... Good afternoon, everyone, and thank you very much again for joining us for this afternoon session. I'm very happy to have Nik Jhangiani here from Diageo joining us. So Nik, thank you for coming to the conferences here.
Cheers.
Yeah, we've got these lovely ritual drinks in front of us, so.
Yeah, we served them all day yesterday, I think starting at 8:10 A.M., and that's the beauty of a non-alcoholic product, right? There's no real cocktail hour that you need to wait for to start drinking them.
Absolutely.
If you haven't tried them, please go out and buy some today.
Okay. So you've been at the company for about a year now. So how's that measured up to your expectations?
Has it measured up to my expectations? I mean, I think. Listen, I joined Diageo for what I have truly seen, which is amazing iconic brands, amazing marketing, and brand building capabilities. I mean, I think unparalleled scale and reach, both from an angle of the size of the markets and the categories in which we play, but also from an angle of just our geographic diversity, of where it is, and all of that's been incredible, right? And that's really been supported by amazingly passionate people who truly love the business, love the brands, love our consumers.
But on the flip side, having come in from the Coke system and spent more of my time on the bottling side of the business, it's also incredible to see where we don't necessarily have, in my mind, the same degree of love and passion, and I'd link it to our customers and our commercial execution capabilities, right? And I think that's a big opportunity when I look at Diageo. I also look at it from an angle that says it's a really interesting time to come into a company where clearly there is a lot of noise. I didn't realize that I'd spend my whole first year in every kind of conversation, be it with investors and with friends and with family, around structural versus cyclical. And Laurie and I were joking.
I probably wake up in the middle of the night saying, "I don't know!" Right? But it's, it's something that I just never expected to have dominate the conversation so much, right? But it is interesting when you then start getting into it that says, you know, there are clearly trends and indications of stuff that's been around for a number of years, right? So potentially, is this cycle taking us longer, for a variety of different reasons that I believe, and we can talk about those, potentially. But is there also some accelerated changes that have been around that might be coming more at pace?
And do we need to be thinking about our business and our business model and our portfolio with a slightly different lens, right? Without losing what is the beauty of what we have, right? And I think that's the exciting part of coming in and being here a year, and in some ways still being that, being in that luxurious position of being that, what I call an insider outsider. Where you've been inside long enough to have a view, in a sense, but you're still an outsider, where you're continuing to view and challenge because, you know, you haven't been there long enough that you've gotten kind of steeped into that culture or that environment or that category or that, you know, business where you can't step away and say something different. So that's where I am.
We'll certainly get to a number of those topics, structural, cyclical, and portfolio and the like, but.
I thought I addressed it right there.
We're gonna go a bit deeper than that, I think.
Okay.
But in terms of... You've come up with new cost-saving targets, gone up from five hundred to six twenty-five recently. Where are you finding these cost savings? Where does the additional opportunity come from? And importantly, will it cost you anything to deliver them?
Yeah. There's no such thing as a free lunch, so yes, it will cost us, but we'll come back and talk about that. So I think Diageo's been really good in terms of some of the work that they've been doing in the recent years around supply agility, right? And I think there continues to be opportunities as we look at our supply chain, all the way from manufacturing through to logistics and distribution, and how can we actually look and eke out dollars there that are not necessarily driving, growth and or efficiency for us.
So I think that continues, but truly looking at it with a lens of what is actually dollars that are delivered to the bottom line, as opposed to a cost avoidance element, which is important for us to track in terms of how we are performing relative to how the market's doing, but that's not necessarily real savings that come through. So I think for me, that's just a bit of a shift in terms of how we're looking at it and how we're communicating to the market around those opportunities. The second piece really is when you look at Diageo, one of the strengths that they've had, which you don't wanna lose, is you've got this real entrepreneurial way of working.
So each of the markets, in a way, has had a lot more freedom to be able to go out and do what they need to do, which is great because you want them to be close to the consumer and the customer, and you don't wanna lose that. But with that freedom also means there's almost been a opportunity for them to opt in, out, opt out, and/or also, in my mind, I joke and I say: It's not just a menu that we offer, and they kind of say, you know, "Well, I'll pick this, and I'll pick that." It's actually they also have the choice of going off menu, right? Well, what does that mean?
Well, clearly, when I talked about one of the strengths and the scale that we have, why aren't we creating those capabilities at scale?... But still being able to have that flexibility at a local level, right? And that comes back to being clear around, you know, some of the decision rights and what gets done where, and what happens at a market level, what happens at a region level, what happens at a corporate or a group level or a center of excellence or capability development. And that can unlock a lot of wasted resources and dollars because you're creating a lot that might just be on the margin different, but not necessarily giving something that's so substantially strategically different, right?
So I think that's the second bucket of work that we're looking at, that will drive obviously some OpEx savings. And then the third piece really is around the whole bucket of our trade investment and our A&P dollars, which have both grown at a very high rate. And in some ways, they've grown at a much higher rate than our NSV growth, and we've allowed that to continue happening because it was almost this vicious cycle around, well, I need to continue investing there to get the growth, and if I'm not getting the growth, I'll put more money in there, and I'll hope that the growth will come, right? And I'm not saying that we want to look at that and in any way cut what is the brand building element of it.
Because if I look at those numbers, right, we've got about, you know, $3 billion of addressable spend in trade investment. And if I look at the $3.6 billion that we spend in A&P dollars, only about 40% of that today, you know, rough numbers, is actually spent on media scale and reach, right? Another 40%, you know, was being spent on commercial A&P, which is also linked to trade investment. And then we've got this big bucket of, you know, what with non-working, which we've been working very hard at bringing down. And we can talk a little bit about that.
So I think it's really feeding more on the media scale reach piece through more digitization and digital media that we can leverage, where we can track better returns and move quicker in terms of how we allocate those dollars to where the growth is, and actually pull out inefficiency in these other buckets to be able to reinvest. That's what it's all about. And I think as we laid out the target of around $500 million, as we got deeper into some of the work, and actually in some ways it was great because we started working with each of the markets around that, and they were able to think about unlocking more opportunity and hence the ability to take that number up.
In terms of cost, I would say to you, circa $500 million over that three years to deliver that savings. But remember, that would be an exceptional cost on our PNL that, but that's very much included in my free cash flow guidance, because cash is cash. You know, I always joke, there's no exceptional cash, and I can kind of pull that out. It's cash. You know, we will deliver the $3 billion, which is net of any of the cash element of that $500.
When we think about cost savings, I guess as analysts, we of course like that, and it's gonna grow the margin and all the rest of it. But whenever I talk to people in the industry, there's a sense that the drinks world, the spirits world, is a very relationship-driven world. So how can you be sure, like you mentioned in terms of the marketing spend, how can you be sure that when you take the cost out of the business, you still maintain that person-to-person relationships that are so important to the industry?
Yeah. So it's a really great question because I actually think in the last round of the productivity savings that Diageo did back in 2017 through 2019, one of the areas that they cut the most was on the commercial muscle.
Interesting.
Okay? And if you look at what we've positioned and talked about, is we do expect to see roughly half of those savings being reinvested. And I would actually tell you that's around commercial excellence and commercial execution. Now, is it linked to more business development and feet on the street? Is it related to more tools that allow us to work with our partners to effectively drive better margin-enhancing growth? Whether it's around a center of expertise for, you know, RGM capabilities, where we can drive data and insights, that's where I see a lot of that going, right? So in fact, that's where I think we need to rebuild and actually gain back that strength, because you're absolutely right, it is very relationship oriented, right?
And that relationship should be that point of contact that's helping that outlet grow their business. But it's also that relationship that has a better ability to understand what is happening at the consumer trend level through that outlet for the occasion and/or experience that the person who's coming into that outlet is there for. Because you don't expect each of them to build out their own shopper marketing or consumer, you know, kind of choice framework, right? That's what we should be able to bring to them, right?
But that has to then marry up with how we actually brand build, both in terms of digital or traditional media or scale and reach through influencers, et cetera, as well as how does it come to life at the point of sale, right? Because I always say brand love is great, but if it's not translating into a purchase of my product, well, how good is brand love, right? So that's where we need to rebuild some of that muscle.
I guess similarly on marketing spends, when I talked to your predecessors, there was a general sense that marketing was looked as you just want to get the return on the marketing spend you put in. There was no limit to how much was spent on marketing. There was no maximum. And actually, marketing spend has been increasing over the past sort of few years, well, around a decade. How are you thinking about the sort of quantum of marketing spends that the business is going to be putting in? Do you have a set limit, or are you looking at things like the returns that you're taking from that marketing?
Yeah, I mean, but I think, again, you have to step back and look at it. Are you looking at just the marketing scale and reach, or are you looking at your commercial A&P dollars and what it's actually delivering at that point of sale? And you've got to look at it holistically. So I think the first thing we need to be focused in on is how well are we looking at it end to end, right? And how well are we looking at it from the brand building all the way to the point of sale, right? And I think that's where we've not been as strong, right? I think where we have to continue driving that cost down is on wasted commercial A&P.
That is not necessarily effectively going back towards shopper, consumer, and/or customer if we want them to be our preferred partner of choice, right? And it's not just, I add more discounts because I want to push more volume, because I want to get it out there, but there's nothing really that drives to help activate that at the point of sale, right? So I don't necessarily look at it as we need a prescribed number of dollars. We need to look at it, firstly, in terms of growth. We also need to look at it in terms of markets, because not all markets are created equal, right?
And what are the markets in which we see breakout growth or future growth potential versus what our value contributor is today, versus what our growth engine is today, and how do we allocate resources within market, within portfolio, within channel, right? End to end in a more effective way, right? And we... You know, I joke about the fact that we've got a number of brands, right? It's kind of like having a lot of children, right? Might sound terrible to parents. I'm a parent, but yeah, you know. But that's why I only had two, so I could love them equally. But when you have the hundred plus, well, it's difficult to love them all equally, right? So we've got to go where the performance is and where the growth is.
I think one of the changes that we've heard from you since you joined a year ago was a focus much more on the dollar margin rather than the percent margin focus. What's this change all about? I wonder if you could sort of run us through what your thinking is here.
Yeah, I think what I saw as I came, and I can give you a couple examples of that, which is there was such an obsession with gross margin percentage that we were actually driving some of the wrong behaviors in the business. All right? So we were getting out of categories or businesses because the margin percentage was low. And I'm not talking about RTDs. We'll come back and talk about that in a moment. I'm also talking about within, let's say, whiskey, because we were so focused on premiumization or because we were so focused on margin percentage, and that meant more, how much more can I premiumize, then I was forgetting or not focusing on what might be primaries or lower age liquid, right? And in some instances, I was actually selling off those brands, right?
Wherein if I came from the last place that I had, I would kill and chop my left arm and leg off to get a business that had that type of gross margin, right? I'm talking about 65-plus as opposed to an arbitrary 70 being a measure, right? So it was leading us to the wrong decisions that we weren't going after the growth, right? I'll give you another great example of that. We have a new GM, MD, who's gone into Mexico, and he was in GB, and we had spent a lot of time together in the UK market, just whole market, and it was easy to go out and stuff like that.
We were chatting a lot around this margin percentage piece, and he got to Mexico and he said, "I've come here and I want to redo my whole business plan." I said: Tell me more. He said, "Well, I've come here, and we're just about to launch Don Julio Seltzer, but that sells at MXN 900 a bottle. But we are completely ignoring doing Don Julio Blanco because it sells at MXN 600 a market, and the margin's gonna be lower." The size of the Don Julio Blanco market is probably 10 times as large as the Seltzer market. More importantly, what have you lost by not playing in that profit pool? An opportunity to build Diageo brand Don Julio, right from a Blanco, which naturally then leads to brand affinity.
And if you've got a brand ladder, you can move people up, like we do with Johnnie Walker, for instance, right? That was a flawed choice because it was a margin percentage-led kind of decision to be able to do that, right? So that's why I kind of am turning that metric around, because there's profit pools and dollar pools that we're not going after, right? Where the absolute growth is great and we have a right to win, right?
And that's why I think in some ways, that's very liberating for the organization, who were told, "Well, you can't do it if the margin's gonna come down, percentage." Even though if we're focused on operating profit dollars and an outcome, if I'm growing my operating profit dollars at a faster rate than growing my top line, is clearly gonna mean the commitment to leverage, which means an expansion of my operating profit margin. And over time, right, that will also allow me to get my, you know, dollars right.
And if I'm focused on those elements of cost in the right way, right, does it really matter what my gross profit margin is, whether it's sixty-nine or seventy, as long as my operating profit and what cash I take to the bank is right, right? That's not to say margin percentage isn't important, but it's an outcome if you're doing your business right.
No, it's very helpful, and the examples are very helpful as well. Just want to go back to something you said at the beginning around portfolio, because at the beginning of this year, you talked about substantial disposals, and of course, this has caused a lot of speculation in the world.
Intentionally.
I'm sure. How are you evaluating the various parts of the business that could be thought of in this way as in terms of their relative importance? Are there any criteria you're putting on any brands or businesses that could be potentially looked at as disposals?
... Yeah, and I think we've looked at it from the first lens that says, you know, if we're growing and our... The largest part of our business is actually growing in the spirits world, okay? And yes, it's international spirits, but it's not only about premiumization. Are there businesses that I have today that don't offer me synergies and, or growth opportunities for what is the largest part of my business? And am I actually driving that business, which actually could belong in the hands of someone else, and particularly if it's a scarce asset, it might be something that a buyer universe would be able to pay, would be willing to pay, you know, very attractive valuations for, right? Which also then means I have the focus on what I'm doing.
So I really see those as non-core, non-strategic types of businesses. Disposing of those also allows me to focus where I'm growing, but more importantly, gives me that flexibility also on my balance sheet, because I'm clearly not happy with where we're sitting from a leverage perspective, right? But that's an outcome, again, as opposed to I'm doing it because I wanna get to a leverage target, right? Because my leverage target should really be achieved by me doing the right things organically and growing my profits and growing my cash flows to allow me to delever, but this will support it, but it's being led by a strategic review, right?
I think as we continue to do the work around our portfolio, being led very much by the consumer, the occasion, the experience, and the choice that they're looking for, is do we have the right portfolio going forward, right? I think we largely do, but I think there's work that we need to continue doing, and are there areas that indicate, well, maybe this isn't a part of our portfolio going forward, and/or do we have gaps that we need to think about? That gives me more flexibility if there's either M&A and/or partnership opportunities that today I'm a little more strapped on, given where my leverage is.
Now, if it's the right opportunity, I'm still gonna go ahead and do that, right? You know, I'd clearly like to have a lot more flexibility, so that's the way we've thought about it, and, you know, I think it's truly where we feel we can maximize value for Diageo and our shareholders, but also allow us to get more focused. That's what we're doing.
I do wanna talk about the structural, cyclical question as it's one that does dominate the conversation.
At least wait until about the sixth question.
Well, yes, we've got a little bit through. But I guess you've changed the tune, I suppose, from a lot of your peers within the industry, talking about the effects of moderation on the industry. I think you've said it's largely cyclical, but there potentially are some elements of moderation. I guess we don't take a hugely different view, but some of these moderation trends we have seen for, say, 15-odd years, and I think some of our data suggests that anyway. What we've seen in terms of alcohol consumption is a very dramatic change over the past 3 years, really, since the middle of the pandemic to now. Do you think there's been any real change in moderation over that period that could explain that really quite dramatic change?
Yeah.
Or are you describing a more continuous, well, a continuation of the moderation changes that we've seen over that sort of, say, fifteen years?
Yeah. So listen, the big debate has been out there, which then goes down to well, so if it is not cyclical and it's more structural, what are those structural issues, right, and what are the ones we all talk about, well, or I get asked about, well, cannabis, GLP-1s, Gen Z is drinking less, and then, to your point, a continuation of moderation, right? Now, let's come back to the first three, but when you think about moderation, it's interesting because are people moderating because I'm more focused on health and wellness, or am I more focused on how much I'm consuming and how I'm gonna wake up the next morning? Are they also moderating but they just don't have enough money to spend, and so they're moderating? That's still moderating, right?
Now, is that a trend that's a continued one, or is that a trend that will reverse because that's linked to more of the cyclical or the macroeconomic issue, right? And is that probably a part of what's exacerbating what looks like a longer trend and a more dramatic falloff, right? 'Cause what ended up happening? At the end of the day, people were buying so much through COVID, right? And had premiumized because they had a lot more money, they were buying better stuff, and I wasn't going out, and I wasn't traveling and all that kind of stuff, right? And then, you know, all the post-COVID issues hit from a supply chain issue, from a cost issue, et cetera. And what did everybody do? They started taking their prices up, right?
In some ways, I would almost step back and say: Has the discipline been in place in the industry, and I would actually say led by Diageo being the leader, around taking pricing almost each year? And I don't mean, you know, just a blanket, I'm going to go out and take a 1% pricing each year, and that's what's gonna solve my problems, right? But it's actually back to this RGM capability. And where are the elasticities or relative inelasticities for not a brand, but for an occasion or an experience that a consumer is looking for in a particular type of outlet, and how well are you taking advantage of that as your price and mix opportunities, right? So you get a lot more surgical around how you think about that, right?
Let's come back to that, because that's a capability that we need to build. Going back to this, then it says there was such a large inflation element, and people were already dealing with, you know, the fact that they had stock, right? Clearly things slowed down, right? When you're actually going to think about replacing that stock. You're thinking twice because you don't wanna spend, you know, that money, or you'll wait until you're literally down to the last drink before you go out and replace that. You also start thinking about your cash outlay. Moderation just is coming through from a macroeconomic pressure perspective, right? The other elements are quite probably different, and there's probably one that's the one that I think we need to continue to understand more, right?
Which is what is the impact of GLP-1s on consumption? Now, clearly, there's been impacts on some categories, right? To date, we don't necessarily see anything of a significant impact on TBA, other than potentially within TBA, how are people consuming? But it's one that we need to think about, and that's the one piece that's different because cannabis has been around for a while. In fact, when we look at all the trends of what we're seeing and the research that we have across the states where it's been legalized, and keeping aside some of these Delta-8 THC and hemp-derived beverages, actually the majority of the consumption is co-consumption.
So it's not like people are saying, "I'm only smoking," or, "I'm vaping," or, "I'm, you know, chewing, and I'm not drinking as well." So there's a lot of co-consumption going on, so I don't think that's a big issue, right? I think this whole thing about Gen Z drinking less, I think is an over-exaggerated piece, but that's probably the cohort that is feeling the most pressure on their wallet, right? And that's not something that suddenly... A structural change doesn't happen overnight, right? It's years, right? So I do think moderation is a theme, but it's not suddenly that moderation was pacing, and I'm making up a number, 1% suddenly has gone to 10%, right?
Now, is that one gonna be two, or is it gonna be one and a half, or is it gonna be three? We don't know that, right? But there is a real world of a continuation of moderation and perhaps maybe at a slightly higher pace. We don't know, right? Because we'll only know that once the economic elements kind of settle and people get back to more normality, right? But even when you look at the Gen Z cohort, and we're talking about, you know, a group of people, some of whom have not even reached legal drinking age, some of who are in the earlier part of their legal drinking age piece, and they're probably the most cash-strapped, right?
So actually, when people say it's all about health and wellness, and the younger generations talk, you know, all about health and wellness, I'll call a bit bullshit on that. This probably is, don't get me wrong, but it's not every one of those coming in is, like, suddenly become the healthiest person overnight, right? And that's all that they're focused in on. And actually, when you look at it as they get into the large... the higher age cohorts, right, there's probably a different level of type of socializing that happens, and then they'll probably get back to more normal levels, right?
But I almost step back in a way, and I say, well, if there is a theme here, and even if it's slightly higher or even if it's at the same rate, is there something that we can tap into in terms of what we can offer from an angle of moderation? And, you know, we've been doing some research, and it's early days, right? But I guarantee you, if we went around this room with over a hundred people and we asked what moderation means, we'd have at least 15 different answers of what moderation means to that individual, right?
Because moderation doesn't mean the same thing to me as it probably does to you, right? And so the research that we've been doing says, "Okay, in a world of moderation, well, what are you consuming?" Right? And I joke, and I say, well, at one end of the spectrum, people who say, "Well, I'm not substituting with anything." Well, those are the boring lot that none of you wanna go out and party with, right? So at the end of the day, if someone's gonna go out and I'm just not drinking something, well, kind of boring. So we'll keep them aside for a moment, and we'll see how we can convert them over time, right? But we can only convert them if we offer them a great alternative where they feel that they might be willing to drink something.
But there are other ones who are drinking, you know, soft drinks, adult soft drinks, you know, more premium soft drinks, functional beverages, hot beverages. But so are there pools or opportunities there that we might be able to tap into? But there's also ones who are saying, "I'm looking for lower ABV products. I'm looking for RTDs and convenient formats because I'm drinking differently," right? There's ones who are saying, "Well, when I do drink, because I'm moderating, I drink premium, not more. So I actually, you know, will have my one drink, but I really go for that 1942 , right, as opposed to two Blancos type of thing." There's ones who are zebra striping. "I'll have one regular, and I'll have..." So everybody's doing something different, and those are areas we can tap into more.
But also I would say that broader other occasion consumption that we don't play into that, is there something that we can do there, right? And that's how I want us to think about an opportunity set that in potentially a world of moderation, would we be? Could we tap into that? And if all of this is all cyclical, well, I've still got my business that I want to continue growing, but not just on one vector, which is premiumization, right?
It sounds like we're gonna be in violent agreement around the structural versus cyclical arguments.
Good.
So one of the other areas we do think about a lot and get a lot of questions on is, I think it's fair to say that Diageo's generally taken share within the U.S. market over the past few years, but that recent growth has largely come from, it's not even just two brands, it's a couple of SKUs within the portfolio. You've got Don Julio Reposado, which has been doing brilliantly, Crown Royal Blackberry, a recent innovation, and then you might also argue Guinness has been very helpful as well. But outside of those successes, there is a lot of the portfolio that has been struggling and feeling the impact of the difficult industry. So how can you breathe life back into all of these brands, not just the few that are being very successful?
No, you're absolutely right. Listen, firstly, you know, I think we should be proud of the growth that we've had and the market share gains that we've had, because that's where the growth has been, and we've been, you know, winning there. So I don't wanna take away from that. But absolutely, why do I have a portfolio and why, or why do I have a hundred children, where only two of my children are actually, you know, smart and doing well, and the other ninety-eight are duds, right? Well, that's not great, right? And so either it comes back to, do I have the right portfolio? But if I do have the right portfolio that I am thinking about from a consumer and occasion-led perspective that is relevant there, why am I not utilizing that as effectively, right?
So I think it does come back to stepping back and looking at, again, consumer occasion, experience-led, what is relevant, and are we focused around execution then, of that set of brands and/or category or sub, you know, offerings within that for that particular channel and occasion, right? And I think that's where we need to get better. And I think part of it has also come because of this element back to margin percentage and premiumization, was the one vector. And that's great, but I've also got a great set of other brands in the premium plus and the mainstream core that actually have a role to play for what is actually a great consumer base that I might not be addressing, right? And I think we just need to look at it differently. So I think there's an opportunity as we look forward to be...
But that doesn't mean I do everything everywhere, right? So I've got to be more choiceful, right? And I think the US team has clearly been focused around tequila, but also building out a lot of expertise in whiskey, because those are our two biggest brands, and those are probably the two biggest growing opportunities. But that's not to say we won't do stuff on some of the others, right? Ketel One is actually a great example of a brand where we've actually maintained, if not slightly gained share, right? And it's incredible because, you know, vodka is an interesting category, and you've seen one of our competitors do extremely well over there. But we've done a great job in terms of bartender advocacy around Ketel One, right?
And I think another thing that we're doing with Ketel One that's great is with some of these ready-to-serve cocktails, right? And the Ketel One Espresso Martini that's being sold out, those are elements that build the brand as well. Bulleit's another example of that, right? And so we've got to continue looking at where these pockets of growth are, too, and how do we accelerate some of that, too. So that's what we're focusing on, and that's what we'll be doing going forward.
I appreciate we've only got a couple of minutes left, but are you seeing one of the themes of this conference has been what's happening in the U.S. consumer. Are you seeing any signs of an improvement in the U.S. consumer as we sit here today?
Can't say we are, right? It's something that I would say we continue to track, even from an angle of how is sentiment looking, right? As opposed to necessarily buying, because, you know, one links to the other. I think there's still a large period of continued flux and uncertainty. I don't think the tariff situation and everything that's going on there helps. I don't think, obviously, outside of the signaling of what might be happening from a rate cut perspective, it's really happened, and how long does that actually take to translate into the spend power and/or sentiment that starts improving? So, you know, for 2026, for our fiscal, we haven't necessarily planned for an improving consumer environment, but nor have we planned for a further deterioration in that environment either.
Again, we remain, you know, very much focused on what we can manage and control for now, but also at the same time building out, you know, a more robust and inclusive growth algorithm, right? That we can start leveraging sooner than later, right? But at the same time, do what we can manage and control.
Okay, well, I fear we've only scratched the surface of what we could talk about, but you've been in meetings the last few days. Are there any questions you think we as analysts or the investment community should be asking you? What part of the agenda do you not talk about, that you want to talk about? Where's the... Where should the focus be?
Well, you know, I think obviously, you know, if you ask me, I think the... It's been an overfocus on this whole structural versus cyclical, and I do believe that the category is still, you know, very robust and very attractive, right? And I think there are growth opportunities in this that are just not being appreciated right now because of the uncertainty around this whole debate, right, and is there truly much more structural versus the cyclical element? So I think that's probably an area that gets over-indexed on. I think the other interesting piece for me is really this whole debate out there around, in some ways, and links into what could be structural if people bought into that.
This whole no safe level type of piece that seems to have just garnered and gained so much momentum, when clearly the science doesn't really support it, right? But, you know, you don't, you don't start rationalizing and reasoning with people from a scientific perspective only, right? Because outside of the scientific element, there's a social and a structural element of enjoyment and being together that's equally important, right? And we were talking earlier, right at the end of the day, when that happens, it typically revolves around drink and food and stuff like that, right?
So I think the category is still very robust and has been overshadowed and overtaken by some of this. And as an industry, I think we can do a lot more to be able to manage that, that dialogue in the public domain space, right? Not so much with the regulators, because I think we work with them. It's about what is that public opinion piece.
Nik, I could ask you questions all afternoon, but I really appreciate you coming and joining us at the Barclays conference.
Thank you.
Thank you very much.