Greetings and welcome to The Boston Beer Company fourth quarter 2023 earnings call. At this time, all participants are in a listen-only mode. A brief 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. It is now my pleasure to introduce to you Mike Andrews, Associate General Counsel and Corporate Secretary. Thank you, Mike. You may begin. Thank you. Good afternoon and welcome. This is Mike Andrews, Associate General Counsel and Corporate Secretary of The Boston Beer Company. I'm pleased to kick off our 2023 fourth quarter earnings call. Joining the call from Boston Beer are Jim Koch, Founder and Chairman; Dave Burwick, our CEO; and Diego Reynoso, 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 reflects 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 this afternoon 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 Diego, who will focus on the financial details of our fourth quarter results as well as our outlook for 2024. Immediately following Diego's comments, we will open the line for questions. As I look back on our 2023 performance, I'm encouraged that we saw steady, sequential improvement in depletions as we moved through the year. On a comparable week's basis, our depletions improved from a decrease of 7% in the first half to a decrease of 3% in the third quarter and a decrease of 1% in the fourth quarter. We've made progress across the portfolio, and we have innovations that are launching this quarter, which Dave will review in more detail. Gross margins improved by 120 basis points in 2023 as we made progress on our operating plans to generate procurement savings, improve brewery efficiency, lower waste, and optimize our network. Our entire organization is focused on driving margin improvement, and I want to thank all of our cross-functional teams for their continuing efforts. Diego will provide more details on our gross margin outlook in his remarks and why we feel good about our long-term gross margin potential. As we move into 2024, we have the strategy and team in place to continue to deliver progress on depletions and margins. We've provided a range of guidance for 2024 with the pace of improvement depending on how the consumer environment plays out and the pace and success of our innovations. We continue to have a highly cash-generative business that delivered over $200 million in free cash flow and ended the year at an all-time high cash balance of almost $300 million and no debt. Our strong balance sheet enables us to invest in our brands and continue to return cash to shareholders with over $128 million in stock repurchased over the last 14 months. Overall, I'm confident that our diversified portfolio across categories, strong brand equities, and the best salesforce in the industry position us well for long-term success. Finally, I am thankful to our outstanding coworkers, distributors, and retailers who continue to support our business. I'd like to close with some comments on the press release we issued today regarding Dave's retirement from Boston Beer, which is effective April 1st. I've known and collaborated with Dave for the past 19 years, first as a valued board member and then for the past six years when he served as our CEO in an extraordinary period. During that time, Dave has had a tremendous impact on our company. We've grown from $850 million in revenue when he began as CEO to more than $2 billion in revenue with a portfolio of powerful brands and attractive categories. He's built a strong team across the company, and his deep beverage industry expertise and brand building and innovation skills have fortified our portfolio to successfully compete in the broader alcoholic beverage environment. Dave has positioned the company very well for ongoing success in 2024 and beyond. I can't thank Dave enough for his partnership with me over the last 2 decades, and I wish him the very best. I know many of you on this call have known Dave for years and have experienced his intelligence and integrity. I have certainly been proud to have him represent Boston Beer Company to the community of investors and analysts. I look forward to introducing you to our incoming CEO, Michael Spillane, on the April earnings call. Michael joined Boston Beer's board in 2016 and has been our Lead Director since May of last year. He has a broad business background with extensive consumer products experience and has spent the past 17 years at Nike. Given his already extensive knowledge of our company and our culture, we expect Michael to hit the ground running as he steps in to help lead us into our next chapter. I will now pass the call over to Dave. Thanks, Jim, and good evening, everyone. It's been my privilege to be connected to the company since I joined the board of directors in May 2005, and I've greatly enjoyed adding whatever value I could to build our people capabilities and improve our growth prospects over the years, whether as a board member or in the last six years as a CEO. My tenure as CEO has included the pandemic as well as significant shifts in consumer behavior and the competitive dynamics in our category. We've had our ups and downs during that time as we've adjusted our approach and our organization to meet the challenges. With great plans lined up for 2024, I believe we're poised for growth, and now is the right time for me to move on. I'd like to thank Jim for giving me the wonderful opportunity to lead this organization as well as our wholesalers for their dedication and partnership. I'm especially grateful for the talented, committed, and passionate people at Boston Beer who've taught me much about leadership and myself over the past six years. I'd also like to thank our investors and analysts who've supported the company during my tenure. Boston Beer has a very unique and powerful culture, and I'm confident the organization is in great hands to take advantage of the opportunities ahead of it. Now I'll turn to a discussion of our business results. As Jim mentioned, our fourth quarter volume showed continual improvement. We remain focused on sustaining Twisted Tea's industry-leading growth and turning Truly's volume trends while improving our supply chain performance to enhance our gross margin and provide more funds to invest in our brands and our top-ranked industry salesforce. I'll now provide some color on our brands. Twisted Tea in the fourth quarter had 29% dollar sales growth while adding $2.4 share points and expanding its overall share leadership to 28% of total FMB dollar sales in measured off-premise channels. This sustained demand is a result of balanced efforts at growing both physical availability via improved geographic channel and package distribution, and mental availability via a highly effective advertising campaign, increased media investment, an expanded college football tailgating platform in the fourth quarter, and optimized packaging design that highlights the brand's distinctive assets. Twisted Tea Party Pack is now the third largest and the fastest-growing SKU among all FMBs, and our wholesaler service levels are in very good position to support further growth. Importantly, our superior product quality and brand relevance have sustained our success as the fastest-growing major brand in beer the past three years. We intend to invest heavily in 2024 with the goal of continuing Twisted Tea's trajectory in the face of more competition. We remain confident that Twisted Tea will accomplish this goal in 2024 for many reasons. First, there remains upside in growing brand awareness and household penetration, and our ad campaign is working. Second, there's still ample room to broaden distribution through shelf space gains and new channels. As I mentioned on our last call, Twisted Tea continues to increase shelf space, and those benefits will further fuel the business in 2024. Having said that, while it holds a 28% dollar share in FMBs, it still only has 18% of FMB shelf space. The on-premise channel, Twisted Tea, is under-penetrated versus other FMB competitors, yet has a 60% share and drove 96% of the volume growth in Beyond Beer for the full year in 2023. Third, the brand is underdeveloped with Black and Hispanic and Latino consumers. We enjoyed a 55% household penetration increase within these demographics in 2023 as a result of our marketing efforts, and we plan to aggressively expand our investment this year. Fourth, there's opportunity to widen the brand's presence in underdeveloped markets, and we're making great progress in places like Texas and California where our household penetration among Hispanic and Latino consumers is above 40%, underscoring the future potential with this emerging new consumer group for the brand. Fifth, last year represented the early stages of Twisted Tea Light's national launch, and we've seen the sales per point accelerate and exceed our expectations. It's approximately 85% incremental to the Twisted Tea portfolio. Given the excellent response among consumers, retailers, and wholesalers, we believe Light is an X factor for brand growth in 2024 and therefore plan to more aggressively expand our distribution and marketing support. Lastly, in the second half of 2023, we began testing in several markets Twisted Tea Extreme, a higher ABV version of Twisted Tea. Twisted Tea Extreme is part of our efforts to increase drinking occasions and add new drinkers, and we will expand distribution during 2024. Now on to Truly. We remain confident in the changes we made to the brand proposition starting in the second quarter of 2023 and have seen sequential improvements in our results. In essence, we're recrafting a new Truly brand to stand for light refreshment versus bolder flavors and are shifting the mix in that direction. This takes patience and time, and we're seeing progress in our efforts. For example, during this time, the brand has moved from a 35% mix of lightly flavored styles to 55%, and the lightly flavored part of the portfolio is actually growing 2% year to date and has gained two full share points versus a year ago. Given Twisted Tea's strong growth, Truly continues to become a smaller part of our portfolio mix with Twisted Tea now 1.9 times larger than Truly in measured off-premise channels in the fourth quarter. We expect hard seltzer category volumes to decline low teens in 2024 compared to a decline of 21% in 2023 and remain focused on investing in innovation, advertising, and growing physical availability of our lightly flavored portfolio to hold share. In the fourth quarter in measured off-premise channels, Truly's dollar sales declined 22% and a loss of $2.9 share points versus a 27% decline in dollar sales and a loss of $3.4 share points for the full year of 2023. Underlying this improved trend is much better performance in our lightly flavored variety packs and 24-ounce single-serve cans. Our lightly flavored variety packs gained $0.4 share points in the fourth quarter and grew share broadly in almost every Circana multi-outlet market. Meanwhile, our 24-ounce single-serve cans grew 5% in the fourth quarter while gaining $0.7 share points while velocity also increased. Additionally, berry and citrus variety pack trends are improving across the country as our new Party Pack is now starting to hit the market. Lastly, our rotator strategy of offering new flavors in a variety pack three times a year utilizing the same UPC is building momentum. Our newest entry, the Getaway Pack, has exceeded forecasts and in the latest four weeks is Truly's number four selling SKU and has the fastest sales per point in the portfolio. Over the past nine months, our packaging refresh, merchandising, and innovation focus on light flavors, new rotator program, push behind single-serve in the convenience channel, new ad campaign, and higher media spend all have contributed to these improving brand trends. As previously announced, we're planning some innovations for the Truly brand launching this quarter that include a new 8% ABV Truly Unruly variety pack, which will replace our Truly Margarita pack, and a new Truly Party Pack, which will replace our Truly Tropical pack. In addition, we've approved the recipe of both Truly Lemonade and Fruit Punch to create a lighter, more refreshing finish addressing the key issue with lapsed drinkers. Also, late this quarter, we will start the national launch of Truly Tequila Soda, which tested successfully in several markets in the fall. We believe these innovations will better position the Truly brand offering and set it up well for continued improved trends in 2024. While maintaining Twisted Tea's double-digit growth and improving Truly's trajectory remain our top priorities as we enter 2024, we have a broad portfolio and will continue to support and build out our smaller brands. Our Samuel Adams brand grew its share of craft by 0.2 points across all channels in the fourth quarter, according to the Beer Institute. We'll continue to invest behind Boston Lager in our seasonals in addition to our non-alcoholic portfolio, including Just the Haze and Gold Rush Golden Lager, which grew 79% in dollars and $1.1 share points in the fourth quarter in measured off-premise channels. We're very excited to share today that in May, we'll start to broadly expand the Hard Mountain Dew distribution footprint beyond the existing 17 states currently serviced by Blue Cloud to all 50 states serviced by our own beer wholesaler network. There is tremendous excitement within our distribution network about this move from Blue Cloud to Boston Beer wholesalers, and we believe it puts us in a great position to expand the reach and consumption of Hard Mountain Dew, which has demonstrated very strong sales per point and repeat but has not yet benefited from extensive distribution. It will take some time to fully transition to the Boston Beer wholesaler network, and we expect to benefit primarily in the second half of 2024 and into 2025. While currently a small part of our portfolio, we see incremental opportunities in spirits-based RTDs. Truly Vodka Soda has strong repeat and continues to gain distribution, and Truly Tequila Soda had demonstrated good results in test markets in the fourth quarter. Meanwhile, Dogfish Head's award-winning can cocktails have gained a solid foothold in the traditional can cocktail segment, and we have new packaging and styles, including 12% ABV offerings, coming to market in the first half of 2024 to enhance our brand offering and drive growth. To add to our spirits-based RTD portfolio, we're very excited about the launch of Sun Cruiser, a new vodka-based Hard Tea brand which has been enthusiastically embraced by wholesalers and retailers. While we originally had planned to launch in only 15 markets across the U.S. late in the first quarter, given the opportunity we now see, we've decided to launch it starting next week with the intent of being national by the end of the year. Turning to our supply chain. We continue to modernize our supply chain through investments in equipment, capacity, and improved systems and processes. We're maintaining our focus on our three key areas of savings: procurement, brewery performance, and waste and overall network optimization, and have multi-year savings plans across each of these categories, which we expect will generate significant long-term gross margin expansion. Diego will discuss gross margin in more detail in his remarks. We're also closely managing our operating expenses. We expect to use the cost savings that these efforts generate to nurture new innovation and support increased brand support, and within brand spend, both converting non-working to working dollars and shifting our mix from traditional to digital and social media. In summary, we're optimistic about the long-term outlook for our diversified beverage portfolio. Our company has exceptional innovation and brand-building capabilities, the top sales organization in beer, and a cash-generative business model with an excellent balance sheet to support long-term growth. We're building depletions momentum, and we believe our focus on Twisted Tea and Truly and an exciting innovation offering across multiple brands, including Sun Cruiser, the Hard Mountain Dew rollout into our beer wholesaler network, Angry Orchard Crisp Light, and others not yet announced, put us in a very strong position to continue to improve our volume trends and return to growth later in 2024. I'll now hand it over to Diego to discuss our detailed financial results and our 2024 guidance. Thank you, Dave. Good afternoon, everyone. Before I discuss the fourth quarter results in detail, I'd like to give an overview of 2023 performance. We delivered depletions down 6% for the year, which was at the midpoint of our guidance. Shipments were slightly below the midpoint as wholesale inventories declined by one week in the fourth quarter. Gross margin expanded 120 basis points for the year to 42.4%. Excluding increases in contractual prepayment expenses and shortfall fees, which I will discuss in more detail later in my remarks, gross margin was 44.3%. Non-GAAP EPS of $7.17 was at the lower end of our guidance due to the volume impact of lower-than-estimated wholesaler inventories at year-end and a fourth quarter income tax adjustment. Turning to fourth quarter results. Our 2023 fiscal fourth quarter included 13 weeks compared to the 2022 fiscal year, which included 14 weeks. We've included the full details of our fourth quarter performance in today's earnings release. So I'll just briefly discuss the key drivers. Fiscal calendar depletions for the quarter decreased 9% from the prior year. Depletions on a 13-week comparable basis decreased 1% from the prior year, primarily due to declines in Truly Hard Seltzer, partially offset by growth in Twisted Tea, Sam Adams non-alcoholic offerings, and Dogfish Head can cocktail. Fiscal calendar shipment volumes for the quarter was approximately 1.5 million barrels, a 12.2% decrease from prior year. On a 13-week comparable basis, shipments decreased 3.5% in the fourth quarter. We believe distributor inventory as of December 30, 2023, averaged approximately four weeks on hand compared to five weeks on hand at the end of the third quarter. Our fourth quarter gross margin of 37.6% increased 60 basis points from the 37% margin realized in the fourth quarter of 2022. As we mentioned on our last earnings call, the majority of our shortfall fees are booked in the fourth quarter. Excluding shortfall fees and third-party production prepayments that I'll discuss in more detail later in my remarks, gross margin was 40.7%. Advertising, promotional, and selling expenses for the fourth quarter of 2023 decreased $10.6 million, or 7.6% from the fourth quarter of 2022, with lower freight costs fully offsetting increased brand investment and selling costs. We reported a net loss of $18.1 million, or $1.49 per diluted share. The year-over-year change in net loss and loss per diluted share was driven by lower revenues, including the loss of the 53rd week, partially offset by higher gross margins and lower operating expenses. Now, I'd like to provide some detail on the components of our gross margin and why we feel confident we can improve our margins over the long term. The key operational drivers of our gross margin are volume, commodities, labor costs, and our productivity efforts around procurement savings, brewery performance, and waste and network optimization. Additionally, to the extent we experience significant growth in partnership brands and variety packs, there will be some mixed headwinds. Most of our productivity savings during 2023 came from procurement and reducing waste at our breweries. In 2024 and beyond, we expect more equal contributions from all three saving buckets, for which I'll provide some color. We continue to see opportunities for procurement savings on material and packaging, primarily due to the price negotiations and recipe optimizations. Brewery performance and absolute volumes, as well as the mix of internal versus external production, impacts our ability to leverage fixed costs in our plants. We experienced volume declines in 2023, and our margin guidance for 2024 reflects a range of potential outcomes for volume. We had a 71% internal and 29% external volume mix in 2023 and plan to continue to move more volume internal over time while balancing our commitments to external manufacturers. With more consistent and predictable volumes and improved supply chain processes and systems, we have more savings opportunities in waste and network optimization. In the first half of 2024, we are implementing an automated customer ordering and inventory management system that we believe, along with other improvements in our supply chain processes, will help further reduce waste and optimize our network. In addition, as previously discussed, before the decline in volumes related to hard seltzers in the second half of 2021, we entered certain contractual agreements to access third-party production capacity, which continue to impact our gross margin. The costs associated with these agreements include shortfall fees for not meeting contractual production minimums and third-party production prepayments that are expensed over the estimated life of the related agreements. Together, these contractual items negatively impacted gross margins by 185 basis points in 2023 and are expected to have a 175-225 basis points negative impact in 2024. Excluding these two items, the midpoint of our gross margin guidance for 2024 would be approximately 46%. As these contractual terms expire, we will reassess our capacity needs and commitments with our third-party production partners. The multi-year operational improvements we are making in our business, together with the diminishing impacts of the contractual items I just discussed, give us confidence that we have a strong pathway to significantly improve our gross margin over time to high 40s-50%, dependent on volume, product mix, and commodity inflation. Now I'll discuss our 2024 guidance in detail. Our fiscal week depletion trends for the first eight weeks of 2024 have decreased 2% from 2023. We are currently planning 2024 depletions and shipments to change between a decrease of low single digits to an increase of low single digits. We expect price increases of between 1%-2%. Full year 2024 reported gross margins are expected to be between 43%-45%. We expect commodity inflations in 2024 but at a lower rate than 2023, primarily driven by sweeteners and flavorings. We expect to cover commodity inflation dollars with pricing and expect some additional margin headwinds from higher labor costs in our breweries in 2024. Our investments in advertising, promotional, and selling expenses are expected to change between a decrease of $5 million and an increase of $15 million. This does not include any changes in freight costs for shipments of products to our distributors. We estimate our full year 2024 effective tax rate to be approximately 27.5%. We are currently targeting full year 2024 earnings per diluted share of between $7 and $11. This projection is highly sensitive to changes in volume projections, particularly related to the hard seltzer category, mix of owned versus partner brands, supply chain performance, and inflationary impacts on consumer spending. As you model out the year, please keep in mind that our business is impacted by seasonal volume changes, with the first quarter and the fourth quarter being lower volume quarters, and the fourth quarter typically our lowest absolute gross margin rate of the year. Turning to capital allocation, we ended the quarter with a cash balance of $298.5 million and an unused credit line of $150 million, which provides us with the flexibility to continue to invest in our base business, fund future growth initiatives, and return cash to our shareholders through our share buyback program. For the full year 2024, we expect capital expenditures of between $90 million-$110 million. These investments will primarily relate to our own breweries to build capabilities and improve efficiencies. During the 52-week period ended December 30, 2023, and the period from January 3, 2024, through February 23, 2024, we repurchased shares in the amount of $92.9 million and $35.6 million, respectively, for a total of $128.5 million of repurchase since January 2023. As of February 23, 2024, we had approximately $230 million remaining on the $1.2 billion share repurchase authorization. This concludes our prepared remarks, and now we'll open the line for questions. Thank you. We will now 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 that your line is in the queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. And the first question comes from the line of Nik Modi with RBC. Please proceed with your question. Yeah, thank you. Good evening, everyone. And Dave, best of luck going forward, and Diego, welcome. I guess the couple of questions, actually. Maybe this one for Jim. When you think about Michael, is this a permanent fixture, or is this more of an interim situation? Would just love your thoughts on that. And then getting to the whole gross margin dynamic, it strikes me as visibility on volume has been pretty weak, and innovation has been such a critical part of Boston Beer's growth historically. And so I'm just how do you guys think about that in terms of really trying to get more consistency in terms of how you grow volume since it's such a critical part of the profitability and the margin progression of the company? Thank you. Thanks, Nik. I'll take the first part of that question. Michael is a permanent fixture. It's not a fill in a gap for a year. This is a significant commitment for him. So this is not an interim caretaker situation. And I'll take the second part, Nik. You are correct. Volume is one of our biggest pieces in our gross margin journey. So we've done a few things. As I mentioned before, we implemented a new system to help us integrate with our distributors and really work on our volume forecasting. But the second thing is we've got a lot of exciting innovation coming down our path. You saw the announcement today on Mountain Dew. We've got some strong innovations coming with Sun Cruiser and some other brands that we haven't talked about yet. So I think as we go forward, I feel positive that those will help us down the path, both again on the operations part of that volume forecast, but also on the branded side of that forecast. Yeah, now. And Nik, I'll build on Diego's comments too. I think we need to get to broad-based growth across the entire portfolio. Obviously, we have it with Twisted Tea. We've made progress with Truly. It's not going to grow this year, but we're making progress there. But when you look at first of all, it comes down to building those five brands that we have. They're very strong brands, and we need to grow them without innovation. But there is line extension innovation this year and new-to-world innovation in the case of Sun Cruiser, arguably in our wheelhouse, which is fast-follower innovation. And when you look at it, we feel as we enter this year, we have broad-based avenues for growth. So again, on Twisted Tea, we'll probably get into it, but Twisted Tea Light is only 14% of the ACV. There's a big opportunity with Twisted Tea Light. We have Twisted Tea Extreme, which we're going to broaden. Diego mentioned we have Hard Mountain Dew, which now goes to our wholesalers. There's a lot of interest there. The Sun Cruiser brand is something that we have planned to do just regionally, but there's been so much interest from wholesalers and retailers that we're going to, as I mentioned in the script, we're going to go nationally on. With Truly, when Unruly is coming in, it's a high ABV product. It's going to replace Margarita. We have Party Pack, which is replacing the Tropical Pack. We have three sort of LTO, we call them rotator packs. They're all lightly flavored and the reformulation of Lemonade and Fruit Punch. And I could go on. So we feel like there's a lot of innovation. It's a nice combination of building our brands, the core brands, adding smart line extension to those brands, and then when we see the opportunity going new to world. And to us, we feel like this is the year we got to demonstrate that we can get growth not just from one brand. It's not Truly, then it's not Twisted Tea. It's across more than one or two brands of the portfolio. And we feel we've set the table to do that. Thank you. Best of luck again, Dave. I'll pass it on. Thanks, Nik. And the next question comes from the line of Kaumil Gajrawala with Jefferies. Please proceed with your question. Hey, guys. Dave, congratulations. And over the next coming days, I'm sure you're going to get this question privately, but maybe I'll just do it publicly as well. One of the many things that you've done is increase your outreach to investors and just helping investors and analysts out maybe a little bit more. We hope that continues. As it relates to business, can you maybe you talked about the success of RTDs and such. Can you just talk maybe a bit about how big that is as part of your portfolio and maybe what those businesses are growing kind of collectively? Sure. Sure, Kaumil. I mean, right, I mean, just as I mentioned in the script too, it's a small part of the portfolio. Obviously, RTDs have been the next wave that's kind of come into the shore. And so we're competing and across multiple areas. So with Dogfish, we think that's a really interesting play for that brand. I mentioned we have 12% ABV products coming out this year, which is an important part of that can cocktail piece. Obviously, with Truly, Vodka Seltzer, talk about Vodka Soda. It's done okay. It's not big right now. High Noon has continued to dominate that space. We have Tequila coming out. And then Sun Cruiser, which we think is a really interesting play on Hard Tea, which obviously we know tea, our tea very well. So we're making a big push. It's starting now with all of these. It's still not going to be a huge part of our portfolio. It's probably, we're saying, I don't know, maybe 2, 3, 4% of the business in total. But it's a place we have to play. We'll see we played so far with existing brands, like in Dogfish and Truly. Now we're going to launch a new one in Sun Cruiser. We'll see how that works for us. Got it. Thank you. Sounds like you might have the free time now, so we'd love to see you in Nantucket. I might just be there, Kaumil. Sounds good. I might add a little bit of color to how we view RTD space. And it's obviously early days with it in the sense of many things take a decade or more to gel in this business. Right now, they're roughly 2.5% of beer volume when you put them all together, all the spirits-based can products ranging from Crown Royal in a can to High Noon. It's interestingly not dominated in any way by the traditional spirits companies. From our data, it looks like they have less than 10% of that volume. Of course, the big winner is a wine company, Gallo, with High Noon. Second place actually goes to the folks at Anheuser-Busch with Cutwater and NÜTRL and Devils Backbone and a few other things. So we view that as actually a significant opportunity that will not necessarily fall to the spirits companies. It's very much wide open to people in our situation. These products basically are made in a brewery because you need a high-speed can line and mix blend and things like that. And we believe may be best sold by beer wholesalers because they work the cold box and are a really attractive opportunity for a player like us who's traditionally been focused on the Beyond Beer space. New-to-world brands seem to be winning in that space. The new-to-world brands are probably 80% of the volume. So we view it as a place where we can and should play and where we have some real competitive advantages over the entrenched competitors, especially the spirits companies. That's really good color. Thank you. And the next question comes from the line of Steve Powers with Deutsche Bank. Please proceed with your question. Hey, thanks. Good evening, guys. Dave, best of luck for me as well. A couple of questions, probably for Diego, actually, if I could. First one, just a little bit of a cleanup. I think coming into the quarter, you guys had guided the extra week to be a 6-point impact. I think it ended up being more of a 9-point impact. Maybe just talk me through the math there and what caught you by surprise. Yes. I think as we mentioned before, one of the things that we saw was wholesaler inventories being lower than we expected. And that was specifically in the last couple of weeks of the year. So that extra week that we dropped off ended up being significantly more, a bigger delta that we had originally guided to. And that's what took the guidance from six points to nine points. Okay, perfect. Okay, that's helpful. And then as we think about 2024, the gross margin step-up that's embedded in the guide, you talked about inflation, some pricing offsetting that, but not a lot of pricing. And it sounds like the shortfall fees and the third-party production payments are going to be round about the same year-over-year, if not maybe a little bit more. So what drives the gross margin expansion? Is it all productivity, or are there other levers that you're seeing that maybe I'm not thinking about? No, I think you've read it really well. So we have pricing to 1.2%. That should help us offset the majority of the inflation. But we will continue with the savings agenda that we talked about last year. Initially, a lot of our savings we thought came from scrap and other pieces. Now we're really focusing on the other areas, which is the network optimization and some of our purchasing and contracts pieces. So we think those pieces will continue in the next two years, three years to provide some opportunities for growth and gross margin. Okay, very good. All right, I'll leave it there. Thank you. And the next question comes from the line of Rob Ottenstein with Evercore ISI. Please proceed with your question. Grea.t Thank you very much and all the best, Dave. So, Jim, wondering, you're really good at examining and understanding competition. And I don't know if this is competitively sensitive or not, but love to get your thoughts on why High Noon has been so successful and what you've kind of learned from that and maybe how you can pivot from that. So that would be question number one. And then the second question, maybe for anybody, how do you see the Hard Tea category developing? A lot of new entrants now. Are you seeing just kind of the overall category getting a lot of shelf space? How do you see that moving over time? And are you going to have to make any sort of changes in terms of your competitive activity to hold on to your very significant leadership position? Well, I'll start with High Noon. My view on it is they did a bunch of things right. I mean, to start out with, Gallo is a really excellent company. We've, in the early days, modeled our sales force on them 35 years ago. They executed retail well. I think the first thing they did is they realized that there was a potential to premiumize hard seltzer. And they did that quite correctly with a simple proposition of real vodka, real fruit. So hats off to them for that. And then they have really dominated liquor channel and gone through liquor wholesalers. And in that channel, liquor wholesalers are often able to do things that you can't do with beer. And beer wholesalers are probably not used to doing big discounts, RIPs in New Jersey, QDs in Massachusetts, etc. So I think that's been part of their excellence in execution. And they've been, I think, a good role model for all of us to learn from. The second question is, how do I see Hard Tea developing? Right now, clearly, Twisted Tea is dominant. And there have been, over the years, lots of competitors that have been thrown at it, and none of them really even made much of a dent. And today, everybody is piling into it. There's literally hundreds of new competitors. I don't see much traction from the vast majority of them. What I don't know is, will something begin to get traction with a brand name from somewhere else, like Arizona or a Monster? But they have a big high hill to climb because Twisted Tea is the original. We defined the flavor profile. So to a hard tea drinker, it should taste like Twisted Tea. And it's a hard flavor profile to duplicate. Tea is an interesting thing to work with flavor-wise. It's got the tannins and polyphenols you've got to account for. So I mean, we continue to believe that Twisted Tea can grow at the category growth rate, which means and I don't know what we have, 85% of the category now, and the rest is split among a bunch of people. I don't see a strong number two emerging. But we've got great competitors out there, everybody from Monster, I mean, people we don't normally face, Monster, to Coca-Cola, Gallo. Pretty much, it's the biggest growth pocket outside of Mexican imports. So we expect to see everybody come in. But we're 25 years into this, so we've got a 25-year head start. But we're expanding our brand support. I think we've quadrupled it over the last few years. So we're overinvesting to maintain that leadership. I know we'll share some of it with some of the excellent competitors that we have, but we're going to continue to fuel that fire. Great. Very helpful. Thank you so much. As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. The next question comes from the line of Eric Serotta with Morgan Stanley. Please proceed with your question. Good afternoon, guys, and congratulations, and best of luck. Dave, we'll miss hearing from you on these calls. A question for Jim and one for Dave. Jim, just wondering to get your latest thoughts in terms of beer category growth, particularly in traditional beer as opposed to beyond beer, or if you want to talk total beer category, that's fine too. One of your competitors recently has talked about improving trends in the category, exiting 2023, and certain expectations that the category would get back to historical trendline of kind of flat to down 1% this year. So that's for Jim. And then for Dave, hoping you could give some color on the slowdown in Twisted Tea growth in scanner over the past couple of months, probably some weather impact over the past month or two. And to be fair, you guys have been very upfront that Twisted isn't going to grow 30%, 40% forever. But do you think we are sort of downshifting into a more sustainable rate of growth here? Is there something else going on in terms of distribution or velocity that you would point out? Great. Well, I'll give you some comments on both of your questions and then hand it over to Dave. In terms of beer category growth, I think we've seen some slowdown in the first 8 weeks of this year. That's reflected in at least the Circana numbers that we're looking at. The category growth has dropped a bit from a reasonably strong finish to 2023. I would attribute that to three things, two of which are transitory and the other is a permanent fact of life sort of thing. The permanent one, I think, is it's January, and there was a Dry January. I think that movement is slowly growing. My numbers we're looking at is maybe 1.5% slowdown in the category the last 8 weeks, maybe 2%, that order of magnitude. Maybe a third of that is the Dry January. The transitory phenomenon are the continued leakage out of the beer category as a result of the Bud Light issues from our numerator data. Obviously, some of that stayed within the beer category, might have gone to Molson Coors or some to maybe Pabst and Yuengling. But a fraction of it left the beer category, either for spirits or just no alcohol consumption. So that's maybe a third of the 1.5%-2%. And then the third factor is last year, we had a big price increase. It was about 6%, and that caused load-in at retailers in the very beginning of last year, which we then gave back as the year went on. This year, we did not have that bump. So I think that's the third component. So two out of those three are transitory. In terms of overall beer category, we're probably a little less rosy than what we heard from Molson Coors. I was very happy to hear that their analytics are probably way better than ours. So I was very happy, and I hope they're right. I'll just give you some numbers of kind of what happened in the beer category that we find very relevant last year. I mean, if you think of traditional beer, which is 80% of the volume attributed to the beer category, and then Beyond Beer, which is about 20%, traditional beer last year, that 80% probably dropped by 4%. And then that was offset by Beyond Beer growing in these are volume numbers about 7%. So you do the math on that, and that leaves you a drop from traditional beer of 3.2 and a gain from Beyond Beer of 1.4. So you end up with a net in the beer category of falling close to 2%. I think that dynamic will probably continue, I would say, as I mean, these are parsing some things that are not huge numbers, but there's continued growth opportunity for brewers like us, ABV Molson Coors, et cetera, from this RTD base. I do believe that that's a fertile ground for creativity. There's some sort of blue ocean nature to it. There may be some very interesting categories that come out of spirits-based high-flavor drinks. And I believe those should be added to the "beer" category. I think of beer as stuff that it's made in a brewery. It's sold through a beer wholesaler. And that's an opportunity for us that somewhat offsets what the traditional beer and beyond beer categories are doing. Quick thoughts on Twisted Tea. I do see, again, double-digit growth for Twisted Tea this year, maybe into next year, depending on what we can do to not so much line extend it, though things like Twisted Tea Extreme and, more importantly, Twisted Tea Light, I think, open up more drinking occasions and more customers to Twisted Tea. But I also think there is considerable growth still in the base. Twisted Tea is a product that has very wide appeal, from upscale college kids to blue-collar NASCAR fans. And we have, again, some demographic groups that are quite significant, especially Hispanics and also African-Americans, where we're underpenetrated. And I think just increasing that appeal of the base proposition of Twisted Tea to more people, and it's a unique product. It's fun to drink, and it's not carbonated, and it has just an image of fun in the sun. So I think we have multiple avenues, as Dave said, for double-digit growth. Yeah, I think Jim sort of answered. I think he got it. I think, Eric, the deceleration you called out is sort of it is expected. I think we were minus if you look at Circana start, we were +27, latest 52 weeks, and +22, the latest 13. But that's still above where we expected to be for the year. We're still gaining share. And this is sort of a reloading time for this brand. We have a lot of activity ahead of it for the spring that will be coming soon. So we feel like we look at the numbers, we know we're not going to stay in the high 20s all year. We feel okay with it, and we feel very confident for the reasons Jim mentioned. There are different ways to grow here. Jim talked about some of the consumer pieces, the Hispanic, African-American, Twisted Tea Light. Also, we expect we gained a fair amount of shelf space last year. We're still under spaced. We've got 28% of the category and 18% of the space. And we expect in the spring the numbers aren't in yet fully, but we expect to have probably 20% or more shelf space gains in large format for Twisted Tea. And the last thing I'll say is we look at it across different developed BDIs, so low, developed, mid, high. We're growing and gaining share in all of those right now. So not taking anything for granted. As Jim mentioned, there's a lot of competition, and we're investing a lot across every avenue we can. I think, importantly, when we think about innovation for this brand, we talked about Light, we talked about Extreme. We're not going to make the mistake of over-innovating on this brand either. There's a lot as Jim said, there's a lot of growth in that core business, the original and half-and-half flavors, and we've got a lot behind that as well. So as we enter the year, we feel good. We'll see how it goes. But the last thing I'll say is we know we're not going to sit back and rely on Twisted Tea to do everything this year. We've got to give it support. That's the goal. That's what the plan is all about for 2024. Great. Thanks so much. Good luck, guys. And the next question comes from Brett Cooper with Consumer Edge. Please proceed with your question. Thanks. Good evening. I would add my congratulations to Dave, and thanks for the humble and frank commentary over the ups and downs of the last six years. So the question's on the portfolio. Can you just speak to Boston Beer's capacity to operate with a portfolio of brands that I don't know, it could be 10, 15 brands or whatever the right number is versus the five or so that you do today? And I guess I'm asking this from both a production standpoint and then how your brand support budgets will need to change to address those. Thanks. Perfect. I'll take production. Yeah, I can do the production side of it. We have a unique set of capacities in our brewery. We do have a very complex product mix, and it's gotten more so over the last five years. So our manufacturing strategy is essentially to make a complex product mix at scale economics. Within the beer business, the manufacturing strategy is kind of long runs and don't make the portfolio too complicated, maybe outsource some of the complications. And the packaging and equipment is made for long runs, and the manufacturing strategy is built around that. We don't have that luxury. We can't put Miller Lite on a can line in February and run it for 12 months. So we have equipment that you won't find elsewhere for doing things like automating variety packs. We have what are very, very short runs on our canning and bottling and kegging equipment. And we are reducing our finished goods inventory. We're implementing, in the next two weeks, actually, a new ordering system and sales and operations planning that feeds into that. And it's all about a replenishment model for how we're managing our inventory. So our breweries are different than big company breweries. Our hope is that we can do that without losing the economy's scale. And it's very much a Toyota Production System philosophy. Toyota pioneered all this stuff 40 years ago. And I started my career as a manufacturing consultant, trying to figure out what Toyota was doing by taking the. Had higher quality, shorter runs, and lower costs. So we're kind of mimicking that. So I'll build on Jim's point. So we also talk a little bit about shortfall fees sometimes. What that allows us externally is that complexity and that flexibility we have externally in our network. So part of the reason we do have that 30-70-30 mix is so that we can allow to push some of that complexity out to people that can manage it really well. So we feel confident that we can, on the operations side, distribution side, we can produce to what we are planning and guiding to. And Brett, I'll pick up on the 15 brand portfolio. I don't think we're going to we don't need to have 15 brands. First of all, consumers are. There's no question they're demanding more. We have five great brands right now. Then this year, we're going to have Mountain Dew nationally, and Sun Cruiser is a new brand that we're launching nationally. We certainly have the bandwidth within our sales organization to sell these brands, to support them in the marketplace. I think the other thing, clearly, we need we need to be able to invest in those brands. And that's all the growth margin initiatives enable us the flexibility to invest more to build a broader portfolio, if you will, because we do believe that we need to we need to win. We need to satisfy changing needs in the marketplace across many segments. And the last thing I'll just say is, as it relates to innovation, we do feel that we're set up to we have been a terrific fast forward, and we're set up to do that. We also think, I mean, when you look at the company, we have a long-term orientation. We have that sales force that can drive the execution. We have the wholesaler and the retailer relationships. And I would say years, and certainly in the form of Jim, years of pattern recognition of the marketplace. So I think we are uniquely able to see maybe even sometimes hidden demand signals in the marketplace and then quickly turn those demand signals into ideas, into concepts, into products, into test, and into the marketplace. So that engine of finding innovation, in addition to building our core brands, we're going to need to rely on that muscle as well. And ultimately, it goes through that selling organization and through the and backed by the production capabilities that Jim talked about. Perfect. Thank you. And the next question comes from the line of Peter Grom with UBS. Please proceed with your question. Thanks, operator. Good afternoon, everyone. Dave, wish you nothing but the best of luck moving forward. So two questions from me. Diego, maybe the first one for you. Just on the long-term gross margin comment, I know this is minor, but I think the prior commentary in terms of the long-term target was solidly 50%. I think you mentioned high 40s-50%. Has something changed in your expectations that you're now incorporating a lower end of the range, or am I kind of reading too much into that comment? And then, Jim, I wanted to ask about this is a big picture question, but I wanted to ask about your dry January comment. And I think you mentioned the movement's growing, but I wanted to get your thoughts on consumers exiting beer or alcohol more broadly. You read a lot about the younger consumer being less interested in alcohol. So what's your perspective on whether this movement that coincides with dry January expands beyond just kind of a kickstart to the year? It is really kind of a sign of things to come. And how do you think the industry is going to evolve as this does become a bigger threat to growth? Thanks. Perfect. First of all, I'd say we're still in the same path we were before. We want to return to the profitability we had in 2019. The reason we have a range is because there's quite a few things in there. Part of it will be the mix of brands. Part of it is just how commodities and some of the inflation piece behave in the next few years. Our target continues to be the same, to return to previous profitability. I think we have a plan to get there. I wouldn't read more than that into it. Yeah. I'd second that. 50% is still our goal. We've been there before. We were over 50% at one point. So no reason that we can't get back to that, especially given the capital we put into our breweries and the transformation in our manufacturing system that we're really on just the first year of that journey. And second, about dry January, I don't have a crystal ball here. I'm only intuiting it. I'd say two things. One, alcohol consumption per capita is one of those rock-steady statistics over the last 70 years. So any movement in that up or down is going to be glacial. I do feel like there and this is just a wild guess, that there is a somewhat different attitude among 20-somethings. I have two 20-something kids. And alcohol is a part of their life. I mean, it's a part of their socializing and so forth. But they are somewhat more aware of just overall wellness. And so it's at the margins. It's not a dramatic shift. And there's no telling how that will change as they move out of their 20s. So I don't know. But there is some leakage to moderation rather than abstinence. We've seen some mild leakage to cannabis, but they're not big numbers. On a year-to-year basis, they may not be even 1%. Time will tell. But it's just a very slow glacial thing when you look at what's happened over the last 70 years. No, that's really helpful. I'll pass it on. And the next question comes from the line of Filippo Falorni with Citi. Please proceed with your question. Hey, good evening, guys. A quick question, Dave. You mentioned in the prepared remarks that you expect the hard seltzer category to decline at a low teens rate in 2024. You also mentioned a lot of initiatives in Truly. So are you expecting Truly to grow in line with the category, to gain share? And then longer term, when do you think we're going to see kind of a new moderation or a new normalization in the hard seltzer category? Do you think it's something that could happen in the tail end of 2024, maybe 2025? Just a sense of how you see hard seltzer evolving from here. Sure. I think if you look at so last year, the category was maybe down -20, -21, something like that in volume. We are seeing improvements, gradual but improvements. I think the latest 13 might be -14. So we're thinking -10 to -15 probably on the category. I've seen projections that are more optimistic than that, but I wouldn't necessarily go there, like low single-digit declines or low to mid-single-digit declines. But it is improving a bit. For Truly, we're now almost a year into the journey of kind of redefining what we want the brand to stand for. The brand really has got to stand for lightly flavored variety and not the bold flavor as much because bold is a part of the category, but it's not nearly as big as we thought it would be. We have made progress. I mentioned it in the opening remarks. I think a year ago, the business was 65% weighted toward bold flavors and 35% light. Now it's in favor of light, 55%, 45%. We're making that move. If you look at just our light flavor SKUs, including our single-serve packages, our sales dropped 9% year to date. That part of our business, again, it's 45% of our business, but it's up 9%. So we're getting validation that people want lighter flavors. And by the way, we do this three times a year. We call it a rotator. It's one UPC three times a year. And in the past, it had been all bold flavors. We moved to all light starting last summer with Red, White, and True. Then Celebration Pack was in T3. And T1 is the Getaway Pack. And we're seeing much better response. We're seeing very good repeat. We're bringing about 10% of the new consumers that come in come through that. So the last thing I'll say is we've made a big push on single-serve. In convenience stores, it's up 23% year to date. And it's basically light flavors. It's pineapple. It's wild berry are really driving it. And it's in a new flavor called Citrus Squeeze. So we like where we're going. It's going to take patience, though, as we turn the mix within the brand toward lighter flavors. Now, having said that, let's say the category is -10% for the year. Let's just use that as a number. We're not going to be -10%. We don't expect, and certainly in our guidance, we're not expecting to be flat share for the year. We'll be south of that, meaning worse than -10%. But for me to be happy, personally, I want to see this brand continue to deliver better growth rates. And it has been getting gradually better. So a year ago was in the low -30s. Now it's around -20, -21, hopefully heading south of -20%. So I would just say from a share perspective for the year, it's probably unlikely we're going to gain share with Truly. But if we get into the summer and beyond, if we're holding share starting then, then I think that would be a really good sign. And I would add, thinking about this long term, the fundamental factors that drove the success of seltzer are still out there. And it is very much in tune with long-term consumer trends in alcoholic beverages, which are movement to flavors, to lower-calorie drinks, and sort of and hard seltzer is a quintessence of those. And it also represents a very drinkable, refreshing alternative to beer, to hard liquor, to wine. It offers category benefits that you really only get in hard seltzer, in just the consumption experience of interesting, varied, light, refreshing, low calories, and a very drinkable, poundable level of alcohol. So long term, I think we're thinking that there can be a second act for seltzer, very much like craft beer had. It grew like crazy for the first 12 years. The category started in 1984. And then it had a flat period for some years. And then it's, I think, quadrupled when it started growing again in 2004. So I think we've just seen the first act for this hard seltzer space. And the last thing I'd add is and it's a category where you have two strong creative players, us and Mark Anthony, very committed to it and who see a long-term future if we can innovate around new consumer needs and occasions. Great. Thank you, guys. And best of luck, Dave. Thanks. There are no further questions at this time. And I would like to turn the floor back over to Jim Koch for any closing comments. I want to thank you all for joining with us. Thank you for your kind thoughts about Dave, who has done an outstanding job here. When he joined, we were $850 million. Now we're over $2 billion. That's pretty damn good in six years. Thank you, Dave. We'll talk in a couple of months. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.