Our brand ascribes values to private label obviously by anchoring the category in most retailers up into the velocity is the good and you know that’s something more monitor as it goes on, but right now I think as we think about plans for ‘24 for branded pricing we’re sort of looking to optimize revenue, sort of optimize, I suppose revenue, I can’t think what the word is now, but it was revenue optimization, I suppose, across our portfolio of SKUs, is how we’re thinking about trying to take pricing next year as opposed to moving price.
Chris Carey: Okay, one final follow-up. I know you said that the Q3 gross margin was probably atypically high. I’m just trying to understand that comment, because pricing will remain, cost relief seems to remain. So is the key difference mixed in Q4? What gets sequentially worse into Q4 and into next year? Thanks so much.
Mike Kirban: Yes, there’s a little bit of kind of mix seasonally the price — the absolute price of coconut water, Vita Coco coconut water in the quarter was higher and then the efficiency of the supply chain as inventory is low drove advantage cogs. So that combined with a different price mix on private label is what makes the quarter seasonally high.
Chris Carey: Okay. Thanks so much.
Operator: Thank you. [Operator Instructions] And our next question comes from Eric Des Lauriers of Craig Hallum Capital Group.
Eric Des Lauriers: Thank you for taking my questions and congrats on another strong quarter here. So profitability and cash flow obviously a big standout this quarter, presumably that helped lead to the share repurchase authorization. With that share repurchase, so I’m wondering, should we take this as an indication that perhaps the M&A opportunities have gotten maybe less attractive over the last, call it, six, 12 months? Maybe just give us an update on the sort of opportunity you see in categories beyond coconut water and this is just more of a build versus buy at this point? Thank you.
Mike Kirban: Yes, I think the way I would think about the buyback authorization is primarily in the company, sort of, basically creating optionality and flexibility for use of its cash. Obviously without a buyback authorization, that wouldn’t be an option. I think our cash balance at the end of the quarter is obviously very healthy. Part of that is due to inventory being a little low for the quarter. And as we’ve indicated, inventory is going to build. We certainly model out our cash needs over the next 12 months to look at what’s possible and certainly believe we could support a buyback if that was something we wanted to do. But that said, obviously it’s one option for use of capital and there are other options for use of capital.
The M&A environment, I think continues as we previously talked about. There are some opportunities, they’re all interesting in their own right, whether the valuations make sense or the fit makes sense depend on the specific situation. And we obviously look at things as they become available and explore them. But there is nothing, sort of, currently imminent, but obviously that could change. So again, coming back to the buyback aspect of this, I think it just creates flexibility for us. If you take the models out and assume no M&A, then you would probably be asking us why are we sitting on the cash balances you project. So this gives us some optionality and as I think we said in the release, it was approved yesterday. And so obviously we’re only in the process of deciding what to do.
Eric Des Lauriers: All right, that’s very helpful. And then last question for me is on marketing spend. So much of the spend so far has been on driving new use occasions, it certainly makes sense. And we saw a number of examples of that over the summer, various cocktail partnerships and pop-up bars. It seems to me that there might be some seasonality in that kind of driving new use occasion spend, but at the same time, you’re obviously increasing marketing spending into the winter months. Can you just give us a bit more color on where those incremental marketing dollars are being spent? Thank you.
Corey Baker: I think you highlighted a number of those. I think also during the quarter we announced the Becky G relationship and for us that’s a great opportunity to increase our brand saliency among our core demographic that we think is a long-term opportunity for us. And so some of the timing of that is affecting the timing of the spending, Q3 and Q4. I do acknowledge that our business has some seasonality to it, that typically most marketing would be driven Q2, Q3. But this year, I think we got a little bit delayed. Obviously, a relationship like the relationship with Becky G takes a little bit of time to put together. And so some of the timing is perhaps off this year, plus we have some catch up that we’re doing in terms of sales execution and driving distribution that we have pulled back on, on prior years that we’ve amplified this year. So this year is a little abnormal to what you might see going forward.
Eric Des Lauriers: That’s very helpful. Thank you.
Operator: Thank you. [Operator Instructions] Our next question comes from Bryan Spillane of Bank of America.
Bryan Spillane: Thanks, Operator. Hey, good morning, everyone.
Mike Kirban: Hey, Brian.
Bryan Spillane: I just have one question related to the ‘24 commentary or the color you’ve given on ‘24. And it’s just, I think if at the midpoint of the ranges, we’re adding about $50 million back to revenue in ‘24 versus at least kind of where, I guess where we were. And then to go back to when you originally talked about ‘24, I think we took 80 million hours, but I’m not entirely sure if that was too much or not. But anyway, my point is, as we look at ‘24 now, are we just adding back the business you thought you’d lose? Like, has anything else changed underlying in terms of, you know, the way you’re looking at ‘24 now versus the way you were looking at ‘24 back in August?
Mike Kirban: Yes, I think, you know, we’re adding back a piece of the business that we thought we were losing and under sort of, you know, terms that are agreeable to us right, so I think that’s the difference we still think that the branded business is healthy, you know, certainly with additional private label business we can fund you know more investment in growing the category and you know one of the reasons we like it growing the category is we have share of the category both on the branded and the private label side. So just adding back to business is purely margin-accretive might not be how we, sort of, view it because we view certainly in North America that investments to grow the category have higher return when we have more of the business.
Bryan Spillane: All right, yes, so simplistically, if we’re just looking at our models, what we’re doing is really adding back that portion that now you’re going to retain. And everything — most everything else in the model seems like it’s been washed out, right, in terms of, again, revenue expectations for ‘24 relative to where you were in August?
