Greetings, and welcome to The Boston Beer Company second quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn this conference over to Mr. Mike Andrews, Associate General Counsel and Corporate Secretary. Thank you, sir. You may begin. Thank you. Good afternoon, and welcome. This is Michael Andrews, Associate General Counsel and Corporate Secretary of The Boston Beer Company. I'm pleased to kick off our 2022 second quarter earnings call. Joining the call from Boston Beer are Jim Koch, Founder and Chairman, Dave Burwick, our CEO, and Frank Smalla, our CFO. Before we discuss our business, I'll start with our disclaimer. As we state in our earnings release, some of the information we discuss and that may come up on this call reflect the company's or management's expectations or predictions of the future. Such predictions are forward-looking statements. It's important to note that the company's actual results could differ materially from those projected in these forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in the company's most recent 10-Q and 10-K. The company does not undertake to publicly update forward-looking statements, whether as a result of new information, future events, or otherwise. I will now pass it over to Jim for some introductory comments. Thanks, Mike. I'll begin my remarks with a few introductory comments and then hand over to Dave, who will provide an overview of our business. Dave will then turn the call over to Frank, who will focus on the financial details of our second quarter results, as well as our outlook for the remainder of 2022. Immediately following Frank's comments, we'll open up the line for questions. Given Truly Hard Seltzer's growth last year, we knew we would be facing tough volume comparisons this year. The continuing decline of the Hard Seltzer segment, which was down 17% in volume and 13% in dollars in off-premise channels in Q2, is deeper than previously expected, which impacted our second quarter results and is expected to continue to impact Truly's performance for the balance of 2022. Our 2022 second quarter revenue grew slightly over the second quarter last year, driven by pricing gains. Our second quarter depletions declined 7% and our shipments declined 1% against prior year comparisons of 24% depletions growth and 27% shipment growth. We made progress improving our second quarter gross margin despite negative impacts from lower than expected volume. As Frank will discuss in more detail later in the call, we also returned to profitability and generated more than $100 million in operating cash flow. Based on our first half performance, our view of the remainder of the year and the current economic environment, including uncertain consumer demand and broader supply chain challenges, we've reduced our volume and earnings guidance for the remainder of 2022. In the second half, we will focus our efforts on Twisted Tea, Truly and Hard Mountain Dew, which we believe have the most potential to positively impact our business. Our multi-brand strategy, plus our long history of innovation, have supported our growth over the long term, and we will work hard to capitalize on these strengths going forward. We're also thankful to our outstanding coworkers, distributors, and retailers who continue to support our business. We're proud to have just been named the number one beer industry supplier in the Tamarron survey, the annual poll of beer distributors conducted by Tamarron Consulting, a consulting firm specializing in the alcoholic beverage distribution industry. It is our fifth number one ranking in a row and 11th in the last 13 years. This is a result of the efforts of all Boston Beer coworkers to service and support our distributors' business and to the strong relationships we've built with them over many years. We continue to believe that we have the best group of distributors in the beer business. I'll now pass it over to Dave for a more detailed overview of our business. Okay. Thanks, Jim. Hello, everyone. Our second quarter depletion declines were primarily driven by declines in Truly Hard Seltzer and were partially offset by growth in our Twisted Tea and Hard Mountain Dew brands. Excluding the declines in Truly, our depletion volumes for the remainder of our business increased 14% in the second quarter and 11% in the first half. Our strategy is to become the number one player in the fast-growing beyond beer segment by creating a broad, relevant brand portfolio that enables many pathways to growth. This portfolio is led by the number one FMB in Twisted Tea, number two Hard Seltzer in Truly, the number one Hard Cider in Angry Orchard, and the newly launched Hard Mountain Dew, which is the number one FMB in the seven states where it's currently distributed. Towards that end, we improved our number two position in Beyond Beer in the second quarter with a 27% volume share, up 0.5 share point versus the second quarter of 2021. Meanwhile, we'll continue to experiment and plant new seeds in our search to cultivate the next big contributor to our future growth. For the remainder of the year, we're focused on fueling Twisted Tea and Hard Mountain Dew's growth and remaking Truly's core original flavors with improved formulations, a new ad campaign to communicate those changes, and superior distributor support and retail execution. We're also targeting margin improvements as we continue to enhance our supply chain performance and inventory management and offset commodity cost pressures. Hard seltzer dollar sales declined by 13% in the second quarter of 2022 in measured off-premise channels. We believe there are two primary drivers to the continued deceleration of the segment. First, hard seltzer has lost its novelty as consumers have been distracted by many new beyond beer products entering a hyper-crowded marketplace. Second, and tied to the macroeconomic environment, we're seeing a volume shift from hard seltzers back to premium light beers with their lower pricing, particularly among 35-year-olds to 44-year-olds. Whether this continues into the future or reverts back is still to be determined. The Truly brand has not yet overcome these headwinds of 2022, as Truly dollar sales declined in the second quarter by 17% and lost 1.3 share points. Despite losing share, Truly's week-to-week sequential share has held steady since early January at around 27 percentage points and has been at 28 percentage points for the past four weeks, maintaining our continued strong number two position. Our Truly innovation has been well received by consumers, as Margarita is the number one innovation year to date in all of beer with a $4.2 share, and our Poolside limited time offer also has performed very well. However, our core light flavored Truly business has suffered and not performed as we'd expected as consumers eagerly adopt what's new and interesting. Despite this challenge, Truly's year-to-date household penetration remains strong across all age groups and is number one in all of beer among 21-year-olds to 34-year-olds. Our go-forward plan is to activate this large base of drinkers by bringing new excitement to our core original flavors to better complement our innovation. Despite the recent trends, we believe hard seltzers will remain an important beer industry segment in the future, but its trajectory remains unclear. Hard seltzers still command a large consumer base with 29% household penetration over the latest 52 weeks, but the first half of 2022 penetration declined 12% from the first half of 2021. While the Hard Seltzer segment was 10% of total beer dollars in the second quarter of 2022, it's down from 11.4% in the second quarter of 2021. Consequently, as we look at our forecast for hard seltzer category growth for the year, we've adjusted down our category volume growth from between flat to +10% to down 15%-20%. Regardless of where the category growth settles in 2022, our longer-term goal is to outgrow the category and improve our Truly brand trends driven by a renewed focus on building our core business, smart brand innovation, and strong distributor support and retail execution. With respect to innovation, there's significant wholesaler and retailer excitement around our upcoming Truly Vodka Seltzer launch this fall. Our Truly flavored bottled vodka, which has been sold by Beam Suntory since late in the first quarter, has been well received by consumers, and we believe this bodes well for the Truly Vodka Seltzer launch. Important to improving Truly's trends is the performance of its core flavors. Today we're announcing a reformulation and improvement of our core Truly flavors that includes adding real fruit juice for an even smoother, easy to drink, and refreshing taste profile. A similar exercise in the fall of 2019 led to retrial and share gains, and we believe we can do the same again. Our reformulated citrus variety pack is in the market now, and the other Truly variety packs will transition in August and will be supported by a new ad campaign focused on the flavor improvement, a significant investment in shopper marketing activity, and other promotional programs to drive volume in core flavors. Twisted Tea expanded its position as the number one FMB in the second quarter by 5 share points and grew double digits, primarily by improved distribution of 12 packs and a unique product and brand proposition that resonates with more and more consumers. We improved our service levels and reduced out of stocks during the second quarter compared to the first quarter, which helped support this growth. In measured off-premise channels. Its volume growth has accelerated from 21% year-to-date to 27% in the latest 13 weeks to 39% in the latest four weeks. Twisted Tea has been the fastest-growing brand among the top 20 in all of beer for the past 10 months, and in the second quarter became the 11th largest brand in all of beer. It also has the highest sales per point of any Beyond Beer brand. Twisted Tea's single-serve 24-ounce can is the fourth largest single-serve beer of any kind nationally, underscoring its resonance with convenience store shoppers. This is despite many competitive offerings entering the market and is a testament to the brand's growing following and the potential upside that remains as we close distribution gaps across the country. Retailers are excited about Twisted Tea, and in the recently finished spring resets, Twisted Tea space grew 28% and now has 13.4% of FMB space. Because of its growing 12-pack distribution, the brand is receiving unprecedented retailer support, including expanded promotional and display activity. Additionally, to support pull, we're advertising the brand year-round to increase brand awareness, and then we've received strong response from consumers to our current Tea Drop advertising campaign. We'll work to maintain momentum from the summer into the fall with a large college football-themed initiative, significantly building on our college activities from 2021. In the seven states where it's been launched, Hard Mountain Dew is showing good promise with an 18% share of FMBs in measured off-premise channels where it's distributed in those markets. We'll continue to roll the brand out and expect it to be launched in up to five additional states in 2022. The brand rollout has been delayed in certain states due to a slower than expected regulatory process. While this will result in fewer depletions in 2022 than originally envisioned, we're in this for the long term, and we're very encouraged from the early consumer response that has been so positive. In the first half, our Samuel Adams brand depletions were down low single digits. The brand had growth in seasonals and the draft business and held share in a difficult craft beer market. Meanwhile, Angry Orchard remains the number one brand in hard cider with a 48% share of the segment in measured off-premise channels. Angry Orchard brand depletions are down, consistent with low double-digit declines in cider category trends. Total Dogfish Head brand depletions in the second quarter also declined against a difficult craft beer market. However, our expanded lineup of award-winning Dogfish Head canned cocktails, including the new eight-pack Bar Cart variety pack, grew depletions significantly in the second quarter off a relatively small base. Bar Cart is now the largest variety pack in ready-to-drink cocktails in measured off-premise channels. So far in 2022, we've continued to experience out of stocks on certain brands and packages, primarily with Truly, as our supply chain is still struggling to react to changes in demand. We also have had issues with availability of some of our ingredients and packaging materials. We believe we're managing these issues and have the capacity, ingredients, and packaging in place to improve service levels and reduce our out of stocks during the second half. In summary, we're optimistic about the long-term outlook for our diversified beverage portfolio. We benefited from the unprecedented growth in hard seltzer during the pandemic and are now experiencing changing consumer demand as the environment becomes more normalized. This resulted in the revision to our 2022 guidance. Our company has proven innovation and brand-building capabilities, the top-selling organization in beer, and an excellent balance sheet to support long-term growth, even as we navigate some challenges in the near term. Now I'm gonna hand it over to Frank to discuss our second quarter financials as well as our outlook for the remainder of 2022. All right. Thank you, Dave. Good afternoon, everyone. For the second quarter, we reported net income of $53.3 million, or $4.31 per diluted share, compared to a net income of $59.2 million, or $4.75 per diluted share in the second quarter of 2021. This decrease between periods was primarily driven by lower gross margins, partially offset by increased revenue and lower operating expenses. The second quarter results showed sequential shipment, gross margin, and profit improvements and generated over $100 million in operating cash flow. During the quarter, we continued to work through the 2021 Truly inventory overhang as we lapped the back end of the 2021 peak season inventory build. While margins have improved from the first quarter, the lower than expected volumes and higher returns and scrap for Truly and Bevy brands have negatively impacted our margins and offset some of the margin improvement programs we have achieved in our brewery network. In addition, our supply chain challenges have not improved to the level we expected. Twisted Tea service levels and out of stocks have improved, but Truly service levels and out of stocks continue to be below our internal targets. Shipment volume for the quarter was approximately 2.4 million bbl, a 1.1% decrease from the prior year, reflecting decreases in all brands other than our Twisted Tea and Hard Mountain Dew brands. We believe distributor inventory as of June 25th, 2022 averaged approximately four weeks on hand and was an appropriate level for each of our brands, except for low inventory levels for certain Truly brand packages. We expect distributors will keep inventory levels for the remainder of the year below 2021 levels in terms of weeks on hand. Our second quarter 2022 gross margin of 43.1% decreased from the 45.7% margin realized in the second quarter of 2021, primarily due to higher material costs and higher returns and scrap, only partially offset by price increases. Our second quarter operating expenses decreased $1.2 million or 0.6% from the second quarter of 2021. This net decrease was due to a decrease in brand investments of $11.3 million, mainly driven by lower media costs, partially offset by increased general and administrative expenses of $5.9 million, mainly driven by increased salary and benefits costs and increased freight to distributors of $4.6 million. Our depletions and shipments for the first 29 weeks of 2022 have declined 7% and 11% respectively from the comparable periods in 2021. Based on information of which we are currently aware, we are decreasing our full-year 2022 earnings guidance per diluted share to between $6 and $11, from between $11 and $16. However, actual results could vary significantly from this target. This projection excludes the impact of ASU 2016-09 and is highly sensitive to changes in volume projections, particularly related to the hard seltzer category and supply chain performance, as well as inflationary impacts. The 2022 fiscal year includes 53 weeks compared to the 2021 fiscal year, which included only 52 weeks. Full year 2022 changes in depletions and shipments are now estimated to be between a decrease of 8% and a decrease of 2%. A change from our previous estimate of an increase of between 4% and 10%. As we discussed earlier, the revision is driven by a change in expectations in our Truly Hard Seltzer business and the launch timing of Hard Mountain Dew in certain states, moving from 2022 into 2023. We estimate the 53rd week will have positive impact of between 1 percentage points and 1.5 percentage points on our full year depletions and shipments growth rates, and between 4 percentage points-6 percentage points on our fourth quarter depletions and shipments growth rates. We continue to expect increases in revenue per barrel of between 3% and 5%. Full year 2022 gross margins are expected to be between 43% and 45%, a decrease from our previous estimate of 45% and 48% due to the impact of lower volume expectations and continuing supply chain impacts. We continue to expect to cover higher commodity costs through pricing. Our full year 2022 investments in advertising, promotion and selling expenses are expected to decrease between $30 million and $50 million, a change from our previous estimate of a decrease between $0 and $20 million, reflecting our reduced volume expectations. This does not include any increases in freight costs for the shipment of products to our distributors. We estimate our full year 2022 non-GAAP effective tax rate to be between 26% and 27%, excluding the impact of ASU 2016-09, a change from our previous estimate of approximately 26%. We're continuing to evaluate 2022 capital expenditures and currently estimate investments of between $110 million and $140 million, a change from our previous estimate of between $140 million and $190 million. The capital will be spent mostly on continued investments in our breweries to further build our capabilities and improve our efficiencies. We expect that our cash balance of $137.8 million as of June 25th, 2022, along with our future operating cash flow and unused line of credit of $150 million, will be sufficient to fund our base business and future growth initiatives. We will now open up the call for questions. At this time, we'll be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary for you to pick up your handset before pressing the star keys. One moment while we poll for questions. Our first question comes to the line of Kaumil Gajrawala with Credit Suisse. You may proceed with your question. Hi, guys. Good evening. A couple of questions, I guess, starting with Truly and maybe how it's been trending, particularly with, you know, around Fourth of July. You know, does it look like it's stabilized or is Fourth of July kind of the end of the period where comps are particularly difficult? Just any read you have on, you know, where we think it could go would be helpful. Hey, Kaumil, this is Dave. I'll answer that. I think, I mean, you're right. The big overlaps really started to decline right after July Fourth of last year. I can tell you that we got great execution on July Fourth weekend. We had more ads than any other hard seltzer brand in the marketplace. It's and we're being very prudent about interpreting anything right now because it's been so hard to do that. I wouldn't look at one week. It was okay. I'm not sure it's necessarily a trend breaker for us. I think we're gonna be looking actually obviously each week subsequent to here to see what's happening. I can tell you what's good, to summarize what's happening that's going well. I mean, the innovation is doing quite well, particularly Margarita and Poolside are pulling the velocity. Everything looks great. The issue, as I mentioned in my prepared remarks, is the core flavors, the lightly flavored, you know, packages, the variety packs like, you know, tropical and berry and citrus have really disappointed us in their performance. That's why we're really focusing our effort to them, because consumers really, in the end, hard seltzer, they like flavors, they like bolder flavors, but they also, you know, they like the light refreshing, easy to drink nature of the core flavors. As I mentioned, we just announced that we've already reformulated. It's going in the market now. I think we just wanna see how that plays out, the new flavors, the support behind it. We have Truly Vodka Seltzer coming in behind that, which really is the high end of hard seltzer. We'll see where it goes. There's no, you know, there was no epiphany that happened on July Fourth weekend. Got it. Just on margins, one of the success of Truly has also been a drag on margins. As, you know, the growth and third-party manufacturing, distribution, all those sorts of things. Truly is obviously coming off now, but it sounds like the conversation has shifted from, you know, the inefficiency of Truly versus the rest of the portfolio to, volume deleverage and use of the brewery. Can you just help maybe that's for Frank, can you just help square, how we think about margins in the context of what had been happening to margins in the years prior with Truly's success? Yeah, sure. As you know, margins have declined during the growth period of Truly because we added a lot of external production, and that came at a higher cost than double weight internally. We said, okay, as we increase our internal volume, we should gradually see an improvement in the margins. I think what has happened here, especially when it comes to the first quarter, and I talked about it in the first quarter as well, we had an overhang from the inventory that we had in 2021 that clearly impacted margin in the first quarter. In the second quarter, what we're seeing are two things. One is that because of the lower volume, we had higher product returns and scrap, and that was weighing on the margin. Hopefully, that's gonna normalize as we go forward. The second thing is that if you look at our supply chain, we had made certain assumptions on bringing internal variety pack capacity up to speed. We installed two integrated variety pack lines in our own facilities in PA, Pennsylvania and in Ohio. The startup is taking longer than what we had expected. As such, we don't have as much internal capacity as we had projected. We're getting there. We can see that in Pennsylvania, we're making really good progress. Ohio is slightly behind, so we'll ultimately get there, but we don't have the capacity that we had projected for this year, originally. Those are the two things. It's literally, you know, the volume-based returns on scrap and a delay in the supply in the internal capacity of variety pack. Got it. Thank you, guys. All right. Our next question comes from the line of Rob Ottenstein with Evercore. You may proceed with your question. Great. Thank you very much. I guess when you kind of stand back and reflect on the year to date, obviously, you know, some negative surprises. I mean, when you kinda think about that, do you think it's something that, you know, you know, kind of relatively minor tweaks, like, you know, putting some more fruit in Truly is enough to address, or do you think something maybe more fundamental needs to be done, either in terms of your approach to the hard seltzer category or execution or just kind of very big picture strategy? Just trying to get a sense of, you know, you know, kind of the big picture takeaways, that you have, and how that may impact how you look at the business, over the next few years. Thank you. Hey, thanks, Rob. This is Dave. I would say in the short term, the reformulation is bigger than you might think. It's more than just putting a little bit of fruit into Truly. It's actually reformulating and optimizing all the flavors that we have. It is meaningful. If I take a step back from that and just kind of look forward, there's a number of things that we have to do. I mean, others in the category have to help, but clearly we have to do in order to really drive sustainable growth again for Truly. The first is we really need to reengage consumers back into the hard seltzer category. Remember, the category is really the category that is the, you know, most refreshing, easy to drink, alternative to any kind of alcoholic beverage. I think we've kind of lost track of talking about the easy to drink nature, the refreshment, the, you know, the variety and the flavors. We happen to have, as I mentioned actually in my script, we actually have the largest household penetration of 21-year-olds to 34-year-olds across all of beer. Of all brands within the beer world, the broad beer world, we have a big base. What we have to do is activate that base, right? We have to bring them something new and different to get them to reengage in the category. What are we gonna do? One thing is, it's clear the category has become very complicated, right? We thought by now the long tail would be gone potentially, and there'd be less of this kind of sameness that exists out there. It's not there yet. I think it's complicated for consumers. If they have to think too hard, they're gonna go find something else. We have to simplify the choices for the consumer. Part of that is really talking about light flavors, you know, hint of flavor versus bolder flavors, and helping them make choices more easily, you know, at the shelf or on display. It also includes, you know, eliminating SKUs that aren't performing. I'd say, also, is creating news without SKUs, which really in this case is this reformulation that I just referenced around the core flavors, but also, you know, tweaking our bolder flavors as well and constantly improving them. We've proven before that consumers are very willing to retry something when they believe it's been improved. Another thing I'd say is, you know, LTOs have been successful for us. They are cannibalistic, there's no question. Successive innovations are more cannibalistic than ones that came before. With LTOs, we can be smarter and more strategic in how we do them. You'll see more of that next year in how we do that. I think and lastly, I'd say is just delivering the message and not wavering from a message that, you know, Truly is the most authentic, refreshing, fun alternative to beer, right? Really think about how can Truly deliver that across multiple segments, not, maybe not just hard seltzers. You know, we're venturing out into the vodka seltzer, the RTD vodka seltzer, soon, and there might be other ways for us to play down the road. There's a number of things that have to be done to change the trajectory of the brand and the category. We think we have a pretty clear roadmap of what we need to do. Right now, right here, right now, this summer, we think making this formulation change, and really, it's about the best-tasting flavors ever that happen to have, you know, real fruit in them. It's not just about, you know, real fruit, it's about the taste because that's what people care about. We think that can make a difference. The last thing I'll say is we've had amazing support. Our wholesalers have stuck with us, so have our retailers. We have the executional support we need. We need to just deliver simpler, fewer, better ideas to get them charged up. Then just one follow-up on all that. You did mention in the starting narrative that you had seen a certain amount of consumers go back to light beers or premium light beers. You mentioned that maybe that was. I think you said maybe that was because they were lower priced. Is there an affordability issue? Because that's. Is that what you were trying to suggest? I mean, just trying to better understand what you're seeing in terms of going back to premium light beers and what your analytics say is actually happening. Yeah, I think when we look, Rob, we're looking at the Numerator data, and we're seeing particularly really in that 35-year-old to 44-year-old age break, we're seeing like most of the shifting out of hard seltzer. A significant proportion went to back to light beer. I think it's partially affordability, but it's also partially the fact that light beer offers a lot of the same benefits that hard seltzers provide. It's like I'm getting some of those same benefits. In fact, we think a lot of these folks had obviously were light beer drinkers before, and they came to hard seltzer. Now they might be shifting back out. There's about a 7% price gap on average right now between hard seltzer and premium light beer. That could be part of it. You definitely see it in the data. In fact, that's the majority of the volume that shifts out of hard seltzer has gone back to light beer. Again, whether it's transitory or not, we'll see. I think, again, it also speaks to the need to reinforce and remind people why hard seltzer has been successful in the first place and why it's a 10% share of beer, because it has some unique attributes and benefits that, you know, that people like. Does that suggest that you may need to somehow either lower price or come out with a lower priced variant, you know, an economy Truly? Or I'm just trying to get a sense of how to address that issue. I don't think it's not gonna be through price. You know, we're sticking to that approach. I think again, it goes back to we need to do a better job, I believe, communicating the benefits of hard seltzer because they do provide a unique benefit that even light beer cannot provide. If, for example, one is, you know, flavor variety, right? That's really important. You see it across all these different segments in beer right now. Hard seltzer can deliver the variety unlike any other segment within beer. It's. It comes back to the leaders in the category to deliver that message and to do it in a compelling way. It's not about reducing price or to be more price competitive to light beers. Got it. Thank you very much. Sure thing. Our next question comes from the line of Nadine Sarwat with Bernstein. You may proceed with your question. Hi. Evening, guys. Two questions from me. First, can you please walk us through the various assumptions behind your updated shipment guidance and what gives you confidence that you can hit this guidance? Secondly, what was Hard Mountain Dew's contribution to your Q2 shipments, and what do you expect its contribution to be for the full year? Thanks. Okay, Nadine, this is Frank. Let me take you through the assumptions. As you know, we had our original guidance, you know, to a large extent based on the overlaps that we had versus last year. Last year started, as you know, extremely strongly. We had, you know, 48% growth in Q1, and that moderated in Q2. We were expecting, like, an improvement in our trends this year when we hit those lower growth months from last year. We're expecting that at the end of May, beginning of June. You know, when that didn't come through and we looked at the depletions, it was pretty clear that they were staying. They're pretty stable. You see that in the results that we've been reporting. It's 7% down on depletions, essentially. We said, okay, instead of really, you know, relying too much on the overlaps and expecting a trend change based on the overlaps, we just project out the growth rates that we have seen broadly, you know, year to date and more recently. Then we get a benefit in the second half. We clearly get a benefit from the 53rd week that we have put out. That gets you kind of to the midpoint of the guidance that we have projected. Now, shipments is a slightly different story because shipments were faced very differently last year because we didn't have enough capacity for the volume that we had planned for in 2021. As such, we built significant inventory at wholesalers and internally, which peaked essentially at the middle of the year, which is when the volumes really, you know, or the volume growth came to a halt, and we didn't sell through the inventory that we had built. Two things happened. We really reduced significantly our production and our shipments to wholesalers because the wholesalers they were selling through what they had in the warehouses. There's a significant imbalance between the first half of the year and the second half of the year, where we had significant growth in the first half and shipments declined in the second half of the year. If we align that and then if we meet our depletions target that I explained just before. The shipments that we need to satisfy that will get us to the range that we have. That gets you broadly to the midpoint. We looked at what's the risk profile around that number and, you know, can it go lower? What we did is instead of just projecting out the trends, we looked at the different brands and what you're seeing probably in IRI as well, that, you know, Truly, you know, was getting worse. The declines intensified a little bit. You look at Twisted Tea. That performance accelerated. In the last four weeks and the last 13 weeks, the performance is significantly better than on the year-to-date. We projected out and assumed that Twisted Tea would stay on the year-to-date rates, and we assumed the worst declines of the first half to be projected out for the remainder of the year. That kind of gets us to the low end of the range. Those are kind of the broad assumptions for the depletions and shipment guidance. Then the second question on the Hard Mountain Dew. I mean, we don't break out the numbers, but the majority of the Hard Mountain Dew volume is coming in the year to go as opposed to what you've seen in the first two quarters. Got it. Thank you. Our next question comes from the line of Bonnie Herzog with Goldman Sachs. You may proceed with your question. All right. Thank you. Hi, everyone. I just wanted to maybe ask a little bit of a follow-up just on some of the things you talked about regarding guidance. I just wanted to maybe specifically understand what your new shipment guidance assumes in terms of declines for Truly. I guess when I did the math and just thinking about the midpoint, I think based on our model implies that Truly shipment volume could decline more than 20% for the full year. Just wanted to get a sense if that is in line with your expectations. If that's right, you know, just trying to think about that in the context of your guidance or outlook for the category being down 15%-20%. Just wondering if you think you can still take share. I also, you know, had a question about the second half for Truly declines. You know, just given some of the sharp declines we've seen so far this year. I think it does imply that the declines moderate a bit in the second half. Just kind of wanted to check on those items. Yeah. Bonnie, we don't give specific guidance for brands, but I think your assumption is right that you mentioned. I mean, we didn't take an optimistic view on Truly. And as I said before, if you look at IRI, I think IRI is pretty representative for the trends. That's kind of what we projected out. Which is more negative than 20% for the rest of the year to get to the guidance. In terms of share, yeah, again, we haven't taken an optimistic approach because we haven't really gained share so far. But I'll let Dave talk to that and also to the future volumes. We haven't assumed an improvement for the remainder of the year versus the year to date. As it relates to share, 15%-20%. Bonnie, we came up with that just by looking, again, similarly, looked at the last four weeks in the category, which I think we're down like 19%. We said, let's assume it doesn't get any better. That's kind of the low point. That's your - 20. Then we looked at the year to date, which is - 14. We think it's gonna be somewhere in the middle. We think as it relates to share for Truly, we've lost like 1.5 share points or so this year. That's what, like I said, 1.3 share points in the quarter. The way I look at it is obviously that is our goal. Our goal is to grow share. I think balance of year, we're looking at it as balance of year with a reformulation on the core business, investment behind that. The launch of Truly Vodka Seltzer, which we will count, if you look at it from a consumer perspective, that is a hard seltzer, you know, business. Our goal is to grow share balance a year. Where that's out at the end of the year, you know, we don't know. But that's the intent as we turn along right now, we want a different performance the second half, and we're aiming for it. As Frank said, our guidance, you know, our guidance is very prudent. It's not anticipating share growth to update our guidance. Okay, that's helpful. I just had a second quick question maybe on, you know, your A&M guidance cut. You know, on one hand, I guess I get the cut given, you know, the slowdown in the hard seltzer category. On the other hand, I question, you know, how you're going to get consumers interested in the category again without incremental spending. You know, just hoping to hear a little bit more color on how you're balancing this, especially in the context of, you know, the reformulation that you're mentioning. Thanks. Yeah. So to the A&M cut, I mean, honestly, it's really reflecting the volume declines that we have, and it's still very healthy spending that we have in general. You know, if you look historically at our A, P & S spending, we were like in the 2017, 2018 period, we were like at 25%, and that came down with the tremendous volume growth that we had. In 2021, and we went, you know, to slightly below 20%. Then we went up in 2021 because we were spending front-loaded in anticipation of higher volumes. The volumes didn't come through, so we had to adjust the spending. We feel we have really healthy spending behind Truly especially, but also the other brands and don't feel if you look in the bigger context, what we how we have supported it historically, that we don't have enough spend. Yeah. Bonnie, I would just say that we consider it. You're looking at the gross number, but we can, and we do, we move funds between brands where the opportunity is. We have plenty of ability to do that. For Truly, that's one of the ways we're spending this, you know, August, September into the vodka seltzer launch. From the new flavors to vodka seltzer, you know, we have dollars we can reallocate. It's important, I think, as I said, we have to get people to start thinking about the categories the way they did a couple years ago. Also give them new ways to think about it. That's it. You can't do that unless you invest. Agreed. Okay. Thank you so much. Our next question comes from the line of Eric Serotta with Morgan Stanley. You may proceed with your question. Good afternoon. Dave, you called out the switching, particularly among male cohort, I think you said, 35-year-old to 44-year-old back to premium lights. I'm wondering if you have any perspective as to whether you're seeing some leakage from the hard seltzer category to the broader RTD, particularly spirits-based RTD, you know, as well as full-flavored FMBs. Hey, Eric. Yeah, let me answer that. I think, and I'll use the data I'll cite, it comes from Numerator. I know there's been a lot of talk about the RTD shifting. First, I'll tell you what the numbers look like. Where is it going? Where is the hard seltzer shifting going to? Bottled spirits are picking up about 1/3 of it. People back to bottled spirits, light beer 26%, wine 14%, and then you get to ready-to-drink cocktails, which is about 9%. It's not. There's a lot of noise in the RTD cocktail space, right? It's a $1.4 share of beer. If you split that in two, a little more than half the ACV 0.8% of the $1.4 is actually, you know, vodka seltzers like High Noon and others of that ilk. We consider those. Those are really hard seltzers. We can talk about that separately. Those are hard seltzers. Really, you're talking about 0.8% of dollar sales are really traditional RTD cocktails, which are different occasions, different ABVs, different consumers, lower repeat rate, lower buy rate, et cetera. They are having an impact. I think the interesting thing I looked at the other day in RTDs is that they have about the same number of brands and SKUs, like call it 250 brands and over 1,000 SKUs, as hard seltzers do right now in the market. They're 7% of Beyond Beer, and hard seltzers are 48% of Beyond Beer. Clearly, there's a lot of noise and excitement. I would say the noise is larger than the volume right now in that space. It is taking, I mean, it is taking some from hard seltzer, particularly if you look at the vodka seltzer part of it. The other part of RTD cocktail is really not a factor here. I think what you have in the marketplace, though, which is interesting to watch, is that everybody goes one direction really hard. In some cases, we saw it with hard seltzer, it can become self-fulfilling. In others, they might hit a dead end, and it doesn't play out the way they think, and they'll go somewhere else. Right now, I'd say there's more support and execution and focus on RTD cocktails than maybe is warranted by what the consumer is saying. All of that has had a bit of an impact. Again, it comes back to the other, the big segments like light beer, bottled beer with wine, to maybe reclaiming some of those consumers that hard seltzer had stolen over the last few years. Great. Really helpful. Another question. I know it's still very early in the context of things, but what are you guys seeing in terms of Hard Mountain Dew repeat rates? You know, you're talking about a category, Mountain Dew obviously has tremendous brand equity, but you're talking about a category that's kinda notorious for flavor churn and people chasing the new thing. I guess, what are you seeing in terms of repeat rates and what are you know, how are you positioning for next year to have, you know, some continued growth there, you know, other than, you know, the distribution tailwinds from expanding to more states? Sure thing. I'd say right now it's a little early to make a call on repeat rates 'cause it's a strange launch. It's in seven markets, right? It's gone in, you know, different times. It's been focused on great execution in large format stores, right? Large grocery stores. It's not up and down the street. There's only one take-home package and I think four single-serve packages that have basically been sold more because it's in large format. So it's hard to give a firm number on that. Now, having said that, if you look at all those markets where it's distributed, as I mentioned in my remarks, it's an 18 share right now. The last time we spoke, it was higher, it was in the 20s. The amount of trial that was delivered off of this is extraordinary. I've never seen anything like it, quite honestly. There's a novelty around Mountain Dew that drove huge trial rates. Now, having said that, it's come down to an 18 share, but that 18 share makes it the number one FMB in every single one of those markets. Its velocity is 2x-5x what the number two FMB is in those markets. So we just look at the share and the velocity right now, you know, we like what we see, but we just wanna we need to get into. We were in seven states now. I think I just said we'll get to probably 10 states by the end of the summer, three states more locked, and then a couple by the end of the year. Ideally, next year, we wanna go all out. I think so there's an opportunity here to repeat as we go, as we get more distribution, and importantly, like, you know, deeper distribution within these markets. Then we'll get a real sense of repeat, because you can't repeat if you can only go to one chain in a market to find that product. You need broader distribution. Again, I would just say we're trying, you know, to be temperate about this, but what we see so far is very positive, and we need to keep, you know, running the game plan. The beauty is we keep adding as we go, and we'll learn as we go. Next year we expect it to be a big contributor, but it's, you know, too early to talk any, you know, too many details about that. Great. Thanks for that. Our next question comes from the line of Stephen Powers with Deutsche Bank. You may proceed with your question. Yes. Hey, thanks. Good evening. You talked earlier about the need to simplify the hard seltzer category to make it easier for the consumer. I think I heard within that, you know, a perceived need on your part to simplify the Truly portfolio as well. I guess question one is, did I hear that correctly? Question two is, if I did, I guess I'm curious as to what portion of the Truly portfolio you would at this point consider, you know, relative noise that you'd ideally like to simplify, to optimize versus the core that's higher performing. I'm just trying to assess how big a tail you think it is that you need to cut before getting down to that higher performing, you know, base that you can grow off of from here. Hey, thanks, Stephen. That's a good question. I think you did hear me correctly. We do need. I think we definitely need to make those decisions. We're not really ready to talk about what part of it, but if you just look at the underperforming, generally the underperforming SKUs. I think also we probably, you know, we went after the bolder flavor thing and we did a. We own the bold flavor segment, if you will, you know, with lemonade and fruit punch and margarita. But as I mentioned before, I think we neglected a bit the light flavored segments, which, you know, again, is like our tropical and our berry and our citrus. I think one thing we need to do is shore up that core lightly flavored, 'cause consumers really do like that, and they want that. We're also gonna improve the profile across the whole portfolio. As relates to, okay, what hits the chopping block, it's probably, you know. I can't tell you before we talk to our wholesalers. It's a little premature to share that information. We do agree that. It's not just fewer SKUs. I mean, fewer SKUs is important. I think also making it easier for when the consumer shops to see something and know exactly what it is and what they're gonna get out of it, what the flavor profile will be, what the taste experience is gonna be. We need to start with the. Put ourselves back in the consumer's shoes and look back from there to the shelf and make sure we're delivering what they're looking for. I'm sorry I didn't really fully answer the second part of the question, but we're not quite ready to go there now. Okay. Fair enough. If I could also just follow up on the advertising piece. You know, I guess it's more of a, I'm just curious on the mechanics that, you know, at the midpoint of the guidance cut on advertising, promotion, and selling costs, it's like a $3 cut, you know, in EPS terms, like $50 million. So how much of that is mechanical? Like, it's variable with volume as, you know, as volume goes down, selling costs go down. Versus how much of that is actually you guys electing to cut, you know, $50 million out of the budget at the midpoint? Yeah. Yeah, Steve, we don't really do mechanical very well if you look at A, P & S spend. I think, you know, I've talked about that also in previous earnings calls. The approach that we take to A, P & S is we look at where can we make a difference. If we see an opportunity and we feel good about our advertising, we invest. Yeah. We don't really focus too much on the quarter, too much on the year. You know, what you get is our best estimate. Long term, we're getting leverage out of our A, P & S spend, and that's what you see over the years. We've reduced it on a percent basis, percent of net revenue basis. That's the leverage that we get by growing the company. We go after opportunities as we see them. We feel actually with what we have, I mean, clearly we're looking at the P&L, but we're looking at where can we cut, where we don't really get a lot of mileage out of our spending, and where do we put the money where we get the biggest return? That's kind of how we think about it. The reduction that we have, as I said, it is in response to the volume, but is more driven by where we believe we get the biggest return on our investments. We feel fairly comfortable with the level of spending that we're putting behind our brands. Okay. Just, you know, as you're calling the year now from a demand perspective, you feel the advertising spend is now, you know, appropriate. It's not like you're guaranteed a big catch-up next year based on the revenue line. No. I mean, as I said, like short term, we always, when we see- Yeah. An opportunity, we will spend, but it's not. While we keep the P&L in mind, it's not that we mechanically reduce, you know, automatically the A, P & S spend just to hit a certain number. I wanna be relatively clear about that. It's the top line growth that we feel is really important and that's driving the long-term value creation. You see variations quarter to quarter or year to year, but long term, you're gonna get to the leverage. Okay. Thank you very much. All right. Our next question comes from the line of Kevin Grundy with Jefferies. You may proceed with your question. Great. Thanks. Good evening, guys. Two for me as well. First on gross margin, and then a broader question for Jim and Dave, perhaps. The gross margin question, just comment on how big of a priority it is to restore gross margins at the company. Longer term, understanding that Truly there's a wider range of possibilities here with some of the uncertainty that exists with consequences on your fixed cost absorption. Based on your current projections internally, how quickly can you return to low to 50% gross margin for the business? I have a follow-up. Thank you. Yeah. Kevin, the gross margin is really important. You know, typically, when we talk about our business, we talk about the top line, we talk about the gross margin, with the priority that growth trumps gross margin, because we know over time we'll get the company to the right place. Let me. We've talked about the supply chain transformation. We're investing, we're making significant investments into our transformation, get to our concept of four anchor breweries, that we have a more distributed network between the East Coast and the West Coast, bringing costs down. We are focusing on getting to a portfolio like to a network that can significantly reduce the cost of variety pack costs, which is our highest cost. We're optimizing the supply chain, and we're doing that over time. We're very much focused also on improving our service levels, which is very much related to the supply chain and to the entire value chain if you look across the company. It's not only the narrow focus on the breweries, it's really on the broader supply chain across the entire company, which starts with wholesaler inventory and ends with wholesaler inventory, if you will. That is a significant focus for us, and we wanna get it right. We will see, I mean, yeah, the guidance for this year, we will see improvements over the years to come. The target that I've communicated previously has not changed. The drivers haven't changed, but we are a little delayed, as I mentioned earlier, on the implementation on creating the internal capacity. We definitely have the right equipment. It just takes us a little longer, and that's just one piece to get it up to speed. It is a significant priority. Okay. Understood. Jim, and perhaps Dave, just comment from a macro perspective, expectations broadly for the beer category, you know, Jim, perhaps even total beverage alcohol, given the inflationary pressures that the consumer is under. Maybe just also comment, it'd be great to get your thoughts on the industry's pricing posture, which has been to take less price than we've seen in most other consumer staples categories, frankly. I'll pass it on. Thank you, guys. Yeah. Hey, Jim. Yeah, let me jump in on it. You know, basically, you know, per capita consumption of alcohol in the U.S. has been extremely stable, you know, over decades. You're kind of getting a, you know, an LDA population that's growing 1.5% a year or something like that. That's probably gonna be the growth rate of alcohol consumption in terms of, you know, amount of ethanol. Then you can parse that out between wine, spirits, and beer. You know, beer has been losing share of ethanol to spirits, a little bit to wine. The growth of, you know, what I've called the fourth category, things like hard seltzer, FMBs, that you know, that draw consumers in not just from beer, but from wine, and spirit occasions has helped beer grow over the last few years. I think from like 2008 to 2018, beer declined most years. Since then, it's actually grown, and hard seltzer and FMBs have been a big part of that. You're not talking about huge numbers. You know, a terrible year in the beer business is when you're down 1%, and a great year is when you break out the Sam Adams 'cause you're up 1%. It's not a big band in there. You know, you do have traditional beer declining and you know the growth being driven by fourth category type products, also called Beyond Beer, where Boston Beer is very strongly positioned and has been a leader in innovation for decades. You know, in a macro sense, I guess that's what I see, you know in total alcoholic beverages, and it's having probably a bigger impact on beer than wine and maybe spirits. It's largely the growth of this fourth category, and beer getting the vast majority of that, you know, maybe 70%, 80% of it has changed the beer growth rate by maybe as much as 2% over the last three years. You know, last point is it's my belief that beer is currently quite advantaged in what it takes to be successful in this fourth category. They are products that basically, you know, look like beer. They're largely in, you know, 12-ounce servings and cans in the cold box, and because one of their advantages is convenience, portability, ease of consumption. They tend to, you know, sell for beer type price points, so you need the efficiencies of a beer distribution system and the reach of a beer distribution system. You need producers that have, you know, high speed can lines and economy of scale and so forth. There is, of course, the big tax differential that basically says a spirits-based product gives you know, four cans for $10 and a quote-unquote malt-based, which can be sugar-based, gives you those for $10, you get six cans. You know, there's a 50% price premium when you go to a spirits base. All of those things tell me, I guess, fundamentally, in alcoholic beverages, the fourth category is gonna drive the growth, and beer is advantaged in that category. Does that help? Yeah, very good. Thanks, Jim. Dave, did you want to add anything with respect to the macro, how you expect the category to hold up and whether the industry is taking the right path here from a pricing perspective, i.e., less than other staples categories? There's not much I could say that would add to what Jim has to say. I mean, the pricing, I would say on the pricing piece, I mean, 5%, you know, 4% or 5% pricing is in this category, and Jim could talk this better than I, is a lot. I think also it's a category where people can choose to drink less in that moment, maybe over time, you know, Jim is certainly right. I think, you know, we're not leading with price, we're following. We agree with the levels, and we think they're reasonable. You can see what the volume is. You know, the volume is worse than -1% right now. The dollars are a lot better, but the volume is. Jim, I don't know if you have a point of view about the rate of pricing that's happening in the marketplace or not? I don't know that I have any great insights. I guess what gives me some comfort about where we are at the 4%-5% level, that kind of tracks people's, you know, wage and salary growth. I know, you know, headline inflation is 8% or 9%, but people's, you know, wage and salary growth is 4%-5%. In terms of, you know, the dollars available, beer is not going up in as a percent of people's income. That, I think, supports minimizing the volume hit from inflation. Okay. Very good. Thanks for all the time, guys. Have a good night. Sure. Our next question comes from the line of Peter Grom with UBS. You may proceed with your question. Hey, good evening, everyone. Hope you're doing well. I was kind of hoping to shift gears away from Truly for a second and kind of just talk about the strong performance of Twisted Tea. Can you maybe unpack the drivers there? I apologize if I missed this in an earlier response to a question, but, you know, what is the expectation for the brand as we think about the guidance for the back half of the year? Then, you know, maybe more importantly, bigger picture, you know, how do you think about the long-term growth potential of Twisted Tea beyond this year, you know, particularly as, you know, the brand grows, you know, comps get more difficult, et cetera? Thanks. Sure thing, Peter. I'll answer that part, but then maybe hand it over to Frank for a little bit there. In terms of Twisted Tea, I think what's happening right now is we have. It's like the perfect combination of push and pull happening in concert with each other at the right moment. The thing, this brand, as you know, this brand's been around for over 20 years. It's been growing steadily, you know, on average, you know, low double digits for all those years. It's really been still arguably like a regional brand. I think what happened over the last year, just look at our 12-pack distribution, it's up at, like, 58% of the ACV right now. A year ago, I think it was about half of that. I think that was sort of the tipping point. Once we get distribution of 12-packs, we have three of them, then that's when everything started to come into play with our wholesalers and with our retailers. What's happening now is that all the major retailers now can promote this and support this brand on a national basis. That's, in turn, driving a lot of trial and our household penetration is up 10% or 12%. You've got the 12-pack thing really started it. At the same time, you've got this brand that was built very slowly, the right way. It started with a narrow demographic target, you know, and a, you know, which were, you know, blue collar guys, you know, driving pickup trucks who had decent income, who went to the convenience store to buy it. In a narrow geography, tend to be Northern New England and Montana or Michigan. Don't ask why, but it just was. Then it found its base. What we've been able to do is very carefully grow that base, grow the demographic to broaden the demographic appeal, grow the geographic distribution to broaden that geographic reach. The brand has got a unique combination of sort of product attributes and brand, you know, sort of emotional benefits. It's kind of creating the. It's creating a little bit of a moat around the brand in that it's very hard to sort of replicate exactly what Twisted Tea provides as a product and as a brand. It's a really good example of you know how building the brand the right way over a long period of time and working in concert to get you know the push and pull. You've seen the brand's accelerated its growth over the course of the year. I think I said the last four weeks and IRI was up high 30s%. We you know we've got a lot of activity all through the summer into the fall, and you know we're gonna keep investing there. We also have, by the way, an ad campaign that scored in the top quintile. It's an incredible campaign that's resonating as well. That certainly helps. We're spending behind it, and it's coming together. I've learned over the last year or so never to predict anything at all, other than, like, we're taking it one step at a time. We feel we've got something here that's finding its level, and we're gonna keep supporting it. Again, last thing I'll say is that still, despite its success, the household penetration, the distribution, the brand awareness, far lower than its primary competitors in the space. There's still a lot of upside to grow the brand. I think the other question. Yeah. Yeah. I think, Peter, you were asking about the guidance. As I said before, we took a relatively simple approach and looked at the growth rates that were demonstrated over the last 13 weeks, basically, okay? Projected that out and that, you know, when it comes to depletions, that's essentially what we all sell year to date. Now, within that, you have a mix impact. As I said before, Truly has decelerated, so the last 13 weeks are worse than what you see on a year to date basis if you look at IRI data. Twisted Tea is better and has a higher growth rate in the last 13 weeks than the year to date. We have not taken the latest four, where, you know, Twisted Tea has grown even stronger, and the growth rate for Twisted Tea in the last four is basically double what you have on the year to date. We've not taken that. You know, we've taken a relatively straightforward approach of the last 13 weeks, and then when you go to the low end of the range, we have just assumed for Twisted Tea the year to date rate, and I've projected it out for the rest of the year. That's kind of the approach that we've taken for the guidance. Just as a reminder, our guidance, our full year guidance also includes the benefit of the 53rd week, which is of course not reflected in the year to date growth rates, but will be reflected in the year to go. It's not reflected in the year to date and will be reflected in the year to go rates. Great. Thank you so much. Have a great night. Thanks. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes to the line of Vivien Azer with Cowen. You may proceed with your question. Hi. Good evening. Thank you. I wanted to follow up on Twisted Tea. Dave, last quarter, you articulated some very specific targets in terms of gains, both in terms of shelf space as well as points of distribution. Can you just update on how you're tracking against those goals, please? Sure, Vivien. The shelf space, I can't remember if I mentioned in the opening remarks, but Twisted Tea grew shelf space by 28%. It's getting the support now, and I think, again, a lot of that is 12-pack distribution, but it's also 24-ounce in convenience stores. So it is tracking really well. You know, household penetration is up about 13%, so that's also really good. I think the big thing, again, like I said before, the tipping point is getting a 12-pack out there where retailers can now promote it and support it on a national basis. That's really been the big driver. The other thing I would suggest, again, a sign of strength for the brand to believe in it is that it's, you know, from a single serve perspective, it's by far and away the number one FMBs, 24-ounce. It's number four in all of beer. You know, of all like, so there's three beer brands that come ahead of it. You maybe guess who they might be, and then it's Twisted Tea. It really and that channel is so special and important because consumers are going in and they're picking the brand they want. They're not being swayed by promotion pricing generally or displays. They walk into a cold. It's like the most, you know, egalitarian place for a brand to present itself, and Twisted Tea has got, you know, is getting the attention. We're also adding some flavors in 24 ounce as well to broaden that yellow band that you see in convenience stores. The last thing I'll say is we have a national promotion with Doritos right now, which is a big one for us, too, that plays across all off-premise channels, that again, we could tap into that, the connection between those two brand groups or those two consumer groups. Again, keep driving household penetration. Got it. That's interesting on the Pepsi partnership on Doritos. Quick follow-up for me. I know it's a very small piece of the business in very early days, but any update on TeaPot in Canada? Thanks. Yes. I mean, TeaPot is, I can tell you this, it's a great tasting product. It's a great name. We're very excited about its launching. Where else would you launch a product like TeaPot first, but Saskatchewan? It's going to Saskatchewan actually I think this week. It moves to Manitoba. We're conquering the biggest provinces of Canada first, and then eventually to Ontario, which obviously is the most populous province of Canada, sometime in the fall. It's just getting going. You know, 5 mg of THC, great tasting tea. You're leveraging obviously our experience in making great tea products. You know, we're looking forward to seeing what it can do. Perfect. Thank you. Ladies and gentlemen, we have reached the end of today's question and answer session. I would like to turn this call over to Mr. Jim Koch for closing comments. Well, my apologies. I was on mute. I just wanna thank everybody for sitting in on this, and we'll talk again in three months. Cheers. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. You may disconnect your lines.