BRCC - Earnings call transcript Q3 2024

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Operator

Greetings, and welcome to the Black Rifle Coffee Company Third Quarter 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Matt McGinley. Thank you.

You may begin.

Unknown Executive

thank XXXX joining Financial and Company's Rifle everyone, Quarter Third Results morning, you Black for Coffee Good Conference Call. results at our on released yesterday, can they We be our website ir.blackriflecoffee.com. and found

like Before we safe statement. remind of the harbor to begin, company's you would I

today's risks forward-looking including risks, and to could actual the may uncertainties, guidance based on differ make statements our previous SEC. to the results further refer these assumptions. which please These are management discussion materially.Â For expectations call, and During with statements, underlying that of a involve cause filings

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Chris Mondzelewski

everyone. morning, Matt, and Thanks, good

Joining Stephen me Executive Evan Financial Founder Officer. Chairman; our Kadenacy, and today is Hafer, and Chief our

approaching review express our our Before we take Day business, with into dive to Veterans a of heartfelt the I want moment to gratitude.

our family have employees veteran-founded who serving grateful their to connected currently of a the with are or and XX% served. military, profoundly those As to company and to members we all

we uphold commitment, to Veterans' but at community do. we are not just Supporting results. honored the day.Â Turning to inspire veteran that courage Your sacrifice we and every quarterly heart who of and your is on our Day, are, everything the

building creation a growth foundation and expect. We support a substantial strengthens model core of in business scalable we long-term and year have that value establishes our the solid to progress this made the

our KDP chain, supply improvement XX-point supporting over sales than on coffee energy $XX retail where and a $X earlier builds our aligns deep more category business and Nielsen, increase margin of excellence, the coffee On shares have drive including gross spanning quarter, mission over that continue well in which distribution proud to that with we across improvements.Â To investments forecasting a this to is Most billion. channels, call, X last year-over-year Dr. Rifle launch this to Pepper, the partner.Â According ready-to-drink our of meaningful tracked in grocery, the management with partnership to overall them this year. an capabilities currently partnership compared energy at in XX% Our a fans, billion established to categories with significantly we younger audiences. $XX X growth in drink category operational as compete, especially the of year. this we among performance we outpacing pleased points importantly, Energy. commitment KDP quarter And quarter, and of billion K-Cup in a at last our veterans' Keurig I'm is causes, are ACV sequential announced EBITDA generates our quarter's third we adjusted the end, and with Black announced during

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into will in strategy energy But Rifle We across it's that Black every to do, Black from X.Â Our that we and veterans important the defined of our warfare, we operations who dive have facet by mindset founded was day are company deeper shortly. Rifle. reinforce apply principles before experts special guerrilla

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an As we fight upstart, hard.

to about grocery quarter, grown a the increased ACV year-over-year highlights, ground we XX over to the where outperforming mass I'll dollar had year available above month with our Category we XX% coffee data channel, growth in meet X%. retail, have category. we We food, a to Slide sales our we while beginning third X. on in continued market Nielsen at by been channel, demand. in distribution capitalize the growth. In ability the achieved With are declined expect the our to channel category punch According consumption and to results, Black the category now trends points discuss XX%, consumer drug better and points more the first challenging, opportunities quarter's well have and have flat Year-to-date, weight. Returning becoming quarter-over-quarter and our but September Rifle for throughout marked XX the positive the and excited widely expand XX%, opportunity reach XXXX. growth products nearly

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extension we energy energy of of a looking be fans that research consumption believe a refreshing energy our quarter, consumers category the natural brand consumers interested drinks natural for we will of in XX% our profile derived already are As our last coffee, for this Many more and XX% outside from their sources. are brand. drinkers of suggests of and about our are the of highlighted

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X. Slide to Turning

post-pandemic DTC of be consumers continues reasons building we period. coffee shifting our returning from purchasing marketing market from trends in their patterns impacted wholesale We retail Our DTC in-store. business in business channels to or We've to This ago. is over wholesale to prioritize of one purchases direct-to-consumer started broader a efforts that to shifting the our away and year the online by FDM with some our growth DTC in customers and anticipate little channel. will continue the sales aligned a

revenue business is contributor largest segment. our DTC Our to the subscription

counts our We in the average with include subscriber quarter order of volume our continue subscriptions see existing website September. third stabilization than was options third in growth We've to quarter subscription new with the subscribers. positive enhanced to in simpler and in subscription higher XX% bundling

in driven the quarter enhanced October. Stronger management Finally, efficiency. implemented in have and improved focused ticket our momentum gaining on inventory execution Outposts, promotions the we in with plan has growth third

While expect progress is emerging, solidify. efforts results consistent as these more we

brand in awareness. in the Outpost business, see have to distribution potential continue wholesale prioritized and We significant investments but

units franchise-operated and We evaluating provide of are Steve balance strategy a next expected optimal with this full now between and template segment for store year. financial our the a refining results. Steve? will review company-owned our

Steve Kadenacy

to XX. turn Please Mondz. Slide you, Thank

due declined ready-to-drink revenue in prior transactions categories. X% cycling of from the coffee channels barter quarter slower growth year, and consumer the and direct-to-consumer away preferences Third a from shifting primarily year-over-year, of pace to

last transaction in While address it was barter replicate excess the a aim stream is revenue operations. necessary to ongoing year, inventory RTD not we to

to other we were than consumer in towards news the by segment behavior strategy sales larger now achieved more last quarter Year-to-date resources more paying channels accessible in wholesale off. and earlier, the to brand period quarter in retailers. is as year, X% from our retail. products a our driven in our our The Sales wholesale last retailers year, post the our growing pandemic compared grown largest we were carried that to and same third mentioned good revenue steady customer being compared primarily XX% business shifted same Mondz period quarter this As in away this of our reallocated have became are year, wholesale. is DTC with and last they Xx growth FDM sales

sales in Looking be increased XXXX. in both ahead, continued and key growth to Rifle distribution growth coffee and XXXX expect drivers Black we Energy of

continued outpaced as and to our investments rose earnings metrics from cash quarter. gross sales advertising. gains in improve of margin X.X% Our EBITDA to marketing flow in the X.X% free third and

COGS sequentially inventory which year-end. better business highest free driven margins resources the towards compared is we driving on working cash depletion capital sells. efficiencies same the launch generate a savings the flow to by K-Cup quarter lower cup generation. focus its impacting cash initiatives build basis, in provided for primarily purchases, reduced both through due margin of this to and quarter, most seen year-to-date improvement On This per pulled and period this to cost year generation the improvement third $XX flow This rate product Our return across million in and clearly the and XXXX. accounted in fee a directing is cash forward a into we've grew expect the Inventory program as and to investment.

XX. Slide to Moving

Our improvements to have productivity gains, focus margins staying adding target consecutive quarters, threshold the basis XXX productivity the points for for our driven in our gross we has XX% chain third that on and quarter year. resulted margin. third gross anticipate exceeding enhancements above Supply

basis growth retailers. Additionally, coffee XXX favorable provided supported product point by mix aisle in the a FDM distribution at lift,

offset year. of seasonality improvements, reflecting our driven $XX the guidance year purchase share ramp increase accruals green We the XX. gain in as progress at now favorable range. we normal of volatility to this year, narrowed in economies timing by million We and green narrowed in to from of pressure expect percentage which revenue guidance XX% margin rising more by from RTD well free Year-to-date, the the year lapping and have We prior adjusted year from the Adjusted headwinds. quarter confident gross Year-to-date, the in margin points we our the are prior free as million mitigate improved full our breakeven to expect the $XX the normalization on volume. cash marketing the an for significant our conversion and XX.X%, fourth to laser-focused year. on expectations margins a the shipments very and and by to Overall, onetime administrative later margin improving market support builds.Â Turning in payroll cash as range, categories. same XX period reducing trajectory coffee XXs EBITDA, exerted Slide XX% which has improvement seasonal revenue quarter. free positive range to with X points gross to both this top for actively than of prices same and an flow guidance our improvement resulted to period expenses external EBITDA prior over year. coffee, margin variability we flow have and XX.X%. mix EBITDA investment We through the year, over up gross This made compared flow working $X.X confident growth growth will expect our While and remain have in the cash high profitability prior of remain compared with absence in modest coffee year-to-date be above quarter smaller just XXXX. period forward promotions margin represents we same nearly contracts to last quarter the in with as a to the ready-to-drink profitability are and line in from million, improving of was EBITDA to capital, higher in as in generated in Slide strategy committed raised the that the our impressive for $XX inflection generation driven also in and and in scale for midpoint to productivity gross planned pleased the margin gross been EBITDA million primarily optimizing XX. resources we We from deliver be in to benefits.Â We our

our to Overall, cash assumptions planned FDM different we we originally coffee, support gaining mix.Â Additionally, our of RTD was supporting coffee, shareholders. similar long-term are channel. revenue the ability XXXX. been expect around success our veteran Energy mission product expect in bag for than growth K-Cups The trends positive to to enhancing have and on flow further based we higher initial generating market Our to community in and the across inventory while deliver in Rifle share Black now value guidance and business carry

operator Q&A, like be we for that Before we January where longer-term the Orlando, join Conference session. an on detail Q&A in to We ICR at investor call event either we call our via will or mention us for will share the webcast. over you that, the I'd goals. XX to the turn will open more With in hope on person I'll hosting the

Operator

from of comes question Davidson. first Michael Our the Instructions] with [Operator line D.A. Baker

Michael Baker

come Great. Okay. we of update in that in -- in you of a bit of retail progressing, wanted early XXXX, the still expect I Any of early last to And be we new talk that, expecting to about XXXX from retailers those to delay expected had some little that's those think if on were XXXX? in retailers. I timing quarter, partners. how some instead

Chris Mondzelewski

it's the Michael, Thanks Chris. question. for

the So continues last yes, it quarter. that to progress it exactly way we had talked about

country well. right north. the retailer conversations were the now. of go add quarter, last Teeter. continued to All with XX% to to Harris major ACV our Lion We're has and very That This in move distribution Food every we continue able at

If in all XX% you brands look in the they ACV at the of top category, range. kind that exist X XX%,

business. that is target continue as a We that, to believe us the for right

we continue be will to increase. add in QX, objective about ultimately, other will talked we largely business. as the the that So our see for that the year And next timings we the previously, accounts on distribution

Michael Baker

Okay.

like is year, timing down hearing unclear. we flow bit a to get What turn because and little free I -- thing, flow or seems I'm presumably, you're quarter flow-through little the interpretation? from it clarification. because the going One -- be that I a I'm it a that that of helpful. just The a right Is just positive. now will others guidance higher cash think cash free should and adding XX% so It's a little which was inventory. then to suppose the So follow-up, is more more last from next I'll guide, guide of lower

Steve Kadenacy

good still the expect for already very We've This That's flow cash year-over-year cash Good Steve. is our improved year. million. question. $XX flow by We right.

as We robust We the the forward. because cash was expect in $X.XX you that little do all And cup, QX, up. going K-Cup purchases per quarter. very did a in have flow did discount things and that of acceleration million know, XX in but we you cups strategically gross add we received margin, really the it

still So cash at profit. But were inventory the robust to did we change we changes, we on the it. given looking pennies we flow. are But way the expect drive focused the

Operator

Advisory question comes Telsey Vora Sarang next with Our of from Group. line the

Sarang Vora

So X questions here.

the about last growth exclude when barter from quarter like return seem improvement I on sales does sales, sales you $XX the trajectory. in the million First, are fourth think, positive you year, to was, it transaction guidance, a which a to sequential a seeing and

change? back? Are seeing to of about on excluding trend know relative what's quarter quarter should think barter. wins the know driving a positive account sales, like bit the So sequential that more like curious fourth coming to a how curious of turning third Just you normalization, we and to

Steve Kadenacy

It's some know had which we quarter expected in also enough headwinds let to a we and good up business cycling KBS Outpost relative tailwinds that. question. Obviously, to our to we be transaction. our that down, for the and business, had we make all DTC But you

ex our and up XX%. barter If was ex up largest Xx revenue ex KBS FBM you XXX% was customer overall or X%. the transaction was look up wholesale

we're rates. So coming on, are ACV our in and it's that the focused out we that's and markets our out succeeding, in growth underlying in coming

Chris Mondzelewski

order that, that. pleased continue And the coffee in the to season, on we we're wanting bit of I winner. right as with last promotional to we key ensure that level just a a be Sarang, put hit quarter to on little about talked the to think can we build market activity results the in And

to key in we any customers, want we with at look markets where continue grocery of growth. our were look exactly will QX. Steve have as level our our sharpen ability as and at And to If growers in among said, latest will the XX% that to we period, at understand we continue you promotional the fastest the

to we plays. got going we've well momentum forward QX, driver. above in the where into declining category that which that category latest throughout X.X% the RTD, that this we're largely Even the is and we at the right So now have the period, want to hope in is growth, is I push But year. mention,

any in play expect QX. again, to playing of the So above segments we market we're out in in, growth that

Sarang Vora

mean And out wait is what That's to December. one in exciting we I energy the great. comes try drinks. more a can't

ramp should energy coming gross you structure it how you if curious Analyst above? on can know you Just the like there's color about the on us still an in out think Day thoughts of plan the give Is the share, energy color margin extent thoughts, how business? roll we early do or share 'XX to can any and like you 'XX? can it I like or up XX% margin would drinks. to helpful Or nationwide distribute into be Any

Chris Mondzelewski

let Well, build extremely start, and will a Great. few me probably comments. of on my Steve We're excited.

us I in seeing on our a But mission likewise, fantastic the lean. a in partnership with we been as We've business We're already with that. partnership that already. opening KDP. of military. multiply we bit about need talked We're standpoint, that little the KDP with that are this really pods, extremely who focusing has important remarks and work we're talked So a from remain partners energy about aligned excited do we're going partners value success for lean, well And in capabilities. example and with it's model find business, our about to a my really our what very we in to

clearly the with it rollout smart going we're We're key them the happen in rollout product do plan efficiently, a to them.Â That this. been and We've a in play will the of together. to of have channels rollout that role will they So to the designing the with as in we'll can on-demand that of manner. Clearly, get as early focus trial such lot product. We're and strong well. behind a going promotion going we ensure advertising C-store on much very designing

quality. we item. ensure profile It's So we're of product is The very, no-sugar can very the proud flavor fantastic. a

hopefully we sure soon. to it hands. And get will in want make folks' try here we get You cans those to

to working part on guidance give we of that arena. the we're numbers. the over on to as That is believe something they far KDP muscle happens why exact can a the in As this of be going get the product.Â That's XX% big with period we have years. the ACV we're reason in first a that That distribution, year. won't not Ultimately, happen that DSD will

be, scale, as areas, So call customers demand focused to again, next I'd cetera. think go gas move then that like C-store, we'll larger on what 'XX. I into into the high, other those channels ramp-up we as year like immediate we And stations, will et build

So about place. in to the again, excited we're very but that, think going the talk successful. plan to of We specifics to not it's we going we're be have

Steve Kadenacy

your be over to question relative going to are energy time, Sarang, margins, margins on strong. energy And very

first to largely It of strong. because they will out product. slotting trade and The year, the XX%, be related the expenses the be rolling less will under

mind time. something giving how just in not over XXXX, headwinds. we So to maybe will there, stronger to still about just to but And strong and growth, some but we're guidance keep growing now, you have have we think should but significantly expand that

successful strong And side, to we I've expand have on trade. prices the we're transactions at rising. and partner be that energy, growth already Coffee in mentioned we still impact, seeing we'll But fairly that million cycling are mitigating have the $XX although of will slotting it. continue year-to-date. the We're FDM. So we'll

but and stronger got you've some So expect fighting we'll still bundle, headwinds. be we a growth,

Chris Mondzelewski

expansion is firepower center our margin point we go the next reinforce final of One year, business. as coffee a building amount to talked That year. this we've good us really our a through of that just store gives into about lot

to of is lot resource margin do the think and management capital the our out the us the brand force the plan of advertising important through the coupled first end Rifle, the the inventory, with gives their thing. in have At business, go most working at and partnership we that room foremost. with you plan, day, the strong there of our Black of sales take combination on and where about the KDP, they through As a

that we majority is building into this out the be investment will putting be going to there that the of brand. So

Operator

Our Instructions] question [Operator Anderson comes William of with from the Blair. next line Jon

Jon Andersen

ask on FDM. to wanted I

progress solid made You sequentially on ACV.

at now. I think XX% sitting right

this You you full target time? earlier, anticipate I point kind the reaching And distribution of that by what kind towards Is in it referred XX%? underlying just expecting to still clarification. may of to Are XX%? to a XXXX? of end at but do your the goal there? you have want it What's Is level get

Chris Mondzelewski

Jon, major number thanks for to had the customers no, our year. just Yes, so of reiterate, into question. next shift we a

So, we do not those into of what expect every kind to get to With our said well. final We goal I'll customers those of one reinforce has I on year, before. ACV this shifting year. gone feel conversations next exceptionally

end tend X in of yes, range. we top that be at to goal of going by distribution" business we 'XX. the look we're "full 'XX, believe the at end to for as in if look which play category, brands the would again, the the that consider to they I be in XX% is to be -- So XX% we would going That ultimately do the what

Jon Andersen

And you provide referred your what being with forward? an customer, distribution to color maybe velocities how might thinking Any your its more to able going largest opportunity -- you're on level business are customer performing, be from the you item year-over-year. that business largest stable and

Chris Mondzelewski

you're see points of our a We our the a our where four a down total We manner during believe with across going TDPs come come the to Sure. in right portfolio really third did we when customer. That about Yes. some stores. distribution that had right you're down our period. looking currently. common We sit distribution customer. at work that went period through feel is in in very had largest the we your a SKUs year at into of share summer or We business we great where

to player be continue We a there. leading growth

comes promotions. them. ensure the actually able have have are really strong to promotional above week sharpened velocity those we any actually largest. in exactly been we And per distribution, our is get that we're substantially the we We the prices We've to we've when those period. remain XX% but store in certainly And that bottom our double-digit strategy in where seeing are the in executed, that average, resulted want it that customers behind our growth that increases well above average increases line units per plus category has have up category our of current velocity. Where in promotions to to

forward. going plan that continue we'll So,

that into As items customers, how we're store but be we resource to those there do have we manage it of put we able has, talk business been next having exciting into energy. there talk ready next as lines have will about cut ensure working to of we're imagine, ideas. would not strong of on shelves you to have we our teams happen new the as at a that. a lot new we existing specifics into But that that look Clearly, hard innovation yes, center business year, some have you as expanding lot well resets largest that building our to as far in our innovation a margins as year. that, as with customer coffee and We the

Jon Andersen

the energy. be terms on you trying serving incremental to for the it looking rate to of will to bringing research think that energy for research around done is some users Or energy you risk think the you've the the I'm that I more existing to sounds done, terms very encouraging receptivity to that highly heightening customers franchise this and based this brand so the for in cannibalistic perhaps that your The want boost? a get with buy there's respect could to occasions, of new of on Do a users. be how you've that ask overall. in did real sense across kind users be there opportunity of incremental?

Chris Mondzelewski

we a a never actually a the feel where when situation Yes, put going plays zero will at look reality occasions. the different during that. is fan We have way, fantastic you dynamics coffee we both. very consumer There's of incrementality. drink great find that who than And do the of that very or usage consumers certainly of Rifle drink We different does. both the to that's are low. a total but overlap, that There it about Black research question. lot be energy the market, it's either consumers The into role to tend

add beverages. Rifle. the really the purely be those which And to of their skew a more the involve And our tends may drinkers demographic preferences They're they fan tend existing either afternoon. that Energy other. fan we the an routine, flavor who I that to more towards base or refreshing Rifle right? able one million are will are following have mean, have to coffee however, media Black morning. consumers, folks profile to are towards sources, really of younger would and look XX already. as up to growing everyone, demographics. all huge at arena across coffee to we lot to we want consumers already, be in tend the remind hot So, I coffee These There RTD the do skew base, drinking cold, a have is Black coffee

energy fan as energy are them and that we a that to drinkers we a As find open brand. already base, access of huge percentage

$XX number brands, out even feel within billion. that with. as brands category The It's good that category we as at we incremental. There crowded other the category, believe we a about be the it's certainly compete of but far that thing will we are is giant a highly energy there will

So, category the to coffee that, believe the be put of And lifestyle quite our room incremental together, product believe as our we again, to really think then profile and we whole. our a mission positioning, energy not on could focus ingredients, that we to we be zero only are there's again, business, clean plenty going with we sugar, that in. we to come incremental

Jon Andersen

can last one The just one, if in. more I squeeze

mentioned we What should I into the think comments, you actually how in prepared minimum, subscriber on that think you forward? that going positive 'XX? expectations a slowing seeing September or were are inflected at that And in your the base declines. about

Chris Mondzelewski

as continued to our decline. driven by That of consumers flowing now, just that little number are our is talked post dynamic grocery. as seeing seeing our we it of So the reality more has changed of context good happy a number is available, That have you element data shopping where consumer with we're bit patterns consumers, yes, to consumers We've that. pandemic. a what The have calling about are entirely into reasonable is a we on we stabilization. we're give business the their of

So that's good. We're happy that. very about

churn churn subscribers period, consumers, We themselves. And Again, subscribers to the very someone our to you to in seeing Again, to business subscription our As needs where is that continue of But very goal always to an we're positive. we're increase point want net are they is meet but even latest of on able be this seen a our as we obviously have where we'll starting we're seen are onetime to each they at. every are weeks we be purchase maintain us. had have them out, and where lose ensure those buy sell where our valuable actually sites. see products period, in our reducing to still want happy subscribers the base. buy want off to long other that we've a one their as we we the we've -- to subscriber we putting wherever to most focused made, point it. What to in can cancel actually, the

continues not business believe going it's be where continue now. that we will strong to I going I'm not goal. that because right on on ensuring give the growth to we're believe, like simply that back that So over in our 'XX store. consumer overall growth guidance segment be I'd to we to And of DTC subscribers shift to for you, our in would element stabilization. themselves, see focus will time, back But of that get business. then dynamic specific our our tell

Operator

the Wallum comes from Partners. question JP next ROTH Our Capital with of line

Unknown Analyst

ramped. the If and sort FDM maybe how a it's I just just to of bit kind I could of want little side. in dig start understand to on Albertsons

point. your one retailers in maybe year at or that's of for you've large main plus kind think been account I of this that a

for So on year additional share your is at as that ramp of you could means out share kind retailers? sort if shelves and where of just you next just at roll your maybe what expectations market Albertsons

Chris Mondzelewski

the Sure. question. Thanks for

rollout QX So yes, indicated, year. -- as we about of the out started you we rolled last

good lapping So we feel about are We that it. as speak. we really

Albertsons. distribution all of XX% across are We in

So brands. that of of any is their top normal

We climb continue to in share.

brands among XX many of segments of the higher in a quite across top their we're bit But total. So the Albertsons, we're than that.

overall, very As category. introduction this number the to And earlier, actually versus business, growing the then Again, we're is a distribution is seeing XX% lapping strong was ago. which even year close far as numbers, XX%, growth. of RTD our we're a in which

that promotion the of period.Â But through growth execution So to we in, continue into full we're we very velocity we off progress share which similar seeing, that other customers to way the are based as as even pushing in, put see then we've period, that 'XX. up that growth numbers move distribution the strong is of we expect some versus all the to

lot successful we as room And overall, it X of in and share customer. rollout. still largest X you X. consider know, So The hovers be very share to A our improvement. a we're between for a

out we as we'll share to as our really at success in much of 'XX. continue can gains to leverage into to So those drive that continue get ensure that, behind look move our manage as continued portfolio store we we and

Steve Kadenacy

really I think that important. last is point

have We us. front improvement massive in of

share we retail have over in We time. then small outlets SKUs a as and roll we new expand out

us comes on then And quite seeing then we're And that on bodes well to we're doing only the our count the expansion. velocities shelf. element, SKU improve our SKUs, revenue So for one well. ACV and is are comes category, SKU is what those obviously, outperforming

Unknown Analyst

I you to It maybe believe XXXX end Great. it calls. maybe end is see That's helpful. want expect sure on very understand. said of Chris, was now business. I to sounds I of past FDM And by just distribution And you like, I then when the that think, XXXX in make full

correct? a would of in kind you not want dig if that, could just to resets color gone very So helpful. there about additional with Any that's planned? as then retailers be a, b, And just double I check, little bit, conversations have

Chris Mondzelewski

reiterate, that So correct. just is to yes,

be by at. had XX in I XX are the So to to top that full end we're where quoted 'XX, distribution. the we believe of players going number are of

that every that's customer As we we where major the out. add can we net in believe U.S.,

-- as As talk we customers. about yes, of far shifting quarter last did

have in So great success we customers all we point, into. our customer adjust have a that we this XX, of The just on expectations continue did did the we've rolled have news some that that is shifted to from every expected XX Steve's to building bit. and

in, the of our coming time, are velocities in there gives changes, while those continue up already the share you're you're to above category push is the very us category So based average. that that what each about over the are gain to it those additional first seeing one above them. well hope SKUs largely was And footholds. great some continue able picture velocities ability off be of calendars our When we'll and that timing in by customers I average your year of grocers, to feel and add immediate good in we rollouts and and themselves, plans mean to that

Operator

Altobello with of next James. Joe comes Our the Raymond question from line

Joseph Altobello

revenue are but guidance for know energy? housekeeping Just in quick curious. terms of quarter, The the it's implied it's so initial first, or assuming for revenue the guys what guide just QX, in late I you trade a load item. small, probably

Steve Kadenacy

energy, sorry, Joe? we What what assume for do

Joseph Altobello

energy. Shipments. The initial trade for load

Steve Kadenacy

honest, shelf. gets be comes To it the on trade when

be we this at that So anything would estimate -- guide would point. we an would book that

So immaterial, it as numbers, contra is but give exact we and booked revenue. can't it you

Joseph Altobello

Got you.

Okay. did giving margin And in energy next year, not cetera. coffee 'XX, et today, prices, headwinds you're you I higher know green some but mention terms the launch, of guidance

we think next about this year? EBITDA big improvement the can about think directionally, least you at So margins after kind should year how of us help

Steve Kadenacy

I continuing on focused we're Yes. very operational excellence. mean

So out higher do as our in you we're business, are year. to and no continue slotting to and that our see current of question currently there's we'll be margins, going But can driving fees cost the trade that. next

are prices XX%. be I And gross we're going to productivity below energy higher, improvements coffee focused to kind that I Our within will of margin. also on but gave guidance supply drive as mentioned, the other be chain

the energy launch. So primary that be addition going is to the in to expense around driver the marketing

I you give -- from wouldn't So the a standpoint but can't numbers, significant line. I bottom growth exact percentage on expect on

Operator

from Securities. Our Chappell next question the line with Truist Bill of comes

William Chappell

And has next you to market share distribution back do and on -- be category look primarily been you to kind question category the the overall of as do just First few the weak you extent? expect coffee for bounces on the the Or outlook. drivers? basis. think past volume the year, to Obviously, months some a

Chris Mondzelewski

the for question. thanks Bill,

think I apart. So it let me break

has did that two expensive again, into in that through continue When it but in perspective going look RTD factors coffee, that. center category center to tends to at time there's different on. that, still as store year segment we that there's long actually play of weaker. strong some is are a of bit it dips that times. And That's do drive that other segments for nice year a go we think the same a it's to been our I an of then at more an U.S. the so elements. you don't growth recover each through have and It explosive our so overall believe the to growth the we think be next see at to a believe saw distribution that seasons, a far of the saw weak ability latest I to being thing the we period. had year, is is continue ingredients But coffee will in the segments. if And those we coffee over And way We -- time, increase growth to the the speak. a return store RTD drive than where continue as the far, gone here as opportunity to have coffee I you there's When that X% gains will softness there. Black has latest will into a It see vast our great belief be how to necessarily, a category from, an given we category said, is growth. That out around the to to we category that said, category stay. we has been even RTD, that share. believe that come RTD period. think number comes majority Rifle

has that's have to has wallets behind a to demands. meet is of as category the that So And think scenes. I itself innovate we're something any that category to played itself, the certainly factor it that hard some that very is tightened, consumer on out. ensuring And working continue

So given and how to segment 'XX. of we're we speed a continue as exactness our ability are still believe consumer that We we and we evolve don't about coffee of that versus do continue in our meet given talk specifics specifically, our can into business, go not take believe where portfolio. to will category rather other constructed necessarily expect demands this. at. greater to just RTD grow we're going explosive that can explosively we business, do a to But on to our while that growth they competition, I'm any like going that advantage than at we we as

William Chappell

don't company-owned with audience. good your completely space those brands all and and put target switching I'm mutually a of is thing certainly color just understand up. because great on just brands. energy, them having see unlimited exclusive But -- you're you a distribution I why trying you I sure CX maybe other have Okay. to kind for mean doesn't is And -- terms KDP to why of Ghost I'm a partner, approach now brands in why little lift and three it's a to going KDP diversified then give of more to shelf a as

a just understand to And having trying primary you're so versus focus. this of the how just beneficial where incrementally distributor kind I'm is

Chris Mondzelewski

business strategically they've the since with aligned Yes, us. start have saying we that's I'm year. going is that a a been been extremely of We've question. the and to been beginning great with talking KDP transparent by

is the you're the excited recent about be winners in overall the reality their to that lot their ambition call. a energy most with is space. win brand. talked never to of in One And one about this things They we're going

need have brands category of that You to in size. multiple a

you is that, being those profiles simply together with segments Ghost, exclusivity one at be winning portfolio complete a When the Ghost really case. portfolio. that day that tell from they that a would The you But there's Ghost brands brands. of knew as you're in in And each of play it that do have you you compete we of look right, added. constructed market. a Black Rifle are an that I look brands, is the the a Swedish put between they completely same use energy I'll obviously flavor the patch brands very different would never example, reality that the with they category. at recent kids the of So most sour fish. element When versus carefully

Freedom You have with and Ranger Black Berry. Punch Rifle

are flavors even it's you So themselves the how thinking about different. positioned, can vastly just see

an So overall net we us being that. feel about within positive great

of the at are the brands get win how I piece other that muscle I on to out these right? choice the brands other the to end is think You're DSD distributed. The win, each -- day. accounts in one way that win their are with the consumers to brands competing going of line themselves one among the based able call that or bottom ultimately will the those brands these want are

allows high you we we have have Again, of brand. a our have share every in And that's very winner. over gone been into, to very we be much strong that to while So if ultimately own. build The than what route to faster do distribution it it dictates a were where time. whether or every confidence stick market, gives and to not gives will us we on us category level able our it a brand be very, efficiency you segment,

We continue of those winner segments. to be in any a share

energy. So believe be in it we will same the

Operator

line comes the [indiscernible] question Daniel next Our of from

Unknown Analyst

year's going we modeling distribution I spend your an next sales Is plans, to I should what what spend is XX% investment gains? Or marketing that be saw ask of about QX. of ahead in wanted forward?

Steve Kadenacy

You said marketing spend?

Unknown Analyst

Yes.

Steve Kadenacy

the and definitely during Yes. and quarter ramped promotion marketing. side shopper ads, Well, on the we agencies

aspects promo did the expect it the the into energy that there's we we're are QX in QX that and a of a to on rollout that the would so through likely spiky. But And will quarter. holidays continue is I in phase because given and QX coming. year, Typically seasonality the little even change of what 'XX.

Unknown Analyst

growth it a no with targeting of after said did category Okay. me, get was just as up to wanted wanted go that you a your would RTDs? the research is And that a is. I a where and sugar question. show profile, to what your follow decided sense when Because really different well. energy previous I about on -- then you of to Did research the for customer that just than the drinks

Chris Mondzelewski

right. exactly Yes. That's

reasonably as for as that way is us to everything where a us of market. that very been deliver reasons. super us. easy decision was brand both That a Rifle, the to Black it again, allowed that strong our positioned has is quality the number it does premium for So brand product one products One in we has support mission well across

about the a say, profile that I categories in our the quality put compete lot flavor that should buy that we we of or #X of the is market. beans an any talked distribution. a for So ingredient of in, We've together we all

naturally an energy We be together we the ingredients. use same energy. green the to that is This blend using knew we put in why wanted is completely So would coffee sourced true best point, that the beans, of segment a category. the our is piece, consumers are looking product. what for no other It's demand a natural to growth They double-digit now. extracts. sugar right And your

easy that the flavor more testing, about each versus be again, done this. We a an one rest And extremely was talked to products we tested we've like decision. when believe our the But That's item. of well will segment that, what category. that flavors in much a from grow. consider of we've again, So subjective continue to has standpoint, would

product So we delivery. feel quite confident in the

Operator

reached remarks. the call over of the And end the now we Chris question-and-answer turn for have Monzlowvski session. to I'll closing

Chris Mondzelewski

Awesome.

encouraged by January. KDP with partnership our the sure growing our forward partnership, We're more business, wholesale the everyone energy to as up much us able some share for for our thanks, joining very the So We're about business, at today. in to being in there on our particularly boots. detail our excited Big launch. make event efficiency gets gains. And momentum very new gear and out this we everyone, we're ICR day, looking

we'll hopefully, see all of So to Everyone, Thanks continued support. there. get a have great the you for down day. chance a

Operator

participation. does for This you. your teleconference. Thank We you conclude thank today's

at You this may lines disconnect your time.

BRC (BRCC) 5 Nov 242024 Q3 Earnings call transcript