COCO - Earnings call transcript Q1 2024 | The Vita Coco Company, Inc.

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Operator

Hello, and welcome to the Vita Coco Company's First Quarter 2024 Earnings Conference Call. My name is Stephen. 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'd now like to hand the call over to John Mills with ICR.

John Mills

to Conference Coco Call. welcome XXXX First and Results Earnings you, the Company Vita Quarter Thank Today's is call being recorded. With us are Mr. Chairman, Financial Mike Corey Executive Martin Executive Chief Kirban, Officer; Baker, Chief Officer. Roper, and access By now, release earlier today. the fourth quarter issued to everyone earnings Company's have should website is Company's investors.thevitacococompany.com. information Vita the available Relations on section This The of Investor Coco at which the Also website, there this our Harbor performance financial and made the on Litigation is on of Private to the Reform XXXX. results.Certain including call, are provisions of statements, Act forward-looking commercial Safe an accompanying subject comments Securities presentation of These management's to described forward-looking statements. concerning several beliefs are differ cause forward-looking subject uncertainties in future these and to statements those could that based current expectations from risks are actual on events and results and materially today's differ other that we expressed risk from the use the Please filings describe discussion more we measures call, to performance. release factors or the some a today.Also, in refer forward-looking and non-GAAP will results as with materially detailed financial actual to statements for SEC made any during of the implied business those could cause press and the The the over most filings website financial reconciliations supplementary provide earnings to Chairman. as call Kirban, of with that, available Executive well.And Co-Founder release as pleasure the measures well turn presentation to press my SEC earnings the and GAAP to directly and the comparable measures are non-GAAP as on our is it Mike

Michael Kirban

our to the Company our for communities performance XXXX. financial to to and and for and by plans John, I and our by Thanks, creating our planet. everyone. morning, uplift XXXX right for our all better-for-you you of start their incredible and commitment of Vita performance to us and our good colleagues mission sustainable results that want expectations taking improved discuss ethical, across joining Thank first quarter for do today beverages the commercial globe Coco our continued

working are relationships our as results Our as strong first that and ever. are customer that quarter strategies reflect our

initiatives markets. to are the X% quarter, In priorities in Our the Vita Coco major driving Vita brand grew share U.S. category in growth healthy the U.K., of our in in and the grow order category in Circana, grew retail our brand scans the first Coco of and to according the the the XX%. coconut visible

label In well play branded water. coconut validates to addition strategy we're to label strong volume, growth, private strong coconut dominant space value which private in as experiencing premium the in growth in water allows retail as and position our our us in

in opportunistic more comment branded XXXX, timing with quarter and activity with first scans fully. net promotions cycling due gap expectations promotional were line the our of which Martin in the sales Our shipments of to of to will

for grow offsetting key priorities of results. high mid- our aim transition continuing to coconut same we in a growth. with Our as in private We the communicated providing coconut expected remain line business relationship to year-end single the label out with volume water for those XXXX strong of the oil a our water headwind, category growth digits

a also hope in be which for as larger, in We channel business Coco today.We City in this penetration over it allow to in hard team, historically streets, very was how us which investor U.S. I'm sample have and area channel. We've Vita the Coco how the to and not deliver greater we our Multipacks, farmers is, experienced and perform New an Our Juice business Investor posted us. recently to Coco and it commercial invested initiatives This Organic approach. reminded Relations fun about our only happy but continued our deck, seen that I'm home and with the our around scans underpenetrated service growing to long to Lift new well to in in market. in Power is areas this of highlighted excited Vita hustling which will we food York website how Vita we in Circana are back in making to away-from-home, it core been to promote progress successful launched more of assembled our term. recently able is local see roots it we're bodegas my our grow is, the and have

old the New certainly fun Our this is York building team having fashion brand, way.

The to recently what that it a with exclusive too we're Velocity Treats, Coco a launched early of the be, although refreshing brand is and scan further Vita is results. early launch go. delicious We very will Target, very beverage initially and also is tell our can excited exploration where to

the these water category. our long-term growth the X algorithm confidence of to give our XXXX long-term results expected material results, date our of sales building are meet coconut should be percentages, to to that health approach While not the initiatives branded help on innovation us us mid-teens net for

the Coco will we focused and business maintaining strong early we efforts and customers drawn are U.K., in in released sustainability #X really Foundation there support category levels top international in-market from the regions brand. these which the Benelux of Coco to and Coco, Europe, terrific by impact Community with Our job performance, intend to in one U.S. business categories, a further Vita our strong of increase be and beverage our areas. were does both to our laying expand Water to Asia fastest-growing week, Vita where potentially I'm the and remains years growth, believe social weaker launching just the we with we which third the of suppliers by we momentum Germany after performance Vita are stages XX is what report, we the announced from is We and of Europe, remains help Coconut development. in on the impact offset of as that still in U.K., category of healthy out led perspective. down. the its solicit the inventory able to and in On particularly shipments gain investment last the are share our creation and our happy

the are populations growth. well have and share these addition private profile.I positioned category through that combination the believe in our our that further to branded Martin that our now stronger we and we in to label call Officer, been a We consumer I'll in a growth, Roper. opportunities the over markets match lead position we've our in and accelerate are Chief developed to grow grow to of ever to less see than Executive And turn that markets

Martin Roper

good and morning, Thanks, Mike, everyone.

on We of X% with pleased sales strong quarter by growth the of water brand was growth Vita Coconut promotional top quarter first Water Coco to of the driven This benefited Coco XXXX. growth. from achieved We Vita first growth, amounts. net up and sales start our some which in XXXX, water label coconut both in opportunistic XX% very private coconut in are achieved XXXX, reported

line our when year Importantly, laid sales full with out our expectations results the guidance. net in we were

margins gross oil from lower the relative significantly branded years. on first promotional Our to margins importance benefiting exceptional, decline benefited business, lower were reduced margins. and quarter private of Gross in prior from transportation was label where pricing the traditionally also cadence effects which the operated costs

ahead net optimum forecast Africa, private servicing delayed label in been slightly retailer demand systems service effects performance times and levels lanes. product was these around challenging. than our As strong expected, going hampered less lower transit arrivals, water coconut of for Both have as lanes than and increased resulted has sales profit Ocean inventory

until this to normal to to is, time But last shifting than are at demand coconut price water to not year driven more partially occur inventory believe, within ocean underlying provided already levels. and we cost higher Gulf. our rebuild strong coconut in chain, with of appear of From the with market These shipments mainly water rates elevated costs to we guidance. expectations, our length the freight but The we started are seen our working be rates diversion slightly now in are private ahead year, to availability. and decline. We by line have seeing finished private this this the larger channels that we in supply later year. of the our XXXX this The will a are assumptions by shipping early remain label a but penetration today away of in due slow ocean levels, peaked branded from the side, goods label have given gaps in consumers seeing

commitments Our negotiate Freight on we current is routes on guarantee longer-term rates to limited to with where contracts need monthly capacity lanes. approach certain to to most spot Ocean

into enter agreements to ocean offers. prepared competitive longer-term are see we if freight We

potential is and XXXX additional our over our about With and new Baker, of Chief extensions and of the in Financial existing in We as discussions us. are growth will on into the capacity that have remain Corey entered growing we contracts front for our to turn long-term Officer. plans needs positive contracts to supply support that, I call supply

Corey Baker

our will full I results. discuss you good will on drivers Martin, then everyone. and Thanks, financial for provide with outlook first some XXXX XXXX additional the now the improved quarter morning, details the fiscal I of year.

million million, X% label net X% and to driving by sales Americas, oil. price X% was Coco of net changes the quarter $XXX $X X%. basis, impact volume of growth X% net Water Vita On Coconut started while to private million of label million, the Vita by XXXX, negative private growth year-over-year mix X%. of increased increased For decline, the saw private within transition increased to in have decline X% X% offset Vita label net private a we benefit, and of offset volume, while X% Coco which as $XX to Coconut net driven or segment $XX year-to-date sales sales Coco price/mix partially first a by Water label sales the see by of decreased Coconut Water

channels inventory in quarter scan trends and Coco time key healthy, the very water activity promotional believe relative absence some levels remain the to Our the of during American in untracked timing decrease and quarter XXXX same Vita shipments coconut period, in reflect DSD of retailers. our a to we shipments

basis $XX from within a our Coco sales which On basis, from at in costs. first water period. XX% global very XX% XX%, Cocoa million, profit of retailers. decreased resulted with and continues approximately in X,XXX label grew Europe branded Private to quarterly versus growth strong an XXXX. label the consolidated in margins transportation Asia. increases gross mix effects These reported business segment benefit offset million products quarter, net volume On softness pricing, improvement European by Vita up International growth gross large the the gains For new the were XX%, was was of QX up basis, revenue where quarter X%, year a prior XXXX, percentage private over were in points partially strong $XX

operating to on expenses. Moving

XXXX diluted for quarter costs per to profit, the unrealized income expenses. from $X $X.XX a the First $XX Net XXXX benefited compared prior or million was tax $XX increased year. FX people lower primarily share share partially SG&A to and attributable year-on-year for Net X% reflecting gross impact $X.XX SG&A quarter diluted shareholders increased increased million to for million, first per offset expense. by derivatives increased higher the income year-on-year costs, from or quarter

quarter was for year. was Our first the flat prior to effective the rate which tax XX%, XXXX

gross reconciled discussed. $X First the EBITDA, release, XXXX. net of was up which is and The XX% from increase non-GAAP primarily sales, X.X% was quarter of in previously in or net or $XX profit XXXX million measure, our adjusted sales press due our to improvements million defined

Turning flow. to balance sheet our and cash

by decrease $XX the As treasury we cash driven of of purchase $XX under December debt the capital seasonality our facility $X expect position expected $XXX receivable on by category Inventory full our increase best The year decrease inventory the net performance and due the on full as our in Based EBITDA vendor health million, as in million well cash markets. and working of costs. now our million capital increased $X expenses, $X to year-to-date of between raising of by both chain of have in of to $XX adjusted accounts in are to partially Working Coco we sales XX%, confidence guidance million current of million revolving and shares net of Vita offset XX, our $XXX brand, marketplace to due an million accrued payments. a to resulted was $XXX XX% reflects in increase supply income. global the margin total debt strong Martin million and net the compared our of no for with assumptions to the We delivering accounts in gross XX, credit payable guidance. the $XX million are as million of and customer million. higher cash and of XXXX, our million, year was and The delays, no discussed $XXX hand of the and as and XXXX. inventory earlier March transit had our

the confident side. uncertainty in we are providing range to cost we are reflect strength underlying on our While of a EBITDA transportation on the some wider business,

will our supply which which our QX. us to ocean and our We guidance balance in product allow freight absorbing actively our manage the activity P&L while margin will to promotional impacting costs, higher deliver gross will begin pricing,

year, if remain opportunities in term. for balance emerge, the back may we see disciplined long with continue I'd full investment and fund share our any the SG&A that his year-on-year. improvements M&A business spending And Martin anticipate to expect healthy We closing spending cash than us Ocean to productive remarks. for quicker increasing strengthen will our growth. support year through business XXXX buyback potential to our call flat We in Freight turn to allowing slightly opportunities with We to for see further we to that, like long-term throughout activity if the or SG&A the adjust invest expected SG&A

Martin Roper

Thank platform of I'd To brand. our of to and better to Coco the Corey. our potential the beverage Vita in Vita confidence like the you, reiterate long-term company, our build ability close, Coco a strength

the to excited our are ability We growth. current drive in and confident to initiatives our key environment navigate about

our balance prepared and are remarks, and compete your joining brands for us and Thank domestically today, well a for the we That you Vita Coco and and solid sheet, concludes you strong will thank we first to questions. in have positioned We interest internationally. quarter now your Company. take

Operator

Bonnie Instructions] Thank Herzog of Goldman comes you. Our Sachs. the question first line [Operator of from

Bonnie Herzog

question I your guidance. on had a

the the on Vita in You your just impacts highlighted water. some quarter tiny Coco coconut

in I all think So hopefully or then mentioned I these what of wanted water? category with unwind above. year imply QX. growing should the Vita for guess I your impacts in for to understand guidance, first full that if does Coco you line And you're

So year? growth coconut water for does imply the guidance branded for single-digit your your high

Martin Roper

grow I think high and Yes, digits, would expect hope suddenly question. great category closely. Bonnie, Yes, the to single very that we we brand the category match would growth

branded timing in to down to sales, year largely we and retailers shipments are some related shipments and bit U.S. inventory to last year. to difficult took would and promotional comparisons We little this typically the just inventory in to And there year First quarter, on to during had opportunistic. space, where had build. last believe was direct DSD bit that probably reoccur -- there and where a then also those we then little it and that relate activity retailer a it, of a did the we're environment to, flat was quarter not shipment

shipment versus the growth growth, our very remains of the healthy. view, which So and sort on in number scan a that couple difficult comparisons of explains branded

Bonnie Herzog

Right.

clarify, good. that sounds to just so again So

that are see starting a month then guess, already you nowhere, improve, So QX. I into to

feeling year full see shipments moving seeing you're less to scanner in the forward. more kind or of about what So match good and the starting data you're

Martin Roper

What guidance, would it's knowledge. say I we've update based year-to-date in Yes. our the on is our of described how

Bonnie Herzog

strong very course, to from margins. the expected just of then by And right. et All dragged a question QX Obviously, is in freight, recent on cetera. ocean gross me mentioned you increases of And some maybe second in Okay. QX. be

even margins more color I context the think headwind? trying I'm of a below gross they last is curious of assume of magnitude quarter? be QX? we in you maybe last just gross the a should QX to if just provide it maybe you year's just in in in high kind mean of little second margins really Or the the Will about So step could bit margin? terms from saw year, the back

Martin Roper

full quarter-to-quarter. ocean pricing. QX the updated we combination of year abnormally freight, yet Yes. We with to Bonnie, call hard high it's branded -- the on what impact no guidance it's was higher again, low expect

ocean quarter back to the XX%. in XX% Then in detail range harder the So start the land kind of we of quarter-to-quarter highest call. with in see But that quarter. is the for the full to step that to will year freight we

Bonnie Herzog

Right...

Operator

next comes of for our Bank of moment Junquera the Christian One America. of next question from question. line

Christian Junquera

increased Christian are doing to on you strong. advertisements? benefiting for growth, Just you be the type all retail Brian. like other could of on into options? share sales coconut from would which what U.S. are this retail support any Is introducing like multipacks? Or it category helpful. for guys water already, up sales, the the category details provide X%, for hydration you work from very are sourcing the put Any color guys is you've

Michael Kirban

Yes.

And that sport equally. water I mainstream is We and category, think continues the is coconut we're to source aisle and demand water source about becoming fact out, source grow happening think juice. and we've what right as now. and We category drinks, playing that continues be really that's from continuing is fastest-growing continues. pretty We've we seeing that in from the we we as about That categories, right? there. coconut before, from multiple talked spoken beverage category mainstreaming the a and to from that, waters we see enhanced that continues source and

Martin Roper

major category play I Yes. we I we're think in. seeing that in add, most would also a the of markets healthy

in from base is countries growth Europe. So the in smaller U.K. happening a growing. We other see

going from economies. on water certainly, coconut mature globally our in something there's perspective, So in in

of focused of of household penetration our both sort in want on household new up is and on. that money. think by going to and efforts of and or growth, rate. results show And all we data driving goal right, also invest increase how increased sort that's that household new up accelerate occasions to as very our there, and gain I showing consumers that's education share increased rates. trial, to Obviously, the those consumption increase We're So our we

we're great So keep momentum that just hopefully, this And that. to maintains driving going

Operator

our One next comes moment of the line for from question Jim -- next our question of Salera Stephens.

James Salera

ask maybe I has from if incremental because marketing it occasions. the of use wanted sounds come the to about think limits communication lower the driver before I spend. biggest the do on about we shipping turn more a some levels, first incremental about inventories refilled getting extended sales, advertising? times think you can guys increased can probably the of and to what think you on Should ad like bit of inventory I flex little volume it And first the up on

Michael Kirban

now, Yes. about Demand right it's building is there. inventory. And

Martin Roper

Jim, stuff promotional on spend a something towards full our maybe ease cadence, something of going have expectation watching constraints items channels either the channels little monitoring. but or and maybe is we're both and the that Yes, a think And have but of we're we year, about based inventory what we stock our or like on that marketing bit, we in costly. sort is demand, like on available e-commerce the directly middle sort that, we're bit of supply of promoting like pulling price which certainly that is little as the back year, modulate this to certainly, right, generate end

James Salera

Okay. label. can if Great. ask question And then a on you I private

private consumers existing into coconut water you be branded? just that format might private new concept, trade Do in they're a with if Or coke a formats opportunity conditions they buying a in category are that private get on those some shopping economic private label retail that in are a to more private into the an up shift whole label mentioned guys you water. from are actually have You have that value when label label label? see consumer to as but your a sense normalize,

Martin Roper

just category multipack lend can we monitor familiar sorts side I to it's certainly those up from of growth consumers recognize other new of we to think Long accounts, very purchase, health of who you're the time We helped that inventory price volume a we branded that partially at that because it's sides consumers is Private as gaps lower it's we indicative you trade category we're And private carefully. believe very private growth. think our in label the growth, to relative certainly generating it's our themselves shipments of already and belief but the and last where playing label healthy think our that buying as that are suppliers typically is that channels of with particularly by strong category. look are multipack a sort are of a to the branded. the we opportunity, addition And part is very and happy label we ahead both term, an both position operating slightly because very at the of on price in view this than it points just healthy. of it. year, tend international

Michael Kirban

just going was into to I Yes. add are some the coming consumers category.

category the So brand coming the growth that's health households. is increasing of the the the channels, households and increasing but label. branded of it's is supporting through They're private both category multiple underlying and

James Salera

I back the appreciate hop I'll it. queue. in

Operator

moment Sar for question. William question The of Blair. next of Trevor next our from line comes the One

Jon Andersen

year for whether of rollout. that's to some performance to been channel regarded I some and multipack to wanted the from rollout guys here in how good has you distribution on We're so question you was multipack trends And but from kind next seeing just My come context been? far, meeting hear of measured to Jon guys the hear Trevor maybe to data, this Circana that? on gains Anderson. expectations. I the wanted any

Martin Roper

Yes.

that few those multipacks Those size the as of I of wins And brands in out and impact and that of good mass. obviously seen the both very the investor sort think given business share, with food the and laid we're in progress happy the wins multipacks offers we've our the of on one at deck. our we're very wins.

retail little we delayed. that distribution sectors hope year, some are for fair I of say think the it's more to a this

but the when that's to delivered, going for those we items of optimistic the those on singles. those and have that closing that items retailers unclear of our to items little velocity a ACV get profitability justify the we're gaps it's So relative

hammering at keep just know the to obviously too expect wins some happen. that. are going that. when away We resets completed. those going we're We've to early presented do to So as get It's exactly

Operator

our from our of question question Eric the comes -- next line Serotta for Morgan moment next of Stanley. One

Eric Serotta

want multipacks. I picture circle spoken then you is helping you've want back here. spoke unlock of door some year. absolute about? label inventory wondering as a for branded back to question on contribution to that about a promotional opener multi less label of circle some on than the seeing the on in quick in particular fact little probably of was your past broader side, A part private I or coming slides private bit in business. branded last impacted label growth. being private in Wondering The issues now We're you're timing were on a in the year of your quarter the pretty by the as robust customers? run and rate the if terms for private And label just And what multipacks

Martin Roper

to in later alluded We moved the year. probably distribution call the of the of that of on our contribution I is some limiting have of QX supply business. certainly to, -- the happy challenges trends we We multipack the on Yes. think the sort couple major think, execution. multipack multipack a of distributor on incentive I retail sort the to and question, out with we're that

retail the would reduce numbers. the and activity scan that help execution so that promotional And might

think the brand. And think healthy year-on-year healthy shape trends. I household and look it's numbers, So the scan you have any good function and we of form. a not worried numbers category, a reflective when we or Corey these as all of we're things, of very very It's all and mentioned, a showed at that

we As good it business markets, opened European the about for those markets, we've gained in accounts making label, is when We've mostly us basically healthy. have and that progress too. gained we private in with talk our doors our very -- the to private and are relates brand label

an And about so exciting I our in talked U.K. we just beyond being the think remarks, Germany opportunity

these different each water stages of think coconut I of is at markets development.

of some to we Spain And U.K. where participate Europe encouraging. are France opportunity so Germany, potentially and trends sales in Mainland those is doors sort we're opening seeing But in private for us business we're that markets of and -- but have the as ahead the label branded is the an are.

those build large think our the the category long-term markets to I that and U.S., North the in goal goal. grow penetration is premium could as from, almost or Europe which coconut nothing That's long-term So the in the water be markets #X mean would same frankly, U.K. as those to as America. the

Eric Serotta

Great. a follow-up. quick And then just

whatever impact any that the your that into quarterly incorporated quarter terms could incentives guidance in us color growth that's that expect of help In give in, distributor terms later terms second would on in your of magnitude to and it's year, cadence. we this from first in in quarter of us should quarter sales fall going order of really, of terms third the moved to of or terms the you quarter? And in that

Martin Roper

Yes.

but QX, and think for based availability what factors. product -- I hard move it's supply planned impact the chain inventory on those subject it's and really demand of types to might currently quantify to have So been. all

little It program was largest so with uncomfortable And a doing distributor. our a that.

our business. And to exact it of the distributor, national but covers quantify impact. So our very hard program, a largest was significant DSD again, which it a wasn't part

Eric Serotta

And on. I'll it. pass Got it

Operator

question. next our for Moment Thank...

Sandler. of of the from Piper comes Michael question Lavery Next line

Michael Lavery

a Can the have there challenges just bit? there? convenience, expect is And expected. at up to a of through? build of you give cans. has what break bit on are wanted Just little should to we of sense than what a ahead some looking the juice the for way it we kind That least ACV in might Or follow been slower a little

Martin Roper

building said convenience before, distribution and game. as good made progress. we I is long, slow, nationally So hard think launched a we've We really year, and last

what for wasn't doesn't or distribution maybe that have it I is whatever. reasons some of quality then that stick you think distribution

The the incentives But churn. a mentioned of in I actual to I the Juice think, by previously that up little data we fact impacted bit push. little cans healthy. quarter. a still is a us, big scan a is the bit very, that certainly get didn't have distributor XX% positive You growing, it's because very

of velocity to keep a obviously, and So the starting And build, us we're to confidence. just lot pushing. that going gives has

slow So it's -- going to think we about... long, a but that's how And be build.

Michael Lavery

a color. more But of the on which How the obviously, do does in base occasions? Can seems from that behavior impacted quarter the consumer multipacks. more of consumer have like driving helpful simple? it's X, sustainability some just give you just on growth We had of that, in you've some just see and that's Is Slide on And or been business, sense might multipacks terms of got helpful really No, shifts where incrementality promo obviously it it. one drove the kind it But things that is different a up? holding here growth. what multipacks, kind back the of breakdown this the perspective, doing? interact go it's from of

Martin Roper

Yes.

think purchase. it's larger a obviously, I

discount is is value provided shopping high-volume the sort launched opportunity, with them more And much slight we coconut a right, better so there And the a experience discount. therefore, it bigger it of because When water them, it's plus sits within consumers. than today. was

in it less out. more in and category that people's helps So we've close because water the velocities. and still coconut to been homes us We being chances growing these maintain able of having think there's

all it's good. So

to we the it's distribution so this ability before some feel it need probably talked slower years, maybe plan delayed supply anticipated, maybe little be to summer. I perspective now with all very goes we've how of that's X-year gaps than the resets is a think about produce a that going X we to that expand see But them. our planning good. we'll read but on from And a we to our close

working that. we're so hard on And

Michael Kirban

Over different the also, of time, there new multipacks things. type be flavors, will these different into formats, system coming

consumers users continue one that build. that using will more other And on on each which the for bringing bringing the continue believe more educate occasions we that home, So into we many is different coconut. thing is product in home for to to behavior,

Operator

One moment next our for question.

Next line ISI. question Evercore of of Gregory Porter comes the from

Gregory Porter

wondering on provide branded was kind if products of and change you've respond, maybe you talked was you something the your you could private that there how seen the gaps of just the color wondering more how quantum I provide a earlier more But label a bit and you price plan all? to just could call. about on versus on bit at if if color

Martin Roper

Sure.

that. I And COGS label costs, said move track what private it to that a swings cost is lag right? pricing the think as there's and historically on so tends we've

when to think are private where at price I where us pretty were pre-COVID. so gap and look we to seems label branded mirror current they to we today, appropriate And much be

price more to back And think of we're so sort normalized a we gap situation.

much, label remember branded not the bit. may move pricing moved COGS we You during that have but did the COVID, a private quite would

little And tighter. so gaps see normal. lapping to still We're we think we're a stuck a we're and were last that back period year the to

start to that, in of is is year-on-year in and some channel will And of fact some to end at growth a but label shifting. then And it probably it's rates. all also we've comparison branded is things. we the pretty So QX, that it long-term private of of private expect right? of some the label a combination of same similar QX the lap total, we're so accounts, where think And we the for grow -- normalizing gained

Operator

line our Craig-Hallum As a Instructions] reminder, question [Operator Lauriers comes Capital of next Des Eric of the from Group.

Eric Des Lauriers

on us? on you freight. call, that's expect for I supply me how a are talked sort for quantify Brazil, you That ocean the Brazil. you just First coming about last versus of the of evolve And for to be related, the maybe Maybe with freights comment how your ocean increasing least commentary process from Obviously, think would then obviously, kind to the then guys being just for that provide here? you great. where U.S. of of on for rest some Could going? contracts futures spot that kind impact for year? that is First And Could of that's you shipments me, expensive initiative longer-term mix

Martin Roper

Sure.

On we last you. on time to it ocean side, what remains it sort coverage freight our the pretty Ocean contract as to was spoke position much relates of on freight

freight which We have what typically regard entered not about contracts, we ocean XX would long-term months. into think as we would at

as we're is situation them about operate recorded are in other. against on does we and say, competitive. from to off the basically spot. B, in talked on are And that we rates bidding seeing "Hey, to we that is, price, time, what what have necessarily with below each We that But we spots go a we're what's resulting what are to last month, continue not you're A XXX we containers reflect to carriers index think and your by month where are communicating

stop We need and the have arrangements that into certain the entered we to where capacity particularly shorter-term at guarantee port. ships guarantee lanes on

them those lanes. months we to So X to. are X on need typically But specific commitments

are months given rates business we we and given in the containers, higher consumer that better very -- proposals that So contracts on those exists in are for that when the we to long-term proposals overcapacity is at capacity over us, operating the being XX this overall believe an be situation are still and reason asked the unreasonable as for basis. ocean the at to think pricing what of to a And those remain time, next paying. to currently excess that then the we're as point we've under-contracted for long-term forward-going the in proposed demand we're committing we is we that likely than sort look shipping

Michael Kirban

future well of from or is in then all is it our objective anywhere, supply to as And increasing we into growth the Brazil our see relates to increase our to as -- regions. continuing supply currently

over weeks and supply places couple prepare You keep supply to looking other last expand the partnerships Philippines announced the and there, several deals might see the at we up demand. that to to with a continue we in we're of continued new expand in as supply also

Eric Des Lauriers

new on last question Okay. That's for And occasions. innovation me use helpful. just and sort of then

at expand of with this new elsewhere? Target coconut on touching just of exclusive to first I this remain something just you of the mentioned see other the then retailers you Target? And Target. is sort Should drink expect or with this kind guess to usage partnership something similar Might exclusive occasion that channels? So on we to mean, that, water. I

there As Diageo sort on I the was an maybe guess, an with year events. continuing Diageo specific for alcohol use a mixture, year, water alcohol mixer? partnership at Can few, And and any featured the summer be great. obviously, you of consumer cocktails educate of coconut occasion some the the partnership comments last on comment would to as on plans this

Michael Kirban

Yes.

using occasion So treats in we're looking initial excited Vita really Coco about of basically of Target results, going better new a than as type early probably a coconut are at treats, its there beverage have scans What which we consumers, results in. kind Initial is the treat great. thing. for milk at a results. but initial expected doing is mid-afternoon it's we're might

we're so about course continuing it the over excited the it and looking to And year next into at expand year. of and

that spoke our on we it working, become going as be making menu, X -- for on team. the and putting occasion. working cocktails sure right fact there is Vita clubs, communications, and a part primary consumer able the building happening food water that a is about now as on part for that we're distribution through and bigger to used that and our the putting we're systems And mixer, coconut is that's Coco It's the we're service bars out everywhere And cocktail Coco Vita start a relates it's seeing of years. that's been to As we've which something restaurants get choice communications. to significant and of the

growing important believe, is an consumers. occasion for it occasion a we So and

Operator

question. moment One for our next

Morgan question line Eric of Next comes Stanley. Serotta of the from

Eric Serotta

Just a quick follow-up.

was would private increase, both? to or In terms be just of Any branded the on that label attributable helpful. top line color that or guidance

Martin Roper

It's us the to just the we expect a the at look information Eric. to business, year and year-to-date guys performance can underlying give the of we trying both, you and It's taking best health land. the where

Operator

showing time. no you. Thank to right. I Martin like Roper it turn at this All I back would now remarks. for to am closing questions further

Martin Roper

report earnings when to you like we earnings. we I'd all Thanks joining to thank you call, Thanks, for look Stephen. QX QX Thanks... forward talking very our to our much. and

Operator

Thank does may This you the you participation disconnect. conclude for conference. in and your today's program, now

The Vita Coco Company, Inc. (COCO) 1 May 242024 Q1 Earnings call transcript