in pretty much all sectors of the beverage industry. If you look at the performance of the energy drink sector in the 13 weeks ended December 26th, the category has grown at 10.9%. Monster as a brand has grown 10.7% and the growth with the category. Red Bull has continued to grow at 18%. Generally, most of the other participants in the category have had negative growth. On the positive side, Reign has continued to grow at 7.4%. The graph that I now have up illustrates quite well state of the category and the real big differential between the top brands in the category being Monster and Red Bull and the rest of the category. In unit share, a similar picture emerges, but it's probably even more marked. What is quite interesting in this slide and worth noting is the falling off in share of Rockstar and Bang, and the continued dominance in the category of Monster and Red Bull. Turning to the Convenience category, which is the biggest sector for energy drinks generally. The category had also growth had stalled a little earlier in the earlier parts of the year. That seems to be growing back nicely. The growth is at 8.4% for the category, and Monster is growing at 8.7%, Reign at 3.1%, and Red Bull at 17%. Most of the other players or larger players in the category are pretty much with negative growth. The five-week numbers for the Convenience category are showing that the category is up 5.9%, Monster is up 7.5%. While the category seems to have slowed a little bit in the short five-week period, Monster has actually started to outgrow the category. Reign was -5% and Red Bull's growth was moderated slightly to 13.9%, most of the other players have negative growth. One of the bright spots on the horizon for the category and for the company has been the advances we've been able to make in e-commerce. The results for the company have been really very satisfying. Through Amazon, brand performance is up 115% in the 13 weeks to the end of 26th of December. Monster's sales are up 117%, Reign is up 287%, as compared to Red Bull, which is up at 113%. Looking at the dollar numbers, you can see the marked lead that Monster has in this category and is leading this category by a long distance. We are very optimistic that this category will continue to deliver increased sales and be seen importance for the company as we move forward. In the four-week period for Amazon, it shows similar results. Monster saw the leading product brand. Our sales are up 172% in the four-week. Reign is also up 283%, while Red Bull is up 158%, sales substantially lagging behind the Monster brand. The next slide just is a picture just to give everyone an easy picture view of where we are in distribution for Monster brand around the world. There is really only three where we are not with the Coke system, which is Japan, the Philippines, and Afghanistan. An update on our distribution that we've been able to achieve in the company. Monster is now distributed in 140 countries and territories around the world. Strategic brands are being distributed in 73 countries and territories. Reign is now being distributed in 11 countries and territories, and Affordable Energy, which is really our Predator brand, and Fury in some countries, is now distributed in 24 countries and territories worldwide. If you take all of our brands together, one or more of our energy drinks are now being in a total of 154 countries and territories worldwide. The following slide is really an illustrative version of where our different products are being distributed. This slide shows the strategic brands throughout the world with a sort of an enhanced area for Europe. If we turn to the next slide, which illustrates the Reign markets, existing markets around the world, which is an easy reckoner for you guys to have reference to. We have a separate slide for our Affordable Energy brands around the world, and you'll notice that they're all generally Predator. In two countries, Honduras and India, Fury. There were trademark issues with the name Predator in those countries, so the brand is identical. It just uses the trademark Fury as opposed to Predator. In odd few countries where we do encounter trademark issues with Predator, we will be using the Fury brand for this product line. The next slide we're putting up is really to give you a guide, in very general terms, of our targeted launches. As anything in life, these are targeted launches and while we are targeting these launches, there may or may not be slippage in our launch in time. There isn't any specific time horizon that we are suggesting or implying with these launches, but these are the target launches that we are hopeful to launch during the rest of this year. I think you'll see the real strong development internationally for the Reign and the Predator brands. That's going to be a significant focus for us internationally going forward. Thank you. On the next slide, just to share with you some of the value share growth that we've been able to achieve in selected markets. In Brazil, our share for Monster is up at 35.1% from 28.2%. In Brazil, Monster is growing at 32.3%. In Canada, our market share for Monster has increased from 34% to 34.8%, and Monster is growing at 0.7%. Our portfolio share in Canada is up at 40%. Probably forgot to mention that our portfolio share in Brazil is at 37.1%. We have a dominant share in both those countries. In France, Monster share has increased from 28% to 30.3%, and we now have a 32.1% share of the energy category. In Germany, our drop from 15.7% to 14.8% and our value. Germany has still grown at 7.3%. In Germany, there does seem to be a disconnect between Nielsen numbers and our own numbers and sales to hard discounters and others. Our sales are actually up higher in Germany than are being reflected in the Nielsen. In Great Britain, sales are up. Monster share is up from 22.1%-27.5%. Here we also have the Relentless brand, and our portfolio value share is at 31.2%. Monster growth in Great Britain is at 39%. Japan, our share has really flat from 54.5%-54.1%, while our growth in Japan has still been 10.9%. In Mexico, our share is 27.7% in 2020, which is pretty flat with 2019. Continued to grow at 7.9%, ahead of the category. In Poland, our Monster share has grown from 14.4%-20.9%. Our portfolio share is 29%. Monster growth in Poland has been 58.7% in the four-week period, which is well ahead of the category. In South Korea, Monster share has grown in the four-week period from 50.5% to 55.2%. Our growth is at 55% year-on-year. Finally, in Spain, Monster share has grown from 35.1% to 37.9%. The portfolio share has grown to 45.8%. Again, we have leading shares in all of these countries. Our volume is up 19.6%, again, well ahead of the category. As you'll see from the last column, generally we are continuing to grow our brands internationally well ahead of the category growth. To be clear, these are the top 10 markets for the Monster brand outside of the U.S., and we have ranked them alphabetically because we don't give the exact sizes of our international markets, and we don't disclose that. These are the top 10 markets for Monster outside the U.S., ranked alphabetically. They're not just random markets. Thank you. Thanks. Give you an update on China. Our performance has been solid despite. We have continued to expand our portfolio. We launched our first non-carbonated energy product in China, which was Tea Plus energy, in April last year, which was well received by consumers. We are just in the process of launching a new product, non-carbonated product, called Dragon's Gold, in the last month. We believe that this product will assist us in recruiting new consumers from the category. The category, our brand range in China has three carbonated products and two non-carbonated products. We are continuing to grow distribution and promote our brand. China continues to evolve and continues to be an ongoing challenge. We are seeing good results, and we are very positive about the ultimate ability to establish our brand as a- in the Chinese market. To be clear, we have the two main Coke bottlers in China. There's Swire and COFCO. Both of them, like us, are really committed to the Monster brand and to the success of our business in China. It'll be still a little of a long haul. We have no doubt that we will prevail and be successful in China. If you look it up, China falls just outside our top 10 markets. It's growing, and it's becoming a sizable business for us. This slide just lists some of the major sponsorships that we have been involved with historically and continue to be involved with going forward. I'd like to sort of call out the Formula One sponsorship of Mercedes and Lewis Hamilton. We've been sponsors of Mercedes and Lewis Hamilton for almost 10 years now, and we've actually gone through the journey with Lewis to the point where he's now achieved seven World titles, and he's literally ties with Schumacher for the most World titles ever. That's been a tremendous success and tremendous exposure for us internationally, the relationship. In MotoGP, we also have a very extensive presence. Another sport that's shown on the world platform and television in hundreds of countries. We continue to have our relationship with Valentino Rossi, who's the doyen of the sport, and the Yamaha team. We also were able to sign up sponsorships of two young riders on the Suzuki team, Joan Mir and Álex Rins. In this last year with the unconventional season, Joan Mir actually won the World Championship. That was a fortunate sponsorship that we've had. We have also decided to increase our sponsorship and our relationship with Suzuki, and we have a deal going forward to sponsor the Suzuki team going forward, as well as the Yamaha team. We're continuing to maintain our presence very extensively in the sport, which we believe is very important for us and for the brand worldwide. One of the newer sponsorships that we've embarked on in recent years is UFC and MMA, which has continued to grow, if any of you have noticed. The one thing that UFC has done in the period of lockdowns around the world, they've increased the number of tournaments and competitions that they have. Literally there is a UFC fight almost telecast around the world almost every week. That the sponsorship, the exposure, has been very, very much enhanced and we are continuing to increase our sponsorship and participation in that sport going forward with UFC and with Bellator, which is another series that we also sponsor. During the times of COVID again, we continue to step up our sponsorship and sponsorship efforts in the e-commerce and gaming arena, eSports. We are continuing to sponsor the top tournaments, DreamHack and Beyond The Summit, as well as influential streamers, and have expanded the number of top teams that we sponsor that have continued to win major tournaments and give us continued exposure for our around the world. It's been a bit difficult year in music, as you can all imagine. Most of these festivals have been canceled. There were some live festivals that took place though. There were a number of festivals that got canceled, but there was quite a few that also virtually. We've continued to sponsor top artists. We have some new interesting artists we've signed on, it's a little premature to disclose them at this time. You will hear about their future on the music as we continue to step up our support behind music and with the brand, which really does scale internationally. Finally, on the marketing side, social media, we have continued to increase our presence and focus on social media. We've also looked at focusing on individual brand families and through the social media outlets. That is continuing to get attention from us and as we move forward, continuing to probably increase our percentage of our marketing dollars on social media and to get to consumers who we believe are our target market. Sorry. Sorry, go ahead, Hilton. I interrupted you. Sorry. I was going to say that one of the highlights on social this year was the #CrushQuarantine campaign that drew 1.3 billion impressions. It really was an incredible campaign that focused on activity while people were under lockdown. We've continued to look at our marketing building out our brand families, continuing to put effort behind marketing the brand family separately and individually from the core Monster brand. This slide just illustrates some of the efforts that we have and what we're doing on some campaigns for Java Monster, Ultra, and our juice products. We're showing we've had new products, innovation, how we're sort of marketing them through promotions and programs, the same thing with our juice products. HydroSport, we again are also looking at promoting Hydro Super Sport and Hydro Energy Water. This was the line that we originally launched as Hydro. We've really refined it. We introduced Super Sport last year, we are repositioning the Hydro to be more clearly delineated as an energy water and make it easier for consumers to understand what it is. We have two lines in the Hydro line, and we are continuing to market and put emphasis on those lines and have specific athletes and ambassadors to actually send and give the message and work with us to promote those products differently to our regular Monster Energy strategy. Turning to innovation. 2020 was a really interesting year. We had fantastic innovation, and just at about the time we started launching it, everybody went into lockdown. It's been a very challenging year to have got the innovation out into the market and onto shelves. Nevertheless, while there were some stumbles early on in the year due to people [stocking] down and not being able to get into stores as much as before, it all started to come back in the second half of the year. I think we've had a great second half, if you look at the innovation that we've done, we've been very grateful. Our two latest or three latest products, Papillon and Khaotic, which is our juice. Khaotic was really a repositioning and a slight change in flavor for the original Khaos product. Papillon is a new product. We also launched very successfully, late in 2020, our Ultra Watermelon, which has proved to be really successful. If we turn to the next slide, we'll look at innovation going into 2021. Our innovation pipeline continues to be very robust. While we're still seeing the benefits in rolling out our 2020 innovation, we plan to launch and build on that with Ultra Gold, which we're launching very shortly. We've also repositioned our Extra Strength from a 12-oz can into a regular 16-oz can size product under the Nitro brand. Super Dry, which has been a very strong selling product for us historically, but we believe that by line pricing it and having it in a 16-oz can, it will continue to give us a lot of growth. The newest product we've got, you'll see actually the new packaging. The packaging that you're seeing there is the redesigned packaging for our Rehab line, and we have a new product in Rehab, which is Strawberry Lemonade, which we're launching again early in the spring. Two super flavors. Additional flavors are being launched, and we do have additional innovation. As we're saying in those two last items, watch this space. We think that for competitive reasons, we don't want to discuss those products at this point in time. We'll probably be in a much better position to deal with them and give you more insight into them when we have our next shareholder meeting, when we release our results for the full year at the end of February. We're also looking at launching some of our really more core SKUs in a 12-oz size in convenience retail and food service. Depending on how we go, we'll expand sales and distribution. We believe there is an opportunity for us to attract additional consumers in 12-oz sized products. We are going to have a focus on that size this year. Thank you. Just a slide which just summarizes some what we wouldn't call it innovation, but really refreshed designs. Assault, we've had a slight change to the formulation, the flavor. We've updated the flavor. It's a new flavor, and we've got a new can. As I indicated earlier, we had taken what was just the Hydro product line in a clear bottle, but it really, I think, struggled a little bit to have shelf presence, and be visible on shelf. We've changed a package that will have a sleeve around it, which will be much brighter, and we've repositioned it as energy water. There is a full line of energy water products, which will complement the Super Sport products that we have in the bottles. These will be in 20-oz sized bottles. There you see the full Rehab line. It's going to be refreshed shortly in the next couple of months coming out. We have the Strawberry Lemonade, which is the additional new product in that line. Turning to Reign. Reign has continued to do very nicely and grow. We're continuing to roll out some more innovation in Reign, which I will show you this now, but we continue to market and support Reign on its own platform, and it is continuing to help in that category. Innovation for Reign in 2021. We are introducing two new flavors, Cherry Limeade, White Gummy Bear, and we are also introducing a new Reign Inferno, Watermelon Warlord. On our strategic brands, we are continuing to innovate. The version that you have is for Power Play, which is sold in South Africa and in some countries in Africa, Nalu, and BPM. Similar flavors will be introduced in our other strategic brands like Burn and Relentless as well. Affordable energy innovation. We have, as you've seen, rolled out Predator to a number of countries, and from the list that we showed you earlier, we anticipate or are planning Predator in many, many more countries around the world. As we are doing that, we're also expanding the Predator line. We're introducing a ginger beer product, which is particularly popular in African countries and Eastern Europe, Red Apple in Eastern Europe, and also a Predator malt, which is a non-alcoholic malt energy drink in Nigeria. Nalu, one of our strategic brands that we acquired from The Coca-Cola Company in 2015. We are continuing to grow the brand. As you will see, one of our innovation last year was to introduce a turbo version, which has BCAAs and higher caffeine, which is really playing in the energy category. We are continuing to put our efforts behind this brand and continue to grow in its [market] field, which is really its core positioning. Full Throttle, another brand which we acquired from Coca-Cola. We are continuing to support the brand. We've redesigned and refreshed the package. We are also looking at experimenting with some different packaging in certain areas this year. We'll continue with the strategy that we have employed in the past for this brand. Relentless in the United Kingdom continues to perform nicely. Refining our marketing a little bit to be more hip hop, grime, and electric music from rock previously. It's still a great brand and continues to be very profitable for us. Burn, we are continuing to innovate, increase, and launch additional flavors. The main markets for Burn are Russia, Poland, Spain, and Brazil. It's in many more countries than that, those are the core countries for Burn. It continues to do well in those countries, particularly in Russia and Poland. The next slide shows Live+ Energy, which is one of our brands. We've redesigned the packaging, and we are continuing to see good sales from this product in New Zealand. It was interesting, we have three energy drinks in New Zealand. We have Mother, Live, and Monster. Mother is an energy drink in Australia, as you're all familiar with. We've owned this for a number of years. It's continuing to do very nicely. We're continuing to innovate on its own platform, and it really complements Monster in the Australian market. Monster gives us a good positioning and a really good seat at the table as an energy player in the energy market in Australia. Power Play continues to do very nicely and is a brand that's centrally, mainly focused in South Africa, but it is also sold in a number of additional countries, as you saw from the map we put up earlier, in Africa. Again, continues to be really well-received. It's sort of almost a brand that's positioned between the premium Monster and between the affordable brand Predator. It sort of goes right in between those two. We're continuing to grow the brand and expand the product offerings in Africa for Power Play. Nalu is a fruity energizer product. It's very strong in Belgium. I think there is a great opportunity for us to grow the brand outside of Belgium. That's something we've got to put on our chart. It's just a question of, got so many things to do. We think that this is a really nice brand. It's positioned differently to other energy drinks. We believe that there is some scope for this brand to grow in the future as well. Affordable energy. This really is probably where we see our largest growth opportunity outside of the Monster brand internationally. Consumers are continuing to demand functionality, taste, and lifestyle. They want a brand, a product that they can be proud of. They just premium, just the buying power in many countries around the world just puts the Monster brand out of reach. There are also many countries where the energy category in the affordable space is a very big category. We see really incremental opportunities in LatAm, Eastern Europe, the Middle East, and Southeast Asia. It's a differentiated target consumer from premium energy drink consumers. Predator has a unique positioning and an ownable look and feel. It's got an icon, a gold color, and is able to embrace the conquering spirit. Our tagline for that is, Rule your kingdom. Where we've started to sell now, we are starting to see very results. We have a lot of flavor extensions that we've already introduced, and we literally have a number of flavors lined up so that we can actually expand this product and launch it really quickly. We are launching this product on a concentrate model, which makes it a lot easier from a logistics point of view with the bottlers to expand this product internationally into many countries this year. This is a summary of our financial results. You can see that we've had 28 consecutive years of increased sales, and earnings per share and profitability has moved very strongly. This last year with COVID, we've had, I think, pretty exceptional results. Unfortunately, we can only repeat the numbers that we have until the end of September 2020. We'll release full year results late February. We'll be able to talk about the year in perspective then. I don't think there's anything more I need to say other than these numbers are the published numbers, and we'll talk more on our earnings call at the end of February. Thanks, Hilton. All right, guys, I will call over to the operator for the Q&A session, and we'll be available then. There will now be a five-minute break for those who wish to dial in for the Q&A session. After you have dialed in, please mute your webcast audio as you will now be listening via telephone. To ask a question, please press star then one on your touch-tone phone. To withdraw your question, please press star then two. We do ask that you limit yourself to one question. While we wait for the roster to assemble, please enjoy the video on the webcast. [Presentation] [Presentation] [Presentation] We will now begin our question- and- answer session. Our first question today will come from Kevin Grundy with Jefferies. Great. Thank you. You guys hear me okay? Yes, thanks very much. Perhaps what I would like to do at the beginning of this session is just ask to participants for the choppy recording. I realize that as I've been talking, every couple of words, sentences, I get a word cut out. Apologies for that. Hopefully, I'll try and do better during the question- and- answer session. Thanks, guys. All right, Kevin, sorry, go ahead. No. No worries at all. Thank you guys again for doing this. First, congratulations, to Hilton and Tom. My question relates to that. I have a bunch of questions, let's start with this. Just the Co-CEO structure. The investors naturally understand, been following the company for a while. To your credit, the two of you have done a magnificent job building this company over the past three decades. The structure, of course, of Co-CEO is sort of fairly unique and not one that we see very often, either in staples or even outside of consumer, I would observe. Maybe just talk about the decision for the Co-CEO structure, why it's appropriate, what drove the decision. Is this a temporary structure, I would imagine, and whether there's anything unique about the timing. Thank you. Perhaps I could just start to address it. I don't think it's something that you should interpret as being separate. I think that we looked at all of the titles and looked at the structure and the Hilton group titles, but ultimately, Hilton really functioned as my partner, and we've operated together. We just felt that going forward, it would just better reflect how we function as partners, business partners, and how we run the company. Those were titles assumed and took on when we were trying to divide up how we were actually going to function 30 years ago. That's really all I think that you guys should read into that. It is unusual, but it has worked. It's worked between Hilton and I. For whatever reason, you guys have seen how we operate, how we even do some of the calls. It is a bit unique, but it works. We have a very trusting relationship personally and in addition to in the company in these positions. I think that's been important to be able to make this work because you can't agree on everything, and we don't. Ultimately, we find a way to come to what we think is a better decision and to move forward with it. Maybe I could just comment, Kevin. The company's grown significantly in all those markets that you saw earlier in the presentation. Rodney and I have worked together for many years, and we've divided responsibilities. I was Chief Operating Officer, I was President, I was Vice- Chairman, I was Chief Financial Officer. We have a very good financial structure under the leadership of Tom Kelly, and it really made sense to elevate Tom, to give him a lift up in his own career, and be able to spread the work as we've done before. Nothing's really changed. We're just carrying on, and it is what it is. We both run the company, and it's grown significantly. Happy to be part of it, and as we've always said, we've got a great bench strength as well. Yeah, I think all positive. Our next question comes from Chris Carey with Wells Fargo. Hey, good evening, everybody. I guess, and this is going to be more higher level, but you've seen this dynamic in energy where despite the best efforts of others, you still have two dominant players in the category, and that really hasn't changed. I wonder what it is, and potentially, even more recently, why you're able to sustain this level of dominance in the category and whether that is informing your decision to remain focused on this category, because you do see that dynamic certainly in other categories where top two players are staying quite strong. Yeah, just again, strategically high level, why despite best efforts, this seems to sustain with this two-horse race, and if that's informing your strategy to not enter other categories. Thanks. Rodney, I don't know if you want to take it, or I can. I don't mind. I think that what we've been able to do in order to continue to grow and maintain, I think, this leading position in the category is to innovate. We've innovated not just by adding additional flavors or additional SKUs, but by creating different brand, what we'd call families. I did refer to that earlier in the slides. That has facilitated continued growth of consumers and additional consumers coming into the category that have continued to drive the growth of this category. Over the last 18 years that we've had Monster, you've continually seen increased sales in this category for that period, and they are continuing to grow. There was sort of a slowdown towards the end of 2019, beginning of 2020, some of it due to COVID-19, but that seems to have regained some momentum again, and the category, even in a very mature market like the U.S., has continued to grow. The category, as you saw from the one slide I put up, is continuing to grow in other markets around the world. Some of them are actually older than the energy category. I think that, again, is due to the fact that we've been able to expand the category and the use occasion and the family. You have Java Monster, which addresses the coffee category and people who like focus or would like coffee, but with coffee with the energy twist, the Hydro Line, and it goes on and on. I think that's been part of the reason we've been able to continue to maintain the category growth as well as our own growth in that category. You saw the pretty robust innovation we had in 2020. Looking forward to 2021, we've continued to innovate and do things differently. I was actually just drinking this last new Ultra Gold that I have here, which is really a way of actually, again, continuing to find different ways of growing the Ultra franchise. The product is fantastic. I think that most of the analysts who have received packs of the new products, who've been able to sample them themselves will agree. Now, this is a sort of a pineapple type flavor. It's new, it's different, great new packaging. I think that's going to continue to help us grow the category and grow our sales. Yeah, I think one of the earlier questions was why are there two major players in the energy category? We've seen this in many categories. We've seen it in colas. We've seen it in just so many different categories across the board. I think one of the differences is that we don't believe that we sell a beverage. We believe we sell a lifestyle. Our next question comes from Dara Mohsenian with Morgan Stanley. Hi, Dara. Hey, guys. Congrats to Hilton, Tom. How are you? Good, and you? I just wanted to talk about why it makes sense to introduce the 12-oz cans at this point. I know it's something you guys have considered in the past. What sort of got you over the line at this point? As you think about it, what's sort of the biggest source of incrementality there? Is it just the consumer looking for a different option, shelf space presence? How do you guys think about that? Also on the other side, do you worry about the potential cannibalization and trade down from a 16-oz can to a lower price point? How do you sort of manage that risk? Thanks. You want to take that, Hil? What we do know in the category is that Red Bull sells $2.1 billion worth of 12-oz cans in convenience retail, and we don't participate in that part of the business at all. We see it as an opportunity, and it will be incremental. 18 of the top 20 national convenience chains have agreed to give us an additional half shelf, which will be incremental for this product. There will only be four products that will initially be launched in 12 -oz, of which only one of them, the Monster Green, is full- sugar. They will have low carb, we've got Ultra, and we've got Paradise. That's the third SKU. We'll have four SKUs in this lineup. Remember, in Canada, we launched a 12- oz a few years ago. In Canada, it's also in convenience retail, and there hasn't been any trade down that we have seen in that market. We think it's going to be incremental. We think it's going to attract more consumers. A lot of people are put off with the 16-oz. We believe that it may appeal to more of a woman consumer, and excited to try it out and see what happens. If we feel it doesn't work, then obviously, we can do what we have to do and change out. We honestly believe it's incremental and will be positive news for us. Our next question comes from Peter Galbo with Bank of America. Hey, guys. Thank you for taking the question. Maybe just to follow up on Dara's question around 12-oz and maybe the other side of the slide there where you had C-stores, you also had food service. Sure potentially on-premise. Can you just dimension, for us what you think that opportunity could be? Why it makes sense to lean more into that channel now, maybe as it's recovering more? Then just, does that require anything like hiring a different sales force or other investments to access that channel, which you historically haven't done much in, versus your existing portfolio? Thanks. No, we've always participated in food service. If you track back the numbers, as you have reported on previous conference calls, that part of the business is growing and growing significantly. This is really no change. Some of our food service on-premise customers want a 12-oz as opposed to a larger can for a whole bunch of reasons. We're happy to oblige, and we've always had a 12-oz, but we've kept it to very select customers. It's the 12-oz slim. Sure, that part of the business is growing. I know we've had a slowdown with COVID, but we're not going to be in the COVID scenario forever. These markets are going to continue opening up, and we'll be part of it. We don't have as much as an on-premise business as Red Bull, but it's certainly growing. Our next question comes from Laurent Grandet with Guggenheim. Hey, good evening, everyone, and congrats, Hilton and Tom, for your new position. My question is around the seltzer category, and no mention of seltzer. As you may know, it has been a major point of discussions with investors recently. Is it something you are keeping for the next earnings release, or you decided simply not to play in that category? If that's the case, is that because you think it may be too late to enter into that category, or you would have to dedicate too much money or too much of your resource without the certainty of you could win? I'd like to have your thoughts on these, please. Thanks. There's a lot of speculation, but we can't run the company according to speculation. There is a category, people are sort of coming to conclusions or making assumptions from some of the trademark that we registered. We are looking. We've said we are looking, and we are continuing to look and evaluate the seltzer market, both the alcoholic and the non-alcoholic seltzer market, energy market. We are involved in developing products. How we're going to launch, when we're going to launch. Things are changing. The markets are changing, as you said. We are reluctant to simply launch and become one of many just following the same me-too products. We are looking at where do we see the opportunity or where do we see being able to make an impact and have a point of difference. What we've said is, I think you shouldn't assume anything. We think that, I may have misspoken, I said the next shareholder, then I said meeting in February, it's obviously an Investor call in February. By that time, we will have some more direction for you on our innovation, that may or may not involve one or more of the seltzer categories. We are working on it. As I said earlier, stay posted. We don't want to prematurely talk about it until we are ready from a competitive point of view as well. With the changing landscape, we are looking at and reevaluating which way to go to market in those areas. Our next question comes from Andrea Teixeira with JP Morgan. Thank you, and Happy New Year. Congrats to Hilton and Tom on their promotion. Following up on this past question on innovation. I know you don't want to be too specific, but I was hoping if you can comment also about other white spaces, perhaps cannabis-infused drinks or other things that you might be looking at. Andrea, what I was going to say is we were waiting for your question because you always get in number one or number two. Kind of gave up on you this time. Thank you. All right. I think that we're looking at other categories. Again, our non-compete with Coke has expired. We just don't want to rush into categories where there are thinner margins, there's a lot of competition. As we've said, we actually have got so much on our plate in the energy space on its own, including the opportunities we see now in many countries around the world with an affordable energy brand. We're saying at the moment, those are offering more opportunity to us and to our growth. You can see from the numbers and results that we're very excited about that. These other categories, we are watching and looking at, whether it's cannabis and other things. There's a lot of Federal issues with cannabis, and we don't want to run into them and end up with a lot of regulatory issues, and then when the time is right, we will be able to formulate products and participate in that category. As we've said in the broader non-alcoholic category, there are opportunities, but again, some of them are a lot of heavy lifting and a lot of work to be done. We just see much more potential in what is available to us in the energy-related categories and products. We're not saying no at all. Those are clearly on our radar. At the moment, we're very happy, focused where we are. As I said a little while earlier, on the seltzer area, both alcoholic and non-alcoholic, we probably will have some more to give you some more news in February, May or if I put it that way. Our next question will come from Mark Astrachan with Stifel. Hey, guys. Happy New Year. Hope all is well. Also lagged today, Mark. I congratulate you, Hilton, but I think we all thought of you as a co-CEO anyway, so congrats to Tom. I agree with that. Yeah. Fair enough. I guess I wanted to ask on the price pack architecture just in terms of what does this mean? Can you do more of it if successful? I guess the one thing you didn't comment on is pricing. Red Bull seems to sell its 12-oz at slightly more per ounce than 16-oz and same with 8-oz. Are you guys going to do the same thing here from that standpoint? Would you potentially look to move it outside of the U.S. over time? On the 12 -oz, that pricing is probably going to be in the $2.29- $2.39 area retail, sort of aim, which is a little bit lower than our 16-oz. Our pricing is the pricing, and you can't come in with a 12 -oz at equivalent pricing. That have good margin, and we think that, hopefully that as Hilton said, and we believe it will be incremental. There might be a small amount of cannibalization, but we do believe it will open the usage occasion. We've literally done business in convenience in one size. A little bit of business in 24 -oz, which is even bigger, but we haven't really played in that smaller size, single-serve market, and we think that that is opportunity for us. With regard to international, in many countries, we are sort of locked into the architecture of the category, which was there before we got internationally. That's a little different. As we continue to grow, we are continuing to improve our margins. We are continuing to pace of cutting our costs on some of our products internationally, which we have done. For example, in some of the juice products, we've been able to obtain great products and reduce the juice content, which will help us the bottom line, because those were the products that we were struggling with on thinner margin. We will continue to look at economies of scale going forward. That's a harder task because we are, as I said, built into the existing price architecture in each of those countries. One of the other things we should just mention is that we're converting our 10-packs of 16 -oz to 12-packs. That's another move that we're taking t o change the usage occasion. Consumers buy a 12-pack, have it in their larders, and then just take it out and drink more, as we've seen. Our next question comes from Nik Modi with RBC Capital Markets. Yeah. Happy New Year, guys. Thanks for taking the question. I just wanted to go back to some of the shelf space comments you made earlier on. Outside of the 12-oz incrementality, can you share with us if you're gaining space in the core space, with your 16-oz area? Just thinking about Red Bull's relative outperformance versus Monster in 2020, do you think you want to prioritize volume this year, kind of close that performance gap? I'm just curious on your thoughts around that. Thanks. I think if you looked at that unit slide, Nik, you'll have a kind of different impression about what happened in 2020. 2020 was not a usual year. The Red Bull consumer who traditionally was drinking Red Bull in on-premise in the bars were just sent home and were buying their Red Bulls in the convenience stores and at grocery. It was a big change this year. Plus, we've spoken historically about the success of Red Bull Watermelon as a new flavor. Their flavors have really made a difference. Their guys were out in the field. They have their own dedicated sales force. We depend on the Coca-Cola system, but we've also set up, as we've reported on previous calls, our own street teams to be able to deal with that all other market that sometimes the Coke bottlers don't get to. I think 2020 was just a transitional year, and we are looking forward to 2021. We'll just see what's happening in 2021. With regard to pricing, our business is our business, and we're not going to go after volume at the expense of margin. That's not something that we would do. Just perhaps just commenting on the Red Bull increase over the last year and ourselves. If you looked at earlier in the year, due to the factors that Hilton has mentioned, that we found that Red Bull's growth was quite higher than our growth, and our growth had slowed. Obviously, we've seen that turnaround. As we've continued to go through to the end of the year, the categories continue to pick up. If you look at, for example, at the last week and the category's up in all measured channels up to about 11% growth, and we are growing ahead of that category. As you've seen over the last few weeks, again, I think Red Bull's growth has started to also ameliorate a little bit downward. The gap between Red Bull and us on the growth has narrowed very much. We believe that will continue to happen. We are hopeful that with our new innovation and things to normal with our street team that Hilton's alluded to, we will continue to actually accelerate our growth and the differential between Red Bull and ourselves going forward. Yeah. 2020 was just a crazy year. I mean, the bottlers were focusing on their major SKUs, and so they should given the times that we were living in and still living in. Red Bull have fewer SKUs, and they just dedicated themselves to addressing their merchandising. We would have done the same, frankly. Our next question comes from Kaumil Gajrawala with Credit Suisse. Hey, everybody. Good evening, I guess afternoon for you guys. When it comes to innovation, one of the newer kind of emerging trends where we're seeing quite a bit of growth is in fitness energy. Obviously, you have Reign, and it sounds like that global rollout of Reign is a big bet for 2021. It's a different market proposition looking at the Celsiuses of the world or the announcement of ZOA yesterday. Can you maybe just talk about what you're seeing in that market? Do you need to launch something kind of like a Reign where it doesn't build off of the flagship brand, but needs to be an entirely new brand and an entirely new platform? Just discussing what you're up to there would be useful. Thank you. I think you ought to also draw a distinction between the fitness category and I think where you're looking at this new category, the ZOA that's been announced and Celsius. Where Celsius is getting its sales increase is probably not in their original HEAT product, but in the smaller 12-oz size, which is a little positioned, but not quite as a fitness product, but probably more as a sort of a clean, healthier sort of energy. Those products, if you do look at them and some others that have come up that are around, they're still very small. I think we don't want to overplay. We don't believe that the market for something like ZOA will be very big. That being said, that's a view we have, and we'll see what happens. We are certainly looking at that, and we are evaluating how to address that perceived clean energy or healthier energy sort of focus, which may be a slight variation, and we do some of that through the Reign brand, but also it may entail us looking at another brand. We looked at Monster, but Monster's positioning doesn't really play in that area. We don't think that being true to who Monster is, we initially[audio distortion] Monster. We will look at the potential to look at another brand to basically look at that healthier, lighter, area, which is probably, as I said, a little redefined or a little bit different to our fitness category, which is really where Reign and Bang play in. That's part of what we are saying for innovation. Watch the space. We are going to do something going forward. I don't think that these people should be over-expecting, because we think those are smaller niche categories, and they will build, and they will become more important contributors to growth in future years. Certainly, it's going to take some time. It's not going to be a real contributor overnight. Yeah, I think it's the differential between what we call performance energy and clean energy. We certainly are examining that clean energy space very carefully. As Rodney said, it's smaller. We don't think it's going to be a significant category initially, but there's a market there. One thing that I just wanted to mention, if I may, to Nik. Nik Modi, I forgot to talk about the non-measured channels that we have with Home Depot and Lowe's that have particularly benefited from the COVID situation. Obviously, we are well-represented in Home Depot, Lowe's. We spoke about Amazon and other online retailers. Also, to add to that, Costco is also out of the measured channels. I just wanted to mention that so I don't forget about it. Our next question will come from Bonnie Herzog with Goldman Sachs. Thank you. Hi, guys. I hope you're both doing well. Yes, thank you. I know it's- Do we look well, Bonnie? Good, Oh. Bonnie asked, Do we look well? Oh, well, you know what? I haven't seen you. I'd like to hopefully visit you guys soon and be able to see you guys in person. All right. I did want to touch on something with you guys. I know it's early in the year, but I was hoping to get your high-level thoughts on margins. Maybe you guys could touch on some of the big puts and takes for us that we should be thinking about. I guess I'm thinking about it in the context of your marketing efforts. Last year, for instance, you mentioned you shifted more towards digital, and you probably scaled back a fair amount given COVID. As we think about this year, how do you expect your spending levels to evolve? Then maybe you could also touch on some of the other cost buckets for us in terms of how we should think about it in 2021, whether that's transportation costs, any increases in input costs, et cetera. Thanks. I always get confused with you guys when you talk about margins. Are you talking about gross margin or net margins? Fair. I'd love color on both, to be honest. I scared you. If you could just talk about some of that. I know. If I could touch on gross margins for a minute. That's a factor of many things, right? As we look at gross margin going forward, we are taking steps, as we've said, in Europe, to move to lower percentage juice products with higher margins. We will have can increases this year. It's already 2021. We are also doing a lot more transportation than ordinarily we would because there is cans. While we have sufficient cans for our needs at this time, there's no abundance of can volumes, so we've had to move product really around the U.S., which ordinarily we would try and avoid. There's additional costs in the system that are starting to increase, and against that, we also, don't forget, as we sell more product percentage-wise internationally, we have this issue where international margins are not at the same level as the U.S. I don't think, frankly, that they ever will be. We have this continual drag on percentage margins, but not on actual dollar margins. That's my take on gross margin. I know it's not very helpful, but that's the big buckets that we've looked at and we've examined. Then, getting onto net margins. There's a lot that's happened in 2020, and you saw the quarterly results up till September. There have been significant savings in travel and entertainment. There have been significant savings in sponsorship and endorsements, but there have been increases in the digital marketing space. As we get back to a more normal 2021, things are going to change, and they won't be, I don't believe, the same as they were in 2019, but they certainly won't be at the same levels as 2020. Given all of that, we obviously have our budgets, and we don't give guidance, I can't comment on the budgets. The business is solid, the business is sound, and is operating really profitably. I don't know if there are any other specific questions that you want to raise. No, that was helpful. Just mention that, not to just refer to 2019 and 2020, I think you were saying it to I think you will all understand it to be 2020 and 2021. No, I'm talking about 2019. 2019 was a full proper year. Okay. 2020 was our COVID- year. 2021 is going to be, I don't know, somewhere between 2019 and 2020, depending on when we can get moving and get shots and get organized. Yeah. Herd immunity, as they say. Yeah. We have time for one more question, which will come from. Sorry, excuse me. Bonnie, the one thing that I just wanted to mention, I want to draw everyone's attention to the last Q, to note 20 of the Q, where we spoke about the subsequent event, the tax rate that will be impacted in the fourth quarter because of the reorganization of our international and structure and intangible assets. Please, could you go back and re-look at that note because I don't want there to please to be any surprises. We've disclosed it. It was there in the third quarter, note 20. It was on page 32. You'll see we'll have a very low tax rate in the fourth quarter. We've explained why. As I said, we have time for one more question coming from Steve Powers of Deutsche Bank. Yes. Hey, can you hear me okay? Yes. Thanks, Steve. All right, great. Hey, thanks for the question. Just to loop back on something you talked about earlier. You mentioned the incremental half shelf in major C- stores around the 12-oz launch. I just was curious if you could speak more broadly to any other major shelf space or cooler space changes that you anticipate this year, both given all the activity you've talked about within your trademarks, but also some of the category developments more broadly, performance energy, clean energy, et cetera. If you have any commentary around how category or shelf space development may be happening overseas in some of your major markets, that'd be good color, too. Thanks. I think that we are seeing that we are all going to be able to get incremental shelf space in 2019, and then going into 2020. Our strategy for the Reign brand was to get incremental. The space is very limited in the, what I call the energy door, particularly where you've got a full door. The strategy was to get shelf space outside of that door into a performance type of subset. We are continuing to achieve in that area. In a lot of chains, Reign was still shelved amongst the Monster product shelves, and that did put some pressure on our overall shelf space. Together with the 12-oz and the realignment in many of the chains to get incremental shelf space for the performance category outside of the space. Overall, we believe we will increase the shelf space for our product in convenience and other channels as we continue to go forward this year. Internationally, we think that some of the shelf space, again, is increasing as we continue to grow. We think that retailers are giving more space to the energy category. That's just going to be an evolution of increased sales. If you looked at the international sales increase that we showed on that one slide, the category is growing very healthily in many countries. We do expect to be able to get shelf space, additional space as we go forward. Yeah. As the retailers look at their sets, they have juice products that are declining, and they're giving more shelf space to those categories that are growing. Energy is one of those that's growing. Obviously, that's what we charge our executive sales force with every year is to increase shelf space. It's something we're very passionate about. We purchase shelf space where we can because it's good for us to do and to have a permanent home, and it's something that we really focus on. Yeah. This concludes our question- and- answer session, and I'd like to turn the call back to Mr. Sacks and Mr. Schlosberg for any final remarks. Thanks, everybody. On behalf of Monster, I would like to thank everyone for their continued interest in the company. As we said earlier, we continue to believe in the growth strategy of the company and remain committed to continuing to innovate, develop, and differentiate our brands, and to expand the company both at home and abroad. We believe that we will be able to navigate through the challenges ahead. There are still challenges as a result of the COVID-19 pandemic, and we continue to hope that with the release recently of vaccines, this unfortunate situation will resolve itself in the not too distant future. We believe that we are well-positioned. One of the things that I referred to earlier in the call was on our music sponsorships and social media platforms, where we're continuing to increase our percentage of our spend in those areas. Really big music sponsorship we've been able to secure that it's premature just to discuss. That will happen shortly, and it will become public. We're pretty excited about what are the avenues we have to continue to broaden the attraction for our brand and the relevance to our consumers, in the U.S. and internationally. Once again, thank you very much for your attendance. We hope that you will stay safe and healthy, and look forward to speaking with you again on our I nvestor call at the end of February. We are still hopeful that we may be able to actually see everybody physically, but we don't know whether that's going to be a little premature. Whatever it is, we will get back to you with our full- year results in a very short space of time now. Thanks very much, everybody. Have a good evening. Stay safe. See you guys. Thanks. Bye. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.