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spk02: Ladies and gentlemen, good morning and welcome to the Xebia PBC fourth quarter 2023 earnings conference 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 and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Reed Anderson, Managing Director, Investor Relations. Please go ahead.
spk11: Thank you, and welcome to Xebia's fourth quarter 2023 earnings conference call and webcast. On today's call are Amy Taylor, President and Chief Executive Officer, Girish Satya, Chief Financial Officer, and Florence Neubauer, SVP Finance and Business Transformations. By now, everyone should have access to the company's fourth quarter 2023 earnings press release and investor presentation made available this morning. This information is available on the investor relations section of Xebia's website at investors.xebia.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 1995. 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. 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. 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 accompany 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.xevia.com. And now I'd like to turn the call over to Amy Taylor.
spk06: Thanks, Reed, and good morning, everyone. Welcome to the Q4 2023 earnings call for Xevia PBC. Before I walk us through fourth quarter results, I'd like to introduce our new Chief Financial Officer, Girish Satya. Girish is a 20-year veteran of high-growth consumer businesses and brings a varied skill set across finance, operations, technology, and strategic planning. His track record of success in driving growth and profitability will make him an excellent partner for me and for our leadership team and our board as we chart the course to the future. I'm also thrilled that Florence Neubauer, who has served as our interim CFO, will continue in a key leadership role at Xevia, now as SVP Finance and Business Transformation. The entire Xevia organization and the board joined me in thanking her for a remarkable contribution overall, but especially in these last several months. And now on to cover fourth quarter results and to provide an update on foundational initiatives that set us up for accelerating growth during exciting times for Better For You Beverages. I'm pleased to announce that Xevia returned to volume growth and net sales growth in the fourth quarter as the remediation of customer fulfillment issues in the midst of a supply chain transformation was implemented on time and as the brand refresh came to life on shelf. I'm grateful for the remarkable effort put forth from veteran and new Xevia team members in 2023, and I'm proud of their well-executed initiatives, not only to restore service levels, but also to ensure supply chain scalability for the future. Zevia's business has growing tailwinds as consumers across demographics continue to move away from sugar and increasingly toward clean label products. Diet and zero-calorie carbonated soft drinks continue to lead the growth in the broader soda category, and natural sodas outpace even further. Zevia is the number one consumer choice in natural soda. Consumer spending on the brand is up per household and per trip, and over the past 18 months, we have increased price with strong consumer acceptance. This demonstrates brand strength and supports unit economics and a strong gross margin, which enable our ability to invest in growth going forward. Our brand refresh improves on-shelf visibility and continues to position Zevia as the beacon for this growing category within CSD. Zevia is the natural soda brand with a strong foundation at scale at Center Store across natural and conventional groceries. with a loyal consumer base. And now, we have the opportunity to expand our base through a launch into immediate consumption and cold singles distribution in new and existing channels. CJA's focus remains taking our better-for-you beverages mainstream. Our competitive advantages include great taste, limitless enjoyment across usage occasions, our zero sugar clean label, and our affordability relative to other better-for-you beverages. Our mission focuses on global health for people on the planet, and in Q4, we removed another 2.7 thousand metric tons of sugar from consumers' diets, never having sold a plastic bottle. Vivia is more affordable than 64% of non-alcoholic beverages in North America, and more accessible than recent functional entrants in adjacent carbonated beverage categories. I'll share a few important shopper metrics. Vivia households increased their annual brand spend by 9%, and their spend per trip by 7% over the past 12 months as of the fourth quarter. We are a home stocking brand and are relevant across all youth educations and day parks. Devious shoppers spend 39% more on beverages versus total non-alcoholic beverage shoppers and make 32% more trips to stores to purchase beverages. Devious shoppers continue to differentiate themselves even further from average beverage shoppers year over year and versus prior periods. as they continue to spend more on the brand and overall. I'll provide a few channel and category insights before moving on to address some of our new initiatives here at the start of the year. Our growth for the quarter was led by continued exciting progress at the world's largest retailer, who doubled Vivia's space in 2023, as mentioned last quarter, and is testing the brand in the mainstream carbonated soft drink aisle. The test continues to outperform expectations. Zevia Soda is up 94% in same-store sales. This evolution is one of the few examples of our opportunity to lead the exciting growth that mainstream, better-for-you soda represents. Similarly, one of the three national drug chains took Zevia to the mainstream CSD aisle across 100% of its stores in Q4, posting double-digit growth. Zevia Soda delivered growth in the food channel in the quarter, outpacing the category in food here at the start of the year. Our newest flavors, Creamy Root Beer and Vanilla Cola, continue as number one and number two in Zevia dollar growth across the quarter, and both have ample room to expand distribution further, as we expect their performance to support increased brand presence in upcoming spring resets at retail. Each new soda item we introduce into our portfolio performs better than the last. And in e-commerce, Zevia returned to growth in the quarter. Our top e-commerce customer posted 30% growth in December, indicative of supply chain recovery and continued demand in one of our strongest channels. I'll provide some insights on Q1. We are experiencing a delay in the recovery of on-shelf stock levels at retail, a lag effect of last year's customer fulfillment issues amid supply chain transition, and thus some initial volume softness. We expect a recovery in Xevious points of distribution, and the return to normal promotional support at retail following spring resets, and thus a return to growth through spring and summer. Media turns the corner into 2024 with a sharp brand refresh in market, a stable and scalable supply chain, momentum in critical new market segments, and strong pricing. These factors underscore brand strength and bolster gross margins, indicating the ability to invest in accelerating growth going forward. On that foundation, we are focused on the following initiatives. Firstly, we are prepared to launch a regional approach to direct store delivery or DSD, which we believe will present an excellent case study of what DSD can do for our well-established high potential brand in our current distribution footprint and in yet unpenetrated market segments. Secondly, we have gained distribution in a limited number of regional convenience chains in the U.S. and in Canada, to test and learn the right assortment, merchandising, price points, and service levels for Zevia to be successful in this critical immediate consumption trial-driving channel. Thirdly, we have stabilized and strengthened our supply chain in the following manner. We have shifted contract manufacturers' ownership over raw materials such that we manage only finished goods, and we have outsourced freight to an excellent partner who will help reduce costs and deliver efficiency as we ready Zevia to scale. And finally, we're introducing marketing beyond retail now that the brand refresh is fully in market, ramping up after spring reset season with a nationwide focus on the spring and summer beverage season. In short, it is critical we invest in consumer marketing outside the store and in route to market to drive growth in 2024 and beyond with a focus on the long-term opportunity. Following the broader category, we've also announced a price increase effective May 1st, between 4.5% and 5% across selected packages as Zevia continues to demonstrate brand strength and as we maintain the same relative price position as premium to mainstream soda, but materially more accessible and affordable than other natural and better-for-you beverages on a unit and per ounce basis. I'll turn it over to Florence for additional color on our financial results. and I'll come back to speak about our broader opportunity, especially in light of the addition of an experienced strategic CFO to our leadership team.
spk09: Good morning, and thanks for joining the call today. I will now provide an overview of our fourth quarter and four-year financial results, discuss guidance, and then pass it back to Amy for final remarks. In the fourth quarter of 2023, we delivered net sales of $37.8 million, up 6.9% versus same time prior year. We saw positive impacts from a price increase mid-year, which deliver a sizable impact of $1.5 million, as well as an increase in volumes of 3.7% or $0.9 million, reflecting a return to volume growth after previous quarters were impacted by short-term supply chain fulfillment challenges. Growth margin was 40.7%, down 3.6 percentage points versus the same quarter a year ago. The decrease was driven by the decision to accelerate our supply chain transition, which included the write-off of some legacy branded materials, discontinuation of long-tail SKUs as we focus on our highest potential products, and the write-off of some raw materials as we transition our supply chain to a new model. All of these temporary inventory losses had a four percentage point impact to the quarter. Selling and marketing expenses increased by 38.1% to $13.8 million, entirely due to freight and warehouse expenses. Given our supply chain logistic challenges, which are now remediated, freight to customers and freight transfer costs were temporarily elevated as expected, but translated into a lower impact compared to the previous quarter. Our increased inventory level also impacted our warehouse's cost as we continue to manage our inventory back to optimal levels. G&A expenses were $8.4 million, or 22.2% of net sales, which is essentially flat compared to $8.5 million, or 24.1% of net sales versus same time prior year. Stock-based compensation, a non-cash expense, was $1.7 million as compared to $3.1 million same period in the prior year. Net loss was $9.2 million compared to a net loss of $6.2 million last year, a decline of $3 million, or 48.3%, primarily driven by the supply chain logistics challenges and inventory losses. Loss per share was $0.14 per diluted share to Xelia's Class A common shareholders, compared to $0.09 same time prior year. Adjusted EBITDA loss was $6.8 million compared to an adjusted EBITDA loss of $2.9 million same time prior year due to continued expenses from short-term supply chain recovery efforts through the back half of the year as expected. More than half of the losses are attributed to this recovery effort, which was better mitigated than in the previous quarter and stabilized going forward. Our balance sheet remains strong with $32 million in cash and cash equivalents and no outstanding debt as of the end of the fourth quarter of 2023, as well as an unused credit line of $20 million. Full year results. For full year 2023, Zivia achieved net sales of $166.4 million, an increase of 2% versus 2022. Our effective price increase during the year resulted in 11.5 million higher net sales, which mitigated the volume loss from shortened supply chain disruptions. We realized healthy growth margins of 44.9% versus 42.9% in 2022, indicating strength in our business model, which allows us to invest in future growth. Net losses were 28.3 million as compared to net losses of 47.6 million in 2022. An adjusted EBITDA loss was 19 million for the year compared to an adjusted EBITDA losses of 19.6 million for the full year of 2022. Turning to guidance. The company expects net sales for the first quarter of 2024 to be in the range of 38 million to 40 million. reflecting a delay in the recovery of on-shelf stock level and display activity at retail at the start of the year. Given the current transition in financial leadership and as we look ahead to spring reset, along with our overall route to market evolution, we are delaying providing full-year guidance until our Q1 earnings call under Girish's leadership. Turning the call back to Amy.
spk06: Thank you, Florence. Before we wrap, I'd like to introduce Girish and have him speak about his view in the Zevia brand and the opportunity ahead here in his first full week.
spk00: Thanks, Amy, for the kind words. I'm really excited to join the Zevia team. Zevia's strong consumer value proposition and leading brand position are incredibly well positioned to take advantage of the accelerating tailwinds in the natural soda category. I look forward to partnering with you and the rest of the executive team to help unlock the brand's true potential and accelerate this next phase of growth. Lastly, I'd like to thank Laurence for her efforts over the last few months, and I look forward to partnering with her in her new role.
spk06: Thanks, Girish, and welcome. We are excited to have you join, and we look forward to the impact you will make here at Zedia. These are exciting times and better for you beverages. Vivia is the number one consumer choice in natural soda, and Vivia is accelerating initiatives to expand into new market segments with a category captain's mindset in a growing portion of a massive category. Our business can deliver mid-40s gross margins, which allow us to invest in growth. We launched marketing out of store this spring and summer, and we are evolving our route to market with an advantage in taste across usage occasions, With proven broad distribution and in relative affordability, we aimed to step up as the beacon brand in the category that we pioneered. We continue to have strong demand, and now we have new scalability in our supply chain, pricing upside, and a step change organizational capability amid a rising tide of excitement around natural soda and a seismic consumer shift away from sugar. We've spent a few years building a strong foundation, and this business is now ready to scale. We are bullish on the years ahead. Thank you for your time this morning, and we are prepared to take your questions.
spk07: Operator?
spk02: Thank you. Ladies and gentlemen, we will now be conducting a question and answer session. If you would like to ask a question, please press star and 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and 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. Ladies and gentlemen, we will wait for a moment while we poll for questions. Our first question is from Bonnie Herzog with Goldman Sachs. Please go ahead.
spk01: Hi, good morning. This is Ethan Huntley on for Bonnie. Thanks for taking our questions. I guess my first one here would be sort of your thoughts on not providing full-year guidance. I recognize you're going to provide it on Q1. And then also sort of the Q1 guidance being a bit softer than expected. I guess we're just trying to get any color you can provide on sort of full-year sales, recognizing things should return to growth in the spring and summer. But just maybe any sort of qualitative commentary you can provide on how we should Should we be thinking about net sales growth for the full year here?
spk06: Sure. Thanks, Ethan. You're right. We expect a return to growth in the spring and summer, given our healthy velocities. As an example, we're exceeding the category here at the start of the year versus CSD in the food channel, which is obviously massive for us and reflective of our potential and collectively our performance in mainstream channels. And as we return to full presence on shelf, we can also return to more competitive promotional levels, promotional investments in display. So add that to the impact of our brand refresh, our fast-growing innovation, and forthcoming investments in marketing, we look to the spring recess as being a trigger to the return to growth at more expected levels. In short, our Q1 was softer in shipments than we expected. as we're getting back to health on shelf at brick and mortar retailers, ensuring that the retailer merchandising is actually reflective of the space dedicated to ZVS through planograms. So that progression has been a little slower than expected in Q1. We've invested in incremental merchandising to top accounts to speed recovery there, and the spring reset should really be a trigger going forward. In terms of guidance, We're really excited to have Girish join us as our CFO, and he's had now four days on the job. We want to give him just a little more time than that to get a point of view on full year. And so we come into the year bullish on full year growth with strong growth margins, which indicates our ability to invest, be it marketing or route to market, and a new CFO at the helm, so more to come and greater clarity on the full year after the Q1 earnings call.
spk01: Got it. That's helpful. And then maybe just as a follow-up, maybe sticking with gross margins, we're under a bit of pressure here in Q4, as you mentioned. Any sort of color on how we should be thinking about gross margins for the year? Are any sort of headwinds related to the inventory losses and your supply chain transitions, are those sort of all behind you at the moment, or might that bleed into Q1 and maybe Should gross margins expand this year from an improved cost environment? Any sort of guardrails you can provide on gross margins for the year would be helpful. Thank you.
spk06: Yeah, so I mentioned before that we have the ability to deliver gross margins in the mid-40s, and that was reflected in the first three quarters of 2023. Obviously, Q4 was the exception, given the choice to invest in some of the inventory write-offs that really helped us start the year 2024 clean from the standpoint of legacy branded materials or raw materials through our supply chain transition. So let's call Q4 the anomaly. We have an outlook with the ability to deliver mid-40s gross margins, but we will also take the opportunity to invest. You know we don't provide guidance on gross margin, but we expect a lagging impact of inventory into Q1 on some of our costs. But generally speaking, expect a return to the strong growth margins that we've had historically.
spk01: Got it. Helpful. Thank you very much for taking our questions.
spk02: Thank you. Thank you. Our next question is from Andrew Stolzlik with BMO Capital Markets. Please go ahead.
spk12: Hey, good morning. Thanks for taking the questions. My first one, I guess, is just about the visibility that you have to get it to the restocking timeline with the delays that you're seeing right now. And maybe just more broadly from a volume perspective and a distributions gain perspective, can you talk about the visibility you have to return to that growth in the spring and summer and kind of some of the underpinnings of that bullishness?
spk06: Sure. So we saw the softness coming kind of mid quarter this first quarter here after a first round of scan data in late January and with January shipments. And we can share that that is already improving. I mentioned one bullet point as to reasons to believe a faster recovery being the fact that we are leading CSD growth in the food channel. And while our dynamics vary channel by channel, Some of the biggest ones, including food and strong e-commerce business, et cetera, are reflective of demand, but also a faster clip to recovery. Spring resets are obviously a moment in time, varying between February, March, and April, depending on the retailer. And we know that some of the degradation of our presence on shelf is really just in-store merchandising rather than true dedication of space to Zevia. So what we've done to get there faster is invested in some incremental merchandising across top accounts, especially in the grocery or food channel to help to sort of bridge to the time of spring resets. With fast-growing innovation like Creamy Root Beer and Vanilla Cola, we have a good story going into resets to ensure that we gain back not only the space we had dedicated prior, but that we make some strategic gains in presence on shelf as well. So combine this with strong velocity and for the first time marketing out of store now that we have the brand refreshed fully in market, in stocks back on shelf, a stable supply chain, and those are some of the accelerators of velocity and therefore net sales that we expect going forward.
spk12: Okay, that's helpful. Thank you. And then, you know, maybe I'll take the crack on the cost side as well. And I guess you talked about a couple different pieces. some benefits on the supply chain side that you have in place now, but then you've got, you know, the route to market stuff and the marketing pieces as well. Is there any way to kind of frame the various pieces in terms of pluses and minuses through the year on an annual basis? I'm just trying to get a sense for how to handicap each of the various pieces as that kind of comes into place. Thank you.
spk06: Yeah, let me ask Florence to speak to that through the lens of 2023, and then we'll do our best to give you a look forward as well.
spk08: Yeah, so as you remember, Q3 was heavily impacted by selling costs, right? We still have some lingering selling costs in Q4, but as far as supply chain remediation, we are definitely now in a better position for 2024 on the selling cost side. As far as route to market, Amy, that's more of a going forward? Sure.
spk06: So with route to market, we're excited that, you know, we talked about before what would it require for Xevia to be ready to go DSD. And we've talked about our merchandising capabilities and different merchandising setups in store for our singles lineup. We've talked about unit economics and therefore price. We've talked about the brand refresh being complete. And then, of course, now a stable supply chain. So, with all those factors in place, we're ready to launch DSD on a regional basis and we'll have some specific news on that forthcoming. And with that, we'll obviously be investing on the foundation of strong gross margins to accelerate that launch. So, I wouldn't anticipate the noise in our selling costs in 2024 to the same degree that we saw them in 2023 instead. We have a solid gross margin that allows to invest in DSD and then ultimately as well in marketing to accelerate both expansion and growth. Does that answer your question, Andrew?
spk12: Yeah, I mean, you know, I guess I'm trying to get a sense of magnitudes of the various pieces, but, you know, also understand that you probably want to hold off on some of that until the next call. But the call is helpful. Thank you.
spk06: Yeah, both qualitatively and numerically as we provide a full year outlook in net sales with our new CFO in seed, you know, with 90 days under the belt, then we can also provide color on structure and margins at that time.
spk07: Great. Perfect. Thank you.
spk02: Thank you. Our next question is from Sarang Vora with Telsey Advisory Group. Please go ahead.
spk10: Thank you. I'll continue the follow-up on the prior question. Can you help us understand the economics of the DSD model compared to your model? Just at a high level, how does it impact your gross margin versus the cost? And I know you will share details ahead, but any thought on as you expand, do you expand with a customer nationally? Do you go region by region, product by product? Just any early thoughts you can share on the the expansion of DSD? Sure.
spk06: Absolutely. Absolutely. So first of all, this will be a rolling launch. So we will be nowhere close to nationally distributed in DSD anytime soon. We have a regional rollout, which will give us great intel as to the case study for DSD support for this brand, the impact that it will make. So to answer your last question first, This will be regional based on geography, not nationally based on customer. And that allows us to gain the full benefit of DSD across channel, which brings me to my next point. How does DSD impact the business as well as the P&L? The way it impacts the business is in our existing footprint, it step changes our ability to compete in store through merchandising. That means fewer out-of-stocks. That means more displays. That means the ability to commit to certain programs that some retailers hold for only DSD brands, whether that be incremental cold availability then merchandised by your DSD provider rather than retail staff, or whether that be incremental coolers and permanency around the store. So those are some examples of how DSD helps you in your existing footprint. Now for Xebia, we also have upside in other channels. And the most important example of that is convenience. And convenience is best serviced by a DSD model with frequency of visits and merchandising capabilities on a regular basis in a fast turn environment. This is a great place for us to drive trial and remember that we have a really healthy, strong center store business as a multi-back and home stocking brand. And this is now our upside to drive trial and significantly step change the size of our consumer base. So how does one pull off DSD? There is a gross margin investment. with a DSD operator. And while I can't detail that at this time, what we needed to do as a brand was be ready, both from an awareness and pull perspective, but also from a unit economic lens, having strong enough pricing to turn around and go DSD and be able to sustain our path to profitability and make sure that that model benefits us, the DSD operator, and the retailer. And my final comment on this is one advantage that we have and one of the reasons why there's a lot of interest in Xevia among DSD operators is that our healthy established grocery business is something they can pick up on and make an impact for their business and for ours immediately and then also bring new channels to bear. And that level of development is unusual at first blush for a new DSD and supplier partnership. So, Sarang, hopefully that steps you through how we expect the impact to play out by channel. We focus first on geography, and we will make investments through a gross margin lens to launch that effort, albeit quite small, out of the gates, given the regional launch model.
spk10: Thanks for the color. And, you know, I have one big picture question. Can you help us understand how the competitive landscape is right now? You know, for Zevia, I mean, there were some losses on the volume and shelf side last year. You know, you are trying to get back some of that shelf space. You know, you're also raising prices in conjunction with it. So you're trying to raise volume, but you're also raising prices. I'm just trying to, and you're competing with a lot of brands who are also expanding, you know, whether it's tea or it's cola. Yeah. natural zero calories. So I'm just trying to understand like the competitive landscape as you see today and how do you see that evolving in 24 hours?
spk06: Sure. It's a very dynamic environment right now in carbonated soft drinks. The driver of growth is diet and zero as has been the case over the last few years. And then what's accelerating even faster is the subset of the category we refer to as natural soda. And of course, that's the space where we are the pioneer and have the largest consumer base, have sold by far the most cans, so we are the number one consumer choice as it relates to natural soda. And what's been exciting is that now there's a number of new brands in adjacent functional spaces making significant investments to seed with the consumer the idea that soda can be better for you. And as that idea is seeded with the consumer and they come to the shelf, they find, when properly merchandised, Zevia sitting next to other fast-growing competitors. And Zevia is advantaged on taste, advantaged on relevance across usage occasions. We call it limitless enjoyment versus being limited to minimal consumption based on a functional promise, but also on price. And so we're more affordable for a better-for-you product is more affordable across households and an easier choice for both impulse purchase as well as home stocking. And so with that positioning, we're excited to see a rising tide of focus on better-for-you sodas, and we continue to focus on expansion to defend our number one position in that space from a consumer perspective.
spk02: That's great. Thank you.
spk07: Thanks, Ron.
spk02: Thank you. Our next question is from the line of Jim Salera with Stephens. Please go ahead.
spk03: Hi. Good morning, guys. I wanted to maybe start off by maybe just closing the loop on the gross margin. For the fourth quarter, that impact is primarily just flushing the remainder of the old packaging out of the system. Is that the right way to think about that?
spk06: Yeah, it is that plus. some raw materials write off as we transition our supply chain, our contract manufacturers to manage raw materials from this point forward, while we as suppliers manage only the finished goods. So it is those two factors together.
spk03: Okay. And I think in Florence's prepared remarks, she said it was like a four percentage point impact. So if we back that out, that's 4Q gross margins are just under 45. Is that kind of a fair number to think about on a go-forward basis, maybe a little bit of headwind from the DSD? But moving forward, that's kind of in the ballpark of what we should think about.
spk09: Yes, absolutely, Jim. You have it.
spk03: Okay, great. And then if I can maybe drill down on some of the C-Store opportunity, can you just give some color around What skews you guys have in the C-Stores? Are there any branded fridges? And if possible, if you could kind of size up maybe store counts or give us a range of what you think that opportunity is right now.
spk06: Jim, I can't size it up quite yet. More color on that at the next quarter. But I can share with you that in each instance in the limited number of regional players with whom we are launching in the coming months, we're featuring ZVS Soda. And then a few instances also energy drink and in one instance tea as well. We're testing different merchandising setups of the portfolio in the way that I just described. And then in one operator we will be featuring branded barrels, so ice barrels near the register to drive impulse purchase. So each of these scenarios will give us different data sets to test everything from price point to range to merchandising strategies in that footprint.
spk03: Okay, great. And should we think about, you know, the C-Store opportunity as being kind of the full complement of Xevia products? Or do you feel that there's a certain piece of the portfolio that you lead with and then, you know, starts with soda and then teas come down the road?
spk07: Or is it, do you have a thought of what goes in first? Ladies and gentlemen, we have lost the line of management.
spk02: Please stay connected.
spk07: This is unbelievable.
spk02: Ladies and gentlemen, we have the management connected with us. Jim, you can proceed with your question.
spk05: Jim, I'm so sorry. We're having some technical difficulties. Can you repeat your question and we'll pick right back up?
spk03: Yeah, no problem. I was just asking, is there a particular skew that you lead with, whether it's
spk06: traditional soda offering like citrus offering what what do you lead with into C stores and then what does that look like as you expand the portfolio you offer yeah so see that the soda is by far our number one priority and so featuring our heroes use our strongest flavors in the in the soda line is our top priority but we all know that energy drinks is obviously a very relevant category in within energy, within convenience as well. So, in a couple instances, we're testing energy drapes across four key flavors. Does that answer your question?
spk07: Yeah. Yeah, that's great. Thanks, guys. I'll hop back in. Thank you.
spk02: Ladies and gentlemen, as there are no further questions, I will now hand the conference over to Amy Taylor for her closing comments. Amy?
spk06: Yeah, thanks. thank you and thanks for dialing in this morning everyone apologies for the delay in communication given our technical difficulties you know we are excited to continue to accelerate top line growth for the full year 2024 through a mix of volume and price we talked about a price increase effective may 1st we've had strong consumer acceptance of that we continue to drive gains and household penetration and execute the key initiative we discussed this morning whether that be investing in marketing or step changing our route to market so with this route to market evolution an initial expansion into convenience, and for the first time, out-of-store marketing. We head into spring and summer beverage season very bullish. We have strong growth margins indicative of our ability to invest, and we're excited to have Girish and Seat as our new CFO. So we're excited about the future, and we appreciate your time this morning.
spk02: Thank you. The conference of CBR has now concluded. Thank you for your participation. You may now disconnect your lines.
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