Welcome to the Constellation Brands Q2 Full Year 2022 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode. Following the prepared remarks, the call will be opened for your questions. Instructions will be given at that time. I will now turn the call over to Patty Yahn-Urlaub, Senior Vice President of Investor Relations. Please go ahead.

Thanks, Josh and good morning and welcome to Constellation's second quarter fiscal 2022 conference call. I'm here this morning with Bill Newlands, our CEO; and Garth Hankinson, our CFO. As a reminder, reconciliations between the most directly comparable GAAP measure and any non-GAAP financial measures discussed on this call are included in our news release or otherwise available on the company's website at www.cbrands.com. Please refer to the news release and Constellation's SEC filings for risk factors, which may impact forward-looking statements we make on this call. Before turning the call over to Bill, similar to prior quarters, I would like to ask that we limit everyone to one question per person which will help us to end our call on time. Thanks in advance. And now, here's Bill.

Thank you Patty. Good morning and welcome to our second quarter call. Let's dive right into a discussion about the quarter. There were a number of puts and takes impacting our results in Q2 and Garth and I will spend time walking through them. However, the fundamentals of our business remains solid and consumer demand for our brands particularly our core beer portfolio remains strong. This gives us confidence to increase our EPS guidance for the year which we outlined in our press release earlier today and Garth will review in more detail shortly. In addition, we repurchased a significant number of shares in Q2 at prices that are favorable as we believe Constellation’s stock is undervalued at current levels. We've received some feedback from investors on this topic in recent weeks and we will address key themes that emerge from these discussions in our remarks. As we walk through our Q2 performance and outlook for the remainder of the year there are several key takeaways we would ask you to keep in mind. Number one, the momentum of our core imported beer brands provides a point of competitive strength versus industry peers as we are the leading share gainer in the high end of the U.S. beer market. The majority of our growth continues to be driven by Modelo Especial supported by strong consumer demand for Corona Extra and Pacifico and we expect this to continue for the foreseeable future. We continue to believe that Modelo Especial in particular has a long runway for growth given the steadily increasing household penetration for this brand among non-Hispanic consumers and continued strong velocity. Now we've admittedly had some supply challenges this fiscal year driven by several external factors, the most relevant being the ongoing robust demand for our beer brands. We…

Thank you Bill and hello everyone. Q2 certainly reflected another strong quarter of marketplace performance for our beer business. Due to continued robust consumer demand for core beer portfolio we now expect to exceed our initial top line and operating income targets for our beer business. Additionally, our strong cash flow generation enabled us to continue to repurchase shares during the quarter and through September we've repurchased 6.2 million shares of common stock for $1.4 billion. As a result, we have increased our full year fiscal 2022 comparable basis diluted EPS target and we now expect to be in the range of $10.15 to $10.45. This range excludes Canopy equity and earnings impact and reflects the increase in beer operating income guidance and decrease in the average -- in the weighted average diluted shares outstanding based on shares repurchased through September partially offset by an increase in the tax rate for fiscal year 2022. Now let's review future performance and our full year outlook in more detail where I will generally focus on comparable basis financial results. Starting with beer, net sales increased 14% driven by shipment volume growth of nearly 12% and favorable price partially offset by unfavorable mix. Depletion volume growth for the quarter came in above 7% driven by the continued strength of Modelo Especial and Corona Extra as well as the continued return to growth in the on premise channel. Depletion trends tempered in Q2 versus Q1 driven by out of stocks due to ongoing robust consumer demand as well lost shipping days for some of our distributors due to severe weather events including hurricanes and wildfires. We estimate that these factors hampered Q2 growth by approximately two to three points. As Bill mentioned on premise volume accounted for approximately 11% of the total beer depletions…

. Our first question comes from Dara Mohsenian with Morgan Stanley. You may proceed with your question.

Hey guys, so on the beer topline front, first just a detailed question given the volatility here and the tough comp in Q3, can you give us an update on how September depletions are trending so far and also for the quarter are you expecting depletions to still be above that low single-digit shipment rate that you mentioned or is that tough with the difficult 12% depletion comp? And then second, the longer term question is, you raised your revenue guidance for this year how much of that is underlying demand strength and depletions maybe versus shipments and perhaps getting more supply into the balance of the year versus pricing and on the pricing front you've sounded more aggressive in terms of pricing expectations going forward publicly, a) I guess, is that correct and b) is that more just to combat higher commodity costs or is it more confidence in market share gains or that the consumer environment is conducive to taking pricing care? Thanks.

Sure, Dara. Let me take a swing at that and if I miss anything Garth can fill in behind. So relative to depletes in September, we expect those to be fairly consistent with year-to-date trends. We're just about wrapped up for September. Keeping in mind that's going against the 20% increase that we had during September of last year. So, that's a pretty powerful start to the quarter. We do expect that depletions are going to continue to be above shipments for the reasons that Garth noted in his remarks. So we would expect that depletions would be above it for that window of time. The pricing environment remains relatively strong. As we've said, we expect to be slightly ahead of our usual algorithm driven more by taking to pricing on some skews that we had not anticipated earlier in the year, more than we're doing anything unique to take additional pricing where we -- over what we had already planned. Garth anything you want to add to that?

No, I will just say on the depletions for the quarter, depletion growth will absolutely outpace shipment growth in the quarter. But on an absolute basis, the shipments will outpace depletions which helps us get into a better position from an inventory perspective.

Yes, keep in mind, as we've said, we have our inventory levels at our distributors below what we would like to see and what they would like to see on an ongoing basis. So we would be expecting to fill some of that as we get our inventory levels back to normal position by the end of the fiscal year.

Thank you. Our next question comes from Bonnie Herzog with Goldman Sachs. You may proceed with your question.

Hi, thank you. I actually had a question on your guidance as well. I just -- in thinking through it and thinking about the mid points of your new beer guidance for the full year, this does imply a pretty big step down in the second half. For instance, your new guidance implies around 4% to 4.5% beer shipment volume growth, 3% off income growth, and then beer margins of 39% for the second half, and that compares to your beer margins of 40% in the first half, which did include the $80 million obsolescence charge that you pulled out. So, I guess, I'm trying to understand your level of conservatism with your new FY guidance especially with margins given you mentioned there's going to be no more charges in the second half. You highlighted you plan to take in incremental pricing and then there are a few other net positives Garth that you called out. So just wanted to make sure I'm not missing anything or maybe what’s changed there? Thanks.

Thanks, Bonnie. I mean look let me try to give you the walk on margins right and you noticed -- as you noted, we've got some headwinds and we've got some tailwinds, right. And so just on the tailwinds, obviously, we said in my opening remarks we've got a bit of a benefit on depreciation just starting later than expected in the year and so that's a net positive. As Bill just articulated, we're taking more -- we're taking increased pricing across more skews than we had originally planned, so we'll be above our range there. So that's a net positive. We also have a mix benefit of Seltzers and again a net positive there and then the increase in core beer outlook is a net positive. So, those are all the headwinds. But we still have -- those are all the tailwinds. But we still have the headwinds that we've been talking about all year long, right. So, even though depreciation is coming in less than expected, we still have an uptick in depreciation in the second half of the year. We still are facing increase in commodity prices, including aluminum, diesel, natural gas, wood those will continue in the second half of the year. Now we think that the guidance we provided takes into account all of those cost increases, so we feel we have those covered. But again, I mean, we just continue to have these puts and takes and we feel confident that in the margin outlook that we provided. Keep in mind too that even though we're going to have a mix benefit from Seltzers, we still are going to sell Seltzers and those are margin dilutive as we've noted previously.

Thank you. Our next question comes from Nik Modi with RBC Capital Markets. You may proceed with your question.

Yes, thanks. Good morning everyone. So, I have two questions. One is a real quick one, just on the self-service formulation, still a bit -- I know you probably don't want provide too many details until it is in the market, but will this change the calorie or the sugar levels, so just curious on that? And then my broader question is Modelo is clearly doing very well. We see that in the data with non-Hispanic consumers. But as we look at some of the numerator data and we look at different cohorts, what we notice is that Corona has kind of leveraged to some of these demographics, so Modelo is doing much better so we are seeing some of those numbers in period. So just wanted to get a sense on incrementality of Modelo when you think about Modelo and Corona together and do you ever think that maybe there's a different merchandising scheme you can use instead of putting both brands right next to one another to kind of reduce some of that cannibalization?

Sure. So relative to your first quick point there won't be radical change in the core formulation of our Seltzer layout. Relative to Modelo and Corona, obviously, there's interaction between those two brands as you would expect. However, as we've said before, Nik, and I'm sure you're quite familiar our household penetration on Modelo is still significantly below where Corona is to say nothing of it is below other brands that it competes against. So while it is a true statement that as Modelo grows or as Corona grows it does eat into some of our brands, we still see it as largely positive as we see that growth profile. And as we have talked before, Modelo, it continues to grow velocity, there's a lot -- still a lot of runway to expand distribution. Household penetration which I touched on just a second ago, remains a massive opportunity for that. And we only started advertising to the non-Hispanic community about three and half years ago. So, we're really just getting started on Modelo and the opportunity that presents itself there. So, well you continue to see some interaction and clearly, I think, the idea of separating those at retail to some degree has some opportunity. I think overall, we're still focused on expanding our presence of both of those brands. As you probably saw Corona Extra had a very good quarter. And it just shows the ongoing strength of the core Corona franchise in addition to exceptional performance by Modelo.

Thank you. Our next question comes from Lauren Lieberman with Barclays. You may proceed with your question.

Great. Thanks. I wanted to know a little bit about Corona Extra since you called out the 5% depletion growth for that brand and how that kind of shakes out between on premise recovery versus track channels or sorry, I should say I'm off premise? And then I was hoping you could also talk a little bit at Nielsen /IRI versus what you guys saw in terms of off premise trends in total, including on track outlets? And then finally, do any kind of update on Pacifico, just continually intrigued to hear about progress you are making with that brand? Thanks.

Sure. So probably 50% give or take of the growth profile that we saw in Corona Extra is the reopening of the on premise. As we said in prior calls, we were down as low as 3% of our business a few quarters ago during the sort of the peak of the initial COVID pandemic issue. That's now up to 11% and clearly with the Corona being one of the most loved brands that exist in the category, the increase that you would expect to see an on premise has been important. But don't underestimate, Corona actually has done very well at retail as well. Relative to Pacifico, we continue to feel like Pacifico is another great opportunity. It's like a baby Modelo. It's developing in a very similar way to what Modelo did say 20 years ago with extensive growth profile on the West Coast and it is starting to filter East. As you know, we're investing more against Pacifico than we have historically. We have a little bit of challenge in this quarter with Brown Glass, which had some impact on Pacifico during the quarter as it did with Modelo Negra as well. But those are ongoing supply chain challenges that we're working our way through. It does nothing, nothing to slow down what we expect to be another superb brand for us as time goes forward in Pacifico.

Thank you. Our next question comes from Chris Carey with Wells Fargo Securities. You may proceed with your question.

Hi, thank you very much. Just on Hard Seltzers. You had originally planned on investing pretty significantly behind the launch this year. Are you getting any savings from those investment plans now that the category has slowed or are those locked and presumably that can be a good story going into fiscal 2023? In addition, you had mentioned that you had plans to double capacity for your ABA’s and so how are you thinking about flexing that capacity towards beer, obviously you're looking at building a new brewery in Southeast Mexico, does this get to delay that new build out over time because you have capacity?

Yes, yes, thanks for the question. So on the capacity piece first, right as we announced last spring, we were investing in 5 million hectoliters worth of ABA capacity that is moving forward as planned and should come online earlier in our fiscal year 2023. That's still an important initiative for us because it's built outlined in his prepared remarks. Well the Seltzer category has slowed the ABA segment within beer continues to be a dynamic and meaningful part of the high end and it's one that we need to need to compete in. And by having dedicated ABA capacity that frees up capacity for our core Mexican beer portfolio. So that goes on as planned. And then furthermore on the investment that you referenced in the first part your comment and your question, we did indicate that we going to spend $60 million this fiscal year behind Corona Hard Seltzer. Most of that spend was slated to be spent in the first half of the year. So that has been spent and that, which wasn't spent is being redirected to invest behind our core Mexican beer portfolio.

The only other thing I'd add to that on the last part of your question was about whether or not it causes any delay in what we would do to invest in the Southeast. As I said, we're continuing to work with the Mexican government. We feel the Southeast is highly likely to be where we put our next brewery position. And as we said, because of robust demand we're going to continue to invest to support our business. So, we would not expect to see any radical change of what our timeframe is all about. Demand has been higher than expected. We need to create some redundancy in our system as we've noted on prior calls and our brewer in the Southeast will be an integral part of that strategy.

Thank you. Our next question comes from Vivien Azer with Cowen. You may proceed with your questions.

Hi. Good morning. I was hoping you could comment please on intra quarter trends in on premise, whether you saw an evolution or a softening there around the delta variant? And as well, perhaps from an industry perspective, are you observing any changes in consumer alcohol preference across kind of TBA, and across category switching as consumers central back out and deposit in restaurants? Thanks.

Sure. We saw a lot of variation in on premise and at the risk of saying yes, no, yes, no, and yes no it is largely depended on where you were geographically and what was going on in particular markets. So, while we would sit here and say, State X is coming up and we're seeing more on premise if you saw a wave of COVID challenges and in another market, you saw stuff go the other way. So what that basically I think there was an over overarching answer to that question, it was really on a localized basis that you saw many of the movements within the quarter. Again, in the aggregate, on premise was better than it was in the prior year and it continues to be increasing as a percentage of our business but it's still not quite where it was before the pandemic. So, hopefully that helps. It's very hard to give a real aggregate of the thing because it's really made up of a lot of individual answers rather than something being an overarching trend across the marketplace. I think relative to your question about across category, I think the overarching thing that you see there is the premiumization trends continue, whether you think about it in ready to drinks or ABA’s, you continue to see people premiumizing, you see it in the wine business where the higher end of the wine business continues to outperform the mainstream sector of the business and you continue to see that in spirit. So, I think that is an over overarching trend, that you see. You also see what we found for many years now, which is consumers are more interested in having and array of beverages depending on the exact occasion in which they are consuming product and are less likely than they used to be to consume only one type of product at any anyone occasion than what was perhaps the case historically. So hope that helps.

Thank you. Our next question comes from Kevin Grundy with Jefferies. You may proceed with your question.

Great. Thanks, good morning everyone. Bill, just picking up on the last question, but really kind of lasering in I guess a little bit on wine and broadly for the industry, because there's been some discussion in the marketplace about the recent slowdown and it's not limited to the on premise and we have seen the Nielsen data. So your point is extremely well taken, the premiumization trends are still in place, obviously broadly based across total beverage alcohol but even on a two-year average basis this is -- we're seeing the trend slowdown here. So, I'm not sure how much more you can add to your comment previously. Do you view this as transient at this point on this deceleration we're seeing in the category, is there a bigger maybe bit more difficult to quantify dynamic going on around ready to drink beverages in a way there hasn't been with wine before, if you could comment on that? And Garth just sort of a cleanup up, but I think important, the 30% operating margin target in the wine segment, is that still the target and is fiscal 2024 over the next couple of years, is that sort of enough of a timeline line to take out the stranded overhead, so your comments there would be helpful? Thank you, both.

I think you got to keep in mind relative to the higher end of the wine business, you're also seeing some what I'll call channel evolution and things like three tier e-commerce and direct-to-consumer. Those are for us three to four times what it was in 2019 and you're seeing that as sort of 3% to 5% of our business today where it was 1% before. So some of what you're seeing in that is a difference in the way the consumer actually acquires and it may or may not be reflective of some of the IRI/Nielsen data because it's not picked up in those channels. Some of it is with three tier e-commerce, but certainly the direct to consumer channel is not. So, you've got some of that dynamic in place and of course, almost all of that tends to the higher end. That's where that consumer purchasing behavior occurs. So, I do think there's ebbs and flows on all of those things. I think you saw probably more consumption behavior at home during COVID so you're probably seeing a little bit of more challenging comparable versus prior year. So, I think as we get hopefully back to a bit more normalcy, I think you'll continue to see what the long-term trend is which is that the higher end of the business continues to outperform, and then it's a strong growth of play for that sector. Garth.

Yeah. On the wine margins, certainly the target margin for wine is still 30%. As we've said all along that it was going to take us about two years post divestiture of the low end for us to be able to achieve that 30% operating margin. So, by the time we get to the end of our fiscal 2023 wine should be in that zip code. Obviously the progress on that is underway. We're making some good progress as we've said before in order to get there. There's a number of initiatives that that we have to make progress on, that's pricing mix footprint optimization, making smart design to value choices. And like I said, we're making good progress and we're confident that we can get that 30% by the end of 2023.

Thank you. Our next question comes from Robert Ottenstein with Evercore. You may proceed with your question.

Right. A couple of questions. First, obviously the low inventories hurt depletions. Can you give us a sense of where you think depletions would have been if you had full inventory levels and I'm hearing it hurt Corona most, can you verify that?

Obviously, that's a little bit of a tough question to answer, because unlike a year ago where we were very selective a what we produced this year we've been producing all skews. We've just had trouble keeping up with the demand. Our best estimate would probably be in the 2 to 3 percentage points that we lost in this process. But again, in most instances the consumer is looking for our brand, they may have an issue out of particular point time finding a skew, but they don't have trouble finding our brand. So, I think that's probably the way to think about it.

Great. And then second question, as you kind of do a diagnostic on what happened with Corona Seltzer, I think I heard you say that flavor was an issue, that the consumer wants more flavor. So, as you think about it, was it a question of the taste not being differentiated or is there an issue with having a brand that's associated with the beer or are there other factors in addition to obviously the sector slowing a little bit, just like to hear a little bit more of your diagnostic on the situation?

Well, I would put more emphasis on your very last point, which is the sector changed a lot versus what everybody anticipated. I think we were probably a bit on the conservative event compared to some of the competition as to what they expected going into this year where some of them were predicting in excess of 50% growth, we projected less. But even as it was, we were wrong. So that is the fundamental issue. When you combine that with the fact that we pre-produced, which again at the time was about production scheduling and our judgment was the right thing to do at the time, that in hindsight did not work out for us as well either. But you got to keep in mind, despite all of that, it's a relatively small percentage of our overall growth profile. It is additive to our growth, it is not the majority of our growth. The majority of our growth continues to be the robust demand against our core beer portfolio, and that's where we expect it to continue to be. So, now relative to the formulation, we just -- we obviously do a lot of consumer research and we track consumer perspectives and we have found that consumers are desiring a bit more flavor and a bit more differentiation within their Seltzer preferences and we plan to address those consumer needs.

Thank you. Our next question comes from Sean King with UBS. You may proceed with your question.

Great, thanks for the question. Thinking longer term on the margins front and some of the long-term exposures you have and hedges you have in place, is the second half fiscal 2022 the right way to be thinking about margins for 2023?

Okay, I think the right way to think about margins over the near and medium term is consistent with our long-term growth algorithm, which is that we're going to achieve margins in the range of 39% to 40% and as we say in every call, those are best in class margins and we're not apologetic about those. In any given fiscal year margins might be slightly higher than that due to tailwinds and in some years they might be slightly lower than that just due to too many headwinds. But the right way over the medium term is to think about those in the range of 39% to 40%.

Thank you. Our next question comes from Nadine Sarwat with Bernstein. You may proceed with your question.

Hi. Thank you for taking my question. I want to circle back to Pacifico and you had called out the Brown Glass challenges that you faced. So obviously that brand saw weaker Nielsen off trade trends this quarter and I noticed that you didn't call out its depletion figures in the release. So, could you provide this and maybe give us some color as to if there were other issues outside of the glass issue you already called out? Thanks.

Sure. We had mid-single-digit depletion growth in that brands during the quarter. And obviously it was constrained. We would have expected it to be higher without any supply chain issues that revolves around Brown Glass.

Thank you. Our next question comes from Andrea Teixeira with J.P. Morgan. You may proceed with your question.

Thank you. Good morning. So I wanted to go back to the depletion in shipments commentary. You said depletion should outpace the low single-digit shipments you have guided in the 3Q which would imply a sequential acceleration in 3Q from the 12% on a two-year stack that you achieved in the second quarter. So given that you're facing a tougher comparisons, as you do depletion the same amount of our 12% in the third quarter of last year, is that acceleration on the two year coming mostly from on premise and at home decelerating, but still growing, is that the way we should be thinking, in other words, should we think about the depletion growing around mid-single-digits when you said, I think you said it emphatically that the third quarter depletions would outpace shipments as well? And then related to -- and just a clarification on the pricing front, should we think that you will have about 2% price mix realization already in 3Q and what are you seeing playing out so far? Thank you so much.

Sir just on Q3 shipments and depletions. What we said in terms from a growth perspective, shipments will grow in the low single digits and depletions will grow higher than that. We furthermore said that on a volume basis, depletions -- shipments would outpace depletions and therefore we made progress in returning inventory to more normal levels by the end of our fiscal year. On the pricing question, what we said on that was is that our typical pricing algorithm has us gaining one to two percentage points per year. Given the pricing environment that we're in this year, we're able to be a little bit more aggressive on products that we wouldn't otherwise take pricing on. And so we're going to be -- we're going to take pricing on those skews and as a result, we will be slightly lump above our 2% this year.

Thank you. Our next question comes from Laurent Grandet with Guggenheim. You may proceed with your question.

Yes. Good morning everyone and thanks for the question. So, I'd like to come back on the Seltzer category. So first, what is the gross for the category and really I am interested in the rationale behind it and thinking about the next let's a year or so? And then as you mentioned, there will be a consolidation with the elimination of lower velocity SKU, do you see a risk potentially for the Corona Seltzer, the white can as that SKU has been severely underperforming the category, so do you see a risk here that you could lose ACV? And finally, how are you planning to gain the fair share of the Seltzer category especially as Mexican brand I mean, Top Chico is really becoming more national beginning of next year and they are also launching a margarita flavored, more flavor than that SKU, so would like to understand how you will play that?

Sure. If I understood the first part of your question correctly, I mean, keep in mind that the beer category has been roughly flat at a time when we are up roughly 8%. So there is a significant delta between what the overall category is performing and what we are performing. We're radically outperforming the category. Relative to our desire in the Seltzer/ABA space, there's a number of things. First of all, we're going to focus our attention on where we think we bring differentiated products that are distinct. Given what we have today, I would use Refresca and Limonada as two examples of that that meets specific needs and are not what I would describe as need to products. We also have as we noted in our scripts some innovation agenda items that we think are going to be distinctive and will bring unique value to the table as well. So, we continue to believe this is going to be additive portion of our growth, but certainly not the largest portion of our growth that will continue to be our core beer portfolio.

Thank you. Our next question comes from Bill Chappell with Truist. You may proceed to your question.

Thank you. Sorry to belabor the Seltzer questions. But I mean I guess two things, one simple, one bigger picture. I mean, two quarters ago like you said, you have a lot of market research, you and everybody else was very bold up about the market and it seems like it was a soft summer. But it didn't seem like the category was a fad or it's over. But in kind of redirecting, marketing and advertising and moving to kind of focus SKUs, it seems that is what you're kind of saying so, I guess, is that what you're saying, I mean do you see this as kind of a small niche permanently and everybody was kind of wrong, it was going to be a bigger place or is this just a pause for the category? And then the second question is with you directing kind of advertising marketing towards your core beer portfolio, does that result in -- I know it's small, but Seltzer falling off a cliff over the next two quarters and creating kind of headwinds for your growth on beer? Thanks.

Sure. Relative to the category, our view of it is this, we still think that the overall ABA space is going to be a growth category. Whether or not the Seltzer sub segment of the beer category is -- how much of that is going to be driven by the Seltzer sub segment remains to be seen. Quite frankly, clearly it is going to be a lot less than what everyone anticipated coming into this year. But again, for us, it's a relatively small percentage of our overall play. So, we are not entirely reliant on success in the Seltzer category. In fact, we expect to achieve our algorithm through our core beer business. Relative to the question of will this put a damper on our growth in the beer business, if Seltzer is challenging, not really. I mean the fact that we are able to raise our guidance is largely driven by the fact that we're able to make more beer. And we're able to make more beer because we're making a little less Seltzer and that is margin accretive and it's a very high growth category. So I realize there is a bad side and good side to that answer. But the reality is, it's not inconsistent with what we've always seen, which is our core business portfolio of beer from Mexico continues to radically outperform the industry and we continue to be the leader in the high end and the high end growth. So, is it going to be any different going forward? I think it's a little bit remains to be seen. We're going to have a little bit more of a watch and see efforts than we had before. I think everyone got a little bit excited about Seltzer. And frankly, the category has slowed significantly. So I think we will probably do a much better job of being guarded in terms of our expectation around that while continuing to leverage our outstanding portfolio of core beer brands.

Thank you. I would now like to turn the call back over to Bill Newlands for any closing remarks.

Alright. Thanks very much. And thank you all for joining our call today. Despite some challenges impacting our results this quarter, as you can see, we remain very confident on the strength and underlying fundamentals of our business. Our beer business in particular continues to be a tight growth driver within the industry while we continue to see the benefits of our wine and spirits premiumization take hold. We remain bullish on the future performance of our powerful collection of consumer connected brands, which provides us with strong momentum as we head into the second half of our fiscal year. Our next quarterly call is scheduled for early January so we hopefully wish everyone a safe, happy, and holiday season. Please remember to enjoy some of our great products during your celebrations, and please remain safe. Thanks for joining the call.

Thank you. Thank you for participating. You may now disconnect. That concludes today's conference call.