The Vita Coco Company, Inc.

Hello and welcome to the Vitacoco Company's third quarter 2023 earnings conference call. My name is DeeDee. I'll be coordinating your call today. Following prepared remarks, we will open the call to your questions with instructions to be given at that time. I'll now hand the call over to Clay Crumbless with ICR.

Thank you, and welcome to the Vitacoco Company's third quarter 2023 earnings results conference call. Today's call is being recorded. With us are Mr. Mike Curbin, Executive Chairman, Martin Roper, Chief Executive Officer, and Corey Baker, Chief Financial Officer. By now, everyone should have access to the company's third quarter earnings release issued earlier today. This information is available on the investor relations section of the Vitacoco Company's website at investors.thevitacococompany.com. Also on the website, there is an accompanying presentation of our commercial and financial performance results. Certain comments made on this call include forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and beliefs concerning future events and are subject to several risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Please refer to today's press release and the filings with the SEC for a more detailed discussion of the risk factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. Also, during the call, we will use some non-GAAP financial measures as we describe business performance. The SEC filings, as well as the earnings press release and supplementary earnings presentation, provide reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures and are all available on our website as well. And with that, it's my pleasure to turn the call over to Mike Kerbin, our co-founder and executive chairman. Mike?

Thanks, Clay, and good morning, everyone. Thank you for joining us today to discuss our third quarter 2023 financial results and our current expectations for full year 2023 performance. I want to start by thanking all of our colleagues across the globe for their continued commitment to the Vitacoco Company. We recently received recognition as one of Fast Company's Brands That Matter for 2023. This is a testament to the incredible work by the entire team and their dedication to our mission of creating ethical, sustainable, better-for-you beverages that uplift our communities and do right by our planet. Before addressing our performance and expectations, I want to reiterate that we believe we have a strong strategic position enabled by our category leadership in coconut water, within the better for you functional beverage category, which in America's tract channels is in excess of $30 billion, according to Cercana. We continue to be very happy with our performance in 2023. We believe that our strategy of delivering coconut water growth through increased usage occasions is working, and I'm excited about the progress we're making with both our commercial initiatives and our marketing efforts. In the third quarter, we saw consolidated 11% net sales growth against prior year, bringing our year-to-date net sales growth to 15%. We remain very bullish on the coconut water category in the United States, where according to Circona, the category is posting one of the healthiest growth trends in beverages, outperforming major categories like energy, CSDs, sport drinks, and bottled water in dollar growth rates, while also being one of the few categories growing in volume and price. For the quarter, our Vitacoco Coconut Water brand is leading the coconut water category growth with U.S. retail dollar sales up 23%, with our market share improving to 51% versus the same period last year, while the category is growing 19%. We believe we're benefiting from the success of our multi-pack focus and our marketing initiatives that are supporting coconut water growth. Our brand has never been stronger. and our focus on consumer expansion via occasion-based initiatives has continued throughout the summer. In the quarter, we built on our extremely successful Roblox activation, the Coconut Grove, an immersive experience on Roblox where consumers can farm and harvest virtual coconuts. Over 26 million people visit us in the metaverse, driving over 94 million impressions to date and introducing a new generation of consumers to our brand, We also targeted the core hydration occasion this quarter at the U.S. Open, partnering with American tennis superstar Chris Eubanks and other players generating over 2.5 million targeted impressions at this prestigious event. Our summer cocktail initiative was very successful in continuing to cement Vitacoco's role as a mixer. We saw over 300 million impressions through PR and social as a result of our outstanding execution with several high-profile Hamptons locations. To capture those that maybe enjoyed too many cocktails, we amplified our hangover occasion over Labor Day with a broad influencer activation delivering over 14.6 million impressions of authentic content. Finally, we announced our partnership with Mexican-American award-winning singer, songwriter, actress, and activist Becky G. Becky's community-first approach aligns perfectly with our brand values. She has 116 million combined followers on social channels and Spotify and recently came off her first national Mi Casa, Tu Casa tour. We could not be more excited to partner with this incredible artist to grow our brand. Before handing the call to Martin, I'd like to provide an update on our private label business. As we indicated during our second quarter earnings call, we had expected to cease to supply a major customer on private label coconut water and private label coconut oil, with the transition potentially happening as early as the fourth quarter of 2023. We also indicated that this customer is important for our branded products, and we expressed our commitment to support a smooth transition. Since our last update, this customer has requested that we continue our partnership and we now expect to continue supplying a significant portion of their private label coconut water needs, a decision that we believe is reflective of their valuing our supply chain for its outstanding reliability and quality. This is a significant change to our prior expectations for the private label business with this key customer, and we are excited to continue this partnership and explore ways to further expand it over time. As further evidence that our private label supply chain is one of the best in the world, All of our private label revenue growth in the third quarter versus the same period last year came from accounts outside of this major customer, including the benefits of new retailer relationships around the globe. Finally, I'd like to reiterate my excitement for our accomplishments this year and our momentum for the balance of the year and into 2024. We're stepping up investments in our brands and in the long-term health of the business. We believe that we are uniquely positioned as one of the few fast-growing profitable beverage companies of our size with the talent and commercial capabilities to maintain growth, to execute on new opportunities, and to act as an acquirer of complementary beverage brands that could benefit significantly from our relationships, capabilities, and financial resources. And now, I'll turn the call over to our Chief Executive Officer, Martin Roper.