Eric Serotta: Got it. Thanks for the color and I’ll pass it on.
Martin Roper: Thanks Eric.
Operator: Thank you. One moment for our next question. Next question comes from the line of Michael Lavery of Piper Sandler. Please go ahead.
Michael Lavery: Thank you. Good morning.
Martin Roper: Hey, good morning.
Corey Baker: Good morning, Mike.
Michael Lavery: I just wanted to follow up on the juice cans that, at least in convenience, the ACB build has been a little bit slower than we might have expected. Can you just give a sense of what some of the challenges are there? And is there a way for it to break through or what should we expect to kind of looking ahead a little bit?
Martin Roper: So I think, as we said before, building distribution and convenience is a long, slow, hard game. We launched nationally last year and we made really good progress. I think, you know, what you then have is some of that distribution doesn’t stick for reasons that maybe it wasn’t quality distribution or whatever, so you get a little bit of churn. The fact that it’s still growing, I think, is a positive to us. I certainly impacted a little bit by the distributor incentive that I previously mentioned because we didn’t have a big push. But the actual scan data is very healthy. Juice cans up 34% in the quarter. So the velocity is just starting to build, and that gives us a lot of confidence. And obviously, we’re going to keep pushing, but it’s going to be a long slow build and that’s how we think about it.
Michael Lavery: No, that’s helpful color. And just one more back on multi-packs. We see the breakdown on slide nine, which is really helpful, just kind of what drove growth. But some of that, obviously, in this quarter had, you know, some promo shifts or different things might have impacted it. Can you just give a sense from my incrementality perspective that the consumer behavior on multi-packs? It seems like its driving more occasions, is it that simple? How does the consumer interact? And you’ve got the base business obviously holding up, but where do multi-packs go from here in terms of the sustainability of the kind of growth that it’s been doing?
Martin Roper: Yes, I think, you know, obviously, it’s a larger purchase, and so therefore it sits within the more sort of high-volume coconut water consumers, and it’s provided them with a better shopping experience, plus a value opportunity, right, because there is a slight discount. When we launched them, the discount was much bigger than it is today, so we’ve been able to close that and still maintain these velocities. We think it helps us in growing the category and having more coconut water in people’s homes, because there’s less chances of being out, so it’s all good. I think we’ve talked about before that it’s probably a two-year plan to close all the distribution gaps with some of the delayed resets. Maybe that’s now going to be three years, so maybe a little slower than we anticipated, but we’ll see how that goes this summer, but we feel very good, and I’ll read on it from a supply planning perspective, as we need to expand our ability to produce them, and so we’re working hard on that.
Michael Lavery: Okay.
Michael Kirban: And the idea is over time there’ll be new multi-packs coming into the system also. Different formats, different flavors, these types of things. So that will continue to build. One other thing on behavior, we believe that it’s bringing more product into the home, which is bringing more users in each home for the many different occasions that we continue to educate consumers on for using coconut water.
Michael Lavery: No, that’s helpful. Great, thank you so much.
Operator: Thank you. One moment for our next question. Next question comes from the line of Gregory Porter of Evercore ISI. Your line is now open.
Gregory Porter: Hey, guys, thank you for the question. I was wondering if you could maybe just provide a bit more color on the private label price gaps, kind of versus your branded products and, how you’ve seen that change. I mean, you talked a bit about earlier on the call. But just was wondering if you could provide more color on the quantum there and how you plan to respond if at all? Thanks.
Martin Roper: Sure, I think what we’ve said historically is that private label pricing tends to track costs or costs, right? And so, it swings as the costs move and there’s a lag on that. And so, I think when we look at where we are today, current private label prices to branded, price gaps seem to us to be appropriate and pretty much mirror where they were pre-COVID. And so we think we’re back to a more normalized sort of price gap situation. You may remember during COVID we did not move the branded pricing that much, but the private label costs would have moved quite a bit. And so we think we’re back to normal. We’re stuck to see that — we’re still lapping a period last year when the gaps were a little tighter, and so probably end of Q2, Q3, we’ll start to lap where we’re normalizing in the year-on-year comparisons for the same.
We think, some of the growth of private label is that, but some of it is also channel shifting, and then some of it is the fact that we’ve gained accounts, right? So it’s a combination of all things, and in total we expect long-term private label and branded to grow at pretty similar rates.
Gregory Porter: Great, thanks guys.
Operator: Thank you. [Operator Instructions] One moment for our next question. Our next question comes from the line of Eric Des Lauriers of Craig Hallum Capital Group. Your line is now open.
Eric Des Lauriers: Great, thank you for taking my questions. First for me on ocean freight, did you comment on your mix of spot versus futures contracts for shipments here, and then maybe how you expect that to evolve for the rest of the year? And then just kind of related, I think last call you talked about sort of increasing the supply that’s coming from Brazil. Obviously that’s kind of a longer-term initiative, with Brazil obviously being where ocean rates are least expensive for you guys to the U.S. Could you just provide some comments there on how that process is going, maybe quantify that impact for us? That’d be great. Thank you.
Martin Roper: Sure, on the ocean freight side, our position as it relates to sort of coverage on contract on ocean freight remains pretty much what it was last time we spoke to you. We have not entered into what we would regard as long-term ocean freight contracts, which we would typically think about as 12 months. We continue to operate on what we call spot, but as we talked about last time, does not necessarily reflect what you’re seeing on the indexes. We’re basically in a situation where month-by-month we are communicating with carriers to say, hey, we have 200 containers to go from A to B, what’s your price, and we’re bidding them off against each other, and that is resulting in rates that are below what are reported spots and that we think are competitive.
