We’ve been moving into a lot of, call it, non-tracked channels, but a lot of areas where you don’t see promotional activity as deep, and so you start to see that benefit. And if you look at Monster as an example, historically, you can see where their promo as a percentage of gross revenue or gross dollars improved over time. And so, we’re starting to see that as well. Now we did invest or add additional incentives in Q3, but the leverage allowed us to more or less have a percentage of revenue or a percentage of gross revenue consistent year-over-year when you’re looking at Q3 2022 to Q3 2023. And so that’s where that was called out.
Operator: Our next question comes from the line of Jon Andersen with William Blair. Please proceed with your question.
Jon Andersen : I wanted to ask first about the rollout of foodservice. You mentioned the 2,000 Jersey Mikes, and then I think you mentioned authorizations in over 3,000 Dunkin’ Donuts nationwide. What’s the timing of that with Dunkin’ Donuts? And what are your expectations for further rollout in eateries as you move forward this year and next?
John Fieldly: Jon, great question. I think we do see a huge opportunity in foodservice. I think when you look at — and we’ve talked about this with Celsius, which is unique, is that consumers really are enjoying Celsius and consuming Celsius outside of that traditional energy drink consumption occasion, which I think is a huge unlock for the brand in the portfolio. When you look at Jersey Mikes, we’re really using that and really focused on that as a proof of concept. This is really our first nationwide fast casual chain, and initial feedback has been positive. But we’re really, really early. I mean, you look at it probably only about four weeks in, but initially has been fairly excited on the partnership, and we’re going to continue to see how that goes.
I think if that’s successful, we’ll be able to roll that out to other fast casual restaurants and eateries that Pepsi has access to. And Pepsi has vast access to a large portion of foodservice. Dunkin’ Donuts was a great addition. Unfortunately, we only have one SKU currently that is authorized, and that’s our Orange flavor, which tastes great and refreshing. I have heard feedback from a variety of new customers to the portfolio that they’ve actually found Celsius and learned about Celsius because of the distribution gains in Dunkin’ Donuts, which was great. So, I think the foodservice could be a great way to also bring new consumers into the franchise and the portfolio. We are in about 3,000 to 4,000 Dunkin’ Donuts currently. There’s a lot more Dunkin’ Donuts to further leverage and grow upon.
So, it’s really that proof of concept and also getting more flavors in. Jersey Mikes, we have about three flavors right now and Dunkin’ Donuts is one. So still in the early phase, but I think when you see the success of our revenue, our PepsiCo revenue, approximately 10% is foodservice, which is universities and hospitals, I think we’re all really excited about the opportunity that lies ahead.
Jon Andersen : Absolutely. You’ve mentioned Essentials as a key innovation for 2024. How is that product line differentiated within your portfolio? And is that really a key element of achieving the greater shelf space and facings that you talked about that you expect in ’24? Is that going to be more limited to select retailers such as 7-Eleven initially?
John Fieldly: Yes. It’s going to — the Celsius Essential line is going to be limited to particular retailers initially. We’re really focused on further building out our core portfolio. So that’s — when you look at prioritizations, our prioritization is number one, our core Vibe offerings, flavor profiles, and then secondary will be our Celsius Essentials that’s going after that performance energy segment. Initial feedback has been extremely positive, and it is designed to be incremental on top of the gains that we’re already anticipating we’re getting in ’24. And we’ve aligned with our partners on this as well, and feedback has been initially well received.
