5% decline in revenue due to slower installed bas growth and increased competition in pods

“The 5% decline in revenue in the quarter was below our expectations, as we continued to experience challenging category dynamics, due to slower than expected installed base growth and increased competitive activity in pods.”

More unlicensed brands leading to excess capacity at manufacturers and aggressive pricing

“As we bring in more previously unlicensed brands to our system, we believe other pod manufacturers have excess capacity, which has led them to respond with more aggressive pricing. Additionally, some branded partners have remained promotional. During the third quarter, the challenges were greater than anticipated and impacted pod volumes. ”

Growth in measured channels is strong, but weakness in some unmeasured channels

“Volume growth in the U.S. measured channels continues to be strong at 15% total category growth in the quarter, according to IRI. However, we continued to see weakness in several unmeasured channels, including the specialty channel and digital.”

Brewer volumes down 18% as work through inventory

“Brewer volumes were down 18% in the quarter, as we continued to work through the high levels of inventory at retail on Reservoir Brewers and experienced lower sales of MINI brewers, as we continue to restock that product at retailers. Brewer price realization declined in the quarter due to investments we made in brewer promotions to work through inventory.”