Q4 2024 Zevia PBC Earnings Call
Ladies and gentlemen, greetings and welcome to the <unk> P. B C Q4, 2024 earnings call.
At this time all participants are in a listen only mode.
Brief question and answer session will follow the formal presentation.
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Please press star and zero on the telephone keypad.
As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host Alex <unk> from ICR. Please go ahead.
Thank you and welcome to <unk> fourth quarter 2024 earnings conference call and webcast.
Amy Taylor: On today's call are Amy Taylor, President and Chief Executive Officer, and Gary <unk>, Chief Financial Officer, and principal accounting officer.
Amy Taylor: By now everyone should have access to the company's fourth quarter 2024 earnings press release and Investor presentation made available this morning.
Speaker Change: This information is available on the Investor Relations section of <unk> website at investors <unk> CBS Dot com before we begin. Please note that all financial information presented on today's call is unaudited certain comments made on this call include forward looking statements, which are subject to the safe Harbor provisions of the private Securities Litigation Reform Act of 1009.
Amy Taylor: <unk> five <unk>.
Amy Taylor: These forward looking statements are based on management's current expectations and beliefs concerning future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in these forward looking statements.
Amy Taylor: Please refer to today's press release and other filings with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward looking statements made today.
Amy Taylor: During the call we will use some non-GAAP financial measures as we describe business performance the SEC filings as well as the earnings press release presentation slides that accompanies today's comments and reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are all available on our website at investors <unk> CBS Dot com.
Amy Taylor: And now I'd like to turn the call over to Amy Taylor.
Amy Taylor: Thanks for joining us for our fourth quarter and full year 2024 conference call. We are pleased to have ended the year on a strong note with a return to topline growth and progress.
Amy Taylor: Toward our goal of achieving profitability.
Amy Taylor: We elevated our branded entity.
Amy Taylor: Advanced our three strategic growth pillars, and continue to lay the foundation for our plans for sustainable long term growth and profitability.
Amy Taylor: I want to thank the <unk> team for their commitment and dedication to executing on these priorities.
Amy Taylor: I am as confident as I have been since joining the media about our long term opportunity our optimism in the future is based on three factors.
Amy Taylor: The better for you soda category is in the nascent stages and we believe there's tremendous growth opportunity as more consumers move towards healthier for you options.
Amy Taylor: Natural soda is growing six times faster than conventional.
Amy Taylor: Comprises 25% of them also to growth.
Amy Taylor: And men tell projects natural setup will more than double the growth of conventional diet in zero. So that the next five years.
Amy Taylor: This shift is further evidenced by the fact that large retailers are dedicating prime real estate to this emerging category Walmart launch of the modern soda that and Albertsons. The recent launch of our renovated better for you soda set are great. Examples of the speed and scale of this change.
Amy Taylor: We believe we are uniquely positioned within this fast growing and dynamic category is the only brand that combines great taste zero sugar and naturally sweetened <unk>.
Amy Taylor: At an accessible price point, we have seen that once consumers tries easier. They are highly engaged so our focus is on amplifying our brand and our clear points of differentiation on taste and ingredient to drive trial and continue to grow the bank.
Amy Taylor: And finally, we believe that the foundation for long term success lies in creating a brand that consumers love and delivering great products, along with an exciting pipeline of innovation work, we had done to sharpen media brand identity as well as to elevate our product are setting us up to deliver on boat, while we recognize the discovery and trial happen.
Amy Taylor: Over time, we're excited about the green shoots, we're seeing and our positioning for the future.
Amy Taylor: We have advanced our strategic growth pillars of amplified marketing.
Amy Taylor: Innovation and focus the distribution expansion, while maintaining agility within this rapidly changing category.
Amy Taylor: So briefly highlighting our results, which we pre announced in mid January we returned to growth in the fourth quarter with sales increase of over 4%. We grew in volume and in dollars, which is also reflected in our scan data.
Amy Taylor: And adjusted EBITDA improved by $3 million as compared to the fourth quarter of last year to negative $3 9 million.
Amy Taylor: Savings, we achieved from our productivity initiatives, we invested in brand building initiatives weighted in the back half of 'twenty 'twenty four will also floating a portion of the savings to the bottom line, we see additional cost savings opportunities and we remain confident that we will achieve positive adjusted EBITDA within 2026.
Amy Taylor: Chris will speak to this in more detail shortly.
Amy Taylor: Now I'd like to provide an update on the progress we've made across our strategic growth pillars.
Starting with marketing, we believe that the work we have done to sharpen our brand voice is cutting through and resonating with the consumer we made strides in elevating our brand identity across medium as reflected in our break from the artificial holiday campaign, which delivered a lighthearted parity of the artificiality content and in beverages.
Amy Taylor: This campaign went viral in December and serve the brand very well communicate our positioning as the real euro sugar soda in a world of Washington State.
Amy Taylor: Performance mirrored in incremental investments and we took it from digital to linear TV, we will scale. The success of a break from the artificial campaign into a comprehensive brand platform with additional campaigns that engage a broader audience with compelling content.
Amy Taylor: Clearly communicate the benefits of media in a fun and memorable way.
Amy Taylor: As we said our marketing spend is largely focused on driving awareness and trial.
Amy Taylor: Maybe as consumers highly engaged in the brand exemplified by our repeat rate of over 40%.
Amy Taylor: And then average brand spend per household which is an impressive 38 percentage points higher than the average every shopper.
Amy Taylor: However, with household penetration and only the mid single digit range, we have a lot of room to grow and so as such we're increasing our marketing investment in 2025, leveraging the learnings from last year.
Amy Taylor: We are still in the early stages of this journey and we expect these actions to build momentum over time.
Turning now to product innovation, our second pillar, we have two key drivers of growth in the 2025 pipeline.
Amy Taylor: One is a breakthrough we've had in a more sugar like taste experience, which will be introduced in our new flavor launch Strawberry 11 burst this spring.
Amy Taylor: This enhanced flavor profile will also be applied to other key under leveraged flavors within our portfolio.
Amy Taylor: And then secondly, we have a more robust product innovation pipeline coming into 2025. So in addition to strawberry Lemon bus, which will be nationally distributed across channels. We're also launching retailer exclusive such as orange cream nickel at sprouts.
Amy Taylor: And then finally, we'll launch limited edition seasonal flavors building on the success of the outperforming salted caramel flavor in 2024.
Amy Taylor: In addition to flavors will be scaling multiple variety pack offerings for the first time at retail to support efforts in driving trial and expanding the base.
Amy Taylor: We recently launched our first retail variety pack at Walmart is in APAC, which is our top a lot. These skus within that set.
Amy Taylor: Building on our success there we are rolling out 12 pack variety packs across the grocery and natural channels currently and we will continue to test additional configuration.
Amy Taylor: Not only can these variety packs drive incremental velocity, but they can also convert shoppers to their favorite higher margin Street flavor pack.
Amy Taylor: So moving along to our third pillar distribution expansion.
Amy Taylor: In parallel the top of funnel marketing investment. We're also focused on growing awareness accessibility trial and repeat.
Amy Taylor: Through expanded distribution.
Amy Taylor: We recently expanded our presence from 800 to more than 4300, Walmart doors in the U S.
Amy Taylor: And a precedent setting move within the category Walmart recently introduced a new scent called modern soda feat.
Amy Taylor: Featuring a selection of leading low and no sugar brand with better for you positioning.
Amy Taylor: This should raise awareness both for better for you soda and for the Xavier brand and it helps to drive market penetration, particularly in basketball in geographies like the South East.
Amy Taylor: And grocery we continue to see strong results as evidenced by scan data and we believe that there remains ample opportunity to increase penetration Albert's.
Amy Taylor: Albertsons one of our key partners has created its own better for you said, where the deal will have a strong brand block at eye level in a vertical shelf set.
Amy Taylor: Lastly, we continue to see progress in our direct store delivery or D. S D regional pilot.
Amy Taylor: Grocery is outperforming rest of market in the northwest where our DSD initiatives has been deployed for several months.
Amy Taylor: And now we plan to expand into the southwest starting with Crescent Crown in Arizona with neighboring states to follow we believe our DSD initiative will improve in store presence and enable singles distribution across key channel overtime.
Amy Taylor: Big Picture media remains focused on being the better for you soda with an authentic brand connection with great tasting product at accessible price points.
Amy Taylor: Nothing artificial in our ingredients or not claim.
Amy Taylor: We are more excited than ever about our future.
Speaker Change: We have a clear brand voice and I'm, making increased investments in marketing to drive growth.
Speaker Change: We're also gaining distribution with recent and with upcoming shelf reset and then lastly, we have strong innovation in the pipeline.
Speaker Change: With a clear path forward and strong momentum behind the category better for you soda.
Speaker Change: We expect these initiatives to pay off in the back half of this year and going forward.
Girish: So with that I'll turn the call over to Girish.
Girish: Thank you Amy good morning, everyone and thanks for joining our call today.
Girish: Looking back at 2024, we laid the groundwork for future growth and strengthen our financial position.
Girish: Through the successful execution of the productivity initiatives, we commenced in March.
Girish: We have reinvested the majority of these cost savings thus far into our enhanced promotional strategy in building brand awareness, while also flowing through a portion of the bottom line.
Girish: Turning to our fourth quarter financial results, we delivered net sales of $39 5 million, an increase of four 4% compared to the fourth quarter of last year.
Girish: This was driven by increased volumes as we expanded from 800 Walmart locations to more than 4300 in late November.
Girish: The improvement in net sales during the period was driven by an 11, 6% increase in cases sold on an equivalent basis.
Girish: Partially offsetting this was the decision to increase promotion with select new and existing retailers overall.
Girish: Overall, we continue to hone in on the optimal mix of frequency depth and breadth to drive volume while protecting margin.
Girish: Gross margin was a record high at 49, 2% an increase of 850 basis points from 47% in the fourth quarter of last year.
Girish: This improvement reflects the cycling of inventory write down in the prior year associated with our improved inventory management.
Girish: Additionally, gross margin continues to benefit from our productivity initiatives.
Girish: These improvements were partially offset by the dot formation increase in promotional activities during the period.
Girish: Selling and marketing expenses were $16 5 million or 41, 7% of net sales in the fourth quarter of 2024 compared to $13 8 million or 36, 6% of net sales in the fourth quarter of 2023.
Amy Taylor: The increase was primarily due to the incremental investment in advertising associated with the viral holiday campaign that Amy discussed earlier.
Amy Taylor: This was partially offset by a reduction in warehousing and freight transfer costs associated with our productivity initiatives.
Amy Taylor: General and administrative expenses were $6 8 million or 17, 3% of net sales in the fourth quarter of 2024 compared to $8 4 million or 22, 2% of net sales in the fourth quarter of 2023, largely driven by cost savings initiatives.
Amy Taylor: As a result, net loss was $6 8 million compared to a net loss of $9 2 million last year, an improvement of $2 4 million.
Amy Taylor: Adjusted EBITDA loss was $3 9 million compared to an adjusted EBITDA loss of $6 9 million in the prior year period.
Amy Taylor: Turning to our balance sheet, we continue to enhance our liquidity position.
Amy Taylor: We ended the quarter with approximately $37 million in cash and cash equivalents.
Amy Taylor: A an undrawn revolving credit line of $20 million.
Amy Taylor: For the full year fiscal year 2024. This represents an improvement in operating cash flow of $15 million.
Amy Taylor: Moving to our full year results for the full year 2024 D. B achieved net sales of $155 1 million a decrease of six 8%.
Amy Taylor: The decline was driven by lost distribution channels and increased promotional spend partially offset by increased pricing.
We realize healthy gross margin of 46.4% versus 44, 9% in 2023 it'd be more effectively manage our inventory net loss was $23 8 million compared to a net loss of $28 3 million in 2023.
Amy Taylor: And adjusted EBITDA loss was $15 2 million for the year compared to an adjusted EBITDA loss of $19 1 million for the full year of 2023.
Amy Taylor: Now turning to our outlook for fiscal 'twenty five.
We see additional cost saving opportunities of approximately $2 million, which is expected to bring us to a total of $15 million in annualized savings from our productivity initiatives.
Amy Taylor: This target is inclusive of the recent reduction in workforce that we executed on February seven.
Amy Taylor: It is expected to result in an additional $1.7 million in savings this.
Amy Taylor: This most recent action completes the organizational redesign we began in Q2 2024.
Amy Taylor: We continue to see additional areas of efficiency largely and caused the selling expenses that we expect to realize in 2025 and enter 2026.
Amy Taylor: We focus on further optimizing our product portfolio.
Amy Taylor: Looking to the future, we intend to balance reinvesting those savings into driving revenue growth, while remaining committed to reaching positive adjusted EBITDA in 2026.
Amy Taylor: Turning to 2025 guidance.
Amy Taylor: Estimate net sales in the range of $158 million to a $153 million does reflect the previously discussed gains in distribution and Andy mentioned earlier offset by the lapping of box distribution at one customer in the mass channel.
Amy Taylor: In the club channel as well as the discontinuation of kids and make sure lives for.
Amy Taylor: For which we expect the majority of impact to occur in the first half of the year.
Amy Taylor: Looking at the quarterly cadence. Please note that.
Amy Taylor: The second quarter and third quarter are historically, the highest volume quarters of year due to seasonality.
Amy Taylor: We expect an adjusted EBITDA loss in the range of 8 million to $11 million in 2025.
Amy Taylor: It assumes gross margin in the high 40% range as well as other expense reduction as part of our cost savings initiatives.
Amy Taylor: We plan to increase marketing investments, primarily in the first and third quarters in order to capture the strong momentum in the better for you soda category.
Amy Taylor: For the first quarter, we expect net sales between 36 million to $38 million.
Amy Taylor: This guidance reflects the aforementioned distribution losses related to the club channel and one of our mass retailers.
Amy Taylor: More cautious consumer behavior.
Amy Taylor: Partially upset by the extended distribution at Walmart.
Amy Taylor: While these impacts will continue into Q2, we also expect to regain some distribution and therefore anticipate a return to growth for the full year.
Amy Taylor: We expect Q1, adjusted EBITDA loss to be between $5 6 million 6 million reflective of the increased marketing investment in Q1, as well as higher promotions I noted earlier.
Amy Taylor: While this does not impact adjusted EBITDA. Please note that in conjunction with our workforce reduction we will recognize approximately $1 6 million in severance and restructuring expenses in Q1 2025.
Amy Taylor: By the end of Q1, we expect to have also concluded the vast majority of our restructuring activities and expect only de minimis restructuring expenses for the remainder of the year.
Amy Taylor: In closing, we believe that the work we've done over the last year combined with our unique market position will enable us to capitalize on the enormous tailwind within the natural soda and better for you beverage category.
Amy Taylor: I will now turn it over to the operator to begin Q&A.
Amy Taylor: Operator.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen, we will now be conducting a question and answer session.
Speaker Change: I would like to ask a question. Please press star and one on the telephone keypad.
Speaker Change: A confirmation tone will indicate your line is in the question queue.
Andrew: You May press Star, Andrew If you would like to remove your question from the queue.
Andrew: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the strategies.
Andrew: Ladies and gentlemen, we will wait for a moment, while we poll for questions.
Speaker Change: The first question comes from Jim <unk> with Stephens, Inc. Please go ahead.
Speaker Change: Hi, Good morning, guys. Thanks for taking my question.
Speaker Change: And then I wanted to maybe start with some some thoughts around the new customers <unk> been interacting with it at Walmart and just any trends you can speak of kind of engagement repeat rates once they become introduced to the video product, especially with kind of all the new news about.
Speaker Change: Incremental entrance to new.
Speaker Change: New brands entering the category just thoughts on how you feel <unk> holds the new data.
Speaker Change: Yeah. Thanks, Jim we are really excited about moving from 800, Wal Marts Sellings Ive, yet to 4300 now and it does a tremendous job for us to step change household penetration and as I mentioned in the prepared remarks, especially across the south east, which is the highest engage region in soda ash.
Speaker Change: And now the fastest growing for us based on the penetration opportunity I guess another comment I can share about our early stage performance at Walmart the variety pack from Cvs is our fastest selling SKU the strongest velocity and what we know about variety packs in the past both in E Commerce.
Speaker Change: And now in early days in retail because it's new at retail is that not only does that drive trial folks try and BVA for the first time, but.
Speaker Change: But it also leads to the purchase of incremental straight flavor packs when people find their favorite flavors, which also happened to be a higher margin. So.
Speaker Change: So we have a great sort of virtuous circle going in the early days with Walmart, which is step change household penetration trial with new users and strong initial repeat.
Speaker Change: The other exciting thing Jim just mentioned is this is somewhat of a precedent center as retailers figure out how to frame this exciting and increasingly competitive category and when we see Walmart and albertsons and others starting to frame it together as a better for Ya destinations in store, it's a rising tide that floats all boats, it's a very competitive environment, but for us our greatest op.
Speaker Change: <unk> is to grow the size of the base once a consumer enters the evs through trial. They repeat we know this to be the case. So the example that you serve up here in Walmart helps us to step change our awareness trial and household penetration, which is really our top priority.
Speaker Change: Okay, Great and then maybe one question on just expectations around gross margin and 25% how should we think about kind of balancing.
Speaker Change: Driving excitement around expanded distribution and getting that initial trial with obviously, maintaining the gross margin gains that you guys.
Speaker Change: One over the past couple of years.
Speaker Change: Yeah, no. Thanks, Jim.
Speaker Change: Part of the gross margin gains have also come at our are also reflective of increased promotional spend so I think in from that standpoint, where we believe we can maintain gross margins in the high 40 give or take.
Speaker Change: While also investing appropriately to drive trial.
Speaker Change: <unk>.
Speaker Change: And effectively drive the business. So I think we're we've loaded the appropriate amount of promotion.
Speaker Change: Into the P&L and now I think it's really about ensuring that we're driving the correct depth breadth and frequency of promotion.
Speaker Change: Okay, Great I appreciate the color guys I will hop in queue.
Speaker Change: Thanks.
Speaker Change: Thank you.
Speaker Change: The next question comes from Andrew <unk> with BMO. Please go ahead.
Daniel: Hi, Good morning. This is Daniel goes on for Andrew Thanks for taking my question.
Daniel: Good morning would you expect good morning, what do you expect will be the cadence of sales growth for the year given the implied <unk>.
Daniel: 6% decline in <unk>, and three 5% growth for the full year.
Daniel: And why that deceleration from <unk>.
Daniel: Particularly given the elevated marketing spend is that really just a function of.
Daniel: Lapping the CFO.
Daniel: Yeah. So we're excited about Q4 and returning to volume driven growth primarily driven by the pipeline fill at Walmart I think Q1 is.
Daniel: We're very confident about.
Daniel: The distribution gains that we've secured for the full year, which is what is really going to drive.
Daniel: Our growth for 2025, I think Q1 is probably the most challenging comp partly because the impact of loss distribution from one.
Daniel: Mass customer as well as the lapping of loss distribution at club and so.
Daniel: Really when you think about.
Daniel: As well as the discontinuation of the kids and mixers lines and so when you think about.
The cadence of growth from a modeling perspective, we expect Q1 to be.
Daniel: As noted slightly down to flat with Q2 and Q3 being the.
Daniel: Uh huh.
Daniel: The highest volume quarters, and then to address your point I think your second question in there was about.
Daniel: Marketing spend and I think really Q1 is reflective of higher marketing spend driven primarily by what I'd call non working marketing, which is related production expenses, which we expect to benefit us in later.
Daniel: In Q2 in primarily in Q3, as well and Dan just to build on that really quick I think gears did a great job of talking to the phasing of the timing of our expectations for the year and our return to growth on the full year, which we're excited about I'll mentioned that scan data has accelerated the last five four week periods showing double digit growth in the last two.
Daniel: We're really pleased with the trajectory, we're performing well at Walmart, we talked about that despite really heavy and increasing competition. So when we look at things like a grocery shelf reset at albertsons forthcoming in March specifically contributing to accelerated growth for the balance of the year and then you add to that innovation also launching this spring.
Daniel: And then increased investment in and really compelling marketing, we are bullish about the trajectory and we're cautious on the unknowns, given the macro and increasingly competitive environment.
Daniel: That's really helpful. Thank you.
Daniel: Thank you.
Sarah: The next question comes from Sarah <unk> with Telsey Advisory Group. Please go ahead.
Speaker Change: Okay. Thank you guys.
Sarah: My question is on the DSD.
Sarah: Model I feel like it's been a couple of quarters that you have rolled it out in Pacific Northwest Barb.
Sarah: Arizona.
Sarah: Can you share some of the key observations from the model and how it does transform your business in those parts of the region.
Sarah: Sure sure no problem, so speaking about direct store delivery or DSD. We've piloted this hybrid route to market in the northwest and the DSD operators there across four states have enabled outsized growth in grocery relative to the rest of the market how are they doing that by addressing out of stocks or increased.
Sarah: <unk> by activating our programming that Girish was speaking about earlier as we rightsize our promotional activity. The DSD, operator is able to drive display and greater in store visibility and a more competitive manner and so we see outsized growth in grocery in the DSD footprint relative to the rest of the market than the other thing that DSD does for.
Sarah: US has enabled singles merchandising and thus new singles distribution, which is critical for trial. We're building that over time, it will take time, but what's exciting about this immediate next several months is that as retailers are resetting shelves, we will pilot into a number of regional convenience stores to develop similar.
Sarah: Earnings there and some initial proof points of category is in its very nascent stages inconvenience.
Sarah: In terms of next steps, we are now moving into the southwest and this is not to indicate a rapid national rollout rather than expansion of a second read region to continue to capture learnings again about a hybrid route to market some channels being addressed through DSD and it's a worthwhile investment we believe based on what it enabled the way I work.
Sarah: Do you have that in grocery and then in the opportunity with singles inclusive of convenience. So we're bullish on what DSD can do for us, but we're also really thoughtful about our pace and we're capturing learnings now in one end and then over the next several months to broader and very competitive in important regions.
Sarah: That's great.
Sarah: Just had one one quick follow up on the marketing it seems like since holiday marketing has really stepped up to a lot of buzz.
Sarah: In social media on your marketing how should we be thinking about the role of marketing in 'twenty five like it seems like you're stepping up the investment does it correlate to like have you seen any correlation in terms of like.
Sarah: Sales in markets like L. A where do you have really stepped up a lot more than others. So I'm curious to know have you have you think of marketing whats new coming up in 'twenty five.
Sarah: Anything different and then in general like how much is an increasing spend on marketing youre thinking for 'twenty five relatively thank you.
Sarah: So wrong youre hitting on my favorite topic. So thank you.
Sarah: Very excited about the marketing that we have in the market and our confidence in the quality of the creative and the strategic nature of the mix are exactly why we are increasing our investment because we really believe in what we're doing and we have tremendous proof points starting with the campaigns as you mentioned that resonated with the consumer so well in December.
Sarah: And we know that through for example, 82% positive sentiment from social commentary very rare. These days, if you think about what social commentary normally sounds like so as I stated in the past we've historically under invested in marketing for our growing beverage brand and especially now if you look at the competitive environment. So we expect to increase marketing spend to do.
Sarah: What we really believe is the right strategic thing for the brand and that's focused on awareness and to be specific we're thinking about and planning for let's call it low double digits.
Sarah: In percentage of sales as a marketing investment which has materially increased from the past, but also funded through our productivity initiatives specifically, we're learning a lot about marketing in some of our key accounts. We are able to report on internally anyway marketing attribution, meaning what portion of the volume increase is attributable to <unk>.
Sarah: So we studied added a key account level and scan what works. We also have a brand health tracker in the markets, where we can measure all the way down the funnel awareness trial conversion that gives us directional confidence in efficacy of marketing and then we'll be putting some incremental modeling into the market something called a marketing mix model to continue.
Sarah: To fine tune.
Sarah: Tactics and weighted investments going forward and then we always do concept and copy testing with our creative we know we had lightning in a bottle in December with a campaign that went viral we're building on that now with our continuing break from artificial campaign and I'm excited about what's coming in March as we elevate that campaign and bring it to <unk>.
Sarah: People with some familiar faces behind the brand. So thanks for asking about marketing it as a fundamental reason why we believe in our long term opportunity in one of our top priorities for the year.
Sarah: Thank you good luck ahead.
Sarah: Hey.
Sarah: Thank you.
Sarah: Ladies and gentlemen, there are no further questions I would now like turn the conference over to Ian.
Amy Taylor: Taylor for closing comments.
Amy Taylor: Thank you very much CECO.
Speaker Change: Folks thanks for joining today, we're obviously really excited about what's ahead for <unk>.
Amy Taylor: Is an exciting time to follow the story. So we thank you for following along.
Speaker Change: We know that the trend toward better for you products and toward health is here to stay but we also know that people love soda.
Speaker Change: As a soda brand that has zero sugar.
Speaker Change: <unk> ingredients and importantly in this moment is priced excessively for your average American household we're really bullish on our ability to compete in an increasingly competitive environment.
Speaker Change: We are excited about our key strategic pillars, and just to reiterate those we're amplifying marketing.
Speaker Change: We're moving at a faster pace and product innovation with great tasting products and on trend and relevant flavors.
Speaker Change: And then finally, we're driving and sustaining distribution with really meaningful strategic partners with early green shoot indicators for that so as I mentioned at the can exciting time to be following the <unk> story and we thank you for your attention today.
Speaker Change: Thank you.
This concludes today's teleconference. You may disconnect your lines at this time.
Speaker Change: You for your participation.
Speaker Change: [music].