We have the both flavors that we have to improve. There’s no question because we’re not going to get total growth until we get Lemonade and Fruit Punch on a better trajectory. We have — we did talk about it at NACS. I think we talked about it in my remarks, where reformulating both of those. We’re taking Stevia out, and we have a much better tasting product, we believe that leads to more sort of repeatability. So that’s a play for us to kind of to buoy that part of the business as we head into next year.
Stephen Powers: Okay. Great. Thank you very much.
Operator: Thank you. Our next question is from Eric Serotta with Morgan Stanley. Please proceed with your question.
Eric Serotta: Good afternoon, everyone, and welcome, Diego. I realize you guys aren’t going to give 2024 guidance until February, which I think is a wise decision. But Jim has spoken lately about an approaching inflection point or tipping point where your overall volumes and revenue could turn into growth with Truly Twisted growth more than offsetting Truly declines. What’s your degree of confidence in terms of reaching that tipping point in 2024? And what are some of the puts and takes from a big picture standpoint for getting there?
Diego Reynoso: Thank you for the question. This is Diego, and thank you for the welcome. Although we — to your point, we’re not giving guidance right now for 2024. What we can say is that we’ve seen constant improvements and sequential improvements in Circana. So if you look at the numbers we’ve seen so far, I mean, we’ve gone from looking at a reduction of 5%, 6% — sorry, 5% and improving all the way to the last numbers that we can see that you’re looking at 2% reduction. So you’re seeing sequential improvement in each one of the periods when you look at 52, 13 and 4 weeks, and we expect that to continue. What trajectory that will take? We will share a little bit more in the next conversation, but we’re really happy with the performance and the trends so far.
David Burwick: And this is Dave. I’ll just jump on top. I think what we’re seeing is, obviously, Twisted Tea become — as we mentioned, becoming bigger, growing, having a bigger impact on the total results. And again, actually look at our depletions that we talked about, Q2 minus 7 on a calendar basis, Q3 minus 3 on a calendar basis. So that’s pointing us in the right direction. And we’ll talk again — we’ll talk to your point, Eric, we’ll talk more about it in February. But I mean, next year, I mean, the goal is to get growth for more than one place. So we have a great portfolio of brands. And we need to get growth in multiple places, and we think we’re on the pathway to do that. So for example, non-alc beer is growing, can cocktails are growing.
Truly Vodka Soda is growing. We have other innovation that we haven’t announced yet that we think will have an impact on the business. So the momentum is there. We need to keep hitting it hard, and we need to move continue to grow Twisted, continue to find a way to get Truly back to where it needs to be at least gaining share and then ultimately growing. And then we have the rest of this portfolio that we think there’s a lot of opportunities to get the growth from the other elements of it as well.
Eric Serotta: Great. And then just a quick follow-up in terms of Twisted Party Pack, at least in scanner data has been a huge incremental contributor beyond the overall portfolio, which is doing extremely well. Could you talk about how you’re looking at further runway for Party Pack? Would you do additional variety packs for Twisted? Or is it more keeping it close to the core there?
David Burwick: Sure. I think on Twisted, we’re being very deliberate and very disciplined in how we roll things out, and we don’t want to over renovate. I think when you look at — Party Pack has been terrific for us. It’s still only has about 52% ACV distribution of originals like around 58% or 59%. So we still have a lot of runway just by driving distribution on Party Pack. We are announcing — we have announced Twisted Tea Light Variety Pack next year that will be out there as well. So that’s really for the more developed markets. So again, like when we go to market, we go to market and we think about it on a BDI basis — on a brand development basis. By market, there’s not one size fits all. But we’re focused on original 12-pack first.
If you get that right, then you move on to half and half. If you get that right, you move on to Part Pack. If you get that right, you move on to Twisted Tea Lights, then Twisted Tea Light Variety Pack, et cetera. I think by doing it that way, we’re maximizing the growth from each SKU that we add, and it’s not just a free for all, which the category — the total beer category, as you know, has become. So I think there’s a disciplined approach that we’ve deployed for many years that we’re continuing to hold the line on. So that’s why we feel pretty confident there’s a lot of growth without adding a lot of new innovation other than just driving distribution of what we got. And again, I think the Party Pack — last thing I’ll say about is the Party Pack is just an example of what consumers are looking for today, and that’s a variety — flavor variety, number one.
It did trumps everything else out there. And so that’s what consumers want. We’re going to make sure we give it to them, and we’ll find ways to do it, but we’ll do it in a way that’s very orderly and smart.
Eric Serotta: Great. Thanks. I’ll pass it on.
Operator: [Operator Instructions] Our next question is from Filippo Falorni with Citi. Please proceed with your question.
Filippo Falorni: I was thinking about the growth of the flavored malt beverage category. I think that’s an interesting analysis on in terms of understanding how much of the shelf space of the growth of FMB [Technical Difficulty]
David Burwick: Filippo, we’re losing — I think we lost — we have a bad connection. We can’t quite understand your question. I don’t know if you want to try again or maybe move a few feet to either side.
Filippo Falorni: You hear me now good?
Diego Reynoso: Try it again.
David Burwick: Yes, try it again, Filippo, give another shot.
Filippo Falorni: Yes. I was just thinking have you guys had any studies in terms of understanding how much of the shelf space in FMB is coming from Hard Seltzers? Thank you.
David Burwick: Okay. Got you. Okay. Yes. I think, I mean, if you look at the spring resets and then the fall resets, I mean, the hard seltzers are the net contributor to shelf space pretty much across the board. I think if you look at it now, like where we are in the fall, there have been some resets in the fall about 70% of customers that do resets in the fall in addition to the spring. And things are kind of settling out pretty much right out of to what you would expect from a space to sales perspective. So right now, I think in the last year, for example, hard seltzers has gone from maybe 11% to about 8%, which is about right in terms of space of sales. RTDs have gone up like one point to maybe 2.5 points. So they’re gaining some of that.
