Molson Coors Beverage Company (TAP) Earnings Call Transcript & Summary

Okay. Welcome back from break. Thanks, everybody, for joining us, and thanks, especially to the Molson Coors Beverage Company for joining us back at the conference. With us today, Gavin Hattersley, President and Chief Executive Officer; and Tracey Joubert, Chief Financial Officer. Again -- got it. Got it. All right. Thank you both for joining us again.

Thank you.

Thanks for having us.

Great to have you back. Look, I -- there's a lot to talk about. But before we get into some of the details, let's just kind of ground ourselves in the here-and-now. The company is off a very strong first quarter set of results and acknowledging that it's a relatively small seasonal quarter, second quarter consumption rates are -- have remained very strong, especially in the U.S. Maybe just to start, Gavin, kind of give us a state of the business from your perspective. And then Tracey, maybe you can just ground us in -- ground the room in the current guidance?

Thanks, Steve, and thanks for having us. Look, we feel very good about where we are. We started down the path of our plan going on about 3.5 years ago now. And the North Star for that was to deliver top and bottom line growth. And we did that last year. So the plan we put in place is working. We're executing strongly against it. And we came out of 2022 in a really good position. And as you rightly say, we had a very good first quarter. Our core brands, which we've been investing in strongly over the last 3.5 years, are in a great close. They're very healthy. And I think you saw the results reflected from that in Q1. So from an overall business point of view, we felt very good coming out of Q1. Very good. From guidance point of view, Tracey?

Yes. So the guidance that we reaffirmed on our Q1 call was basically grow our top and bottom line low single digits. We did say that we expect both our business units to grow gross margin dollars per hectoliter. And then also, importantly, our free cash flow as we are a cash-generative operation. So we expect our free cash flow to be $1 billion plus or minus 10%. I think those are the important ones.

Okay. Okay. Great. And that guidance does not include or assume continuation of the lift that you've gotten in the U.S. from Bud Light's decline essentially?

That's correct. I mean when we had our Q1 call, everything was still early days. We weren't sure how long the situation would last. And so we're obviously tracking that. And if we have an update, we'll talk about that on our Q2 call.

Okay. The situation has lasted and continues. So I guess one question for folks is around the ability to supply and meet demand. Maybe you can talk about -- you've expressed confidence in your ability to do so both because of the inventory situation that you exited the first quarter with as well as your ability to kind of flex supply over the course of the year. Maybe just kind of elaborate on the puts and takes there and what gives you that confidence?

Sure, Steve. So coming out of 2022, we worked very closely with our distributors to build inventory to the end of the year to make sure that we had the right levels coming into 2023. And we did that, obviously, not knowing that this situation was going to happen. But we've experienced over the last 3.5 years, any number of dislocations in the supply chain. And so we wanted to make sure that if something happened again in 2023 that we would be ready for it. So most of our distributors worked really closely with us to build inventories coming into 2023, and we maintained that in the first quarter. If you remember from our first quarter results, we actually overshipped compared to STRs quite meaningfully. So we came out of Q1 in a very healthy position. And that's obviously really helped us as we face this very sudden spike in demand, which, as you rightly say, has now lasted. I think we're in the tenth week of that now. Our supply chain over the last 3.5 years, as I said, has faced a number of challenges. And I think they've battle-hardened, and they're used to now pivoting on a diamond. So that's what they did. The moment we saw this extra demand and distributor orders spiked, we elevated shipments and we've kept going through May, and obviously, we're going to keep going through June. From an overall shipments point of view, we have been keeping pace with the extra demand. Yes, it is true that our inventory fell after Memorial Day weekend. As you saw in the scanner data, we had a good Memorial Day leading week. I think the latest scanner data covers up to the Sunday before Memorial Day. So it's a decent chunk of the Memorial Day holiday. And our inventory fell. It always does. Our inventory always falls off after Memorial Day. It has forever, and this was no exception. And we'll maintain inventories now. And then again, it will fall coming out of July 4th weekend because it always does. I mean it's a very, very big holiday for us. The summer months for us are obviously high-capacity months. We have, for a long time now, managed to -- well, we bring in seasonal workers, we extend the shifts, but it's a full couple of months for us from a supply point of view. And then outside of those shoulders, we're able to build inventory. So I think that's the important thing to note, right, is that we had high inventories coming in, certainly helped us out. And our supply chain is rising to the challenge. They have elevated supply, as I said, we've overshipped compared to April and May. Now are there going to be challenges in the marketplace? Of course, there are. We're always going to have challenges, whether that's a particular SKU or a particular package or a particular brand or even a particular distributor for whatever reason if a market has substantial surge outside of expectations from one or the other of us that does lead to challenges and that's no different to what we normally experience. But our supply chain team is doing an amazing job keeping the supply as high as they have been.

Okay. So the headline is no outsized disruption. Any -- normal friction, but nothing?

Right. I mean, it will always be tight in summer. It always is. And of course, probably a little tighter this summer because of the elevated demand. Yes.

And I guess we all see and track because the data is more readily available, the off-premise dynamics. But I got to remember -- I got to imagine and from what we've gleaned from the trade that the same dynamic is happening at least as much, if not more so, on-premise. Is that reasonable? Is that fair? Or is that -- is there any reason that that's aggressive thinking on my part?

No, it's not aggressive thinking. We have seen a surge in demand in the on-premise. Obviously, that's actually easier for us to meet the demand there. We have a really good keg float, and we're able to meet the demand there, and we have seen an acceleration there, for sure.

Have you -- is it -- you're just seeing more demand? Or are you actually winning tap handles?

We are winning tap handles, yes.

Sure. So against this demand, you also -- you signaled that if continued, you'd invest, you take the opportunity to keep investing behind the brands. I want to ask about that investment, but I also want to ask about sort of the magnitude. It seems to me that at some point, the spending becomes unnecessary, right? The ROI at some point becomes sort of -- incrementality falls off. So how much in -- how do I -- how do you think about that? How do you approach that? And is that the correct assumption at some point the incrementality you're spending is just not a good ROI?

Well, you can talk about ROI. I'll just talk about the broader campaigns that we've got running. We actually said coming into the 2023 that we were going to elevate spending behind our brands. particularly our core brands. It's part of our strategy, not only in the United States but also in Europe and Canada. So we had all the plans laid in. We've got a number of exciting opportunities, which we're dealing with right now, and we were always going to deal with. So we're not actually on a dime changing things. We've got the Tastes Like Miller Time campaign, which is running right now. We've got some exciting Coors Light work coming up. We're the inaugural sponsor of the of the new leagues cup that cause -- that major league soccer is having in summer this year, and it's going to be a kind of March Madness scenario for soccer with teams from Mexico and the United States. And so Coors Light has got some really exciting things planned around that. And yes, you can spend too much money. You can -- where things are quicker than you perhaps want to, and maybe Tracey talk about the marketing effectiveness models we've got?

Yes. So over the last, I'd say, 3, 3.5 years, we've really increased our capabilities around marketing with both models that give us really good insights around return. So whether that be live sports on TV or whether that be digital, over the last couple of years, we have shifted -- the majority of our spend now is digital. More than 50% of our marketing spend is digital, which also makes it a lot more flexible. It's a lot easier to switch things on and off on social media or the digital space than it is when you've got sort of longer-term media contracts. So it does make us more flexible and we're able to ship between brands. So we'll continue to look at that. But to Gavin's point, it is a time where we are diminishing returns. And especially with something like live sports, if you've seen -- if you're looking at the same commercial 5x in 1 sort of hour, kind of you -- you may even get sick of it. So we're very careful with that. But we've put the right investment behind where we think we need to fuel our brands. And some of the work that we've done over the last couple of years, I think, has made our brands spending not just more effective, but also a lot more efficient from a cost point of view.

Okay. A couple of threads I want to pick up on that. But just on the brands that are sort of most directly benefiting from the shift from Bud Light, Miller Light and Coors Light, maybe frame for us what those brands stand for and what the spending is trying to fuel? And then what measures are you taking just in general, and learning from what's happening at Bud Light so as not to replicate a similar situation within your business?

Yes, Steve. So I think our marketing team have done a really amazing job over the last 3.5 years, differentiating those brands, making sure that the consumer understands what they stand for. I think that's a fair criticism in the past is that sometimes we hop from one positioning to another and led to confusion sometimes even inside the company. That's an accusation that cannot be leveled with us over the last 3.5 years. It's very clear that Miller Light stands for taste and Coors Light stands for refreshment. And all of the campaigns that we build around those 2 brands have that at its core, whether it's the Chill campaign or the Tastes Like Miller Time. It's Miller Time campaigns that are the current ones that we're running with Miller Light, all focuses on those 2 things. And I think that pulling them apart is -- has been really helpful for us, particularly as we head into this significant dislocation. In terms of marketing, we've always had really a strong governance process around marketing. We have a marketing compliance committee that meets I believe it's weekly. It's a large group of people. It's a very diverse group of folks, it's multifunctional, all walks of life. And they look at just about everything that we do, whether it's a billboard or a poster to a big campaign. And they, first and foremost, look to see whether it complies with our voluntary standards that we have with the BI in terms of who we are advertising to, to make sure it's not under-age drinkers, and then look at how the campaign would land with any number of different constituents. So that's something we've had in place for a while. And obviously, I would guess that the team is sort of turning things over once, probably turning things over twice now. The other thing which has worked really well in our favor, and this is quite different to what it was maybe 5 years ago is that the marketing and sales teams really work very, very closely together. And marketing is not an island. They pretty much bounce everything off the local sales teams who are on the ground, understand what works in their market, what doesn't work in their market. They're pretty much joined at the hip and that's worked very well for us. And then, of course, with sometimes, we also involve our distributors and distributor council for a particular campaign. So I think we've got good processes out there that have been working for us and hopefully, will continue working for us.

So you have a number of sort of pillars, I guess, for a lack of a better word, of the growth strategy. Growing with core brands such as Miller Light and Coors Light as well as Carlsberg and others, premiumizing in the above premium segment and then innovating with -- around flavors. We talked obviously a little bit about Coors Light and Miller Light, but maybe just a quick health check on whether it's Molson Canadian in Canada or Carling in the U.K. Just how those core brands are performing outside of -- sorry, Miller, of course.

Yes, it's a great question. And we probably don't talk enough about that. Our revitalization platform and the strategies which we're following actually encompass our entire business, not just the United States. Carling continues to be healthy. It continues to be the #1 beer in the U.K. market. We're actually investing behind calling for the first time in many years. And including the sponsorship and a new campaign, which we've just launched there, and that's been well received and is certainly helping maintain that brand as #1. In Canada, Coors Light, obviously, a big brand in Canada, benefits from the Chill campaign, which we've launched in the United States. But Molson Canadian is actually performing really well. We're actually growing share of that brand for the first time in a very long time, and it's benefiting from the increased focus that we've put on it. And then in each of our markets in Central and Eastern Europe, we've got a core brand that is receiving extra investment and is benefiting from that, brand like Ozujsko, which was in long-term decline up until a few years ago, shown a remarkable recovery. And if my memory serves me correctly, it's over 50% market share now in that market. Staropramen would be another brand that we've elevated and changed the position and trying to premiumize that brand a little bit more in the eyes of the consumer, it's certainly doing very well outside of the Czech Republic as well. So you're right. We have made significant strides beyond just the Miller Light, Coors Light dynamic.

Yes. And I mean, we talked about the limitations on running the same commercial 3x and one ad segment. Enough sports at spring event around one brand. But I mean, I would imagine as you have upside in the U.S. that you're able to think about, at least fueling incremental dollars behind some of these other brands and other initiatives across the business. And is that happening? And how much opportunity do you see in ROI mentality outside of the U.S. premium business?

Yes, certainly, we are investing behind those brands. And there are other brands that are benefiting from this current situation. Somewhat surprisingly, actually like Keystone and Miller High Life and putting a little bit of extra funding behind those brands has an outsized impact because we haven't traditionally spent a lot behind those brands, frankly. And so putting a little bit more there, which is what we're doing is going to benefit those brands as well.

Above Premium. There's Peroni in the U.S. Madri, is that how I pronounce it?

Madri Excepcional, it is.

Yes. You said it better than me, in the U.K. But I mean those are performing well as well. Maybe just give us a little bit of an update on what you're seeing, what the opportunity is there on that leg of the business.

Yes, right. I mean Madri Excepcional is just a rocket ship for us at the moment. We launched that brand right at the beginning of the pandemic somewhat cautiously because obviously, we were focusing on the on-premise, but it is our strength in the U.K., and we launched it into that market and it has frankly surpassed our wildest expectations. It is, I think, our fifth largest above-premium brand in the world now. It recently passed the Budweiser franchise in the United Kingdom. It's past [indiscernible] in the on-premise, I think it's the sixth largest brand in the on-premise. And we've got lots of both -- we've got lots of distribution upside for that brand. So we're really excited about the performance there. It's the best innovation we've had certainly in the European market and arguably the best we've had in quite some time as a total company. So I'm very excited about that. Peroni, we just launched Peroni 0.0% in the U.S., obviously, way too soon to tell. I believe that brand has done well outside of the United States. So we have high expectations for Peroni 0.0% as well. And Peroni has benefited from the reopening of the on-premise. It had a tough time during the pandemic as any brand that was really focused on the on-premise was, which Peroni was. And we've seen the benefits of that reopening and the strength of the Peroni brand, for sure.

And with Madri, is -- when you say distribution opportunities, are you -- I am sure that includes the U.K., but are you looking at other markets for that brand to expand across borders?

The primary focus at the moment is the U.K., and there are more distribution opportunities there, particularly from an off-premise point of view, but also in the on-premise. And yes, we are looking at expanding that brand outside of the U.K. in a smart way. But our primary focus at the moment is taking it to -- scale it up in the U.K.

Arguably even more successful have been some of the efforts you've made to innovate and premiumize through flavor. Topo Chico, Simply Hard Lemonade. I mean, including brands now like Peace Tea and Arnold Palmer Tea. I guess what -- so far -- I mean, still relatively early days in the grand scheme of things. But what have you learned so far? What has most pleased you, what work is left to be done?

Yes. So Topo Chico and Simply Hard franchises are -- we're very pleased with them. Topo Chico recently became the #3 seltzer in the marketplace behind White Claw and Truly. Molson Coors as a company is now the third largest supplier in the seltzer space, having recently passed Anheuser-Busch. So pleased about that. We've launched Topo Chico Spirit to expand the Topo Chico hard franchise. Coca-Cola gave us the Simply franchise last year to expand into the hard space. We launched a little bit out of cycle. We launched right at the end of June. And quickly, that became clear to us that we had something here. And we struggled candidly to meet demand in the summer of last year. We brought the brand in-house. But we only really got that done by the end of September, beginning of October. So we essentially missed out on the full benefit of summer last year. And of course, we don't have that problem this year. We have got it in-house. And we've got plenty of capacity to meet demand. We recently launched Simply Peach. Both of those brands Simply Hard Lemonade and Simply Peach individually are in the top 10 fastest growing brands in the U.S. So we are pleased behind that, and we're leaning in behind it. And yes, Coca-Cola and ourselves recently agreed to expand Peace Hard Tea that's coming later on in the year on a regional basis. So we feel good about our relationships with Coca-Cola and going to keep the focus and pressure and momentum behind those brands.

Does -- growing through brands that are licensed, does that, a, create any risk? And then b, we've talked about this a lot, it's raised questions about the profitability, but you've been clear the economics are still accretive, both in penny profit and margin. So I guess maybe, Gavin, on the risk factor. And then, Tracey, if there's any way you can kind of provide a little bit of dimensionalization around, if that's a word, around that accretion?

Well, we do all of them, right? We buy a borrower and bold and in this case, having a great relationship with Coca-Cola with 2 really 3 of their brands now and Simply is the second largest brand in the United States, it makes absolute sense for us to partner with them. But in some instances, we also do our own innovation. I mean Madri would be a fine example of that. It's a beer innovation, which makes it even more exciting. And ZOA would be another example. That's not a license agreement that we have a small stake in that company. And so we're happy to look at all ways to bring great brands to the market profitability point.

Yes. So firstly, they're all playing in the above-premium space. So revenue is much higher. And then when you have brands like Simply, Topo Chico, I mean the brand recognition is there. So you're not spending significant dollars to build up that brand recognition. So that's certainly helpful. And then from a COGS point of view, initially, when we launched these brands, we did it through co-manufacturing because we first wanted to see just how big they could become before we actually put in CapEx and took that capability in-house. But right now, we make Topo Chico and Simply in-house. So that margin that we were sharing with the co-man, we now have that margin 100% ourselves. So that's certainly helpful. And then over the last couple of years, what we've also been doing is other than adding these favored capabilities in-house, which we can now do all flavors and all flavor type products, we've also invested in things like variety packing. So normally, when you buy these types of products, it comes in a variety pack. Previously, what we were doing is we would have the co-man making it. We would bring it to the brewery. We would then send it out to a co-packer. It would come back to the brewery and we'd send it out to a distributor. Now we're making it in-house, we're co-packing it in-house. So you -- minimizing all of the logistics, there's not 5x you're handling it, it's twice. So all of that is adding to margin as well. But as I said, about premium brands, the more we bring in-house, the more margin we get. So yes, definitely margin-accretive.

Okay. I mean -- and you've also done a lot of work and experimentation outside of beer or near beer to the extent that seltzer fits that characterization. Both nonalcoholic with things like ZOA and before that La Clombe and now increasingly into spirits with Barmen bourbon and Five Trail whiskey. What have you learned to that process? What positive/negative, were you taken away from it? And do you feel like -- you've got a good definition and handle on what success looks like 3 to 5 years out?

I think 3 years in, we do. These are obviously totally new spaces for us. And so we've learned a lot. There's no question about that. We're zooming in our focus on beyond beer and beyond the sort of flavor space of seltzers and FABs into and towards ZOA in the energy drink space. And as you rightly pointed out, the Coors Whiskey Company. It's fair to say that we made our fair share of mistakes as we entered into these very established categories. And I'm not going to run through a long litany of them. But for example, in the energy drink space, I think it's fair to say that launching with a full sugar product was not the right decision, and we quickly pivoted into sort of free version, which is what the consumer actually wanted and which the proposition of more healthy ingredients played into in terms of the sort of peck size, 16 ounce was probably the wrong decision. It should have been in 12 ounce. So we've pivoted as we've got smarter about this. I think ZOA is a brand that has real potential for us. We've gained significant distribution in meaningful places with some large chains. And so we'll see the velocity of that brand start to accelerate now that we're there. So learned a lot. I think we have a winner here, are going to continue pushing the brand hard. Coors Whiskey Company, probably new space for us as well. But we think we've got a great product there. The -- there is the association that judges these whiskey brands and Coors Whiskey Company certainly won its fair share of awards. So it's -- we think we've got a high-quality product there. We've had some challenges from a route-to-market point of view, and we've learned a lot there about how to bring the brand like Coors Whiskey Company to that space. But spirits and whiskey, in particular, is an area that we think we can win. We think we've got a right to win there given our capabilities. And you'll see us increase our focus there over time.

Great. We got about 10 minutes left. Kind of pivot maybe a couple few more questions for Tracey. One thing that's been topical for a while, has topical this week at the conference, this is around pricing. And as we lap significant price increases, what does the future look like in terms of the mix of growth. So I guess a couple of questions. One is as pricing sort of naturally decelerates just because we're lapping outsized pricing, what is your confidence and Gavin you can weigh in here, too, but what's your confidence that the underlying volumetric trends of your business and the broader category will reaccelerate, number one? And then number two, at this point, how are you thinking about your pricing strategy? Do you -- are you still entertaining or envisioning a normal price increase post Labor Day? Or is that -- is the calculus around that different in this environment?

Gavin, if you want to talk to the pricing and then I can talk to margins or bottom line?

Sure. Yes, from a pricing point of view, obviously, we've been very clear that last year was unusual from a price point of view. And this year, we would expect pricing to revert back to more historical levels of that 1% to 2% range. We've got a little bit of time yet to make a call on that. But certainly, I think last year's pricing strength is in the past. We did see elasticities which were quite strong in the months after we put those prices increases in and then dial back a little bit to actually levels that were slightly lower than we would have expected. And I think that's partly because relative to other consumer goods, we took very, very strong price increases. Ours were although very strong for the beer industry, were actually muted compared to other folks. So that would be our expectation, Steve.

Yes. And then I think going forward, in terms of trends, et cetera, so we've given medium-term sort of guidance out there. We've said that beyond 2023, we expect to continue to grow both the top and bottom line, but with the bottom line growing at a faster pace than the top line. And again, a lot of that is driven by the premiumization of our portfolio. So Gavin spoke to some of those beyond beer categories that all play in that above-premium space. But in addition, we have done a lot of work around efficiencies and effectiveness in our breweries. So the capital that we spend, a lot of that, in fact, the majority of that goes to efficiencies and cost savings initiatives in our breweries, but also bringing some of the capabilities in-house, as I mentioned, with the flavors. So -- we've also got a good line of sight in terms of our hedging. We've got cost savings programs. And so that's why when we talk about beyond 2023, expecting margin expansion with the bottom line growing at a faster pace than the top line.

Okay. Are there -- you mentioned bringing flavors and that kind of thing in-house. Are there other sort of larger buckets of productivity that you're going after?

I mean we've given guidance around CapEx, $700 million, plus or minus 5%. And that's probably similar to what we've been spending in the past. But a lot of that CapEx has gone to modernizing our breweries. So we've got a big project on the go at the moment in our Golden Brewery, modernizing that brewery, that's going to make it more efficient, more automated. So these big buckets of spend that are going to sort of those initiatives. But just continuing to drive the cost savings efficiencies, we're not expecting to make big investments, but it will just sort of be at the continued pace of the last couple of years but really driving a lot of the COGS efficiencies.

Yes. And in order for those margins to expand, your pricing is going to hold up, productivity is going to flow through, the costs need to cooperate. So -- which has been a challenge. So you mentioned line of sight. Maybe just remind us of your outlook for '23 on costs? And then is it too early to give some directional color on what cost picture looks like in '24 given your hedging?

Yes. So yes, we haven't given COGS per hectoliter guidance. But what we have said is that we continue to expect inflation to be a headwind for 2023. Still elevated levels for Q2, but then moderating in the back half of the year. And things like our hedging program, which gives us good line of sight, the cost savings, some of these capabilities that we've built, premiumization, et cetera. So we've got good line of sight. We haven't given 2024 guidance other than saying we expect margin expansion because of the bottom line growing faster than the top line.

Yes. And Gavin, I should -- or Tracey, I should've asked this question when we're talking about pricing, but -- because it's been a topic. Have you seen -- there's been different reports anecdotally about promotional activity in the category in response to Bud Light's decline? Have you seen anything material? Do you anticipate anything material? How are you thinking about the competitive response?

Yes, there has been promotional activity leading into the Memorial Day weekend. We've obviously got just that week of data just like you have. And our market share actually expanded a little bit. I think it went from 2.5% to 2.6% growth. And that would include a week where that promotional activity was in place and obviously, we'll keep a close eye on that. From our perspective, obviously, going back to my comments around supply, I mean, summer is tight for us. I mean, elevating demand through promotional activity for us is probably not something we would think about.

Just a couple of minutes left. So I will ask on capital allocation just because it's such a dynamic environment. So I think your prioritization over time has been pretty consistent. But with interest rates where they are and trends of the business being what they are, does your balance between options for cash change at all, right? You've got your -- in terms of more accelerated deleveraging towards that 2.5x leverage ratio target, incremental cash returns to shareholders to the extent there's upside in cash or any appetite for -- to use positive cash flows for M&A?

So the priorities haven't changed. So we still look at it around investing behind our business, and I spoke about the capabilities that we've invested in, but also from an M&A point of view, we've been very clear that we're not going to go and do big acquisitions, billions of dollars. But we will continue to approach M&A with our string-of-pearls approach and it will be smaller type of acquisitions, but something that fills a white space for us and meets our strategic objectives. So we will look at that, but it won't be massive acquisitions. In terms of the debts, I think we have kind of a really good job in 2016. Our leverage was around 4.8x. We brought that down to below 3x at the end of Q1. You rightly said, we've got a target of around 2.5x. I think the good thing is with the strength of the balance sheet that we've got now, we do have options for use of cash. And we'll look at things like paying down debt as we get a little bit closer to maturity. Obviously, interest rate environments will play a big part in that decision. But as I say, with the cash that we generate, we have the option to either pay down the debt or refinance. That'll -- that decision will be made soon. And then returning cash to shareholders, it's been important to us to make sure that when we reinstated the dividend back in 2021 that we reinstated it at a sustainable level, a level that we can grow sustainably over time. And then from a share buyback, we've got a small program mainly anti-dilution-type program. But we have those conversations with our Board and finance committee all the time. We run all of the capital allocation decisions through our models, which at that point in time, we want to make sure that it gives us the best return for our shareholders. So I guess bottom line is the priorities haven't changed, but we'll continue to look at it through our models.

When you do execute on string-of-pearls type M&A. What is the typical time frame to harvest? Or how are you thinking about the ROI in terms of time to recoup investment?

I mean I think it depends on the size of it. I think it depends on what it is. If it's a white space, it may take us a little bit longer to learn. But we have hurdle rates, and we have time horizons that we look at. But it depends on geography, the type of investment, the size of the investment.

Just about right on time. I will give you the final word. We covered a lot of ground. Anything you want to leave the room with?

Yes. Look, I mean, Steve, we're excited about where we are right now. Our revitalization plan is working. We've delivered top and bottom line growth. We were strong coming out of Q1. Obviously, we've got this current situation from a share point of view. And our job now is to make sure we retain as much of that share and consumer as we possibly can. So I think we've got a really good story to tell in the United States in particular, with our chain customers with the velocity of Miller Light and Coors Light, and we're going to tell that story. We're going to sell that story. We worked really hard to keep the momentum going.

Great. Gavin, Tracey, thank you very much, and thank you.

Thanks, Steve.

Thank you.

Thank you, everybody, for joining us.

Thank you.