Zevia PBC (ZVIA) 9 May 232023 Q1 Earnings call transcript

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Zevia PBC Q1 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. the to turn Anderson host, now ICR. with will conference your over Reed I you. Thank

begin. may You

company's website access Investor information earnings is Thank to are on quarter and the press Beckles, and and you, at welcome Executive this Chief release Webcast. Conference everyone should XXXX first Chief now, filed On Call Financial Earnings Officer. today's and call This have Officer; and Amy By President section morning. Zevia's Zevia's Taylor, of Denise First Relations investors.zevia.com. to the XXXX investor presentation available Quarter

Before Securities information to Certain subject we call Reform XXXX. Litigation forward-looking begin, comments please on unaudited. are Private note which the that Act of safe include all is call statements, presented financial harbor made provisions this on the today's of

refer on results these described statements of a to management's expectations cause made are and Please events that differ discussion that any or statements release risks number actual in with those to forward-looking filings differ the of a materially other future are in could could SEC implied current and for beliefs results from the and forward-looking those detailed to concerning These statements. cause subject uncertainties forward-looking materially expressed risks today's and today. based actual to from press

accompany as the the we as to that comparable Taylor. on financial website now earnings and our well comments I'd filings business the to of And the measures most some slides call will Amy are measures at The non-GAAP non-GAAP financial over available all use the performance. financial release, turn GAAP to reconciliations During SEC call, today's describe measures as we press presentation investors.zevia.com. directly like

continue good trial. the PBC. on progress earnings and everyone. focus distribution our morning, for we toward strong a QX Thanks, Zevia XXXX quarter and profitability our to as and drive Reed, Zevia had call Welcome

enter increased even households we are We average gain spend across household increase with channels, singles distribution. channels. strong business our immediate growth strong to in We're before per consumption as new momentum traditional we demonstrating seeing new continuing even

The in realizing quarter in basis saw public our the cost date year. reducing gross of a continue is company And growth cash any to gross continues as prior at business, momentum. price profitable in demonstrate we halfway improvement materially recovery and manage XXXX We're to we driving in the a strategic plan point The improvement resulting off. market made line. EBITDA executing on exciting brand paying the of margin. margin QX to adjusted mark shift focus the effectively, continuing team to and strongest our and the over the critically, on are XXX

in transformational to indications year their Zevia, diets another And people we walk to continue them is on we and in replaced plastic on affordable XX% keeping markets. even beverages XX as our beverages for our available than bottles mainstream, this we and removed the global results nonalcoholic levels. of taking Planet. focuses health income better-for-you is for pricing the XXXX focus of for morning. with Zevia more North of QX, and the consumers making through in realize and metric X,XXX we're million the tons mission from affordable serve Zevia's across in America, and a pleased market sugar communities

and volume. in a ahead prior XX.X% year delivered revenue a QX decline $XX.X X.X% We just realized from growth and growth new million, over we resulting of of In expectations, our distribution. XXXX, sales price net in

from new strong new and into of and season retailer distribution here team's spring consumer We increases, are in item we've another pleased continued execution and position legacy seeing growth the summer go QX. we strength. and of acceptance communicated price and customers, X% in with price increase beverage our and the from of We're a

in line. levels run mid-XX controls, adjusted for on to management EBITDA improve We've to implementation, of so the disciplined and very and rate a our quality keeping strong on strong focus continue with expectations. precedents Cost promotional Zevia new have improvement a with price increase margins cash adaptations delivered demonstrated Gross our strong strategies to growth.

and and to do strong, entirely progress made unit we've our linear. While are path our brand to expect economics not profitability we be

increased a plan I'll to levels our service support focus make throughout brand learnings base go XX data buying evolution and XX% per consumer syndicated from investments now We purchase spend over driven in their our chain with the household in the and to trip from our base. to panel marketing increases Zevia's by QX. supply households brand more to among by ultimately spend growth. support consistent past frequency this and year and and months, detail support in refresh brand with on larger Zevia's X.X%, rates is penetration in

average new We added for we maintained and purchase per consumers frequency increased brand. even as spend household the

and Following quarter strong across our user Best sales in Zevia by users health Your base of we focus favor cycled new brand dollar the light these as summer. spring new and heavy, X% material strong year's program item the performance. price Live the on increase, this for Year medium grew and our last year's of bolstered Scan indicators are in of New

QX by and sales and highest In healthy progress desirable mix data shopper in Same-store price, continued strategic brand driven that at refresh, retail retail quality anticipate Zevia Zevia in all demonstrate the the income the marketing robust we less dollar record. continues sell-through, price highly coming And a a true to remained delivered growth programming The on sensitive e-commerce. and levels. is through is brand, months. volume in support of its same

as valuable nonalcoholic which simultaneously a beverage Zevia business to spend grow a we availability. proved partners a brand, versus beverage remarkable singles and shoppers advantage home Cola a shoppers. total stocking competitive higher remains build remain We with retail XX%

more shoppers XX% shopper. stores trips beverages Our the purchase average to to versus also make

to grow where at where continue are We pace dynamics we soft see similar we in carbonated drink with #X retail. e-commerce the and

on for quarter on based focusing years past, retail peak calendar changes QX As annual the more a on less season of versus we this Zevia the leadership and team strategic new as first a activity. mentioned, in operating XXXX made shift promotional marks beverage plan, for

results accounted the driven were for which and growth, organic accounted our for XX%. while new remaining items XX% of new through store largely growth QX velocity distribution,

balance will XX-XX closer this on coming the expect in brand the our We on to and focus months shifts based refresh. calendar

of packs in cold. when packs Singles can growth customers. Distribution per rooted The X was channel units the continues food. are our natural in can, single to driver business in becoming key with a quarter our grow sleek single mass XX-ounce merchandise week packages, soda new XX doubled in and in per store our our major

stores distribution gain New soda quarter. gaps bolstered new as close selling club. gained food growth and the stores we in X,XXX the also new channel We store in selling and warehouse

were As Zevia year shoppers first stores in on of spending cycle average Zevia club and XX% those who additional and the Zevia to we bought half distribution warehouse in than in Zevia club, our that also more of new XX% bought see brand are we to new channels, pleased shoppers shopper.

power in traditional spending This of in Zevia and as spurs channels. it trips Club the demonstrates retail brand discovery the

this in be able in cloud have opportunities will region on share we and to updates more the We to coming months. selling, further expand

and sizes channels. Shoppers of as to our by than larger as trade-up the The larger are driven account shift for a stocking outside in category-wide pack club of measured expansion also is channel Velocity for XX% home retailers This channels. growth more and more in driving on e-commerce. XX-pack, measured consumer switched to and options profitable warehouse now of and business and Moving to consumption continued. Apex Zevia the sit broader growth consumer food, for the Velocity. part the in but from Zevia in competitive much trend natural through also channel and strength nonalcoholic warehouse beverages. E-commerce, a in some brand by mass players at home our of club is XX-pack

fundamental make to Operationally, are process we're chain reductions, improvements to supply time. that contribute our expected beginning and in changes efficiencies cost over to

the agility to also of brand costs our on with improve store out require selling These in to parallel focus. and level refresh be We changes reduce for will stocks work customers. continued and happening will continue to reducing

very the and consumer I'll experience brand. the the with it over has picture base big per to turn simultaneously business increasing on spend growing continues strong to a healthy Zevia household wrap demand, consumer Denise. and and

having We Critically, and increase price another first market In business. the our on we effective in in improvement to EBITDA drive line. costs a cash reducing are XXXX. strongest effectively becoming the manage X% the ever delivered announced the company are since in realizing we continue in margin QX quarter, adjusted and gross public

position into strength. headed of summer the from We're a

double-digit engaged to Denise. brand hand on-shelf improved new most continued supply chain refresh new brings radically increased and by expect identity, base. a refresh exciting year, Thank and and sharp and I'll an bolstered you, the brand all, transformation. and logo incremental differentiated Zevia's modernized and pack new highly brand with a on We to consumers, over design but of visibility, resonance our it growth

Amy, you, and an begin quarter I our of overview morning, will good Thank with everyone. financial results. first

In sales then $XX.X quarter of delivered call we year. questions. for the of time versus your XX.X% the first will We growing open net XXXX, million, same prior

$X.X X.X% by basis on driven was volume the to period. was higher realization equivalized million Growth as an down price in

year our QX higher of impact Our the pricing, as at ago, points points versus the costs. manufacturing above Gross continued XXXX, company margin by quarter of by with slightly to gross due strongest improved X.X sequential public also yet X.X a first XXXX. quarter for XX.X% margin sequentially offset improvement a primarily margin same

net $XX.X of promotional in a lower $XX.X delivered growth in of expenses year to driven million, freight pricing $X.X up of costs $X.X XX.X% decreased and sales, ago, by Selling marketing and warehousing freight period primarily to million nonworking was driven efficiencies reduction million. lower by a marketing reflecting profit XX.X% versus and improved pricing and Gross spend. million, costs the million, and reflecting $X.X

in of compared a G&A or net was to company quarter as decrease costs sales XXXX, million the of first the of percent XXXX the noncash million first compared net and of of dollar XX.X% quarter $X.X lower same year-on-year quarter sales. the Stock-based expenses or quarter were attributed million decrease sales $XX.X to last million first lower in a The year. expenses. in employee as and to points of compensation of in $X.X public was X.X net XX% expense $X.X XXXX

XXXX, A XX.X% of was an first million year. in XXXX. per compared was of Zevia of the Class Net compared Loss compared of share improvement last first $XX.X a $XX.X quarter $X.XX to first or of of in loss the $X.X to stockholders per as quarter quarter loss diluted common the million net million share to $X.XX

was million showing XX.X%, or generating quarter continued adjusted EBITDA $X.X a Adjusted loss and $X.X million in XXXX, managing $X.X to progress cash loss operations. of of the profitability million of first year-on-year flow from EBITDA compared an improvement towards

in million for and our maintained no of new a the $XX and the with Our working healthy We as end capital balance of well million. XXXX the $XX strong sheet quarter cash as cash credit of remains of first million. line $XX.X period outstanding of debt equivalents as

growth and brand to $XXX driving is will concludes to refresh continue XX% refresh, support million reaffirming of that our Turning through annual to results QX phased in to over we million, of on brand this anticipate this velocity metrics, XX% to to of guidance. XX% remarks. our of plan year. increase including our to $XXX distribution and strong late which initiatives in new we prepared $XX Based being anticipation In QX an net marketing our of support $XX invest and increase the year. our to the XXXX our guidance launched That brand XXXX, in an million the X% are year, sales the consumer million, ambitions rest of ambitions

the your open Operator? for call We now questions. will

first question Sachs. Our is Herzog Goldman Instructions] [Operator with Bonnie from

few be just to wanted all in brand of it far? you starting ship that's it refresh. during ship questions had Did I QX? have visibility clarify a now to on some just I QX? the And Is something. any so to you why expected

Sure.

it shipping So is now, Bonnie.

our We have right store some in now innovation. and specifically products

previously. only new the the for out the beer, sold six also the brand had then rolling root pack flavor and market time, pack been in and XX XX creamy in portfolio And first cola, pack existing follows. our ID vanilla of is new So then

Okay.

Or context of in QX, the should volume refresh lapping So guidance, we that's growth continue that know I comp price light all expect driven? on rolling, tough will your volume your you're helpful. then And in QX in line? in just thinking that the to QX but it about is some a be top of

derived summer refresh on through anticipate shelf. it's the driven the in would largely into I impact it then and the to price and late QX will as brand QX fully business start

transitions So at increase. all all have the guidance, as then refresh timing we think place mind in supply year. well chain when of about we look of They at And guidance, time. price as our the taking one in full some tailwind, also we both and through brand our forthcoming confirming this a factors flowing as are the because

in marketing in so feel support tailwind as new think talked I And beverage refresh. will And got remarks from parallel well, is about coming the we've investment prepared yes, we a consumption peak of for the our the we look Day increase So the of same months Memorial following, as being lot about that well. obvious other, brand with I then brand kind tailwinds and that the mentioning think the a we worth think, in refresh. and as good and

it on. Next pass question then final I'll and and

the incremental could shelf exactly or couple of you maybe And A&M especially impact refresh mentioned your the in resets. Any color And ultimate on might spend. brand in during quarters. spring profitability, gains of a hoping the next on any space received on have the stepped-up just more then Just about chain just the that about especially you touch highlighted, that? you you bit thinking light the changes what supply

Sure.

Denis talk supply a talk of presence about outlook me touch a then profitability over and I'll change it about and Let little to set your little to the step bit and turn question balance on and the answer in-store bit chain. on shelf

natural some gains taking customers now so February, beautiful, the And to line nice really refresh brand. including depending rolls X brand Those natural channel, into shelf, are our feet spring of home place billboard X really pack resets. to cardboard rolling others and the full top some In great overwraps, full had represented. our our of sort have out, late format on we where the have in May. effect a store with brand we've So blocks, we as channel origins bottom at X

in gains some stores some well had us test distribution. as some in which significant in represents mass, conventional gains and further grocery We've then for games upside in for

and of brand are when X.X% a like drug So about chip penetration you as a channel and us mass the still gain upside channels still we household ground to with think value away continue lot to for and distribution.

Some in of that follow will XXXX.

and new portions grocery store And through in we cold of stores gains both instances, had mass in availability nice through of as within we've XXXX, at But in club. shelf the increasingly year test conventional now then couple the the gained other and regions such in some channel. in a

all So profitability. that's chain turn and just supply over it I comment to on outlook forthcoming. the will on Denise to

expect the with Thank I with terms say And key costs associated transitioning you, onetime or network a the is What in that primarily supply that's we Amy. would change chain. coverage our our payments of in distribution.

number So of smaller a XPL large from going and XPL groups. to our partnerships partners

be impact to expect And have going that incur there's that will to few look it. arrangements, at we co-manufacturing our also, a costs we we so as onetime

that, to marketing of support invest the in going to we remainder refresh are for brand the each In addition quarter year. the heavily to

the So answers margins adjusted those costs our year. EBITDA Hopefully, rest of your question. that will impact this through

Any further one? that on color

no. Just guiding just think phasing I the line, understand in of trying to the mean, that to top I just through EBITDA. context. trying you're

year this drive profitable you're more line, expect forward? a on ultimately, moving top you're but expecting little expecting should bit pressure EBITDA we more So behind growth

capabilities, Yes. only support refresh year we'll ones. is of to say as make balance the indicative brand your choices And new through the of would I QX our but the

and unit supply and transitional economics our ultimately and costs forward. outlook, profitability going chain, investments So in our will of some that's benefit materially then which marketing some sort

America. with from question Our of next Christian is Ocera Bank

You have for Brian. Christian on

up sales not April for accurately discuss X% capturing outlook, So according transpire you of to X% to is sales higher are needs your to guys sales your range? the accurate? to to financial grow performance you according hit Nielsen, your XX% just guys expecting XQ of retail to for underlying Can year-over-year. Nielsen were this the Is you year-over-year. end what And Or business? also

question, this I Christian, Yes, understand some you know the appreciate of works. I how and

or not So our our entirely me, of some tracked of front a our results club the year. Scan is launching reflective are represents business. end in we of cycling that in -- apples-to-apples. excuse heavy prior launch numbers our cycling investment is quite are in original But because the of subset we because internally not of our and strategy I mean, data it you're it's as years a the seeing

of support favor three beverage months reduced in And months. year four the promo so refresh we this summer of brand in the peak the year, to first the and

we'll you'll for results what summer. portfolio through up obviously of to happen see the speak has catch To hit about Scan drinks, and end, So In on like across to the cetera, have reflect an our planet. be data to and and sort us top kind the diverse in our over. energy soda, as phases rolling guidance the a out reported that we a other eye, brand et cut say, We'll doing hard be not with P&L tea, of to I we're refresh rolling words, out. the

Denise with earlier, the QX chain And in both mentioned guidance. that transition factors our are hand-in-hand that supply

out retail in we a high-velocity need of So order of space at those sure end can meet stock in all store at we gain because will the stocks demand. to to build out need smoothly. hit to that, continue to are We'll to brand, we top to need shelf to go that and make manage indeed in-store

we for now benefits. couple And as chain transition, the then we diversify changes mentioned, cost can challenges through we efficiencies have long-term Denise as smoothly tremendous but our supply to that to efficient that we gain and warehouses the fewer, the we'll co-manufacturers next long more as months just making transition our anticipate of some need term, we're in for

guidance, to base through reality anticipate brand of. pull-through, now smoothly need any and refresh cleanly I products household, the and chain operationally quarter-over-quarter-over-quarter, us continued all need the growth, consumer transition hit with for the we consumer continued the those continued in of through more tailwinds of in So even high just spending supply we but place, which have midst per without walk to hiccups to flow also for with a been end increased we're all this

So hopefully, question, that Christian? answers your

is question from with next Our Jim Stephens. Salera

To taking ask, price. dozen not surprising,

elasticity. traditional that Zevia some little the to does more a recoup shorter beverage buys beverages? rate, But little they're the kind consumer shelf coming of a faster you price that kind see can time they're often? become You of more them bit takes losses So readjust of to the to because given of demand at higher for buying those us volume of kind a frequently because it back

we think question and still that's the yes, say are would because and relatively the I our about I new still I have base. in we not astute definitely Jim, that to you're say answer is game reason question probably the in a because And very price a probably. increases. right small is highly brand engaged your taking

additional Our tailwind as we increase that to took increase August portfolio, lapping Prior price price the as have first a as we going done on we an forward price pricing on year. increase full that, we an those took last company X. deeper only. was actions last we increase right X will a now. But well had price the lap pack of the X, material points and And of promotions are August a lower full

the of because price shopper price have with keeping the in that, early it. point so not indeed, adjusts market, indicators ahead are increases simply And new our the been to yes,

price would gates given it that pretty so consumer new for points question? is your pricing anticipate as Does And indicators But of early true. the adjust to say out quickly that's early days us that history and we our a company. answer the

And kind can strategy. a of broader the Yes. advertising That's I on great. ask follow-up maybe

What this you what's terms to are channels brand kind level launch the the You you kind of to and at of advertising? message not consumer. once want lot refresh might be of with? you brand a only bring to from visibility that familiar more much And have in met going guys drive use put having consumers into the shelf into

Yes, I'm that's a the great excited thing question the most about. probably that and

channel, feel that new, push What's seek call, the on is historically tactics brand velocity. refresh question purchase, and however, and to to with past. support some your voice we'll we drive what I'll in Zevia at answer of support new new continue the employed a retail to brand the marketing, haven't So of point has and identity supported tactical business so the and that we and really marketing look

a engaging about, sampling, geographical what so end-market additional broader BDI digital with we activity, spot brand we in-market So have below-the-line markets low advertising complementary and basis opportunity. social media then consumers, and know activity, it, call building, tactics what call, let's I'll CDI advertising based some on on where

I rollout as of good in the goal we've new reach, Most these of to got after the it Memorial And is our Day, message? And field flavor. you what's say ask, summer. consumers. great you late would some say,

all about very are people Zevia. tries a rates trial high. are and When the driving We consumer experience conversion product, having

are the when of for back then funnel, and is half brand invest know trial, to top awareness the so shelf. a year to especially XXXX refresh initiatives we that and So we'll very in in full of us, and high building fully ROI sampling attractive the continue

about they into sugar product can still a ingredients great. and the have So taste realize they have clean consumers and then franchise once we're more the and product excited inviting them maintaining X taste and

Okay. if more just squeeze in could Awesome. one I Maybe question.

of energy mix kind noncore in guys or a Zevia buyer into core get who the an to of or do somebody maybe cross-sell and any summer, teas unaware you bring soda or the is you detail bring some the on them on thoughts offering? and either has kind the to provide energy a if offerings, or especially can have that tea of into any kind LTO CSD, Going with

and upside for categories opportunity we us, which and and We've Sugar space. of over soda that in big XX for in the product energy Zero our a years really tremendous soda. have is been awareness beyond mentioned for for you tea. pace set trial a driving Yes, And

And most products, those for to build and thing so availability us in-store for visibility to do cold the important is trial.

in answer your summer. directly to some don't have any in so We question, the offers flavors the new have time do we And limited pipeline.

in vanilla soda, So we have cola.

have X look drive flavors alongside coming We there. increased can visibility And our new that coming energy refresh distribution drive brand with out we anticipating cold tea. and a are flavor some for feel different drink for a business drinks to support tea and radically energy one and out on the to drive trial singles have new and and availability in are

in visibility time you're the tactic the new great limited drive will drive likely a featuring bolster to existing packs, some most part, it's portfolio permanent time, for holiday winter, way and will which our visibility. describing. in-store that in us follow is Our offers flavors variety display help for the But so also and

Our question Andrew BMO. Strelzik next is with from

start you think to right still expecting cost the kind of for does How still that from the gross the margin more the the cost Is to that hoping was way about gross seeing. mid-XXs? the are doing job very company a you see then But the by internally, I externally, what controlling talking guess it's I good broadly, And margins do that Obviously, could year? is outlook? environment. balance perspective? environment cost contribute you a about of

the the year. I for of will being margins mid-XXs think the actually, Yes, rest of in

pricing a supply that inflation rest some the saw still expect the we last perspective. lots in seeing mid-XXs answers that to and we promotion We looking our be we Hopefully, rates cost from the of what But and at question. in year. with for year. but of chain anticipating are your are the strategy

helpful. the single mix just a That's confirm, press out the serve? Are to maybe clarification, side the wanted like if Is other you but areas. a pack the talk seeing in headwind of -- you And release. Yes. sizes just how either consumers the different that the a called more Just or I about treating you just could anything or mix that? business else are and with channels anything

Sure.

an we drive that of been so think I opportunity other for sense a X of is is And Cola the seeing our to just continue in has through availability. than volume us packs larger, packs more XX% positive. for that to mix now us, singles upside are then and the coming

natural well, the And where where what's conventional in exceptionally us but building win they're well know performing and Cola exciting so new consumers. single channel consumers to very sold distribution singles brand, are for and is out

asking So which for really as positive that a you're wasn't relative generally remain speaking, And sure brand, Andrew, the we us of category. answer strategic the the question? stocking mix see does benefit up. to consumers a trade we home is continue advantage regard what to with your rest to I a headwind.

quarter, as not if think I So I [Indiscernible], out called a I called in mistaken. last was the And press it actually out think release, you am benefit.

was just that wrong, out that guess to Maybe the it about. trying I asking had I no channel release believe impact, here. consumer was found but I there shifting in so sure I And That's anything like was what trade-down that? making impact, was I

it. Got

Okay. as margin continues both then gaining And mix be supportive, that the a consumers. think I to what and the we is new most we're from a brand in We perspective. refresh anticipate roll focused volume on out

adapt tailwind going will and forward. to then to expect a should us user for that's So trade our on and drive by with heaviest also metrics portfolio what and ups our channel availability based we're be singles, and we Cola drive seeking profitability

Chris question is next from Fargo. with Our Wells Carey

the SKU? put of supply in go been initiatives distribution that Can year toward give place barriers going the specific comment you're after or logistical market, greater the the that you Obviously, or just to geared things changing that or that going less network you rest kind on a over opportunity to of opportunities course your of has from to the single-serve? expanding offering chain

there's can just any component, on Denise as turn and touch I over focus then if Sure. on supply I'll the of follow-up with it logistics on touch distribution the chain, a you to singles, to questions. say,

is We store are So merchandising in-store channels. a hindrance delivery, that relates Cola not it right? availability in and direct across as multiple DSD, to inherently

are leading We fortunate in exciting a and we're item high-velocity, in that, natural.

able to solid interest we from the conventional we retail merchandising pull-through of store greater channels. that our distribution delivery and get in are other then lack despite partners from we our have direct data, in So And great get environment. once

single market of like and to maximum of right now, an route the as market convenience. So to are in as opportunities we all, our studying route capabilities box accommodate of evolution driving cold most to within well distribution the our drug

that of next expand us, we through Chris. do a partner step consumption growth. to or and So to with immediate unit footprint that a potential will and profitability especially a right efficiently profitable We partners so up also for way in supports our sign fast, economics and not be lens the could DSD want it

quite in not we're on come to that and But following the there yet quarters. news more

So on don't I our our in have in? convenience, channels other logistical in we to really have immediate question? Does growing consumption the we is answer chain expansion you could today, barriers dig Or know. business any supply to and your route as true you the where that follow-ups Denise but to any market play within that where central do

to that some And this exactly of that's I'm No, ultimate journey. is channels. other velocity, high sounds foundation just higher-margin getting opportunity the into of start kind the expand like to at, Yes. single-serve what these it

That's right.

about combination that's points form performance our of a and channels, cold have excitement a sold some single of set and have at path unit I for And price the economics then partner and our to in we I foundation in the build to great data think in convenience. future our to perfect the other profitability. take think we strong

no are chain expanding supply us obstacles There singles. on

so that's just -- clear. So

opportunity pursue. us, opportunity since we that great For growth that. a a see supply chain is and launched not hindrance is the singles the to And chain to continue the We it. we've

Joe question next Feldman Telsey. with Our is from

even getting I the just you the say distribution. maturity like sounds And your continuing to you club what club Wanted you're in channel I heard about most more it's grow. have to It because ask clubs. how mature has performance And I there. you're some seeing know thought been

could around So share maybe that. a you more just little color

our Yes, launch the Sure. we're Joe. in lapping Thanks, club.

fill head benefit following that the Day more we full the the so are sampling. with distributed, gain regions better on in year We're of results in XXXX good Club, not we saw in business the as yet we support we of have to we nationally coming entirely getting our results toward still first quarters the club sort updates summer. So and pipeline and but Memorial in get even when some

time. And also that it these can consumers track shoppers Zevia of channels. past incremental the XX% XX buying Club months, so And to we first buy in back those are for over

grocery So to where continue average they than adjacent like channels shopper. spend more the Zevia

a valuable the shopper there is as they as more. both us shopper, learning as for spend tend Zevia to net brand our for at well stick Club and is very club So a the outlet with

to considered a Club an I normally wouldn't better-for-you be discover a drinks, in national think to out increase in of brand the It's point a exciting purchase in and a Zevia to energy a are or is flavor what's because getting during brand it price is which shoppers maybe environment. environment variety space, of energy lot a and next for club important driving we is moment. lot Zevia because finish then and at tea trusted to press be trial whereas attention high and and distribution in Club a rotations tea

and sell And rotational look to successful we can and there. these so multiple prove are drive able as that's starting distribution Club to increased anticipate as in categories fruitful, being we to tests

Or for lot but that's gains coming you're share probably from? having where Got just No, other the from drinks category? that the do are And there obvious smaller think sure. a it. big -- do it are or just the it -- this Is guys guys? ones, see you trigger you big this opportunity the of of are coming entering then know, maybe great. that from sort like you other There's players

Sure. Yes.

draw from we diet beverages. from share really draw We mainstream So zero isotonics sodas. meaning we from share sugary and of varied functional interesting sodas that data, from and the traditional share players a have stomach

volume from draw want drinkers from who really who flavor sort soda. also a satisfying water We have of sparkling fatigue,

usage quite share broad stomach. so we we occasions we call So base what a offer that of many of have different

in Zevia. more and products interest also more As online, come increased finding better-for-you we're

better-for-you sit rising benefit a household X.X% much lot that notion tide is upside. the us have this in given out penetration very of boats, So a a all we to floats again products, and seeking macro trend at and

I of off get summer, for we now As there's level, marketing start draw distributed may continue, upside the tide. the otherwise increased bottom rejected also at category this altogether? players, a on this to in those the machine, but eye shelf believe, interest just source volume are to us in Cola And an a and of a drive have turn lot availability big we'll rising soda mainstream from that

for out have call. reached question-and-answer of session thanks for are the gentlemen, and time you the we participation. and today's Ladies of time your end Zevia and

time. You may disconnect lines at your this

everyone. Thanks,