Martin Roper: You know, I think we like our current position relative to the category. I think if you look over two to three years, most of the rest of beverage has taken very significant pricing increases relative to what coconut water took, partly because of the economics of those businesses relative to how our supply chain has performed absent the ocean freight increases, right? So we actually like the fact that perhaps today we’re more affordable than we were three years ago in the relative beverage category. Obviously, we’re going to monitor that. We have, as we stated, one of the few categories in beverage — in non-alcoholic beverage that is growing volume and price. So we’re going to continue to fuel that by maintaining the current price gaps and obviously we monitor what’s going on, on the competitive environment basis to see if any changes to that are necessary.
Jim Salera: Okay, great. Very helpful. Thanks, guys. I’ll pass it along.
Mike Kirban: Thank you.
Martin Roper: Thank you.
Operator: Thank you. [Operator Instructions] And our next question comes from Michael Lavery of Piper Sandler.
Michael Lavery: Thank you. Good morning.
Mike Kirban: Good morning, Michael.
Michael Lavery: I just wanted to follow-up on Bonnie’s question where you’ve given us a little peek into 2024. And if I’m catching it all correctly, a bit of the thinking is the mixed drag from strong private label growth. Can you just touch on what the branded Vita Coco coconut water segment by itself might look like in terms of how you’re thinking about the momentum there on the top line?
Corey Baker: Yes, obviously we’re not trying to provide sort of guidance, we’re just trying to think about modeling. If I had to model this, I’d be modeling coconut water category, volume growth, pretty similar to what you’ve seen in the last two, three years, which in the scan data I think is high-single-digits…
Mike Kirban: Sort of high-single-digits.
Martin Roper: High-single-digits plus some gain of share, right? Obviously, when Mike asked me to set goals for the year, he tells me I’ve got to grow share. So that’s how I would think about it. I think as Corey alluded to, there’s lots of moving pieces here. We’ve got some changes in the private label relationship that we’ve talked about, those mixed price changes in the private label business, which obviously provides a headwind in net revenue next year. But we feel very good about branded growth. Obviously, the scan data continues to be very strong for scan channels. Obviously, we need to grow the other channels as effectively as scan is growing. So that’s a challenge for our sales force, but that’s the challenge we’re signing up for.
Michael Lavery: Okay that’s helpful. And it doesn’t get touched on too much, but I actually want to put over to the other segment and just, you know, very, very small obviously. But can you update us, you know, the growth there sequentially in year-over-year, even the tiny and absolute numbers was robust? Just maybe help us understand how to think about, you know, PWR LIFT or some of what else might be going on there. I think there’s been a pretty small, geographically limited test. Is that alone moving the needle on this? Or how do we think about maybe how that segment could evolve if that test is going well?
Martin Roper: Well, you know, in that segment, you know, obviously there’s a variety of items that don’t fall into the two main segments. What I would say is we continue, you know, from a business priority perspective to prioritize coconut water growth and growth of Vita Coco related branded activities with the innovation as sort of a secondary priority and the innovation efforts obviously fall into that other as long — as well as commodities and some other stuff. So it’s a little bit noisy. I think what you’re seeing in there is some slight volume growth that reflects our investment in PWR LIFT. I think we’re you know very happy with it. I think we believe PWR LIFT over indexes with our investors which is sort of interesting based on the conversations we have and our analysts actually.
So we know we have something there and we’re trying to work out how to make it work at retail, obviously it’s a very competitive segment. But we’re happy with the progress and as we look to next year, we’re hoping to add some additional geographies perhaps where we can influence the distribution a little stronger to get it on shelf in a cost effective way. Because obviously that’s what’s required to make something like this successful is to get drive it to shelf. So, but we have some opportunities, but we’re also pretty pleased with it as a brand initiative as part of our portfolio of innovation. And when I say portfolio of innovation, there are other efforts that we’re not ready to talk about yet that we’re doing that hopefully will help in that other category as well.
Michael Lavery: Okay, great. Thanks so much.
Operator: Thank you. [Operator Instructions] And our next question comes from Chris Carey of Wells Fargo Securities.
Chris Carey: Hi, good morning.
Mike Kirban: Good morning, Chris.
Chris Carey: One quick follow-up. So you’re rolling back pricing on private label, but you don’t intend to do that on the branded business. Can I just confirm that?
Martin Roper: I don’t think Chris we have said that we’re rolling back private label. We’ve been very careful to just talk about mix and private label effects that affect our business. And long-term private label tracks costs, but we’ve been very careful so I just don’t want to confirm the question as a fact.
Chris Carey: Okay, yes, that makes sense. How do you feel about, you know, overall price gaps in the category currently where you sit and, you know, any, you know, plans to maintain certain levels going forward. Just in general, how you feel about price gaps relative to the strong consumption that you can see?
Corey Baker: So, we’ve sort of talked about how we feel relative to the rest of the beverage category already in reference to a prior question. I think relative to private label, that’s obviously retailer specific. As private label, as we’ve sort of said, is concentrated in a few major retailers in the U.S. and the situations where our brand sits next to private label are sort of few relative to the total retailer universe, right? So we look at it retail-specific. Obviously, we’ll monitor that. If those suppliers should — those retailers should reduce their shelf price on private label, we will monitor the trends. I think right now we believe the branded and private label co-exist nicely on the shelf, they’re complimentary.
