Jonathan Keypour: Okay, cool. On margins again, just in terms of the amendment to the agreement, I guess what are the implications to the margin from here? What is there a benefit? Is it likely dilute or anything like just a sense of what it may or may not do to margins?
Jarrod Langhans: Yes. So, the incentive program is for Pepsi. It’s incentive based, right? So obviously we’re going to get something for it. So, the idea is to really drive what our priorities are, what their priorities are across energy. We want to be the number one energy brand in the world. It’s also really to drive alignment. And so, from that perspective, it’s an incentive program. So, the idea is to really push us to the next level. There is obviously it’s an incentive program. So, there is obviously a cost to that program. So, it’s something that I would look to see ramping up across call the first six, seven, eight months of the year and to really be cruising by the time we get to the back part of the year.
Jonathan Keypour: Cool. Thank you. And if it’s all right, just a couple more on revenue, I guess specifically in Costco that became a bit light on foodservice. Just wondering about the sequential decline in Costco and the flats and foodservice and drivers there that you can point to or what to expect going forward?
Jarrod Langhans: Yes. So, Costco, really the club channel, we probably should have called that out last quarter, but we did see a really good Thanksgiving week and Black Friday. So, we had the team really activated phenomenally there. So, we did get a bit of a bump there in Q4 versus Q1. Q1 does also tend to be a little slower in the club channel. What was the other part? The foodservice, foodservice remains strong. That can be a little lumpy at times, but being up at that 12, 12-ish range is pretty good for us. And we do we are seeing gains in areas like convenience. So, we’re seeing gains in some of the other areas that are from a scale perspective bigger. So, as we see gains there, you may not see the same percentage growth from a percent, but we are seeing dollar growth.
Jonathan Keypour: Cool. And then, just the last one on the shelf reset coming up, so it sounds like one third done already, two-third coming, so basically a doubling of what’s already been put in there — more than a doubling of what’s been put in the trade already. I guess in the Nielsen, you can see that the TDPs and the average number of items looks great. But if it’s going to keep moving up from there, I guess, is that going to be, does that kind of imply new flavors or innovations coming to market by the end of the year? Or is it going to be like double, triple facing, that kind of thing?
John Fieldly: Yes, I think the goal is to gain double, triple facings. So, a lot of the resets items, average items per store might not increase, show up in the scanner data, but we’re gaining those secondary third placements and better placements within retailers. So, as an example, like within, I mentioned Publix moving from HPC into the energy aisle, also gaining additional availability and placements in cold checkouts. That’s an example of a transitional move. And also we’re looking at other retailers as well. So, we do have innovation coming in this year, which we’re launching. We launched CELSIUS Essentials. We got a Galaxy Vibe, a variety of other great flavors, but we’re really, I think the bulk of the resets, you’re going to be seeing them by double, triple facing within stores and gaining secondary placements.
Jonathan Keypour: Great. Thanks very much.
John Fieldly: Thank you.
Operator: Our next question comes from Michael Lavery from Piper Sandler. Your line is now open.
John Fieldly: Thank you. Good morning.
Michael Lavery: Good morning. I just wanted to come back to the inventory for a minute. And I think you’ve been clear not to expect a snapback or an inventory restocking, but should we expect any more de-stocking? I know you said the inventory levels feel about right, but how low could it go? Is that something we should watch out for?
John Fieldly: Yes. I mean, I can’t control, I can’t control that or we can’t control that. I think it’s sales are flowing; sales are strong at the register. So, it seems to be like the balancing has been finalized, but who knows what next week or the week after happens. But I think right now it seems somewhat stable as we ended the ending March.
Michael Lavery: Okay. Thanks. And just back on the incentive plan, you’ve given some color on that. I know you don’t want to be too specific, but can you maybe touch on what the rationale was, what prompted you what problem was it fixing, because obviously there was great momentum in place, what does this change qualitatively that makes it seem like it’s kind of worth changing the terms?
John Fieldly: Yes, I think when you look at the partnership, we’re heading in, we’re really at a great point where within the, where Celsius is within the energy category we just broke that 10th share. You’re looking at ways to further partner and incentivize our distributor and our partners. And we do that with our employees, we do that with retailers and our distributors. So, this is like a standard practice we’ve done in the past. So, I don’t think it’s out of the, anything out of our standard course of business. We’ve done variety incentive programs. And this further aligns us with additional prioritizations within PEP Energy also solidifies this as more incentives, we both win together and it really achieves our long-term goals. We feel really confident in where we are and what better way to incentivize both parties to continue to drive Celsius forward. I don’t know, Jarrod, if you want to add anything else.
Jarrod Langhans: No, I agree with you. It’s really about making sure we’re all fully aligned together to take that next step and to really go after the number two and number one players in the market. We need to do it together.
John Fieldly: Yes.
Michael Lavery: Okay, great. Thanks so much.
Jarrod Langhans: Thank you.
Operator: The next question comes from Peter Grom from UBS. Your line is now open.
John Fieldly: Peter, are you there? Can we go to the next question?
Operator: Our next question comes from John Andersen from William Blair. Your line is now open.
John Andersen: Hey, thank you for the question. I just wanted to ask about the category growth that you’re driving. I mean, you’re driving half of the growth in the category, energy category. And I’m curious to know to what extent you’re seeing that come through as new consumers into the category, to what extent you think you’re driving buy rate through new occasions, and then how the brand is performing overall from a household penetration and the kind of repeat rates you’re seeing, so, just digging into some of the metrics underpinning the growth that you’re seeing, both for the category that the brand is driving, but also your brand. Thanks.
